FILE: B-217121
DATE: December 18, 1984
BONDS - PAYMENT - MILLER ACT COVERAGE - SUBCONTRACTORS, ETC.
The Miller Act requires that before any governemtn construction
contract in excess of $25,000 is awarded, the awardee must furnish a
payment bond for the protection of persons of persons or firms
furnishing labor and material used in the performance of the contract.
The protection of the Miller Act extends only as far as secon-tier
subcontractors and is the only protection for nonpayment provided by the
government for subcontractors.
The Honorable Sherwood Boehlert
House of Representatives
Dear Mr. Boehlert:
We refer to your letter dated October 29, 1984, in which you inquire
about the Miller Act, 40 U.S.C. Section 270 (1982), and the protection
it affords subcontractors on projects involving federal funds. Your
specifically ask:
(1) What type of protection is available for firms that are not
parties to a federal contract, but are working on a project that
uses federal funds, and
(2) To what tier of subcontractors does protection under the
Miller Act, or any similar law, extend?
Generally speaking, the Miller Act requires that before any contract
exceeding $25,000 in amount for the construction, alteration, or repair
of any public building or public work of the United States is awarded to
any person or firm, such person or firm shall furnish (1) a performance
bond for the protection of the government, and (2) a payment bond for
the protection of persons or firms furnishing labor and materials. 40
U.S.C. Section 270(a) (1982). The payment bond, which is in the nature
of a substitute for mechanic liens not recognizable by the government,
is the only protection for nonpayment provided by the government for
subcontractors.
In the event that a subcontractor furnishing labor and material used
in the performance of a government contract is unable to obtain an
adjustment of an unpaid account with the contractor or its surety, the
subcontractor has the right under section 2 of the Miller Act, 40 U.S.
C. Section 270b (1982), to enforce collection through a suit under the
payment bond after the expiration of 90 days after furnishing the last
of the services or supplies, but no later than 1 year after the date on
which the last labor or material was furnished.
As to the tier of subcontractors to which the protection of the
Miller Act extends, the court in J.W. Bateson Co., et al. v. United
States ex rel. Board of Trustee of the National Automatic Sprinkler
Industry Pension Fund et al., 434 U.S. 586 (1978), held that the payment
bond is for the protection of those who have a direct contractual
relationship with either the prime contractor or a subcontractor. The
court found support for its conclusion in a statement in the legislative
history of the Miller Act that Congress intended the scope of the
protection of the payment bond to extend no further than to
sub-subcontractors -- in other words, to second-tier subcontractors.
We trust this information is helpful.
Sincerely yours,
Harry R. Van Cleve
General Counsel
FILE: B-217118 84-2 CPD 625
DATE: December 4, 1984
MATTER OF: Centroid, Inc.
CONTRACTS - PROTESTS - ALLEGATIONS - SPECULATIVE
Protest against proposal evaluation is dismissed as premature where
agency is still evaluating proposals it received in response to the
solicitation and no award decision has been reached.
Centroid, Inc., protests that the proposal it submitted in response
to defense Logistics Agency request for proposals No. DLA400-84-R-6711
may be rejected. Centroid also protests that the contract under this
solicitation may be awarded to other than the low efferor.
DLA has informed this Office that it is currently evaluating the
proposals it received, including the proposal submitted by Centroid, and
that no offeror has been selected for award. Consequently, Centroid's
protest that its proposal will be rejected and that DLA will improperly
award a contract to other than the low offeror is speculative and
premature and we therefore will not consider it on the merits.
Mil-Craft Mfg., Inc., B-214015, May 7, 1984, 84-1 C.P.D. Paragraph 512;
Security Assistance Forces & Equipment Export Corp., B-207787, June 22,
1982, 82-1 C.P.D. Paragraph 617.
The protest is dismissed.
HArry R. Van Cleve
General Counsel
FILE: B-217117 84-2 CPD 655
DATE: December 11, 1984
MATTER OF: G.R.P. Farquhar
GENERAL ACCOUNTING OFFICE - JURISDICTION - CONTRACTS - PERFORMANCE -
CONTRACT ADMINISTRATION MATTER
Whether federal Supply Schedule contractor's products meet
specification requirements during performance of contract is a matter of
contract administration which GAO will not consider.
G.R.P. Farquhar protests that Vestal Laboratories, Division of Chemed
Corporation, which was awarded a Federal Supply Schedule contract by the
General Services Administration under solicitation No.
7PF-52426/S5/7FC, is not providing chemical products which conform to
the contract requirements.
Whether a Federal Supply Schedule contractor's products meet
specification requirements during performance of the contract is a
matter of contract administration for resolution by the contracting
agency and will not be considered by this Office. Mosler Safe Company,
B-213864, February 2, 1984, 84-1 C.P.D. Paragraph 144.
The protest is dismissed.
Harry R. Van Cleve
General Counsel
FILE: B-217115 85-1 CPD 365
DATE: April 1, 1985
MATTER OF: Permutit Company, Inc.
CONTRACTS - GRANT-FUNDED PROCUREMENTS - GENERAL ACCOUNTING OFFICE
REVIEW - POSTAWARD
1. In reviewing the propriety of contract awards made by grantees,
GAO will examine whether the procurement was conducted in a manner
consistent with the fundamental principles of federal procurement
inherent in the concept of competition. These principles include the
requirement that where required descriptive literature does not show
conformity to the solicitation requirements in all material respects,
the bid must be rejected as nonresponsive.
BIDS - RESPONSIVENESS - DESCRIPTIVE LITERATURE - ADEQUACY
2. Allegation that awardee's bid was nonresponsive is without merit
where protester has not clearly shown that the agency's technical
determination that the required descriptive literature submitted by the
awardee indicated conformity to the material requirements of the
solicitation was unreasonable.
Permutit Company, Inc. complains that the Arab Republic of Egypt has
improperly awarded a contract to Graver Water Company under invitation
for bids (IFB) No. DSF-MLG/55-84/ARE, issued by Egypt for the supply of
demineralization water treatment units. This procurement was financed
under an Agency for International Development (AID) grant. /1/ Permutit
contends that Graver was ineligible for award under the solicitation
because its bid was nonresponsive to the specifications. We deny the
complaint.
The solicitation requested bids for the supply of water treatment
units for the removal of iron and manganese from artesian well water in
rural areas in Egypt so as to produce drinking water. In order to
determine whether the product offered conformed to the specifications,
bidders were required to submit with their bids current and complete
descriptive literature describing the product offered. Bidders were
warned that failure to submit the literature or to fully and adequately
explain how the product offered would meet the specifications despite
apparent discrepancies between the specifications and the description of
the product would render the bid nonresponsive.
Permutit alleges that the water treatment units offered by Graver
were nonresponsive to the specifications in three respects.
Permutit initially contends that Graver offered pressure filter
vessels to be shipped with unassembled, flanged face piping and valves,
thus allegedly failing to conform to the requirement in the solicitation
that:
"All units shall be supplied in factory assembled skid mounted
sections requiring barest minimum of field installation time and
labor. Connecting the various sections of the unit shall require
field bolting only."
Permutit contrasts the filters Graver promised to supply with those
Permutit offered, that is "pressure filters individually mounted on a
structural steel skid, with face piping and valves shipped assembled."
In response, contracting authorities cite that portion of Graver's
bid in which it indicated that "components shall be supplied
prefabricated and ready for easy installation or assembly on a flat
concrete foundation," and conclude that Graver satisfied the requirement
for offering units needing only minimal field installation.
In reviewing the propriety of contract awards made by grantees, we
have examined whether the procurement was conducted in a manner
consistent with the fundamental principles of federal procurement
inherent in the concept of competition. One basic principle is that a
bid which does not conform to the solicitation requirements in all
material respects must be rejected as nonresponsive. See Rapsco
Wholesale Distributors and Arvin Industries, Inc., B-213798, June 12,
1984, 84-1 C.P.D. Paragraph 622; A. Metz, Inc., B-213518, Apr. 6, 1984,
84-1 C.P.D. Paragraph 386.
When descriptive literature is required by an IFB to be submitted
with bids for use in bid evaluations, the adequacy of the literature in
showing product compliance with the specifications is a matter of
responsiveness. Thus, where the literature does not show compliance,
the bid must be rejected as nonresponsive. See Washex Machinery Corp.,
B-214591.2, Sept. 25, 1984, 84-2 C.P.D. Paragraph 352; Computer
Sciences Corp., B-213134, May 14, 1984, 84-1 C.P.D. Paragraph 518.
The determination of the technical adequacy of bids, based on the
submission of descriptive literature, essentially involves a technical
evaluation. Accordingly, in keeping with our basic standard of review
of technical evaluations, we will not disturb the determinations of the
technical evaluators concerning the adequacy of the technical data
absent a clear showing of unreasonableness, an arbitrary abuse of
discretion or a violation of procurement statutes and regulations. See
Washex Machinery Corp., B-214591.2, supra, 84-2 C.P.D. Paragraph 352 at
6; Computer Sciences Corp., B-213134, supra, 84-1 C.P.D. Paragraph 518
at 3.
Permutit has failed clearly to show that contracting authorities
acted unreasonably in concluding that the technical data submitted by
Graver demonstrated that its pressure filters would require only minimal
field installation. While Graver's bid included references to a
concrete foundation and flanged piping, Graver described its units as
"prefabricated," and as "shop-assembled skid mounted equipment," with
the pressure filter modules "completely assembled." We also note that
contracting authorities appear to have envisioned the possibility that
the water treatment units might require foundations, since they
requested bidders to describe the "Foundation requirements" for their
equipment.
Permutit further alleges that the transfer pumps offered by Graver do
not conform to the solicitation requirement for "(i)n-line, centrifugal
and electrically driven (transfer) pumps," with the electric pump motors
mounted on vertical motor supports. Permutit contends that Graver only
offered "ordinary," horizontal centrifugal pumps, not "in-line" pumps
whose suction and discharge connections are on the "same vertical and
horizontal plane," and that the motors for Graver's pumps could not be
mounted vertically.
Our examination of Graver's bid provides us with no basis to question
the determination of contracting authorities that Graver's bid was
responsive to the above requirement. On the contrary, we note that
Graver has specifically indicated in its bid that it will furnish
"in-line centrifugal process pumps" with the motors mounted on vertical
motor supports. The descriptive literature for the model Graver offered
in fact distinguishes that model from a different, "Horizontal Process"
pump model manufactured by the same company.
Nor do we believe that Permutit has carried its burden of clearly
demonstrating that, contrary to the determination of contracting
authorities and the requirement of the solicitation, Graver offered
butterfly valves which did not conform to AWWA (presumably the American
Water Works Association) standards. As pointed out in the agency
report, Graver indicated that the butterfly valves it offered met AWWA
standards. Moreover, the descriptive literature for the model offered
by Graver described the valves as in "Full AWWA Compliance."
In conclusion, we believe the complaint to be without merit.
Comptroller General
of the United States
(1) Effective with complaints filed January 29, 1985, we no longer
review complaints concerning the award of contracts under grants. See
50 Fed. Reg. 3978 (1985); see also The George Sollitt Construction Co.,
B-218101, Feb. 6, 1985, 64 Comp. Gen. . . ., 85-1 C.P.D. Paragraph. . .
. We review this complaint since it was filed prior to January 29.
File: B-217114.2
Date: February 3, 1988
APPROPRIATIONS/FINANCIAL MANAGEMENT
Accountable Officers
Disbursing Officers
Relief
Illegal/Improper Payments
Travel Allowances
Supervisory U.S. Army Finance and Accounting officer is relieved of
liability for improper payments because he maintained and supervised an
adequate system of procedures to prevent improper payments. The
improper payments were the result of criminal activity outside the
control of the finance officer.
Brigadier General B. W. Hall
Deputy Commander
U.S. Army Finance and Accounting
Center
Indianapolis, Indiana 46249
Dear General Hall:
This responds to your request of July 21, 1987, that we relieve Mr.
G. E. Durham, Special Disbursing Agent, DSSN 3995, U.S. Army Engineer
District, under 31 U.S.C. Sec. 3527(c) for improper payments totaling
$6,341.00 chargeable to his account. For the reasons stated below,
relief is granted.
Deficiencies totaling $77,125.44 were discovered in Mr. Durham's
account as a result of an investigation of travel fraud involving 12
employees of the Mobile District. The investigation, conducted by
Security and Law Enforcement personnel and the Federal Bureau of
Investigation at the request of the South Atlantic Division Audit Team,
indicated that the 12 individuals had falsified their travel vouchers by
claiming reimbursement for lodging expenses not incurred.
Seven of the individuals made full restitution. The debts of the
other five persons were referred to U.S. Attorney's Office. In February
1983, the U.S. District Court for the Southern District of Alabama tried
and convicted the five and ordered them to make restitution. According
to your submission, ongoing collection efforts by Mr. Durham and the
court have resulted in recovery of $47,427.54, leaving a balance of
$29,697.90.
Mr. Durham bears no pecuniary liability for that portion of the
remaining debt that has been settled by operation of law upon the
running of the statute of limitations. However, on June 24, 1984, our
Office issued a Notice of Exception which tolled the statute of
limitations on the payments made from Mr. Durham's account during the
period May 11, 1982 through August 12, 1982. On the basis of the
court's actions, the extent of Mr. Durham's liability during this period
is $6,341.00 and is the basis of your relief request. See B-220172,
March 4, 1986.
Under 31 U.S.C. Sec. 3527(c), this Office has the authority to
relieve a disbursing official from liability for an improper payment
when the record shows that the payment was not the result of bad faith
or lack of reasonable care. In the case of a supervisory official, our
Office will grant relief upon a showing that the official properly
supervised his subordinates by maintaining an adequate system of
procedures and controls to avoid errors and took steps to see that the
system was being effectively implemented. B-228851, October 13, 1987.
According to your letter and supporting documents, Mr. Durham had
established and maintained an adequate system of controls to safeguard
the funds for which he was responsible. We also note that upon being
informally advised of the investigation in October 1982, Mr. Durham
immediately caused all funds held by the U.S. Government potentially
payable to the individuals involved to be frozen. Therefore, we concur
in your finding that Mr. Durham acted in good faith and with reasonable
care.
It appears that the improper payments in this case were the result of
criminal activity over which Mr. Durham had no control. Even the most
carefully established and efficiently supervised system cannot prevent
every conceivable form of criminal activity. Under these circumstances,
we grant relief.
Sincerely yours,
(Mrs.) Rollee H. Efros
Associate General Counsel
File: B-217114
Date: February 29, 1988
MISCELLANEOUS TOPICS
Fedreal Administrative/Legislative Matters
Information Disclosure
Statutory Regulations
Applicability
1. Although GAO is not subject to the Freedom of Information Act, 5
U.S.C. Sec. 552, GAO's disclosure policy follows the spirit of the Act,
and thus we will provide claimant copies of the materials in his case
file that our regulations allow to be disclosed. 4 C.F.R. pt. 81.
APPROPRIATIONS/FINANCIAL MANAGEMENT
Accountable Officers
Liability
Debt Collection
2. Collection of amounts owed by an accountable officer whose
retirement account has been flagged for repayment may be held in
abeyance pending resolution of government claims against individuals
liable for the same debt. Collection of corresponding interest and
penalty charges also may be held in abeyance.
APPROPRIATIONS/FINANCIAL MANAGEMENT
Claims by Government
Past Due Accounts
Debt Collection
Penalties
Interest
3. Interest and penalties assessed against an accountable officer
pertaining to monies for which he is liable to the government may be
returned to the extent the accountable officer's liability is
subsequently decreased by (1) a determination that the accountable
officer was not responsible for the entire amount initially assessed, or
(2) through collections from the individuals who fraudulently procured
the monies from the accountable officer and the collections include
amounts for interest and penalties at least equal to the amounts
assessed against the accountable officer.
APPROPRIATIONS/FINANCIAL MANAGEMENT
Claims Against Government
Interest
4. The United States generally may not pay accountable officers
interest on amounts refunded to them.
Mr. Paul F. Kane
USAEDE, ATTN: EUDRM-FF
APO New York 09757
Dear Mr. Kane:
By letter of June 15, 1987, you raised several questions concerning
B-217114, Sept. 24, 1986, 65 Comp. Gen. 858, in which we granted you
relief from liability for payments of $7,615.73 for fraudulent travel
claims, but found you liable for $15,232.49. 1/ The payments were for
fraudulent lodging claims submitted by a number of United States Army
Corps of Engineers employees. It appears that several of these
individuals may have repaid, or are in the process of repaying, their
debts to the government.
You state that your letter is not a request for reconsideration of
the merits of 65 Comp. Gen. 858, but suggest that in the future you may
present such a request. Accordingly, we limit our response to the
questions you raise which we answer seriatim below. We will consider the
merits of your reconsideration request when it is presented.
1. You ask to be provided with a copy of the file in B-217114, Sept.
24, 1986. We enclose the materials in our file that our regulations
allow to be disclosed.
Although GAO is not subject to the Freedom of Information Act, 5 U.
S.C. @@552, GAO's disclosure policy follows the spirit of the Act
consistent with its duties, functions and responsibilities to the
Congress. 4 C.F.R. pt. 81. Accordingly, we enclose copies of the
materials in the file that our regulations allow to be disclosed. Id.
2. You ask whether collection action against you should be held in
abeyance pending resolution of claims against the fraudulent payees. We
find that collection of the amount for which you are liable as an
accountable officer may be held in abeyance. Collection of interest and
penalty charges against you may also be held in abeyance.
In your letter, you suggest that since the Finance and Accounting
Officer with the Corps of Engineers, Buffalo District, has flagged your
retirement account for the total amount of your indebtedness, thus
guaranteeing repayment of this amount to the government, collection
action against you should be held in abeyance pending resolution of
compromise proposals and collection actions against the fraudulent
payees. You cite the provisions of 4 C.F.R. Sec. 104.2(c)(2) and 4 C.
F.R. Sec. 104.2(c) (3) in support of your position. These provisions
establish a mechanism for suspension of collection where there exists a
statute that "permits collection of a debt to continue during the
pendency of a request for waiver or review," or where applicable
statutes and regulations would not authorize refund by the agency to the
debtor of amounts collected prior to agency consideration of the
debtor's waiver request. .
The amounts to be collected cover the amount for which you are
accountable ($15,332.50), interest on this amount, and penalties
incurred for collection. It is clear that government agencies have
authority to charge interest and penalties on the delinquent accounts of
their employees. 31 U.S.C. Sec. 3717; 4 C.F.R. Sec. 102.13; B-192479,
Sept. 27, 1978.
Although you do not cite the statute on which you rely that permits
review of your liability, we assume it to be either 5 U.S.C. Sec. 5512,
or 31 U.S.C. Sec. 3527, the general accountable officer relief statute
under which reconsideration may be considered. As your liability for
the principal amount is related to your status as an accountable
officer, but your liability for interest and penalty charges incurred in
collecting your debt is related merely to your status as a debtor of the
United States, we will discuss first collection of principal, and then
discuss collection of interest and penalties.
Section 5512 of title 5 of the United States Code provides:
(a) The pay of an individual in arrears to the United States
shall be withheld until he has accounted for and paid into the
Treasury of the United States all sums for which he is liable.
(b) When pay is withheld under section (a) of this section the
General Accounting Office, on request of the individual, his
agent, or his attorney, shall report immediately to the Attorney
General, the balance due; and the Attorney General, within 60
days, shall order suit to be commenced against the individual.
Previous decisions of the Comptroller of the Treasury, the Attorney
General of the United States, and the Comptroller General indicate that
the requirements of section 5512 are mandatory, may not be waived, and
require the government to immediately commence collection of an
accountable officer's debts. 4 Op. Att'y Gen. 33 (1842); 10 Comp.
Dec. 288 (1903); 39 Comp. Gen. (1959). In 64 Comp. Gen. 606, 608
(1985) we stated that even after litigation has been initiated under
section 5512(b), collection of debts of accountable officers should
continue. 2/ This is because accountable officers are automatically and
strictly liable for funds entrusted to them. Serrano v. United States,
612 F.2d 525, 528 (Ct. Cl. 1979); 64 Comp. Gen. at 607.
Thus, even though you have not as yet invoked the provisions of
section 5512 as a basis for deferring collection, should you do so, our
decisions suggest that collection should continue notwithstanding
litigation under section 5512. We think the same reasoning would apply
during any period in which you sought reconsideration of B-217114, Sept.
24, 1986.
Nevertheless, in this instance, we think the Corps of Engineers has
taken the requisite collection action by flagging your retirement
account for the entire principal amount of the debt, thereby assuring
that the Government will be repaid. Since the Government is protected,
at this point we do not think it necessary for the Corps actually to
make installment deductions from your salary, as it is doing. A number
of the individuals responsible for submitting fraudulent lodging claims
are in the process of repaying, and their repayments could well diminish
your debt. Under these circumstances, it would make sense for the Corps
to wait until the collection process is completed before making
installment deductions from you.
We also conclude that collection of interest and penalties may be
held in abeyance. Section 3717 of title 31 and regulations promulgated
thereunder, 4 C.F.R. Sec. 102.13, authorize agencies to assess interest,
penalties and administrative costs on debts owed to the United States.
The statute and regulations also allow for waiver of collection of
interest, penalties and administrative costs, if, among other
circumstances, the agency determines that collection would be against
equity and good conscience or not in the best interests of the United
States. 31 U.S.C. Sec. 3717(h); 4 C.F.R. 102.13(g). The regulations
cite waiver pending resolution of a request for reconsideration as an
example of a situation in which waiver of interest would be appropriate.
Section 104.2(c) (2) of title 4 of the Code of Federal Regulations,
on which you rely, is consistent with the provisions allowing waiver of
collection of interest. It permits suspension of collection where there
is a statute that permits collection of a debt to continue during the
pendency of a request for waiver or review. Section 5512 of title 5 and
section 3527 of title 31, the general accountable officer relief statute
under which reconsideration may be sought, are such statutes. In this
regard we have said that where a permissive waiver or review statute
applies, an agency may suspend collection of interest, pending
consideration of the underlying debt. 63 Comp. Gen. 10, 13 (1983). In
the same case, we said even if waiver of the underlying debt is not
granted, an agency still has authority to separately consider waiver of
interest. We think this conclusion also would apply to collection of
penalties.
With regard to any interest and penalties charged by the Corps, you
are not in the position of an accountable officer but merely a debtor of
the United States. Thus the standard of strict liability applicable to
accountable off icers and the implied duty to immediately collect monies
owed from accountable officers would not apply to interest and penalty
charges. Accordingly, collection of interest and penalties may be
suspended should the Corps choose to do so without regard to 4 C.F. R.
Sec. 104.2(c)(2), or, consistent with that section, during any period in
which your debt is being contested under section 5512, or is being
reconsidered by this Office.
3. You question whether interest and penalties collected from you
may be returned if the individuals who fraudulently reported lodging
expenses pay the entire amount owed, or the interest and penalties
assessed against you turn out to exceed your actual liability; 3/ and
whether the Corps may pay you interest on money that is subsequently
refunded to you.
We agree that interest and penalties assessed against you may be
returned to the extent your liability subsequently is decreased either
by a determination that you were not responsible for the entire
$15,332.50 or through collections from the individuals who fraudulently
reported lodging amounts and the collections include amounts for
interest and penalties at least equal to the amounts assessed against
you. 4/ On the other hand, the Corps may not pay you interest on any
amounts refunded to you.
As stated above, accountable officers are automatically and strictly
liable for funds entrusted to them. Furthermore, we have held that
amounts for which accountable officers are liable should be collected
immediately. 64 Comp. Gen. 606, 608 (1985). To the extent that amounts
for which accountable officers are liable cannot be collected
immediately, interest and penalties usually should be collected. The
assessment of interest and penalties compensates the government for not
immediately receiving the money owed. This is the case with your debt.
You are repaying the Corps by installments, and the Corps, consistent
with its collection procedures, is charging you interest and penalties
covering the costs of collection.
Nevertheless, if it should be determined at some future time that
your original liability was incorrect and is decreased, we have no
objection to the Corps also refunding to you the amount of interest and
penalties corresponding to the amount refunded. Under these
circumstances, since your original liability as an accountable officer
would have been erroneously assessed, you should not have to pay
corresponding interest and penalties. The government would not lose
anything by refunding the interest and penalties since they relate to
monies for which you were never responsible.
We also think interest may be returned to you if your debt is reduced
through collection from the individuals who fraudulently reported
lodging expenses and the amounts collected include corresponding amounts
for interest and penalties that you already paid. Under these
circumstances, the fraudulent payees would compensate the government for
not immediately receiving the money owed. Since the collections from
them, including the interest and penalties, would make the government
whole for the same debt that you also owe, we see no reason why the
corresponding interest and penalties you paid should not be returned to
you.
Regarding any interest that you suggest might be payable to you
resulting from refunds of monies collected from you, it is clear that
interest is not recoverable against the United States unless it is
expressly authorized by statute or contract. The interest prohibition
has been recognized frequently and consistently not only in decisions of
the Comptroller General but also by the Courts. United States v. Alcea
Band of Tillamooks, 341 U.S. 48 (1951); 60 Comp. Gen. 710, 712 (1981).
The rule does not permit the payment of interest on equitable grounds
and applies even where the government has unreasonably delayed payment.
United States v. N.Y. Rayon Importing Co., 329 U.S. 654 (1947). Since
there is no statutory or contractual basis for paying you interest under
the circumstances you describe, the payment could not be made.
4. You question whether it is appropriate to attempt to collect from
you the entire amount of per diem paid to the fraudulent payee without
regard to the amount actually obtained by fraud.
Our cases suggest that the entire amount should be collected.
Nevertheless, since the amount you owe could be reduced either by
collections from the fraudulent payees or a favorable answer to your
request for reconsideration, we would think it more timely to consider
this issue when your liability is more conclusively fixed rather than
here.
Should you submit a request for reconsideration as you have suggested
you will do, at least one significant point we would like to see
developed is the extent to which you were advised to continue making
payments to Corps employees in spite of any knowledge you may have had
that the payments were fraudulently procured, the time or times when you
were so advised, and the names of the individuals rendering the advice.
Sincerely yours,
(Mrs.) Rollee Efros
Associate General Counsel
Enclosures
1/ These amounts were incorrect by approximately $100. We corrected
these amounts in B-217114.3, Feb. 10, 1987.
2/ It is true that in the past occasionally we have recognized
exceptions to immediate collection of debts when private relief
legislation was pending before the Congress, or when a lawsuit was filed
in court, B-191121, March 20, 1979; however, these cases did not
generally involve accountable officers.
3/ You suggest this could happen if your liability is reduced by
settlement or by payments received from the fraudulent payees.
4/ We assume the interest and penalties charged the fraudulent payees
are at least equal to the amount of interest and penalties charged you.
FILE: B-217113 85-1 CPD 546
DATE: May 15, 1985
MATTER OF: Northern Medical Supply, Inc.
DIGEST:
CONTRACTS - AWARDS - SEPARABLE OR AGGREGATE - ADVANTAGE TO GOVERNMENT
Where the IFB for two items contemplates that award will be based on
the low bid for the first program year and/or the total 3-year low bid,
whichever is more advantageous to the government, the contracting agency
may award the contract to the single bidder with the lowest single or
3-year bid and is not required to award to separate bidders, even if the
split award would be the lowest cost to the government, where continuity
of service requires an award to a single bidder.
Northern Medical Supply, Inc. (Northern Medical) protests the award
of a contract to B&B Medical Services, Inc. (B&B) under invitation for
bids (IFB) No. 635-56-85, issued by the Veterans Administration Medical
Center (Va), Oklahoma City, Oklahoma for oxygenerator services and
ancillary supplies.
The protest is denied.
The IFB'S multi-year contracting format required that bidders submit
prices for item Nos. 1 (services) and 2 (supplies) for each of 3 program
years, and that a single offer for the 3-year requirement would be
considered nonresponsive. The IFB further reserved the right to
disregard the 3-year price and make an award only for the first program
year. Award would be based on the low bid for the first program year
and/or for the total multi-year low bid, whichever was more advantageous
to the government. The IFB, as amended, provides three separate
schedules for the three item No. 1 program years, but only provided one
undated schedule for item No. 2, requiring a total bid for item No. 2
and a total bid for item Nos. 1 and 2.
The VA states that five bids were received in response to the IFB.
The low bid, submitted by B&B, quoted an annual price of $84,357.50 for
the two items and a 3-year price of $253,072.50. The contracting
officer rejected Northern Medical's bid as nonresponsive for quoting
only a price of $87,832.50 for 1 year, but no price for 3 years as
required by the IFB.
Northern Medical contends that since its bid on item No. 2 was less
than B&B's, a split award should have been made as representing the
lowest cost to the government. The protester states that since B&B
submitted only a nonresponsive aggregate bid, Northern Medical should be
reconsidered for the award of a contract for both items. The protester
also alleges that it was misled by the solicitation and a contracting
official into submitting only a single-year price.
We can understand how the protester was misled by the IFB. The
Chief, Supply Service, at the procuring activity, admits that the
amended schedule was confusing. This is evidence by the fact that even
the responsive bidders did not complete the amended schedule uniformly.
Moreover, given the IFB'S requirements for annual 3-year prices and the
fact that the amended 1-page item No. 2 schedule contained no dates, it
could be argued that the protester's bid was responsive.
Despite this, the protester was not prejudiced, even though it
submitted the low item No. 2 bid. As the VA points out, both extending
the protester's prices over 3 years or considering the protester's
1-year price does not displace B&B as the low bidder. Since, despite
Northern Medical's contention to the contrary, B&B responsively supplied
bids for 1 and 3 years, the only issue remaining for consideration is
the protester's request for a split award.
The VA states, and the protester does not deny, that for continuity
of services, it is imperative that only one contractor perform both
schedule items, by providing the services and consumable supplies.
Further, the IFB clearly does not contemplate a split award, and nothing
in the IFB required such an award. In these circumstances, there is no
basis to recommend a split award. Synergetics International, Inc.,
B-200801, Mar. 5, 1985, 81-1 CPD Paragraph 174.
Harry R. Van Cleve
General Counsel
FILE: B-217111 85-1 CPD 731
DATE: June 27, 1985
MATTER OF: T. Warehouse Corporation
DIGEST:
CONTRACTS - PROTESTS - ALLEGATIONS - UNSUBSTANTIATED
1. Protester's inference that alleged irregularities in agency
conduct of negotiations indicate agency's intention to avoid awarding a
contract to the protester is insufficient to establish bad faith; in
order to establish bad faith, the protester must present virtually
irrefutable evidence that agency officials acted with a specific and
malicious intent to injure the protester.
CONTRACTS - NEGOTIATION - AWARDS - INITIAL PROPOSAL BASIS - AWARD
AUTHORITY DISCRETIONARY
2. Although in a negotiated procurement award may be made on the
basis of initial proposals under certain circumstances, the decision is
discretionary; a procuring agency is under no obligation to make an
award on the basis of initial proposals, and no offeror has a legal
right to insist on such an award.
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - SMALL BUSINESS
ADMINISTRATION'S AUTHORITY - CERTIFICATE OF COMPETENCY - AGENCY REQUEST
THAT SBA SUSPEND COC PROCEEDINGS
3. Where a contracting officer has referred a nonresponsibility
determination to the Small Business Administration for consideration
under its certificate of competency procedures because of critical need,
time pressure, and the belief that the low priced initial offeror was
unlikely to be displaced, withdrawal of the referral is proper when,
after receipt of best and final offers, it becomes apparent that the
offeror is no longer in line for award.
T. Warehouse Corporation (TWC) protests the decision by the Defense
Logistics Agency (DLA) not to award TWC a contract on the basis of TWC's
initial offer under request for proposals (RFP) No. DLA13H-84-R-8751,
issued by the Defense Personnel Support Center (DPSC), for cold storage
warehousing.
TWC was the low offeror based on initial proposals but was found
nonresponsible by the contracting officer who referred the matter to the
Small Business Administration (SBA) for consideration under the
certificate of competency (COC) procedures. TWC alleges that when the
contracting officer learned that SBA planned to issue a COC, he
improperly requested best and final offers without prior discussions and
withdrew the COC referral, to circumvent the COC procedures and avoid an
award to TWC.
We deny the protest.
In response to the RFP, which was for a base year plus 2 option
years, DPSC received an offer from the incumbent, United States Cold
Storage (USCS), and two lower offers from TWC, one approximately
$870,000 lower, and an alternate offer, contingent on obtaining a
Department of Labor (Labor) wage determination variance, approximately
$1,030,000 lower.
Because both of TWC's offers were substantially lower than USCS's
offer, and since the agency had no previous experience with TWC, the
contracting officer ordered a preaward survey of TWC on August 15, 1984.
On September 6, the Defense Contract Administration Services Management
Area (DCASMA), Philadelphia, recommended no award. Because TWC had
submitted additional information to DLA in the interim, the contracting
officer requested DCASMA to review the information. DCASMA did so but
did not change its recommendation. On October 1, the contracting
officer referred the matter to the SBA under the COC procedures. The
contracting officer offered the services of survey team members to
accompany SBA on its site inspection, which they did on one of the two
SBA inspections. On November 7, SBA informally advised TWC and the
contracting officer that it would issue a COC. In response to the
contracting officer's stated intention to appeal the COC, SBA delayed
the COC issuance.
Also, on November 7, the contracting officer requested best and final
offers from both offerors by November 13. The contracting officer
states that he believed that this was appropriate before initiating a
formal COC appeal. He stated to TWC in an informal briefing that he
felt that best and final offers were appropriate since the incumbent
probably had not been aware that there would be competition under the
RFP, and because of the possibility of obtaining a lower price. The
contracting officer also indicates that he did not request best and
final offers earlier because the substantial price differential between
the two offerors made displacement of the low offeror unlikely.
Finally, the contracting officer notes that after reviewing the detailed
material submitted by TWC, he concluded that TWC could perform
satisfactorily and, accordingly, at about the time best and final offers
were due, he advised SBA that he would not appeal the COC.
After protesting the request for best and final offers, TWC again
submitted two offers, one contingent on obtaining a wage variance. USCS
submitted one unconditional offer which was lower than TWC's
unconditional offer, but higher than TWC's conditional offer. After the
contracting officer determined that USCS had submitted the low offer, he
withdrew the COC referral from SBA. However, DLA has decided that a
final price evaluation cannot be made until a wage variance
determination is issued by Labor. A wage variance hearing was held on
March 26, but Labor's final determination is still pending. In the
interim, DLA has extended USCS's contract on a month-to-month basis.
TWC asserts that it is entitled to award on the basis of its initial
proposal. The crux of TWC's protest is that DLA had used the
negotiation process to frustrate SBA's COC procedure. In particular,
TWC argues that the best and final offers were unjustifably called for
without any prior discussions, and that DLA's withdrawal of the COC
referral improperly negated the effect of a COC procedure. TWC contends
that DLA intended to make an award on the basis of initial offers with
TWC excluded as nonresponsible, but when the COC issuance was imminent,
DLA requested best and final offers in bad faith to thwart the award to
TWC.
DLA asserts that the advance referral to SBA was appropriate because
of the large price differential between the initial proposals and
because the storage requirement was critical and urgent. DLA states
that when TWC was no longer in line for award after best and final
offers, the contracting officer properly withdrew the COD referral.
However, the contracting officer concedes that the referral was
premature and that negotiations should be concluded before a COC
referral.
In our view, TWC has not established that the contracting officer's
request for best and final offers constituted a bad faith attempt to
circumvent the COC procedure. The protester bears a heavy burden of
proof when alleging bad faith on the part of government officials; it
must show by virtually irrefutable proof that these officials had a
specific and malicious intent to injure the protester. Kelvar
Corporation, Inc., v. United States, 543 F.2d 1295, 1301 (Ct. Cl.
1976). TWC has not met this standard.
Because TWC has submitted no direct evidence, it essentially asks
that we infer bad faith. However, we do not find evidence of bad faith
based on the record. See Ebonex, Inc., B-213023, May 2, 1984, 84-1 C.
P.D. Paragraph 495. DLA has explained that the preaward survey was
conducted and the COC referral made before the completion of
negotiations because of time pressures and the contracting officer's
expectation that TWC would remain low after best and final offers. This
is reasonable in view of the price differential and the fact that DLA
had no contracting experience with TWC. Moreover, a premature preaward
survey is justifiable as a means of reducing the amount of time required
to ultimately award a contract. Ebonex Inc., supra; Security
Assistance Forces & Equipment International, Inc., B-194876, May 5,
1980, 80-1 C.P.D. Paragraph 320.
Regarding the decision to ask for best and final offers, the
contracting officer states that the request was needed to provide notice
to USCS that there was competition, and to realize the possibility of a
lower price. The decision to award on initial proposals is
discretionary with the procuring activity and an offeror has no legal
right to award on its initial proposal. Townsend & Company, B-211762,
Mar. 27, 1984, 84-1 C.P.D. Paragraph 352. Moreover, regarding TWC's
allegation that the call for best and final offers was made without
discussions, we point out that the mere request for best and final
offers may constitute adequate discussions. ATI Industries, B-215933,
Nov. 19, 1984, 84-2 C.P.D. Paragraph 540; Information Management, Inc.,
B-212358, Jan. 17, 1984, 84-1 C.P.D. Paragraph 76. Such is the case
here, where DLA did not find any deficiencies or improprieties in either
proposal and was interested only in realizing lower cost.
The contracting officer has cited two bases for his withdrawal of the
COC. First, after evaluation of best and final offers, TWC was no
longer in line for award, and second, upon evaluation of TWC's final
submissions, he concluded that TWC was capable of performing the
contract. TWC's objection is premised on its assumption that it
automatically would have been entitled to an award on the basis of
initial proposals if the COC was issued. However, the referral was only
withdrawn when TWC was no longer low. Once an offeror is no longer in
line for award, the COC referral is rendered academic and should be
canceled. Syosset Laboratories, Inc., B-212139, Sept. 23, 1983, 83-2
C.P.D. Paragraph 369. Thus, the withdrawal of the referral was
appropriate under the circumstances and provides no basis for imputing
bad faith to the contracting officer.
Further, the record shows that the contracting officer consistently
provided TWC with a broad variety of assistance during this procurement.
More significantly, we note that under the Federal Acquisition
Regulation, 48 C.F.R. Section 19.602-4(c) (1984), the contracting
officer was required to wait only 15 days for a COC issuance before he
could have made an award to USCS. Instead, he withheld award for more
than 1 month in order to permit SBA to complete its review, which also
gave TWC time to upgrade its facilities. The granting of an extension
beyond the 15-day period for filing or processing a COC application is a
matter within the discretion of the contracting agency. American
Photographic Industries, Inc., B-206857, Sept. 29, 1982, 82-2 C.P.D.
Paragraph 295. If the contracting officer's intention was, as TWC
asserts, to make an award to USCS under the initial proposal he had
ample opportunity to do so while the COC consideration was pending.
We deny the protest.
Harry R. Van Cleve
General Counsel
FILE: B-217107 85-1 CPD 219
DATE: February 21, 1985
MATTER OF: United States Playing Card Company
DIGEST:
CONTRACTS - PROTESTS - BURDEN OF PROFF - ON PROTESTOR
1. Where the parties to the telephone conversation in which the
protester made its bid are in total disagreement as to whether a prompt
payment discount was offered, the protester has not met its burden of
affirmatively proving its case.
BIDS - COMPETITIVE SYSTEM - ADEQUACY OF COMPETITION - SUSTAINED BY
RECORD
2. Resolicitation of procurement is not recommended since there is
no evidence of unfairness or unreasonableness concerning the protester's
competing for the procurement and adequate competition and reasonable
prices were obtained.
The United States Playing Card Company (USPCC) protests the proposed
award to Western Pu0lishing Company, Inc., (Western) under Government
Printing Office (GPO) Solicitation No. 455-206. USPCC contends that its
bid included a prompt payment discount which made its bid low and that
it should be awarded the contract. the GPO denies that USPCC's
telephonic bid included any prompt payment terms.
We deny the protest.
The initial GPO solicitation required delivery of 715,838 specially
made decks of cards to the Department of the Army. Invitations for bids
(IFB's) were mailed to 20 prospective bidders on October 16, 1984, with
bid opening scheduled for October 26. Telegraphic or telephonic 0ids
were acceptable under the solicitation's terms which required delivery
on the contract on or before January 23, 1985, and three bids, including
a telephone bid from USPCC, were received as follows:
Western Publishing Co. $423,055.00 net
USPCC $493,928.22 1 percent 30 days
Arrco Playing Card Co. $524,709.25 net
The bids of Western and Arrco were determined to be nonresponsive
because the delivery dates were qualified. USPCC's bid was considered
to be excessive by the contracting officer who sought and received
approval from the GPO Contract Review Board on November 1, 1984, to
cancel and resolicit, using an extended delivery schedule. On November
2, the contracting officer sent telegrams soliciting rebids to be opened
November 7, with shipping under the contract to be completed by February
21, 1985. According to GPO, two bids were received on the
resolicitation as follows:
Western Publishing Co. $418,009.00 net
USPCC $418,765.23 net
GPO reports that USPCC's bid was submitted telephonically to the GPO
contract specialist handling the procurement at 10:47 a.m. on November
7, 1984. The GPO contract specialist provided an affidavit in which he
states that during the transmittal of the bid the USPCC official
initially stated a discount period of less than 20 days and that he
reminded the USPCC official that a period less than 20 days would not be
considered in accord with GPO policy. The contract specialist further
states that the USPCC official excused himself from the conversation
indicating that he wished to confer with a fellow employee, after which
he returned to the telephone and indicated the bid was "net." The GPO
specialist also states that he read the bid back as "net" to the USPCC
official and no request for clarification was made.
USPCC's position regarding the terms offered in the resolicitation is
quite different. The USPCC official in charge of the procurement
provided an affidavit in which he states that in the telephonic rebid on
November 7, he offered prompt payment terms of 1 percent 30 days, net 31
days. USPCC offers several considerations in support of its bidding
official's position such as the fact that USPCC had offered the same
prompt payment terms in its original bid and it was USPCC policy to
offer the same discount terms for all large contracts. USPCC also
points out that its president, from whose office the rebid call was
made, recalls the contracting official interrupting his rebid
conversation to confirm to him that USPCC was in fact offering its
standard prompt payment terms. Finally, USPCC's confirming telex, which
was received by GPO the next day, contained USPCC's discount terms.
However, the GPO contract specialist states he was contacted after
4:00 p.m. on November 7, by a second USPCC official whom he advised
concerning the effect a prompt payment discount would have had, and who
in turn made it clear that USPCC's confirming telex had not yet been
sent. Moreover, GPO points out that while USPCC states it is a company
policy to offer discount terms on similar contract bids, the firm in
fact submitted a "net" bid on a similar procurement on October 31, 1984,
the week before the bid in question.
What remains is an irreconcilable dispute of fact between the
parties. the GPO maintains that USPCC's telephone bid on this
procurement on November 7 did not include a prompt payment discount
which could be applied to its bid price of $418,765.23. Consequently,
its bid was not low when compared to the bid of $418,009 submitted by
Western Publishing Co. On the other hand, USPCC contends that in fact
it did bid the discount and therefore it had the low bid and should be
awarded the contract. Alternatively, the protester contends that the
solicitation should be canceled and resolicited.
Based on our review of the record, we cannot say that the protester
has met its burden of affirmatively proving its case since the only real
evidence before our Office is the conflicting statements of the
protester and the agency. Adams-Keleher, Inc., B-213452, Mar. 6, 1984,
84-1 C.P.D. Paragraph 273; Protex Systems, Inc., B-213228, Mar. 5,
1984, 84-1 C.P.D. Paragraph 265. Where, as here, there is an
irreconcilable conflict between the protester and the agency on a
factual matter and there is no documentary support for either version of
the facts, the protester has not met its burden of establishing its
version of the facts. See, e.g., National Council for Urban Economic
Development, Inc., B-213434, Aug. 1, 1984, 84-2 C.P.D. Paragraph 140.
The protester urges that the miscommunication between the parties and
the misunderstanding of its intended bid by the agency provide a basis
for this Office to rule that the procurement should be canceled and
resolicited.
We judge the propriety of a particular procurement from the
standpoint of whether adequate competition and reasonable prices were
obtained. On the basis of the record here we are unable to conclude
that competition for this procurement was inadequate or that the prices
obtained were unreasonable. See Adams-Keleher, Inc., B-213452, supra,
and Maintenance Pace Setters, Inc., B-212757, Jan. 23, 1984, 84-1 C.P.
D. Paragraph 98; E & I, Inc., B-195445, Oct. 29, 1979, 79-2 C.P.D.
Paragraph 305.
Accordingly, we deny the protest.
Comptroller General
of the United States
FILE: B-217106 85-1 CPD 655
DATE: June 7, 1985
MATTER OF: The Goodyear Tire and Rubber Company
DIGEST:
BIDS - INVITATION FOR BIDS - CANCELLATION - AFTER BID OPENING -
DEFECTIVE SOLICITATION
Air Force's cancellation after bid opening of invitation for bids
(IFB) for aircraft tires listed on qualified products list is
appropriate where: (1) protester has failed to show that a direct
response to the specification cited in the IFB would have met Air
Force's minimum needs, and (2) other bidder would be prejudiced by award
to protester whose tire was not shown to be qualified as of bid opening.
The Goodyear Tire and Rubber Company (Goodyear) protests the
cancellation of invitation for bids (IFB) No. F42600-84-B-1076 by the
Department of the Air Force. The IFB was for the procurement of landing
gear tires for the F-16 aircraft stationed at the Ogden Air Logistics
Center (OAL), Hill Air Force Base, Utah. Goodyear contends that the
cancellation after bid opening was not adequately justified in violation
of competitive procurement requirements. Goodyear asks that the IFB be
reinstated and that it receive the award based on its low bid. As set
forth below, we find the Air Force had a compelling reason for canceling
the IFB and, therefore, deny Goodyear's protest.
The IFB was issued for 6922 nose landing gear tires meeting
specification MIL-T-5041G for F-16 aircraft. No further specifications,
standards or drawings were furnished in the IFB.
Specification MIL-T-5041G is for a pneumatic aircraft tire, which may
only be procured from vendors whose products are listed on a qualified
products list. Generally, "qualified products" refers to items that
have been examined and tested for compliance with specification
requirements and are then included on a qualified products list. If
qualified products are being acquired, the contracting officer may only
consider those offers that offer products identified as qualified for
inclusion on the list applicable at the time set for bid opening. See
Federal Acquisition Regulation (FAR), 48 C.F.R. subpart 9.2 (1984),
"Qualified Products."
Shortly after the issuance of the IFB, under which only the B.F.
Goodrich Company (Goodrich) qualified, Goodyear requested that its tire
be placed on the qualified products list. A letter was sent by the Air
Force's Aeronautical Systems Division (ASD), Wright-Patterson Air Force
Base, Ohio, to the General Dynamics Corporation, Fort Worth, Texas,
transmitting Goodyear's request and qualification test report. ASD
requested General Dynamics, a manufacturer of F-16 aircraft, to qualify
the Goodyear tire for use with the F-16.
Subsequently, OAL amended the IFB to incorporate the qualification
test reports for tires manufactured by both Goodyear and Goodrich.
Goodyear was the apparent low bidder, and Goodrich was the only other
bidder. However, in response to a protest by Goodrich, OAL canceled the
IFB in its entirety.
Essentially, OAL canceled because specification MIL-T-5041G is a
generic aircraft tire specification which had not been updated to cover
F-16 nose landing gear and was incorrectly cited in the IFB. Ogden
contracting officials state that another specification, General Dynamics
drawing 16VL027, usage I and II, should have been cited. Furthermore,
OAL points out that the qualification test report for Goodyear's tire
was not approved by the proper authority and should not have been
incorporated in the amended IFB because its qualification test report
only showed compliance with usage I of the General Dynamics
specification.
Goodyear first argues that the failure to reference General Dynamics
drawing 16VL027 in the IFB was not a compelling reason for cancellation.
Goodyear points out that in order to be placed on the qualified
products list, as Goodyear maintains it properly was, a bidder would
necessarily be aware of the General Dynamics specification. Thus, the
failure to cite the General Dynamics specification had no meaningful
effect on the bidders. Second, Goodyear argues that its tire was
qualified to usage I performance requirements and that Air Force
personnel had advised it that usage II would not be a consideration for
the procurement. According to Goodyear, there are only two of the
existing F-16 aircraft, model XL, that would require a tire qualified to
usage II. Even if the two XL plans were intended to be provided for by
the procurement, which Goodyear questions, Goodyear nevertheless
contends that cancellation of the entire solicitation was not warranted.
The FAR permits cancellation of an IFB after bid opening only when
there is a compelling reason. 48 C.F.R. Section 14.404-1(a) (1984).
The regulation provides that inadequate or ambiguous specifications
cited in the IFB may constitute such a compelling reason. Id., at
Section 14.404-1(c)(1). Contracting officials have broad discretion to
decide whether or not appropriate circumstances for cancellation exist,
and our review is limited to considering the reasonableness of the
exercise of that discretion. Professional Carpet Service, B-212442;
B-212442.2, Oct. 24, 1983, 83-2 CPD Paragraph 483. Our Office generally
regards cancellation after opening to be appropriate only when an award
under the ostensibly deficient solicitation would not serve the actual
minimum needs of the government and when other bidders would be
prejudiced by such an award. Dyneteria, Incorporated; Tecom
Incorporated, B-210684, B-210684.2, Dec. 21, 1983, 84-1 CPD Paragraph
10.
We conclude that the Air Force has shown the existence of both
conditions, and, therefore, the cancellation was appropriate. It is
uncontested that specification MIL-T-5041G does not provide the proper
specification for the F-16 nose landing gear tires needed by the Air
Force. The parties acknowledge that the General Dynamics specification
is the relevant specification. Although Goodyear maintains
incorporation of its qualification test report in the IFB demonstrates
compliance with the relevant General Dynamics specification, it is also
uncontested that Goodyear's test did not show compliance with usage II
of the General Dynamics specification. The Air Force maintains that
compliance with usage II is required by the General Dynamics
specification and is necessary for wartime preparedness of its F-16
aircraft currently in inventory, not just the XL model, despite
Goodyear's contention to the contrary. We have no legal basis to
question the Air Force's position that compliance with usage II is
necessary to meet the agency's minimum needs. In this regard, it is
primarily the contracting agency's responsibility to determine its
minimum needs, and we will not question its determination absent a clear
showing that the determination was arbitrary or capricious. Winandy
Greenhouse Company Inc., B-208876, June 7, 1983, 83-1 CPD Paragraph 615.
Here, meeting usage II conditions is clearly required by the General
Dynamics specification. Thus, Goodyear has not shown that a direct
response to the specification cited in the IFB would have met the Air
Force's minimum needs.
Moreover, an award to Goodyear under the IFB would have been
prejudicial to the other bidder in this case. As stated above, the
qualification test report on which Goodyear based its bid did not show
that its tire would meet the agency's minimum needs. While there is
evidence suggesting that further testing might show the Goodyear tire to
comply with usage II of the General Dynamics specification, the tire was
not shown to be so qualified as of bid opening. It would be improper to
allow Goodyear, simply because it submitted a lower bid, an exclusive
opportunity to show subsequently that it would meet the Air Force's
minimum needs in order to keep the contract. Winandy Greenhouse Company
Inc., B-208876, supra.
Accordingly, we concur with the Air Force's decision to cancel the
IFB and resolicit the procurement, and we deny the protest.
Harry R. Van Cleve
General Counsel
FILE: B-217105 85-1 CPD 44
DATE: January 16, 1985
MATTER OF: BHT Thinning
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - ADVERSE AGENCY ACTION EFFECT
1. Protest filed with GAO more than 10 days after protester receives
notice of adverse agency action regarding protest filed with contracting
agency is untimely.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - ADVERSE AGENCY ACTION EFFECT
2. The fact that a protester continues to pursue its protest with
the contracting agency after notice of adverse agency action does not
extend the time for filing the protest with GAO.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
3. Protest regarding an alleged solicitation impropriety apparent on
the face of the solicitation must be filed prior to bid opening and will
not be considered by GAO when it was initially filed with the
contracting agency after bid opening.
BHT Thinning (BHT) protests the rejection of its bid on item 4, under
solicitation No. RI-04-84-78 for tree thinning on the Fernan Ranger
District, issued by the United States Department of Agriculture, Forest
Service (Forest Service). We dismiss the protest as untimely.
Bid opening occurred on September 7, 1984. Award was made only on
two of the five areas solicited because the Forest Service determined
that the bids received on the other three areas were excessive. For
item 4, BHT's bid of $54,595, the lowest of three bids received, was 54
percent higher than the Forest Service's original estimate of $35,399.84
and 35 percent higher than the Forest Service's revised estimate of
$40,265. BHT's primary basis of protest is that the government estimate
improperly calculated cost on the basis of horizontal acreage, which
does not reflect the actual surface area which is greater because of the
slope of the area in question.
BHT asserts that it was clear from the solicitation that the
specified acreage figures which constituted the basis for the Forest
Service's estimate did not reflect the actual surface area. BHT points
out that the solicitation's acreage figures conflicted with information
in the solicitation on how to calculate the acreage on sloped areas.
BHT first raised this objection in its September 18, 1984, protest
letter to the Forest Service after BHT had been advised of the agency's
determination not to make any award for item 4 because of excessive
prices. On September 27, BHT supplemented its protest by raising
procedural objections to the procurement process, in particular alleging
that award had been made in an inordinately short period after bid
opening, and that it had not been properly advised that it had been the
low bidder on item 4 before the Forest Service made its decision not to
award this item.
BHT indicates that on September 28, the Forest Service advised BHT
that it would not make an award for item 4, thus denying BHT's protest.
Thereafter, BHT continued to correspond and meet with the Forest
Service, reiterating its arguments. The Forest Service reaffirmed its
decision not to make award on item 4 and attempted to clarify its basis
for acreage calculation cost estimates. BHT's final letter to the
Forest Service is dated October 16, repeating the same issues, after
which BHT states that the Forest Service declined to provide further
response. BHT filed its protest with GAO on November 13.
Our Bid Protest Procedures, 4 C.F.R. Section 21.2(a) (1984), clearly
provide that when a protest is initially filed with a procuring agency,
any subsequent protest to our Office must be filed within 10 working
days of initial adverse agency action. NDE Technology, Inc., B-216419,
Sept. 24, 1984, 84-2 C.P.D. Paragraph 345. This is defined as any
action or inaction that is prejudicial to the position taken in a
protest filed with the agency. 4 C.F.R. Section 21.0(b). Moreover, the
fact that the protester continues to pursue the matter with the agency
does not extend the time for protesting to GAO. Trane Air Conditioning,
B-214259, Sept. 26, 1984, 84-2 C.P.D. Paragraph 359.
Here, in response to BHT's protest letters, the Forest Service
examined its cost estimate and advised BHT on September 28 that it would
not make an award on item 4. This constituted initial adverse agency
action. The fact that the Forest Service considered and responded to
subsequent letters submitted by BHT and continued to attempt to clarify
its acreage calculations did not extend the time for protesting to our
Office. Trane Air Conditioning, B-214259, supra. BHT's protest was not
filed in our Office until a month and a half after the initial adverse
agency action.
In addition, the underlying basis of BHT's protest is an alleged
apparent impropriety in the solicitation, i.e., the alleged discrepancy
between the stated acreage and the solicitation formula for calculating
sloped acreage. Under our Bid Protest Procedures, 4 C.F.R. Section
21.2(b)(1) (1984), such alleged improprieties must be protested prior to
bid opening. T.L. Garden & Associates, Inc., B-216318, Sept. 28, 1984,
84-2 C.P.D. Paragraph 368. BHT did not file its initial protest with
the Forest Service until after bid opening and, therefore, its initial
protest to the agency was untimely. Consequently, we will not consider
the protest, notwithstanding the fact that the agency may have
considered it because our timeliness requirements provide objective
criteria which may not be waived by action taken by an agency. Evans,
Inc. -- Request for Reconsideration, B-213289.3, Feb. 27, 1984, 84-1 C.
P.D. Paragraph 240.
Accordingly, we dismiss the protest as untimely.
For The Comptroller General of the United States
FILE: B-217104
DATE: September 30, 1985
MATTER OF: M. H. Todd - Conversion from Prevailing Rate System to
Federal Wage System - Application of Annual Pay Comparability Adjustment
COMPENSATION - PREVAILING RATE EMPLOYEES - CONVERSION FROM CLASSIFIED
POSITIONS - RATE ESTABLISHMENT - COMPARABILITY ADJUSTMENTS
Department of Navy questions payment of October 1982 annual pay
comparability adjustment to printing and lithographic employee at the
Charleston Naval Shipyard, whose position was converted from an
agency-established special printing wage schedule to the Federal Wage
System (FWS) in December 1980. Navy questions applicability of
adjustment because previous wage schedule upon which employee's retained
grade was based on abolished effective September 1982. Employee is
entitled to full comparability adjustment which became due in October
1982, based on the rate of basic pay for his new FWS position pursuant
to instructions issued by the Office of Personnel Management.
This decision is in response to the appeal by Mr. M. H. Todd from a
determination made by the Naval Civilian Personnel Command, Department
of the Navy, not to pay him an annual pay comparability adjustment in
1982.
The issue in this decision is the entitlement of an employee to the
1982 annual pay comparability adjustment after the employee's position
was converted from an agency-established special printing wage schedule
to the Federal Wage System (FWS) in December 1980. The employee's
previous printing and lithographic wage schedule, upon which his agency
had been basing wage adjustments during the 2-year period, was abolished
in September 1982 before the 1982 comparability adjustment became due.
For the following reasons, we hold that the employee is entitled to the
full comparability adjustment which became due in October 1982 under 5
U.S.C. Section 5307 (1982), based on the rate of basic pay for his new
FWS position.
The Navy reports that Mr. Todd and 14 other employees at the
Charleston Navy Shipyard, Charleston, South Carolina, who had been
classified as printing and lithographic (P and L) employees under the
agency-established special printing schedule designated as "WP," were
reclassified into the FWS (designated as "XP") in December 1980. This
reclassification was taken at the direction of the Office of Personnel
Management (OPM) and the instructions for the establishment of the new
pay plan for printing and lithographic employees under the FWS were
provided in Federal Personnel Manual (FPM) Letter No. 532-119, August
28, 1981. This reclassification action entitled the affected employee
to 2 years grade retention and to indefinite pay retention under 5 U.S.
C. Sections 5362 and 5363 (1982) because the new XP schedule would have
otherwise resulted in a loss of pay. In 1981 these employees received
the pay comparability adjustment. However, in September 1982 the old
special printing (WP) schedules were eliminated. The Navy reports that:
"this resulted in nothing on which to base the 'retained grade'
entitlements. There was no WP schedule to increase * * * . These
converted, retained, FWS jobs had a maximum rate of pay less than
the amounts Mr. Todd and his coworkers had been receiving as
retained WP's. There was simply no authority to grant these
employees the 4.8 percent comparability adjustment."
Title VIII of the Civil Service Reform Act of 1978, Pub. L. No.
95-454, 92 Stat. 1111 (1978), provides that an employee who is placed in
a lower grade as a result of reclassification of the position, is
entitled to retain for a period of 2 years the grade held immediately
before that placement or reduction. 5 U.S.C. Section 5362. It also
provides the authority for granting an employee indefinite pay
retention. 5 U.S.C. Section 5363. In addition to specifying criteria
and conditions for the application of the grade and pay retention
provisions, the law (5 U.S.C. Section 5365) authorizes OPM to extend the
application of these provisions to other individuals and situations to
which they would not otherwise apply. See 5 C.F.R. Section 536.101
(1984).
As noted previously, OPM has issued instructions for the
reclassification of printing and lithographic wage employees in FPM
Letter 532-119. Attachment 2 to the FPM Letter contains the following
guidance at paragraph 4(d) and (g):
4. Conversion from agency-established special printing wage
rate schedules to FWS special 3-step printing wage rate schedules
in the 13 designated special schedule areas.
"d. * * * If the employee's position is reduced in grade as a
result of application of the standards, the equivalent grade will
be retained by the employee for 2 years during which time the
employee will receive 100 percent of the amount of each increase
in the pay of the retained grade granted pursuant to an FWS
special printing schedule survey.
"g. An employee who retains his or her scheduled rate of pay
at the time of mechanical conversion and whose position is
downgraded upon application of FWS job-grading standards under
step 2 of the conversion will, during the two-year grade retention
period, receive the same percentage increase given to the maximum
step of his or her retained (equivalent) grade as a result of an
FWS special printing survey. * * * "
As indicated in paragraph 4(g) of attachment 2 to the FPM Letter, set
forth above, an employee who retains his pay at the time of the
conversion and is downgraded as was Mr. Todd, will during the 2-year
grade retention period receive the same percentage increase given to the
maximum step of his retained or equivalent grade as a result of an FWS
special printing survey. Since the printing and lithographic wage
schedule upon which Mr. Todd's pay was based prior to the conversion of
his position to the FWS was abolished in September 1982, under paragraph
4(g), above, the operative grade upon which his percentage increase is
to be based is his new "equivalent" grade under the "XP" schedule to
which he was converted. Therefore, it is the full comparability
percentage increase, found to be applicable by the FWS special printing
survey for 1982, that is to be applied to Mr. Todd's equivalent grade.
Our Office has been informally advised by OPM's Wage Systems Division
that it concurs in the position that the 1982 comparability pay increase
should have been granted based on the new equivalent grade assigned to
Mr. Todd under the "XP" schedule pursuant to the conversion process to
the FWS.
Therefore, the employee's retained pay and comparability pay
adjustment should be determined in accordance with the foregoing.
Comptroller General of the United States
B-217102, Nov 28, 1984, 84-2 CPD 587
CONTRACTS - Small business concerns - Awards - Responsibility
determination - Nonresponsibility finding - Review by GAO
DIGEST:
GAO generally will not review a contracting officer's determination
of nonresponsibility with respect to a small business bidder since by
law the Small Business Administration is empowered to determine
conclusively that a small business firm is responsible.
Belex Enterprises, Inc.:
Belex Enterprises, Inc. (Belex), a small business, protests the
negative preaward survey and the nonresponsibility determination by the
contracting officer made in connection with solicitation No.
DLA100-84-B-0945 issued by the Defense Logistics Agency, Defense
Personnel Support Center, Philadelphia, Pennsylvania. We have been
informed that this matter has been referred to the Small Business
Administration (SBA) for the possible issuance of a certificate of
competency (COC).
We dismiss the protest.
The SBA has statutory authority to review a contracting officer's
determination of nonresponsibility and to determine that a small
business concern is responsible by issuing a COC. 15 U.S.C. Sec. 637(
b)(7) (1982). Consequently, we will not undertake an independent review
of a contracting officer's nonresponsibility determination, since such
review would be tantamount to a substitution of our judgment for that of
the SBA. See Hoffman Construction Company, B-214240, Mar. 13, 1984,
84-1 C.P.D. Para. 304. COMP GEN (UP)
FILE: B-217101 85-1 CPD 233
DATE: February 25, 1985
MATTER OF: Connecticut Telephone & Electric Corp.
DIGEST:
BIDS - RESPONSIVENESS - BRAND NAME OR EQUAL PROCUREMENT
1. Where clause requiring listing of brand name of offered product
in "Brand Name or Equal" procurement is omitted from the solicitation,
bid that did not list brand name should not have been rejected as
nonresponsive since contracting agency admits that award to that firm
will meet the government's needs, and no other bidder would be
prejudiced.
BIDS - PREPARATION - COSTS - RECOVERY
2. There is no legal basis for a bidder improperly rejected as
nonresponsive to be given an award under another contract -- the
original contract having been completed -- or to recover anticipated
profits. Bid preparation costs may be awarded, however, since but for
the improper action of the agency, the firm would have received the
award.
Connecticut Telephone & Electric Corp. (Contelco) protests the award
of a contract under invitation for bids (IFB) No. F41800-84-B-0160
issued by the Department of the Air Force. Contelco challenges the Air
Force's determination that Contelco's low bid was nonresponsive.
We sustain the protest.
The solicitation was for various sizes and quantities of telephones.
Although the solicitation stated that it was a "Brand Name or Equal
Acquisition," and the schedule requested a brand name and model number,
the clause that defines such a solicitation and states its requirements
was neither included in the IFB or incorporated by reference, as
required by section 1u.004(b)(ii)(B) of the DOD Supplement to the
Federal Acquisition Regulation, 48 C.F.R. Section 210.004 (b)(3)(ii)(B)
(1984). Contelco's bid was rejected as nonresponsive for failure to
provide the brand name and descriptive information to demonstrate how
the specifications would be met by the products it proposed to furnish,
as required by the omitted clause. When award was made to the next low
bidder, Contelco protested to the contracting officer, who denied the
protest.
Contelco argues that it purposely did not include individual brand
names in its bid. Contelco states that, aside from the omission of the
applicable clause, listing a particular brand name was no longer
appropriate after an amendment to the solicitation was issued permitting
new and completely remanufactured telephones to be offered, since
remanufactured telephones include parts made by various manufacturers.
Contelco maintains that as long as it agreed to offer products
possessing the salient characteristics described in the solicitation,
which it did by signing the bid, it would be responsive to the
solicitation.
In responding to the protest, the Air Force states that it now
believes Contelco's bid was responsive. The Air Force asserts that all
bidders in fact competed on an equal basis, and that the brand name or
equal purchase description together with the specifications contained in
the salient characteristics provided adequate assurance that award to
Contelco would have met the government's needs.
We see no legal basis to disagree with the Air Force's current
position. The Air Force points out that by signing the bid, Contelco
agreed to provide the items described in the specifications, and the
agency is convinced that the government thereby could be assured of
having its needs met. Further, there is no basis to believe that award
under the IFB would have prejudiced anyone. In this respect, even
assuming that the omission of the brand name or equal clause rendered
the IFB defective, we often have stated that award may be made under a
defective solicitation if the government's needs would be met and no
other bidder would be prejudiced. See, e.g., GAF Corp., et al., 53
Comp. Gen. 586 (1974), 74-1 C.P.D. Paragraph 68. We therefore agree
that award to Contelco as low bidder could have been made, and that the
rejection of Contelco's bid as nonresponsive was improper.
We have been informed by the Air Force that performance of the
contract is complete, so we can make no recommendation regarding award.
We do, however, believe that Contelco is entitled to recover its bid
preparation costs. Contelco has demonstrated that but for the improper
action on the part of the Air Force, it would have received the award.
See Power Systems - Claim for Costs, B-210032.2, Mar. 26, 1984, 84-1 C.
P.D. Paragraph 344.
Contelco has requested that we direct award of a similar contract to
Contelco at the bid price or reimburse it for its profits that would
have been realized on this contract. Since we are without legal
authority to grant either request, those requests are denied. See JT
Systems, Inc., B-213999, Apr. 9, 1984, 84-1 C.P.D. Paragraph 399; M.L.
MacKay & Associates, Inc., B-208827, June 1, 1983, 83-1 C.P.D.
Paragraph 587.
The protest is sustained. Contelco should submit its claim for
expenses incurred in the preparation of the bid directly to the Air
Force.
Comptroller General
of the United States
B-217100, Nov 26, 1984, 84-2 CPD 576
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Date basis of protest made known to protester
DIGEST:
Protest that awardee is unable to provide a typewriter currently in
production, as required by solicitation, is untimely where filed more
than 10 days after protester became aware of specific model to be
provided by awardee.
White Business Machines:
White Business Machines protests the award of a contract for
typewriters to Swintec Corporation under solicitation No.
FGE-D1-75313-A, issued by the General Services Administration. White
alleges that award should not have been made to Swintec because
Swintec's offer was not for a model typewriter currently in production
as required by the solicitation. We dismiss the protest as untimely.
Our Bid Protest Procedures require that protests be filed not more
than 10 days after the basis for protest is or should have been known.
4 C.F.R. Sec. 21.2(b)(2) (1984). Here, White was told that on October
25 award had been made, and notified of the model typewriter Swintec
would provide. Thus, as of that date, White was or should have been
aware of the basis for its contention that Swintec would not provide a
model currently in production. White's protest, however, was not filed
with this Office until November 13, more than 10 days later. As a
result, the protest is untimely. COMP GEN (UP)
FILE: B-217098 85-1 CPD 317
DATE: March 28, 1985
MATTER OF: Math Box Inc.
DIGEST:
ADVERTISING - COMMERCE BUSINESS DAILY - FAILURE TO SYNOPSIZE
PROCUREMENT
Agency need not synopsize for publication in the Commerce Business
Daily its intention to issue an order of $50,000 or less against a
nonmandatory automatic data processing schedule contract. While the
agency nevertheless must attempt to secure maximum competition, a
protester objecting to the lack of notice of the intended purchase has
the burden to show that the agency acted intentionally to preclude the
protester from competing.
Math Box Inc. protests the Department of the Army's sole-source
purchase of five microcomputers and accessories, at a price slightly
exceeding $25,000, from International Business Machines Corporation
(IBM). The Army purchased the equipment by issuing a delivery order,
No. DAKF04-84-F-3392, 84-F-3392, against a nonmandatory automatic data
processing (ADP) schedule contract between the General Services
Administration (GSA) and IBM. The protester complains that the Army
failed to have a notice of the intended purchase published in the
Commerce Business Daily (CBD), thus precluding Math Box from an
opportunity to express interest in competing to supply the equipment.
Math Box explains that it is a dealer in IBM equipment.
We deny the protest.
The Army issued the delivery order on September 30, 1984. The
contracting officer reports that on September 12, he had electronically
transmitted a synopsis of the proposed order to the CBD, but for some
unexplained reason the notice never was published. The contracting
officer nonetheless proceeded with issuing the delivery order in
reliance on Department of Defense Federal Acquisition Regulation
Supplement (DOD FAR Supp.), Section 5.203, 48 C.F.R. Section 205.203
(1984), which provides that when a synopsis is required, the contracting
officer shall not issue a competitive solicitation until at least 15
days after the date of publication of a proper notice in the CBD, and
the contracting officer "may presume that notice has been published" 2
days following electronic transmittal to the CBD.
Math Box contends that the Army's issuance of the delivery order
without actual publication of a CBD notice was inconsistent with the
requirements of Public Law No. 98-72, which amended the Small Business
Act to require generally that federal agencies have a notice published
in the CBD of all proposed competitive and noncompetitive procurements
of property, supplies and services in amounts of $10,000 or more. 15
U.S.C. Section 637(e) (Supp. I 1983). /1/
The notice requirements of Public Law No. 98-72 do not apply here,
however. The statute provides an exception to those requirements where
it is determined in writing by the head of the agency, with the
concurrence of the Administrator of the Small Business Administration
(SBA), that advance notice is not appropriate or reasonable. 15 U.S.C.
Section 637(e)(1)(H). On September 26, 1984, the Administrator of GSA,
with the concurrence of the Administrator of SBA, determined that it is
not appropriate or reasonable to apply the statute's requirements to
nonmandatory ADP and telecommunications schedule contracts. The notice
requirements of the statute therefore do not apply to this case since
the delivery order in question was issued (on September 30) after the
Administrators' determination.
The requirements that control the disposition of this case are,
instead, at section 5.h of Federal Information Resources Management
Regulation (FIRMR) Temp. Reg. 6, 50 Fed. Reg. 4411, 4414 (1985) (to be
codified at 48 C.F.R. Section 201-32.206). That regulation,
promulagated by GSA, imposes a synopsizing requirement where an agency
intends to place an order against a nonmandatory ADP schedule contract;
the regulation requires that the intent to place an order in excess of
$50,000 must be synopsized in the CBD at least 15 calendar days before
placing the order. Applying that provision, we note that the Army's
delivery order had a value well below the dollar threshold for requiring
a CBD notice ($50,000). Thus, there was no requirement that a notice be
published here.
That does not mean that the Army was free to disregard nonschedule
suppliers, since nonmandatory schedule purchases still must comply with
the mandate that all purchases be made on a competitive basis to the
maximum practicable extent. FIRMR Temp. Reg. 6, Section 5.h.
Generally, if an agency is aware of suitable nonschedule sources, it
must give the sources an opportunity to demonstrate their ability to
meet the agency's needs at a price lower than the schedule contractor's
and, if an interested source does so, then the agency should conduct a
competitive acquisition. See CMI Corporation, B-210154, Sept. 23, 1983,
83-2 C.P.D. Paragraph 364. There is no showing, however, that the Army
was aware of Math Box's interest in supplying the items and
intentionally acted to preclude the firm from competing, which the
protester must prove where there either is no requirement for a CBD
notice or the failure to meet such a requirement for a CBD notice or the
failure to meet such a requirement did not prejudice the protester. /2/
Tri-Com Inc., B-214864, June 19, 1984, 84-1 C.P.D. Paragraph 643.
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) We note that DOD FAR Supp., Section 5.203, cited by the
contracting officer, apparently derives from the statute's requirement
that an agency not issue a solicitation until 15 days after the
publication of a CBD notice. 15 U.S.C. Section 637(e)(A). This
requirement and the cited regulation are not applicable to this case,
however, since a delivery order against an ADP schedule contract does
not entail the issuance of a competitive solicitation. GSA has
determined, and we agree, that ADP schedule contracts are in the nature
of basic agreements, basic ordering agreements or similar arrangements
for which Public Law No. 98-72 generally requires that a notice be
published 30 days in advance of placing the order. 15 U.S.C. Section
637 (e)(2)(B).
(2) The cited case involved an agency's failure to comply with the
notice requirement of Public Law No. 98-72 for a nonmandatory schedule
order; we found that the protester had not been prejudiced. The
District Court for the District of Columbia, however, subsequently
disagreed with our finding. Tri-Com Inc. v NASA, No. 84-1058 slip op.
(D.D.C. Oct. 31, 1984), as amended, slip op. (Jan. 22, 1985). We also
note that at that time, there had not yet been a determination by the
Administrators of GSA and SBA that the statute's notice requirements
were inappropriate.
FILE: B-217096
DATE: March 11, 1985
MATTER OF: Retired Marine Corps Officers
PAY - RETIRED - FOREIGN EMPLOYMENT - CONGRESSIONAL CONSENT - PUBLIC
LAW 95-105 - APPLICABILITY
Retired Marine Corps officers who are attorneys either employed by or
"of counsel" to a law firm incorporated in Virginia as a professional
corporation may not serve as legal counsel for the Office of the Saudi
Military Attache, an instrumentality of a foreign government, without
obtaining the consent of Congress as required for officers of the United
States by Article I, section 9, clause 8 of the U.S. Constitution and 37
U.S.C. Section 908. Under Virginia law an attorney's professional
relationship with his clients remains unchanged notwithstanding the
existence of a professional corporation; thus, the fact that they are
employees of the professional corporation does not exempt Virginia
attorneys from obtaining the required consent.
The question presented is whether the existence of a professional
corporation would affect the applicability of Article I, section 9,
clause 8 of the United States Constitution to retired officers of the
U.S. Marine Corps who as employees of a professional corporation,
incorporated in the Commonwealth of Virginia, will serve as legal
counsel to the Office of the Saudi Armed Forces Attache. /1/ We
conclude that the constitutional prohibition on the acceptance of any
emolument from a foreign government without the consent of Congress by
one who holds an office of the United States remains applicable.
Accordingly, the individuals concerned should obtain the consent of
Congress as required by the Constitution prior to their legal
representation of the Office of the Saudi Armed Forces Attache. This
may be accomplished by obtaining the approval of the Secretary of the
Navy and the Secretary of State as provided in 37 U.S.C. Section 908.
By letter dated November 7, 1984, to the Commandant of the Marine
Corps, Colonel Matthew A. Clary, Jr., USMC, Retired, the President of
the law firm of Clary & Pijor, P.C., advises that the Office of the
Saudi Armed Forces Attache contemplates retaining the law firm of Clary
& Pijor, P.C. to represent it and designated Saudi nationals in legal
proceedings in courts or before administrative agencies in the United
States. The law firm also would counsel and advise the Attache on
United States legal matters pertaining to the Office of the Saudi Armed
Forces Attache or to Saudi nationals under the control of that Office.
He advises that Clary & Pijor, P.C., with principal offices in Virginia,
was established in 1976 as a Virginia professional corporation. The
firm employs seventeen persons, seven of whom are attorneys. Four other
attorneys are associated with the firm on an "of counsel" basis. Two of
the employee attorneys, including Mr. Clary, and one of the attorneys
who is "of counsel" to the firm are retired regular officers of the
Marine Corps. Legal services would be performed for the Saudi Attache's
Office by whichever of the firm's attorneys, including the retired
Marine officers, is or are deemed best or appropriately qualified to
handle the particular matter.
While it is undisputed that the Office of the Saudi Armed Forces
Attache is an instrumentality of the Saudi Arabian government, Mr.
Clary argues that Article I, section 9, clause 8 of the Constitution is
not applicable to either himself or the other two attorneys associated
with the firm in connection with the firm's proposed representation of
that Office. He states that the Attache's Office would be the client of
the professional corporation and would not be the client of any
individual attorney employed by the corporation. He further states that
the Attache's Office would be billed by the corporation for all services
performed which billing would be due the corporation itself and not to
any of its personnel individually. He elaborates on this point by
stating that the compensation of the corporation's employees, including
its attorneys, is normally established annually by the corporation's
board of directors /2/ and that no attorney will be entitled to or
receive any compensation on the basis of collection by the firm from any
particular client or for any particular service. He emphasizes that
under the laws of the Commonwealth of Virginia the professional
corporation is a separate legal entity from its employees. Thus, Mr.
Clary concludes that the proposed situation under consideration is no
different from that of retired officers working for U.S. corporations in
the aircraft, automotive, and consultant businesses which do business
under contract for foreign governments.
He also argues that, in any event, his view is supported by the case
of Lieutenant Colonel Marvin S. Shaffer, 62 Comp. Gen. 432 (1983), in
which we held that the constitutional prohibition does not apply to a
retired officer employed by American Motors Corporation, the controlling
interest in which is held by a French company owned by the French
government.
Article I, section 9, clause 8 of the Constitution prohibits any
person "holding any Office of Profit or Trust" under the United States
from accepting "any present, Emolument, Office, or Title, of any kind
whatever" from a foreign government without the consent of Congress.
The history of this constitutional provision indicates that the evil
intended to be avoided by it is the exercise of undue influence by a
foreign government upon officers of the United States. See 24 Op.
Att'y Gen. 116 (1906). It is well established that this prohibition
applies to retired members of the uniformed services. 58 Comp. Gen.
487 (1979); 53 Comp. Gen. 753 (1974); and 37 U.S.C. Section 908
(1982). And, we have held that the term emolument as used in this
provision includes the salary, fees or compensation received for
services. 44 Comp. Gen. 130 (1964); 37 Comp. Gen. 138 (1957). We also
have held that in view of the wording of the provision in prohibiting
the acceptance of emoluments, etc., "of any kind whatever", it is to be
given the broadest possible scope and application. 58 Comp. Gen. 487,
493 (1979). Therefore, it seems clear that a retired officer practicing
law as a sole practitioner would be subject to the constitutional
prohibition if he wished to provide services to, and receive
compensation from, the Saudi Defense Attache's Office.
The question for resolution in this case, then, is whether Colonel
Clary and the other retired officers associated with Clary & Pijor are
releived from the constitutional restriction by practicing law as a
professional corporation.
As indicated above, we did hold that a retired officer who was
employed by American Motors Corporation did not violate the
constitutional restriction by that employment notwithstanding that a
controlling interest in American Motors was held by a French automotive
firm 92 percent of which was in turn owned by the French government. In
that case we noted that, as a general rule, a corporation is a legal
entity separate and distinct from its shareholders. We did note that
where equity dictates, the corporate entity will be disregarded, for
example, where there is such interest and ownership that the separate
personalities of the corporation and its shareholders no longer exist.
In that case, however, we found no indication that American Motors, a
domestic corporation, and the French company were not separate entities,
and we found that the power to control and direct the retired officer's
employment was with the domestic corporation. Thus, we did not deem it
necessary for him to seek the approval required by the Constitution,
although we did caution that in cases where doubt exists as to an
employment situation the individual involved should seek the required
approval. Lieutenant Colonel Marvin S. Shaffer, 62 Comp. Gen. 432,
supra.
In another case a retired officer was nominally employed and paid by
a domestic corporation but the facts of the case showed that the
domestic corporation was in effect merely an employment agency and that
actually there existed an employee-employer relationship between the
officer and an instrumentality of a foreign government for which the
domestic corporation procured personnel. In that case we looked through
the ostensible relationship with the domestic corporation and held that
the officer's acceptance of salary incident to that employment was
prohibited by the Constitution in the absence of the consent of
Congress. 53 Comp. Gen. 753 (1974).
While neither of these cases involved attorneys or a professional
corporation, they do show that we base our determinations on the actual
relationship involved and not merely on form.
Until relatively recently lawyers in private practice did so as sole
practitioners or in partnerships because, in view of the personal nature
of the attorney-client relationship, a corporation could not be licensed
to practice law. However, most states have now enacted statutes to
authorize professional service corporations primarily to extend certain
Federal tax benefits to professionals by enabling them to organize and
carry on their professions by means of a legal entity possessing
corporate characteristics. The corporate entity method of doing
business brings the corporation itself within the disciplinary
jurisdiction of the courts, but does not relieve the individual
practitioner through whom the corporation practices from his obligation
to abide by all the rules and canons of professional ethics. Annot., 4
A.L.R.3d 384-385, 390; 7 Am. Jur. 2d Attorneys at Law Section 111.
Under the laws of the Commonwealth of Virginia, which apply to Clary
and Pijor, P.C., every attorney-at-law is liable to his client for any
damage sustained by him due to the attorney's neglect of his duty. Va.
Code Section 54-46 (1950), as amended; Ortiz v. Barrett, 278 S.E.2d 833
(Virginia 1981). Furthermore, under the Code of Professional
Responsibility, promulgated by the Supreme Court of Virginia, an
attorney has the responsibility to represent a client zealously within
the bounds of the law, and with limited exceptions, should preserve the
confidence and secrets of a client. Va. Code Vol. 11, DR 4-101, DR
7-101, and DR 7-102. Thus, professional corporations differ
significantly from ordinary business corporations.
The following provision of the Virginia professional corporation
statute makes it clear that an attorney's association with a
professional corporation does not affect his professional relationship
with his client:
"The provisions of this chapter shall not be construed to alter
or affect the professional relationship between a person
furnishing professional services and a person receiving such
service either with respect to liability arising out of such
professional service or the confidential relationship between the
person rendering the professional service and the person receiving
such professional service, if any, and all such confidential
relationships enjoyed under the laws of this Commonwealth, whether
now in existence, or hereafter enacted, shall remain inviolate. *
* *" Va. Code Section 13.1-547.
Thus, it appears that the attorneys who are either employees or "of
counsel" to the professional corporation of Clary and Pijor, have the
same professional relationship with their clients as attorneys who are
not associated with a professional corporation.
While the attorneys performing services for the Saudi Arabian
Government would not be paid directly for their services as they would
be if they were individual practitioners, the Saudi Arabian Government
would pay the professional corporation for the services performed by the
retired military officers and they in turn would benefit from these
payments through the receipt of salary and other compensation and
benefits from the professional corporation. In the circumstances it
cannot be said that the retired military officers would not receive "any
present, Emolument, Office, or Title, of any kind whatever" from the
Saudi Arabian Government. It is, therefore, our view that the existence
of the professional corporation does not exempt the retired military
officers concerned from application of Article I, section 9, clause 8 of
the United States Constitution. Accordingly, it appears that their
representation of the Office of the Saudi Military Attache and receipt
of compensation as a result thereof without the required consent would
require the withholding of their retired pay. See Major Marvin L.
Friedman, 61 Comp. Gen. 306 (1982).
Congress has given its consent to retired members of the uniformed
services accepting civil employment by foreign governments and
compensation for that employment provided the retired members receive
the approval of both the Secretary of State and the Secretary of the
service concerned. See 37 U.S.C. Section 908, and implementing
regulations in 22 C.F.R. Part 3a (1984). Mr. Clary and the other
attorneys involved who are retired military officers should obtain the
required approval prior to their legal representation of the Office of
the Saudi Military Attache.
Comptroller General of the United States
(1) The request for a decision is presented at the direction of the
Commandant of the Marine Corps by Brigadier General H.E. Davison, Deputy
Fiscal Director of the Marine Corps.
(2) The board of directors is composed of six of the seven attorney
stockholders.
FILE: B-217095
DATE: November 29, 1985
MATTER OF: George D. Sack -- Relocation Expenses -- Maximum Weight
of Household Goods Shipment
TRANSPORTATION - HOUSEHOLD EFFECTS - WEIGHT LIMITATION - CHANGES -
RETROACTIVE
An employee is limited to the maximum weight for shipment of
household goods provided in the regulations in effect on the date of his
transfer, November 14, 1982, rather than the maximum weight allowed at
the time of his household goods shipment, on December 21, 1983. The
regulations implementing the increases authorized by section 118 of
Public Law 98-151, November 14, 1983, restrict these increases to
employees reporting to their new duty station on or after November 14,
1983. Contrary statements made by congressional sponsors after
enactment are not sufficient to show that the implementing regulations
are improper. See Jack G. Petrie, B-216542, June 11, 1985.
This decision results from a request by Mr. Peter M. Conroy, Jr.,
National Field Representative of The National Treasury Employees Union,
for our opinion concerning the entitlement of Mr. George D. Sack to
reimbursement for the expenses of moving his household goods to his new
duty station. Mr. Conroy's request was made under the regulations found
at 4 C.F.R. Part 22 which set forth procedures for our decisions on
appropriated fund expenditures which are of mutual concern to agencies
and labor organizations. Mr. Sack's employing agency, the Internal
Revenue Service (IRS), has not submitted comments on this matter.
Mr. Sack was promoted and transferred from his position as a GS-11
Revenue Officer in Brooklyn, New York, to a GS-12 Revenue Officer in
Burlington, Vermont, effective November 14, 1982. He moved his family
and his household goods to Burlington on December 21, 1983. The IRS
restricted Mr. Sack's reimbursement to the regulatory weight limits in
effect at the time of his transfer rather than the higher limits in
effect at the time he moved his family and household goods. It did so
on the basis of General Services Administration (GSA) regulations which
provided that the increased benefits authorized by amendments made to
Title 5, United States Code, Chapter 57, by section 118 of the Joint
Resolution of November 14, 1983, Public Law 98-151, 97 Stat. 977-979,
were available only to employees whose effective date of transfer was on
or after November 14, 1983. Mr. Conroy contends that these regulations
do not conform with the congressional intent regarding the effective
date of the increases authorized under section 118 of the Joint
Resolution, as evidenced by a January 26, 1984, letter from two of the
congressional sponsors of section 118 to the GSA Administrator.
Section 118 amended a number of the statutory authorities for
reimbursement of employee relocation expenses but it appears that the
specific entitlement involved in Mr. Sack's situation is the maximum
weight limitation for shipment of household goods. Section 118 amended
5 U.S.C. 5724(a) to increase the maximum weight limitation from 11,000
pounds to 18,000 pounds. Mr. Sack apparently shipped more than 11,000
pounds of household goods and was found to be indebted for the shipment
of excess weight in the amount of $1,930.86.
Neither section 118 nor any other provision of the Joint Resolution
specified the date of a transaction or event involving relocation as the
effective date of the increases provided by that Resolution. Instead,
subsection 118(c) of the Joint Resolution merely stated that the
amendments would be effective on the date of the enactment. The General
Services Administration promulgates the Federal Travel Regulations (FPMR
101-7, September 1981, incorp. by ref., 41 C.F.R. Section 101-7.003
(FTR)), which implement the provisions of Chapter 57, Title 5, United
States Code. On March 13, 1984, GSA issued regulations amending Chapter
2 of the FTRs in accordance with the changes made by section 118 of the
Joint Resolution. (GSA Bulletin FPMR A-40, Supp. 10, published at 49
Fed. Reg. 13920, April 9, 1984). Under the heading "EFFECTIVE DATE", GSA
stated that:
"The revised provisions of Chapter 2 are effective for
employees and certain new appointees whose effective date of
transfer or appointment is on or after November 15, 1983. For
purposes of these regulations, the effective date of transfer or
appointment is the date the employee or new appointee reports for
duty at the new or first official station."
Under the heading "SUPPLEMENTARY INFORMATION", GSA also stated that:
"The relocation allowances contained in the FTR were changed
substantially effective October 1, 1982, and again with the
changed pages transmitted by this supplement. Because of these
changes and the extended eligibility period for certain allowances
(potential 3 years) payment of relocation allowance claims may
require application of different allowance levels for different
employees. Agencies are reminded that provisions of the
regulations in effect on the employee's or appointee's effective
date of transfer or appointment must be used for payment
purposes."
Prior to the issuance of Supplement 10, on January 26, 1984, Senator
John Warner and Representative Frank R. Wolf sent a letter to the
Administrator of GSA with which they enclosed an outline "to explain the
history of our initiative and to show our discussions with the House and
Senate leadership concerning the congressional intent of this
initiative." In that outline they stated as follows:
"The legislation is clear that the provisions of Sec. 118 of P.
L. 98-151 become effective on the date of enactment -- in this
case, November 14, 1983. We would like to clarify that this is an
entire change of policy and a departure from past practices. At
the point in time when this legislation was enacted, anyone
undergoing a move or continuing to incur costs associated with a
government-directed move (whether tax-related, unsold home at the
old station, or other) would be subject to the new reimbursement
rates for costs incurred on or after November 14. We believe the
statute is clear on this point."
In a recent case, Jack G. Petrie, B-216542, June 11, 1985, we
considered the claim of an employee who contended, as does Mr. Conroy,
that in light of the above statement the FTR reporting date requirement
does not comply with congressional intent to make the increases under
section 118 of the Joint Resolution effective November 14, 1983.
In finding that GSA's regulation is not arbitrary or contrary to the
statutory purpose we stated in Petrie as follows:
"* * * The statement (of the two congressional sponsors) does
not refer to any formal legislative history showing congressional
intent. In fact, the letter points out that there were no
committee hearings or reports on the legislation. Ordinarily
those are the key portions of the legislative history for
interpreting a statute. Significantly, the sponsors' statement
concerning the effective date was made over 10 weeks after the
enactment of the Joint Resolution. Sponsors' remarks in the
formal legislative history and debate prior to enactment may be
important interpretive aids because the legislative body
considered them before passing the measure. On the other hand,
postpassage remarks by sponsors carry less weight and do not serve
to change the legislative intent. See Epstein v. Resor, 296 F.
Supp. 214, 216 (N.D. Cal. 1969), aff'd, 421 F.2d 930 (9th Cir.),
cert. denied, 398 U.S. 965 (1970); Ambook Enterprises v. Time
Inc., 612 F.2d 604, 610 (2d Cir. 1979); 2A SUTHERLAND STATUTES
AND STATUTORY CONSTRUCTION, Section 48.15 (4th ed. 1973).
"In the present case, Congress granted the General Services
Administration the authority to designate the transaction or event
that must occur on or after the effective date of section 118 in
order to qualify an employee for the relocation increases.
Although the sponsors requested the General Services
Administration to choose a different event, it selected the
employee's entrance on duty at the new official station. This
appears to have been a practical solution to establishing the
effective date and is generally consistent with previous changes
made in the regulations governing these entitlements."
In light of the above, we must deny Mr. Conroy's request that we
direct reimbursement of Mr. Sack's claim for shipment of 18,000 pounds
of household goods.
Comptroller General
of the United States
FILE: B-217093
DATE: January 9, 1985
DIGESTS
DEPARTMENTS AND ESTABLISHMENTS - SERVICES BETWEEN THEM - EDUCATIONAL
PROGRAMS
1. The Japan-United States Friendship Commission may transfer funds
to the Department of Education for a study of education in Japan
pursuant to the Commission's authority to support Japanese-American
cultural and educational activities not mentioned in, but which are
consistent with, subsections (1)-(5) of section 2902(b) of title 22 of
the United States Code. The authority provided by subsection (6) is
very broad and its legislative history shows that the Commission is to
have some discretion in determining which projects are to be funded
under it.
DEPARTMENTS AND ESTABLISHMENTS - SERVICES BETWEEN THEM - EDUCATIONAL
PROGRAMS
2. The Commission's authority to "enter into contracts, grants, or
other arrangements", 22 U.S.C. Section 2905(8), particularly the
language "or other arrangements" is sufficiently broad to encompass
transfers of Commission funds so long as the transfer is to an entity
carrying out a function set forth in 22 U.S.C. Section 2902(b).
The Honorable William V. Roth, Jr.
Chairman, Committee on Governmental Affairs
United States Senate
Dear Mr. Chairman:
By letter of November 7, 1984, you asked whether the Japan-United
States Friendship Commission legally could transfer $165,000 /1/ for
fiscal year 1985 and $134,500 for fiscal year 1986 to the Department of
Education to help fund a study of Japanese education. For the reasons
given below we find that the transfer would be permissible.
The Department of Education informs us that in November 1983,
President Reagan and Prime Minister Yasuhiro Nakasone discussed the need
for cooperative studies of mathematics and science education in the
United States and Japan. In April 1984, Dr. Edward M. Elmendorf, the
Department's Assistant Secretary for Postsecondary Education, and his
staff had extensive meetings with the staff of the Japanese Ministry of
Education, Science and Culture on the guidelines for the studies.
Several months thereafter, the proposal for the studies was presented at
the biannual meeting of the United States-Japan Conference on Cultural
and Educational Exchange (CULCON) /2/ and was approved. In September
1984, former Secretary of Education, Terrell Bell, and the Japanese
Minister of Education, Science and Culture, Yoshiro Mori, reached final
oral agreement for the studies.
The study is to be conducted by the Unites States Department of
Education in conjunction with CULCON. Direction and development of the
study is to be at the Department's National Institute of Education with
policy guidance provided by Dr. Elmendorf. Research for the study also
is to be conducted at the National Institute of Education; however,
extensive use will be made of Unites States experts on Japan wherever
they work. The materials submitted by the Department show that the
Japan-United States Friendship Commission's (Commission) role in the
project essentially is to provide funding, although Department officials
suggest that the Commission also will monitor the project and provide
some advice. At the study's conclusion, reports are intended to be
published and distributed in both Japan and the United States. It
appears that the Department will contribute some $800,000 to the
project, which includes funds for salaries for the five National
Institute of Education employees to be assigned to the project.
The Commission's involvement in the project was formally proposed at
a meeting of the Commission on September 20, 1984. There, Dr.
Elmendorf /3/ suggested that the Commission contribute to the study some
$300,000 over a two-year period: $165,500 for fiscal year 1985 and
$134,500 for fiscal year 1986. The largest share of these monies is
intended to be used for privately contracted-for research studies from
experts on Japanese education ($100,000 in fiscal 1985 and $70,000 in
fiscal 1986). The other monies are intended to be used for travel and
per diem, research-related expenses, and working conferences.
Commission personnel will not be working on the project. At the meeting,
the Commission approved the proposal by a vote of 9-2; /4/
nevertheless, a question arose about the legality of the transfer of
funds from the Commission to the Department.
The Department of Education maintains that there is sufficient legal
basis for the Commission transferring funds to the Department. The
Department relies on the Commission's authority to "develop and carry
out programs at public or private institutions for the promotion of
scholarly, cultural, and artistic activities in Japan and the United
States", "to support studies * * * in * * * scholarly research in Japan
* * * designed to foster mutual understanding between Japan and the
United States", and "to enter into contracts, grants, or other
arrangements" to carry out its functions. 22 U.S.C. Sections 2904(a),
2902(b), 2905(8).
The Department also states that it is authorized to receive funds
from other Federal agencies by virtue of section 415(a) of the
Department of Education Organization Act, 20 U.SC. Section 3475, which
permits the Secretary to make, enter into, and to perform contracts,
grants, cooperative agreements, or other similar transactions with
Federal or other public agencies; section 405(e) of the General
Education Provisions Act, 20 U.S.C. Section 1221e(e), which contemplates
that the National Institute of Education will coordinate and cooperate
with other Federal agencies in conducting educational research; and
section 405(i) of the same Act, id. Section 1221e(i), which provides
that the National Institute of Education may act for all agencies where
funds are advanced for a single project by more than one Federal agency.
In this regard, the Department says that the study is a project neither
primarily of the Department nor jointly undertaken by the Department and
the Commission. Although the Department will manage the project, it
maintains that the project reflects a multi-agency effort, including the
State Department, United States Information Agency, the National
Endowments for the Arts and the Humanities, the Library of Congress, and
CULCON, as well as the Commission. Nevertheless, the Commission is the
only Federal agency other than the Department providing funding for the
project, nor are we aware, at this point, that any of the agencies
mentioned above will have more than a limited advisory role.
Additionally, the Department relies on section 601 of the Economy
Act, 31 U.S.C. Section 1535, which permits interagency agreements where
one agency provides goods or services to another agency on a
reimbursable basis. The Department states that while the Commission is
not actually purchasing the study from the Department, consistent with
our decision in 38 Comp. Gen. 36 (1958), it is contributing toward the
conduct of it.
The Japan-United States Friendship commission was established by law
in 1975 for the purpose of aiding "education and culture at the highest
level in order to enhance reciprocal people-to-people understanding and
to support the close friendship and mutuality of interests between the
United States and Japan." Pub. L. No. 94-118, Section 2, 89 Stat. 603,
codified at 22 U.S.C. Sections 2901 and following. The Commission is an
18 member entity composed of (1) the 12 members of the United States
Panel of the Joint Committee of CULCON; (2) 2 members of the House of
Representatives; (3) 2 Senators; and, (4) the Chairmen of the National
Endowments for the Arts and Humanities. The Chairman of the United
States Panel of the Joint Committee of CULCON also is the Chairman of
the Friendship Commission. Informally the United States Information
Agency has told us that the 12 United States CULCON members are
appointed by the Director of the United States Information Agency, the
Director is a member himself, and USIA provides small amounts of funds
to CULCON.
Section 2904(a) of title 22 of the United States Code authorizes the
Commission to "develop and carry out programs at public or private
institutions for the promotion of scholarly, cultural and artistic
activities in Japan and the United States", consistent with section
2902(b) of title 22. The latter section specifically authorizes the
Commission to promote (1) studies in institutions of higher education or
scholarly research in Japan and the United States designed to foster
mutual understanding between the two countries; (2) support for major
collections of Japanese and American books and publications in
appropriate libraries /5/ throughout the two countries; (3) programs in
the arts in association with appropriate institutions in Japan and the
United States; (4) fellowships and scholarships at graduate and faculty
levels; (5) support for visiting professors and lecturers at colleges
and universities; and (6) support for other Japan-United States
cultural and educational activities consistent with the above-enumerated
purposes. 22 U.S.C. Section 2902(b)(1)-(6). The House report
accompanying the legislation stated that the last category was a
catchall to insure that any other activities not enumerated, but that in
the judgment of the Commission are consistent with the Act's purposes,
would be included. H.R. Rep. No. 503, 94th Cong., 1st Sess. 3 (1975).
In the House debate, one of the bill's sponsors stated that colleges and
universities would be the bill's beneficiaries, but that other
institutions such as libraries and civic centers also would benefit.
121 Cong. Rec. 30410 (1976) (Representative Zablocki).
The Commission is authorized to carry out the activities enumerated
in section 2902(b) by entering into "contracts, grants, or other
arrangements, or modifications thereof." 22 U.S.C. Section 2905(8).
Funding for the Commission's programs is to come from the Japan-United
States Friendship Trust Fund. Id. Section 2902(a). Monies are
appropriated yearly from the fund. E.G., Pub. L. No. 98-166, 97 Stat.
1071, 1097.
Consistent with the Department's position described above, we do not
question its authority to enter into contracts, grants, or cooperative
arrangements with other Federal agencies to carry out functions of the
Secretary of Education or the Department that the Secretary determines
necessary, or to receive funds from other Federal agencies when funds
are advanced for a single project. The problem with the proposed
transfer concerns the Commission's authority to transfer funds to other
Government agencies.
In general, unless otherwise authorized by law, transfers of funds
between government agencies and instrumentalities are prohibited by
section 1532 of title 31 of the United States Code. In addition, 31 U.
S.C. Section 1301(a) provides that appropriations be applied only to the
objects for which appropriated. /6/ B-182398, March 29, 1976 (letter to
Senator Laxalt); B-166506, January 17, 1974. Prohibiting interagency
transfers without specific authority preserves Congress' control over
the appropriations process. See U.S. Const. art I., Section 9, cl. 7.
The Commission is neither specifically authorized to transfer monies
to Federal agencies nor does the legislative history state that that
activity is contemplated. Nevertheless, section 2902(b)(1)-(6) provides
broad authority for Commission funding of scholarly, cultural, and
artistic activities between Japan and the United States, including
"support for studies * * * in institutions of higher education or
scholarly research in Japan and the United States," designed to foster
mutual understanding between the two countries, 22 U.S.C. Section 2902(
b)(1) and "support for Japan-United States cultural and educational
activities" not mentioned in subsections (1)-(5) which are consistent
with the Act's purposes, id. Section 2902(b)(6). Although section
2902(b) suggests that the institutions to which the Commission will
provide funds essentially are to be non-governmental entities, the
legislative history indicates that public libraries such as the Library
of Congress are intended to receive Commission funds. H.R. Rep No.
504, 94th Cong., 1st Sess. 3 (1975).
Although we doubt that the Congress expected that Commission funds
would be transferred to other Federal entities to carry out studies for
which such entities had already received appropriations, we think such
transfers would be authorized when the project for which the monies are
being transferred clearly falls within the purposes set forth in section
2902(b). In this regard, the authority provided by subsection (6) of
section 2902(b) is very broad. Moreover, the House report accompanying
the legislation establishing the Commission indicated that the
Commission was to have discretion in determining which projects were
consistent with the Act's purposes; that is, projects that are not
specifically provided for in subsections (1)-(5) but which could be
comprehended by subsection (6). H.R. Rep. No. 503, 94th Cong., 1st
Sess. 3 (1975). This show of intent together with the broad language of
subsection (6) gives the Commission substantial leeway in determining
the kinds of projects it may fund, and, similarly, the kinds of
institutions which may carry out the projects that the Commission funds.
We think this authority does cover the Department's study of Japanese
education. We note that the Commission already has approved the project
by a 9-2 vote.
We also think it arguable that the study is authorized by subsection
(1) of section 2902(b). The study clearly is one that is designed to
foster mutual understanding between Japan and the United States. /7/
Although the language of the subsection suggests that the projects
contemplated are to be done by universities and other non-governmental
research institutions, as the National Institute of Education is
authorized to carry out educational research, it could qualify as an
institution of scholarly research for the study of Japanese education.
The Commission's authority to "enter into contracts, grants, or other
arrangements," 22 U.S.C. Section 2905(8), provides the means to carry
out the Commission's functions set forth in section 2902(b). We think
the language, "or other arrangements" is broad enough to encompass
transfers of Commission funds so long as the transfer is to an entity
carrying out functions authorized by section 2902(b). As we have found
the Department to be such an entity for the proposed study, it follows
that the transfer can be made to the Department.
Although the circumstances were somewhat different, /8/ our
conclusion is, to some extent, supported by our decision in B-182398,
March 29, 1976 (letter to Senator Laxalt). In that case, we permitted
the Secretary Labor to transfer funds, pursuant to Title III of the
Comprehensive Employment and Training Act of 1973, (CETA) Pub. L. No.
92-203, 87 Stat. 839, 857, 29 U.S.C. Sections and following, to the
National Commission on the Observance of International Women's Year
where the legislation authorized the Secretary of Labor to enter into
"(g)rants, contracts, or other arrangements" to carry out research and
investigations in furtherance of the objectives of the CETA. /9/
We hope we have been of assistance.
Sincerely yours,
Comptroller General of the United States
(1) The correct amount appears to be $165,500.
(2) CULCON is a joint United States-Japan entity formally established
in 1968. Agreement on Joint Committee on Cultural and Educational
Cooperation, November, 8, 1968, United States-Japan, T.I.A. S. No.
6597.
(3) Dr. Elmendorf, Assistant Secretary for Postsecondary Education,
Department of Education, is also a member of the Commission.
(4) Although there appears to be a dispute on this issue, the
proposal may have been agreed to on condition of the outcome of
consultation between the Commission and its four congressional members,
and, as regards funding for the second year, subject to the Department's
seeking alternate sources before asking the Commission for additional
funds.
(5) It was intended that libraries include public libraries such as
the Library of Congress that are not connected with institutions of
higher learning. H.R. Rep. No. 503, 94th Cong., 1st Sess. 3 (1975).
(6) Unauthorized transfers also can create unlawful augmentations in
the appropriations of an agency receiving the funds. However, as
indicated above in the text, this is not a problem here because
Education has the necessary authority to accept funds from other
agencies.
(7) The Japanese are conducting a similar study of education in the
United States, and both studies already have been sanctioned by each
nation's highest officials.
(8) The executive order creating the National Commission on the
Observance of International Women's Year clearly indicated that Federal
agencies were to provide financial assistance to the Commission. Exec.
Order No. 11832, 40 Fed. Reg. 2415 (January 13, 1975).
(9) As we have found that the Commission's legislation authorizes it
to transfer monies to the Department for the study of education in
Japan, we need not discuss the Department's argument that the transfer
of funds can be made pursuant to the Economy Act, 31 U.S.C. Section 1535
-- an argument with which we disagree. In any event, as we understand
it, no Economy Act agreement has actually been concluded, nor is one now
contemplated.
FILE: B-217088 85-2 CPD 259
DATE: September 3, 1985
MATTER OF: Caprock Vermeer Equipment, Inc.
DIGEST:
CONTRACTS - PROTESTS - ALLEGATIONS - ERRONEOUS AGENCY ADVICE - NOT
PREJUDICIAL
1. Protest that contracting officer gave misleading advice as to
protest procedures is denied where protester was correctly instructed to
file its protest first with contracting agency and then, if necessary,
with GAO.
BIDS - QUALIFIED - DESCRIPTIVE LITERATURE - UNSOLICITED
2. Contracting agency properly considered unsolicited descriptive
literature furnished with protester's bid where the literature described
the same name and model number as equipment offered in the bid.
BIDS - RESPONSIVENESS - DESCRIPTIVE LITERATURE - UNSOLICITED -
DESCRIBING NONCONFORMING EQUIPMENT - BID NONRESPONSIVE
3. Protester's bid was properly rejected as nonresponsive where
unsolicited descriptive literature furnished with bid contained
handwritten annotations indicating salient feature of brand name
equipment to be procured was not included in bid.
BIDS - CONSTRUCTION - "FOUR CORNERS" OF BID - BIDDER'S INTENT AT TIME
OF BID OPENING
4. A bidder's intention must be determined from bid itself at the
time of bid opening, and contracting agency could not have considered
any postopening explanations by protester in determining responsiveness
of its bid.
BIDS - QUALIFIED - DESCRIPTIVE LITERATURE - UNSOLICITED
5. Statement, contained in successful bidder's unsolicited
descriptive literature, which was merely descriptive of its standard
equipment and not a limitation of the features otherwise described on
that bidder's specification sheet, which included salient features, did
not render bid ambiguous so as to require its rejection.
Caprock Vermeer Equipment, Inc. (Caprock), protests the award of a
contract to Valley Equipment Company, Inc. (Valley), d/b/a Ditch Witch
of El Paso, under invitation for bids (IFB) No. DAA007-84-B-0069, issued
by the Department of the Army. Caprock challenges the Army's rejection
of its "basic" bid as nonresponsive and, also, questions the
responsiveness of the awardee's bid. We deny the protest.
The IFB solicited bids for an earthmoving trencher, on a brand name
or equal basis, described as a "Ditch Witch Machine 5010-Diesel with
Backhoe, or Vermeer Model M455 with roll over protection option, or
equal in accordance with Salient Characteristics in Section C." The Army
received three bids prior to bid opening, two of which were submitted by
Caprock, and the third by Valley. The Army subsequently determined that
both Caprock's low "alternate" bid and its second low "basic" bid were
nonresponsive and made the award to Valley. Caprock originally
protested the rejection of its "basic" bid to the Army. After its
agency protest was denied, Caprock filed the instant protest alleging
that its bid was improperly rejected as nonresponsive and that it was
deliberately misled by the Army contracting officer as to the protest
procedures to be followed while the Army made the award.
Regarding Caprock's contention that it was misled by the Army, we
note that the record shows that the award to Valley had already been
made before Caprock inquired as to the protest procedures. Furthermore,
it appears that the contracting officer gave Caprock correct advice
consistent with our Bid Protest Procedures then in effect as to the
applicable protest procedures, i.e., filing with the agency and then, if
necessary, with this Office. See 4 C.F.R. Section 21.2(a) (1984). By
following the advice, Caprock was able to timely file its protest here.
We therefore find no merit in Caprock's allegation that it was misled by
the Army as to protest procedures.
We next consider Caprock's contention that the Army improperly
rejected its "basic" bid as nonresponsive. (Caprock does not protest
the rejection of its "alternate" bid.)
The IFB isted "4-way ROPS (rollover protective structures)" as a
salient characteristic. Caprock's "basic" bid offered the specified
Vermeer model M455. However, Caprock also furnished descriptive
literature with its bid consisting of a brochure which described the
model M455 and various options. The brochure contained handwritten
annotations which the Army maintains rendered Caprock's bid ambiguous as
to the inclusion of the ROPS salient feature. Specifically, the
literature listed "4-Post ROPS" as "optional," and the feature was not
included in Caprock's handwritten bracket as were other required salient
features. The Army concluded that Caprock's bid was nonresponsive for
failing to indicate clearly that Caprock would be obligated to furnish
the 4-Post ROPS feature under its bid.
Caprock argues that while its literature described the 4-Post ROPS as
an option, it included the specification sheet containing the salient
characteristics with its bid which did not describe the feature as
optional, and there was no statement that inclusion of the 4-Post ROPS
would result in additional cost. Caprock also questions why the Army
made no attempt to clarify any questions raised by the literature by
conducting discussions with Caprock. Additionally, Caprock asserts that
Valley's bid was similarly qualified by its literature and that the Army
acted arbitrarily by rejecting Caprock's bid while accepting Valley's
bid.
As explained below, we find the Army acted reasonably in determining
Caprock's bid ambiguous and, therefore, nonresponsive. The IFB
contained the standard "Brand Name or Equal" clause found in the
Department of Defense Supplement to the Federal Acquisition Regulation
(FAR). 48 C.F.R. Section 252.210-7000 (1984). The clause does not
require a bidder to furnish descriptive material unless an "equal"
product is being offered. Therefore, where, as here, the brand name
products specified are being offered, no descriptive literature is
required. The FAR provides for the consideration of unsolicited
descriptive under the procedures set forth in section 14.202-4(g) for
unsolicited bid samples, (48 C.F.R. Section 14.202-5(f) (1984)), as
follows:
"Unsolicited Samples. Bid samples furnished with a bid that
are not required by the invitation generally will not be
considered as qualifying the bid and will be disregarded.
However, the bid sample will not be disregarded if it is clear
from the bid or accompanying papers that the bidder's intention
was to qualify the bid. (See 14.404-2(d) if the qualification
does not conform to the solicitation.)" (Emphasis added.)
Section 14.040-2(d), as referred to above, provides in part:
"A bid shall be rejected when the bidder imposes conditions
that would modify requirements of the invitation or limit the
bidder's liability to the Government, since to allow the bidder to
impose such conditions would be prejudicial to other bidders."
Where the unsolicited literature describes the same name or model
number as the equipment offered in the bid, we have found a sufficient
relationship between the bid and literature so that the literature may
not be disregarded. See Devault Manufacturing Co., B-195959, Jan. 7,
1980, 80-1 CPD Paragraph 18 at 3. Since the literature furnished by
both Caprock and Valley contained the same name and model number as the
equipment offered in their bids, the contracting officer was required to
consider the literature as qualifying the bids.
Examination of the literature furnished by Caprock reveals that the
4-Post ROPS feature was identified as "optional" and, more importantly,
not contained in Caprock's handwritten bracket which we believe the Army
reasonably interpreted as indicating which features were to be included
in Caprock's bid. The literature thus indicates the 4-Post ROPS feature
was not being offered. While nothing in the bid itself suggested that
4-Post ROPS would not be furnished, the descriptive literature qualified
Caprock's bid so as to make it ambiguous because it was subject to two
interpretations, one of which would be nonresponsive. Under these
circumstances, Caprock's bid was properly rejected as nonresponsive.
See Franklin Instrument Co., Inc., B-204311, Feb. 8, 1982, 82-1 CPD
Paragraph 105 at 3.
Moreover, it would have been improper for the Army to request
clarification from Caprock of its descriptive literature, as Caprock
suggests, since this would afford the bidder an opportunity to alter the
responsiveness of its bid by extraneous material not available at bid
opening. See 49 Comp. Gen. 851, 852 (1970), citing B-166284, Apr. 14,
1969. A bidder's intention must be determined from the bid itself at
the time of bid opening, and only material then available may be
considered. Franklin Instrument Co., Inc., supra, at 2-3. Thus, the
Army could not have considered any postopening explanations by Caprock
in determining the responsiveness of the bid.
Finally, Caprock points out that Valley also furnished a brochure
which Caprock alleges casts doubt on the responsiveness of Valley's bid
regarding the 4-Post ROPS feature. Valley included a brochure
describing its Ditch Witch model 5010 and containing the statement
"Two-Post ROPS is standard." Unlike Caprock's literature, however, there
were no additional handwritten annotations indicating that the 4-Post
ROPS feature would not be made available under Valley's bid. We
therefore find the Army reasonably understood the statement as merely
descriptive of Valley's standard equipment and not necessarily a
limitation of the features otherwise described on Valley's bid
specification sheet, which included 4-Post ROPS. Accordingly, we reject
Caprock's allegation that the Army acted arbitrarily in accepting
Valley's bid.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-217087 85-1 CPD 345
DATE: March 25, 1985
MATTER OF: Airtronix, Inc.
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
1. Protest based on alleged solicitation improprieties which are
apparent prior to the closing date for receipt of initial proposals must
be filed prior to that date.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
2. Allegations first raised more than 10 days after protester was
aware of basis for protest are untimely.
CONTRACTORS - RESPONSIBILITY - DETERMINATION - REVIEW BY GAO -
AFFIRMATIVE FINDING ACCEPTED
3. Allegation that awardee engaged in questionable management
practices under previous government contracts involves a protest of an
affirmative determination of responsibility which GAO will not review
unless there is a showing of possible fraud on the part of the
contracting officials or an allegation of misapplication of definitive
responsibility criteria.
CONTRACTS - NEGOTIATION - AWARDS - NOTICE - TO UNSUCCESSFUL OFFERORS
4. Alleged agency failure to provide protester with proper notice of
award is a procedural deficiency which does not affect the validity of
an award.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - GENERAL
ACCOUNTING OFFICE REVIEW
5. GAO will not reevaluate proposals or substitute its judgment for
that of agency evaluators who have considerable discretion. Rather, GAO
will examine record to determine whether agency judgment was reasonable
and in accord with solicitation criteria.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
EXPERIENCE RATING
6. Where incumbent contractor's chief engineer joins staff of
competing firm, agency does not act unreasonably in not crediting other
firm with incumbent's accomplishments during performance of predecessor
contract.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL SUPERIORITY V. PRICE
7. Award to higher-priced, technically superior offeror is not
objectionable where solicitation states that technical considerations
are worth more than price and that awardee will be determined on basis
of cost/technical trade-off.
Airtronix, Inc., protests the award of a contract to Aeromet, Inc.,
for "Meterological Environment Test Support" (METS), to the Kwajalein
Missile Range under request for proposals (RFP) No. DASG60-84-R-0015
issued by the Army Ballistic Missile Defense Systems Command (BMDSCOM).
The crux of Airtronix's protest is that it offered a technically
superior proposal at a lower price than did Aeromet.
We find the protest without merit.
The RFP was issued by BMDSCOM on February 23, 1984, with an April 9,
1984 closing date for the submission of initial proposals. By letter
dated July 3, 1984, Airtronix was advised that its proposal contained 11
significant deficiencies, and was advised to submit a revised proposal
by July 25, which it did. Airtronix submitted its best and final offer
on September 5. On or about September 21, Airtronix was sent a notice
of the planned award to Aeromet; award was made and notice of award was
sent to Airtronix on September 28. Airtronix protested to BMDSCOM on
October 12, 1984. The agency denied Airtronix's protest on October 30
and Airtronix filed its protest in our Office on November 9.
Airtronix;s protest consists of a broad spectrum of mostly
speculative assumptions regarding Aeromet's proposal and the BMDSCOM
evaluation process, many of which are untimely or otherwise not for
consideration.
First, Airtronix alleges that the RFP specifications were poorly
drafted and biased. That allegation is untimely under our Bid Protest
Procedures, since it was not filed until after the closing date for the
receipt of initial proposals. 4 C.F.R. Section 21.2(b)(1) (1984); Carl
Goldberg Models, Inc., B-213046, May 22, 1984, 84-1 C.P.D. Paragraph
539. Similarly, an allegation that award was made to the higher-priced
proposal is untimely since the solicitation evaluation criteria
specifically stated that since the contract is a cost-type, award would
not necessarily be made based on lowest evaluated price, but proposals
would be considered on the basis of cost-technical trade off, with
technical being of more relative importance than price.
Second Airtronix alleges that it was not permitted to meet with
agency personnel to discuss technical deficiencies in its proposal. The
agency's July 3 letter indicated that deficiencies would be addressed in
writing rather than orally. After Airtronix objected in a letter dated
July 17 that it was entitled to face-to-face discussions, the agency
declined to provide same, and advised Airtronix by letter dated
September 4 that discussions had been concluded. Airtronix first
protested this issue on October 12 and thus is untimely under 4 C.F.R.
Section 21.2(b)(2) because it did not protest within 10 days. We note
that, contrary to Airtronix's assumption, there is no requirement that
an agency conduct face-to-face discussions under a negotiated
procurement. Department of Labor Day Care Parent's Association, 54
Comp. Gen. 1035 (1975), 75-1 C.P.D. Paragraph 353; Gulton Industries,
Inc., B-180734, May 31, 1974, 74-1 C.P.D. Paragraph 293.
Airtronix alleges that Aeromet has engaged in questionable management
practices under prior government contracts. This involves a question of
responsibility. By awarding the contract to Aeromet, the contracting
officer made an affirmative determination of responsibility, which our
Office will not review unless there is a showing of feasible fraud on
the part of contracting officials or an allegation of misapplication of
definitive responsibility criteria, neither of which is present here.
Medi Coach, Inc., B-214034, May 2, 1984, 84-1 C.P.D. Paragraph 501.
Airtronix alleges that a double standard was applied with regard to
overhead rates. It speculates that Aeromet was permitted to use a higher
overhead rate than Airtronix, and it bases this speculation on its
purported knowledge of Aeromet's rate on previous contracts. In fact,
Aeromet used a lower overhead rate on this contract than did Airtronix.
Two of Airtronix's allegations are factually inaccurate. Airtronix
speculates that Aeromet's proposal included an experimental remote
pilotless vehicle (RPV), which Airtronix was not given an opportunity to
offer. In fact, Aeromet did not propose an RPV. Airtronix also states
that BMDSCOM misadvised Airtronix on September 25 that an award decision
had not yet been reached. In fact, by an updated letter, apparently
mailed on September 21, the agency advised Airtronix that it planned to
make award to Aeromet. By letter dated September 28, the date on which
award was actually made, BMDSCOM advised Airtronix that award had been
made to Aeromet. In any event, agency failure to provide proper notice
of award is a procedural deficiency which does not affect the validity
of an award. Emerson Electric Co., B-213382, Feb. 23, 1984, 84-1 C.P.D.
Paragraph 233.
Airtronix asserts that its proposal should have been regarded more
highly than it was. In this regard the firm contends that an unnamed
Air Force employee provided Airtronix with a favorable view of its
proposal and was critical of Aeromet's proposal. The firm also states
that in December of 1983 it hired as its chief engineer Aeromet's chief
engineer, who was in charge of the METS projects for the period of
1978-1983. Thus, Airtronix asserts that Aeromet's evaluated superior
technical effort must have been based on prior years' experience since,
as of December 1983, Aeromet's chief engineer became Airtronix's chief
engineer. Airtronix also asserts that it was not credited for the
innovative technical measures with respect to the METS project which it
asserts were conceived by Airtronix's chief engineer at the time that he
worked for Aeromet.
Obviously Airtronix assumes that all of Aeromet's experience and
expertise in performing the METS contract attached personnally to the
chief engineer and, therefore, when the chief engineer shifted over to
Airtronix, it became entitled to credit for all of the program
accomplishments effected by Aeromet in performing the contract. This is
an unwarranted assumption. Our review shows that Airtronix was given
credit for the high caliber of certain company officers. However, the
RFP evaluation criteria focused equally on corporate experience, in
which Aeromet was evaluated highly while, Airtronix, a newly formed
company, was evaluated poorly.
Morever, Airtronix's initial proposal, which the Army maintained in
the competitive range even though it was evaluated as marginal, received
a total technical score of less than one-third of Aeromet's score. This
was based on the Airtronix proposal's brevity and failure to address the
statement of work, compared to Aeromet's proposal which fully met the
statement of work requirements. Also, Airtronix's proposal had other
major deficiencies, including the failure to identify certain required
key personnel. Airtronix did not remedy these deficiencies in its
revised proposals, including its best and final proposal, and the final
technical score differential between the two remained the same.
The determination of the relative merits of a proposal, particularly
with respect to technical considerations, is primarily a matter of
administrative discretion, and the exercise of that discretion will not
be disturbed unless it is shown to be arbitrary or in violation of the
procurement laws or regulations. General Management Systems, Inc.,
B-214246, Sept. 25, 1984, 84-2 C.P.D. Paragraph 351. Our Office will
not reevaluate technical proposals or resolve disputes over the scoring
of technical proposals. Leo Kanner Associates, B-213520, Mar. 13, 1984,
84-1 C.P.D. Paragraph 299.
Here, Airtronix has a fundamental disagreement with BMDSCOM over the
degree to which it should be credited with the accomplishments of an
individual which were achieved during the predecessor contract for
another firm. The fact that the protester disagrees with the agency's
evaluation does not render the evaluation unreasonable. Ocean Data
Equipment Division of Data Instruments, Inc., B-209776, Sept. 29, 1983,
83-2 C.P.D. Paragraph 387.
We find that the evaluators could reasonably have concluded that
Airtronix was not entitled to credit for Aeromet's contract performance
because of the shift of one individual to its firm. In addition, we
find that BDMSCOM reasonably concluded that Airtronix's technical
proposal was deficient in addressing substantial areas under the
statement of work. We have no basis to conclude that the evaluators
were arbitrary or unfair in their assessment of Airtronix's proposal,
notwithstanding Airtronix's assertion regarding the unnamed Air Force
source.
Finally, with respect to Airtronix's complaint that award was made to
a higher-priced offeror, we simply point out that the agency was not
required to make award on the basis of low price. The solicitation
provided that costs would not be controlling, and that the award
decision would be based on a cost/technical trade-off, with technical
concerns of relatively more importance than price. In light of the
difference in technical score between the Airtronix and Aeromet
proposals, we see no basis to object to the award decision.
We deny the protest in part and dismiss it in part.
Harry R. Van Cleve
General Counsel
FILE: B-217086 84-2 CPD 678
DATE: December 17, 1984
MATTER OF: McGregor Manufacturing Corporation
BIDS - COMPETITIVE SYSTEM - EQUAL BIDDING BASIS FOR ALL BIDDERS -
GOVERNMENT EQUALIZING DIFFERENCES
Fact that bidder enjoys competitive advantage because its bid price
is based on a foreign currency is not an unfair advantage that the
government is required to equalize among the bidders.
McGregor Manufacturing Corporation (MMC) protests the fairness of the
United States Army Aviation Systems Command's requiring it to match the
bid price of a Canadian company on the non-set-aside portion of
invitation for bids No. DAAJ09-84-B206. MMC argues that the canadian
company has an unfair advantage because its bid price is based on
Canadian dollars, which have a lower value when compared to American
dollars.
We summarily deny the protest.
We have recognized that a firm may enjoy a competitive advantage by
virtue of its own particular circumstances. As long as the contractor's
competitive advantage is not the result of preference or unfair action
by the government, the government is not required to equalize the
competitive position of the bidders. Rodenberg's Floor Coatings, Inc.,
B-211908, June 20, 1983, 83-2 C.P.D. Paragraph 5.
Comptroller General of the United States
B-217085, Nov 28, 1984, 84-2 CPD 586
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Adverse agency action effect
DIGEST:
Protest that late best and final offer was improperly rejected is
dismissed as untimely because it was received by GAO more that 10
working days after the protester received written notice from the agency
of the rejection and the reason for it.
CDS, Inc.:
CDS, Inc. protests the rejection by the Department of the Army of its
untimely second best and final offer submitted in connection with
request for proposals (RFP) No. DAAK11-84-R-0038. CDS contends that the
Army should have accepted its offer because it was sent the day before
the due date by United States Postal Service Express Mail.
We dismiss this protests as untimely under our Bid Protest
Procedures. The procedures provide that protests based on grounds other
than improprieties which are apparent before bid opening or the closing
date for receipt of initial proposals must be filed not later than 10
working days after the basis for protest is known or should have been
known, whichever is earlier. 4 C.F.R. Sec. 21.2(b)(2) (1984).
Enclosed with CDS' protest was a letter dated September 27, 1984 from
the agency which rejected CDS' second best and final offer because it
was late. Consequently, CDS was aware of its basis for protest when it
received the agency's letter. While the record does not indicate when
CDS received the letter, it is reasonable to assume that receipt was
within one calendar week. Grangeville Chamber of Commerce, B-215392,
June 27, 1984, 84-1 CPD Para. 682. CDS' protest to our Office was dated
October 28 and was received on November 7, more than a month after it
can be assumed that CDS knew the basis for protest. Therefore, the
protest will not be considered on its merits and is dismissed. COMP GEN
(UP)
FILE: B-217081
DATE: March 8, 1985
MATTER OF: Christopher P. Jolly - Real Estate Expenses - Loan
Origination Fee
DIGEST:
OFFICERS AND EMPLOYEES - TRANSFERS - REAL ESTATE EXPENSES - LOAN
ORIGINATION FEE
Transferred employee claimed 3-3/4 percent loan origination fee but
agency limited reimbursement to 1 percent, based on HUD's advice that a
1 percent loan origination fee is customary in the locality of the
employee's new residence. The information provided by HUD creates a
rebuttable presumption as to the prevailing loan origination fee, and
the employee has not submitted evidence to rebut this presumption.
Accordingly, the employee may not be reimbursed for an additional 2-3/
4percent fee. Distinguishes 63 Comp. Gen. 456.
The Director of the Office of Administration, U.S. Department of
Transportation, Federal Highway Administration, requests our decision on
the claim of Mr. Christopher P. Jolly. Mr. Jolly requests reimbursement
for a loan origination fee which exceeds the customary rate for the
locality of his new residence, as established by the Department of
Housing and Urban Development (HUD). We hold that Mr. Jolly may not be
reimbursed for an amount greater than the customary charge quoted by
HUD, absent evidence that the prevailing rate is higher.
Effective January 26, 1984, Mr. Jolly was transferred from Pierre,
South Dakota, to Albany, New York. He financed the purchase of a new
residence in Albany by obtaining an adjustable rate mortgage, and
incurred a 3-3/4 percent loan origination fee in the amount of
$1,995.25.
The agency allowed Mr. Jolly reimbursement for a 1 percent loan
origination fee, based on advice from the Albany, New York, office of
HUD that lenders in the Albany area customarily charge a fee of 1
percent. In suspending reimbursement for the additional 2-3/4 percent,
the agency cited our decision in Roger J. Salem, B-214018, June 27,
1984, 63 Comp. Gen. 456. In that decision, discussed more fully below,
we denied an employee's claim for 4 percent of a 5 percent fee
characterized by the lending institution as a "loan origination fee,"
determining that the bulk of the fee represented a nonreimbursable
mortgage discount.
Mr. Jolly reclaimed reimbursement for the disallowed 2-3/4 percent
fee, contending that his situation is distinguishable from that involved
in Salem. Specifically, Mr. Jolly asserts that the 3-3/4 percent fee he
incurred represents a bona fine loan origination fee, and not a mortgage
discount, because: (1) his loan agreement did not provide that payment
of the 3-3/4 percent fee would reduce the interest rate on his mortgage;
(2) the settlement statement indicates that he was not assessed any fee
for a mortgage discount; and (3) the lending institution has explained
that the 3-3/4 percent fee was assessed to cover costs of loan
origination.
Against this background, the agency questions whether it may allow
Mr. Jolly's claim for the additional 2-3/4 percent fee.
Under 5 U.S.C. Section 5724a(a)(4) (1982), an employee may be
reimbursed for the expenses he incurs in selling and/or purchasing a
residence pursuant to a permanent change of station. Effective October
1, 1982, the implementing regulations in para. 2-6.2d(1) of the Federal
Travel Regulations, FPMR 101-7 (Supp. 4, August 23, 1982) (FTR), were
amended to permit reimbursement for loan origination fees and similar
charges which are not specifically disallowed by FTR para. 2-6.2d(2).
See Robert E. Kigerl, 62 Comp. Gen. 534 (1983). The term "loan
origination fee," as used in FTR para. 2-6.2d(1), refers to a lender's
fee for administrative expenses, including costs of originating the
loan, processing documents, and related work. See 62 Comp. Gen 456;
and Kigerl, cited above. Reimbursement for a loan origination fee is
limited to the amount customarily charged in the locality of the
employee's new residence. See 5 U.S.C. Section 5724a(a)(4), as
implemented by FTR para. 2-6.2d(1). See also Patricia A. Grablin,
B-211310, October 4, 1983.
In Roger J. Salem, cited by the agency, an employee incurred a 5
percent loan fee which was characterized on the settlement statement as
a "loan origination fee." The agency allowed the employee reimbursement
for 1 percent of the loan amount, based on HUD's advice that a 1 percent
loan origination fee was customary in the locality. we denied the
employee's claim for the additional 4 percent, determining that the bulk
of the lender's 5 percent charge represented a mortgage discount or
"points," reimbursement for which is specifically prohibited by FTR
para. 2-6.2d(2)(b). In reaching this determination, we noted that the
employee's loan agreement showed that payment of the 5 percent fee
reduced the interest rate on his mortgage, and that it was inconceivable
that the lender's administrative expenses could have amounted to 5
percent of the loan amount.
We agree with Mr. Jolly that the facts of his case are
distinguishable from those involved in Salem. Specifically, we find
nothing in the loan documents to show that the interest rate on his
mortgage was adjusted downward after he paid the 3-3/4 percent fee.
However, the lack of evidence that the 3-3/4 percent fee included a
mortgage discount does not mean that the entire fee is reimbursable as a
loan origination fee under FTR para. 2-6.2d(1).
As we stated previously, FTR para. 2-6.2d(1) limits reimbursement for
a loan origination fee to the amount customarily paid in the locality of
the employee's new residence. In Gary A. Clark, B-213740, February 15,
1984, we held that an agency may rely on technical assistance provided
by the local office of HUD in determining the customary loan origination
fee for a given locality. We recognized in Clark that the information
supplied by HUD does not establish inflexible rates or limit the charges
which may be imposed by lenders. However, we held that this information
creates a rebuttable presumption as to the prevailing loan origination
fee charged in the area, and is controlling in the absence of evidence
overcoming that presumption.
In this case, HUD's advice that a 1 percent loan origination fee is
customary in Albany creates a rebuttable presumption as to the
prevailing rate in that area. Although Mr. Jolly incurred a loan
origination fee in excess of 1 percent, he has not submitted any
evidence showing that lenders in the Albany area typically charge a
higher rate. Under these circumstances, Mr. Jolly has not rebutted the
presumption that a 1 percent loan origination fee is customary in the
Albany area, and he may not be reimbursed for a higher amount.
Accordingly, based on the present record, Mr. Jolly may not be
reimbursed for an additional 2-3/4 percent loan origination fee.
Comptroller General
of the United States
FILE: B-217080
DATE: June 3, 1985
MATTER OF: Ann Knodle - Flexible Work Schedule - Office Closed Due
to Weather Conditions
OFFIECERS AND EMPLOYEES - HOURS OF WORK - FLEXIBLE HOURS OF
EMPLOYMENT - FEDERAL EMP;OYEES FLEXABLE AND COMPRESSED WORK SCHEDULES
ACT - EFFECT
Agency and union had negotiated agreement authorizing employees to
use 5/4-9 flexible work schedule under 5 U.S.C. Section 6122(a).
Employee elected first day of pay period as extra day off or "flex day"
under flexible schedule. When agency was closed for that entire day
because of weather conditions, she claimed entitlement to an additional
day off in lieu of that day. Employees taking day off or "flex day"
under flexible schedule are in a nonpay status on those days, in
contrast to employees on approved leave. Since the employee was not in
a pay status on the day agency closed because of weather conditions, she
has no entitlement to an additional day off. Her situation is not
analogous to a holiday because employees are in pay status on holidays.
This matter was submitted to us as a request for an advance decision
from the Acting Director, Personnel Division, Internal Revenue Service
(IRS). It was submitted at the request of the National Treasury
Employees Union (NTEU). The question presented is whether an employee
on a flexible work schedule is entitled to an additional day off when
the agency is closed because of weather conditions on a previously
scheduled day off or "flex day." For the reasons set forth below, we
hold that the employee has no entitlement to an additional day off
without charge to leave or credit hours.
On March 4, 1983, a negotiated agreement between the IRS, Denver
District, and the NTEU was signed creating an alternate work schedule
program (AWS) for bargaining unit employees. Article 2 of the agreement
makes available the 5/4-9 work schedule which, within a pay period of 10
workdays, consists of 8 9-hour days, 1 8-hour day and 1 nonworkday.
With exceptions not relevant here, an employee may choose either of the
Mondays or Fridays of the pay period as the designated nonworkday.
Ms. Ann Knodle, an employee of the IRS Denver District Office,
elected the first Monday of each 2-week pay period as her nonworkday.
One such Monday was November 28, 1983. On that day a major snowstorm
caused the Denver District Director, IRS, to close the district offices
for the entire day. The IRS took the position that employees on the 5/
4-9 schedule who had elected Monday, November 28, 1983, as their
nonworkday or "flex day" would not be given an additional day off. The
IRS reasoned that a nonworkday under an AWS is the equivalent of a
Saturday or Sunday and that snow emergencies on a Saturday or Sunday do
not entitle employees to an additional day off.
The union position is that the memorandum agreement establishing the
5/4-9 schedule is premised on the notion that for each 10-workday
period, one of the workdays will become a nonworkday at the employee's
choosing. The important fact, according to the union position, is that
the day chosen must have first been a workday before it could be
converted into a nonworkday by the employee's election. In support of
its position the union refers generally to the Federal Personnel Manual,
and specifically to the Internal Revenue Manual (IRM) 0601 and IRM 1273
which the union quotes as follows: "Whenever an emergency occurs and
the office is closed the entire day, this is considered a nonworkday for
leave purposes, and no leave is charged to regular employees who are in
pay status." According to the union, since the emergency closure day is
recognized as a nonworkday by the IRS manual, it is not a day that can
be selected under the 5/4-9 schedule to be the employee's day off. The
union believes that this situation is analogous to a holiday which would
result in an "in lieu of" day off, and, therefore, should be treated in
the same manner under an AWS.
Alternative work schedules were first authorized by the Federal
Employee's Flexible and Compressed Work Schedule Act of 1978, Pub. L.
No. 95-390, 92 Stat. 755 (1978). After that authority expired in 1982,
the AWS program was again authorized, this time by the Federal Employees
Flexible and Compressed Work Schedules Act of 1982, Pub. L. No. 97-221,
96 Stat. 227 (1982), which is codified as 5 U.S.C. Sections 6120 to 6133
(1982). This is the statutory authority for the March 4, 1983,
agreement between IRS and NTEU. Under 5 U.S.C. Section 6133(a), the
Office of Personnel Management (OPM) is authorized to prescribe
regulations for AWS programs, as it was under the 1978 Act.
A flexible schedule, such as the 5/4-9 schedule, worked by Ms.
Knodle, is authorized by 5 U.S.C. Section 6122(a), which provides that:
"(a) Notwithstanding section 6101 of this title, each agency
may establish, in accordance with this subchapter, programs which
allow the use of flexible schedules which include --
"(1) designated hours and days during which an employee on such
a schedule must be present for work; and
"(2) designated hours during which an employee on such a
schedule may elect the time of such employee's arrival at and
departure from work, solely for such purpose or, if and to the
extent permitted, for the purpose of accumulating credit hours to
reduce the length of the workweek or another workday.
An election by an employee referred to in paragraph (2) shall
be subject to limitations generally prescribed to ensure that the
duties and requirements of the employee's position are fulfilled."
Thus, an employee who is working a flexible, 5/4-9 schedule will
account for 80 hours in each pay period in less than 10 workdays. Put
another way, an employee on a flexible, 5/4-9 schedule will be in a pay
status for 80 hours in each pay period, but those 80 hours will be
completed in less than 10 days. It must be remembered that employees
who are in a sick or annual leave status on a regular workday are in a
pay status.
It is true, as the union argues, that under an AWS, before a day
during a pay period is designated as an employee's extra day off or
"flex day," that day must be a normal workday. However, once a
particular day is scheduled and approved as an employee's "flex day,"
then that day ceases to be a workday for the employee for the period of
time covered by the schedule, and the employee is in a nonpay status
during that day. We note that under the Agreement of March 3, 1984,
between IRS and NTEU, once an employee chooses a flexible schedule,
there are restrictions on when that schedule may be changed. Article 3,
paragraph B of the Agreement provides that:
"Employees under a work schedule in this agreement will remain
under that schedule for at least two (2) pay periods. Employees
electing to change a work schedule must request a change in
writing from their supervisor at least one (1) pay period prior to
the end of the two (2) pay periods. The election period for Tax
Auditors must be three (3) pay periods prior to any change. All
work schedules will start at the beginning of a pay period."
Thus, once a flexible schedule is selected by an employee, it is not
easily changed. Within that schedule, for each 2-week pay period, under
the 5/4-9 plan, there are 9 workdays during which the employee must
account for 80 hours in a pay status through work, credit hours, or paid
leave. The tenth day is the day off or "flex day," and the employee is
not in a pay status on that day. Just as the agency argues, that day is
analogous to a Saturday or Sunday.
We note that the IRS did not charge employees who were on scheduled
annual or sick leave with leave for the snow day November 28, 1983.
Employees who were on sick or annual leave on that day were in a pay
status, and the agency action in not charging their leave accounts
following the closing of the agency was correct. See 43 Comp. Gen. 501
(1964); Michael J. Johnson, B-194432, October 16, 1980.
Since employees who were on approved leave were in a pay status on
November 28, 1983, but employees taking the day off as a "flex day"
under a flexible schedule were in a nonpay status on that day, treating
the two groups differently was correct.
The NTEU argues that the "flex day" is like a holiday and the
employee is entitled to an "in lieu of" day when the agency is closed on
a "flex day." However, the same distinction arises here as in the cases
of annual and sick leave. On a holiday, an employee is in a pay status
or, when the holiday falls on a nonwork day, an employee is entitled to
be paid for the day by statute or Executive order. Under a flexible
schedule, for the employee's extra day off or "flex day," there is no
entitlement to pay for that day. Under this schedule an employee has
voluntarily agreed to earn her pay for that pay period on the other 9
workdays of that pay period.
Accordingly, since Ms. Knodle was not scheduled to work on November
28, 1983, under her flexible schedule, she was in a nonpay status on
that day and is not entitled to another day off without a charge to
leave or credit hours.
Comptroller General of the United States
FILE: B-217073; B-218131 85-1 CPD 406
DATE: April 9, 1985
MATTER OF: Browning-Ferris Industries of the South Atlantic, Inc;
Reliable Trash Service Co. of Md., Inc.
BIDS - INVITATION FOR BIDS - AMBIGUOUS - NOT PREJUDICE
1. Although solicitation was ambiguous for failure to indicate that
option prices would be evaluated, award may be based on such an
evaluation since government's needs will be met and there is no evidence
in the record that other bidders would be prejudiced. Bare conclusion
by agency that some potential bidders may have been discouraged from
competing because of the ambiguity in the solicitation, standing alone,
is not sufficient to support a finding of prejudice.
BIDS - PREPARATION - COSTS
2. Successful protester's claim for costs of pursuing protest and
bid preparation will not be considered unless agency does not make
recommended award to protester.
Reliable Trash Service Co. of Md., Inc., protests the cancellation of
invitation for bids (IFB) No. F44600-84-B-0057 issued by Langley Air
Force Base for refuse collection services. Reliable, the prospective
awardee under the canceled IFB, contends that the agency has failed to
show any compelling reason for the cancellation. Another bidder,
Browning-Ferris Industries of the South Atlantic, Inc. (BFI), argues
that award to Reliable under the original IFB would be improper. We
sustain Reliable's protest and deny BFI's protest. /1/
The IFB called for bids for refuse collection services at seven
government installations for a total of 4 years, one base year and 3
option years. The base performance period under the contract was to be
1 year, from October 1, 1984 or the date of award, whichever was later,
through September 30, 1985. The agency retained the right to extend the
contract for the 3 option years.
The IFB did not indicate whether the bidders' option year prices
would be evaluated for purposes of making award. The standard clause
providing for evaluation of option prices, Federal Acquisition
Regulation (FAR), Section 52.217-5, 48 C.F.R. Section 52.217-5, was set
out in the IFB as one of a list of FAR clauses which, if marked with a
check, were incorporated in the IFB; the clause, however, was not
checked. Nevertheless, the agency evaluated the seven bids received on
the basis of their aggregate prices for the base and option years.
Reliable was the low bidder on the basis of its aggregate bid for the 4
years.
Before award was made to Reliable, the agency canceled the
solicitation. The agency states that it intended to evaluate both base
and option year prices, but that the contracting officer inadvertently
failed to mark the Evaluation of Options clause to incorporate it in the
IFB. The agency argues, the BFI agrees, that the failure to indicate
whether option prices would be evaluated created an ambiguity in the IFB
which may have misled potential bidders and discouraged them from
competing. The agency maintains that in view of the large business
investment required by the contractor to perform these services, an
award on the basis of just the base period was not practicable, and
concludes that cancellation of the IFB and resolicitation were justified
by the prejudice it maintains was caused to potential bidders by the
defect in the solicitation.
Reliable contends that there is no evidence that the seven bidders
under the IFB were prejudiced as a result of the agency's failure to
incorporate the Evaluation of Options clause. Reliable points out that
none of the bidders, except BFI, has claimed that it was misled by the
IFB, and questions the reasonableness of BFI's claim of prejudice.
Reliable also contends that the agency's conclusion that potential
bidders were prejudiced by the defect in the IFB is based on speculation
only, and does not constitute the compelling reason required under the
FAR, 48 C.F.R. Section 14.404-1, to justify cancellation.
We agree with the agency that the IFB was ambiguous because the
Evaluation of Options clause was omitted. An IFB must clearly state the
basis on which bids will be evaluated for award. Williams Elevator Co.,
B-210049, Sept. 15, 1983, 83-2 CPD Paragraph 327. More specifically,
the regulations provide that a solicitation which calls for bidders to
submit option prices must state whether the evaluation will include or
exclude option prices. FAR, 48 C.F.R. Section 17.203( b). Here, due to
omission of the Evaluation of Options clause, the IFB failed to indicate
how bids would be evaluated -- whether based on aggregate prices or the
base year price alone.
The fact that a solicitation is deficient in some way does not
justify cancellation after bid opening, however, if award under the IFB
would meet the government's actual needs and there is no showing of
prejudice to other bidders. Richard Hoffman Corp., B-212775.2, Dec. 7,
1983, 83-2 CPD Paragraph 656. Here, the agency does not dispute that
award under the original IFB based on evaluation of option prices will
satisfy the government's actual needs, since Reliable, the prospective
awardee, has offered to provide the refuse collection services called
for in the IFB.
More importantly, we see nothing in the record to support the
agency's conclusion that award under the original IFB would prejudice
other bidders. The agency itself does not contend that any of the seven
actual bidders would be prejudiced. We see nothing in the bidding
pattern of the seven bidders to suggest that any bidder was misled by
the ambiguity in the solicitation into assuming that only base year
prices would be evaluated. Three bidders submitted level bids and four
submitted escalating bids, with each option year's price increased by a
uniform percentage. There thus is no indication that any bid was
structured with a low base year price relative to the option year
prices, as would be expected if a bidder assumed that only its base year
price would be evaluated.
The agency not only fails to argue that any of the bidders were
prejudiced, but also disagrees with the claim by BFI -- the only bidder
which protested award under the IFB -- that it was misled by the
ambiguity. BFI contends only that it would have submitted different,
presumably lower, base year prices had it known that award would be made
on the basis of aggregate prices. BFI has offered nothing beyond its
bare allegation, however, to explain how the omission of the Evaluation
of Options clause reasonably could have affected its base year bid. In
fact, we find it more likely that a bidder would offer the lowest
possible price for the base year if it thought that price would be the
only one evaluated. In our view, BFI's self-serving contention that it
would have bid differently is insufficient to support a finding of
prejudice. See A to Z Typewriter Co.; Allen Typewriter Co., B-215830.2;
B-215830.3, Feb. 14, 1985, 85-1 CPD Paragraph 198. In addition, as the
agency notes, BFI is the incumbent contractor, having been awarded the
two most recent contracts for a total of 5 years. Bids under the IFBs
for those two contracts were evaluated using both base and option years
prices. Due to its experience as the incumbent contractor, it seems
likely that BFI would have assumed that the agency intended to continue
its practice of evaluating option year prices.
In cases where we have upheld cancellation of an ambiguous
solicitation, the ambiguity affected how the bidders had bid, and award
under the solicitation therefore would have resulted in prejudice to
some of the bidders. Compare Uni-Con Floors, Inc., B-193016, Apr. 19,
1979, 79-1 CPD Paragraph 278 (cancellation is appropriate where IFB is
ambiguous regarding whether bidders were to submit separate or lump sum
bids and bidders clearly would have bid differently had the IFB been
clear) with A to Z Typewriter Co.; Allen Typewriter Co., supra (award
may be made under IFB for requirements contract which failed to state
expressly that each unit price would be multiplied by the estimated
quantity for evaluation purposes, since no bidder showed it was
prejudiced by the ambiguity). Here, the agency does not contend that
any of the actual bidders was misled as to its intention to evaluate
option year prices, and BFI, the only bidder to claim prejudice, has
failed to explain in any reasonable way how its bid was affected by the
ambiguity.
We recognize that allowing a contracting agency to make award based
on one interpretation of an ambiguous solicitation may be inappropriate
in some cases, where it would create the appearance of allowing the
agency to manipulate the procurement after the fact and select a
contractor on an arbitrary basis. In our view, this case does not
present that problem, since making award based on both base and option
year prices clearly reflects the agency's actual needs for refuse
collection services on a continuing basis and is consistent with the
agency's past practice, which was well-known to BFI as the incumbent
contractor.
With regard to the contention that potential bidders were misled by
the ambiguity in the IFB, BFI maintains that because the Evaluation of
Options clause was omitted, it was not clear to other potential bidders
that the agency intended ultimately to extend the contract through the 3
option years. Without such an indication of the agency's intent, BFI
argues, potential bidders might have been discouraged from bidding on a
contract covering the base year only, since the services called for
under the IFB require a substantial capital investment.
We find this argument unpersuasive. The IFB included a standard
clause, set out in FAR, 48 C.F.R. Section 52.217-9, which reserves to
the agency the right to extend the contract through the option years.
By including this clause in the IFB, the agency gave bidders a clear
indication of its intent to consider extending the contract beyond the
base year. /2/ Omission of the Evaluation of Options clause cannot
reasonably be interpreted to make the agency's intent ambiguous, since
evaluating option prices for purposes of the initial base year award is
not a prerequisite to later exercising the options. To the contrary,
the agency may retain the right to exercise options without evaluating
option prices in making the initial award. See FAR, 48 C.F.R. Sections
17.203(b), 17.206(a), 17.208(a), (c). Thus, we believe that potential
bidders whose incentive for competing was the possibility that the
contract would be extended through the option years could not reasonably
have concluded, based on the omission of the Evaluation of Options
clause, that the agency was unlikely to exercise the options.
In any event, there is nothing in the record to indicate that any
potential bidders refrained from bidding because of the ambiguity in the
IFB caused by the omission of the Evaluation of Options clause.
Although the agency states that there was prejudice to potential
bidders, it has not explained in any way who the potential bidders might
be or how they might have been prejudiced. While prejudice to potential
bidders can be sufficient to justify cancellation, in our view the
finding of prejudice must be based on more than the agency's bare
speculation that some potential bidders may have been misled in some
unspecified way. Cf. Jackson Marine Co., B-212882, B-212882.2, Apr. 10,
1984, 84-1 CPD Paragraph 402 (agency reasonably concluded that potential
bidders may have been discouraged from bidding under defective IFB where
only two bids were received in response to 21 invitations sent out by
agency); Doug Lent, Inc., B-209287.2, June 21, 1983, 83-2 CPD Paragraph
9 (agency reasonably determined that potential bidders were prejudiced
by defective specification in light of protest filed by a potential
bidder who was precluded from competing because of defective
specification).
Here, the agency has not elaborated at all on the rationale for its
conclusion that potential bidders would be prejudiced. In our view,
basing cancellation of the IFB on such a conclusory finding by the
agency, standing alone, effectively would nullify the requirement for a
showing of prejudice, since, in all cases involving deficient
solicitations, some potential bidder conceivably might have been misled
or otherwise prejudiced. The requirement for a showing of prejudice to
support an agency's decision to cancel is based on the serious
consequences of canceling a solicitation after bid opening. Such a
cancellation tends to discourage competition because it results in
making all bids public without award, which is contrary to the interests
of the low bidder, and because rejection of all bids means that bidders
have expended resources in preparation of their bids without the
possibility of acceptance. See GAF Corp.; Minnesota Mining and
Manufacturing Co., 53 Comp. Gen. 586, 591-592 (1974), 74-1 CPD Paragraph
68.
We find that the agency has not shown that award under the original
IFB would fail to meet the government's needs or would result in
prejudice to other bidders. We therefore conclude that award under the
original IFB based on the bidders' aggregate prices for the base and
option years would be proper. By separate letter to the contracting
agency, we are recommending that the IFB be reinstated and award be made
to Reliable as low bidder, if that firm's bid is found responsive and
the firm responsible.
In view of our conclusion that award under the IFB is proper, we
sustain Reliable's protest against cancellation of the IFB and deny
BFI's protester against award to Reliable.
Reliable also claims the costs of preparing its bid and pursuing the
protest under section 21.6(d) of our Bid Protest Regulations, 4 C.F.R.
Section 21.6(d) (1985)). Our regulations provide, however, that we will
not award such costs to a successful protester where we recommend that
the contract be awarded to the protester and the protester receives the
award. Bid Protest Regulations, Section 21.6(e). Here, we recommend
that, if otherwise proper, award be made to Reliable. Consequently, we
will not consider Reliable's claim unless that firm does not receive the
award.
Comptroller General
of the United States
(1) BFI filed its protest challenging award to Reliable under the
original IFB before the agency canceled the solicitation. Cancellation
of a solicitation generally renders academic a protest against award
under the solicitation. Petralloy Corporation d/b/a Factech Company,
B-212592, Sept. 21, 1983, 83-2 CPD Paragraph 354. We conclude, however,
that the action originally challenged by BFI -- award to Reliable under
the IFB -- is proper. Therefore, we have considered BFI's protest on
the merits along with the agency's position that cancellation was
justified.
(2) The FAR clause contemplates that the contract will specify a date
by which the agency will notify the contractor that it has decided to
exercise the options. As BFI notes, the solicitation does not specify
such a date. We regard this as a minor deficiency which does not cast
doubt on the agency's expressed intention to retain the right to extend
the contract through the option years.
B-217072, Nov 26, 1984, 84-2 CPD 575
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Adverse agency action effect
DIGEST:
Protest to GAO after denial of protest by contracting agency will not
be considered if initial protest was untimely.
Joule Engineering Corporation:
Joule Engineering Corporation protests a determination by the
National Aeronautics and Space Administration that Joule is not within
the competitive range under request for proposals No. 5-01919/603 issued
by the Goddard Space Flight Center.
We dismiss the protest.
By letter dated August 8, 1984, NASA informed Joule that the firm's
proposal had been determined not to be in the competitive range and
would not be further considered for an award. On September 26, Joule
protested this determination to the contracting agency. On October 26,
NASA denied the protest, and Joule filed a protest in our Office on
November 8.
If a protest is filed initially with a contracting agency, a
subsequent protest to GAO filed within 10 days after the protester
learns of adverse agency action will be considered, provided the initial
protest to the agency was timely filed. 4 C.F.R. Sec. 21.2(a) (1984).
To be timely filed with NASA, Joule's protest must have been received by
NASA within 10 working days after Joule knew or should have known the
basis for the protest. 4 C.F.R. Sec. 21.2(b).
Joule knew of the basis for the protest when it received the August 8
letter from NASA. Since Joule's protest to NASA was not filed with the
agency until September 26, we consider that protest to have been
untimely and dismiss Joule's subsequent protest to this Office.
Municipality of Anchorage, B-215100, May 22, 1984, 84-1 C.P.D. Para.
557. COMP GEN (UP)
FILE: B-217070 85-1 CPD 437
DATE: April 17, 1985
MATTER OF: Aaron Refrigeration Services
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - ADVERSE AGENCY ACTION EFFECT
1. Where protester orally conveys to the contracting officer its
concern that the specifications are defective and should be corrected,
communication between the protester and the contracting officer suffices
as protest to contracting agency. Consequently, since protest to agency
was timely filed and subsequent protest to GAO was filed within 10
working days of agency's confirmation of its requirements, matter is
timely presented to GAO under Bid Protest Procedures.
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - MINIMUM NEEDS
REQUIREMENT - ADMINISTRATION DETERMINATION - REASONABLENESS
2. Protest that specifications do not represent the actual needs of
the government is denied where record shows that solicitation
requirements are reasonably related to the agency's needs and that
bidders were provided with an adequate basis to submit well-informed
bids. The mere presence of risk in a solicitation does not make the
solicitation inappropriate, and specifications are not rendered
materially defective because of minor errors which have not been shown
to have misled protester or any other bidder.
BIDS - PREPARATION - COSTS - NONCOMPENSABLE
3. Claim for bid preparation costs is denied where protest has been
found to be without merit and because claimant never submitted a bid
under protested procurement.
CONTRACTS - PROTESTS - PREPARATION - COSTS - NONCOMPENSABLE
4. Claims for costs of pursuing protest, including attorney's fees,
are denied. Competition in Contracting Act of 1984, under which claims
are made, does not apply to protest filed before January 15, 1985.
Aaron Refrigeration Services (Aaron) protests various portions of the
specifications in invitation for bids (IFB) N62472-84-B-9201 issued by
the Naval Facilities Engineering Command (Navy) for housing heating,
ventilating and air-conditioning maintenance at the Philadelphia Naval
Base. In addition, Aaron claims bid preparation costs and costs of
pursuing the protest.
We deny the protest and claims.
Aaron protests that as a result of its onsite investigation at the
Philadelphia Naval Base, it found that "the IFB specifications were
materially defective as not meeting the actual and true needs of the
Government." Aaron telephoned the contracting activity on November 5,
1984, to state its objections and those objections form the basis of the
present protest. First, Aaron states that the IFB specifications
incorrectly identify the 350 furnaces in the New Mustin Field Housing
units as Day-Night brand, when not all units are that brand and, hence,
they would require different parts and maintenance. In reviewing this
contention, the Navy found that while not all of the furnaces are
Day-Night brand, they are all gas-fired and, consequently, have the same
servicing requirements.
Next, Aaron asserts that the electric heat systems and old
air-conditioning systems in the Mustin Field brick units will be
replaced with new gas-fired furnaces and new air-conditioning systems,
thus changing the amount and type of maintenance required. Here, the
Navy determined that the installation dates for the new heating and
air-conditioning units are unknown because the city must first install
gas lines and because not all new units will come on line at the same
time. Thus, repair and service of the existing electric heat systems
will be required for an indefinite period until replacement of old units
is complete.
Finally, Aaron alleges that the specifications incorrectly identify
the model number and quantity of furnaces and air-conditioning systems
in the Capehart housing units. The Navy acknowledges that while three
model numbers contained typographical errors, the incorrect numbers, in
fact, did not represent a different model of the manufacturer. The Navy
was determined that while two homes had furnaces manufactured by a
company different from the one identified in the specifications, the
cost range for maintenance will be the same.
On the basis of these findings, the Navy determined that there was
not a significant change reflected as far as bidding costs were
concerned. Moreover, since emergency service for base housing was being
accomplished by means of small purchase contracts and regular
maintenance services were being deferred, and in view of the critical
need in the winter season for continuing service to family housing
units, the Navy determined that delay of the scheduled bid opening to
correct the specifications was unnecessary.
The Navy points out that, although Aaron expressed its concerns to
the contracting activity telephonically on November 5, 1984, 3 days
prior to bid opening, the Navy advised Aaron on November 7 that it had
determined that the specifications were adequate and that bid opening
need not be postponed. Bids were opened as scheduled at 2 p.m. on
November 8, and this Office received Aaron's protest letter at 3:08 p.
m. on the same date. Thus, the Navy contends that, since the protest
alleges specification improprieties and there was no written protest to
the Navy prior to bid opening, the protest should be dismissed as
untimely pursuant to Section 21.2 (b)(1) of our Bid Protest Procedures
(4 C.F.R. part 21 (1984)), which provides that a protest based on
alleged improprieties in the solicitation which are apparent prior to
bid opening shall be filed prior to bid opening.
Aaron counters that in conversations with the Navy on November 5, 6,
and the morning of bid opening on November 8, it made it clear to the
Navy that unless as IFB amendment was issued to correct the
specifications, it was protesting the bid opening and any contract that
might be awarded. Aaron emphasizes that the alleged defects in the
specifications it noted during its onsite investigation at the
Philadelphia Naval Base were communicated to the Navy in three separate
telephone calls on November 5, 6, and 8, and that until bid opening on
November 8, Aaron firmly believed that the Navy was going to take the
corrective action it sought by issuing an IFB amendment that would
include an extension of the bid opening date.
It is undisputed that on November 5, Aaron telephoned the Navy and
told the Navy that it considered the specifications to be defective
concerning actual quantities required, the proper types of equipment to
be maintained, and the scope of work actually needed. In this regard,
we have held that the intent to protest may be conveyed by an expression
of dissatisfaction and a request for corrective action. Worldwide
Marine, Inc., B-212640, Feb. 7, 1984, 84-1 C.P.D. Paragraph 152. In our
view, the record clearly shows that Aaron conveyed on November 5 its
dissatisfaction with the specifications and its belief that the
solicitation should be clarified. Therefore, we conclude that Aaron
filed a timely protest with the Navy under section 21.2(b)(1) of our Bid
Protest Procedures, and its subsequent protest to this Office, filed
within 10 working days of the agency's confirmation of its requirements,
is a timely appeal under section 21.2(a) of our Procedures, of the
contracting agency's adverse action on the protest at that level.
Worldwide Marine, Inc., B-212640, supra.
Turning to the merits of Aaron's protest, that the specifications
were materially defective as not meeting the true needs of the
government, the responsibility for drafting proper specifications to
meet the government's minimum needs is the contracting agency's. Rack
Engineering Company, B-208615, Mar. 10, 1983, 83-1 C.P.D. Paragraph 242.
The specifications must be unambiguous, state the needs accurately, and
provide for equal competition. Memorex Corporation, B-212660, Feb. 7,
1984, 84-1 C.P.D. Paragraph 153. The fact that an agency has not
detailed every facet of how performance is to be achieved does not
render the specification inadequate for competition. Industrial
Maintenance Services, Inc., B-207949, Sept. 29, 1982, 82-2 C.P.D.
Paragraph 296 at 5. There is no legal requirement that competition be
based on specifications which state work in such detail so as to
completely eliminate the possibility that the contractor will be
required to perform work other than that specified in the solicitation.
Diesel-Electric Sales & Service, Inc., B-206922, Jul. 27, 1982, 82-2
C.P.D. Paragraph 84, citing Klein-Sieb Advertising and Public Relations,
Inc., B-200399, Sept. 28, 1981, 81-2 C.P.D. Paragraph 251.
We have further stated that the fact that some of the terms of an
invitation are in some way deficient does not, of itself, constitute a
compelling reason to cancel a solicitation. Dyneteria, Incorporated;
Tecom, Incorporated, B-210684; B-210684.2, Dec. 21, 1983, 84-1 C.P.D.
Paragraph 10. Thus, a contract award may be made even where there are
deficiencies in the specifications in the absence of a showing of
competitive prejudice and award would serve the actual needs of the
government. GAF Corporation, et. al., 53 Comp. Gen. 586 (1974), 74-1
C.P.D. Paragraph 68; Hild Floor Machine Co., Inc., B-196419, Feb. 19,
1980, 80-1 C.P.D. Paragraph 140.
In our view, the specifications set forth in the solicitation
adequately state the Navy's needs. The Navy admits that three furnace
and air-conditioning system model numbers contained typographical
errors, two of the 350 furnaces in the New Mustin Field Housing units
were not the "Day-Night" brand listed in the specifications, and certain
of the heat and air-conditioning units would be replaced after the city
installs gas lines. The Navy determined that the overall impact of
these deficiencies was minimal, that similar servicing requirements
would be required and the cost range for maintenance would be the same.
Thus, the Navy determined that all potential bidders would be equally
affected and could take such relatively minor uncertainties into account
in computing their bids. Here, prospective bidders basically were on
notice of what would be expected of them during contract performance
and, presumably, each is knowledgeable enough to recognize the effort
and risks associated with that expectation. Tally Support Services,
Inc., B-209232, June 27, 1983, 83-2 C.P.D. Paragraph 22. The mere
presence of risk in a procurement does not make the competition
improper, Industrial Maintenance Services, Inc., B-207949, supra; nor
do minor deficiencies in the drafting of specifications require the
cancellation of a solicitation where bidders had an adequate basis for
the preparation of well-informed bids, Saxon Corporation, B-214977, Aug.
21, 1984, 84-2 C. P.D. Paragraph 205, the performance requirements are
essentially the same, Dyneteria, Incorporated; Tecom, Incorporated,
B-210684; B-210684.2, supra, and the cost effect is minimal. Dunlin
Corporation, B-207964, Jan. 4, 1983, 83-1 C.P.D. Paragraph 7.
Furthermore, the fact that the Navy received four bids and no bidder
complained about the specifications leads us to believe that the small
degree of uncertainty present here did not prejudice the bidders in any
significant way.
We also deny Aaron's protest that it has been prejudiced by these
minor deficiencies in the specifications, or that it was unable to bid
on the basis of incorrect or incomplete specifications, because we
cannot conclude that the protester has suffered any actual prejudice.
Since Aaron states that its protest is premised on its site examination
before bid opening and its actual knowledge of the correct unit
nomenclatures, models and brand names, it clearly was not required to
guess at the correct specifications. Further, there has been no showing
that the misidentification of comparable equipment items had a
prejudicial impact on prices. In this regard, Aaron has neither alleged
nor shown that bidders were misled into bidding unrealistically low
prices that Aaron could not have matched due to its knowledge of the
correct specifications. See United States Contracting Corporation,
B-210275, Aug. 22, 1983, 83-2 C.P.D. Paragraph 222. The record simply
does not support a finding that the protester was prejudiced by the
allegedly deficient specifications in this case.
In accord with the above, we deny the protest.
Although Aaron never submitted a bid on this procurement, it has also
requested bid preparation and protest costs as well as attorney's fees
under the Competition in Contracting Act of 1984, Pub. L. No. 98-369,
title VII, 98 Stat. 1175 (1984). However, amendments made to the
procurement protest system -- including the award of reasonable
attorney's fees in specified circumstances -- by subtitle "D" of the
Competition In Contracting Act of 1984 apply only with respect to
protests filed after January 14, 1985. As Aaron's protest was filed in
this Office on November 8, 1984, it is not covered under the act.
Safeguard Maintenance Corp., B-215588.2, Nov. 14, 1984, 84-2 C.P.D.
Paragraph 532. Apart from this new authority, costs other than bid
preparation costs may not be awarded. See Hub Testing Laboratories --
Claim for Costs, B-199368.3, June 18, 1982, 82-1 C.P.D. Paragraph 602.
For example, anticipated profits or the legal fees incurred in pursuing
a bid protest at the General Accounting Office were not compensable
prior to the act. Hub Testing Laboratories -- Claim for Costs, id. The
standard for entitlement to bid preparation costs is whether the
procurement agency's actions with respect to the claimant's bid were
arbitrary and capricious -- that is, were not taken in good faith, were
contrary to law or regulation, or had no reasonable basis -- and, but
for those actions, the claimant would have had a substantial chance of
receiving the award. See Da Neal Construction, Inc., B-208469.3, Dec.
14, 1983, 83-2 C.P.D. Paragraph 682. In view of our conclusions on the
merits of Aaron's protest and because Aaron never submitted a bid,
Aaron's claim for bid preparation costs is denied.
Harry R. Van Cleve
General Counsel
FILE: B-217069; B-218006 85-1 CPD 473
DATE: April 26, 1985
MATTER OF: IBI Security Service Inc.
CONTRACTS - PRICES - ADJUSTMENT - INCREASES
1. A contractor is not entitled to a price adjustment for vacation
benefits payable in the option years of a contract pursuant to the basic
wage determination in the contract because such increased labor costs
are not contemplated by the "Fair Labor Standards Act and Service
Contract Act -- Price -- Adjustment" clause of the solicitation, which
only relates to wage rate changes mandated by the Department of Labor
after award of the contract.
BIDS - REJECTION - PROPRIETY
2. A bid was properly rejected as mistaken for not including in the
first-year price factors covering anticipated increased labor costs to
be incurred in the option years of a contract where the solicitation
clearly provided that the options, if exercised, would be at the same
price as the first-year price.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
3. Alleged defects in an invitation for bids, apparent prior to bid
opening, must be apparent prior to bid opening, must be protested to
either the contracting agency or GAO prior to the time set for opening
bids in order to be considered.
CONTRACTS - PROTESTS - ALLEGATIONS - NOT PREJUDICIAL
4. A minor defect occasioned by possibly confusing terminology in a
solicitation provision does not constitute a ground for sustaining the
protest where the protester does not allege that it was prejudiced in
any manner by the defect, and there is no indication that the
competition was not conducted on an equal basis.
IBI Security Service Inc. protests the rejection of its bid on the
basis of mistake under invitation for bids (IFB) No. N62472-84-B-9202,
issued by the Department of the Navy for guard services. IBI asserts
that its bid is not mistaken, and that certain provisions of the IFB
were ambiguous. We deny the protest in part and dismiss it in part.
Background
The IFB solicited bids to provide guard services for a 1-year period,
with the right of the government to extend the term of the contract for
up to two additional 1-year periods. Prices were requested for the
first year only. The option years were not evaluated, but bidders were
informed that the options, if exercised, would be at the same price as
the first-year price. A revised wage rate determination from the
Department of Labor's Wage and Hour Division was incorporated into the
solicitation.
IBI was the seventh low bidder. However, five of the six lower bids
were rejected as nonresponsive for failure to acknowledge certain
solicitation amendments; the other lower bidder was permitted to
withdraw because it acknowledged a mistake in preparing its bid.
As a result, IBI appeared to be the low, responsive bidder. However,
because of the large difference between IBI's bid and the government
estimate, the firm was asked to verify its bid, and a preaward survey
was initiated. IBI did not verify its bid, but indicated that it had
not factored costs for vacation time into its bid since it anticipated
hiring all new employees for the contract, who would not be entitled to
vacaction pay during the first year. The Navy believed that the bid was
therefore mistaken because the IFB provided for up to two option years,
and the incorporated wage rate determination required that vacation
benefits were to be paid to all employees after the first year of
service.
In addition, the Navy concluded that IBI had based its bid upon a
mistaken interpretation of paragraph 4 of section 00005 of the IFB.
That paragraph required the contractor to supervise its employees
through "informal guaramounts," which involve providing instructions to
relief guards at shift changes. IBI indicated that its interpretation
was based upon the customary meaning of the term in the industry; that
is, instructions are given to the relief guards by a supervisor when the
guards report to their posts. However, the Navy pointed out that the
provision, although using the word "informal," specifically required the
assembly of relief personnel for "inspection, arming, announcements, and
a general transfer of information from one shift's personnel to the
next." The Navy noted that the IFB specified that this requirement was
in addition to the time necessary for the posting and relief of
personnel. It concluded that IBI's bid was mistaken because the actual
required procedure was a more formal one which would involve additional
costs beyond those associated with IBI's interpretation.
The Navy has determined to reject IBI's bid in accordance with the
Federal Acquisition Regulation (FAR), 48 C.F.R. Section 14.406-3(g)(5)(
ii) (1984), which provides that when a bidder fails or refuses to
furnish evidence in support of a suspected or alleged mistake, the
contracting officer shall consider the bid as submitted unless there are
indications of error so clear as to reasonably justify the conclusion
that acceptance of the bid would be unfair to the bidder or to the other
bidders. Because of the stated urgency of the requirement, the Navy has
informed us that it will proceed with award notwithstanding the protest.
IBI asserts that its bid is not mistaken, and is based upon its
correct interpretation of the solicitation provisions in issue. The
firm urges that it is entitled to the award as the remaining low,
responsive bidder. In the alternative, IBI contends that the
solicitation is ambiguous and should be canceled, corrected, and
reissued.
Analysis
As indicated, bidders were not asked to price the two option years,
which, if exercised, were to be at the same price as the first-year
price, and the Navy evaluated the bids on the basis of the first-year
only. IBI did not factor vacation pay into its bid price because it
assumed that it could obtain a price adjustment for these increased
costs if the options were exercised. The firm relied upon the "Fair
Labor Standards Act and Service Contract Act - Price Adjustment" clause
of the IFB, which provides that the contract price will be adjusted to
reflect increases or decreases in the minimum prevailing wage
determination, including fringe benefits, as mandated by the Department
of Labor. The IFB specified that the options, if exercised, would be
subject to any labor rate adjustments required by the clause.
IBI errs in assuming that this clause entitles the contractor to a
price adjustment if it is required to pay vacation benefits in the
option years. We held in Serv-Air, Inc.; AVCO, 60 Comp. Gen. 44 (1980),
80-2 CPD Paragraph 317, that the clause only provides for contract price
adjustments if the contractor is compelled to increase employees' wages
to comply with a minimum wage change mandated by the Department of
Labor. Here, the revised wage determination incorproated into the IFB
already provides that guards are to be paid 1 week's vacation after 1
year of service, and 2 weeks' vacation after 2 years of service.
Therefore, IBI could not obtain a price adjustment under the clause if
the options were exercised because the vacation pay requirement would
not result from a change in the Department of Labor minimum wage
determination. Id.
Since IBI incorrectly assumed that it could obtain a price adjustment
for vacation pay if the options were exercised, the firm failed to
project the costs associated with such required benefits and failed to
include in the first-year price factors covering the increeases. We
agree with the agency that this constituted a mistake in bid. See 50
Comp. Gen. 655 (1971).
Although IBI argues that the agency cannot consider the impact of
vacation pay on its costs for the option years because prices for those
years were not solicited or evaluated, we find no merit to this
contention. The essential point here is that the IFB provided that the
options, if exercised, would be at the same price as the first-year
price. Bidders therefore were on notice that they had to include, in
their first-year bids, a factor covering the projected cost increase for
vacation pay in the option years. Since IBI admittedly did not do so,
the Navy properly rejected the bid under FAR, Section 14.406-3(g)( 5)
(ii), supra.
IBI also contends that it correctly interpreted the IFB provision
with respect to what constitutes an "informal guardmount." According to
the firm, the customary meaning of the term in the industry is that
relief guards reporting to their posts are given necessary instructions
at their posts by the shift supervisor. IBI believes that the Navy's
contrary interpretation is inherently unreasonable because the
guardmount provision requires that personnel be assembled for the
transfer of information from one shift to the next, and assembly at a
central point would leave the guard posts unmanned.
We believe the issue is untimely. In general, we regard allegedly
ambiguous language in an IFB as an issue that must be raised prior to
bid opening. Skytop Plastics, Inc., B-207022, Oct. 15, 1982, 82-2 CPD
Paragraph 340. The only exception is where the protester was unaware,
prior to bid opening, that its interpretation of the IFB provision was
not the only one possible. This exception is recognized because, absent
awareness of a second interpretation, the protester cannot be aware of
an ambiguity. See Conrac Corp., B-205562, Apr. 5, 1982, 82-1 CPD
Paragraph 309. However, we cannot conclude that this exception is
applicable here.
Although the Navy used the term "informal guardmount," the provision
in question clearly indicated that the assembly of all relief personnel
at a central point was a definite requirement. In this regard, while
IBI may have interpreted the provision in accordance with industry
usage, it should have been obvious to the firm that the provision was
susceptible to a second interpretation, since the requirement for
assembly at a central point allegedly is inconsistent with the customary
industry meaning of an "informal guardmount." Because IBI did not allege
the ambiguous nature of the provision until nearly 2 months after bids
were opened, the issue is untimely and will not be considered.
IBI also complains that the solicitation was ambiguous because it
referred to "Class A" and "B" guards performing certain work
requirements, whereas the incorporated wage determination provided
hourly rates for "Guard I" and "Guard II" (respectively, $5.68 and
$7.23). The wage determination defines "Guard I" as an employee who may
or may not be armed, but who is generally not required to demonstrate
weapons proficiency and physical fitness, and is assigned duties not
requiring the exercise of a large degree of discretion. In contrast,
"Guard II" is defined as an employee who is required to demonstrate
weapons proficiency and physical fitness, and whose duties require
specialized training and the exercise of judgment in handling
emergencies. The IFB provided that "Class A" guards were to be armed
and demonstrate weapons proficiency, but "Class B" guards were not to be
armed.
IBI asserts that this caused confusion because the terminology
between the IFB and the wage determination did not coincide. We find no
merit in the assertion.
We agree with the Navy that a bidder should have been able to
determine from the IFB's requirements that "Guard II" is equivalent to a
"Class A" guard, as only "Class A" guards were to be armed and
demonstrated weapons proficiency. Further, IBI never asserts that it
was prejudiced in any manner by this minor defect, and there is no
indication that other bidders were misled into competing on an unequal
basis. See Contact International Inc. -- Request for Reconsideration,
B-210082.2, Sept. 2, 1983, 83-2 CPD Paragraph 294.
Finally, IBI asserts in its latest submission to this Office that the
incorporated wage determination is unclear as to what standards
constitute weapons proficiency and physical fitness in a "Guard II"
employee. The matter is clearly untimely and will not be considered
since it involves an alleged solicitation improperity apparent prior to
bid opening. Grace Industries, Inc., B-216224, Sept. 6, 1984, 84-2 CPD
Paragraph 262.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
FILE: B-217067 85-1CPD 396
DATE: April 5, 1985
MATTER OF: CD Systems, Inc.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - BEST AND FINAL -
TECHNICALLY UNACCEPTABLE
GAO cannot question Army's decision to exclude protester's best and
final proposal from the competitive range of a procurement for an
effective insect repellent formulation given the Army's concerns about
the protester's description of two chemicals in its proposal;
consequently, facts that protester's initial technical proposal was in
competitive range and that protester proposed lower cost (compared with
other awardees) to do work were not significant.
CD System, Inc. (CDS), protests its failure to receive a research
contract award under request for proposals (RFP) No. DAMD17-84-R-0056
issued by the Department of the Army for a "Controlled-Release Personal
Use Arthropod Repellent Formulation."
We deny the protest.
The RFP described three phases of work effort referred to as: Phase
I (development of "Prototype repellent effective for 12 hours or more");
Phase II (those contractors submitting the best prototypes in Phase I
were to provide proposals for developing advanced prototypes); and
Phase III (Phase II advanced prototype to be scheduled for full scale
development). CDS claims that its price for the work was significantly
lower than at least one of the successful offerors and that CDS's
proposal, which CDS alleges was of acceptable technical merit, should,
therefore, have been accepted.
Following receipt of initial proposals in June 1984, the Army states
that a Source Selection Board (SSB) "reviewed, analyzed, and scored" all
the eight proposals received. In July 1984, the SSB determined that
seven of the eight proposals (including the one submitted by CDS)
"should be included in the competitive range" for the procurement.
The Army states that discussions were then conducted with CDS and the
other competitive-range offerors. Following discussions, best and final
offers were received from these offerors. Final offers were then
evaluated, and the SSB reconvened and recommended awards to all offerors
except CDS and another concern. As to the reason why CDS's proposal was
not accepted for award, the Army states that CDS's proposal was not
accepted for award, the Army states that CDS's best and final proposal
was "determined to be technically unacceptable."
CDS has raised several issued about the propriety of the technical
evaluation. Before considering those issues, we observe that it is not
the function of our Office to evaluate technical proposals;
consequently, the determination of the relative merits of a proposal,
particularly with respect to technical consideration, is primarily a
matter of procuring agency discretion, and the exercise of that
discretion and not be disturbed unless it is shown by the protester to
be arbitrary or in violation of the procurement laws or regulations.
General Management Systems, Inc., B-214246, Sept. 25, 1984, 84-2 C.P.D.
Paragraph 351.
Technical Evaluation
CDS criticizes the Army's technical evaluation. Specifically, CDS
argues that: (1) the Army misinterpreted CDS's proposal concerning
"continuous repellent release," the use of a certain chemical and the
use of "mineral spirits"; and (2) the Army improperly criticized CDS's
prior research efforts for the Army and CDS's "microencapsulation
technology."
As to the parts of CDS's proposal involving disputed interpretations,
CDS's proposal provided:
Repellent release:
"to release the aqueous solution from the 'dry particle' it is only
necessary to apply sheer stress."
Chemical formulation:
"CDS agrees to delete the incorporation of (a proposed chemical) from
its final candidate arthroped formulations produced under a subsequent
contract."
Mineral spirits:
"CDS would insure that toxicity and/or flammability is not markedly
increased."
The Army interpreted these provisions of CDS's proposal as follows:
Repellent release:
"The proposed repellent formulation, in order to provide
continuous repellent release, would require rubbing the treated
skin areas throughout the 12-hour period -- this was judged to be
impractical for use by military personnel."
Chemical formulation:
"The Source Evaluation Board requested that the proposed
formulation not include (the proposed chemical) yet the contractor
responded that they would intend to use (that chemical) in Phase I
but not in the final formulations."
Mineral spirits:
"The proposed use of mineral spirits in the formulation was
questioned because of its potential toxicity to humans and its
increase to the flammability of the product."
CDS argues that the Army erroneously interpreted CDS's repellent
release description and that an individual would not have to rub the
treated skin areas throughout the 12-hour period to obtain protection.
Nevertheless, we cannot conclude that the Army unreasonably interpreted
this provision since CDS specifically stated that rubbing (sheer stress)
was necessary to release the formulation and no time limit was placed on
the release time.
Concerning the use of the proposed chemical, CDS argues that its use
of the word "contract" in the phrase -- "final candidate . . .
formulations produced under subsequent contract" -- could only mean the
Phase I contract, not the Phase II contract as the Army suggests, and
that CDS was clearly conforming to the Army's request not to use this
substance in Phase I as the Army had requested. Nevertheless, given the
ordinary meaning of the word "subsequent," which CDS acknowledges to be
"following" -- in other words, a contract following Phase Im namely: a
Phase II or later contract, we cannot fault the Army for interpreting
this part of CDS's proposal as it did.
Finally, as to mineral spirits, CDS argues that the Army should have
accepted its assurances that CDS would ensure that toxicity and
flammability would not be increased even though CDS did not commit
itself to the elimination of this substance. Nevertheless, the
protester has not shown that the Army's technical judgment concerning
CDS's implicit reservation to continue use of mineral spirits is in
error.
As to the Army's alleged improper criticism of CDS's
"microencapsulation technology," we consider CDS's comments as
evidencing a difference of technical opinion between CDS and the Army
over the acceptability of that technology. This dispute does not mean,
however, that the Army's position has been shown to be unreasonable by
the protester under our review standard. Although CDS asserts that
other offerors' proposed use of this technology was found acceptable,
this assertion does not mean that CDS's own version of this technology
should be considered acceptable. As to CDS's prior research efforts,
the Army apparently intended its comments to be a statement of fact --
that CDS has not developed an acceptable product -- rather than a
criticism of CDS's research efforts for, as CDS recognizes, no other
firm has developed an acceptable product.
Non-Technical Issues
CDS has raised other issues relating to the Army's evaluation of
CDS's proposals in the areas of subcontracting, facilities, and cost.
Also, CDS alleges that the Army failed to meaningfully discuss some of
the criticisms of CDS's proposal.
Subcontracting
The Army noted that "many key elements (of CDS's proposal) . . .
will not be done by CDS but will be subcontracted elsewhere." As to
facilities, the Army noted that "CDS's proposed facilities are quite
small." In reply, CDS argues that the Army's findings constituted, in
effect, a finding of nonresponsibility which should have been referred
to the Small Business Administration (SBA) for decision. CDS also
argues that its subcontractors -- now its parent company after a recent
corporate acquisition by the subcontractor -- has adequate facilities.
A procuring agency may properly make use of responsibility-related
considerations as proposal evaluation criteria. This does not mean,
however, that proposed ratings in these areas constitute findings
involving responsibility which, in the case of small business, may be
for referral to the SBA in appropriate circumstances. Numax Electronics
Inc., B-210266, May 3, 1983, 83-1 C.P.D. Paragraph 470.
Nevertheless, to the extent that the Army lessened CDS's rating
merely because of CDS's proposal to use a subcontractor and did not
consider the subcontractor's proposed facilities, we think this was
improper since it is well-established that needed resources may be
obtained through subcontracting. See, for example, Federal Acquisition
Regulation, 48 C.F.R. Section 9.104-1(f)(1984).
But, given the Army's above criticisms of CDS's technical approach,
which involved "methodology" -- the most important technical factor --
we cannot conclude that CDS has shown that its proposal should have been
considered eligible for award even if it should have received a higher
rating under the "Facilities" evaluation factor of the RFP. Although
CDS notes that its initial technical proposal was considered to be
"acceptable" -- that is, in the competitive range for the procurement --
the Army insists that it subsequently determined CDS's proposal to be
technically unacceptable because of the above technical criticisms. CDS
argues that the Army's position is inconsistent with its initial finding
concerning CDS's proposal. We disagree.
A procuring agency may revise its competitive range decision,
eliminating from the range a proposal formerly considered to be within,
if discussions reveal that the proposal no longer has a reasonable
chance of acceptance; in this event, the offeror submitting the
proposal need not be provided with an opportunity to submit a revised
proposal. Pettibone Texas Corp., B-209910, June 13, 1983, 83-1 C.P.D.
Paragraph 649.
Regardless of the adjectives the Army used in describing CDS's
proposal, it is clear from the SSB narrative concerning the evaluation
of best and final proposals that the Army evaluators regarded CDS's
final proposal as being technically unacceptable as of that time.
CDS notes that the concerns found in the Army's final evaluation of
CDS's proposal are also found in the initial evaluation of CDS's
proposal. We do not find this inconsistent with the view that CDS's
final technical proposal was unacceptable. The Army apparently expected
that in discussions with CDS that CDS's proposal deficiencies would be
remedied; however, in the Army's view, CDS did not correct its
deficiencies through discussions and its final offer was therefore found
to be unacceptable because of these continuing concerns.
We have already concluded that the Army's conclusions about, or
interpretation of, CDS's proposal regarding the use of the proposed
chemical and the use of mineral spirits are not legally objectionable.
Moreover, both these concerns were specifically discussed with CDS.
Although it appears that the "repellent release" concern (and possibly
other proposal concerns) were not discussed with CDS, we cannot question
the Army's ultimate decision to exclude CDS's proposal from the
competitive range given its reasonable concerns about CDS's discussion
of the proposed chemical and mineral spirits since these were
substantive concerns obviously affecting the acceptability of CDS's
proposed formulation. Consequently, the Army's apparent failure to have
meaningful discussions concerning other perceived deficiencies in CDS's
proposal was not significant.
Given the proper exclusion of CDS's proposal based on technical
reasons, CDS's lower proposed cost simply is not relevant. As we said
in 52 Comp. Gen. 382 (1973) at page 388:
"We do not believe that 10 U.S.C. 2304(g) requires that price
must be considered in all instances in determining what proposals
are in a competitive range. To accord such an interpretation to
the law would place procurement officials in the unreasonable
position of having to consider the price proposals of all
offerors, no matter how deficient or unacceptable the accompanying
technical proposals might be. We do not believe that Congress
intended such a result. Rather, it seems to us that Congress
wanted to insure that the prices proposed by . . . offerors who
submit acceptable proposals would be considered prior to the
making of awards to higher priced offerors on the basis of
technical considerations alone."
CDS also alleges that another successful offeror's "business
activities are completely foreign to the technical requisites of the
contract" -- according to "Dun and Bradstreet data" -- and that the Army
considered the resources of that offeror's proposed subcontractors
(contrary to the Army's approach in evaluating CDS's proposed
subcontractor) in determining that the offeror's proposal had sufficient
merit for award. However, as noted above, an agency may properly
consider a subcontractor's resources described in a proposal in
assessing the merit of that proposal.
Finally, CDS argues that the Army's decision not to disclose its
"scoring and ranking methods . . . degrades the quality and credibility
of the evaluation process." Nevertheless, it is our view that the Army
disclosed sufficient information about the evaluation of CDS's proposal
so that the reasons why the Army excluded CDS's proposal from the
competitive range are evident and sufficient to support that exclusion.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-217066 85-1 CPD 140
DATE: February 5, 1985
MATTER OF: Siska Construction Company, Inc.
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - ADVERSE AGENCY ACTION EFFECT
1. Contracting agency's issuance of an amendment to a solicitation
which advised of the rejection of the sole bid received and the
resolicitation of the procurement constitutes adverse agency action on
protest against the rejection of that bid previously filed with the
agency and subsequent protest filed with GAO over 1 month later is
untimely.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
2. Protest alleging improprieties apparent in an invitation for bids
which was not filed until after bid opening is untimely.
BIDS - MULTIPLE - PROPRIETY
3. GAO will not consider on the merits a protest in which it is
alleged that a number of bidders are ineligible for award for a variety
of reasons but the protester does not identify which bidders are the
subject of its allegations nor to which bidder each allegation applies.
Siska Construction Company, Inc. (Siska), protests the rejection of
its bid as nonresponsive by the National Park Service, Department of the
Interior (Park Service), under invitation for bids (IFB) No. LOWE-117A,
a small business set-aside, for construction and renovations at Lowell
National Historical Park, Massachusetts. Upon rejection of Siska's bid,
the Park Service canceled the original solicitation and readvertised the
procurement since Siska's nonresponsive bid was the only bid received.
Siska's bid was rejected as nonresponsive since it was accompanied by
eight pages of text which the Park Service regarded as qualifying or
restricting the bid: Siska characterizes the text as "clarifications."
In addition to protesting the rejection of its bid, Siska protests
the readvertisement of this procurement, announced by the Park Service
in addendum No. 3 to the IFB, dated September 24, 1984. Siska also
objects to addendum No. 4, which extended the time period for receipt of
bids from November 8 to November 28, claiming that it gave other
potential bidders too much time in which to "ferret out" Siska's
subcontractors and suppliers in an effort to underbid Siska.
Furthermore, Siska claims that six of the nine concerns which submitted
bids in response to the readvertisement are ineligible to receive the
award. Siska claims that two of the bidders are affiliated companies
and, therefore, should be disqualified from the competition, and that
four other companies which submitted bids are "fronts" for much larger
companies and, thus, are not small business concerns eligible for the
award of a small business set-aside contract.
The protests are dismissed.
Siska was orally advised by the Park Service on September 13 that its
bid, opened on September 11, 1984, was nonresponsive to the IFB. By
letter dated September 17, Siska protested the rejection of its bid to
the contracting officer. On September 19, Siska received the
contracting officer's letter of September 17, which formally advised
Siska that its bid had been rejected. In that letter, the contracting
officer also advised that it was anticipated that the project would be
readvertised, through an addendum to the solicitation, in the near
future. By letter of September 25, the contracting officer denied
Siska's protest. Siska's protest to this Office of the rejection of its
bid was dated November 2 and was received (filed) on November 8.
Under our Bid Protest Procedures, 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) (1984). Siska's initial protest to the Park Service was
timely; the question is whether its subsequent protest to our Office
was filed within the 10-day period prescribed by our procedures. In
order to answer that question, we must determine when Siska actually or
constructively knew that the Park Service had acted adversely to its
agency level protest.
Siska states that it never received the September 25 letter in which
the contracting officer denied Siska's protest. We note, however, that
in addition to that letter, the agency also issued addendum No. 3 to the
IFB on September 24, which advised that "the bids received" under the
original solicitation "have been rejected" and that the project was
being resolicited with a new bid opening date of November 8. A copy of
the bidders' mailing list submitted by the Park Service shows that some
of the concerns listed, including Siska, were mailed copies of addendum
No. 3 on September 25. We believe that addendum No. 3, which advised
that the Park Service had rejected all bids and was proceeding with its
resolicitation of the procurement, was sufficient to place Siska on
notice that its protest had been denied. Although Siska states that its
protest to our Office was filed "within six days of the notice and
invitation to rebid," Siska has not specified the date on which it
received its copy of addendum No. 3. We note that in its chronology of
events, Siska has indicated September 24 as the date addendum No. 3 was
issued, but makes no mention as to when it received the addendum. We
note that the bidders' mailing list correctly listed Siska's mailing
address. Furthermore, Siska has offered no explanation of the over
1-month delay between the Park Service's mailing of addendum No. 3 and
Siska's filing of the protest in our Office. In the absence of any
explanation by Siska as to any delay in its receipt of addendum No. 3,
it is reasonable to assume that it was received within 1 calendar week.
Accordingly, it appears that Siska's protest filed with this Office on
November 8, over 1 month after the Park Service mailed addendum No. 3,
is untimely and will not be considered by our Office. See Halifax
Engineering, Inc., B-209822, Dec. 15, 1982, 82-2 C.P.D. Paragraph 537,
and Travel Corporation of America, B-209368, Nov. 22, 1982, 82-2 C.P.D.
Paragraph 467.
As for the resolicitation, by letter dated November 30, Siska
protested the Park Service's extension by addendum No. 4 of the period
for receipt of bids to November 28, claiming that the extension gave its
competitors an unfair advantage. Siska's protest of the new bid opening
date was received in this Office on December 10.
Our Bid Protest Procedures require that protests based upon alleged
improprieties in IFB's which are apparent prior to bid opening be filed
prior to bid opening. 4 C.F.R. Section 21.2(b)(1) (1984). T.L. Garden
& Associates, Inc., B-216318, Sept. 28, 1984, 84-2 C.P.D. Paragraph 368.
Since the alleged impropriety in the solicitation was not protested
until after bid opening, Siska's protest is untimely and will not be
considered.
In its protest filed on December 10, Siska also asserts that two of
the nine bidders improperly submitted bids on the readvertised
procurement since the two companies, which Siska does not name, are
controlled by the same board of directors. Siska further contends that
four of the bidders, which it also does not name, are not eligible for
award under this small business set-aside since these companies are
"fronts" for much larger corporations. In addition, Siska alleges that
some of these bidders are by themselves too large to qualify for a small
business set-aside.
We believe that where, as here, a protester alleges that a number of
other bidders are ineligible for award for a variety of reasons, a
fundamental requirement of an adequately detailed statement of protest
is that the protester identify those bidders and state to which each
allegation pertains. Siska has not done so and, in the absence of such
information, we do not believe it has stated a basis for protest in
sufficient detail to warrant further consideration. We note, however,
that the general rule is that multiple bids from more than one commonly
owned and/or controlled company may be accepted unless such multiple
bidding is prejudicial to the interests of the government or other
bidders. Pioneer Recovery Systems, Inc., B-214700, B-214878, Nov. 13,
1984, 84-2 C.P.D. Paragraph 520. Further, under 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
procurement purposes. Accordingly, our Office does not consider size
status protests. Hart Precision Products, Inc., B-216059, Aug. 22,
1984, 84-2 C.P.D. Paragraph 219.
Comptroller General
of the United States
FILE: B-217061 85-1 CPD 395
DATE: April 5, 1985
MATTER OF: C. J. Harter & Son/Machinery, Inc.
BIDS - RESPONSIVENESS - DESCRIPTIVE LITERATURE - UNSOLICITED -
DESCRIBING NONCONFORMING EQUIPMENT - BID NONRESPONSIVENESS
1. Where unsolicited descriptive literature included with bid
indicates that the product to be furnished does not comply with the IFB
specifications, the bid must be rejected as nonresponsive.
BIDS - RESPONSIVENESS - LOW PRICE OF BID NOT A FACTOR
2. A nonresponsive bid may not be accepted even though it would
result in cost savings to the government, since acceptance would be
contrary to the maintenance of the competitive bidding system.
BIDS - PRICES - REASONABLENESS - ADMINISTRATIAVE DETERMINATION
3. Determination of price reasonableness is a matter of
administrative discretion which will not be questioned unless the
determination by the procuring agency is unreasonable.
C. J. Harter & Son/Machinery, Inc. (Harter), protests the rejection
of its bid as nonresponsive by the Department of the Air Force under
invitation for bids (IFB) No. F41800-84-B-0209 for the procurement of
three computer numerically controlled turning center lathes. In
addition, Harter protests award of the contract to Monarch Machine Tool
Co. (Monarch) on the basis that Monarch's bid, which was about 35
percent higher than Harter's, was unreasonable as to price.
The protest is denied.
IFB No. F41800-84-B-0209 was issued by the San Antonio Air Force
Station, Texas, for the procurement of three numerically controlled
turning center lathes together with operator and maintenance training
and programming services. Harter submitted the law bid of $333,375 but
the Air Force rejected its bid as nonresponsive and made award to
Monarch, the fourth lowest bidder, as the low responsive bidder at a
price of $446,946. Harter had submitted as its bid only pages A-1 and
B-1 of the IFB: page A-1 is Standard Form 33 (revised 10/83) and page
B-1 is the schedule on which the bid prices were entered. When Harter
protested the rejection of its bid to the Air Force, the agency advised
Harter that its bid had been rejected as nonresponsive because it did
not conform to all the material terms and conditions of the IFB, in
particular, the delivery schedule. Harter then timely protested to our
Office. In its report to our Office concerning the protest, the Air
Force has taken the position that Harter's bid was nonresponsive not
only for the reason initially given but also because unsolicited
descriptive literature which Harter submitted with its bid at the best
created uncertainty as to whether the product it offered would meet
certain material specification requirements.
We conclude that the bid was nonresponsive for the latter reason. It
is therefore not necessary for us to determine whether pages A-1 and B-1
of the IFB incorporated by reference all the material terms and
conditions of the IFB.
The IFB schedule at page B-1 solicited bids on computer numerically
controlled turning center lathes in accordance with Military
Specification MIL-L-80219A, as amended. In its bid, Harter offered the
CNC Turning Center (lathe) model Baron 25 manufactured by
LeBlond-Makino. Although not required by the IFB, Harter submitted with
its bid descriptive literature on the Le-Blond-Makino Baron 25. In its
technical evaluation, the agency determined that the descriptive
literature submitted by Harter with its bid created an uncertainty as to
whether the Baron 25 lathe met many of the material requirements of the
specifications. For example, the IFB specifications at section 3.4.6
provide that slide departures shall be from a full floating zero
reference point and that slide acceleration and deceleration shall be
automatically controlled. The Air Force states that the descriptive
literature supplied by Harter on the Baron 25 model does not indicate
the availability of either a full floating zero reference point or
automatically controlled slide acceleration or deceleration. As a
further example of the uncertainties created by the descriptive
literature, paragraph 3.4.6.1 of the IFB specifications provide that the
memory capacity for the system shall be in accordance with paragraph
6.2.1, which provides that memory capacity shall not be less than 1,000
feet of part program storage. The literature submitted by Harter shows
that the Baron 25 is available with three control options, none of which
offers as a standard feature the required 1,000 feet of part program
storage memory. General Numeric (GN) system 3T, model F, does not offer
a part program storage memory capacity of at least 1,000 feet. The
literature shows that model GN GTB2 has a standard part program storage
memory of 66 feet with an optional memory capacity of 1,050 feet
available at a cost of $7,190. The GE 2000T control has a part program
storage memory of 64 feet which can be expanded to 1,092 feet with an
optional memory capacity which costs $5,095.
Where unsolicited literature contains the same model number and name
as the equipment offered in the bid, there is a sufficient relationship
between the bid and the descriptive literature so that the literature
may not be disregarded in evaluating the responsiveness of the bid. See
LogE/Spatial Data Systems, Inc., B-205016, May 17, 1982, 82-1 C.P.D.
Paragraph 465.
To be responsive a bid as submitted must represent an unequivocal
offer to meet the IFB specifications. See E.C. Campbell, Inc.,
B-185611, Mar. 4, 1976, 76-1 C.P.D. Paragraph 155. Where the inclusion
of a brochure creates doubt as to whether some of the specified features
required by the IFB would be included because they either were not
mentioned in the literature or were described as "options" the bid is
properly for rejection as nonresponsive. See Hughes-Henry Equipment
Co., B-200049, Nov. 5, 1980, 80-2 C.P.D. Paragraph 338 and Mars Data
Systems, B-198812, June 4, 1980, 80-1 C.P.D. Paragraph 385. Harter has
not attempted to rebut the Air Force's analysis of its descriptive
literature. On the basis of this record, therefore, we conclude that
Harter's bid was properly rejected by the agency as nonresponsive.
Harter also points to the price differential between its bid and
Monarch's as support for its contention that it should have been awarded
the contract, and argues that, at the very least, the solicitation
should have been canceled since Monarch's bid was about 35 percent more
than Harter's.
The fact that a cost savings would result to the government from
accepting the low bid does not provide a proper basis for accepting that
bid. We have consistently held that a nonresponsive bid may not be
accepted even though it would result in monetary savings since
acceptance would be contrary to the public interest in maintaining the
integrity of the competitive bidding system. Kaydon Corporation,
B-214920, July 11, 1984, 84-2 C.P.D. Paragraph 41.
Concerning Harter's alternate request that the IFB be canceled,
Federal Acquisition Regulation, 48 C.F.R. Section 14.404-1(c)(6)
authorizes cancellation where "all otherwise acceptable bids received
are at unreasonable prices." We have held that a determination
concerning price reasonableness is a matter of administrative discretion
which our Office will not question unless the determination is
unreasonable or there is a showing of bad faith or fraud. Milum Textile
Services, B-207043, Aug. 10, 1982, 82-2 C.P.D. Paragraph 124. The
record shows that eight bids were received under the IFB and that four
other bidders submitted bids higher than Monarch. Further, the agency
determined that Monarch's bid reflected the apparent market conditions.
Under the circumstances, we find nothing in the record which supports
Harter's contention that Monarch's bid should have been rejected and
that the solicitation should have been canceled on the basis that
Monarch's bid price is unreasonable.
Harry R. Van Cleve
General Counsel
FILE: B217059 85-1 CPD 513
DATE: May 8, 1985
MATTER OF: E.R. Johnson Associates, Inc.
DIGEST:
FREEDOM OF INFORMATION ACT - GENERAL ACCOUNTING OFFICE AUTHORITY
1. A firm's recourse to contracting agency documents the allegedly
support its position, but which it has not been able to secure from that
agency, is to pursue the disclosure remedies provided in the Freedom of
Information Act. GAO has no authority under that act to determine what
information other agencies must disclose.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - CRITERIA
- APPLICATION OF CRITERIA
2. Protest that technical evaluation of proposal was conducted
improperly and that award was not made in accord with the evaluation
scheme set forth in the RFP is denied. GAO'S in camera review of all of
the evaluation materials in light of issues raised by protest reveals no
basis for finding that agency's evaluation was arbitrary or unreasonable
or that evaluation officials abused their discretion. Record supports
contracting agency's finding that awardee's proposal was superior to
protester's proposal and that evaluations were performed in strict
conformance with evaluation scheme set forth in the RFP.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL SUPERIORITY V. COST SOLICITATION PROVISIONS
3. 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 rated technical proposal instead of a
lower rated, lower cost proposal if doing so is consistent with the
evaluation scheme in the solicitation.
E.R. Johnson Associates, Inc. (JAI) protests the award of a contract
to Westinghouse Hittman Nuclear, Inc. (Westinghouse) under request for
proposals (RFP) No. F08635-84-R-0157, issued by the Air Force to
identify and evaluate alternative methods of disposal of depleted
uranium wastes generated at Eglin Air Force Base, Florida. JAI contends
that it was fully qualified to perform the subject contract and
submitted a technically acceptable proposal with a firm fixed price at
approximately half the cost of the Westinghouse proposal. Because the
procuring agency did not abuse its discretion in its technical
evaluations and because cost was a secondary factor in selection, we
deny the protest.
The solicitation was issued July 19, 1984, covering a research and
development effort to identify and evaluate alternatives or combinations
of alternatives for the disposal of depleted uranium wastes generated at
Eglin Air Force Base. Each alternative would be analyzed in sufficient
detail to serve as the basis for future Air Force decisions regarding
depleted uranium disposal. Twenty-nine firms were competitively
solicited, and fourteen proposals were received, of which thirteen were
determined to be technically acceptable. Of the thirteen responses
found to be technically acceptable, the proposal submitted by
Westinghouse was rated the highest on technical merit alone.
Discussions were held with each of the thirteen offerors, with
weaknesses pointed out and best and final offers (BAFOS) submitted by
September 21, 1984.
After discussions and BAFOS, the proposal submitted by Westinghouse
was still the highest rated technical proposal and was determined to
represent the proposal most advantageous to the government on the basis
of technical merit and cost combined. Award was made to Westinghouse on
September 28, 1984 in the amount of $180,222.80. JAI was notified by
the contracting officer's letter of the same date that award had been
made to Westinghouse and that its offer, while technically acceptable,
was not the superior offer. JAI protested the contract award to the
contracting officer on October 5, 1984, which protest was denied on
October 29. On November 7, 1984, JAI filed its protest with this
Office.
At the outset, JAI complains that material it received in response to
the Freedom of Information Act (FOIA), 5 U.S.C. Section 552 (1982),
request was so heavily expurgated by the Air Force that it is unable to
provide more explicit comments in support of its protest. Contending
that germane information has been withheld by the Air Force, JAI asks
this Office to conduct a thorough investigation of this procurement to
include documents in the possession of the Air Force to determine
whether the contract was awarded in the public interest. In this regard
JAI suggests that any technical superiority of the Westinghouse proposal
may be due to the inclusion in that proposal of additional work beyond
that requested and may have resulted in an award to obtain capabilities
that exceed those needed for successful performance of the work
requested by the RFP.
We have no authority to determine when or what information must be
disclosed by an agency in response to a FOIA request. Ikard Mfg. Co.,
63 Comp. Gen. 239 (1984), 84-1 C.P.D. Paragraph 266. A firm's recourse
to the contracting agency's denial of its request for documents that
allegedly support its position is to pursue the disclosure remedies
provided in the Act. United States Contracting Corp. --
Reconsideration, B-210275.2, Dec. 28, 1983, 84-1 C.P.D. Paragraph 31.
Although the Air Force has denied the protester access to its
competitor's proposal and to much of the technical evaluation material,
it has provided all of the requested material to our Office for our
review. Due to the proprietary nature of much of this material and
because the Air Force has denied much of the protester's FOIA claims, we
have reviewed all of the proposals and evaluation material in camera.
Our discussion of their contents, however, is limited because of the
agency's restriction on their disclosure. Eaton-Kenway, B-212575.2,
June 20, 1984, 84-1 C.P.D. Paragraph 649; Robert E. Derecktor of Rhode
Island, Inc.; Boston Shipyard Corp., B-211922, B-211922.2, Feb. 2, 1984,
84-1 C.P.D. Paragraph 140.
In undertaking such a review, this Office does not independently
determine the relative merits of proposals, since the evaluation of
proposals is primarily a matter of the procuring agency's discretion.
We therefore limit our review to an examination of whether the
evaluation was reasonable and in accordance with the listed evaluation
criteria, and we will not question an agency's technical evaluation
unless it is shown to be arbitrary or in violation of procurement
statutes and regulations. New Mexico State University/Physical Science
Laboratory, B-215348, Nov. 6, 1984, 84-2 C.P.D. Paragraph 504;
Eaton-Kenway, B-212575.2, supra. Additionally, the protester has the
burden of affirmatively proving its case and the fact that the protester
does not agree with the agency's evaluation of its proposal does not in
itself render the evaluation unreasonable. Litton Systems, Inc.,
Electron Tube Div., 63 Comp. Gen. 585 (1984), 84-2 C.P.D. Paragraph
317.
Based upon our in camera review of both Westinghouse's and JAI'S
proposals and all pertinent evaluation documents, we conclude that the
Air Force evaluation had a reasonable basis and was in conformity with
the evaluation provisions of the RFP. In this connection, the RFP
stated that, "This is a technical competition with cost considered
subordinate to other factors; therefore, the technical and management
areas will be given paramount consideration in the evaluation process."
The evaluation documents generally show that, while the protester's
strength was its low price, Westinghouse's strength was its superior
technical proposal. Both proposals were rated superior in the
management area. The technical evaluators and the contracting officer
cited several specific advantages of Westinghouse's technical proposal
over the protester's, particularly regarding the great detail in which
Westinghouse discussed identification and analysis of disposal
alternatives. In contrast, the JAI proposal discussed objectives and
methodologies in very general terms which demonstrated less JAI'S
familiarity with the specific waste disposal problem faced by the Air
Force. In this regard, the solicitation advised offerors that proposals
should not merely offer to conduct an investigation or perform work in
accordance with the statement of work, but rather should outline the
actual investigation or method proposed as specifically as possible.
As an example of the differences in proposal approaches, where the
statement of work called for an evaluation of alternatives for on-site
disposal, Westinghouse elaborated extensively on the subject --
including, among other things, discussion of regulatory requirements,
technical requirements, site characteristics, and environmental
concerns, thus demonstrating its technical capacity to deal with a
specifically delineated disposal alternative and its familiarity with
related government program initiatives, results, and regulations. JAI'S
response, on the other hand, was very brief and extremely general in
nature, and, thus, did not demonstrate either JAI'S capacity or
ingenuity regarding this disposal alternative.
Our review of the record confirms the Air Force's judgment that
Westinghouse's proposed approach is more complete and better defined.
As the evaluation documents indicate, the protester consistently failed
to provide the quantum of detailed discussion and analysis required by
the RFP or to demonstrate its familiarity and understanding of the Air
Force's requirements, while Westinghouse did provide the required
detailed analysis. Thus, the Air Force reasonably had much greater
confidence in Westinghouse's proposal even though JAI'S approach was
considered technically acceptable. There is no evidence in the record
that Westinghouse was given a higher technical rating for offering to
perform work which was not required under the RFP as the protester
alleges. In a negotiated procurement such as this, the government is
not required to make award to the firm offering the lowest cost unless
the RFP specifies that cost will be the determinative factor. The
Communications Network, B-215902, Dec. 3, 1984, 84-2 C.P.D. Paragraph
609. Here, the RFP specifically reserved to the government the right to
make award to other than the lowest offeror. We have upheld an award to
a higher rated offeror with significantly higher proposed costs where it
was determined that the cost premium involved was justified considering
the significant technical superiority of the selected offeror's
proposal. Stewart & Stevenson Services, Inc., B-213949, Sept. 10, 1984,
84-2 C.P.D. Paragraph 268.
There is ample support in the record for the Air Force's
determination that the technical superiority of Westinghouse's highest
rated proposal justified the additional cost to the government.
Although JAI'S proposal was rated "technically acceptable" in a ranking
of technical merit, it was nonetheless ranked in the lower 50 percent of
all proposals received, and at one point, the technical evaluators even
considered eliminating it from the competitive range because it was
rated significantly below the highest ranked technical proposals. See
Stewart & Stevenson Services, Inc., B-213949, supra at 7. Moreover, the
record shows that acceptance of the Westinghouse proposal may result in
significant cost savings to the government in the long run.
Accordingly, the Air Force concluded that the lower price proposed by
JAI did not make up for the technical inferiority of its proposal.
In these circumstances, we find that the Air Force's evaluation was
reasonable and in accordance with the stated evaluation criteria and,
therefore, not subject to objection by our Office. We deny the protest.
Harry R. Van Cleve
General Counsel
FILE: B-217058 84-2 CPD 630
DATE: December 5, 1984
MATTER OF: Tecom Incorporated
CONTRACTS - SMALL BUSINESS CONCERNS - SIZE STANDARDS - ERRONEOUS IN
SOLICITATION - DECISION ON APPEAL AFTER BID OPENING - PROSPECTIVE
APPLICATION ONLY
A Small Business Administration Office of Hearings and Appeals ruling
that a solicitation contained an incorrect small business size standard,
which is received by the procuring agency after bid opening, has
prospective effect only and there is no requirement that the
solicitation be canceled.
Tecom Incorporated (Tecom) protests invitation for bids No.
DAKF19-84-B-0051, issued by the Department of the Army (Army), Fort
Riley, Kansas.
We summarily deny the protest.
The solicitation was issued as a total small business set-aside, with
a small business size standard of $13.5 million average annual receipts
for the 3 previous years. The Army amended the solicitation, changing
the zize standard to $3.5 million average annual receipts for the 3
previous years. Tecom and two other potential bidders protested the
new, more restrictive size standard to the Small Business Administration
(SBA) Office of Hearings and Appeals. Those firms also requested that
the Army postpone bid opening until the SBA ruled on the protest. The
Army refused to postpone bid opening.
After bid opening, the SBA ruled that the amended size standard was
erroneous and stated that the correct standard was 1,500 employees.
That, apparently, is a less restrictive standard than is the $3.5
million average annual receipts.
Tecom argues that the solicitation should be canceled and reissued
with the correct size standard. Tecom contends that competition will be
enhanced, with the resulting likelihood that the Army will receive a
lower price.
The procedures for protesting the selection of a size standard for a
particular procurement are set forth at 13 C.F.R. Section 121.3-6 (1984)
and in section 19.303 of the Federal Acquisition Regulation (FAR), 48
Fed. Reg. 42, 102 (1983) (to be codified at 48 C.F.R. Section 19.303).
Neither regulation requires a bid opening date to be postponed pending
an Office of Hearings and Appeals decision on a protested size standard.
The FAR Specifically provides that SBA decisions received by the
contracting officer after the due date for bids or offers "shall not
apply to the pending acquisition, but shall apply to future acquisitions
of the product or service". FAR Section 19.303(c)(3).
Since the SBA decision in this case was received by the contracting
officer after the date for bid opening, there is no requirement that the
solicitation be canceled. Logistical Support, Inc., B-205538, Mar. 10,
1982, 82-1 C.P.D. Paragraph 227. However, the correct size standard
must be applied to future procurement for this product.
We summarily deny the protest without obtaining an agency report
since, on its face, the protest is clearly without merit. 4 C.F.R.
Paragraph 21.3(g) (1984).
Comptroller General of the United States
FILE: B-217051 85-1 CPD 258
DATE: March 1, 1985
MATTER OF: Pierce Coal Sales International
DIGEST:
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - RESTRICTED - BURDEN OF
PROVING UNDUE RESTRICTION
A specification for coal is not unduly restrictive where the agency
establishes prima facie support for the specification through historical
and test data and the protester fails to show that the specification is
unreasonable.
Pierce Coal Sales International (Pierce) protests that the
specification for item 0011 in invitation for bids (IFB) No.
DLA600-84-B-0049, issued by the Defense Fuel Supply Center (DFSC),
unnecessarily restricts competition in that the specification exceeds
the government's mimimum needs. The IFB sought 14 line item bids for
bituminous coal with various specifications and delivery destinations.
Item 0011 required 51,000 net tones of bituminous coal with a maximum
ash content of 7 percent and a minimum BTU (British thermal unit) value
of 14,000, for delivery to Wright-Patterson Air Force Base, Ohio.
We deny the protest.
The dispute concerns whether the 14,000 BTU requirement exceeds the
government's needs. DFSC, which is procuring the coal on behalf of the
Air Force, states that the Air Force requires a maximum ash content of 7
percent for the equipment at Wright-Patterson, and that 14,000 BTUs is
required to assure that maximum. The Air Force determined through
testing 45 samples of coal, and conducting a linear regression study of
those results, that ash content increases at BTU value decreases. The
data revealed taht at 14,000 BTUs, ash content below 7 percent could be
expected. The Air Force maintains, therefore, that any significant
decrease in BTU value would result in ash content at unacceptable
levels.
Pierce alleges that a mimimum of 14,000 BTUs is excessive and that
13,000 BTUs is the standard commercial practice in the coal industry.
Furthermore, Pierce argues that BTU value and ash content are not
heavily dependent on each other, and that coal with slightly low BTU
value will not always have high ash content; the protester has
submitted a statement to that effect prepared by a mechanical engineer.
Pierce complains that the specified BTU value precludes if from bidding.
A using activity has primary responsibility for determining its
minimum needs and the best method of accommodating them, since the
agency is most familiar with the conditions under which supplies or
services have been used in the past and how they are to be used in the
future. Sunbelt Industries, Inc., B-214414.2, Jan. 29, 1985, 85-1 C.P.
D. Paragraph. Therefore, in considering a challenge to a specification
as unduly restricitive, we will not disturb the agency's determination
that the specification is necessary to meet its minimum needs unless it
is shown to be unreasonable. Tom Shaw, Inc., B-214191, Aug. 27, 1984,
84-2 C.P.D. Paragraph 227.
DFSC clearly has established support for the specification. In
addition to the test data referred to above, the Air Force Engineering
and Services Command tested lower BTU value coal at Wright-Patterson 4
years ago and experienced the following problems: reduced performance,
increased ash handling and disposal costs, increased maintenance costs,
and increased transportation costs. The record thus includes sufficient
support for the specification so as to require the protester to
demonstrate its unreasonableness.
Pierce argues that the BTU value of coal is more dependent upon
hydrogen content than ash content and, therefore, DFSC should have
written the specification in terms of hydrogen content. The Air Force,
however, has demonstrated a linear relationship between BTU value and
ash content -- in fact, the statement of the protester's expert admits
that such a relationship exists. We thus are faced with, at most, a
technical dispute. Since Pierce merely disagrees with the Air Force and
has not shown that the agency's technical conclusions are unreasonable,
this matter provides no legal basis for our Office to question the
agency's determination of its needs. All-Pro Turf, Inc., B-214339, July
16, 1984, 84-2 C.P.D. Paragraph 49. Furthermore, we note that even the
samples of coal whose characteristics are cited by the protester in
support of its position that coal with slightly low BTU value will not
always have high ash content reveal an increase in ash content with a
decrease in BTU value.
Pierce has offered no supporting information or documentation for the
contention that 14,000 BTU exceeds commercial practice. A bare
allegation by the protester, unsupported by evidence, is insufficient to
satisfy its burden of proof. Systems Engineering Associates Corp.,
B-208439, Jan. 31, 1983, 83-1 C.P.D. Paragraph 97.
Since Pierce has not shown the Air Force's decision, based on
historical and test data, to include the specification in issue to be
unreasonable, the protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-217049 85-2 CPD 4
DATE: July 1, 1985
MATTER OF: Summerville Ambulance, Inc.
DIGEST:
BIDS - INVITATION FOR BIDS - CANCELLATION - AFTER BID OPENING -
DEFECTIVE SOLICITATION
1. Cancellation of a portion of a solicitation which contains a
flawed evaluation scheme and inaccurate estimates is justified where
those defects made it impossible to accurately determine which bid
represented the lowest cost to the government.
CONTRACTS - AWARDS - SEPARABLE OR AGGREGATE - PARTIAL AWARD -
PROPRIETY
2. Award on another portion of the defective solicitation was proper
where award would meet government's needs and no other bidder would be
prejudiced.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
INDEPENDENT INVESTIGATION AND CONCLUSIONS
3. GAO does not conduct investigations pursuant to its bid protest
authority.
Summerville Ambulance Service, Inc. protests the cancellation of some
of the requirements for emergency ambulance service and the award of
others to Herbert's E.M.S., Inc. under invitation for bids (IFB) No.
534-12-85, issued by the Veterans Administration Medical Center,
Charleston, South Carolina. We dismiss the protest in part and deny the
protest in part.
The IFB requested prices on 12 line items. /1/ As interpreted by the
parties, Items 1 and 3 were included to price ambulance services which
require a 45-minute response time, with Item 1 applying to trips made
during daytime and Item 3, to trips made at night. Items 2 and 4 were
similar to Items 1 and 3, respectively, except that they concerned trips
requiring a 15-minute response time. Items 5 and 6 were included to
allow a per mile surcharge for trips outside city limits. In Item 5,
bidders were to submit a surcharge which, when added to the base price
under Items 1 and 2, would apply to out-of-city trips. Item 6 allowed a
similar surcharge, which would be added to the base price established
for trips under Items 3 and 4. /2/
VA concluded it could not determine the low bidder for 45-minute
trips (Items 1 and 3) because the IFB provided no basis for allocating
the surcharges under Items 5 and 6. VA noted that Items 1 through 4
priced ambulance service on a per trip basis while Items 5 and 6 were
based on mileage. The IFB contained an estimate of 25,000 miles for
out-of-city day trips subject to the surcharge in Item 5, but did not
indicate how much of this mileage was allocable to day trips requiring a
45-minute response time (Item 1) or to 15-minute response time trips
(Item 2). Similarily, the IFB did not indicate how the surcharge in
Item 6 (for night out-of-city mileage) was to be allocated between the
base rates established in Items 3 and 4. VA found that either
Summerville or Herbert could be evaluated as low for 45-minute trips,
depending upon how out-of-city mileage was allocated. When conducting
this evaluation, VA also found that the estimated mileage and number of
trips included in the IFB were grossly in error. In the circumstances,
VA decided to cancel the solicitation, revise it, and resolicit bids for
45-minute trips.
Summerville objects to VA's action because, Summerville says, it was
the low bidder on Item 1, at least if all of Item 5 is added to its Item
1 price. The protester argues that it is improper and unfair to award
Items 2 and 4 to Herbert while cancelling the items upon which
Summerville may have submitted the low bid. Summerville contends that
VA should determine how much of Items 5 and 6 is allocable to day and
night trips under Items 1 and 3 and make award to it if it is low on
that basis. Summerville charges that VA has not done so because of bias
favoring Herbert. In addition, Summerville notes that before bid
opening it informed the contracting officer that the estimates actually
included in the solicitation appeared to be overstated.
An IFB may be canceled after bid opening only when a compelling
reason for cancellation exists. Deere & Co., B-206453.2, Nov. 1, 1982,
82-2 CPD Paragraph 392. Where a solicitation contains an evaluation
scheme which does not insure that award will be based on the lowest cost
to the government, Go Leasing, Inc.; Sierra Pacific Airlines, B-209202;
B-209202.2, Apr. 14, 1983, 83-1 CPD Paragraph 405, or contains estimates
which are other than reasonably accurate representations of actual
anticipated requirements, Downtown Copy Center, B-206999.6, Dec. 6,
1982, 82-2 CPD Paragraph 503, their presence can constitute a compelling
reason to cancel a solicitation. The fact, however, that the terms of a
solicitation are deficient 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 defective solicitation would prejudice other
bidders or such award would not serve the government's actual needs.
Twehous Excavating Co., Inc., B-208189, Jan. 17, 1983, 83-1 CPD
Paragraph 42.
Here, we conclude that the VA did have a compelling reason to cancel
Items 1 and 3 of the solicitation. It is clear that the evaluation
scheme was flawed because the use of Items 5 and 6 to allow surcharges
provided no basis for allocation of the cost of out-of-city trips.
Moreover, the record indicates that VA's estimates of the number of
trips on Items 1 and 3 were in error by more than a factor of 2. Thus
it was not possible to properly evaluate bids since the IFB did not
indicate how to allocate the surcharge, and there was no assurance that
any selection based on the stated estimated quantities would result in
the lowest cost contract to the government.
Although it is unfortunate that the contracting officer did not
perform a through analysis of the estimates at the time they were
questioned by the protester and correct them prior to bid opening, the
fact that the matter had been called into question prior to bid opening
does not preclude cancellation after opening if the solicitation indeed
proves inadequate. Ridg-U-Rak, Inc. -- Reconsideration, B-207124.2,
Sept. 24, 1982, 82-2 CPD Paragraph 272.
On this record, moreover, we see no reason to object to VA's decision
to award Items 2 and 4 to Herbert. No bids were received on these
items, except from Herbert. Since the solicitation flaws outlined above
concern only the manner in which an awardee was to be selected, and
since the failure of others to bid left only one possible choice, VA's
decision not to cancel this portion of the solicitation but to award
these items to Herbert was proper. Browning-Ferris Industries of the
South Atlantic, Inc.; Reliable Trash Services Co. of MD., Inc.,
B-217073, B-218131, Apr. 9, 1985, 85-1 CPD Paragraph 406. Moreover,
while Items 2 and 4 were theroretically subject to the problems which
required cancellation of Items 1 and 3, Summerville could not have been
prejudiced by any such defect because, as it admits, its location
prevents it from meeting the 15-minute response time required for Items
2 and 4.
Since we believe VA's decision to cancel the solicitation with
respect to Items 1 and 3 was legally required under the circumstances
and Summerville was not prejudiced by award of Items 2 and 4, we do not
need to decide Summerville's assertion that VA's actions reflect bias
favoring Herbert. Moreover, although Summerville complains about a
number of matters concerning prior VA solicitations for emergency
services dating back to 1983 and requests an investigation of the VA'S
procurement practices, our Office ordinarily does not conduct
investigations or audits of contracting activities under our bid protest
function.
The protest is denied.
Harry R. Van Cleve
General Counsel
APPENDIX OMITTED
(1) The schedule and the bids on Items 1 and 6 are set forth in an
appendix to this decision.
(2) Technically, Items 1 through 4 exclude out-of-city trips with
Items 5 and 6 applying only to such trips. Such an interpretation would
justify awarding Items 1 and 3 to Herbert, not Summerville, could have
resulted in the selection of different contractors to answer calls
inside and outside the city limits, but was never intended by VA.
Rather, both VA and Summerville appear to have assumed that a composite
award would be made for trips within and outside the city.
B-217048, Nov 26, 1984, 84-2 CPD 574
CONTRACTORS - Responsibility - Determination - Review by GAO -
Affirmative finding accepted
DIGEST:
1. Except in limited circumstances not applicable here, GAO will not
review allegations that bid is below-cost bid and that awardee therefore
will not meet minimum wage and fringe benefit requirements, since these
involve a challenge to an affirmative determination of responsibility.
LABOR DEPARTMENT - Jurisdiction - Service Contract Act violations
2. Whether a successful bidder will perform in accord with the
Service Contract Act is a matter for the Secretary of Labor, and GAO
will not review a protest on this basis.
Edwards Trucking Co., Inc.:
Edwards Trucking Co., Inc. protests the award of a contract to
Northern Virginia Van Lines of DOL Inc. by the Department of Labor
pursuant to invitation for bids No. D/L 84-20. We dismiss the protest.
Edwards contends that the bid submitted by Northern Virginia Van
Lines is "unconscionably low," and therefore questions whether the
awardee is capable of performance and whether it will comply with
minimum wage and fringe benefit requirements prescribed by the Secretary
of Labor.
Neither the submission of a below-cost bid nor its acceptance by the
government is illegal, and as a general rule, neither provides a basis
on which to challenge an award. See Hydro-Test Products Inc., B-214009,
Jan. 23, 1984, 84-1 CPD Para. 104. Rather, the question of whether a
bidder can satisfactorily perform at its bid price concerns the bidder's
responsibility. Before awarding this contract, the contracting officer
necessarily determined that Northern Virginia Van Lines was responsible.
See Federal Acquisition Regulation, Sec. 9.103( b), 48 Fed. Reg.
42,102, 42,142 (1983) (to be codified at 48 C.F.R. Sec. 9.103(b)). Our
Office will not review an affirmative determination of responsibility
absent a showing of possible fraud or bad faith on the part of
contracting officials or that definitive responsibility criteria in the
solicitation may not have been met. Richmond Gear, B-211589, May 9,
1983, 83-1 CPD Para. 491. Neither exception applies here.
To the extent that Edwards is contending that the awardee may not
comply with the minimum wage and fringe benefit requirements of the
Service Contract Act of 1965, as amended, 41 U.S.C. Secs. 351-358
(1982), we note that the administration of the Act is vested with the
Secretary of Labor; for this reason, we will not consider a protest
alleging that a contractor may not comply with it. See J&R Cleaning and
General Maintenance, B-206280, Feb. 19, 1982, 82-1 CPD Para. 147.
We deny Edwards' request for a conference since, in view of the
above, one would serve no useful purpose. Zimmerman Plumbing and
Heating Co., B-211879, June 24, 1983, 83-2 CPD Para. 16.
The protest is dismissed. COMP GEN (UP)
B-217046, Nov 26, 1984, 84-2 CPD 573
SMALL BUSINESS ADMINISTRATION - Authority - Small business concerns -
Set-aside determinations
DIGEST:
The determination to set aside a procurement under section 8(a) of
the Small Business Act, as well as the propriety of the 8(a) award
itself, is a matter for the contracting agency and the Small Business
administration and, therefore, will not be reviewed by GAO absent a
showing of possible fraud or bad faith on the part of government
officials to follow applicable regulations.
Forway Industries:
Forway Industries (Forway) protests the Navy ships Parts Control
Center's decision to set aside solicitation No. N00104-83-R-TG31 under
section 8(a) of the Small Business Act, 15 U.S.C. sec. 637(a) (1982).
Forway states that it is a prior producer of the torpedo nose pieces
being procured and, as such, it should have been given an opportunity to
compete for this requirement.
We dismiss the protest.
Section 8(a) 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. By the terms of
that act, a government contracting officer is given the discretion to
let the contract to SBA upon such terms and conditions as agreed to by
the agency and the SBA. Because of the broad discretion afforded the
SBA and the contracting agencies under the applicable statute and
regulations, our review of actions under the 8(a) program generally is
limited to determining whether the regulations have been followed and
whether there has been possible fraud or bad faith on the part of
government officials. Graphic Industries Association, B-211940, Nov.
21, 1983, 83-2 C.P.D. Para. 600, citing Arawak Consulting Corporation,
59 Comp.Gen. 522 (1980), 80-1 C.P.D. Para. 404.
Forway does not allege fraud or bad faith on the part of government
officials or otherwise contend that specific regulations have not been
followed. Thus, the protester has not made the requisite showing here
to warrant our detailed review of the matter.
The protest is dismissed. COMP GEN (UP)
B-217045, Nov 27, 1984, 84-2 CPD 581
OFFICE OF MANAGEMENT AND BUDGET - Circulars - No. A-76 - Policy
matters - Not for GAO review
DIGEST:
Determination under Office of Management and Budget Circular No.
A-76 to contract for services rather than have them performed in-house
is a matter of executive branch policy not reviewable pursuant to a bid
protest filed by a federal employee.
Sidney R. Jenkins:
Mr. Sidney R. Jenkins, foreman of the water and sewage plant at Fort
Detrick, Maryland, protests the decision by the Department of Army to
contract for the operation of Fort Detrick's water plant instead of
retaining the function in-house. We will not consider the matter.
The protest involves a decision made in accordance with Office of
Management and Budget Circular No. A-76 (A-76). Our Office had
consistently declined to consider protests concerning the propriety of
an agency's decision to contract for services instead of performing the
work internally. The provisions of A-76, which in general, encourage
agencies to contract, only set forth executive policy; they do not
establish legal rights and responsibilities. Gerald L. Fehlman,
B-197714, Feb. 19, 1980, 80-1 C.P.D. Para. 142. Consequently, but for
one limited exception, we do not view compliance with A-76 to be a
matter within the protest decision function of our Office. Jake O.
Black, B-199564, Aug. 6, 1980, 80-2 C.P.D. Para. 95.
We do consider A-76 protests which allege faulty or misleading cost
comparisons of in-house estimates with bids received. Hawaii Federal
Lodge No. 1998, International Association of Machinists and Aerospace
Workers, B-214104, Jan. 23, 1984, 84-1 C.P.D. Para. 109. This protects
the competitive system by assuring that a cost comparison analysis
conforms to the terms of the solicitation under which bids were
submitted. Id. This exception is narrowly drawn, intended to protect
parties that have submitted bids from the arbitrary rejection of their
bids, and does not extend to nonbidders. Mr. William T. Springfield,
B-197752.2, Apr. 28, 1980, 80-1 C.P.D. Para. 301. Mr. Jenkins is not a
bidder and, therefore, his protest does not come within the exception to
our policy of not considering protests of decisions made under A-76.
The protest is dismissed. COMP GEN (UP)
FILE: B-217044
DATE: December 11, 1985
MATTER OF: Joseph B. Riego, Sr.
COMPENSATION - REMOVALS, SUSPENSIONS, ETC. - BACK PAY ACT OF 1966 -
BACKPAY AWARD - SCOPE OF ENTITLEMENT
An employee of the U.S. Navy in the Philippines who held a position
available only to Philippine nationals was separated in 1974 when he
acquired U.S. citizenship which was conditional on his emigration to the
United States. The Merit Systems Protection Board later found that he
should have been given a 60-day notice prior to separation under
reduction-in-force procedures. He is not entitled to additional backpay
beyond that given by the Navy for the 60-day notice period, particularly
since the record shows he was unavailable for work in the Philippines
upon his emigration to the United States less than 3 months after the
time of his separation. Payments under the Back Pay Act are designed to
compensate employees for the pay they would have received but for a
wrongful separation, and the employee cannot be considered to have lost
any pay in excess of the 60 days' backpay already allowed in those
circumstances.
Mr. Joseph B. Riego, Sr., requests reconsideration of our Claims
Group's disallowance of his claim for additional backpay believed due
because of purported improprieties relating to his separation from
employment with the Department of the Navy in 1974. /1/ On the basis of
the facts presented, and the applicable provisions of law, we sustain
the disallowance of his claim.
Mr. Riego was an employee of the U.S. Navy Base, Subic Bay,
Philippines, in the Office of the Provost until 1974. He held a
position reserved for Philippine nationals under a Base Labor Agreement.
Upon obtaining U.S. citizenship on April 30, 1974, he was separated and
paid 20 months of severance pay. Within 3 months thereafter he moved to
the United States, and it appears that that is where he has resided and
been employed ever since.
In January 1979 he appealed his separation to the Merit Systems
Protection Board (MSPB). The MSPB's San Francisco Regional Office
initially dismissed Mr. Riego's petition as untimely filed on March 9,
1979. However, on July 24, 1980, the MSPB waived the time limit and
held on December 12, 1980, that the Navy had failed to follow
reduction-in-force (RIF) procedures contained in 5 C.F.R. Section
351.801 (1979) and directed that Mr. Riego be reinstated. The MSPB
found that the requirement to use these RIF procedures in the separation
of a foreign national who became a U.S. citizen was contained in Navy
Civilian Manpower Management Letter No. 301-1, March 25, 1975. The MSPB
further found that the Letter had been determined to be retroactively
effective, and these procedures must be followed, notwithstanding the
Navy's argument that there was no position available to a U.S. citizen
for which Mr. Riego could have qualified.
In an attempt to comply with the MSPB decision, the Navy reinstated
Mr. Riego effective April 30, 1974, converted him to a grade GS-7
General Schedule position, retroactively issued a 60-day RIF notice, and
separated him effective July 1, 1974. He was paid for the 60-day notice
period.
Mr. Riego appealed the Navy's action to our Office as he had received
backpay for only the 60-day period of his retroactive reinstatement. He
claimed that he should receive backpay for the entire period from the
date of his separation in 1974 until such time as he might be
"physically" restored to the rolls following the 1980 MSPB decision. By
a settlement issued May 26, 1982, our Claims Group denied his claim for
backpay on the basis that he had received all that he was entitled to
under the MSPB decisions. He then appealed to the MSPB which held on
April 15, 1983, that Mr. Riego was entitled to current reinstatment and
an opportunity to make an appropriate claim for backpay. The MSPB
indicated that the case should be handled in the way that another,
similar case was handled where the employee was restored to the rolls
and then given the 60-day notice of his RIF. In so holding the MSPB
noted that the Navy had argued that Mr. Riego would not have been
entitled to backpay for an additional period since his receipt of U.S.
citizenship was conditional on his promise to emigrate to the United
States, making him unavailable for duty in the Philippines. While the
MSPB still required that he be currently reinstated while the Navy went
through the RIF procedures, it noted that the availability for duty
question and entitlement to backpay were questions for the Navy and our
Office to determine.
The Navy reinstated Mr. Riego at grade GS-7 effective May 10, 1983,
with applicable step increases, placed him on annual leave, went through
the RIF procedures, and terminated him on August 16, 1983. He was paid
for this period on the basis of being on leave rather than being
required to present himself for work in the Philippines since he was
then living in California. The Navy forwarded his claim for additional
backpay for the period between 1974 and 1983 to our Claims Group for
consideration, and our Claims Group disallowed that claim. Mr. Riego
now requests further review and reconsideration.
Under the provisions of the Back Pay Act, 5 U.S.C. Section 5596, an
employee who is found by appropriate authority to have undergone an
unjustified or unwarranted personnel action is entitled upon correction
of the personnel action to receive, for the period the personnel action
was in effect, an amount equal to all or any part of his pay that he
would have earned during that period if the personnel action had not
occurred. /2/ It must be clearly established that, but for the
unjustified or unwarranted personnel action, the employee would have
actually been entitled to receive the pay or allowances at issue. The
Back Pay Act is designed to compensate employees for the pay they would
have received but for the wrongful separation. If the employee is
incapable of or unavailable for performing the work, he has lost
nothing. /3/
It is well established that the employee bears the burden of showing
that he is ready, willing, and able to perform the duties of the
position from which he was wrongfully separated in order to demonstrate
his entitlement to backpay. /4/ The Navy has indicated that Mr. Riego,
as a long-time employee of the Navy, was aware that his employment would
be terminated upon obtaining U.S. citizenship and that Mr. Riego in
applying for citizenship indicated his intention to emigrate to the
United States. He did in fact emigrate shortly after his separation.
After that time he was unavilable for employment in the Philippines. In
addition, the Navy states that the only pay Mr. Riego would have
received, but for his procedurally defective separation, was that
payable during the 60-day notice period, since there was no position
available for which he could have qualified as a U.S. citizen.
Based on the record we conclude that Mr. Riego has been made whole
within the meaning of the Back Pay Act. He has received all of the pay
and allowances which he would have received but for the unwarranted or
unjustified personnel action which the MSPB found that he had undergone.
Accordingly, we conclude that Mr. Riego has received all of the
backpay that could have been due him under the MSPB's decisions, and we
disallow his claim for the additional amounts believed due. The prior
settlements of our Claims Group in this matter are sustained.
Comptroller General of the United States
(1) This decision is issued under the authority of 31 U.S.C. Section
3702 and 4 C.F.R. Part 32.
(2) The MSPB is an "appropriate authority" to determine whether an
employee has undergone an unjustified or unwarranted personnel action.
See 5 C.F.R. Section 550.803.
(3) See Kenneth L. Clark, 62 Comp. Gen. 370 (1983); and 5 C.F.R.
Section 550.805(b) and (c).
(4) See Kenneth L. Clark, supra, 62 Comp. Gen. at 373, and the
Federal court decisions there cited.
B-217043, Nov 26, 1984, 84-2 CPD 572
CONTRACTORS - Responsibility - Determination - Review by GAO -
Affirmative finding accepted
DIGEST:
A protest that no other firm is able to comply with a solicitation's
delivery requirements or provide a source controlled component is a
protest against the proposed awardee's responsibility. GAO will not
review affirmative responsibility determinations unless there has been a
showing of possible fraud or bad faith on the part of procuring
officials or that definitive responsibility criteria have not been
properly applied.
Fraser-Volpe Corporation:
Fraser-Volpe Corporation (FVC) protests the award of any contract by
the Department of the Army under request for proposals (RFP) No.
DAAA09-84-R-0099 to any offeror that does not have a valid quotation
from FVC for a disk assembly for the gun sight. FVC further states that
no other company has a quotation for this assembly and its delivery
schedule for outside firms would extend beyond the schedule required by
the RFP. FVC contends that this assembly is essential to the gun sight
and FVC is its only approved source.
The protest is dismissed.
FVC's assertion that no other company can legitimately comply with
the requirements of the solicitation is a challenge to the capacity of
any other offeror to satisfy the terms of the contract and thus is a
protest against the affirmative determination of responsibility that the
contracting officer must make before any contract is awarded. Our
Office will not review a protest of an affirmative determination of
responsibility unless there is a showing of possible fraud or bad faith
on the part of the procuring officials or the solicitation contains
definitive responsibility criteria which allegedly have been misapplied.
4 C.F.R. Sec. 21.3 (1984). FVC has not shown that either exception can
be applied here.
The protest is therefore dismissed. COMP GEN (UP)
FILE: B-217042 85-1 CPD 204
DATE: February 15, 1985
MATTER OF: Mid-America Industrial Park, Inc.
DIGEST:
CONTRACTS - COMPETITIVE SYSTEM - RESTRICTIONS ON COMPETITION -
GEOGRAPHIC
Federal procurement policy requires that competition for government
contracts be minimized, providing qualified sources an equal opportunity
to compete. Geographic restriction is unreasonable where the record
does not establish that only the designated area will meet the agency's
actual minimum needs.
Mid-America Industrial Park, Inc. (Mid-America), protests
solicitation for offers (SFO) No. GS-058-14260 issued by the General
Services Administration (GSA) for a long-term lease of office space in
Bloomington, Illinois. Mid-America protests that the SFO is overly
restrictive of competition, and that the GSA's delineation of a
geographical area for which it would accept proposals was arbitrary.
We sustain the protest.
The GSA's solicitation is on behalf of the Internal Revenue Service
(IRS), which requires a site of approximately 18 acres to establish one
of three new Centralized Inventory and Distribution System (CIDS)
facilities. In order to centralize and automate its printed material
warehousing and distribution operations, the IRS will be consolidating
its operations into three new CIDS facilities. A site location
consultant was hired to recommend specific locations for the three new
centers. After conducting detailed studies, the consultant recommended
that the CIDS facility for the central portion of the country be located
in Bloomington, Illinois. The recommendation was based on computer
modeling, statistical/demographic analysis and on-site surveys. Since
no existing facilities were found to be appropriate, the study suggested
the centers be designed and constructed to fit the IRS's needs.
The consultant's study did not recommend that the facility location
be restricted to any one area of the city, and noted that the
Bloomington metropolitan area included five major industrial parks. The
IRS Project director, however, after conferring with the McLean County
Economic Development Council, /1/ requested that GSA limit the
solicitation to a specifically delineated area on the east side of
Bloomington. This restriction ostensibly was based on considerations
such as accessibility to the potential labor force; the availability of
possible sites; zoning expectations, and proximity to postal
facilities, telecommunication facilities, fire stations, municipal
services, medical facilities, commercial services and the airport.
Similar parameters were considered in the consultant's study, however,
uithout proposing any restrictions within the Bloomington metropolitan
area.
Our Office has held that a leasing agency has the primary
responsibility for setting forth its minimum needs, including the
location of the facility, and we will not object unless its
determination lacks a reasonable basis. Charles Hensler and Helen
Kreeger, B-195501, May 23, 1980, 80-1 CPD Paragraph 356. However, the
agency cannot impose a geographic restriction or select a delineated
area which does not represent its actual needs. See Dr. Edward Weiner,
B-190730, Sept. 26, 1978, 78-2 CPD Paragraph 230.
In this case, the considerations cited as the basis for selecting the
east side of Bloomington do not satisfy this standard, and do not
justify confining the competition to this portion of the city. These
considerations consist primarily of generalized statements of needs
which the delineated area meets, rather than evidence that these needs
can only be met within the delineated area.
For example, one consideration cited as a reason for the geographic
restriction is that "the selected area has several hundred acres of
undeveloped land with numerous sites which could reasonably be expected
to be offered for the project." We do not understand how this
consideration justifies the restriction; there is no indication that
available sites are not present elsewhere in the metropolitan area.
Another cited consideration is that a large proportion of the zoned
land in the delineated area is zoned industrial, and assurances have
been made that most of the unzoned land can quickly be approved for
industrial use. There is no evidence, however, that other land zoned
for industrial use is unavailable in the metropolitan area, or that
quick approval cannot be obtained for industrial zoning of unzoned land
located elsewhere in the area.
As previously noted, proximity to a fire station; availability of
municipal services (such as adequate sewer, water and highway access);
proximity to an airport and to postal and medical facilities, and
availability of commercial services needed by employees (such as
restaurants and dry-cleaners) ar also cited as considerations justifying
the geographic restriction. While we do not question the legitimacy of
these needs, nothing in the record demonstrates that only the delineated
area can meet them.
We also note that GSA's legal opinion specifically states that GSA is
not contending that the delineated area is the only one that can provide
the necessary services. Rather, their stated position is "that IRS'
minimum requirements can be met in the chosen area . . . and that
competition will most probably be obtained." Thus, we believe it is
apparent that there is no reasonable basis for the geographic
restriction here.
Additional support for our conclusion is provided by the protester.
For example, in discussing its telecommunications needs, the IRS
indicated that only the delineated area could be adequately serviced by
the local telephone company at reasonable costs. The protester asserts,
however, that the telephone company has advised it that services could
be provided to any part of the metropolitan area at the same cost.
Similarly, the protester asserts that medical services are no more
accessible from the east side than from the other industrial parks, and
that a fire station is scheduled for construction at its own industrial
site. Although the IRS raised zoning considerations, the protester
indicates that less than 15 percent of the zoned land in the selected
area is zoned industrial, much of which land is already in use, and that
zoning procedures and hearings would be necessary to determine whether
the remainder of the available land could be used for the project.
As a further example, the IRS argued that the selected area is most
convenient to the two universities from which the agency expects to
attract the majority of its part-time employees. However, the protester
points out that direct public transportation from the schools is not
available to the east side, but only to the industrial park where the
protester's site is located. On the question of municipal services, the
protester notes that water and sewer lines are neither available nor
planned for a portion of the delineated area. In addition, the
protester asserts that the entire Bloomington area is relatively small,
and that only relatively minor differences exist between the available
sites. GSA has not rebutted the protester's contentions and under these
circumstances, we find nothing in the record sufficient to justify the
proposed restrictions.
We recognize that GSA advertised the project with the proposed
restrictions in order to measure the available competition. The agency
received 24 expressions of interest and met with 16 of the potential
offerors. None of the offerors actually controlled a proposed site, but
were negotiating options for sites. Many proposed offers involved the
same general site locations. GSA asserts that offerors would compete
through construction costs, financing, service and utility costs, etc.,
rather than by offering different sites. The agency therefore concludes
that adequate competition will be available despite the geographic
restriction, and contends that accordingly, the restriction is
reasonable.
The Federal Property Management Regulations governing the acquisition
of space by lease, however, require that competition be obtained to the
maximum extent practical among suitable available locations meeting
minimum government requirements. 41 C.F.R. Section 101-18.100(c) (1984)
(emphasis added). Here, the geographic restriction would needlessly
exclude potential competitors who might well satisfy the IRS's actual
requirements, and it therefore unduly restricts competition.
Finally, we note the agency's o0jection to the delays which might
result from making a change in the solicitation at this point. The
record indicates, however, that the protester and local officials
objected to the restrictions several months before the solicitation had
even been issued. The agency's failure to take corrective action at
that time cannot now be used to perpetuate the error. Moreover, we find
that the policy objective of promoting full and free competition in
federal procurements outweighs the agency's interest in avoiding any
delays.
We therefore sustain the protest and recommend that the GSA open its
solicitation to all offerors within the Bloomington metropolitan area.
Comptroller General
of the United States
(1) McLean County Economic Development Council is an association
representing commerce and industry interests in McLean County, including
the Bloomington metropolitan area.
B-217041, Nov 26, 1984, 84-2 CPD 571
CONTRACTORS - Responsibility - Determination - Review by GAO -
Affirmative finding accepted
DIGEST:
1. GAO does not review affirmative determinations of responsibility
except in limited circumstances.
CONTRACTS - Protests - Contract administration - Not for resolution
by GAO
2. Matters of contract administration are not within the purview of
GAO's Bid Protest Procedures.
Pan Am Aero, Inc.:
Pan Am Aero, Inc. (Pan Am) protests the award of a contract to
Constructora San Pancracio (Constructora) under solicitation No.
DAKF71-84R-0088, issued by the Department of the Army for bids to cut
grass on the Army base in the Panama Canal Zone. Constructora and Pan
Am were each awarded a contract to cut the grass on one-half of the
base. Pan Am protests that Constructora should not have been awarded
the contract because Constructora is not qualified or reliable and will
not fulfill the terms of the contract, including furnishing a
performance bond.
Pan Am's protest that Constructora is not qualified or reliable
concerns Constructora's responsibility, that is, the firm's apparent
ability to fulfill its obligations if awarded the contract. See General
Instrument Corporation Lamp Division, B-205261 et al., Mar. 1, 1982,
82-1 C.P.D. Para. 177; Warfield & Sanford, Inc., B-206929, Apr. 20,
1982, 82-1 C.P.D. Para. 365. The award of a contract necessarily
includes the contracting officer's determination that the awardee is
responsible, and this Office will not review such an affirmative finding
of responsibility absent circumstances not relevant here. Warfield &
Sanford, Inc., B-206929, supra.
This Office also will not review Pan Am's allegation that
Constructora will not fulfill the terms of its contract with the Army.
This allegation concerns a matter of contract administration, and it is
the function of the procuring activity, not the General Accounting
Office, to administer the contract to obtain the purchased performance.
Young Patrol Service, B-204198, May 5, 1982, 82-1 C.P.D. Para. 422.
The protest is dismissed. COMP GEN (UP)
FILE: B-217039 85-1 CPD 472
DATE: April 26, 1985
MATTER OF: T.S. Head & Associates, Inc.
ADVERTISING - COMMERCE BUSINESS DAILY - FAILURE TO SYNOPSIZE
PROCUREMENT
Protest against award is sustained where facts do not support public
exigency finding under FAR Section 15.202 which was used by agency as
basis for not synopsizing the procurement in the Commerce Business
Daily.
T.S. Head & Associates, Inc. (T.S. Head), protests the award to
Rodenberg's Floor Coatings, Inc. (Rodenberg), under request for
proposals (RFP) No. F34650-84-R-0115 issued by the Department of the Air
Force (Air Force) for removal and repair of the Chemical Resistant
Urethane (CRU) floor coating in Building 230 at Tinker Air Force Base.
T.S. Head protests that it was denied an opportunity to reply to the RFP
since the procurement was not synopsized in the Commerce Business Daily
(CBD). We sustain the protest.
Under the Small Business Act, as amended, (15 U.S.C. Section 637(e)
(Supp. I 1983), and the Federal Acquisition Regulation (FAR), 48 C.F.R.
Section 5.201(b) (1984), the contracting officer generally is required
to transmit a synopsis to the CBD for each proposed contract of $10,000
and above. See generally Morris Guralnick Associates, Inc., B-214751.2,
Dec. 3, 1984, 84-2 C.P.D. Paragraph 597. However, in this case the
contracting officer determined on September 10, 1984, that the
requirement for CRU floor coating removal at Tinker Air Force Base was
urgent; he therefore negotiated a contract under FAR, 48 C.F.R.
Section 15.202, which provides for negotiation of a contract where the
pbulic exigency will not permit the delay incident to formal
advertising, and invoked the exception to the synopsis requirement
provided by the FAR for "(u)nusual or compelling emergencies." See FAR,
48 C.F.R. Section 5.202. Negotiations were accomplished on September
26, resulting in a contract award to Rodenberg on September 29, and
notice of award was published in the CBD on October 24. The Air Force
notified Rodenberg to proceed with contract performance on October 29,
and performance of the contract was completed on December 4, 1984.
T.S. Head protests that, since the Air Force did not synopsize the
solicitation, it was wrongfully prevented from having knowledge of the
procurement and an opportunity to compete.
In its report on this protest, the Air Force concedes that the length
of time taken by the requiring activity to provide the urgency
justification, as well as the fact that the contracting office did not
issue the notice to proceed until 30 days after the date of award, are
inconsistent with the public exigency standard set out at FAR, 48 C.F.
R. Section 15.202, which cautions that to use this authority the need
must be compelling and of unusual urgency (as when the government would
be seriously injured financially or otherwise, if the supplies or
services were not furnished by a certain date, and if they could not be
purchased by that date by means of formal advertising). The Air Force
concludes that it could have expeditiously handled this procurement by
formal advertising and still have complied with the synopsis
requirements.
We agree with the Air Force that it should have synopsized its
requirements and we therefore sustain the protest. However, since the
contract was completed on December 4, 1984, corrective action by our
Office is not possible. See Houston Fearless 76, B-209576, Apr. 15,
1983, 83-1 C.P.D. Paragraph 412. We note, however, that the Air Force
states that the pertinent major command has been advised of the
improprieties in this procurement so that this deficiency will not be
repeated in the future.
We sustain T.S. Head's protest.
Harry R. Van Cleve
General Counsel
FILE: B-217038.2 85-1 CPD 159
DATE: February 7, 1985
MATTER OF: Gem Services, Inc.
DIGEST:
GENERAL ACCOUNTING OFFICE - JURISDICTION - CONTRACTS - DISPUTES -
BETWEEN PRIVATE PARTIES
1. Protest based on potential awardee's possible use of protester's
employees and of proprietary information gained from those employees is
essentially dispute between private parties which is not for
consideration under GAO Bid Protest Procedures.
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - PROTESTOR NOT
IN LINE FOR AWARD
2. Protester is not an interested party to contest rejection of its
bid as nonresponsive since, if protest were upheld, protester would not
be in line for award.
Gem Services, Inc. protests the award of a food service contract to
United Management Services, Inc. under solicitation No.
F41800-84-B-8825 issued by the Department of the Air Force, San Antonio
Contracting Center, Texas. We will not consider the protest.
Gem asserts that it is the incumbent contractor; that a
representative of United, escorted through the dining facilities by
government officials, "coerced" Gem's project manager into divulging
confidential proprietary information in return for promise of future
employment; and that the government was at least partially at fault
because it left the United representative unescorted for a period of 1
hour on two separate occasions.
The Air Force states that the purpose of the tour by United was to
permit observation of dining operations without obstructing performance;
that the representative of United was properly escorted at all times;
and no exchange of information between Gem's employee and the United
representative occurred during the authorized tour.
First, we point out that the events complained of here occurred
approximately 1 month after bid opening. Also, it is not inherently
improper or unusual for a prospective awardee to recruit some number of
an incumbent contractor's employees in service type contracts. It is
also well-established that the protester has the burden of proving its
case. International Alliance of Sports Officials, B-211755, Jan. 25,
1984, 84-1 CPD Paragraph 117. The agency specifically denies that any
alleged coercion of Gem's employees occurred during the site visit by
United's representative or that government officials left the visitor
unescorted. While Gem attempts to refute this in its comments on the
agency's report, where the record consists of conflicting statements by
the agency and the protester, we do not believe that the protester has
established the validity of its assertion. See Crown Point Coachworks
and R&D Composite Structures, North American Racing Company, B-208694,
B-208694.2, Sept. 29, 1983, 83-2 CPD Paragraph 386. We therefore
believe that Gem has failed to meet its burden of proving any wrongful
conduct on the part of agency officials. See Alchemy, Inc., B-207954,
Jan. 10, 1983, 83-1 CPD Paragraph 18. Thus, at best, this allegation
involves a question of alleged improper business practices by United and
not the government. As such, it is a dispute between private parties
which will not be considered under our Bid Protest Procedures. See
Computer Science Corporation, B-194286.3, July 3, 1979, 79-2 CPD
Paragraph 5.
Next, Gem complains that its bid was improperly rejected as
nonresponsive simply because its bid bond referenced the wrong
solicitation number. Under our Bid Protest Procedures, 4 C.F.R.
Section 21.1(a) (1984), a party must be "interested" in order to have
its protest considered by our Office. In general, we will not consider
a party's interest to be sufficient where that party would not be
eligible for award even if the issues raised were resolved in its favor.
See Bay Shipbuilding Corporation -- Reconsideration, B-209435.3, Dec.
7, 1982, 82-2 CPD 316. Here, United's bid is low, the responsiveness of
its bid has not been challenged, and the agency considers United to be
in line for award. Therefore, even if Gem's protest concerning the
responsiveness of its own bid were resolved in its favor, Gem would not
receive the award. Accordingly, with respect to this issue Gem is not
an interested party within the meaning of our Bid Protest Procedures.
See Doucette Industries, B-211887, June 17, 1983, 83-1 CPD Paragraph
665.
The protest is dismissed.
Comptroller General
of the United States
FILE: B-217037 85-1 CPD 654
DATE: June 7, 1985
MATTER OF: Monaco Enterprises Inc.
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - ADVERSE AGENCY ACTION EFFECT
1. Protest not made to GAO within 10 working days of initial adverse
agency action on protest filed with agency is untimely. An agency's
continued receipt of proposals after a protest has been filed without
taking the requested corrective action is initial adverse agency action.
CONTRACTS - CONFLICT OF INTEREST PROHIBITIONS - GENERALLY
2. An allegation of a conflict of interest is denied where engineer,
alleged employee of awardee, serves on national committee comprised of
18 individuals which formulated standards used in specifications, since
it is unlikely engineer would have exerted enough influence to favor
awardee.
Monaco Enterprises Inc. (Monaco) protests the award of a contract by
the Department of the Navy to King-Fisher Company (King-Fisher) for fire
alarm systems. Monaco charges that the specifications were defective,
that the Navy unreasonably required that the equipment used be
Underwriter Laboratory (U.L.) listed, and that an employee of
King-Fisher was instrumental in formulating the specifications. The
protester says these irregularities combine to unduly restrict
competition.
The Navy contends that the specifications were consistent with
guidelines established by the National Fire Protection Association
(NFPA) for fire alarm systems. The Navy also argues that contentions
raised by the protester after September 17, 1984, the date set for
receipt of initial proposals, are untimely.
We dismiss the protest in part and deny the remainder.
On September 14, 1984, Monaco filed a protest with the Navy
expressing its dissatisfaction with the specifications contained in the
request for proposals (RFP). Although it did not contact Monaco or
specifically respond to the protest until October 23, the Navy received
proposals as scheduled until the September 17 closing date. Monaco did
not file a protest with us until November 5, when it continued its
protest against the specifications and raised additional protest bases.
Monaco's arguments concerning defects in the specifications must be
dismissed as untimely. Our Regulations require that where a protest is
initially filed with a contracting agency, a subsequent protest to this
Office must be filed within 10 working days after the protester has
actual or constructive notice of the initial adverse agency action on
the protest. 4 C.F.R. Section 21.2(a) (1985). An agency's continuing
with the receipt of proposals as scheduled without taking the requested
corrective action is such adverse agency action. 4 C.F.R. Section
21.0(e). The fact that the agency does not formally deny the protest
until a later date does not alter the fact that initial adverse action
has previously occurred and that a protester has 10 days from the date
of that action to protest with us. Central Air Service, B-213205, Feb.
5, 1984, 84-1 C.P.D. Paragraph 147. Here, since the protest to our
Office was not filed within 10 days after the closing date for receipt
of proposals, it is untimely.
Monaco's protest that the Navy unreasonably required U.L. listed
equipment is also untimely. Monaco did not raise this issue in its
initial protest to the agency. Although protesters may bring additional
protest bases in subsequent filings, they must independently satisfy our
timeliness requirements. An alleged solicitation defect must be
protested prior to the closing date for receipt of proposals. 4 C.F.R.
Section 21.2(a)(1). Since the RFP, as issued, contained the U. L.
requirement, Monaco knew of the requirement upon receipt of the RFP and
had to raise this matter prior to the proposal due date.
Monaco's third contention is that a conflict of interest existed
because the engineer who helped design the specifications is also an
employee or agent of the awardee. This protest basis arose when the
contract was awarded, notice of which Monaco received on October 23;
Monaco filed its protest with us within 10 working days thereafter.
Therefore, this issue is timely. See 4 C.F.R. Section 21.2(a)(2).
The record indicates that Mr. Schulman, although an independent
engineer, had prior business dealings with King-Fisher. Specifically,
he had worked as a consultant on a project for King-Fisher, and had
apparently represented the company by paying for a hotel room registered
under its name.
Mr. Schulman is also the chairman of the NFPA Technical Committee
which establishes standards for fire protection equipment. Since the
specifications under protest are almost identical to these standards,
Monaco alleges that Mr. Schulman was influential in their formulation.
The crux of Monaco's contention, therefore, is that an employee of
King-Fisher designed the specifications in a manner to assure
compatibility with the King-Fisher eequipment.
We find that Monaco has not carried its burden of proof on this
issue. While Mr. Schulman is the chairman of the committee that
promulgates guidelines for equipment, the committee is comprised of 18
members, including representatives from businesses, fire departments,
and the federal government. It is unlikely that Mr. Schulman would have
enough influence to design guidelines that favor King-Fisher. Further,
Mr. Schulman had no role in formulating the solicitation or the review
and evaluation of proposals. The Navy was responsible for the selection
of the awardee. Regardless of Mr. Schulman's relationship with
King-Fisher, we find any potential conflict of interest to be too remote
to object to the award.
The protest is denied.
Harry R. Van Cleve
General Counsel
B-217036.2 May 19, 1986
CONTRACTS - PROTESTS - AUTHORITY TO CONSIDER - CONTRACT
ADMINISTRATION MATTERS
1. Whether awardee has furnished a product in accord with
specifications is a matter of contract administration and thus is the
responsibility of the procuring activity and not the General Accounting
Office.
GENERAL ACCOUNTING OFFICE - JURISDICTION - CONTRACTS - DISPUTES -
BETWEEN PRIVATE PARTIES
2. Manufacturer's allegation that the awardee of a government
contract obtained an item through unauthorized channels involves a
dispute between the manufacturer and the awardee and is not for
resolution by the General Accounting Office.
Bio-Rad Laboratories, Inc.
Digilab Division
237 Putnam Avenue
Cambridge, Massachusetts 02139
Attn: Mr. William R. MacLuckie,
Eastern Regional Sales Manager
Gentlemen:
By letter dated January 13, 1986, you request that we investigate
Nicolet Instrument Corporation's performance of a contract for an
infrared spectrometer, including a microsampling accessory, that the
Walter Reed Army Medical Center awarded under request for proposals No.
DADA 15-84-R0067
you previously filed a protest against this award that we denied in
part and dismissed in part. See Bio-Rad Laboratories, Inc., B-217036,
Feb. 6, 1985, 85-1 CPD P 148.
You now state that you have been invited to submit a quote for
service of the microsampler under request for quotations No. DADA
15-86-Q-0031, in which the item is identified by a Digilab part number.
Essentially, you question whether the microsampler furnished by Nicolet
complied with the requirements of the earlier solicitation. You state
that the Digilab microsampler is the only product that will satisfy
these requirements, and that as the sole supplier of this item, you have
never received an order for it from Nicolet.
Your inquiry concerns issues that are not for resolution under our
Bid Protest Requlations, 4 C.F.R. Part 21 (1985). To the extent that
you are questioning whether Nicolet has delivered a microsampler that is
in accord with specifications, this is a matter of contract
administration and is thus the responsibility of the contracting agency,
not our Office. See IBI Security Services, Inc., B-218565, July 1,
1985, 85-2 CPD P 7. To the extent that you are alleging that Nicolet
may have obtained a Digilab microsampler through unauthorized channels,
this involves a dispute between Digilab and Nicolet and is also not for
resolution by our Office. See Wayne H. Coloney Co., Inc., B-211789,
Aug. 23, 1983, 83-2 CPD P 242.
We therefore can neither accommodate your request that we look into
the matter nor legally object to Walter Reed's issuance of a request for
quotations for service of the microsampler.
Sincerely,
Ronald Berger
Deputy Associate
General Counsel
FILE: B-217036 85-1 CPD 148
DATE: February 6, 1985
MATTER OF: Bio-Rad Laboratories, Inc.
DIGEST:
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - SPECIFICATION -
AMBIGUOUS - ALLEGATION NOT SUSTAINED
1. By merely contending that salient characteristics could be
interpreted several ways and that common meaning does not include
approach proposed by awardee, protester did not show that description of
salient characteristic of brand name item was ambiguous or unreasonably
interpreted by procuring agency.
CONTRACTORS - RESPONSIBILITY - DETERMINATION - REVIEW BY GAO -
2. Claims that offeror cannot provide offered product or meet
delivery schedule are questions of responsibility, which GAO does not
review except in limited circumstances not present here.
Digilab Divison of Bio-Rad Laboratories, Inc. protests the award of a
contract for an infrared spectrometer to Nicolet Instrument Corporation
under request for proposals (RFP) No. DADA15-84-R-0067, issued by the
Walter Reed Army Medical Center. Digilab contends that the infrared
spectrometer offered by Nicolet does not meet three of the salient
characteristics listed in the brand name or equal purchase descriptions.
We deny the protest in part and dismiss it in part.
The RFP specified an infrared spectrometer manufactured by Digilab as
the brand name item, and listed a number of salient characteristics that
"equal" items had to meet. In response to the RFP, Digilab offered the
brand name spectrometer and an alternative "equal" spectrometer.
Nicolet proposed an "equal" spectrometer.
Digilab argues that the spectrometer offered by Nicolet does not meet
the salient characteristic of being "electronically or thermally
stabilized." The Army reports that it reviewed the Nicolet proposal and
concluded that Nicolet used a "computer-driven optical alignment system"
to adjust to temperature variations which was a satisfactory
electronic/optical method of producing optical stability. In response,
Digilab offers only its own statements that the term "electronically or
thermally stabilized" can be interpreted in several ways, and that the
commonly accepted meaning does not include the Nicolet approach.
Digilab offers no evidence of any kind to support its assertions.
The protester has the burden of affirmatively proving its case. TM
Systems, Inc., B-214303, Aug. 14, 1984, 84-2 CPD Paragraph 174. We do
not conclude from Digilab's bare assertion either that the term
"electronically or thermally stabilized" is ambiguous or that it was
unreasonably interpreted by the Army technical evaluators in their
determination that the Nicolet spectrometer has the required
characteristic.
In its proposal, Nicolet offered to meet the salient characteristic
of a "microsampling accessory" by providing a component manufactured by
Digilab. Nicolet offered a streaming magnetic tape system to meet the
"temporary data storage" requirement. Digilab states that Nicolet has
not sought to buy from Digilab the microsampling accessory which it
offered. Therefore, the protester concludes that Nicolet cannot meet
the 90-day delivery requirement of its contract without supplying a used
item to the Army. Also Digilab states that Nicolet has never sold a
streaming magnetic tape system, although such a system is described in
Nicolet's technical literature.
Digilab does not contend that Nicolet's offer does not comply with
the microsampling accessory and temporary data storage requirements of
the RFP. Nor does Digilab argue that Nicolet is not obligated to
provide the offered product. Rather, the protester questions Nicolet's
ability to perform the contract, which constitutes a challenge to the
contracting officer's determination about Nicolet's responsibility.
Business Equipment & Systems, Inc., B-212708, Sept. 6, 1983, 83-2 CPD
Paragraph 307. Absent a showing of possible fraud or other
circumstances not present here, we do not review agency determinations
of responsibility. Teal Industries, Inc., B-208358, Aug. 24, 1982, 82-2
CPD Paragraph 176.
The protest is denied in part and dismissed in part.
Comptroller General
of the United States
B-217033, Nov 26, 1984, 84-2 CPD 570
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Solicitation improprieties - Apparent prior to
closing date for receipt of proposals
DIGEST:
Protest of specification amendment either filed with agency prior to
next closing date for receipt of proposals and not filed with GAO within
10 working days of initial adverse agency action, or filed with GAO
after net closing date for receipt of proposals, is untimely.
SMS Data Products Group:
SMS Data Products Group (SMS) protests the award of a contract for
single and multiuser microcomputer systems to Virginia Information
Systems Corporation (VISC), under request for proposals (RFP) No.
DAAG38-84-R-0013 issued by the Department of the Army. SMS asserts that
the RFP specifications were overly restrictive and that its lower price
offer should have been accepted.
We dismiss the protest as untimely.
The RFP was issued using brand name or equal specifications. SMS
submitted an initial proposal offering an equal product on July 24,
1984. By letter of August 31, 1984, the Army notified SMS of certain
aspects of its proposal which were technically unacceptable and outlined
the changes needed to render the proposal compliant with the Army's
minimum technical requirements. The letter also stated that a 32-bit
microprocessor was now required as a result of an amendment issued on
August 29, 1984, and that SMS's proposed microprocessor did not satisfy
that requirement. In response, by letter of September 11, 1984, SMS
submitted a modified proposal which acknowledged the amendment and made
most of the technical changes outlined in the Army's letter of August
31. However, SMS took exception to the amended requirement and
continued to offer a 16-bit microprocessor. The Army replied by letter
dated October3, 1984, received by SMS on the same day, which advised SMS
that its offer of a 16-bit microprocessor was technically unacceptable
and stated that the 32-bit microprocessor requirement was a firm and
critical part of the technical specifications which could not be
changed. SMS was also advised that its proposal was otherwise compliant
and that best and final offers were due by October 16, 1984.
SMS then submitted a best and final offer, again offering its 16-bit
microprocessor, and again asserting that it took exception to the 32-bit
microprocessor requirement. The Army advised SMS by letter of October
26, 1984, that its offer was found technically unacceptable because of
its failure to provide a 32-bit microprocessor as required. Award was
made to VISC for $216,897. SMS filed a protest with our Office on
November 5, 1984, alleging that the 32-bit requirement was improper and
asserting that its offer for $185,136 should have been accepted by the
Army.
Under our Bid Protest Procedures, 4 C.F.R. Sec. 21.2(b)(1) (1984),
protests of alleged solicitation improprieties that are obvious from the
face of a solicitation amendment must be filed with the contracting
activity or GAO prior to the next closing date for receipt of proposals.
If the protest is filed initially with the contracting activity, any
subsequent protest of GAO must be filed within 10 working days of the
agency's initial adverse action. 4 C.F.R. Sec. 21.2(a) (1984).
Here, SMS took exception to the allegedly restrictive specifications
in its proposal modification of September 11, 1984. the Army's letter
of October 3, 1984, stated that it declined to change the specification
and set October 16, 1984, as the next date for receipt of proposals.
SMS's protest was filed with GAO on November 5, 1984. If SMS's
exception in its September 11 proposal is considered a protest to the
Army, SMS's protest to GAO is untimely because it was filed more than 10
working days after the initial adverse agency action which was contained
in the Army's October 3 letter. If SMS's exception is not considered a
protest, the SMS's protest is untimely because it was not filed prior to
the next closing date for the receipt of proposals. Applicon, a
Division of Schlumberger Technology Corporation, B- 213355, June 11,
1984, 84-1 C.P.D. Para. 613. COMP GEN (UP)
B-217029, Nov 26, 1984, 84-2 CPD 569
CONTRACTS - Options - Not to be exercised - Contract administration
matter - Not for GAO resolution
DIGEST:
Where an option is exercisable at the sole discretion of the
government, the decision not to exercise the option is a matter of
contract administration which GAO will not review under its bid protest
function.
Precision Cabinet Company:
Precision Cabinet Company protests the failure of Warner Robins Air
Force Base, Georgia, to exercise the first option to extend contract No.
F09650-83-C0050 for an additional period of performance. The contract
is for the repair of kitchen facilities in military family housing.
Precision contends that its performance during the initial contract
period was satisfactory and that the option was not exercised due to a
dispute involving another contract.
Where the option provision of a contract is exercisable at the sole
discretion of the government, we will not consider an incumbent
contractor's contention that the agency should exercise the option.
Such a decision is a matter of contract administration and not within
the purview of our bid protest function. Mardan Marine, Ltd., B-213953,
Jan. 9, 1984, 84-1 CPD Para. 62.
Precision also inquires as to the appropriate person to contact
regarding the exercise of the option. Although other parties may be
involved, the contracting officer is ultimately responsible for
exercising the option and notifying the contractor of such action.
Federal Acquisition Regulation, Sec. 17.207, 48 Fed.Reg. 42.237 (to be
codified at 48 C.F.R. Sec. 17.207); Defense Acquisition Regulation,
Sec. 1-1505, reprinted in 32 C.F.R. pts. 1-39 (1983). Thus, we suggest
first contacting the contracting officer for information.
Finally, Precision questions whether the failure of the Air Force to
exercise the first option to the contract automatically cancels options
for subsequent years. Precision was informed by the Chief if the BAse
Contracting Division that the final two options were canceled. Since
applicable regulations do not address this issue, it depends solely upon
the express terms of the contract and the intent of both parties. Here,
we agree with the Air Force that the intent of the contract is that the
entire relationship between the parties will end on the date specified
in the original contract unless the first option is exercised.
The protest is dismissed. COMP GEN (UP)
FILE: B-217028 85-1 CPD 83
DATE: January 22, 1985
MATTER OF: R. P. Sita, Inc.
DIGEST:
CONTRACTS - AWARDS - LOW BIDDER - RESPONSIVE AND RESPONSIBLE
1. Award of a formally advertised contract must be based on lowest
total price if the bid is responsive and the bidder is responsible.
Statement in IFB that the contract will not necessarily be awarded to
the lowest bidder merely informs bidders that responsiveness and
responsibility are additional factors to be considered before award will
be made.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
2. Protest filed after award, alleging that procurement should have
been negotiated rather than formally advertised, is untimely since the
alleged solicitation impropriety was apparent prior to bid opening date.
R. P. Sita, Inc. (Sita), protests the award of a contract to EESCO
Pump and Valve Co. (EESCO), Baltimore, Maryland, under invitation for
bids (IFB) No. DTFA15-85-B-10004, issued by the Federal Aviation
Administration. The contract is for the performance of mechanical
repairs to various types of equipment at Washington National Airport,
Washington, D.C. Bids were evaluated on the basis of hourly wage rates
proposed multiplied by the IFB's stated estimate of the number of hours
required for each labor category, and award was made on the basis of the
lowest total bid price.
Sita, the second lowest bidder, protests that, although the IFB (part
IV, section "L," paragraph L.1) states that "The fact that a bidder
submits the lowest bid does not automatically mean that he will be
awarded the contract," the contract was awarded to EESCO on the
assumption that the bid offering the lowest hourly wages would be in the
best financial interest of the government. Sita argues that it should
have been awarded the contract because it could complete the required
work in the most cost-efficient manner, even though its hourly wages
were higher than those of the lowest bidder.
Because the procurement was conducted under formal advertising
procedures, evaluation of bids based on a combination of cost and
technical factors, as the protester suggests, would be inappropriate.
The award of a formally advertised contract must be based on the most
favorable cost to the government, assuming the low bid is responsive and
the bidder responsible. See Institute for Aerobics Research, 62 Comp.
Gen. 458 (1983), 83-1 C.P.D. Paragraph 635; Emerson Electric Company,
Environmental Products Division, B-209272, Nov. 4, 1982 82-2 C.P.D.
Paragraph 409. The evaluation procedure suggested by Sita is
appropriate only in a negotiated solicitation. The solicitation clause
to which the protester refers, when read in its entirety, clearly
informs bidders that responsiveness and responsibility are factors to be
considered in addition to cost before an award will be made. Therefore,
we deny the protest on this point.
To the extent that the protester contends that a negotiated
solicitation should have been used and cost effectiveness considered in
view of the nature of this procurement, the protest is untimely because
a protest based upon an alleged impropriety in a solicitation that is
apparent prior to bid opening must be filed prior to bid opening. 4 C.
F.R. Section 21.2(b)(1) (1984); AT&T Information Systems, Inc.,
B-216438, Sept. 24, 1984, 84-2 C.P.D. paragraph 347. The fact that the
procurement was formally advertised was evident when Sita received the
IFB, but Sita did not file its protest in our Office until after bid
opening. Therefore, Sita's protest of the solicitation procedure is
untimely and will not be considered further.
The protest is denied in part and dismissed in part.
Comptroller General of the United States
FILE: B-217027 85-1 CPD 39
DATE: January 14, 1985
MATTER OF: R. P. Sita, Inc.
DIGEST:
BIDS - MISTAKES - VERIFICATION - ACCEPTANCE OF CONTRACT AT INITIAL
BID PRICE
1. Where contracting officer suspects mistake in bid price, but
original bid price is subsequently verified by the bidder, the bid
properly may be considered as originally submitted.
BIDS - PRICE - BELOW COST - NOT BASIS FOR PRECLUDING AWARD
2. Protest that award of contract to low bidder was improper because
the bid was allegedly below cost is dismissed since, even if the low bid
is below cost as the protester contends, that fact alone does not
constitute a legal impediment to award to the low bidder.
CONTRACTS - PROTESTS - ALLEGATIONS - SPECULATIVE
3. Protest allegation that is not supported by evidence in the
written record is regarded as speculation and will not be considered.
R. P. Sita, Inc. (Sita), protests the award of a contract to Edw.
Kocharian & Co. (Kocharian) under invitation for bids (IFB) No.
DAHA49-84-B-0006, issued by the District of Columbia National Guard, for
the repair and replacement of certain heating systems at Andrews Air
Force Base, Washington, D.C.
Sita contends that Kocharian, the low bidder, made a mistake in
calculating its bid price and that the work required cannot be performed
at Kocharian's bid price. Sita suggests that Kocharian's alleged errors
were based upon an inadvertent omission of the cost of certain work
which was required by an amendment to the IFB or a misinterpretation of
the IFB's plans and specifications. Alternatively, Sita claims that the
contracting officer was required to reject Kocharian's bid because it
was below cost. The protester further questions the responsiveness of
Kocharian's bid.
The Department of the Army states that Sita has challenged the low
bidder's responsibility to perform the contract but has provided no
evidence of bad faith in the contracting officer's affirmative
determination of responsibility, or of responsibility criteria in the
solicitation that were not applied. Thus, the Department of the Army
contends, the protester has stated no legal basis for review by the
General Accounting Office. Sita has declined to comment on the
Department's position.
If a contracting officer suspects there is a mistake in a bid,
verification of the bid is to be requested of the bidder. If the bidder
verifies the bid, the contracting officer is to consider the bid as
originally submitted. See K&P Incorporated and Kirsch Maintenance
Service, Inc., B-212263; B-212263.2, Oct. 11, 1983, 83-2 C.P.D.
Paragraph 436 at 4; G.T. Murphy, Inc., B-204351, Feb. 23, 1982, 82-1
C.P.D. Paragraph 161. Sita acknowledges in its bid protest that
Kocharian verified its bid price. Kocharian's bid price was $467,000,
and Sita's bid price was $29,000 more, at $496,000. We do not view the
difference of less than 6 percent between Kocharian's and Sita's bids as
requiring rejection of that bid by the contracting officer on the basis
that the lower bid contained an obvious error. See, G.T. Murphy, Inc.,
B-204351, supra, AT 3. Accordingly, we deny the protest on this point.
We have held that if a low bidder is determined by the contracting
officer to be responsible, the award of a contract to the low bidder is
not legally precluded, even though the bid may be below cost. K&P
Incorporated and Kirsch Maintenance Service, Inc., B-212263;
B-212263.2, supra, 83-2 C.P.D. Paragraph 436 at 5; see also NonPublic
Educational Services, Inc., B-204008, July 30, 1981, 81-2 C.P.D.
Paragraph 69. Accordingly, we will not consider this protest issue
further.
concerning Sita's allegations that Kocharian's bid is nonresponsive,
no evidence has been submitted in support of this contention. Rather,
this charge appears to be conjecture based upon the protester's personal
business judgment. Accordingly, we regard this unsupported argument as
speculation and will not consider it. Janel, Inc., B-214036.2, may 22,
1984, 84-1 C.P.D. Paragraph 547.
We dismiss the protest in part and deny it in part.
Comptroller General of the United States
FILE: B-217024; B-217024.2 85-1 CPD 344
DATE: March 25, 1985
MATTER OF: Andrew Corporation; Cablewave Systems, Inc.
DIGEST:
CONTRACTS - TERMINATION - ERRONEOUS AWARD - REMEDY
1. Protest against agency termination of contract is denied where
award had been made on a bid offering an "equal" product radio
transmission cable and the descriptive material did not demonstrate that
the offered product possessed all the salient characteristics of the
"brand name" product. A contracting officer may not waive compliance
with the salient characteristics even though the product in fact
satisfies the minimum needs of the government.
BIDS - RESPONSIVENESS - BRAND NAME OR EQUAL PROCUREMENT
2. For a bid offering an "equal" product to be responsive to a
"brand name or equal" solicitation, and thus eligible for award, the
descriptive material submitted with the bid or readily available to the
agency must be sufficient to permit the contracting officer to assess
whether the equal product possesses each salient characteristic
identified in the solicitation. If the equal bid includes a model
number, information describing the model may be supplied after bid
opening to show conformance with the salient characteristics, if that
information was in existence prior to bid opening.
CONTRACTS - OFFER AND ACCEPTANCE - ACCEPTANCE - WHAT CONSTITUTES
ACCEPTANCE
3. Acceptance of an offer by the government must be clear and
unconditional and it must appear that both parties intended to make a
binding agreement at the time of the purported acceptance. Notification
by the contracting officer that he had sustained a protest against the
improper award of a contract, that he had determined that the improperly
awarded contract be terminated, and that the protester "should be
receiving the award soon," cannot be considered notice of award since
award is thereby represented as a future action.
BIDS - INVITATION FOR BIDS - CANCELLATION - AFTER BID OPENING -
COMPELLING REASONS ONLY
4. Protest fails to show that agency acted arbitrarily or
capriciously in canceling a "brand name or equal" invitation for bids
(IFB) where the agency determined that a less expensive product which
did not possess all the salient characteristics of the "brand name"
product nevertheless could satisfy the minimum needs of the agency. The
required cogent and compelling reason to cancel an IFB after bid opening
exists where the agency determines after bid opening that the IFB
contains specifications which overstate the minimum needs of the
government or that its needs can be satisfied by a less expensive
alternative.
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - PROTESTOR NOT
IN LINE FOR AWARD
5. GAO will not consider the merits of an allegation that protester
was entitled to a combined award for both Lots I and II, because of its
low overall bid where agency properly canceled solicitation as it
related to Lot II and protester was not in line for award for Lot I
alone, because its bid for that lot was not low.
CONTRACTS - PROTESTS - NOTICE - TO INTERESTED PARTIES
6. The failure to apprise an interested party of the pendency of a
protest to the agency does not give rise to a substantive remedy but, at
best, only provides the basis for the right to a procedural remedy, the
rehearing of a protest. Protester, in essence, received this rehearing
when GAO subsequently considered its protest.
Andrew Corporation (Andrew), and Cablewave Systems, Inc.
(Cablewave), protest the actions of the Defense Industrial Supply Center
(DISC) in regard to invitation for bids No. DLA500-84-B-0348, issued by
DISC for the procurement of radio frequency cable. Andrew alleges that
DISC improperly terminated for the convenience of the government the
contract awarded to Andrew on its "equal" offer for Lot II of the "brand
name or equal" solicitation. Cablewave, on the other hand, argues that
DISC acted improperly in initially failing to award both Lots I and II
to Cablewave and subsequently in refusing to award a contract for Lot II
to Cablewave after DISC terminated Andrew's contract for that lot.
We deny both protests.
The solicitation included 18 items divided between two lots. Bidders
were informed by clause D-81, "AWARD BY ENTIRE LOT/ITEM/SUB-ITEM," that:
"With respect to each lot/item/sub-item identified below, no
award will be made for less than the full requirements shown in
this solicitation for said lot/item:
Lot I, II
Item
Sub-Item
Any offer offering less than all of the solicitation
requirements of any said lots/items/sub-items will be
nonresponsive as to said lot/item/sub-item."
Under Lot I, DISC solicited offers for the supply of 259,000 feet of
3-inch radio frequency cable. Under Lot II DISC solicited offers for
the supply of 211,000 feet of 1-5/8-inch radio frequency cable, with the
cable required to be:
"1-5/8 INCH INNER CONDUCTOR CORRUGATED COPPER DIELECTIC FOAM
POLYETHYLENE, CORRUGATED COPPER OUTER CONDUCTOR, POLYETHYLENE
JACKET, 50 OHMS OUTER DIAMETER 2.00 INCH, ELECTRICAL AND
MECHANICAL CHARACTERISTICS AND TEST PER ANDREW CORP P/N FHJ7-50 OR
EQUAL ANDREW CORP (84147) CHICAGO ILL P/N FHJ7-50 CABLE WAVE
SYSTEMS, INC. (16733) NORTH HAVEN CT P/N FCC158-50J PRODELIN INC
(94661) HIGHSTOWN N.J. P/N 31-1695"
Bidders proposing to furnish an "equal" product were warned that:
"The evaluation of bids and the determination as to equality of
the product offered shall be the responsibility of the Government
and will be based on information furnished by the bidder or
identified in his bid, as well as other information reasonably
available to the purchasing activity. CAUTION TO BIDDERS. The
purchasing activity is not responsible for locating or securing
any information which is not identified in the bid and reasonably
available to the purchasing activity. Accordingly, to insure that
sufficient information is available, the bidder must furnish as a
part of his bid all descriptive material (such as cuts,
illustrations, drawings, or other information) necessary for the
purchasing activity to (i) determine whether the product offered
meets the salient characteristics requirements of the Invitation
for Bids and (ii) establish exactly what the bidder proposes to
furnish and what the Government would be binding itself to
purchase by making an award. The information furnished may
include specific references to information previously furnished or
to information otherwise available to the purchasing activity."
In response to the solicitation, DISC received bids from Andrew and
Cablewave. For Lot I, Andrew offered the brand-name cable specified for
that lot at a bid price of $4.89 per foot, while Cablewave offered a
cable listed in the solicitation as an equal at a final, modified bid
price of $5.15 per foot. The contracting officer accordingly made award
to Andrew for Lot I.
As for Lot II, Cablewave offered its FCC158-50J cable, listed in the
solicitation as an "equal," at a final, modified bid price of $3.56 per
foot. Andrew, on the other hand, offered not only the "brand name"
FHJ7-50 cable, at $3.89 per foot, but also submitted an alternate bid in
which it offered as an "equal" its LDF7-50 low-density type foam cable
at $2.89 per foot. Andrew submitted with its alternate bid a cover
letter in which it claimed that its LDF7-50 cable met or exceeded all
the specifications of the FHJ7-50 cable and a 1981 letter from the Naval
Electronic Systems Command granting "qualification approval" to the
LDF7-50 cable on the basis of test data furnished by Andrew indicating
that the cable complied with certain military specifications. After bid
opening, Andrew submitted copies of Andrew Bulletin No. 1139A, dated
12/82, describing the LDF7-50 cable and Andrew Bulletin No. 1111, dated
8/75, describing the FHJ7-50 cable.
DISC's Directorate of Technical Operations, in response to an inquiry
from the contracting officer, determined that Andrew's LDF7-50 cable was
"ACCEPTABLE . . . FOR THIS DIRECT DELIVERY BUY" and indicated that
action was being taken to establish a new national stock number for the
cable. The contracting officer thereupon made award to Andrew on its
alternate bid for Lot II.
Shortly thereafter, Cablewave protested to DISC, alleging that the
award to Andrew for Lot II was improper because LDF7-50 cable was not an
"equal" to the "brand name" FHJ7-50 cable. Cablewave later added that
it had not offered its own low density foam cable only because the
government had previously not considered low density foam cable to be
the "equal" of the medium density foam cables specified under Lot II.
DISC subsequently determined that Andrew's LDF7-50 cable indeed
failed to meet all the salient characteristics of the "brand name"
FHJ7-50 cable as set forth in the solicitation and, accordingly, decided
to terminate for the convenience of the government Andrew's contract for
Lot II. DISC notified Cablewave of its decision by letter of October
16, indicating that "(y)ou should be receiving the award soon." However,
upon further consideration, DISC concluded that since Andrew's less
expensive LDF7-50 cable met its minimum needs, award of Lot II to
Cablewave "may not be appropriate." DISC so notified Cablewave by letter
of October 26. Both Andrew and Cablewave then filed protests with our
Office.
Andrew contends that the termination of its contract as it relates to
Lot II was arbitrary and capricious, arguing that its LDF7-50 cable is
an "equal" to the "brand name" FHJ7-50 cable. Andrew emphasizes that
DISC has determined that the less expensive LDF7-50 cable satisfies its
minimum needs and points out the Defense Logistics Agency, of which DISC
is a part, stipulated in 1980 that it had no reason to question Andrew's
contention that LDF7-50 cable is equal or superior to FHJ7-50 cable.
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 by a court of competent jurisdiction.
However, where the contracting agency's action is based upon a
determination that the contract was improperly awarded, then our Office
will review the validity of the procedures leading to award to the
terminated contractor. See Amarillo Aircraft Sales & Services, Inc.,
B-214225, Sept. 10, 1984, 84-2 C.P.D. Paragraph 269.
For a bid offering an "equal" product to be responsive to a "brand
name or equal" solicitation, and thus eligible for award, the
descriptive material submitted with the bid or readily available to the
agency must be sufficient to permit the contracting officer to assess
whether the equal product possesses each salient characteristic
identified in the solicitation. See Ruud Lighting, Inc., B-215259, Aug.
17, 1984, 84-2 C.P.D. Paragraph 189. If an equal bid includes a model
number, information describing the model may be supplied after bid
opening to show conformance with the salient characteristics, if that
information was in existence before bid opening. See Scanray
Corporation, B-215275, Sept. 17, 1984, 84-2 C.P.D. Paragraph 299.
However, the above information must demonstrate that the offered product
possesses all the salient characteristics, and a contracting officer may
not waive compliance with the salient characteristics even though the
product in fact satisfies the minimum needs of the government. Id. at
5.
The adequacy of the descriptive material and the equality of the
product it describes are technical evaluations for the judgment of the
contracting agency. Accordingly, we have deferred to the agency's
determination in the absence of evidence showing that determination to
be arbitrary or capricious. See Calma Company, B-209260.2, June 28,
1983, 83-2 C.P.D. Paragraph 31.
The specifications for Lot II provided that an "equal" product must
meet the electrical and mechanical characteristics of FHJ7-50 cable. In
the preexisting descriptive literature submitted by Andrews after
opening, the mechanical characteristics of FHJ7-50 cable were said to
include a flat plate crush strength of 300 pounds per inch and a
hydrostatic crush strength of 750 pounds per square inch. However, the
descriptive literature submitted by Andrew as to its LDF7-50 cable
indicates that this cable possesses a flat plate crush strength of only
150 pounds per inch and gives no indication as to its hydrostatic crush
strength. Since the available descriptive literature indicates that
Andrew's LDF7-50 cable fails to meet one of the salient characteristics
of the "brand name" cable and there is no indication as to whether
LDF7-50 cable meets a second salient characteristic, see Sutron
Corporation, B-205082, Jan. 29, 1982, 82-1 C.P.D. Paragraph 69, we are
unable to conclude that DISC's determination that LDF7-50 is not an
"equal" under Lot II was unreasonable.
We note in this regard that while DISC now believes that the less
expensive LDF7-50 cable will satisfy its minimum needs, the agency
continues to maintain that the crush strength of the cable to be used is
a significant, salient characteristic since the cable may, in some
circumstances, be buried. In any case, as indicated above, contracting
officials may not waive compliance with a salient characteristic in
order to accept a product offered as an "equal" which in fact satisfies
the minimum needs of the government. Accordingly, DISC properly found
that Andrew's alternate bid was nonresponsive to the requirements for
Lot II and that the award to Andrew for that lot was improper.
While Cablewave agrees with DISC that Andrew's alternate bid was
nonresponsive, it questions DISC's subsequent decision to resolicit
DISC's requirement for cable as set forth in Lot II. Cablewave argues
that it has already received notice of award for that lot, citing the
October 16 letter to Cablewave in which the contracting officer
indicated that:
"I have determined that the Lot II portion of the contract with
Andrew Corporation be terminated . . . and that said Lot be
awarded to Cablewave Systems. You should be receiving the award
soon."
The acceptance of an offer by the government must be clear and
unconditional. It must appear that both parties intended to make a
binding agreement at the time of the purported acceptance of the offer;
a contract does not come into existence when the purported acceptance is
conditioned on future actions by the offeror and the procuring agency.
See Northpoint Investors, B-209816, May 17, 1983, 83-1 C.P.D. Paragraph
523; Marino Construction Company, Inc., 61 Comp. Gen. 269 (1982), 82-1
C.P.D. Paragraph 167. Given DISC's reference to future action, "(y)ou
should be receiving the award soon," DISC's October 16 letter to
Cablewave cannot be considered a notice of award or present acceptance
of Cablewave's offer for Lot II. We note in this regard that Andrew's
contract for Lot II apparently was not terminated until October 19, 3
days after the letter to Cablewave.
We see no reason to question the cancellation of the solicitation as
it relates to Lot II. We have recognized that while a solicitation may
be canceled after bid opening only when a cogent and compelling reason
for the cancellation exists, the determination as to whether a
sufficiently compelling reason exists is primarily within the discretion
of the administrative agency. This determination will not be disturbed
absent proof that the decision was clearly arbitrary or capricious or
not supported by substantial evidence. See Jarrett S. Blankenship Co.,
B-211582, Oct. 31, 1983, 83-2 C.P.D. Paragraph 516; Chrysler
Corporation, B-206943, Sept. 24, 1982, 82-2 C.P.D. Paragraph 271.
Moreover, we have also held that when it is determined that an IFB
contains specifications which overstate the minimum needs of the
government or the agency decides after bid opening that its needs can be
satisified by a less expensive alternative, there exists a compelling
reason to cancel the solicitation. Jarrett S. Blankenship Co.,
B-211582, supra, 83-2 C.P.D. Paragraph 516 at 2-3; Chrysler
Corporation, B-206943, supra, 82-2 C.P.D. Paragraph 271 at 3-4; Uffner
Textile Corporation, B-204358, Feb. 8, 1982, 82-1 C.P.D. Paragraph 106.
Accordingly, we do not believe that Cablewave has demonstrated that
DISC's decision to cancel because Andrew's less expensive LDF7-50 cable
could satisfy the government's minimum needs was arbitrary or
capricious.
We note that Cablewave points out that its final, modified bid prices
for Lots I and II combined, when extended, totaled $2,085,010, $2,290
less than the $2,087,300 total of bid prices in Andrew's responsive bid
for Lots I and II. Cablewave interprets clause D-81 to require that
award be made to the bidder offering the lowest overall bid price for
both lots combined and contends therefore that the initial award should
have been made to Cablewave for both lots.
However, given our conclusion that Cablewave has not shown that DISC
acted improperly in canceling the solicitation as it relates to Lot II,
and since Andrew was clearly the low bidder for Lot I, then even if we
were to accept Cablewave's interpretation of the solicitation, Cablewave
would not have been in line for award for Lot I. Accordingly, we will
not consider the merits of this allegation. See M. Pashelinsky & Sons,
Inc., B-214973, Aug. 29, 1984, 84-2 C.P.D. Paragraph 237.
Finally, Andrew observes that it was "not contacted about the merits
of Cablewave's allegations" in the protest to DISC until after the
contracting officer had sustained the protest. We note in this regard
that the October 16 letter to Andrew informing that company of the
contracting officer's determination that the award for Lot II was
improper indicated that the letter was to be both notice of the protest
and notice of the disposition of the protest.
While we believe that DISC should have given Andrew an opportunity to
comment prior to sustaining Cablewave's protest, see Electronic
Associates, Inc., B-184412, Feb. 10, 1976, 76-1 C.P.D. Paragraph 83;
cf. Commonwealth Communications, Inc., B-209322.2, June 6, 1983, 83-1
C.P.D. Paragraph 606, nevertheless, the failure to apprise an interested
party of the pendency of a protest gives rise to no substantive remedy.
At best, this failure provides only the basis for the right to a
procedural remedy, the rehearing of a protest. See BDM Management
Services Co., B-211036.2, Apr. 9, 1984, 84-1 C.P.D. Paragraph 392.
Essentially, that is what Andrew has received here. See Commonwealth
Communications, Inc., B-209322.3, supra, 83-1 C.P.D. Paragraph 606 at
5.
Accordingly, both protests are denied.
Harry R. Van Cleve
General Counsel
FILE: B-217023.2 85-1 CPD 101
DATE: January 25, 1985
MATTER OF: Novak Co., Inc. -- Reconsideration
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - TIMELINESS
Request for reconsideration filed more than 1 month after decision is
issued is untimely.
By letter received on January 2, 1985, Novak Co., Inc., requested
reconsideration of our decision in Novak Co., Inc., B-217023, Nov. 26,
1984, 84-2 C.P.D. Paragraph 568, which dismissed the company's protest
to our Office as untimely filed.
We dismiss the request for reconsideration.
Section 21.9(b) of our Bid Protest Procedures (4 C.F.R. part 21
(1984)) requires that a request for reconsideration be filed within 10
working days of when a protester knows or should have known the basis
for reconsideration, whichever is earlier. A request for
reconsideration filed more than a month after the decision is issued is
untimely. TeOcom, Inc. -- Reconsideration, B-212425.2, et al., July 17,
1984, 84-2 C.P.D. Paragraph 55.
Comptroller General of the United States
B-217023, Nov 26, 1984, 84-2 CPD 568
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Date basis of protest made known to protester
DIGEST:
Protest filed with GAO more than 10 working days after protester
learns of basis for protest is untimely.
Novak Co., Inc.:
Novak Co., Inc. protests the rejection of its bid as nonresponsive
under Department of Justice solicitation No. JDJMD-84-B-0061. Novak
contends that its bid was responsive.
By letter dated September 29, 1984, Novak was notified that its bid
had been rejected and the reasons therefor. Novak filed its protest
with our Office by letter of October 29, 1984, which we received on
November 2. Under our Bid Protest Procedures, a protest must be filed
(received in our Office) not later than 10 working days after the basis
of protest is known or should have been known. 4 C.F.R. Sec. 21.2(b)(
2) (1984). The protest filed here on November 2 obviously does not meet
that requirement. Therefore, it is untimely and not for consideration
on the merits. See Bonvicini Building Co., B-209004, Oct. 8, 1982, 82-2
CPD Para. 322.
The protest is dismissed. COMP GEN (UP)
FILE: B-217021 85-1 CPD 312
DATE: March 15, 1985
MATTER OF: McCabe, Hamilton and Renny Company, Ltd.
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
1. A protest filed more than 10 days after the basis for it is known
is untimely.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SIGNIFICANT ISSUE EXCEPTION - NOT FOR
APPLICATION
2. A protest concerning rejection of a bid as nonresponsive for
inadvertent omission of prices of certain items is not for consideration
under the significant issue exception to GAO's timeliness rules since
the issue raised is not of widespread interest to the procurement
community and has been considered previously.
McCabe, Hamilton and Renny Company, Ltd. protests the rejection of
its bid as nonresponsive to invitation for bids (IFB) No.
N00604-84-B-0129, issued by the Naval Supply Center, Pearl Harbor,
Hawaii, The IFB called for bids on stevedoring services on the island of
Oahu, based on commodity tonnage, labor, and fringe benefit rates. We
dismiss the protest as untimely.
At bid opening on September 24, 1984, the contracting officer noted
that the protester's bid did not include fringe benefits, which were
required to be priced separately. By letter received at the Naval
Supply Center on September 25, McCabe, the incumbent contractor,
attempted to submit these rates, stating that it inadvertently had
omitted them.
On September 28, the Navy awarded a $795,023 contract to Hawaii
Stevedores as the low, responsive, responsible bidder. At a meeting on
October 2, the contracting officer informed McCage that its lower bid of
$700,231 had been found nonresponsive because of the failure to state
fringe benefit rates. McCabe contends that the agency should have
permitted it, as the otherwise successful bidder, to cure the omission
after bid opening. The firm concludes that an award at nearly $95,000
higher than its own bid violates solicitation provisions stating that no
contract will be awarded unless at a "fair and reasonable" price.
Our Bid Protest Procedures require that protests be filed with this
Office or the contracting agency within 10 working days after the basis
for them is known or should have been known, whichever is earlier. 4
C.F.R. Section 21.2 (b)(2) (1984). Here, McCabe knew of its basis of
protest no later than October 2, although there is some indication that
the firm knew that it might be rejected as early as bid opening. Since
the protest was not filed, i.e., received by this Office, until November
2, more than 1 month thereafter, it is untimely, and we will not
consider it on the merits.
McCage argues that even if untimely, its protest should be considered
under the significant issue exception to our timeliness rules. See 4
C.F.R. Section 21.2(c). We will review an untimely protest under this
exception 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. Sequoia Pacific Corp., B-199583,
Jan. 7, 1981, 81-1 CPD Paragarph 13. The exception is strictly
constructed and sparingly used to prevent our timeliness rules from
being rendered meaningless. Dixie Business Machines, Inc., B-208968,
Feb. 7, 1983, 83-1 CPD Paragraph 128.
The protest here does not fall within the exception: an agency's
rejection of a bid as nonresponsive for inadvertent omission of price
items is not of widespread interest to the procurement community, and it
has been the subject of numerous decisions. See, for example, Indus
Group, B-212713, Sept. 12, 1983, 83-2 CPD Paragraph 315; Central
Certificate Registry, Inc., et al., B-209089, Mar. 28, 1983, 83-1 CPD
Paragraph 314.
The protest is therefore dismissed.
Ronald Berger
Deputy Associate
General Counsel
FILE: B-217016 84-2 CPD 654
DATE: December 11, 1984
MATTER OF: Integrity Management International, Inc.
GENERAL ACCOUNTING OFFICE - JURISDICTION - CONTRACTS -
COURT-SOLICITED - ASSISTANCE - SCOPE OF REVIEW - NO PROTEST PENDING
1. GAO furnishes views on court suit where United States District
Court for the Northern District of California has requested an opinion.
Views are based solely on court record transmitted to GAO.
BIDS - UNBALANCED - PROPRIETY OF UNBALANCE - "MATHEMATICALLY
UNBALANCED BIDS" - WHAT CONSITUTES
2. Bid for base period's and option periods' services is not
mathematically unvalanced on its face where base period's price is only
15 percent higher than option period's prices; moreover, examination of
bidder's post-bid-opening explanation as to why base period price was
higher confirms conclusion that bid is not mathematically unbalanced.
Bidder would not receive a windfall if options are not exercised.
BIDS - UNBALANCED - ESTIMATES - ACCURACY
3. Even if low bid contained unbalanced prices for high-volume items
as compared with low-volume items, there is no indication that estimates
for items were erroneous; consequently, low bid may be accepted.
BIDS - UNBALANCED - PRPPRIETY OF UNBALANCE - "MATHEMATICALLY
UNBALANCED BIDS" - MATERIALITY OF UNBALNCE
4. GAO will not consider whether bid is materially unbalanced where
bid is found not to be mathematically unbalanced.
The United States District Court for the Northern District of
California has requested our opinion in a case pending before the court,
Integrity Management International, Inc. (IMI) v. The Honorable John O.
Marsh, Jr., Secretary of the Army, Civil Action No. C-84-6900 EFL, which
involves the propriety of a laundry service contract awarded to East
Coast Support Services, Inc. (East Coast), for a base year period
(October 1, 1984, to September 30, 1985), plus up to 2 additional option
years. Our knowledge of the facts and issues involved in this civil
action is derived solely from the court record which has been furnished
to us.
IMI argues that its low, overall bid was improperly rejected as
"unbalanced" by the Department of the Army, Fort Bragg, North Carolina,
because IMI's base year price was approximately 15 percent higher than
either of its prices for the option years and because the Army
considered East Coast's bid -- the next low, overall bid -- to be more
advantageous given that East Coast would be the lowest bidder for 29 of
the 36 months of contemplated services.
We conclude that IMI's bid should not have been rejected.
The IFB stated that award would be made to the bidder providing the
lowest total price for all 3 years. Bidders were warned that a bid
might be found nonresponsive if it was "materially unbalanced as to
prices for basic and option quantities."
Eight bids were received as of bid opening on September 21, 1984.
The low bidder was allowed to withdraw its bid. The prices submitted by
IMI and by East Coast, the next lowest bidders, were, as follows:
TABLE OMITTED
On October 12, 1984, IMI was informed that its bid had been rejected
as nonresponsive because of the contracting officer's determination that
its bid was unbalanced as between the base year and the option years.
IMI says that it was told at the same time that award had been made to
East Coast.
Our Office has recognized that unbalanced bidding entails two
aspects. The first is a mathematical evaluation of the bid to determine
whether each bid item carries its share of the cost of the work plus
profit or whether the bid is based on nominal prices for some work and
enhanced prices for other work. However, we have recognized that a
difference of 25 to 50 percent between the base bid and the bid on the
option years does not necessarily render a bid mathematically
unbalanced. Applicators, Inc., B-215035, June 21, 1984, 84-1 C.P.D.
Paragraph 138. The second aspect -- material unbalancing -- involves as
assessment of the cost impact of a mathematically unbalanced bid. A bid
is materially unbalanced if there is a reasonable doubt that award to
the bidder submitting the mathematically unbalanced bid will result in
the lowest ultimate cost to the government. Consequently, a materially
unbalanced bid may not be accepted. Reliable Trash Service, B-194760,
Aug. 9, 1979, 79-2 C.P.D. Paragraph 107.
As to mathematical unbalancing, the record shows that the Army
determined that IMI's bid was mathematically unbalanced because IMI's
base bid was 15 percent higher than its option prices. On October 27,
1984, the Army's contracting officer further found that IMI had
"enhanced" its bid for items 51, 66, and 68 (washing, ironing, and
folding of bed sheets, turkish bath towels, face or hand towels). The
contracting officer further noted that IMI had doubled its unit prices
for these items 2 days before bid opening in an amended bidding schedule
without explanation. Nevertheless, IMI had not changed other prices for
similar items found in comparable, but low volume, items 52, 67, and 69
(bed sheets, turkish bath towels and hand or face towels to be dyed as
well as washed, ironed, and folded). Consequently, the contracting
officer concluded that IMI's prices for items 51, 66, and 68 were
"enhanced to the extent that the unit prices (for these items) did not
accurately reflect the actual cost of the work (involved)."
As to the 15-percent difference between IMI's base period and option
period prices, the Army's finding that this variance constituted
mathematical unbalancing was incorrect under the Propserv decision,
above.
In Propserv, the lowest bid priced the basic contract term and 3
option years at $18,000, $14,000, $13,000, and $12,000, respectively;
in percentage terms, these base/option period price differentials
amounted to 27, 40, and 50 percent. The low bidder did not offer any
explanation as to why its bid contained these differentials. Nor did
the procuring agency suggest any reason for the differentials. We
rejected the protester's allegation that these circumstances rendered
the low bid mathematically unbalanced.
Moreover, we conclude that IMI's post-bid-opening explanations of why
it bid the 15-percent differential do not otherwise contradict our
conclusion that IMI's bid is not mathematically unbalanced since those
explanations show that IMI would not obtain a windfall if all options
are not exercised. IMI explained that additional first year costs
caused the difference and that the 15-percent differential (amounting to
about $80,000) consisted of the following elements: (1) $22,000 to move
IMI's "most experienced" laundry contract manager and his family from
Hawaii to North Carolina; (2) $12,000 to move IMI's proposed assistant
manager (who would be needed for 1 year) and his family from California
to North Carolina plus the assistant manager's salary ($27,500) for 1
year; (3) $3,300 under the accelerated depreciation accounting method
for the first year depreciation of vehicles; (4) $12,000 in higher
labor costs for the first year compared with the option years when labor
efficiency would be higher and labor costs would, presumably, be less;
(5) $2,500 for additional corporate travel expenses and incidental
startup costs related to the first year. The above costs are properly
allocable to the first year, and IMI would not receive a windfall should
the options not be exercised. Consequently, these post-bid-opening
explanations confirm our conclusion that IMI's bid is not mathematically
unbalanced. See Roan Corporation, B-211228, Jan. 25, 1984, 84-1 C.P.D.
Paragraph 116 at page 4.
As to the 100-percent variation in unit prices bid for items 51, 66,
and 68 compared with the unit prices bid for items 52, 67, and 69, we
have held that, if the government's estimate for the individual items
involved is a reasonably accurate representation of actual anticipated
needs, an admittedly mathematically unbalanced low bid may be accepted.
Edward B. Friel, Inc., 55 Comp. Gen. 231 (1975), 75-2 C.P.D. Paragraph
164. In other words, a mathematically unbalanced bid is to be rejected
as materially unbalanced only where there is doubt with respect to the
IFB's requirement estimates. Where the estimates are in doubt, a bidder
could gamble that requirements will be very different from those stated
and that, therefore, bid unbalancing would not damage its interest while
possibly resulting in a disadvantageous price to the government.
Applying these concepts, even if the prices for items 51, 66, and 68
rendered IMI's low bid unbalanced, IMI's bid may be accepted since there
is no indication in the record that the high-volume estimates for the
items were other than reasonable.
Given our conclusion that the base/option price differential in IMI's
bid does not render the bid mathematically unbalanced on its face, we
need not consider the Army's argument that, because IMI's bid would not
become low until the 30th month of the 36 months of contemplated
services, IMI's bid was materially unbalanced. Under our decisions
(see, for example, Roan Corporation, above, at pages 4-5), we do not
consider the issue of material unbalancing unless we have first
determined a bid to be mathematically unbalanced -- a determination
which we cannot make about IMI's bid insofar as its base period/option
period price differential is concerned.
Consequently, it is our view that IMI's bid was improperly rejected.
Comptroller General of the United States
FILE: B-217014.2 85-1 CPD 110
DATE: January 28, 1985
MATTER OF: Quality Inn - Reconsideration
DIGEST:
CONTRACTS - PROTESTS - BURDEN OF PROOF - ON PROTESTOR
Request for reconsideration of a decision dismissing protest on the
ground that protester did not show that fraud or bad faith was involved
in the Small Business Administration denial of a certificate of
competency is again dismissed as protester still has not produced
evidence of fraud or bad faith.
Quality Inn requests reconsideration of our decision in Quality Inn,
B-217014, Nov. 26, 1984, 84-2 C.P.D. Paragraph 567, in which we
dismissed Quality Inn's protest. We dismissed the protest on the ground
that our Office will not review the Small Business Administration's
(SBA) denial of a certificate of competency to Quality Inn absent a
prima facie showing of fraud or such willful disregard of facts as to
imply bad faith. Quality Inn had produced no evidence to make such a
showing.
Quality Inn requests that we reconsider our decision dismissing its
protest, but it still does not produce any evidence of fraud or bad
faith. Rather, Quality Inn states that it has submitted a Freedom of
Information Act (FOIA) request to SBA which Quality Inn expects will
produce such evidence.
A protester has the burden of affirmatively proving its case. T.M.
Systems, Inc., B-214543.2, Sept. 18, 1984, 84-2 C.P.D. Paragraph 313.
Here, Quality Inn has made no showing of fraud or bad faith, but merely
alleges it will in the future produce such information. Since, as
Quality Inn admits, there is no evidence before us to sustain its
protest, we again dismiss the protest.
We note, however, that a protest based entirely on materials received
pursuant to an FOIA request will be considered timely if filed within 10
days of the protester's receipt of information upon which its protest is
founded and the protester diligently pursued the release of information
under the FOIA. Carrier Corporation, B-214331, Aug. 20, 1984, 84-2
C.P.D. Paragraph 197. Accordingly, Quality Inn may refile its protest
at a later date if it obtains information based on its FOIA request to
meet the above-stated review standard.
/s/ Harry R. Van Cleve
General Counsel
B-217014, Nov 26, 1984, 84-2 CPD 567
CONTRACTS - Small business concerns - Awards - Small Business
Administration's authority - Certificate of Competency
DIGEST:
Under 15 U.S.C. Sec. 637(b)(7), Small Business Administration has
authority to issue or deny a certificate of competency and GAO will not
review an SBA determination absent prima facie showing of fraud or
willful disregard of facts.
Quality Inn:
Quality Inn protests the award of a contract to Mariner Hotel under
solicitation No. DAKF15-84-B-0007, issued by the Department of the Army.
The solicitation is for lodging, meals and transportation for male and
female Armed Forces applicants.
Quality Inn complains that although it was the lowest bidder, the
Army has awarded the contract to Mariner Hotel because the Small
Business Administration (SBA) refused to issue Quality Inn a certificate
of competency (COC). Quality Inn contends that it was prejudiced by the
contracting officer's expression of negative views regarding Quality Inn
to the SBA and, therefore, caused SBA to deny Quality Inn a COC. In
addition, Quality Inn asks us to determine if there was bid collusion
because the contracting officer required an SBA evaluation for a COC
only after the bids were open, at which time it was obvious that Quality
Inn was the low bidder.
We dismiss the protest. SBA has conclusive authority by law to make
final determination of responsibility for small business concerns under
a particular procurement pursuant to its COC procedures. 15 U.S.C.
Sec. 637(b)(7) (1982). Therefore, our Office Generally will not review
such SBA determinations unless there is a prima facie showing of fraud
or such willful disregard of facts as to imply bad faith. J. Baranello
and Sons, 58 Comp.Gen. 509 (1979), 79-1 C.P.D. Para. 322; Calcagni
Machine Works, Inc., B-203598, June 16, 1981, 81-1 C.P.D. Para. 536;
Horsburgh & Scott Company, Appleton Machine Company, B-213800;
B-213800.2, Dec. 21, 1983, 84-1 C.P.D. Para. 12. No such showing has
been made here. The mere statement that the contracting officer may
have communicated with SBA expressing negative views about Quality Inn
does not establish bad faith. Cal Pacific Fabricating Inc, B-214946,
May 22, 1984, 84-1 C.P.D. Para. 552. In addition, it was proper for the
contracting officer to await requesting a COC on Quality Inn until it
was clear that Quality Inn was the low bidder since there is no need to
request a COC from a bidder who would not be in line for award.
The protest is dismissed. COMP GEN (UP)
B-217013, Nov 26, 1984, 84-2 CPD 566
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Date basis of protest made known to protester
DIGEST:
Protest concerning rejection of quotation, filed with GAO more than
working days after protester was notified that the products it proposed
to deliver were unacceptable, is untimely and not for consideration on
the merits.
Peck Equipment Company, Inc.:
Peck Equipment Company, Inc. (Peck), protests the disqualification of
its offer to supply surplus blade assemblies under request for
quotations No. DLA-700-84-Q-BN61, issued by the Defense Construction and
Supply Center, Columbus, Ohio.
We dismiss the protest.
Under our Bid Protest Procedures, a protest based on other than a
solicitation impropriety must be filed (received) within 10 working days
after the basis of protest is known or should have been known. 4 C.F.R.
Sec. 21.2(b)(2) (1984). Peck states that it was informed on October 15
and 16, 1984, by government procurement officials, that the blade
assemblies which it proposed to deliver were not acceptable. Peck's
protest was filed on November 2, 1984, more than 10 working days after
Peck knew the basis for protest. Accordingly, the protest is untimely
and not for consideration on the merits. Grangeville Chamber of
Commerce, B-215392, June 27, 1984, 84-1 C.P.D. Para. 682. COMP GEN (UP)
FILE: B-217010 85-1 CPD 188
DATE: February 12, 1985
MATTER OF: Development Alternatives, Inc.
DIGEST:
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
PERSONNEL AVAILABILITY - REASONABLENESS
1. Evaluation of offeror's proposed key personnel, who were changed
after award, is not objectionable when offeror provided firm letters of
commitment and submitted names in good faith.
CONTRACTS - PROTESTS - CONTRACT ADMINISTRATION - NOT FOR RESOLUTION
BY GAO
2. Whether offeror substituted key personnel immediately following
contract award in a manner inconsistent with the requirements of the
contract is a matter of contract administration which is not for GAO
review.
Development Alternatives, Inc. (DAI), protests the award of a
contract to the University of Southern California (USC) under
solicitation No. RFP/COD/OTR-016, issued by the Agency for International
Development (AID) for the implementation and evaluation of a Development
Studies Program. DAI contends that USC's proposal was improperly
evaluated and that USC substituted key personnel immediatley following
contract award in a manner inconsistent with the requirements of the
contract. We deny the protest in part and dismiss it in part.
The contracting officer awarded the contract to USC on September 28,
1984. On October 10, 1984, DAI protested to AID, alleging that USC
failed to satisfy the requirements that AID detailed in the RFP for
faculty personnel. The quality of personnel was assigned 50 percent in
the RFP's evaluation scheme. Firm letters of commitment from the
individuals nominated as core faculty members, including the project
director, were required. According to DAI, USC made recruiting
overtures after contract award to several individuals, indicating that
final decisions had not yet been made on the core faculty positions.
From these facts, DAI concludes that either: (1) AID knowingly signed a
contract with an institution which did not have personnel of the
requisite caliber to carry out the project, or (2) USC concealed its
weaknesses in the critical area of staffing until after the contract was
signed, perhaps by using "stalking horses" (candidates who had no
intention of working on the contract if it were awarded) in its
proposal.
AID denied DAI's protest on October 19, stating that USC provided
letters of commitment from all proposed personnel and that the Project
Director proposed by USC was listed under the "Key Personnel" section of
the contract. AID was satisfied that USC did not propose personnel
which it had no intention of providing.
On November 1, 1984, DAI filed a protest with our Office, raising the
same issues as in its protest to AID and alleging that USC had notified
the individual whose name appeared as project director in USC's proposal
-- and whose name appeared in the "Key Personnel" clause of the contract
-- that his services would not be required, and that another person had
been recruited for that position. DAI argues that USC thus changed
personnel immediately after the contract was signed, without the
knowledge of the proposed individual and, presumably, without AID's
prior knowledge or approval. DAI contends that the substitutions made
by USC amounted to far more than a minor modificatio- of its proposal
and effectively invalidated USC's proposal.
DAI's objection that USC's proposal was improperly evaluated is not
supported by the record. For key employees to be considered in the
evaluation of the offeror's proposal, absent a contractual relationship,
the agency must reasonably be assured that they are firmly committed to
the offeror. See Management Services Incorporated, 55 Comp. Gen. 715
(1976), 76-1 C.P.D. Paragraph 74. Here, AID provided for such assurance
by including in its RFP requirements that "written confirmation from
long-term personnel attesting to their intentions and availability to
work on this contract for the term stated must be provided with the
offeror's proposal." USC provided the required letters of commitment.
An agency's evaluation of an offeror's key personnel, even though
some are changed after award, is not objectionable when the names are
submitted in good faith by the offeror with the consent of the
respective individuals. Kirschner Associates, Inc., B-187625, June 15,
1977, 77-1 C.P.D. Paragraph 426. Here, it appears that USC submitted
the names of key personnel in good faith and with their consent.
According to USC, two of the four individuals originally proposed are
working on the contract. A third individual informed USC just after the
contract was signed that she had decided to stay at her current job and
would be unavailable to serve on the project. A fourth individual
introduced new conditions for his employment as project director after
the contract was signed, which conditions USC determined were
inappropriate for the project director's role and inconsistent with
USC's administrative policies for full-time administrators. In view of
these facts and AID's report that USC did not propose personnel which it
had no intention of providing, we conclude that the aspect of DAI's
protest dealing with improper evaluation of USC's proposal is without
merit.
Both the RFP and the contract awarded to USC contained a key peronnel
provision requiring consent of the contracting officer for changes in
key personnel. Under this provision, AID insures that the contractor
replaces key personnel with individuals who have equal or better
qualifications. Whether USC substituted key personnel immediately
following contract award in a manner inconsistent with the requirements
of the contract is a matter of contract administration, which is not for
our review. Reliability Sciences, Inc., B-205754.2, June 7, 1983, 83-1
C.P.D. Paragraph 612.
The protest is denied in part and dismissed in part.
Comptroller General
of the United States
FILE: B-217007 84-2 cpd 665
DATE: December 13, 1984
MATTER OF: Larrabee Logging Company
BIDDERS - UNSUCCESSFUL - SUBCONTRACTING
1. There is no prohibition against an unsuccessful bidder working as
a subcontractor for a successful bidder.
BIDS - PRICES - REDUCTION PROPRIETY
2. It is permissible for a bidder to change its bid price prior to
bid opening.
BIDS - COLLUSIVE BIDDING - ALLEGATIONS UNSUPPORTED BY EVIDENCE
3. Allegation of collusion among two low bidders and bonding company
is denied where no evidence is submitted to support allegation.
However, if protester has specific information, it should be presented
to the contracting officer for possible forwarding to the Department of
Justice in accordance with the Federal Acquisition Regulation.
Larrabee Logging Company (Larrabee) protests the award of a contract
to either of the two low bidders under solicitation No. R10-84-36 issued
by the United States Department of Agriculture, Forest Service, for a
road project in Tongass National Forest, Alaska.
We deny the protest.
Larrabee protests the award to the low bidder on the basis that it
attempted to correct its bid after the bid opening. However, Larrabee
indicates that award will not be made to the low bidder, which the
contracting agency has verified informally. Accordingly, there is no
need for our Office to consider the protest against award to the low
bidder.
Larrabee protests the award to the second low bidder on the basis
that prior to bid opening, the second low bidder approached the low
bidder about subcontracting the work on the project if the second low
bidder received the contract. However, there is no prohibition against
an unsuccessful bidder working as a subcontractor for a successful
bidder.
Larrabee also protests that the second low bidder lowered its bid
before bid opening in an attempt to make it lower than Larrabee's bid.
However, it is permissible for a bidder to change its bid price prior to
bid opening. Federal Acquisition Regulation, Section 14.303(a), 48 Fed.
Reg. 42,102, 42,177 (1983) (to be codified at 48 C.F.R. Section
14.303(a)).
While Larrabee alleges collusion on the part of the low and second
low bidders and a bonding company in connection with bidding on the
subject solicitation, Larrabee has provided no evidence in support of
this allegation and we therefore deny this aspect of the protest.
However, if Larrabee has specific evidence of criminal conduct, it
should be presented to the contracting officer for possible forwarding
to the Department of Justice in accord with Federal Acquisition
Regulation Section 3.303, 48 Fed. Reg. 42,102, 42,110 (1983) (to be
codified at 48 C.F.R. Section 3.303). See Medi Coach Inc., B-214034,
May 2, 1984, 84-1 C.P.D. Paragraph 501.
We have acted on the protest without receiving a contracting agency
report since the protester's initial submission is clearly without
merit. 4 C.F.R. Section 21.3(g) (1984).
Comptroller General of the United States
B-217001, Nov 27, 1984, 84-2 CPD
CONTRACTS - Protests - Abeyance pending court action
DIGEST:
GAO will dismiss a protest where the material issues are before a
court of competent jurisdiction, the protester has not requested that
the court seek a GAO opinion, and the court has not otherwise expressed
an interest in receiving GAO's views.
Pacific Radiology Associates, P.S., Inc.:
Pacific Radiology Associates, P.S., Inc. protests the award of
contracts by the Department of Health and Human Services (HHS) to
Pacific Health Associates of Seattle and to Sterling Medical Associates.
We dismiss the protest.
Under request for proposals No. 243-RFP-84-0025, the Alaska Area
Native Health Service sought diagnostic radiology consultation services
at six hospitals. Pacific Radiology alleges that the technical and cost
evaluation of its proposal for such services was deficient and that HHS
did not follow proper procedures for the award of negotiated contracts.
On October 26, 1984, Pacific Radiology filed a suit in the United
States District Court for the Western District of Washington (Civil
Action No. C841474), seeking injunctive relief, damages for breach of
implied contract, and attorney's fees and costs. The court's resolution
of the issues before it, which are identical to those raised in the
protest filed with out Office on November 1, 1984, will control the
resolution of the protest. It is our policy not to decide protests
where the material issues are before a court of competent jurisdiction
unless the court requests, expects, or otherwise expresses an interest
in our views. 4 C.F.R. Sec. 21.10 (1984).
It is apparent from copies of the pleadings submitted to our Office
that the protester in this case has not requested that the court seek
our opinion on the matter before it, and the court has not otherwise
indicated an interest in our decision. Therefore, we dismiss Pacific
Radiology's protest. See Tadiran Israel Electronics Industries, Ltd.,
B-210810, Mar. 15, 1983, 83-1 CPD Para. 260. COMP GEN (UP)
FILE: B-216998 85-2 CPD 3
DATE: July 1, 1985
MATTER OF: American Management Systems, Inc.
DIGEST:
EQUIPMENT - AUTOMATIC DATA PROCESSING SYSTEMS - ACQUISITION, ETC. -
FEDERAL SUPPLY SCHEDULE
Agency acts improperly where CBD announcement is used to justify
award to nonmandatory ADP schedule vendor, but order placed with that
vendor deviates materially from the terms of its schedule contract.
Federal Information Resources Management Regulation Section 32.206,
concerning the use of nonmandatory schedule contracts, authorizes award
only where the order conforms to the terms of an existing schedule
contract.
American Management Systems, Inc. (AMS), protests the award of a
purchase order to Cullinet Software, Inc., under General Services
Administration (GSA) Automatic Data Processing Schedule Contract
GS00K-84-01-S557. While the protester raises several issues, our
decision principally concerns a portion of the protest in which AMS
complains that the Department of Health and Human Services (HHS) has
improperly awarded a purchase order to Cullinet because the order
exceeds the scope of the Cullinet schedule contract. We sustain the
protest.
AMS makes several related arguments in support of its contention that
HHS improperly placed an order outside the scope of the Cullinet
schedule contract. According to the protester, HHS is not in fact
acquiring existing Cullinet software as anticipated by the schedule
contract but using the schedule as a device to order the development of
substantially new software that is not on the schedule. AMS also
asserts that HHS has imposed, and Cullinet has accepted, significant
changes in other provisions of the schedule contract and is
circumventing the maximum ordering limitation in the contract. In these
circumstances, AMS contends, the agency has acted outside the terms of
its blanket delegation of procurement authority issued by GSA, making
the Cullinet award illegal.
As the protester points out, HHS' purchase order purports to add a
variety of conditions to the Cullinet contract. These include:
1. A description of the work to be performed, which is
described as "Cullinet's Development Responsibility" and which
includes a list of 48 functional requirements that Cullinet's
modified software is to meet.
2. An agreement by Cullinet that it will maintain the products
it is developing until such time as it provides maintenance for
them as standard products.
3. An agreement by Cullinet that it will complete the
modifications within 12 months.
4. Provisions defining the parties' rights should Cullinet
fail to complete the modifications in 12 months, which includes a
provision for rescission of the entire agreement by the
government.
5. A provision allowing HHS to place future orders for this
software at 25 percent off the then prevailing commercial or GSA
schedule price, whichever is less, and a provision limiting future
increases in maintenance, renewal and update fees.
6. A provision granting HHS a 7-year extension of the current
GSA schedule contract to coincide with what the purchase order
describes as an anticipated 7-year life of this order, including
its option periods.
Additionally, HHS agreed to provide on-site office space, telephone,
computer terminal and normal office support for two Cullinet employees.
These terms differ significantly from the provisions of Cullinet's
schedule contract, the protester says. The schedule contract does not
provide for software development, requires delivery of software within
30 days of receipt of a purchase order and makes no provision for
"option periods." Moreover, AMS contends, the schedule contract provides
fixed fees for continued use of software after the end of the fiscal
year in which an order is placed. It makes no provision for placing
additional orders after that time or for maintaining such software.
On the other hand, while HHS and Cullinet do not deny that the
supplemental agreement contains the disputed provisions, they argue that
the order was proper. Both point out that the order was placed against
specific schedule contract line items. The contracting officer says
that Cullinet's agreement to modify its current products to comply with
HHS' stated functional requirements was anticipated in a Commerce
Business Daily (CBD) announcement of HHS' intent to acquire Cullinet
software, which called for software modules "capable of being modified."
Such modifications are allowed, he says, under the terms of Cullinet's
schedule contract since that contract provides, in part, that:
"any written commitments by Cullinet within the scope of this
contract shall be binding upon Cullinet whether or not
incorporated into a purchase order. Failure of Cullinet to
fulfill any such commitment shall render Cullinet liable for
liquidated or other damages due to the Government under the terms
of this contract."
Moreover, the contracting officer insists, this language includes
supplemental agreements concerning options and additional purchases
because elsewhere the schedule contract provides:
"For the purpose of this contract, a commitment by Cullinet
includes . . . prices and options committed to remain in force
over a specified period(s) of time provided that in any fiscal
year covered by the commitment the Government may, at its option,
order software programs under Cullinet's . . . Schedule contract
for that fiscal year . . ."
Finally, HHS states that its use of the schedule contract in lieu of
procuring customized software competitively is discretionary under
Federal Information Resources Management Regulation (FIRMR) Section
32.206(a)(3)(iii) /1/ and that GSA has upheld the legality of HHS' order
against the Cullinet schedule contract.
In addressing these issues, we first point out that, contrary to HHS
assertion, GSA has not upheld its position. The most that might be said
is that, because ADP procurement authority flows through GSA, that
agency has acquiesed in HHS' exercise of contracting authority. In this
regard, GSA, after receiving submissions from HHS and Cullinet
concerning this matter, advised HHS that:
"We . . . believe the issuance of the order was inappropriate
under the GSA Schedule contract in question. Since it is our
understanding that the software has been delivered to and accepted
by HHS, we do not believe it would be in the Government's best
interest to (take formal exception to HHS' action). This
forbearance should not be construed as an approval of HHS'
utilization of GSA's Schedule contract. GSA's Schedule contracts
are not for the development or significant modification of
software provided thereunder." (Emphasis added.)
Moreover, it is irrelevant, in our view, that the HHS purchase order
calls out specific schedule contract line items. Those line items do
not describe schedule contract items if the parties have also agreed
that the products to be delivered will differ significantly from the
products described in the schedule contract.
Concerning the substance of HHS' actions, the record indicates that
HHS selected Cullinet following an internal review process. First, HHS
identified functional requirements for each of the applications to be
installed as part of a financial and administrative integrated
management system and furnished a statement of these requirements to
several preselected vendors. Based on a briefing by each of the
preselected firms, HHS chose Cullinet software products as best fitting
its needs. AMS was not one of the preselected firms.
The record also shows that following Cullinet's selection, but prior
to release of the CBD announcement, HHS, concerned with how the Cullinet
software would function in the agency, visited Cullinet's facility in
Westwood, Massachusetts. At that time, HHS discovered that the Cullinet
application software would require significant modifications before it
could meet HHS' needs. Recognizing this, Cullinet offered verbally to
modify its application software products to meet the agency's needs and
to incorporate the modifications into a subsequent product release.
Based on this commitment, the notice was published. As indicated, the
notice expresses HHS' intent to acquire software under Cullinet's
schedule contract; the notice did not indicate that Cullinet had
offered to modify the software for HHS.
It is clear from the record, therefore, that the agency knew before
issuing the CBD announcement that the Cullinet schedule contract items
would not meet its needs. It is also clear that HHS believed it was
essential that Cullinet agree in writing to deliver something other than
its schedule contract software. On September 24, 1984, the HHS project
manager stated in a memorandum to the Assistant Secretary for Management
and Budget that:
"It is essential . . . that the scope of the requested
modifications be completely understood by the contractor and that
those deficiencies that impact on "core" Departmental requirements
must be developed by Cullinet as a part of their propriety
release. This will require technical working cooperation with
DHHS to define the specifications for the required modifications.
It is not known at this time whether Cullinet will honor a
contractual arrangement to modify their application products to
meet DHHS needs. This should be ascertained by negotiating
directly with Cullinet before any final decisions, on the systems
are made."
HHS subsequently prepared the additional terms and conditions
mentioned above, which were appended to the purchase order and submitted
to Cullinet for its approval.
We do not think that HHS' award to Cullinet conforms to the
requirements of FIRMR Section 32.206 concerning the use of ADP Schedule
contracts.
First, we reject HHS' interpretation of FIRMR Section 32.206(a)(3)(
iii). It construes that regulation as according it discretion to
determine whether to use a schedule contract in lieu of conducting a
competitive procurement. Section 32.206(a) identifies some of the
factors that agencies should consider in deciding how to proceed in
acquiring ADP equipment. The regulation points out that, although
competitive procurement may consume time and resources, a fully
competitive procurement may be in the government's best interest (where,
for example, existing schedule contracts cannot satisfy the agency's
needs), and in section 32.206(a)(3) reminds agencies that they are
required to seek maximum practicable competition. See also FIRMR
Section 32.206(a)(2) indicating that the provisions of FIRMR Section
32.206 are to be applied with the understanding that the requirement for
maximum practicable competition is not waived. Nothing in these
provisions authorizes an agency to use a schedule contract in lieu of
conducting a competitive procurement where the agency's need cannot be
met by adhering to the terms of a schedule contract.
Further, the agency relies on section 32.206(g)(i) to justify award
in the present case. That section refers to the placing of an order
"against the synopsized schedule contract." An order cannot be fairly
said to have been placed against the synopsized contract if that order
differs materially from the schedule contract. Thus, we see no
difference between the intent of this provision and section 32.206(g)(
2), which states explicitly that the order is to conform to the terms
and conditions of the schedule contract. (But compare B-171313, May 26,
1971, cited by the parties, where we recognized that de minimis
differences in orders placed under Federal Supply Schedule contracts --
in that instance a change in the type of plugs on oscilloscopes -- were
allowable.)
We recognize that, as Cullinet contends, commercially available
software is routinely modified to meet the users needs. According to
Cullinet, commercially available applications software can rarely if
ever be purchased and used without some modification to meet the user's
specific needs. Cullinet explains that it is for this reason that
source code is provided to the user as part of the applications system.
In Cullinet's view, we should treat the modifications as no different in
scope and nature from those that are inevitably required whenever any
customer acquires commercially available applications software.
We do not agree. By its own admission, Cullinet does not customarily
undertake to make applications software changes for end users who are
expected to use in-house personnel or retain outside consultants to
perform this work. The record indicates that Cullinet agreed to make
the modifications in this instance because Cullinet wished to include
these changes in its future software releases. In other words, Cullinet
accepted the contract because the modifications were not of a routine
nature and because Cullinet believed there is a market for the product
it plans to produce.
The task Cullinet has undertaken involves modifying commercially
available accounting software to meet government accounting standards.
Its scope is indicated by the fact that HHS imposed 48 functional
requirements, that it extended the 30-day delivery requirement by a year
so Cullinet could meet them, and that it provided that the government
could rescind the contract without obligation if Cullinet failed to
perform. The applications programs involved constitute approximately
one-half of the dollar value of the product to be delivered and the
record shows that HHS would not have awarded a contract to Cullinet had
that firm declined to make the modifications.
In our view, it is clear that the contract awarded differs materially
from the schedule contract on which it ostensibly was based and that HHS
did not, therefore, comply with FIRMR Section 32.206(a). This portion
of the protest is sustained.
Nevertheless, HHS' Deputy Assistant Secretary asserts that any
disruption due to termination of the Cullinet contract could delay HHS a
year or more in obtaining the considerable savings that it expects to
realize through the implementation of a new financial management system.
He states that HHS anticipates total 5-year savings from this project
of $106 million and asserts that delay of 1 year would cost the
taxpayers approximately $6.9 million. He also states that such delay
would impair HHS' ability to comply with the Federal Managers' Financial
Integrity Act.
HHS assumes it would lose a year or more if the requirement were
competed. At the time the Cullinet order was placed, however, HHS had
completed much of its preliminary procurement planning. Since its
requirements have been identified, it should be able to move quickly to
release a solicitation. Under the circumstances, there is no apparent
reason why HHS could not develop a procurement schedule that would allow
completion of a competitive procurement without compromising its
delivery requirements. We note that the Cullinet modified software is
not to be delivered until January 1986. According to Cullinet, the work
being done fits into its software development plans and is being
developed at its own expense. Presumably, therefore, Cullinet would
continue to develop this software and would offer it in response to a
competitive procurement.
We recognize that in conducting a competitive procurement, HHS will
have to give consideration to concerns AMS has expressed in its protest
regarding HHS' aim of acquiring an integrated database/applications
program package. According to AMS, such a requirement is unsound and
unduly restricts competition. On the other hand, HHS calls its
objective "a fully integrated software approach" which it says is
justified by an expected savings in life cycle system costs. HHS
asserts that if one vendor does not supply both the DBMS and
applications software, and the agency must assume the responsibility to
make changes to the applications software using in-house personnel, it
will encounter cost and delay whenever changes are made to the DBMS
package. A fully integrated approach would place this responsibility on
a single vendor.
While we appreciate HHS' concern, its assertions appear to be founded
on a faulty premise. Software changes would occur if the DBMS vendor
decides to make changes in its product and would be implemented at HHS
only if HHS decided to acquire and install the new version. What HHS is
saying is that it wants to be able to upgrade the DBMS by installing
future software the vendor may develop without having to rely on
in-house programing to maintain the applications software. AMS, however,
has indicated that it is willing to assume contractual responsibility
for applications software changes that become necessary to accommodate
future changes to any DBMS the agency may select. Moreover, whether a
DBMS vendor will upgrade its software, or whether any such future
software release would actually impact on HHS' system is uncertain.
Given this uncertainty, it would seem that any difference between the
HHS and AMS approaches is so speculative that it cannot support a
rational basis for requiring one but excluding the other.
In the circumstances, HHS should complete the process required under
FIRMR Section 23.206(g) by conducting a competitive procurement. The
existing contract with Cullinet should be terminated if following
competition a contract can be awarded that is more favorable to the
government.
The protest is sustained.
Comptroller General
of the United States
(1) The text is found in Federal Procurement Regulations (FPR)
Temporary Reg. 71, 41 C.F.R. subpart 1-4.11 and 41 C.F.R. Ch. 1 App.
(1984). FPR Temp. Reg. 71 was redesignated as FIRMR Temp. Reg. 71 and
given new chapter designators (ch. 201) in 49 Fed. Reg. 20,994, 21,001
(1984). The provisions have been largely reissued in FIRMR Temp. Reg.
6, 50 Fed. Reg. 4,411 Section (1985) and will be codified at 41 C.F.R.
ch. 201. Throughout, citations to the FIRMR are to the section number
within chapter 201.
FILE: B-216996 85-1 CPD 420
DATE: April 12, 1985
MATTER OF: Air Flight Service
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
PROPRIETY
An agency's evaluation of proposals is proper where the criteria on
which it based its conclusion that the awardee's proposal was superior
are consistent with the stated evaluation criteria, and the protester
fails to establish that the agency erroneously determined that the
awardee's proposal was superior under these criteria.
Air Flight Service (Air Flight) protests the award of a contract to
Capitol Color Lab, Inc. (Capitol), under request for proposals (RFP) No.
2-31441, issued by the National Aeronautic and Space Administration
(NASA) for photographic and audio visual support services. Air Flight
contends the award was based on an erroneous evaluation. We deny the
protest.
The RFP, which contemplated award of a cost-plus-fixed-fee contract,
provided for evaluation of proposals in four areas: mission
suitability, cost, experience/past performance, and "other factors" (for
example, financial condition and capability). Only the mission
suitability factor was to be scored in the evaluation, although the RFP
advised that cost and the other factors could become very important once
evaluation of the mission suitability category indicated that firms
could perform properly. The criteria for evaluating mission suitability
were listed as follows, in order of descending importance: technical
understanding; organizational structure; management approach; key
personnel experience and qualifications; staffing plan; total
compensation plan; safety phase-in and training plan; commitment of
key personnel; replacement of personnel; and management and technical
corporate support.
Eight proposals were received, and those of Capitol and Air Flight
were highest rated following evaluation of best and final offers. Both
offerors were judged capable of performing, but NASA determined that
Capitol was slightly superior to Air Flight in three mission suitability
categories -- total compensation plan, key personnel experience and
qualification, and replacement of personnel. Capitol's compensation
plan, based on wage ranges instead of just wage rates, was deemed
superior because it provided for wages based in part on job experience
-- an arrangement NASA viewed as potentially cost effective. Capitol
was accorded an edge in the key personnel category because its proposed
conference coordinator -- one of three positions NASA considered
critical -- currently was performing exactly the type of work covered by
the contract. Air Flight's conference coordinator had a background in
finance and was rated only acceptable. Capitol's approach for backup
and replacement personnel also was found by NASA to be slightly superior
to Air Flight's.
In addition to being evaluated as slightly superior to Air Flight in
mission suitability, Capitol's proposed and probable cost (based on a
cost realism analysis by NASA) both were slightly lower than Air
Flight's evaluated cost. NASA made award to Capitol based on its
slightly superior technical rating and lower cost.
Air Flight argues that the discriminators on which NASA relied were
an improper basis for award. Cost, it maintains, should not have been a
consideration, since Capitol's evaluated cost was only 2.8 percent
lower, the RFP stated that award would not necessarily be based on
lowest cost, and Capitol's cost proposal probably was inadequate and
incomplete. As for the wage range factor, Air Flight states that its
proposal was based on wage rates "as specifically directed by the RFP."
Air Flight believes NASA should have awarded it a contract based on the
commitment of key personnel and replacement of personnel criteria under
mission suitability. Air Flight claims it was superior in these
categories because it presented signed agreements from every individual
under the contract and had experienced, in-house backup personnel; it
speculates that Capitol did not have written commitments from key
personnel or readily available backup personnel.
It is neigher the function nor the practice of our Office to evaluate
technical proposals de novo or resolve disputes over the scoring of
technical proposals. Rather, we will examine an agency's evaluation
only to ensure that it was reasonable and consistent with the stated
evaluation criteria. Potomac Scheduling Co.; Axxa Corp., B-213927;
B-213927.2, Aug. 13, 1984, 84-2 C.P.D. Paragraph 162. The protester
bears the burden of clearly establishing that an evaluation was
unreasonable. ATI Industries, B-215933, Nov. 19, 1984, 84-2 C.P.D.
Paragraph 540.
Preliminarily, NASA argues that Air Flight's protest is untimely
because its purported protest letter of September 24 stated only Air
Flight's intent to protest, and a subsequent detailed protest letter was
not received until October 4, more than 10 days after the debriefing at
which the bases for protest arose. See 4 C.F.R. Section 21.2(b)(2)
(1984). NASA also asserts that in a September 27 telephone
conversation, Air Flight informed NASA that its earlier letter was not
meant to be a protest.
We believe Air Flight's protest was timely. Although the September
24 letter did notify NASA of an "intent to protest," it also set forth
Air Flight's belief that the evaluation criteria were not "properly
followed" and specifically requested "that no award be made from this
RFP until decision is made on this protest." (Award actually had been
made on August 16.) We consider this language a clear indication of Air
Flight's present intent to protest. Air Flight's subsequent telephone
conversation casts some doubt on this intent since it conflicts with the
intent expressed in the September 24 letter, but it is our practice to
resolve such doubt in favor of the protester. See Weardco Construction
Corp., B-210259, Sept. 2, 1983, 83-2 C.P.D. Paragraph 296.
NASA further argues that Air Flight never adequately explained its
basis of protest. We disagree. We were able to understand Air Flight's
arguments, and NASA'S administrative report responding to each of Air
Flight's concerns described above indicates that Air Flight did
adequately present its protest. We therefore will consider the protest
on the merits.
Air Flight's argument that cost should not have been relied upon as a
discriminator has no merit. As already explained, the RFP specified
cost as one of the four evaluation categories and specifically provided
that cost could become an important consideration in the award decision.
The fact that Capitol's evaluated cost was only 2.8 percent below Air
Flight's thus did not preclude NASA from considering cost in accordance
with the RFP; since Capitol's cost was slightly lower than Air
Flight's, NASA properly accorded Capitol a corresponding slight
advantage in the evaluation. We have reviewed Capitol's cost proposal,
as well as NASA'S cost realism analysis of that proposal, and find no
indication that the proposal was incomplete or otherwise inadequate. It
appears Capitol provided sufficient information to enable NASA to
perform a cost realism analysis similar to that performed on Air
Flight's cost proposal. We find no other basis for questioning the
reliability of NASA'S determination that Capitol's probable cost was
lower than Air Flight's.
Air Flight's argument that Capitol's proposal should not have been
ungraded based on its use of wage ranges similarly is without merit.
Contrary to Air Flight's apparent position, the RFP contained no
requirement that an offeror's total compensation plan be based on paying
employees at a certain wage rate for a certain type of work. The RFP
also contained no prohibition against proposing the use of wage ranges
under which the wage rate for a certain type of work will vary depending
on an employee's experience. In fact, as part of the RFP'S description
of the total compensation plan criterion under the mission suitability
factor, the RFP stated that "the salary rates and ranges must recognize
the distinct differences in professional skills and the complexity of
varied disciplines as well as job difficulty." This language not only
supports the view that wage ranges, as well as wage rates, were
permissible, but actually encourages offerors to propose rates or ranges
that reflect employee skill level.
We believe NASA appropriately could consider the extent to which
Capitol's compensation plan reflected skill level and the potential
benefits of such a plan. The record indicates that this is precisely
what NASA did, and we therefore find that this aspect of the evaluation
was consistent with the stated evaluation criteria. Air Flight presents
no arguments or evidence that NASA incorrectly determined that Capitol's
proposed wage ranges would be cost effective, and there is nothing in
the record suggesting that NASA'S determination in this regard was
erroneous. /1/
We also find no basis for Air Flight's position that the award
decision should have been based on its alleged superiority in the
commitment of key personnel and replacement of personal criteria. The
key personnel experience and qualifications and total compensation plan
criteria were more important under the evaulation scheme described to
offerors in the RFP, and cost was one of the four major evaluation
areas. We therefore could not conclude that NASA unreasonably
determined that these criteria were more relevant to the award decision
than those urged by Air Flight.
NASA points our, furthermore, that Air Flight was not superior, as
claimed, in the two areas it believes should have been the major
discriminators. NASA notes in this regard that the RFP did not require
offerors to submit written commitments for each key employee, as Air
Flight suggests, and that, contrary to one of Air Flight's speculations,
Capitol did not propose key employees with whom it had "absolutely no
contact." Capitol identifies and discusses its key employees in its
proposal, and these individuals reportedly attended Capitol's
negotiating sessions with NASA. NASA considered these facts adequate
indicia of key employee commitment, and we find no reason to conclude
otherwise.
NASA'S finding that Capitol was superior to Air Flight in the
replacement of personnel criterion also does not appear unreasonable.
Again, Air Flight's speculation that Capitol had inadequate backup
personnel simply is unsupported. Capitol explained in its proposal both
that it has well-qualified, in-house personnel available for rapid
backup, and the method for recruiting backup personnel when needed to
replace employees working under the contract. The evaluators rated
Capitol's backup capability a major strength. We conclude that NASA
reasonably determined Capitol slightly superior under this criterion.
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) Air Flight does not challenge NASA'S conclusion that Capitol's
conference coordinator was slightly superior to Air Flight's.
FILE: B-216994.2 85-1 CPD 136
DATE: February 4, 1985
MATTER OF: Tritan Corporation -- Reconsideration
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
Request for reconsideration is denied where protester raises no new
facts or legal arguments which were not previously considered while the
initial protest was pending.
Tritan Corporation requests reconsideration of our decision in Tritan
Corporation, B-216994, Nov. 27, 1984, 84-2 CPD Section 579. Tritan's
original protest contended that erroneous oral instructions from the
Department of the Navy caused it to submit a price for diesel equipment
without the logistic support required by the request for proposals.
Although Tritan was then given an opportunity to include a price for the
support, its revised price was not the lowest price. Tritan argued that
it had been prejudiced because its initial low price had been revealed
by the agency to its competitors who were thereby encouraged to lower
their prices. The agency denied that any initial prices had been
revealed and stated that only Tritan had changed its initial price.
Under these circumstances, we concluded that Tritan had not met its
burden of proof and denied the protest.
Tritan's request for reconsideration is denied.
Under our Bid Protest Procedures, 4 C.F.R. Section 21.9(a), a request
for reconsideration must contain a detailed statement of the factual and
legal grounds upon which reversal or modification is warranted and must
specify any errors or law made in the decision or information not
previously considered. Information not previously considered refers to
information which was overlooked by our Office or information to which
the protester did not have access when the initial protest was pending.
SAFE Export Corporation -- Reconsideration, B-205501.2, Jan. 17, 1983,
83-1 CPD Paragraph 40.
Tritan's request merely elaborates and further supports the facts it
presented in a more abbreviated version in its initial protest. For
example, Tritan has submitted a letter from the Navy's contracting
officer which, Tritan contends, confirms that Tritan was given erroneous
information regarding the necessity for including a price for logistic
support in its offer. Tritan does not, however, dispute the fact that
it was permitted to revise its price after it was given correct
information and does not contest the Navy's denial that Tritan's initial
price was disclosed to all competitors before Tritan revised its price.
Tritan does not present any new facts which were not previously
considered by our Office or which were not known to Tritan at the time
of its initial protest. Moreover, Tritan has specified no error of law
in our decision. Apparently, Tritan expects that the investigation
which it asks our Office to conduct will establish the validity of its
allegations. In this regard, we point out that we will not normally
conduct such an investigation under our bid protest function because it
is the burden of the protester to affirmatively prove the allegations it
makes in support of its protest. Basic Technology Incorporated,
B-214489, July 13, 1984, 84-2 CPD Paragraph 45.
Tritan's request for reconsideration also challenges the Navy's
affirmative determination of the awardee's responsibility and the
negative determination with regard to Tritan's responsibility which was
made after the initial offers when Tritan's price was low. Our Office
will not review an affirmative determination of responsibility absent a
showing that the contracting officer acted fraudulently or in bad faith
or the definitive responsibility criteria in the solicitation have not
been met. R. R. Mongeau Engineers, Inc. B-213330, Mar. 20, 1984, 84-1
CPD Paragraph 333. There has been no showing that either of these bases
for our review exists in this case. Moreover, we see no good purpose to
be served by our review of the negative determination of Tritan's
responsibility. This determination became academic when Tritan's price
was revised upwards so that Tritan was no longer in line for the award.
Tritan's request is denied.
Comptroller General
of the United States
B-216994, Nov 27, 1984, 84-2 CPD
CONTRACTS - Protests - Allegations - Unsubstantiated
DIGEST:
Protest based on allegations that are supported only by the
protester's speculations and are denied by the procuring agency is
denied because protester has not met its burden of proof with regard to
the facts that are essential to its case.
Tritan Corporation:
Tritan Corporation protests the rejection of its proposal by the
Department of the Navy under request for proposals (RFP) No.
N00140-84-R-0071, a procurement for water blasters with integrated
logistics support. We deny the protest.
According to Tritan, its best and final offer initially did not
include a price for support of the water blaster unit's diesel engine
because the Navy's contracting officer had instructed Tritan not to
include a price for it. Tritan later was informed that the solicitation
required support for the entire water blaster system including the
engine and was told to include a price for engine support with the
requested extension of its proposal acceptance period. Tritan did so
but was then told by the Navy that its price increase removed Tritan
from consideration for award.
Tritan argues that this was unfair because the Navy initially
announced that Tritan was the low offeror, thereby revealing to its
competitors that their prices were high. Tritan alleges that these
competitors, all of whom had based their best and final prices on
accurate instructions, would assume that Tritan's price was also based
on supporting the whole system and would therefore substantially lower
their prices when extending their proposals.
Tritan provides no evidence to support its statement that its status
as the initial low offeror for this negotiated contract was announced by
the Navy, and the Navy has informed us that no such announcement was
made. /1/ For the Navy to have done so would have violated Defense
Acquisition Regulation (DAR), Sec. 3-507.2 (1976 ed.) which prohibits
the release of such information prior to award. We have also been
informed by the Navy that only Tritan changed its price when extending
its proposal.
Thus, Tritan's allegations concerning the announcement of its
competitive status and changes in prices offered by its competitors
appear to be solely speculative. Under these circumstances, we must
conclude that Tritan has not met its burden of proof. See John
Crane-Houdaille, Inc., B-212829, Jan. 20, 1984, 84-1 CPD Para. 89.
The protest is summarily denied.
/1/ Unlike advertised procurements, there is no public bid opening in
negotiated procurements. COMP GEN (UP)
B-216992, Nov 26, 1984, 84-2 CPD 565
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Solicitation improprieties - Apparent prior to
bid opening/closing date for proposals
DIGEST:
Protest concerning alleged improprieties on the face of a
solicitation is untimely and will not be considered where not filed with
the contracting agency or GAO prior to bid opening.
Bay Cities Refuse Service, Inc.:
Bay Cities Refuse Service, Inc. protests the award of any contract
under invitation for bids (IFB) No. N62474-84-B-8662, issued by the
Department of the Navy for refuse collection and disposal services. Bay
Cities contends that the IFB set forth inaccurate estimates of the
number of containers to be collected per year and also contained other
inaccuracies. We dismiss the protest as untimely filed.
Under Bid Protest Procedures, protest of alleged IFB deficiencies
apparent prior to bid opening, in order to be considered, must be filed
with the contracting agency or our Office prior to bid opening. 4 C.F.
R. Sec. 21.2(b)(1) (1984). Here, Bay Cities was or should have been
aware of the alleged deficiencies from the face of the IFB, but did not
file its protest until October 30, 1984, 11 days after the October 19
bid opening. Its protest therefore is untimely and will not be
considered. See Certified Mechanical Contractors, Inc., B-215411, June
20, 1984, 84-1 CPD Para. 654. COMP GEN (UP)
FILE: B-216990 85-1 CPD 187
DATE: February 12, 1985
MATTER OF: Maryland Computer Services, Inc.
DIGEST:
BIDDERS - INVITATION RIGHT - BIDDER EXCLUSION NOT INTENDED
1. Where adequate competition and reasonable prices are obtained by
the government, an offeror bears the risk of nonreceipt or delay in
receipt of solicitations and amendments in the absence of substantive
proof that the agency deliberately attempted to exclude an offeror from
participating in the procurement.
CONTRACTS - PROTESTS - BURDEN OF PROOF - ON PROTESTOR
2. Where a protester does not submit any evidentiary support for its
bare assertion that specifications are "written around" a competitor's
product, the protester fails to meet its burden of proof.
Maryland Computer Services, Inc. (MCS), protests the award of a
contract under request for proposals (RFP) No. IRS-84-0111, issued by
the Internal Revenue Service (IRS), Department of the Treasury, for
peripheral computer equipment with speech capability ("talking terminal
attachments") to aid the job performance of visually handicapped federal
employees. MCS contends that the solicitation's initial closing date
allowed only 15 working days for preparation of proposals, which the
protester considers to be an unreasonably short time period. MCS also
alleges that the solicitation's specifications are restrictive inasmuch
as they are "written around" a particular vendor to the exclusion of
other interested suppliers. We deny the protest.
First, the record shows that the initial closing date was in fact
extended from November 2 to November 16, 1984, by two separate
amendments and that offerors had a total of 35 working days to submit
their proposals. Despite the fact that both amendments clarified
technical matters raised by the offerors, including a letter from MCS
dated October 24, MCS states that it never received notice of the
extension of the closing date. Both amendments, however, clearly set
forth revised closing dates on the front page.
We cannot determine with any certainty, on the basis of this record,
what occurred here. If MCS received the amendments and simply
overlooked its provisions concerning extension of the closing date, the
responsibility for its lack of notificaton rests with the protester.
However, even if we assume that MCS never received the amendments, we
must still deny this basis for protest. In the case of formally
advertised procurements, we have consistently held that the propriety of
a particular procurement rests upon whether adequate competition and
reasonable prices were obtained by the government and not upon whether a
particular bidder was given an opportunity to bid. The bidder bears the
risk of nonreceipt or delay in receipt of solicitations and amendments
in the absence of substantive proof that the agency deliberately
attempted to exclude a bidder from participating in the procurement.
Native Plants, Inc., B-195481, Jan. 11, 1980, 80-1 CPD Paragraph 35;
E&I Inc., B-195445, Oct. 29, 1979, 79-2 CPD Paragraph 305; A. Brindis
Company, Inc., B-187041, Dec. 9, 1976, 76-2 CPD 477; 52 Comp. Gen. 281
(1972).
MCS does not allege and the record does not indicate that the IRS
deliberately failed to send the amendments to MCS or that adequate
competition and reasonable prices were not obtained (IRS received three
proposals). These principles are equally applicable to negotiated
procurements. CompuServe, B-192905, Jan. 30, 1979, 79-1 CPD Paragraph
63; Polytech, Inc., B-199770, Jan. 7, 1981, 81-1 CPD Paragraph 14.
Accordingly, this basis for protest is denied.
Second, MCS also believes that certain solicitation specifications
are restrictive and favor a particular vendor, apparently the
manufacturer of the "Vert 6000." In this regard, MCS lists certain
features required by the specifications (e.g., interfacing, rate
control, cursor control and other operational requirements) which,
according to MCS, indicate that the specifications are "product
specific." MCS's protest regarding this matter must fail for the
following three reasons. First, IRS in fact received no offers
proposing a "Vert 6000." Second, the IRS states, and MCS has not denied,
that MCS's own "information thru speech computer system" either fully
complies with all solicitation specifications or may be easily modified
with minimal effort to so comply. Third, except for its bare
assertions, the protester has not submitted any support for its
contention that the specifications are unduly restrictive. It is well
established that the protester has the burden of proving its case.
International Alliance of Sports Officials, B-211755, Jan. 25, 1984,
84-1 CPD Paragraph 117. We believe MCS has failed to meet this burden.
Finally, MCS complains that IRS is procuring "dated" equipment by
current standards which is not the best solution for the agency's needs.
MCS has again not submitted any evidence, data, or supporting documents
to substantiate its allegations. Thus, the protester has also failed to
meet its burden of affirmatively proving its case with respect to this
issue. See Ingersoll-Rand, Comapny; Sullair Corp., B-207246.2;
B-211811, Sept. 28, 1983, 83-2 CPD Paragraph 385.
The protest is denied.
Comptroller General
of the United States
FILE: B-216989 85-1 CPD 199
DATE: February 14, 1985
MATTER OF: Mobile Drilling Company, Inc.
DIGEST:
BIDS - RESPONSIVENESS - EXCEPTIONS TAKEN TO INVITATION TERMS
1. Bid which constitutes offer to furnish a drill with a torque
capacity of 6,000 ft.-lbs. at 27 revolutions per minute (RPM) instead of
the required capacity of 5,800 ft.-lbs. at 50 RPM, took exception to a
material requirement of the solicitation and was therefore properly
rejected as nonresponsive.
BIDS - RESPONSIVENESS - OFFER OF COMPLIANCE AFTER BID OPENING -
ACCEPTANCE NOT AUTHORIZED
2. Agency acted improperly in accepting a nonresponsive bid based on
the bidder's explanation obtained after bid opening because the agency
may not seek such a clarification after opening, as a bidder's intention
to comply with the solicitation requirements must be determined from the
bid itself without resort to such explanations.
Mobile Drilling Company, Inc. protests the award of a contract to
Central Mine Equipment Company under invitation for bids (IFB) 84-30-R17
issued by the Federal Highway Administration (FHA) for an auger drill
mounted on an all-terrain vehicle. Mobile contends that its bid was
improperly rejected and further argues that Central's bid should have
been rejected as nonresponsive.
We deny the protest in part and sustain it in part.
FHA received two bids in response to the solicitation, Mobile's
$90,000.00 bid and Central's $99,822.00 bid. After FHA evaluated the
descriptive literature submitted with the bid, it informed Mobile by
letter of October 17, 1984 that its bid was nonresponsive because the
drill offered by Mobile did not have sufficient drill head torque
capacity. FHA found Central's bid responsive and awarded the contract
to it on October 31.
Mobile objects to the FHA's conclusion that its equipment does not
meet the solicitation requirement that the drill head have a torque
(rotational force) capacity of not less than 5,800 foot-pounds (ft.-
lbs.) at 50 revolutions per minute (RPM) by arguing that its drill
provides in excess of 6,000 ft-lbs. at 27 RPM, and that there is no work
reduction attributable to the 23 RPM differential.
FHA maintains that the torque capacity specified in the IFB is the
minimum torque and rotational speed needed to accomplish the work
required. FHA states that the torque and RPM specified in the IFB
result in a "working capacity" of 55.2 horsepower (HP). It reports that
based on the torque capacity listed in the literature submitted with
Mobile's bid it concluded that the HP of the equipment offered by Mobile
was only 30.6. FHA further reports that as a result of discussions held
with Mobile it calculated that Mobile's drill could provide up to 47.2
HP. Since both figures were significantly below the required capacity,
FHA states that Mobile's bid was properly rejected.
A responsive bid is one that on its face is an offer to perform,
without exception, the exact thing called for in the invitation. J. T.
Systems, Inc., B-213308, Mar. 7, 1984, 84-1 CPD Paragraph 277. A bid
which does not contain an unequivocal offer to provide the requested
item in total conformance with the material terms of the solicitation is
nonresponsive and must be rejected. A material deviation is one that
affects the price, quality, quantity or delivery of the goods offered.
Fluke Trendar Corp., B-196071, Mar. 13, 1980, 80-1 CPD Paragraph 196.
Dispite its argument to the contrary, it is clear that Mobile's bid did
take exception to the solicitation's torque capacity requirement and the
protester has provided no basis upon which to question the agency's
judgment that the exception would have a material impact on the drill's
performance. See Le Prix Electrical Distributors, Ltd., B-212518, Dec.
27, 1984, 84-1 CPD Paragraph 26. Further, we note from the record that
FHA contacted Mobile after bid opening to enable that firm to further
explain the capacity of its equipment as listed in the literature
submitted with its bid. Although no bidder was prejudiced by this
contact as Mobile's bid was rejected, this contact with Mobile after bid
opening for the purpose of allowing the bidder to clarify its
descriptive literature was improper. 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. Modutech Marine, Inc., B-207601, Feb. 9, 1983, 83-1 CPD
Paragraph 144.
Mobile argues that its bid should have been accepted even though it
may have taken exception to a solicitation requirement because its
equipment offered safety features and an angle drilling capability in
excess of the specification requirements. Since the bid was
nonresponsive to the solicitation's torque capacity requirement, it is
irrelevant whether the offered equipment may have exceeded some other
solicitation requirements.
Mobile further contends that Central's bid was also nonresponsive and
therefore should have been rejected. According to Mobile, Central's bid
did not meet the specification requirement that the drill head have a
forward speed range of 35 RPM to greater than 700 RPM. The protester
states that Central's bid offered a drill with a speed range of only 100
RPM to 650 RPM.
FHA reports that during the review of Central's descriptive
literature the contracting officer contacted Central and that firm
stated that it would comply with the specification for the spindle
speed. FHA states that it accepted Central's assurance and maintains
that it will only accept a final product which complies with that
requirement.
We have reviewed the record which contains Central's bid including
its descriptive literature and the only portion which appears to pertain
to drill head speed states: "Have a variable forward speed from 90 RPM
to 1,000 RPM in fourth gear at 2,800 RPM engine speed achieved by at
least a 4-speed transmission."
Thus, it appears from Central's bid that it did not comply with the
requirement of a forward speed range of from 35 RPM to greater than 700
RPM. FHA does not argue that Central's bid as submitted was responsive
or that the forward speed range requirement was not material but
maintains that it properly accepted Central's bid based on that firm's
after bid opening assurance that its equipment would meet the
specification. We disagree with the agency and conclude that Central's
bid should have been rejected as nonresponsive. As stated earlier, to
be responsive a bid must on its face offer to supply an item conforming
to all material solicitation requirements. J.T. Systems, Inc.,
B-213308, supra. A bid which is nonresponsive on its face may not be
changed, corrected or explained by the bidder after bid opening since to
permit this would give the firm the option of accepting or rejecting a
contract after bids are exposed. Amendola Construction Co., Inc.,
B-214258, Feb. 28, 1984, 84-1 CPD Paragraph 255. We sustain this
portion of the protest.
While we conclude that the award to Central was improper, due to the
advance state of contract performance it is impracticable for our Office
to recommend corrective action. We are, however, by letter of today
bringing this matter to the attention of the Secretary of
Transportation.
The protest is denied in part and sustained in part.
Comptroller General
of the United States
B-216988, Nov 26, 1984, 84-2 CPD 564
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Solicitation improprieties - Apparent prior to
closing date for receipt of proposals
DIGEST:
Allegation that RFP is restrictive of competition is dismissed as
untimely when not filed before the closing date for receipt of
proposals.
Mitchell Management Systems, Inc.:
Mitchell Management Systems, Inc. (MMS) protests that request for
proposals (RFP) No. DAHC06-84-R-0016 issued by the Department of the
Army is restrictive of competition.
We dismiss the protest.
Our Bid Protest Procedures, 4 C.F.R. Sec. 21.2(b)(1) (1984), require
that protests based upon alleged solicitation improprieties that are
apparent before the closing date for receipt of initial proposals be
filed before that date. MMS filed its protest against the RFP on
October 31, 1984. The closing date for proposals was October 19, 1984.
Since MMS did not protest the alleged RFP impropriety until after the
closing date, the protest is untimely and will not be considered. COMP
GEN (UP)
FILE: B-216987 85-1 CPD 158
DATE: February 7, 1985
MATTER OF: Magnet Electrical Contractors
DIGEST:
BIDS - RESPONSIVENESS - FAILURE TO PROVIDE SOMETHING REQUIRED
Bidder's failure to bid on required alternate item which was selected
for award by procuring activity renders bid nonresponsive.
Magnet Electrical Contractors (Magnet) protests the award of a
contract to Stack Construction Co. (Stack) for alternate item 1 for the
installation of roadway lights under solicitation No. 627-29-84 issued
by the Veterans Administration Medical Center (VA), Newington,
Connecticut. Magnet asserts that it should have been awarded a contract
for alternate item 2 at $12,850 and that the additional work under
alternate item 1 should have been contracted for separately.
We find the protest without merit.
The solicitation schedule included two alternates, item 1 for the
entire project, and item 2 for the same project less certain demolition
and excavation work. The lesser alternate was apparently included
because VA had some question about the availability of sufficient
funding for the entire project. The solicitation included a note which
indicated that depending on the availability of funds, a single award
would be made on either item 1 or item 2. The solicitation required
bidders to submit bids for each of the two alternate items and included
the Federal Acquisition Regulation provision fund at 48 C.F.R. Section
52.314-18 (1984), which states that when a solicitation requires bidding
on all items, failure to do so will disqualify the bid.
Stark submitted a bid of $23,372 for item 1, and a bid of $19,428 for
item 2. Magnet submitted a bid of $12,850 for item 2, with no bid for
item 1. The VA determined that it had sufficient funds available to pay
for the entire project as listed under item 1, determined that Magnet's
bid on item 2 only was nonresponsive, and made award to Stark.
Magnet contends that it would be cheaper for the VA to award Magnet a
contract for item 2 and to contract separately for the additional work
which is encompassed under item 1. In a protest to VA after bid
opening, Magnet offered to perform this additional work for $3,944 (the
difference between Stark's item 1 and item 2 prices). This "offer" by
Magnet is late and may not be considered by the VA. FAR, 48 C.F.R.
Section 14.304-1(a). Once VA determined that it had sufficient funds to
award on the alternate for the entire project, it properly rejected
Magnet's bid. Magnet, choosing to bid as it did, ran the risk that if
the contracting activity elected to accept alternate item 1, its bid
would be nonresponsive to that alternate. See Casson Construction
Company, Inc., B-198746, Oct. 24, 1980, 80-2 C.P.D. Paragraph 318;
Hoyer Construction Co., Inc., B-181974, Jan. 17, 1975, 75-1 C.P.D.
Paragraph 36; 45 Comp. Gen. 682 (1966).
In Magnet's January 17, 1985, comments to our Office on the VA
report, Magnet alleges that it has had prior difficulties in contracting
with the VA Medical Center at Newington. Magnet recounts problems that
it has encountered under two prior solicitations, one of which was
canceled after bid opening in June 1984, and the resolicitation of that
requirement, on which Magnet asserts that it was the low bidder, but
claims that it has not received any information from the VA regarding
the award. These allegations are untimely with respect to the first
solicitation since they were not raised until 7 months after Magnet was
notified of its basis for protest. 4 C.F.R. Section 21.2(b)(2) (1984).
The allegation concerning the second solicitation appears to be
premature since no action has been taken by the VA adverse to Magnet.
In any event, these prior solicitations have no relevance to the
present protest. Each procurement action is a separate transaction and
the agency action taken during the conduct of one procurement is not
relevant to the agency conduct of a different procurement. Channel
Disposal Co., Inc., B-215486, Aug. 17, 1984, 84-2 C.P.D. Paragraph 191.
We deny the protest.
Comptroller General
of the United States
B-216986, Nov 30, 1984, 84-2 CPD 615
CONTRACTS - Negotiation - Competition - Adequacy
DIGEST:
1. Protest against agency refusal to reopen competition after
failing to solicit protester is summarily denied where: agency made a
significant effort to obtain competition; agency did not deliberately
attempt to preclude protester from competition; and there is no showing
that the award will not be at a reasonable price.
CONTRACTS - Negotiation - Competition - Failure to solicit proposals
from all sources
2. Requirement of Small Business Investment Act of 1958, Sec. 223(
a), 15 U.S.C. Sec. 637(b) (1982), that a small business, upon its
request, shall be provided with a copy of bid sets and specifications
concerning a particular contract, without exception, is only applicable
where an agency refuses a small business request and does not apply
where agency acceded to the request by mailing requested information
which was never received by the small business.
Resource Engineering:
Resource Engineering protests the Department of the Interior's
(Interior) refusal to reopen a procurement to allow firms, which did not
receive copies of a request for proposals (RFP) for engineering,
scientific and laboratory services for the Tennessee Small Operators
Assistance Program (Program), to submit proposals. Resource Engineering
contends that its rights under Public Law No. 95-507 are being violated.
The protest is summarily denied for lack of legal merit. 4 C.F.R.
Sec. 21.3(g) (1984).
Resource Engineering also filed a protest, dated October 26, 1984,
with Interior. We have received a copy of Interior's reply to the
October 26, 1984, protest and, on the basis of the facts disclosed in
Resource Engineering's protest to our Office, its protest to Interior,
and Interior's reply to that protest, we conclude that the protest lacks
merit.
We have held that the failure of a firm to receive a copy of the
solicitation does not prevent award and require resolicitation so long
as the agency has made a significant effort to obtain competition, a
reasonable price was obtained, and no deliberate attempt was made to
exclude the protesting firm from competition. This is so even where
only one offer is received. Vigilantes, Inc., B-213010, Feb. 8, 1984,
84-1 C.P.D. Para. 158. Regarding the allegation that Resource
Engineering's rights under Public Law No. 95-507 are being violated, we
note that the requirement of the Small Business Investment Act of 1958,
Sec. 223(a), 15 U.S.C. Sec. 637b (1982), that a small business, upon its
request, shall be provided with a copy of bid sets and specifications
concerning a particular contract, without exception, is only applicable
where an agency refuses a small business request. Lavelle Aircraft
Company, B-211479, Aug. 2, 1983, 83-2 C.P.D. Para. 160, affirmed,
Lavelle Aircraft Company-- Reconsideration, B-211479.2, Sept. 2, 1983,
83-2 C.P.D. Para. 300, reaffirmed, Lavelle Aircraft Company--
Reconsideration, B-211479.3, Nov. 15, 1983, 83-2 C.P.D. Para. 560.
The record shows that Resource Engineering held a contract for
similar work while the Program was under the control of Tennessee.
Interior advertised its intent to establish a contractor source/mailing
list in the Commerce Business Daily (CBD). Resource Engineering
contacted Interior and asked to be put on the mailing list for the RFP.
Resource Engineering was put on the mailing list as were several other
firms that appear not to have received copies of the RFP. All of the
RFP's were mailed on the same day to all names on the list, including
Resource Engineering. Eight firms responded to the mailing, one of
which, like Resource Engineering, had written requesting inclusion on
the mailing list. Moreover, one proposal was received from a firm
located in the same city as Resource Engineering. Interior further
reports that it denied Resource Engineering's protest to Interior
because, in view of the Program's time schedule, it is not feasible to
reopen solicitation proceedings.
In our view, the CBD advertising of the mailing list's existence and
the solicitation of all firms on the list, including Resource
Engineering, constituted a significant effort to obtain competition.
This weighs heavily against any inference of an attempt to exclude
Resource Engineering from the competition. Culligan Incorporated,
Cincinnati, Ohio, 56 Comp.Gen. 1011 (1977), 77-2 C.P.D. Para. 242.
Moreover, Public Law No. 95-507 is clearly inapplicable since Interior
acceded to Resource Engineering's request by mailing it a copy of the
RFP. Since there is no indication that the award will not be at a
reasonable price, the protest is without merit.
The protest is summarily denied.
FILE: B-216978 85-1 CPD 232
DATE: February 25, 1985
MATTER OF: Norse Construction, Inc.
DIGEST:
CONTRACTORS - RESPONSIBILITY - TIME FOR DETERMINING
1. Responsibility of a surety may be estalished any time before
award.
BONDS - BID - SURETY - NET WORTH
2. Net worth of individual sureties on a bid bond need only be in
the amount of the difference between the price stated in the bid and the
price stated in the next higher acceptable bid notwithstanding the
invitation for bids' requirement for a bid bond that was 20 percent of
the bid price.
BIDDERS - RESPONSIBILITY V. BID RESPONSIVENESS - BOND REQUIREMENTS
3. Although determination of nonresponsibility was based on a not
totally proper computation of surety's outstanding obligations, where
discrepancy was minor and would not have led to different conclusion if
corrected, GAO will not question determination.
BIDDERS - RESPONSIBILITY V. BID RESPONSIVENESS - BOND REQUIREMENTS
4. Contracting officer has discretion to decide how much weight to
accord surety's outstanding bond obligations in determining
acceptability.
BONDS - BID - SURETY - AFFIDAVIT (STANDARD FORM 28) - DEFICIENCES -
NONDISCLOSURE OF OTHER BOND OBLIGATIONS
5. Failure to complete item 10 in affidavit of individual surety,
which required the surety to disclose all other bond obligations, may be
considered in determining the acceptability of the surety.
Norse Construction, Inc. (Norse) protests a determination that it is
nonresponsible under invitation for bids (IFB) F45603-84-B-0054 issued
by McChord Air Force Base, Washington (Air Force), for the refurbishing
of military housing units.
The protest is denied.
The IFB required a bid bond that was 20 percent of the bid price.
Norse submitted the low bid in the amount of $154,945 and a $30,989 bid
bond. Because Norse was bonded by two individual sureties rather than a
corporate surety, a completed affidavit of individual surety (Standard
Form (SF) 28) for each individual surety was required to accompany the
bond.
On their SF 28's, the individual sureties, both officers of Norse,
showed net worths that were sufficient to satisfy the requirements of
the Federal Acquisition Regulation (FAR), 48 C.F.R. Section 28.202-2(a)
(1984), which requires that the net worth of each individual must equal
or exceed the penal amount of the bond." Both sureties left blank block
10 of the SF 28, which required information on all other bonds on which
each was acting as a surety.
During a preaward survey, the Air Force learned that the two sureties
were also acting as individual sureties on other bonds totaling $94,902
and had pledged the same assets on those bonds. The Air Force found
that the total bond obligations of each of the two individual sureties
totaled $125,891 ($94,902 plus $30,989), and that this amount was likely
to increase because Norse was the second low bidder on another
solicitation in which the low bidder was being rejected.
The SF-28's showed that one of the sureties had a net worth of
$69,300, which the contracting officer determined was insufficient to
cover his total bonding obligations. Norse was therefore found to be
nonresponsible and the contract was awarded to Roger Lincoln
Construction Company, the next low bidder.
In an attempt to cure the nonresponsibility determination, Norse
submitted a $31,000 certified check and a revised SF 28. The
contracting officer rejected both and denied Norse's protest against the
award on the basis that acceptance of Norse's cashier's check would, in
essence, give Norse a second bite of the apple" and because the
sureties' outstanding liabilities on bid and payment and performance
bonds was more than $125,000, which still exceeded the revised net worth
of the nonresponsible surety.
The protester maintains that the surety has a net worth that exceeds
the amount of the bond and that the SF 28 was therefore sufficient.
Norse also contends that the purpose of the certified check was not to
provide a substitute surety, but to establish its surety as responsible.
Norse also asserts that the Air Force should have considered all of
this information in making its responsibility determination because the
responsibility of a surety can be established any time prior to contract
award.
The protester correctly states that the responsibility of the surety
may be established any time before award. Mercury Consolidated, Inc.,
B-212077.2, Aug. 17, 1984, 84-2 C.P.D. Paragraph 186. The Air Force
therefore should have considered Norse's revised SF 28 and the check in
assessing Norse's responsibility. We are not persuaded, however, that
the result would have been different had the Air Force done so.
We have recognized that the contracting officer has the discretion to
determine whether the extent to which an individual surety's bonding
obligations on other procurements are to be considered in making a
responsibility determination. Jet Services, Inc., B-180554, June 6,
1974, 74-1 C.P.D. Paragraph 307. We note, however, that the Air Force
also used the full value of the bid bond on this procurement in its
computations, apparently without considering that the bond need only be
in the amount of the difference between the price stated in the bid and
the amount of the next higher bid -- here, $7,255. American
Construction, B-213199, July 24, 1984, 84-2 C.P.D. Paragraph 95; 48 C.
F.R. Section 28.101-4(b). That amount, added to the surety's
outstanding liabilities on other procurements, totaled $45 more than the
surety's net worth, as shown on Norse's revised SF 28, and Norse was in
line for the award of another contract which would further increase
Norse's potential liability. Also, the assets represented by the check
were borrowed and were, therefore, offset by an added equal liability.
In these circumstances, we find nothing which persuades us that the
contracting officer might have reached a different conclusion had these
factors been considered.
Moreover, in Dan's Janitorial Services, Inc., B-205823, et al., Sept.
9, 1982, 82-2 C.P.D. Paragraph 217, we stated that a surety is required
to 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 judgment concerning
the surety's financial soundness and held that a surety's failure to
comply with this requirement for disclosure is an appropriate factor to
consider when determining the acceptability of a surety.
In sum, although the contracting officer's determination of
nonresponsibility was not based on a completely proper computation, we
believe that the discrepancy was minor and did not materially affect his
decision. In these circumstances, we find no basis to question this
determination.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-216976 85-2 CPD 162
DATE: August 13, 1985
MATTER OF: Westinghouse Electric Corporation
DIGEST:
BIDS - LATE - MISHANDLING DETERMINATION - REGULAR MAIL
1. Delayed receipt of bid by grantee Egyptian contracting ministries
allegedly caused by Egyptian postal authorities during customs clearance
is not ground for considering late bid since postal authorities are not
employees/agents of contracting ministries and solicitation permitted
consideration of late bids only where the sole cause of lateness was
mishandling by the contracting ministries, not the postal authorities.
BIDS - LATE - ACCEPTANCE - PREJUDICIAL TO OTHER BIDDERS
2. Late bid may not be considered on basis that acceptance would not
prejudice competitive procurement system where protester was in
possession of bid after bid opening and, therefore, could effect whether
or not it would receive the award.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
3. Complaint that bid opening scheduled by grantee should not have
been the day after national holiday is untimely when first raised after
bid opening.
Westinghouse Electric Corporation (Westinghouse) filed a complaint
regarding the rejection of the bid submitted by its subsidiary,
Westinghouse International Power Systems Company, Inc., under invitation
for bids (IFB) No. EL-012, issued jointly by the Egyptian Ministry of
Construction and the Egyptian State Ministry for Housing and Land
Reclamation, for an electric substation. The Agency for International
Development is funding the contract under a grant agreement between the
United States and Egypt to provide low income housing in Egypt.
We deny the complaint in part and dismiss it in part. /1/
Shortly before the June 19, 1984, bid opening, Westinghouse (through
its Cairo office) submitted a price and advice that its complete bid
could not be timely submitted due to delays in clearing the bid through
Egyptian customs. The Cairo office hand-delivered Westinghouse's
complete bid on June 20. Although Westinghouse's price was low, the
Egyptian ministries determined that the price and advice alone were
insufficient to constitute an acceptable bid since they did not contain
the bid bond, certifications, and technical data required by the IFB.
Since the complete bid was not delivered to the contracting ministries
until after bid opening, the Westinghouse bid was rejected as late under
invitation section 1.03(c), which provided that:
". . . A late Tender (bid) will not be considered even though
it becomes late because of factors beyond the Tender's control,
such as delays in mail handling. A late Tender may be considered
only when the sole cause for its becoming a late Tender was
mishandling on the part of the Owner (he ministries issuing the
invitation), his employees or his agents. Telegraphic Tenders
will not be accepted. . . ."
Westinghouse argues that its bid should have been considered for
either of two reasons. First, Westinghouse contends that the late bid
clause permits consideration of its complete bid since the sole and
paramount cause of the late arrival was the Egyptian government.
Second, Westinghouse contends that acceptance of its bid would not have
been prejudicial to the competitive bidding system because its prices
were submitted prior to bid opening and its tender documents were
delivered unopened shortly after bid opening following their delivery by
the commercial carrier to Westinghouse's Cairo office.
Westinghouse states that the reasons for the late arrival were a
sudden change in the normal processing of documents through customs, and
the scheduling of bid opening the day after an Egyptian legal holiday.
On June 14, Westinghouse gave a commercial carrier the complete bid for
delivery to Westinghouse's Cairo office. The bid was at Egyptian
customs on June 17, but, due to Egyptian Post Office instructions not
publicized prior to that date, the commerical carrier was prevented from
hand-carrying the bid through customs (as had previously been customary)
and, instead, had to wait for postal authorities to clear it. The
package was not cleared on June 17, and the customs office was closed
the next day for the holiday.
The general rule is that a late bid must be rejected unless it meets
the specific conditions provided in the IFB. E.g., Retsina Co.,
B-212471, Aug. 3, 1984, 84-2 CPD Paragraph 148. Since the IFB's late
bid clause permitted the consideration of late bids only when the sole
cause for lateness was mishandling of the bids by the issuing
ministries, or their employees and agents, we believe that whether or
not the lateness of Westinghouse's bid can be attributed to Egyptian
postal or customs authorities is irrelevant. See Sandia Die and
Cartridge Co., B-218011, Mar. 13, 1985, 85-1 CPD Paragraph 308.
Regarding Westinghouse's argument that considering its bid would not
prejudice the competitive bidding system, our Office has specifically
held that consideration of a late hand-carried bid would compromise the
integrity of the process. Monthei Mechanical, Inc. -- Reconsideration,
B-216624.2, Feb. 11, 1985, 85-1 CPD Paragraph 177. Even though
Westinghouse had already submitted its price before bid opening, it is
clear that Westinghouse had not submitted all the information necessary
to demonstrate compliance with the IFB's material terms and to bind
Westinghouse to those terms. Thus, should Westinghouse have decided
that it did not want the contract after all, it simply could have failed
to complete delivery of the tender documents. Affording Westinghouse
such an opportunity would compromise the integrity of the competitive
procurement process. We have held on numerous occasions that the
possibility the government might realize a monetary savings if an
unacceptable bid is accepted, is outweighed by the importance of
maintaining the integrity of the competitive procurement system.
Paramatic Filter Corp., B-209296, Mar. 8, 1983, 83-1 CPD Paragraph 234;
Peerless Prosthetics Co., B-210878, Mar. 22, 1983, 83-1 CPD Paragraph
292.
To the extent Westinghouse complains that the IFB was deficient in
designating the day after a holiday as the bid opening date, the protest
is untimely. To be considered on the merits, a complaint alleging
deficiencies on the face of a solicitation must be filed before bid
opening or the time set for receipt of proposals, when corrective action
is most practicable. ADB-Alnaco, Inc., B-212666, May 22, 1984, 84-1 CPD
Paragraph 537. Since Westinghouse did not complain about the IFB's
designated bid opening date prior to bid opening, we will not consider
this aspect of the complaint.
Accordingly, the complaint is denied in part and dismissed in part.
Comptroller General
of the United States
(1) As of January 29, 1985, we no longer review complaints concerning
awards under grants. See 50 Fed. Reg. 3978 (1985) and The George
Sollitt Construction Company, B-218101, Feb. 6, 1985, 64 Comp. Gen.
..., 85-1 CPD Paragraph 150.
FILE: B-216975 85-1 CPD 90
DATE: January 23, 1985
MATTER OF: International Shelter Systems, Inc.
DIGEST:
CONTRACTS - PROTESTS - ABEYANCE PENDING COURT ACTION
GAO will not consider a protest where the material issues are before
a court of competent jurisdiction which has not expressed an interest in
receiving GAO's decision.
International Shelter Systems, Inc. (International), protests the
award of a contract under solicitation No. N00421-84-B-0212 by the
Department of the Navy. The solicitation was for the delivery and
installation of two modular buildings at the Naval Air Station in
Patuxent River, Maryland. International alleges that its bid was
rejected as nonresponsive and that award was made improperly to Williams
Mobile Offices, Inc., the next low responsive bidder.
While the protest was pending with our Office, International filed
suit in the United States District Court for the District of Maryland.
The bases for International's lawsuit are the same as those presented to
our Office in the protest.
It is the policy of our Office not to decide protests where the
material issues are before a court of competent jurisdiction unless the
court requests, expects or otherwise expresses an interest in our
decision. 4 C.F.R. Section 21.10 (1984); CACI, Inc., B-210246, Feb.
1, 1983, 83-1 C.P.D. Paragraph 113. The court has not expressed an
interest in our decision in this matter. Therefore, the protest is
dismissed.
/s/ Harry R. Van Cleve
General Counsel
FILE: B-216974 84-2 CPD 653
DATE: December 11, 1984
MATTER OF: Belex Enterprises, Inc.
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - RESPONSIBILITY
DETERMINATION - NONRESPONSIBILITY FINDING - REVIEW BY GAO
GAO will not review Small Business Administration (SBA) decision
regarding the responsibility of a small business, absent a showing of
possible fraud or bad faith on the part of contracting officials. Where
protester alleges fraud on the part of contracting officials, but matter
is presently before SBA for a certificate of competency decision, GAO
will not consider allegation until SBA issues its decision and only if
SBA declines to issue a certificate of competency.
Belex Enterprises, Inc. (Belex), protests against an allegedly
fraudulent preaward survey conducted by the Defense Personnel Support
Center (DPSC), Philadelphia, Pennsylvania, which apparently was the
basis of a finding by DPSC that Belex was not responsible under
invitation for bids (IFB) No. DLA100-84-B-1049. We dismiss the protest.
DPSC informally advised us that the contracting officer has referred
the matter of Belex's responsibility to the Small Business
Administration (SBA). Under 15 U.S.C. Section 637(b)(7) (1982), the SBA
has conclusive authority to determine the responsibility of small
business concerns by issuing or refusing to issue a certificate of
competency. Generally, we will not review the SBA's decision in this
regard unless there is a showing of possible fraud or bad faith on the
part of contracting officials or SBA allegedly did not follow its own
regulations or consider material information in reaching the decision.
Cal Pacific Fabricating, Inc., B-214946, May 22, 1984, 84-1 C.P.D.
Paragraph 552. While Belex has alleged fraud on the part of contracting
officials, and a showing of possible fraud is one of the circumstances
in which we will review SBA certificate of competency determinations, we
will not presently consider Belex's allegation because the SBA has not
yet made a determination. The SBA may issue a certificate of
competency, in which case there would be no need for a decision from
GAO. If SBA declines to issue a certificate of competency, Belex may
then protest to GAO, and we will examine its allegations and determine
whether the circumstances permit our review of SBA's determination.
The protest is dismissed.
Harry R. Van Cleve
General Counsel
FILE: B-216973
DATE: April 22, 1985
MATTER OF: Keith E. Mullnix - Real Estate Expenses - Loan Transfer
Fee - Association Transfer Fee
OFFICERS AND EMPLOYEES - TRANSFERS - REAL ESTATE EXPENSES - LOAN
TRANSFER FEE
A transferred employee purchased a residence at his new duty station
and was charged a loan transfer fee and an association transfer fee.
Paragraph 2-6.2d(1) of the Federal Travel Regulations, as amended,
effective October 1, 1982, permits reimbursement of loan origination
fees and similar fees and charges, but not items considered to be
finance charges. The employee's loan transfer fee may be reimbursed
where it is similar to and assessed in lieu of a loan origination fee.
The association transfer fee may not be allowed since it is a
nonreimbursable maintenance cost for landscaping. Further, membership
fees are considered a part of the purchase price and not a part of the
cost or expenses of purchase.
This decision is in response to a request from Mr. Charles J.
Williams, Manager, Realty Operations Branch, Real Estate Division, Naval
Facilities Engineering Command, Department of the Navy. It involves the
entitlement of one of its employees to be reimbursed certain real estate
transaction expenses incident to a permanent change of station in 1984.
Reimbursement is authorized in part for the following reasons.
Mr. Keith E. Mullnix, a Navy employee, received a permanent
change-of-station transfer from Eureka, California, to Mission Viejo,
California, in January 1984. As an incident of his transfer he was
authorized reimbursement for relocation expenses.
Following completion of his transfer to Mission Viejo, Mr. Mullnix
submitted a claim for real estate transaction expenses totaling $621.
The agency allowed $371 and provided an explanation as to why the
remaining claimed real estate transaction expenses totaling $250 were
disallowed.
On reclaim, Mr. Mullnix asserted entitlement to all disallowed items
and provided an explanation for each. On administrative
reconsideration, reimbursement of the following items pertaining to the
purchase of his house at his new station remained in doubt:
1. Association transfer fee - $100
2. Lender's Charge (Lender's loan transfer fee) - $150
The provisions of law governing reimbursement of residence
transaction expenses of transferred employees are contained in 5 U.S.C.
Section 5724a (1982), and implementing regulations. Those regulations
are contained in Part 6 of Chapter 2, Federal Travel Regulations, FPMR
101-7, September 1981, incorp. by ref., 41 C.F.R. Section 101-7.003
(1983) (FTR).
As an incident of his transfer, Mr. Mullnix purchased a residence in
the Mission Viejo, California, area and assumed the mortgage loan of his
seller. The authorized certifying officer disallowed reimbursement of
the loan transfer fee on the basis that it was a finance charge within
the purview of Regulation Z, 12 C.F.R. Section 226.4(a) (1984), and was
not specifically authorized under FTR para. 2-6.2d (Supp. 4, Aug. 23,
1982).
The matter of reimbursement of a loan transfer fee incident to the
purchase of a residence at an employee's new station, was the subject of
decision Edward W. Aitken, B-214101, May 7, 1984, 63 Comp. Gen. 355. We
noted in that decision that FTR para. 2-6.2d(1)(f), as revised, allows
reimbursement of "other fees and charges similar in nature" to those
listed in para. 2-6.2d(1)(a-e) unless specifically prohibited in para.
2-6.2d(2). Accordingly, we held that where a loan assumption fee (or
loan transfer fee) involves costs similar to those covered by a loan
origination fee, was not specifically prohibited by the FTR, and is
assessed instead of a loan origination fee, it may be reimbursed under
FTR para. 2-6.2d(1) as a miscellaneous expense. See Raymond P. Keenan,
B-216203, February 22, 1985.
Since the fee involves costs similar to those covered by a loan
origination fee, Mr. Mullnix may be reimbursed the loan transfer fee
charged him, not to exceed the amount customarily paid in the locality
of his new residence.
Mr. Mullnix' claim for $100 for an association transfer fee may not
be allowed since FTR paragraph 2-6.2d(2)(d) (Supp. 4, Aug. 23, 1982)
provides that operating or maintenance costs are not reimbursable. We
have been advised by the certifying officer that these fees are
homeowner's assocation fees for landscaping and other maintenance costs.
Nathaniel E. Green, 61 Comp. Gen. 352 (1982). Further, membership fees
are regarded as items of added value continuing to benefit the
purchaser. As such, they are considered a part of the purchase price
and not a part of the cost or expenses of purchasing. Herbert W.
Everett, 60 Comp. Gen. 451 (1981).
Comptroller General
of the United States
FILE: B-216970
DATE: April 1, 1985
MATTER OF: Dewey R. Caselein - Change in Conversion to Permanent
Appointment
OFFICERS AND EMPLOYEES - PROMOTIONS - CANCELLATION
An employee who was serving under a temporary appointment at the
grade GS-2 level, was converted to a permanent appointment and promoted
to the grade GS-3 level. One month later the employee was promoted to a
grade GS-4 position, but his subsequent promotion to the grade GS-5
level 6 months later was denied under time-in-grade restrictions
applying to promotions under nontemporary appointments. Although the
union argues that the employee was prematurely converted to a permanent
appointment which later affected his entitlement to promotion, we hold
that the conversion to a permanent appointment was proper and may not be
changed retroactively.
The issue in this decision is whether an employee whose temporary
appointment was converted to a permanent appointment and, as a result,
his subsequent promotion to the grade GS-5 level was delayed due to
time-in-grade restrictions may have the conversion retroactively
changed. We hold that where the conversion of the appointment was not
erroneous, the agency may not retroactively change that action in order
to allow the employee an earlier promotion to the grade GS-5 level
consistent with the time-in-grade restrictions on promotions.
This decision is in response to a request from Local 1626, American
Federation of Government Employees, concerning the claim of Mr. Dewey R.
Castelein, an employee of the Defense Property Disposal Service, Battle
Creek, Michigan.
The record before us indicates that on December 19, 1983, Mr.
Castelein received a temporary appointment to a temporary position not
to exceed 700 hours as a clerk-typist, grade GS-2. In February 1984,
Mr. Castelein's supervisor, Mr. Charles Jones, requested that Mr.
Castelein be promoted to grade GS-3. The agency personnel office first
converted Mr. Castelein's appointment to a permanent, excepted
appointment as a clerk-typist, grade GS-2. The personnel office then
promoted Mr. Castelein to the position of clerk-typist, grade GS-3.
Both the conversion of appointment and the promotion actions were
effective March 25, 1984.
In April 1984, the supervisor asked that Mr. Castelein be placed in a
vacant Property Disposal Clerk (typing) position, grade GS-4 with
promotion potential to grade GS-5. In a memorandum dated April 16,
1984, the personnel office stated that the supervisor intended to
convert Mr. Castelein's appointment to permanent before his temporary
job expired. The supervisor was apparently unaware that Mr.
Castelein's appointment had been converted from temporary to permanent
in March.
The Personnel office then promoted Mr. Castelein to the position of
Property Disposal Clerk (typing), grade GS-4, effective April 22, 1984.
According to the same April 16, 1984 memorandum, this action was taken
"to correct this erroneous appointment," referring to the March
conversion to a permanent appointment.
In August 1984, Mr. Jones requested that Mr. Castelein be promoted to
grade GS-5, but it appears that the agency denied the promotion on the
basis of the time-in-grade requirements for promotions. Specifically,
the agency cited Federal Personnel Manual Chapter 300, S6-2(c)(1), which
provides that for promotions to the grade GS-5 level or below, the
candidate may be advanced if:
"The position is no more than two grades above the lowest grade
level he/she held within the preceeding year under nontemporary
appointment * * *." (Emphasis added.)
Mr. Castelein received promotions under a permanent, nontemporary
appointment from grades GS-2 to 3 and grades GS-3 to 4 in 1984. Thus,
he would not be eligible for promotion to grade GS-5 until he had served
1 year in grade at the GS-4 level.
The union argues that the personnel office prematurely converted Mr.
Castelein to a permanent appointment in March 1984, and the union asks
whether the personnel office may retroactively correct that "error" and
whether Mr. Castelein would be entitled to backpay upon correction of
the error.
The union has cited no legal authority for correcting this alleged
error, but they contend that there is nothing which specifically
precludes the personnel office from correcting such an error. Our
decisions have held generally that personnel actions may not be
retroactively changed unless clerical or administrative errors occurred
that (1) prevented a personnel action from taking effect as originally
intended, (2) deprived an employee of a right granted by statute or
regulation, or (3) would result in the failure to carry out a
nondiscretionary administrative regulation or policy if not adjusted
retroactively. See 54 Comp. Gen. 888 (1975), and decisions cited.
The union has not cited, and we are unaware of, any statute or
regulation which has been violated in this case by the agency converting
Mr. Castelein's appoinment in March 1984. Similarly, we are unaware of
any violation of a nondiscretionary agency regulation or policy in this
case.
As to whether or not the personnel action was effected as intended,
it appears from the personnel memorandum dated April 14, 1984, that in
requesting the promotion from grades GS-2 to 3, the supervisor did not
intend that Mr. Castelein's appointment be changed. However, the agency
personnel office converted his appointment to permanent before promoting
him in March 1984, "as is the normal procedure." We have been informally
advised by an agency official that it is not unusual to give an employee
a permanent appointment under these circumstances at the lower grade
levels where there is a large amount of job turnover. In addition, this
agency official pointed out that with the permanent appointment, an
employee would be covered by reduction-in-force procedures if the
temporary position expired, while an employee under a temporary
appointment would have no job protection or security if the temporary
position expired. The conversion to permanent status would also
increase other fringe benefits available to Mr. Castelein such as life
insurance and health insurance.
Based on the record before us, there is nothing to indicate that the
March conversion action was improper or without authority. Although
such conversion from a temporary to a permenent appointment may not have
been intended by Mr. Castelein's supervisor, that fact alone is not
sufficient to overturn the action retroactively. We are uncertain why
the personnel office characterized this action in the April 16, 1984,
memorandum as correcting an "erroneous appointment," but that statement
without further support does not alter our view of this case.
In the absence of any error in connection with the conversion of the
appointment in March 1984, we hold that the agency may not retroactively
change or cancel this action. Mr. Castelein must remain in the grade
GS-4 position for 1 year consistent with the applicable time-in-grade
requirements.
Accordingly, we deny the union's request for corrective action.
Comptroller General of the United States
B-216963, Nov 13, 1984, 84-2 CPD 526
BIDS - Invitation for bids - Amendments - Failure to acknowledge -
Bid nonresponsive
DIGEST:
Failure to acknowledge a material amendment which contained a change
in specifications in a solicitation renders a bid nonresponsive.
Molony & Rubien Construction Co.:
Molony & Rubien Construction Co. (Molony) protests the rejection of
its bid as nonresponsive under invitation for bids (IFB) No.
N62472-84-B-1794 issued by the Department of the Navy for the relocation
of the propulsion laboratory building at the Naval Underwater Systems
Center, Newport, Rhode Island. The Navy rejected the bid because Molony
failed to acknowledge an amendment modifying the construction drawings.
Amendment 0001 to the solicitation contained notes to five drawings,
including a note to the Roof Plan of the building which provided:
"Entire existing roofing system shall be removed to concrete deck."
Molony argues that the amendment was relatively minor and of minimal
value, and recites its history of satisfactory past performance. The
agency considered the amendment to the drawing specifications,
particularly the requirement to remove the existing roofing system to
the concrete deck, to be a material alteration to the solicitation.
It is well settled that a bidder's failure to acknowledge a material
amendment to an IFB generally renders a bid nonresponsive. Air Service
Co., B-204532, Sept. 22, 1981, 81-2 CPD Para. 240. An amendment is
material if it has more than a trivial or negligible effect of price,
quantity, quality or delivery of the time or services bid upon. The
reason for this rule is that the government's acceptance of the bid
would not legally obligate the bidder to meet the government's needs as
identified in the amended solicitation. Aerial Service Corp.,
B-209761.2, May 24, 1983, 83-1 CPD Para. 559.
In light of the note to the Roof Plan mandating the removal of the
entire existing roofing system to the concrete deck, we cannot agree
with the protester that the amendment was not material. While we are
unable to determine from the record the probable impact on price of the
amendment, it is clear that without the amendment the contractor could
not be legally bound to remove the roof to the concrete deck. This
would have a significant effect on the contractual services the agency
requires, and the amendment therefore must be viewed as material.
Huffman Engineers, Inc., B-212281, Nov. 18, 1983, 83-2 CPD Para. 587.
Under the circumstances, Molony's bid was properly rejected as
nonresponsive.
The protest is summarily denied. COMP GEN (UP)
B-216962, Nov 8, 1984, 84-2 CPD 515
BIDS - Prices - Below cost - Not basis for precluding award
DIGEST:
Agency decision to award a contract to other than the low-priced
offeror is not legally objectionable when the low offer is found to be
technically acceptable.
Dutchess Electronics Manufacturing Co., Inc.:
Dutchess Electronics Manufacturing Co., Inc. protests the award of a
contract to another company by the Naval Regional Contracting Center,
Philadelphia, under request for proposals No. N00140-82-R-1320.
Dutchess states that it should have received the award because of its
lower price.
The documents submitted by the protester indicate that the Navy
informed Dutchess, by letter of May 11, 1984, that its proposal would
not be included in the competitive range and that further negotiations
would not be conducted with it. They also indicate that by letter of
September 10, the Navy informed Dutchess of the award of the contract
and the amount thereof.
From these documents, it appears that the Navy viewed the Dutchess
proposal as technically unacceptable, and for that reason did not
consider the proposal to be in the zone of consideration for award.
Dutchess does not challenge the evaluation that resulted in the
elimination of its proposal from the competitive rage. Rather, it
complains only that its proposal was lower-priced and represented " a
savings to the government of 19.5%." Technically unacceptable proposals,
however, need not be considered for award, regardless of the price
associated with them, for the simple reason that such proposals will not
meet the government's needs. See, e.g., LTV Aerospace Corp., 55
Comp.Gen. 307, 338 (1975), 75-2 CPD Para. 203, and cases cited therein.
Therefore, the Navy's acceptance of a proposal that is higher-priced
than the protester's is not legally objectionable.
The protest is summarily denied. COMP GEN (UP)
B-216956, Nov 13, 1984, 84-2 CPD 525
CONTRACTS - Negotiation - Offers or proposals - Evaluation -
Competitive range determination - Reasonableness
DIGEST:
Protest against agency's decision not to include an offer in the
competitive range is denied summarily where documents submitted with
protest show that protester failed to submit an adequate technical
proposal and that the agency did not act arbitrarily in rejecting the
proposal on that basis.
Air Technology, Inc.:
Air Technology, Inc. (ATI) protests the rejection of its proposal in
response to request for proposals (RFP) 2071-411111 issued by the
Department of State for aircraft support (including engine and other
overhaul and repair service. ATI's proposal was rejected as outside the
competitive range after State found ATI's technical proposal was so
inadequate it could not be evaluated. ATI contends that it is qualified
to perform the contract.
We deny ATI's protest summarily because it is clear from its
submission to our Office that the technical proposal it submitted to
State was so materially deficient that ATI would be unable to prevail
were the protest fully developed.
The evaluation of proposals and determination of firms that will be
included in negotiations are matters that properly involve the exercise
of discretion by the procuring agency. Consequently, we will not
question an agency's evaluation of proposals unless it is shown that the
agency's determination was unreasonably, arbitrary or in violation of
procurement laws of regulations. See Digital Equipment Corp., B-207312,
Aug. 9, 1982, 82-2 CPD Para. 118. In this connection, we have held that
agencies do not act improperly when they exclude a proposal from the
competitive range for deficiencies that are so material that major
additions would be required to make it acceptable. MacGregor Athletic
Products, B-211452, Sept. 23, 1983, 83-2 CPD Para. 366.
Materials submitted with the protest show that six technical factors
were to be considered in evaluating proposals. These, quoted in
descending order of importance, were as follows:
"a. Experience and qualification of the individual who will be
assigned as Project/Contract Manager.
"b. Experience and qualifications of personnel (overhaul/repair
services) to include Federal Aviation Administration certifications.
"c. Proposed procurement/overhaul system, including the proposed
record keeping system.
"d. Experience of offeror in providing the aviation support services
required by this solicitation to overseas countries.
"e. Experience and qualifications of offeror in providing any or all
of the aviation support services required by this solicitation.
"f. References of overseas and domestic client who offeror has
provided the required aviation support services. Reference to include
name, telephone number, service provided, contract number and dollar
value."
ATI had included a copy of its technical proposal with its protest.
The proposal consists of two typewritten pages and several standard
contracting forms. The standard forms add nothing to the typewritten
text. The typewritten text is in outline form and includes four parts:
(1) a paragraph in which ATI identified its proposed project manager
and briefly summarized his experience;
(2) a paragraph in which ATI indicated its intent to subcontract
portions of the work to three firms;
(3) a statement that record-keeping would consist of maintaining
three files (identified as "quotes and correspondence," "open orders,"
and "closed orders"); and
(4) a list of references. The proposal did not discuss the experience
or qualifications of ATI's or its proposed subcontractors' personnel in
providing overhaul and repair services, and except for the list of
references, did not address ATI's experience or qualifications in
providing aviation support services domestically or overseas.
ATI's protest contains more technical information than did its
proposal, and we recognize that ATI in fact may be qualified to perform
this work. It was incumbent on ATI, however, to establish in the
proposal the suitability of what it offered. See Duroyd Manufacturing
Co., Inc., B-195762, November 16, 1979, 79-2 CPD Para. 359. It is clear
from the protest that ATI did not meet this responsibility to
demonstrate its qualifications in its proposal. Consequently, ATI
cannot show that the rejection of its proposal was unreasonable.
The protest is denied. COMP GEN (UP)
FILE: B-216955 85-1 CPD 327
DATE: March 14, 1985
MATTER OF: Rolm Southern California
DIGEST:
CONTRACTS - PROTESTS - ALLEGATIONS - UNSUBSTANTIATED
1. Protester's allegation that telephone system offered by awardee
will not meet solicitation traffic capacity requirements is denied.
Where awardee's compliance with solicitation requirement is subject of
technical dispute between protester and ultimate user of system,
protester has not carried burden of proof of showing that awardee's
system would not meet the specification.
CONTRACTS - PROTESTS - ALLEGATIONS - UNSUBSTANTIATED
2. Allegation that cover letter to awardee's proposal showed that
awardee could not meet specification requirement is denied where cover
letter language may be somewhat ambiguous but overall proposal shows
agreement to comply with all requirements.
Rolm Southern California (Rolm) protests the award of a contract for
the lease/purchase of a telephone system to General Telephone of
California (GTE) under request for proposals (RFP) No.
N62474-84-R-4982, issued by the Department of the Navy (Navy). Rolm
contends that the equipment offered by GTE does not meet solicitation
requirements for a specified traffic capacity at a specified level of
service (p.01 grade of service) and that public statements of GTE and
the cover letter to GTE's proposal indicate that it cannot meet the RFP
requirement that 300 digital ports (phone lines capable of processing
data) will be fully equipped and ready for use by October 1, 1984.
The Navy issued this RFP on August 24, 1984, as an emergency project,
with the closing date for initial proposals on August 28, 1984. On
August 29, 1984 the RFP was modified to require that the "system shall
be complete and operational not later than 1 October 1984 based on award
by 31 August 1984." The amendment also established August 30 as the
closing date for receipt of best and final offers. After evaluation of
the final offers, the Navy awarded the contract to GTE as the low priced
offeror at $1,470,415.80 for the lease/purchase of the system
($24,506.93 per month). The Navy specifically determined that the
system proposed by GTE was in accordance with the specifications. Rolm
submitted the second low technically acceptable offer at a cost of
$2,246,747.49 ($37,445.79 per month).
On the record, Rolm has not proved its contention that GTE's offered
equipment cannot meet the RFP requirements and, therefore, GTE's
technical proposal is unacceptable.
Essentially, Rolm asserts that according to its calculations based on
literature contained in the proposal for the GTE system offered, the
system's traffic capacity is insufficient to meet RFP requirements. The
Navy provides an explanation and its own calculations which show the
system offered will be in excess of the RFP traffic capacity
requirement. Rolm, as the protester, has the burden of affirmatively
proving its case. This burden is not met where the only evidence is the
conflicting statement of Rolm and the Navy. Centennial Computer
Products, Inc., B-212979, Sept. 17, 1984, 84-2 C.P.C. Paragraph 295.
With regard to the requirement for 300 digital data ports, Rolm
initially states that in order for the system to be "complete and
operational," it must be "fully equipped" with 300 digital data ports
and "ready for use" with digital line cards installed by October 1.
Rolm argues that GTE has publicly stated that the digital line cards
will not be available until mid-1985. Thus, Rolm concludes the offer
was unacceptable. In addition to these public statements, Rolm refers
to a cover letter to GTE's initial proposal which states that:
"In light of the rapid install that is being required, full data
capabilities are due in February 1985. However, the backplane is
wired for data acceptance and enhancement."
Rolm concludes that based on that statement, the Navy, prior to
award, was on notice that the GTE system would not be fully complete and
ready for use on time.
The Navy states that unspecified public statements did not serve to
qualify GTE's otherwise technically acceptable offer of a complete
system. With regard to the cover letter, the Navy states that it
construed the GTE letter to mean that the GTE system could not process
data external to the system, but could handle data within the system and
this would satisfy the RFP requirement for an operational system. The
Navy did not regard this statement as suggesting that digital data cards
would not be provided by October 1, 1984, and states that GTE is
required to furnish the necessary data cards under the contract.
Finally, the Nayv argues that even assuming that this language meant the
cards would not be furnished timely, Rolm was not prejudiced since its
price was $776,331.69 higher than GTE's offer and the Navy doubts that
this price difference could have been eliminated had Rolm been given the
opportunity to revise its offer to postpone delivery of cards.
Rolm has not submitted the GTE public statements which allegedly
qualify GTE's offer. In any event, proposals must be evaluated based on
the information furnished with them. Aqua-Tech, Inc., B-210593, July
14, 1983, 83-2 C.P.D. Paragraph 91. Thus, we agree with the Navy that
the proposal, including the cover letter, is the only information which
should be considered in determining whether the Navy reasonably
determined that the GTE system proposed was technically acceptable.
With regard to the cover letter, the language does not explicitly take
exception to any RFP requirement and indicates that GTE intended to meet
the requirements. GTE did not suggest in its offer that it could not or
would not comply with the specifications and delivery schedule of
October 1. The language in the letter may be somewhat ambiguous as to
meaning and, with the benefit of hindsight, possibly the Navy should
have sought clarification of its meaning. Nevertheless, we cannot say
that the Navy's explanation of what it believed GTE meant was
unreasonable.
We deny the protest.
Harry R. Van Cleve
General Counsel
FILE: B-216953 85-1 CPD 334
DATE: March 22, 1985
MATTER OF: Kisco Company, Inc.
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - NEW ISSUES - UNRELATED TO ORIGINAL PROTEST BASIS
1. GAO will dismiss as untimely issues raised after initial protest
was filed because they are new grounds of protest and should have been
raised either within 10 working days after the protester knew of them
or, in the case of alleged solicitation deficiencies, before the closing
date for receipt of initial proposals.
CONTRACTS - NEGOTIATION - AWARDS - INITIAL PROPOSAL BASIS - AWARD
AUTHORITY DISCRETIONARY
In a negotiated procurement, although an agency may in certain
circumstances make award on the basis of initial proposals, the decision
to do so is discretionary and no offeror has a legal right to such an
award.
CONTRACTS - NEGOTIATION - REQUESTS FOR PROPOSALS - AMENDMENT - AFTER
EVALUATION OF PROPOSALS
3. After submission of initial proposals, agency may exercise
administrative discretion in amending RFP to increase quantity being
procured by 5 percent when record shows that change is necessary to
ensure satisfaction of government's needs and change is not de minimus.
Amendments to increase quantities are specifically authorized by FAR, 48
C.F.R. Section 15.606(a).
CONTRACTS - PROTESTS - ALLEGATIONS - UNSUBSTANTIATED
4. Speculation that amending RFP to increase procured quantity
resulted in an auction and improper disclosure of protester's price, an
allegation that the procuring activity denies, does not meet protester's
burden of proof.
Kisco Company, Inc. protests the proposed award of a contract to any
other offeror pursuant to request for proposals (RFP) No.
DAAA09-84-R-0369, issued by the U.S. Army Armament, Munitions and
Chemical Command, Rock Island, Illinois.
We dismiss the protest in part and deny the remainder.
On August 5, 1984, the Army requested proposals for 654,550
40-millimeter, M430 Body Assemblies (part of hand grenades) and on
September 11, 1984, it received initial proposals. By telex message
dated October 22, 1984, the Army increased the quantity of the
requirement by 33,332 units to a total of 687,882 unites, requesting
best and finals from the offerors in the competitive range, including
Kisco. These were to be submitted by close of business October 24,
1984.
By telex message filed with our Office on October 26, 1984, Kisco
alleged that it was arbitrary and capricious to amend the solicitation
after prices had been disclosed. Additionally, by letter dated November
13, 1984, and in comments dated January 14, 1985, the protester
supplemented its protest, contending that the requirement should have
been advertised rather than negotiated and that the agency by
telegraphically increasing the quantity requirement, failed to issue a
proper solicitation amendment. Kisco requests that the Army be directed
either to award the contract to it or to cancel and resolicit, combining
fiscal year 1984 and 1985 requirements. Kisco also seeks proposal
preparation costs.
The supplemental protests by Kisco are untimely. Kisco's contention
that the procurement should have been advertised, rather than
negotiated, concerns a defect apparent on the face of the solicitation
and therefore should have been filed before the September 11 closing
date for receipt of initial proposals. See 4 C.F.R. Section 21.2(b)(1)
(1984). Since this ground of protest was not raised until November 13,
1984, it is untimely and not for consideration. Anderson Engineering
and Testing Co., B-208632, Jan. 31, 1983, 83-1 CPD Paragraph 99.
As for Kisco's January 14, 1985 submission arguing that the Army's
telex message did not comply with regulations requiring written
amendments, this basis for protest, raised after the initial protest was
filed, must independently meet our timeliness standards. Booz, Allen &
Hamilton, 63 Comp. Gen. 599 (1984), 84-2 CPD Paragraph 329. Since it
was not raised within 10 working days after the basis for protest was
known, it does not and therefore is untimely and also not for
consideration. Se 4 C.F.R. Section 21.2(b)(2). /1/
The protester timely contends that award should have been made on the
basis of initial proposals and that there was no rational basis for the
agency to amend the solicitation and request best and final offers, so
that an allegedly improper auction resulted. According to the
protester, the quantity increase was an "insignificant" 5.09 percent.
On the other hand, according to the Army, the decision to amend the
solicitation was required by the Federal Acquisition Regulation (FAR),
which provides for RFP's to be amended either before or after receipt of
proposals where the government's requirements change or the agency
decides to relax, increase, or otherwise modify its requirements. See
48 C.F.R. Section 15.606(a) (1984).
The FAR permits agencies to make award on the basis of initial
proposals where it can be demonstrated that acceptance of the most
favorable offer without discussions would result in a fair and
reasonable price. See 48 C.F.R. Section 15.610. The decision whether
to award on the basis of initial proposals in discretionary, however, 52
Comp. Gen. 425 (1973), and an offeror has no legal right to insist that
award be made on this basis. Consequently, regardless of whether the
agency's amendment of the RFP was proper, Kisco has no right to award
based on its initial proposal. Townsend & Co., B-211762, Mar. 27,
1984, 84-1 CPD Paragraph 352.
As for the allegedly improper amendment, whether to issue a amendment
is essentially a discretionary matter for the agency. Patty Precision
Products Co., B-182861, May 8, 1975, 75-1 CPD Paragraph 286. An agency
is not required to amend an RFP when there is only a de minimus change
in requirements. Telos Computing, Inc., 57 Comp. Gen. 370 (1978), 78-1
CPD Paragraph 235 (removal of 1 of 617 equipment items to be serviced).
Amendment of an RFP is justified, however, when there is a substantial
or material change in requirements. 50 Comp. Gen. 619 (1971); Cadillac
Gage Co., B-209102, July 15, 1983, 83-2 CPD Paragraph 96 at 13. Cf.
U.S. District Court for the District of Columbia, 58 Comp. Gen. 451
(1979), 79-1 CPD Paragraph 301 (failure to issue written amendment does
not prejudice sole source offeror that is or notice of substantial
changes). Even when there is a request for new best and final offers
that is not based on a substantial change in requirements, we will not
question the propriety of an award on this basis unless there is a
showing that such action is fraudulent, capricious, arbitrary, or so
grossly erroneous as to imply bad faith. See Bell Aerospace Co., 55
Comp. Gen. 244, 247 (1975), 75-2 CPD Paragraph 168 (involving more than
one round of best and final offers).
The general rule is that an RFP may be revised after receipt of
initial proposals when such action is necessary to ensure that the
government's needs will be satisfied. Sub-Sea Systems, Inc., B-195741,
Feb. 12, 1980, 80-1 CPD Paragraph 123. In this instance, the increased
quantity requirement became known after the closing date for receipt of
initial proposals, as evidenced by the Procurement Work Directive
Amendment dated September 16, 1984. Once that requirement became known,
the contracting officer clearly did not act improperly by amending the
solicitation since increases in contract requirements are a specific
reason given in FAR for amending a solicitation. See 48 C. F.R.
Section 15.606(a). Further, in our opinion, an increase of more than
33,000 units, even though an increase of only approximately 5 percent,
was not a de minimus change in requirements.
The protester maintains that there were methods other than amendment
after receipt of initial proposals to increase the requirement.
According to Kisco, the additional quantity could have been procured as
part of the Army's fiscal year 1985 requirement because the delivery
schedules for fiscal years 1984 and 1985 overlap. Alternatively, the
protester contends that the Army could have obtained the additional
quantity through exercise of an option clause that gave the Army the
right to increase the quantity of 200 percent at a separate unit price.
Although the protester disagrees with the agency's method of
procuring the increased requirement, the determination of the
government's needs and the best method of accomodating them are
primarily the responsibilities of the procuring activitiy. See A. T.
Kearney, Inc., B-205998.2, Feb. 28, 1983, 83-1 CPD Paragraph 190. The
record does not indicate precisely why the Army determined that
amendment for fiscal year 1984 was appropriate. However, the Army
reasonably could have believed, for example, that economies of scale and
other factors associated with increased quantities would affect
originally-offered prices or prices for the additional units. The
protester simply has not shown that the contracting officer abused his
discretion here.
The protester asserts that the opening of negotiations after receipt
of initial proposals resulted in an improper auction in violation of the
FAR, 48 C.F.R. Section 15.610(d)(3) (iii), because, it alleges, its
pricing information was improperly disclosed to other offerors during
the 6-week period between the submission of initial proposals and the
opening of negotiations. Although the protester acknowledges that it
does not have actual evidence of price disclosure, it believes that an
investigation will disclose a pattern of prices that strongly suggests
an auction. The Army denies this allegation.
Our Office normally does not conduct investigations in its bid
protest function. Instead, we base our decisions on written submissions
of the parties, with protesters bearing the burden of proof. P-III
Associates, B-213856 et al., July 31, 1984, 84-2 CPD Paragraph 136. In
this case, cognizant agency officials have provided affidavits stating
that they did not disclose Kisco's price to other offerors. Absent any
probative evidence of actual disclosure, we must assume that Kisco's
allegation is speculative and that Kisco has not met its burden of
proof. Energy and Resource Consultants, Inc., B-205636, Sept. 22, 1982,
82-2 CPD Paragraph 258.
The protest is dismissed in part and denies in part; as the protest
is without merit, Kisco's claim for bid preparation costs also is
denied.
Harry R. Van Cleve
General Counsel
(1) We note here that the Army filed late rebuttal comments with our
Office on February 20, 1985. Our Bid Protest Procedures state that
unsolicited agency rebuttals shall be considered if filed within 5 days
after receipt by the agency of the comments to which the rebuttal is
directed. 4 C.F.R. Section 21.3(d). Although we have considered
rebuttal comments that were filed late, see, e.g., Interstate Court
Reporters, B-208881.2, Feb 9, 1983, 83-1 CPD Paragraph 145, in this
instance we did not find them necessary to the disposition of the
protest, and therefore we did not evaluate them in arriving at our
decision. See Environmental Tectonics Corp. B-183616, Oct. 31, 1975,
75-2 CPD Paragraph 266.
FILE: B-216951
DATE: April 12, 1985
MATTER OF: Lieutenant Colonel Roger B. Files, USAF, Retired
DEBT COLLECTIONS - WAIVER - MILITARY PERSONNEL - PAY, ETC. - RETIRED
A retired service member who received overpayments of retired pay
should have known that the payments were erroneous, considering his
rank, years of service, the amount of the erroneous overpayments, and
the fact that he was aware that he was being paid based upon retirement
as a colonel rather than his retired rank of lieutenant colonel.
Therefore, waiver of this indebtedness is not granted.
Lieutenant Colonel Roger B. Files, USAF, Retired, requests
reconsideration of our Claims Group's denial of his application for
waiver of his debt to the United States in the amount of $50,007.85.
The debt arose from erroneous payments of military retired pay during
the period September 1, 1973, through September 30, 1982. In light of
the facts presented and the applicable provisions of law, our Claims
Group's action in this matter is sustained.
As a Regular commissioned officer in the United States Air Force,
Colonel Files was retired from active duty mandatorily in the grade of
lieutenant colonel effective September 1, 1973, in accordance with 10
U.S.C. Section 8916 (1970). Despite the fact that his retirement orders
stated clearly that he was retired in the grade of lieutenant colonel,
he was inadvertently listed as a colonel when his retired pay account
was established in the Air Force Accounting and Finance Center. The
error was discovered when the Finance Center records were reconciled
with information received in July 1982 from the Air Force Manpower
Personnel Center. The reconciliation revealed that he was being paid
erroneously as colonel rather than as a lieutenant colonel. The retired
pay record was corrected effective October 1, 1982, the debt was
established for the period September 1, 1973, through September 30,
1982, and collection action was initiated effective with his November
1982 retired pay.
In his original request for waiver Colonel Files indicated that he
believed he was being paid correctly in the Reserve grade of colonel and
that he could have retired voluntarily as a colonel subsequent to his
Reserve promotion to that grade. He stated that he understood that
retired pay is based upon the highest rank an officer could have held at
the time of retirement and that his pay would be computed under the
formula most favorable to him.
As evidence that he held the rank of colonel he has submitted a copy
of Department of the Air Force General Orders Number 70, November 30,
1956, captioned "Recommended List for Promotion to Colonel." The orders
provided:
"The following approved recommended list of Reserve officers
selected in accordance with the provisions of section 516, the
Reserve Officer Personnel Act of 1954 (Air Force Bulletin 17, 17
September 1954) for promotion to the permanent grade of Colonel,
Reserve Air Force (Air Force Reserve), is announced. This
announcement does not constitute the actual promotion of officers
concerned. Promotion will be accomplished by appropriate
commanders. The effective date of promotion is 30 November 1956.
Officers listed hereon, serving on extended active duty, who have
not completed periods of required active duty under any provision
of law or regulations will not be promoted until they complete
such required active duty service obligation, or until promoted to
a temporary grade equivalent to the permanent grade to which
recommended. At such time as they become eligible by completing
an active duty service obligation or by receiving a higher
temporary grade, they will, upon their own application therefor,
be promoted with effective date of the Reserve promotion as shown
in this order and be subject to the provisions of section 511(b),
the Reserve Officer as shown this order and be subject to the
provision of section 511(b), the Reserve Officer Personnel Act * *
* "
At the time those orders were issued Colonel Files was serving on
active duty in the Reserve grade of lieutenant colonel. In his letter
of November 4, 1982, he indicates that he continued to serve on active
duty in his Reserve grade of lieutenant colonel from that date until the
date he was appointed as a lieutenant colonel in the Regular Air Force.
Thus, he was not promoted to the rank of colonel while he served as a
Reserve on active duty. The Air Force has indicated that upon receiving
his appointment as a lieutenant colonel in the Regular Air Force his
Reserve appointment was voided. Accordingly, it appears that he was
never promoted to colonel either in the Air Force Reserve or in the
Regular Air Force.
In his appeal from the denial of his waiver request by our Claims
Group, Colonel Files contends that he is unfamiliar with the law
governing the proper determination of his retired pay. He reiterates
that a person entitled to retired pay under more than one pay formula is
entitled to be paid under the applicable formula most favorable to him
and that an officer may retire voluntarily and receive the monthly basic
pay based upon his permanent Reserve grade. He further believes that he
was qualified for voluntary retirement as a Reserve member in the grade
of colonel any time before he was retired mandatorily.
A claim against a member or former member of the uniformed services
arising out of an erroneous payment of pay or allowances may be waived
if collection "would be against equity and good conscience and not in
the best interest of the United States." But the Comptroller General may
not exercise his authority to waive any claim:
"(1) if, in his opinion, there exists, in connection with the
claim, an indication of fraud, misrepresentation, fault, or lack
of good faith on the part of the member * * * " 10 U.S.C. Section
2774.
We interpret the word "fault," as used in that provision of law as
including something more than a proven overt act or omission by the
member. Thus, we consider fault to exist if in light of all the facts
it is determined that the member should have known that an error existed
and taken action to have it corrected. The standard we employ is to
determine whether a reasonable person should have been aware that he was
receiving payment in excess of his proper entitlement. Chief Petty
Officer William F. Seacrest, Jr., B-201814, September 18, 1981, and 56
Comp. Gen. 943 (1977).
It is fundamental that officers retiring from a military service on
the basis of active service performed are entitled to pay of the highest
grade in which they have served on active duty and satisfactorily for
not less than 6 months. This provision was contained in 10 U.S.C.
Section 8963(a) (1970) applicable to Air Force officers at the time
Colonel Files retired. See the general provision, applicable to all
military officers, at 10 U.S.C. Section 1370(a)(1). An officer of
Colonel Files' rank and length of service knew or should have known that
retired pay could not be predicated upon a rank which he never attained
while on active duty. As a matter of fact it was a Reserve rank to
which he may never have been promoted. Since he knew his highest active
duty grade was lieutenant colonel, he should not have expected to
receive retired pay based upon the grade of colonel. Further, as he had
not served on active duty as a Reserve colonel, there was no reason to
believe that he was entitled to be retired in that grade at a time
before he was retired mandatorily as a lieutenant colonel.
Colonel Files should have had doubt at the outset of his entitlement
to receive retired pay based upon the retired grade of colonel. Since
he knew that his pay was based upon the grade of colonel, not lieutenant
colonel, he should have known or at least suspected he was being
overpaid and should have requested a complete explanation of his pay.
The fact that the overpayments were made through administrative error
does not relieve an individual of responsibility to determine the true
state of affairs in connection with overpayments. A person receiving
money erroneously paid by a Government agency or official acquires no
right to the money; such persons are bound by equity and good
conscience to make restitution. Captain David H. Scott, B-188595, June
3, 1977, Colonel Frederick H. Mueller, B-197286, May 20, 1980.
Since Colonel Files should have known that he was being overpaid, we
are unable to conclude that he is free from fault. Therefore,
collection action is not against equity and good conscience nor is it
contrary to the best interests of the United States.
Accordingly, the action of our Claims Group denying waiver is
sustained.
Comptroller General
of the United States
FILE: B-216948; B-217353 85-1 CPD 381
DATE: April 2, 1985
MATTER OF: Western Graphtec, Inc.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - ADVERSE AGENCY ACTION EFFECT
1. Once a timely protest to the contracting agency has been filed,
any subsequent protest to GAO must be filed within 10 working days after
the protester has notice of initial adverse agency action on the
protest. The time for filing at GAO is not tolled while a protester
continues to pursue its protest with the agency.
CONTRACTS - REQUESTS FOR QUOTATION - SPECIFICATION - BRAND NAME OR
EQUAL - "EQUAL" PRODUCT EVALUATION
2. Agency properly refused to consider product alleged to be equal
to the specified brand name product where product did not comply with a
particular feature of the brand name item that was identified in the
solicitation.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
3. Protest objecting to specification requirement is untimely when
filed after closing date for receipt of offers.
Western Graphtec, Inc. protests the issuance of orders
DAADO5-84-F-4118 and DAADO5-84-F-E266 to Gould Inc. under requests for
quotations DAADO5-84-Q-0684 (RFQ-0684) and DAADO5-84-Q-2554 (RFQ-2554)
issued by the Army Materiel Command. Both orders were for Gould
recorders and related equipment and were placed under Gould's Federal
Supply Schedule (FSS) contract. Western Graphtec contends that it has
FSS listed equipment that would meet the Army's needs at a lower price.
The protests are denied in part and dismissed in part.
A recorder or oscillograph records data, in this case
electrophysiological data, by tracing lines on moving chart paper.
RFQ-0684, issued March 13, 1984, requested quotations on a brand name or
equal basis for a Gould recorder and related equipment and included a
list of salient characteristics to be met by equipment proposed as
equal. Among other things, an equal recorder was required to have a
non-thermal, "pressurized fluid writing system assuring clear traces
over the entire pen velocity range." RFQ-2554, issued August 8, also
requested quotations for a Gould brand name recorder or equal and
related equipment. This RFQ did not list salient characteristics but
the bid schedule indicated that the Gould recorder has "ink writing
channels."
Under both solicitations, Western Graphtec quoted prices on its Model
WR-3101 Oscillograph as equal to the Gould recorder. Literature
submitted with Western Graphtec's quotations indicated that its model
has a thermal writing system. In such a system, lines are traced by
moving heat sensitive paper under a heated stylus rather than by using a
pressurized ink pen writing system such as is used by Gould.
Protest under RFQ-0684
The protest under RFQ-0684 was untimely filed and is dismissed. The
record shows that the order was placed with Gould on July 2. Western
Graphtec protested the rejection of its lower priced quotation to the
Army on July 3. By letter dated September 17, the Army denied the
protest. Western Graphtec continued to pursue the matter with the Army
and did not protest to our Office until October 26.
Under our Bid Protest Procedures, once a protest was timely filed
with the contracting agency, any subsequent protest to our Office had to
be filed within 10 working days after the protester received notice of
initial adverse agency action on the protest. 4 C.F.R. Section 21.2(a)
(1984). The fact that a protester continued to pursue its protest with
the contracting agency does not alter this rule. Energy Master of
Maryland, Inc., B-215642, July 20, 1984, 84-2 CPD Paragraph 76. Since
Western Graphtec did not file its protest with this Office within 10
working days after receipt of the contracting officer's denial of its
agency protest, the protest to our Office of the order from Gould under
RFQ-0684 is untimely.
Protest under RFQ-2554
The protest under RFQ-2554 is dismissed in part and denied in part.
The Army made award to Gould after evaluating quotations from Gould and
Western Graphtec. Gould priced its equipment at $18,756.72. Western
Graphtec submitted two quotations, one at $12,500.00 for its Model
WR-3101-8 and a second at $12,500.00 for its Model WR-3101-4. The
contracting officer rejected Western Graphtec's offers because that firm
proposed thermal systems.
The Army's refusal to accept Western Graphtec's quotations was proper
because, although RFQ-2554 did not contain a list of "salient
characteristics" explicitly denominated as such, it did identify the
Gould brand name products as having "ink writing channels." When a
solicitation sets forth particular features of the brand name item,
these features are presumed to be material and essential to the
government's needs. Nexus Inc., B-196593, Apr. 15, 1980, 80-1 CPD
Paragraph 269. It is clear that Western Graphtec's recorders did not
conform to this requirement, and thus, could not have been accepted
without an RFQ amendment and resubmission of quotes. Parkson Corp.,
B-187101, Feb. 11, 1977, 77-1 CPD Paragraph 103.
To the extent Western Graphtec seeks to question the propriety of
requiring an ink rather than a thermal system, its protest is untimely
under our bid protest procedures, which required that protests of
alleged deficiencies that are apparent in a solicitation be filed before
the closing date for receipt of quotations. 4 C.F.R. Section
21.2(b)(1). Western Graphtec's submissions indicate that firm was aware
that ink writing recorders were required but did not protest to our
Office until after quotations were due.
The protest under RFQ-0684 is dismissed; the protest under RFQ-2554
is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
FILE: B-216947.2 85-1 CPD 664
DATE: June 11, 1985
MATTER OF: Fleetwood Electronics, Inc.
DIGEST:
CONTRACTS - NEGOTIATION - REQUESTS FOR PROPOSALS - SPECIFICATIONS -
RESTRICTIVE - GENRAL ACCOUNTING OFFICE RECOMMENDATION OF LESS
RESTRICTIVE
Protest against specifications as unduly restrictive is sustained
where contracting agency has not established prima facie support for
specific design requirements it has imposed. Needs should be stated
functionally to permit consideration of other equipment that is capable
of meeting the government's actual needs.
Fleetwood Electronics, Inc. protests certain specifications contained
in the Department of the Army request for proposals (RFP) No.
DAAG08-84-R-0399, issued for language laboratory systems for the Defense
Language Institute (DLI), Presidio of Monterey, California. The
contractor will be responsible for furnishing a central control console,
central audio equipment (including tape recording/reproducing machines),
wiring, student enclosures, and individual student cassette recorders to
equip several complete language laboratories. Each laboratory will
permit an instructor, working from the central console, to talk with and
transmit prerecorded audio materials to 36 semi-enclosed student
workstations. According to Fleetwood, the specifications are unduly
restrictive of competition. We sustain the protest.
Nine provisions of the specifications are disputed. The nine
provisions concern the design of four features that DLI has required.
These are as follows:
1. Independent Power Supply: DLI has required that each student's
unit contain its own power supply to convert ordinary electric current
to direct current used to power the equipment. Fleetwood states that
this requirement is too restrictive, and points out that a number of
language laboratory systems use centrally located power supplies which,
it contends, promotes safety and ease of maintenance.
2. Interlocked Record Switch. As interpreted by the parties, the
solicitation requires a specific switch configuration for selecting the
record or play function. This configuration consists of two switches,
one of which must be in an "on" position for the selection of either
function. The other switch must be activated for selection of the
record function. It is unclear from the protest file whether DLI also
intends that these switches should be activated simultaneously to
activate the record function. Regardless, Fleetwood believes the
specification does not reflect state-of-the-art designs, which,
Fleetwood says, do not require the mechanically interlocked play and
record switches that are typical of earlier equipment. Newer equipment
accomplishes the same functions with distinct play and record switches.
This simplifies operation of the equipment, Fleetwood says.
3. Dual Channels. As interpreted by the parties, the solicitation
requires that student-machine dialogue must be recorded on a second
track of the master tape on which the transmission was prerecorded.
Fleetwood says that some manufacturers achieve the same objective --
they allow the student's conversation to be recorded for later review by
the instructor -- without recording the conversation on the master tape.
4. Record Lockout and Transport Control Switches. The
specifications state that the equipment must contain a switch or device
that will prevent students from copying master tapes except when a
function selector switch and a record lockout switch are simultaneously
activated. When the system is in the copy mode, any change in operation
must cause it to revert to a playback mode, or to stop.
The specifications further require that when student equipment is
switched in the "master" position, student tape start and stop functions
must be subject to control from the instructor's console. When this
control is in the "off" position it shall not be possible for the
students to erase the master track.
Fleetwood says these provisions describe obsolete equipment and that
state-of-the-art equipment would meet DLI's actual needs. According to
Fleetwood, such equipment is designed so that the students have no
control over the master track, the students' equipment cannot erase the
master track, and all student equipment functions can be controlled from
the instructor's console, including access to the master record. As a
result, Fleetwood explains, this state-of-the-art equipment does not use
record lockout or other switches of the type described in the
solicitation.
When a protester challenges a specification as unduly restrictive of
competition, it is incumbent upon the procuring activity to establish
prima facie support for its restriction. Sparklet Division, Inc., 60
Comp. Gen. 504 (1981), 81-1 CPD Paragraph 446, aff'd, B-199690.2, Oct.
8, 1981, 81-2 CPD Paragraph 285; Constantine N. Polites & Co.,
B-189214, Dec. 27, 1978, 78-2 CPD Paragraph 437.
The protested provisions are imposed as design requirements, and
Fleetwood essentially asserts that the provisions are unduly
restrictive. While the use of a design specification does not
necessarily provide a basis for determining that a solicitation is
unduly restrictive (Christie Electric Corp., B-197481, Oct. 14, 1980,
80-2 CPD Paragraph 273), design requirements are inappropriate where an
agency is capable of stating its minimum needs in terms of performance
specifications which alternative designs could meet. Viereck Co.,
B-209215, Mar. 22, 1983, 83-1 CPD Paragraph 287; Charles J. Dispenza &
Associates; Chicago Dryer Co; McCabe Corp., B-181102, B-180720, Aug.
15, 1974, 74-2 CPD Paragraph 101. This is because, as a result of the
legal requirement that the government maximize competition,
specifications must state only the government's minimum needs.
Specifications that focus on performance or functional characteristics,
which are directly linked to an agency's intended use of a product, may
permit equipment to be offered that would be excluded by specifications
that describe one particular equipment design. Where, as here,
equipment of differing designs may be equally capable of performing the
tasks for which equipment is being acquired, that equipment cannot be
excluded and, if particular design features included in a specification
are challenged, the agency must be able to explain, in terms that will
withstand logical scrutiny, why the design specified, and only that
design, will afford it adequate assurance that its needs will be
satisfied.
We sustain the protest because, in a number of instances, the agency
has not adequately justified its need for the specific features involved
and because, to the extent it may have legitimate needs related to these
requirements, it is clear that those needs can be expressed less
restrictively in functional terms.
Power Supply
The engineering statement included in the Army's report indicates
that independent power supplies are required so that each student module
would have the "essential flexibility" of continuing operations in the
event of a power supply failure in one module. The statement is not
explained in the report; nor is any analysis of the requirement
presented. As we pointed out in Constantine W. Polites & Co., supra,
the adequacy of an agency's explanation of its requirement is determined
not simply in terms of the rationale asserted, but by examining the
analysis that supports it.
On this record, we find that the Army has not established a prima
facie case for the power supply restriction.
We recognize that under these specifications a power supply failure
in one unit may not affect the operation of other units, although, of
course, the likelihood of a power supply failure increases as the number
of power supplies is increased. We must also recognize, however, that a
requirement for independent power supplies, standing alone, does not
compel the conclusion that the specification is reasonable, particularly
in the context of this solicitation, which does not define acceptable
power supply reliability, and which does not appear to preclude the use
of common components (other than power supplies) that could place the
entire system out of service should they fail. By this we mean simply
that having independent power supplies is only one way to enhance the
reliability of a particular system. It is not the only way of achieving
dependability, since it is possible that the reliability the Army seeks
can be obtained from a system incorporating a well designed, fused and
surge protected central power source. Such a system may be more
reliable than a poorly-designed system using separate power sources.
In this connection, the likelihood that DLI, as the end user, will
experience significant difficulty due to failure of a well designed
central power supply appears to be remote. The record indicates DLI has
used systems with common power supplies in the past, has never
experienced a power supply failure, and intends to stock spare parts,
including power supplies, allowing it to quickly replace a power supply
should one ever fail.
In fact, it is not DLI that is insisting upon the separate power
supply requirement, but rather, the Army's Television-Audio Support
Activity (TASA). TASA was responsible for drafting the challenged
specifications. TASA insists that DLI's need for separate power
supplies is supported by its experience. However, TASA has not
documented its experience or established that its experience is relevant
to this procurement.
Record Switch
According to DLI, the specified record switch design is necessary to
reduce inadvertent erasures. Again, DLI does not explain why this is so
or provide any kind of supporting analysis. Elsewhere the solicitation
requires that controls must be located to minimize the risk that the
equipment can be inadvertently turned on. If DLI's purpose in the
protested requirement is to minimize the risk of inadvertent erasures,
we see no reason why it could not so state without requiring that
offerors provide any one specific electro-mechanical design.
Dual Channels
The DLI engineering statement says it is necessary that the
instructor be able to monitor and record the responses of selected
students. The report says that "this can be accomplished through the
use of a dual channel multimode machine at the instructor's console."
Fleetwood does not contend that DLI should accept equipment that would
not permit recording and monitoring of student responses. Rather,
Fleetwood objects because it believes DLI has used the phrase "dual
channel" as a term of art to require a specific equipment configuration,
an interpretation that is supported by a November 20, 1984, letter to
Fleetwood in which DLI defined dual channel as requiring simultaneous
recording of student dialogue on the master tape. That DLI's
requirement to monitor and record student conversation can be met in
this manner is not disputed, but is irrelevant in determining whether
DLI has stated only its actual requirement. We think this requirement
should be amended to make it clear that dual channel capability refers
only to the need for equipment that can support monitoring and recording
of student-machine dialogue.
Lockout and Transport Control
Similarly, the solicitation provisions concerning record lockout and
transport control switches should be restated in functional terms.
According to DLI, its teaching method requires both control by the
instructor and capability to permit students to work independently at
their own pace. As a matter of sound engineering design, this need
includes a need for assurance that the student cannot record over
prerecorded material, or possibly, gain improper access to such
materials. DLI, however, has presented no evidence in its reports to
support the specific switching configuration that the specifications, as
outlined earlier, require.
The protest is sustained.
DLI has postponed the date for receipt of proposals pending our
decision in this case. We are recommending that DLI amend the protested
provisions of its solicitation by defining the reliability the system
must meet and by modifying the other protested provisions to make it
clear that its needs can be met by other designs that may be capable of
satisfying its functional requirements.
Comptroller General
of the United States
B-216947, Nov 26, 1984, 84-2 CPD 563
CONTRACTS - Protests - Interested party requirement - Small business
set-asides
DIGEST:
Large business protester is not an interested party to protest
allegedly restrictive specifications in a small business set-aside
solicitation where the protester would not be affected by the resolution
of the issue which it raises.
Telex Communications, Inc.:
Telex Communications, Inc, (Telex), protests the award of any
contract under solicitation No. DAAG08-84-R-0399 issued by the
Department of the Army. Telex contends that the specifications contain
features which are unique to one manufacturer and are therefore unduly
restrictive of competition.
We dismiss the protest.
The Army has advised us that the solicitation in question is a total
small business set-aside. Telex is a large business and is therefore
ineligible to compete under the solicitation. We have held that where a
large business protester is ineligible for award under a proper small
business set-aside, we will not consider its objection to an alleged
solicitation deficiency since the protester is not an interested party
which would be affected by the resolution of the issue which it raises.
Tri-States Service Company, B-211862, Sept. 26, 1983, 83-2 C.P.D. Para.
374; Republic Steel Corporation et al., B-205951; B-205951.2, Apr.
29, 1982, 82-1 C.P.D. Para. 399. COMP GEN (UP)
FILE: B-216945.2 85-2 CPD 325
DATE: September 24, 1985
MATTER OF: Information Marketing International
DIGEST:
CONTRACTS - FEDERAL SUPPLY SCHEDULE - MULTI-YEAR PROCUREMENT
Protest against procuring agency's renewal of third year of 3-year
agreement for subscription services under Federal Supply Schedule
mandatory multiple-award contract by another firm with schedule contract
is denied, where agency had need for single source of supply and
protester could not furnish all of the agency's needs.
Information Marketing International (IMI) protests the award of
certain delivery orders renewing subscriptions for microfilm services to
Information Handling Services, Inc. (IHS), by the Sacramento Air
Logistics Center, McClellan Air Force Base, California (Air Force).
These order were place under IHS' General Services Administration (GSA)
Federal Supply Schedule (FSS) contract No. GS-00S-23609. This is a
mandatory multiple-award schedule contract. IMI has a similar schedule
contract. We deny the protest.
The Air Force reports that in September 1982 it entered into a 3-year
agreement to place the Air Force's requirements for these subscription
services with IHS. In August 1984, IMI contacted the Air Force about
its schedule contract. The Air Force arranged for a IMI product
demonstration to the Air Force users of IHS' subscription services.
The users of the subscription services advised the contracting
officer that IMI did not offer some significant services which the Air
Force needed, including a master catalog services product/service
listing, a locator product, and a cross referencing product. The
contracting officer reports that the microfilm files had to be supplied
by a single source because of space requirements, research time,
manageability and continuity, and employee training required for two
systems.
Another factor considered in the decision to renew these orders under
the IHS agreement was GSA's advice to the contracting officer that in
light of the multiyear agreement (multiyear subscription agreements can
be used in appropriate circumstances, see 41 C.F.R. Section 101-25.108
(1984)), the Air Force, if it failed to renew with IHS, might have to
pay termination damages. There is a special provision in IHS' 3-year
agreement which provides for payment of a specific percentage sum if the
subscriptions are not renewed.
IMI Contends that this renewal with IHS violated the FSS ordering and
evaluation procedures prescribed by the Federal Acquisition Regulation
(FAR), 48 C.F.R. Section 8.405-1 (1984). IMI alleges that it can meet
90 to 95 percent of the minimum needs of the Air Force and that the Air
Force should have solicited technical information and quotes from it.
IMI contends that the Air Force did not properly identify its minimum
needs to IMI and instead defined its requirements in terms of IHS
product trade names. IMI argues that the "all or none" award violates
FAR, 48 C.F.R. Section 8.405-1, which IMI contends contemplates multiple
awards for the various items. Finally, IMI states that in determining
whether to renew these orders with IHS the Air Force improperly
evaluated the IHS termination costs.
Under FAR, Section 8.405-1, orders are to be placed with schedule
contractors offering the lowest delivered price available for the
products which meet the ordering agency's minimum needs. See
Information Marketing International, B-216945, June 28, 1985, 85-1 C.P.
D. Paragraph 740. However, FAR, Sections 8-405-1(a)(3) and (5) permits
award at other than the lowest price where compatability with existing
equipment or systems is necessary or to procure special features
required in effective program performance.
In response to the agency report on the protest, IMI submitted
unrebutted documentation, which indicates that IMI's products could
satisfy the Air Force's minimum needs for the bulk of the items,
including a cross-reference catalog and index. However, there is no
indication that this documentation was provided to the Air Force prior
to extension of the IHS subscriptions. Cf. Information Marketing
International, B-216945, supra (burden on FSS schedule contractor to
apprise procuring activity of current prices). See also 48 C.F.R.
Sections 38-102-2(c) and 8.404(b). Moreover, IMI admits that it cannot
furnish all of the needed subscriptions, but only 90 to 95 percent of
them.
Under the circumstances, we are unable to conclude that the
contracting officer's decision to renew IHS' subscriptions was totally
unreasonable based upon the information that he had at that time. The
Air Force subscribes to hundreds of microfilmed regulations, vendor
catalogs, engineering standards and military specifications. Its
determination to procure these items from a single source to allow
research access through a single index/locator system is not, on this
record, objectionable. Since IMI cannot supply all the needed items,
the Air Force was not required to award a contract to IMI.
Regarding IMI's assertion that the Air Force improperly considered
termination charges in deciding to renew IHS' contract, the record is
unclear whether the contracting officer thought the government may be
liable for normal termination for convenience damages or the special
damage provision for non-renewal in the IHS contract, a specific
percentage. We understand that GSA is taking steps to assure these
charges are not in future contracts for subscription services.
IMI also protests the Air Force's failure to place a subscription for
"GSA Schedules and Contracts" with IMI after soliciting an offer for it.
This subscription was identified and discussed during the IMI product
demonstration in August 1984. The Contracting officer reports that the
IMI product is not identical to the IHS product that it is now
receiving, but that it would meet the Air Force's minimum needs, even
though not as completely as the IHS product. The Air Force further
reports that it then checked with IHS' representative, who said that IHS
had a product identical to that offered by IMI at a lower price.
Consequently no order was placed with IMI for this item. IMI now claims
that it has another product equivalent to the IHS alternative product at
less COST. However, given the dollar value of the item (under $1,000)
and since both IMI and IHS were given an opportunity to identify their
products, we cannot conclude that the award to IHS without further
discussions with IMI was totally unreasonable.
The protest is denied. Therefore, IMI's claim for attorney fees and
costs in connection with filing the protest is also denied.
/s/ Harry R. Van Cleve
General Counsel
FILE: B-216945 85-1 CPD 740
DATE: June 28, 1985
MATTER OF: Information Marketing International
DIGEST:
CONTRACTS - FEDERAL SUPPLY SCHEDULE - PRICES - REDUCTIONS - NOTICE
1. Protester has not shown that the Air Force improperly placed 10
delivery orders at other than the lowest price under a General Services
Administration (GSA) Federal Supply Schedule (FSS) contract where the
protester has only produced conflicting evidence on the issue of whether
its prices were low. Furthermore, even assuming that the protester had
offered lower prices by modifying its FSS price list, the burden is on
the supplier to notify the contracting agency of price reductions
accepted by GSA and it has not shown that the Air Force had actual
notice of any price reductions.
CONTRACTS - FEDERAL SUPPLY SCHEDULE - TO OTHER THAN LOW BIDDER OR
OFFEROR - JUSTIFICATION
2. When placing orders against mandatory multiple award FSS
contracts, agency can award six items, each valued at less than $500, to
same schedule contractor that it awarded 282 items, even though another
schedule contractor was low on those six items, where awardee was either
low or the only source for all other items. Agency indicated that
administrative benefits of splitting requirements would outweigh $392
price advantage of other FSS contractor for these six items and agency
states that it would be difficult to work with two different companies'
products.
CONTRACTS - FEDERAL SUPPLY SCHEDULE - MANDATORY USE REQUIREMENT
3. There is no requirement to synopsize in the Commerce Business
Daily delivery orders placed against mandatory FSS contracts.
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - PROTESTOR NOT
IN LINE FOR AWARD
4. FSS contractor is not an interested party under GAO's Bid Protest
Procedures to protest that awardee should have been issued one order
instead of 10 orders from its FSS contract so as to obtain applicable
quantity discounts where the protester was not the most advantageous FSS
contractor in the absence of the discount.
Information Marketing International (IMI) protests the award of 10
delivery orders for various subscriptions for microfilm services to
Information Handling Services (IHS) by Robins Air Force Base, Georgia.
These orders were from IHS's General Services Administration (GSA)
Federal Supply Schedule (FSS) contract No. GS-005-23609. We deny the
protest in part and dismiss the remainder.
IMI primarily contends that the Air Force violated the FSS ordering
and evaluation procedures prescribed by Federal Acquisition Regulation
(FAR), Section 8.405-1, 48 C.F.R. Section 8.405-1 (1984). That
regulation states that orders should be placed with the FSS contractor
offering the lowest price available and that any order over $500 per
line item placed at other than the lowest price must be justified. IMI
contends that many of the subscriptions offered under its FSS contract
were lower priced than IHS's subscriptions. To support this allegation,
IMI has submitted a line item cost comparison of prices purportedly
based on IHS's and IMI's GSA FSS price schedules. IMI also alleges that
the Air Force did not document any cost comparison in the contract file.
In this regard, IMI references an Air Force "Memo to File" which states
that "(a) sampling of a price comparison of the two schedules (IMI's and
IHS's) of the items revealed that IHS prices are lower . . ." IMI argues
that evaluating a "sampling" of products does not comply with the
regulation and that its price comparison shows that the memorandum is
incorrect. IMI further contends that the "all or none" awards of the
items to only one supplier was improper.
The Air Force responds that, notwithstanding the use of the word
"sampling" in the memorandum, it made a complete evaluation of product
prices using available GSA authorized price list catalogs for both IMI
and IHS. The Air Force has submitted a copy of the line item cost
comparison of IMI's and IHS's prices on all subscriptions ordered. The
Air Force reports that the evaluation established that of the 232 line
items ocvered by the 10 delivery orders, IHS was lower for 81 line
items, IHS and IMI offered identical prices for 12 line items, IMI
offered a lower price for 6 line items, and IMI offered no equivalent
product for 133 line items.
We have examined the record including copies of IHS and IMI FSS
contracts in light of IMI's allegations, and we are unable to conclude
that the Air Force acted improperly in placing the delivery orders with
IHS. Although IMI's line item comparison purports to show IMI's prices
lower on a majority of items, the bulk of these prices conflict with
IMI's GSA authorized price list, modification No. 14, extended to
November 30, 1984, which the Air Force used to evaluate IMI's products.
Even assuming IMI's lower prices may have been accepted by GSA as a
modification to its FSS contract, the burden is on the supplier of an
item listed under a FSS contract to notify the contracting activity of
price reductions accepted by GSA. Absent actual notice of the price
reduction, the contracting agency need not consider the price reduction
in determining the low price. Dictaphone Corp., B-210692, June 27,
1983, 83-2 C.P.D. Paragraph 26; Dictaphone Corp., B-195043, Sept. 25,
1979, 79-2 C.P.D. Paragraph 222. Although IMI alleges that it kept the
Air Force appraised of the current status of its FSS contract, the Air
Force states it only learned subsequent to award that modification No.
24, October 5, 1984, offered 18-month service for certain items.
Consequently, we cannot conclude that the Air Force improperly evaluated
IMI's prices.
With regard to the six items that the Air Force admits were low under
IMI's contract, the Air Force advises that none exceeded $500 and that
there was a total net difference between IHS' and IMI's prices of $392.
The Air Force states that the small cost savings gained by splitting the
requirements between IHS and IMI were outweighed by the administrative
burden and contends that users would find it cumbersome and confusing
working with two companies' products. Under the circumstances, and
considering that FAR, Section 8.405-1 only requires justifications for
awards to higher priced offerors under FSS contracts if the individual
line item exceeds $500, we do not object to the Air Force's placing
these relatively small portions of the total order with IHS.
As indicated above, IMI and IHS had the same price under the Air
Force's calculations on 12 line items with a total value of $10,059.
FAR, Section 8.405-1(b) requires that such ties be broken by giving
preference to small business or labor surplus area concerns. The record
does not indicate, nor does the protester allege, that there is any
difference in IMI's and IHS's small business or labor surplus status.
Under the circumstances we have no basis to object to the orders of
these items from IHS.
In view of the foregoing, we believe the Air Force had a reasonable
basis for ordering all its visual microfilm subscription requirements
from IHS.
IMI also alleges that the Air Force wrongfully assumed that a
guaranteed pricing plan obligated it to renew its orders with IHS for
these subscriptions. IMI contends that this shows that the Air Force
did not perform a proper cost comparison. As previously pointed out,
the Air Force conducted a line item evaluation of IMI's and IHS's prices
and determined that IHS generally offered the lowest prices. There is
no indication of any consideration of IHS's guaranteed pricing plan in
determining which firm would receive the orders. Consequently, we
believe this contention has no merit.
IMI further contends that the Air Force violated FAR, Section 5.201,
and Pub. L. No. 98-72, 97 Stat. 403 (1983), which generally require that
the contracting agency publish notices of proposed contracts in the
Commerce Business Daily (CBD). These purchase orders were not
synopsized in the CBD. IMI states that it was prejudiced by the Air
Force's failure to synopsize because it had no knowledge as to when,
what, or if the Air Force would procure these services. IMI also
advises that although discussions were conducted with IHS prior to the
orders, no discussions were conducted with IMI even though the Air Force
was aware that it also was interested in the procurement.
Although Pub. L. 98-72 as implemented by FAR subpart 5.2 generally
requires that a notice of government requirements be published in the
CBD, there are a number of exceptions. For example, the statute excepts
procurements from "a mandatory source of supply." Further, Department of
Defense (DOD) FAR Supplement Section 5.202(v) Defense Acquisition
Circular (DAC) No. 84-2, March 5, 1984, 48 C.F.R. Section 205.202 (1984)
excepts procurements by an order placed under a mandatory FSS contract.
Schedule 76, Part II, products and services, which encompass the
requirements acquired under these delivery orders, are mandatory for use
by DOD elements. DOD FAR Supp. Section 8.404-70 (DAC 84-3, March 5,
1984), 48 C.F.R. Section 208,404-70 (1984). Therefore, these orders did
not need to be synopsized in the CBD.
Regarding IMI's allegation about improper discussions with IHS, the
Air Force indicates that it only confirmed that the Air Force was
entitled to continue using IHS's 3-year guaranteed pricing plan. We are
unaware of any prohibition of discussion between the ordering agency and
an FSS contractor in contemplation of placing an order under that
contract.
Finally, IMI argues that the Air Force's decision to split the
procurement into 10 separate delivery orders violated the GSA FSS
program because the Air Force in effect precluded itself from taking
advantage of quantity discounts. However, IMI is not an interested
party to raise this issue under our Bid Protest Procedures. 4 C.F.R.
Section 21.1(a) (1984).
The "interested party" requirement serves to ensure that the
protesting party has a sufficient stake in the outcome of a protest.
ABC Management Services, Inc., 55 Comp. Gen. 397 (1975), 75-2 C.P.D.
Paragraph 245. Whether a party is sufficiently interested depends on
its status in relation to the procurement, the nature of the issue
raised, and how these circumstances show the existence of a direct or
substantial economic interest on the part of the protester. NEFF
Instrument Corp., B-216236, Dec. 11, 1984, 84-2 C.P.D. Paragraph 649.
As discussed above, the Air Force reasonably selected IHS for award
of the requirements covered by the delivery orders. Any applicable
discount that would have resulted from the use of a single order would
have made IHS's prices more advantageous to the government. IMI even
admits that its rights are not prejudiced by the Air Force's failure to
take advantage of applicable discounts under the IHS FSS contract.
Under the circumstances, IMI does not have the requisite direct economic
interest to be considered an interested party to raise this issue.
Eastern Marine Inc., B-212444.2, Aug. 28, 1984, 84-2 C.P.D. Paragraph
232; D-K Associates, Inc., B-213417, Apr. 9, 1984, 84-1 C.P. D.
Paragraph 396. IMI's interest as a concerned taxpayer is not sufficient
to make it an "interested party" under our Bid Protest Procedures.
Turbine Engine Services, B-210411.2, Apr. 3, 1984, 84-1 C. P.D.
Paragraph 376. Consequently, IMI's protest of the use of multiple
delivery orders, instead of one delivery order, is dismissed.
In view of the foregoing, the protest is denied in part and the
remainder dismissed.
Harry R. Van Cleve
General Counsel
FILE: B-216943
DATE: March 21, 1985
MATTER OF: Government Printing Office - Financial Assistance to
Employee Cafeteria.
DIGEST:
CONCESSIONS - CAFETERIAS - SUBSIDIZED BY GOVERNMENT
The Government Printing Office (GPO) may use money in its revolving
fund to subsidize its cafeteria, run by an employee's association, since
the agency head has determined that the expenditure is necessary for GPO
to satisfactorily fulfill its statutory obligations to print materials
for the Congress, Federal agencies, and other entities.
Mr. William J. Barrett, Acting Public Printer, Government Printing
Office (GPO), requests our decision as to whether the GPO may directly
or indirectly provide funds to the nonprofit corporation that operates
the GPO's employee cafeteria. He specifically asks whether GPO may
provide financial assistance to the nonprofit corporation by (1) a
direct loan of $50,000, (2) a line of credit from GPO to be drawn down
as needed and not to exceed $50,000, or (3) a guarantee of a $50,000
loan from a commercial lender. So long as the GPO determines that
expenditures to assist the cafeteria are necessary expenses, we would
not object to use of GPO's revolving fund to provide the financial
assistance suggested.
In 1921, the GPO Cafeteria Recreation and Welfare Association
(Association), was formed by GPO employees to operate GPO's newly
constructed cafeteria. The GPO employees provided the initial capital
for the Association and since then most cafeteria operating expenses
have been paid for by the Association. The GPO has provided the
necessary space, utilities and fixed equipment for the cafeteria.
The Acting Public Printer informs us that the cafeteria is presently
incurring losses of approximately $4,000 each month due to rising labor
costs and a declining customer base. The Association has present
indebtedness totaling $175,000 and is in danger of ceasing operations.
In an attempt to cut operational costs, the Association has laid off
four cafeteria employees and is attempting an internal reorganization to
foster efficiency and reduce operational costs. Additionally, to
overcome its cash flow problems, the Association, which has been a
private nonprofit corporation since 1951, is seeking a loan or a line of
credit from a local commercial lending institution.
Recognizing that it may have difficulty in securing convential
financial assistance, the Association has asked GPO to assist it in its
effort to obtain financing. GPO is amendable to assisting the
Association and is considering three alternative modes of financial
assistance. First, GPO could guarantee a commercial loan of $50,000
made to the Association. Second, GPO could make a direct loan of
$50,000 to the Association. Third, GPO could establish a $50,000 line
of credit out of which the Association would draw from funds as needed.
GPO informs us that any funds providing directly or indirectly to the
Association would come out of GPO's revolving fund which is available
without fiscal year limitation for "the operation and maintenance of the
Government Printing Office." See 44 U.S.C. Section 309(a).
The Acting Public Printer points out that the employee cafeteria is
necessary to the efficiency of the GPO's operation and is a significant
factor in hiring and retaining employees. He stresses that the
cafeteria is essential since it enables employees to comply with the 30
minutes permitted for lunch. GPO must maintain strict observance of
this time limit because of the tight production schedules. Without the
in-house cafeteria, GPO could not maintain its 8 1/2 hour work schedule
which would result in changes in production schedules and hours of duty.
Most critical is that the cafeteria is an alsolute necessity for the
large number of employees on shift 2 (4:00 p.m. - 12:30 a.m.) and shift
3 (12 midnight - 8:30 a.m.), since no suitable alternative restaurant
facilities are available during those times. Moreover, he emphasizes
that the vast majority of work on the Congressional Record and many
other congressional priority items is done during shifts 2 and 3.
Consequently, continued operaiton of the cafeteria is critical since
lack of a cafeteria would impact adversely on GPO's ability to serve the
needs of Congress. In short, the Acting Public Printer deems the
cafeteria necessary for the GPO to accomplish its mission.
As recognized by the Acting Public Printer, we twice previously have
considered whether a Federal agency could use its funds to subsidize a
cafeteria operation. In the first case, an official of the Railroad
Retirement Board asked whether appropriated funds were available to pay
a monthly franchise fee to a food service contractor in order to obtain
cafeteria service in the Board's headquarters Office building. We
approved the use of appropriated funds (the annual appropriation for the
administrative expenses of the Railroad Retirement Act) by the Railroad
Board for partial subsidization of the cafeteria, based on the Board's
administrative determination that the maintenance of the cafeteria was
essential to the efficiency of operations and was a significant factor
in hiring and retaining employees and in promoting employee morale.
B-169141, March 23, 1970. We cautioned the Board to inform the
appropriate congressional committees if the subsidies would continue
over to extended time. Id.
Shortly after issuance of that decision, the Secretary of
Transportation asked whether appropriated funds could be used to
partially subsidize the operation of the employee cafeteria at the
Transportation Systems Center, Cambridge, Massachusetts. Based on an
analysis of the situation at the Transportation Systems Center which
revealed factors similiar to those in B-169141, discussed above, we
again approved the use of appropriated funds to subsidize an employee
cafeteria. B-169141, November 17, 1970. In this case, however, we saw
no need for the agency to notify Congress since the need for a subsidy
was estimated to be only temporary, until staff increases took place at
the Transportation Systems Center. Id.
Accordingly, our cases B-169141, November 17, 1970 and B-169141,
March 23, 1970, indicated that appropriated funds may be used to
subsidize a cafeteria if the agency determines that the expense is a
necessary one. Also, c.f., B-204214, January 8, 1982 (in which we
approved as a necessary expense the purchase of napkins for a cafeteria
out of the appropriation for salaries and expenses). Since GPO has
adequately demonstrated that subsidizing the operation of the employee
cafeteria is essential to its operations, our inquiry becomes whether
GPO has an appropriation out of which a cafeteria could be financially
assisted.
GPO has suggested that its revolving fund is the source from which
the financial assistance could be provided. The GPO revolving fund was
authorized to be established by the Legislative Appropriation Act, 1954,
approved August 1, 1953, 67 Stat. 330, codified at 44 U.S.C. Section
309. This law as codified, provides that "(t)he revolving fund * * * is
available without fiscal year limitation, for the operation and
maintenance of the Government Printing Office."
Since fiscal year 1969, the Congress has been required to review and
enact GPO's annual budget for expenditures from the revolving fund. See
44 U.S.C. Section 309(d). Accordingly, the Legislative Branch
Appropriations Act, 1985, provides
"The Government Printing Office is hereby authorized to make
such expenditures, within the limits of funds available and in
accord with the law, * * * as may be necessary in carrying out the
programs and purposes set forth in the budget for the current
fiscal year for the 'Government Printing Office revolving fund * *
*." Pub. L. No. 98-367, 98 Stat. 472, 487 (1984).
GPO's budget for fiscal year 1985 indicates that all of its printing,
binding, and blank book work for Congress and Government agencies is
financed from the revolving fund. See Legislative Branch Appropriations
for 1985: Hearings before a subcommittee of the Committee on
Appropriations, House of Representatives, 98th Cong., 2d Sess. 676
(1984). Therefore, the revolving fund for operation and maintenance of
the GPO is analagous to an agency's annual appropriation for salaries
and expenses, under which all necessary expenses of an agency can be
paid. Accordingly, GPO may use the revolving fund to financially assist
the cafeteria, since as we have indicated the Acting Public Printer has
established the necessity of the cafeteria to the operation of GPO.
Having reached the conclusion that the GPO may use the revolving
funds to aid the cafeteria, we must now determine what form this
assistance may take. GPO has suggested that it could guarantee a loan
from a conventional lender to the Association; make a direct loan to
the Association, or provide a line of credit as needed up to a maximum
of $50,000. In our opinion, any of the proposed methods may be used.
The GPO submission states that in light of our precedents that
cafeteria operations may be subsidized, "there seems to be no logical
reason why making loans or guaranteeing loans would not also be
permissible." Ordinarily authority to make or quarantee loans is
provided by statute. However, in view of our determination that GPO may
provide financial assistance to the cafeteria, we do not consider the
lack of statutory authority for GPO to make or guarantee loans to be of
consequence in this limited situation. As GPO points out, it would not
make sense to authorize GPO to give financial assistance and then
preclude GPO from being reimbursed for the amount tendered.
Nevertheless, we would strongly suggest that GPO not use the loan
guarantee mechanism. If it were to guarantee a loan, GPO would have a
contingent liability for which a reserve should be set aside within the
revolving fund. Thus, since setting aside a reserve within the
revolving fund would be effectively the same as making a loan out of the
fund, the simpler course of action, which avoids contracting with
third-parties, is for GPO to make a direct loan.
Any cost to GPO of assisting the cafeteria would, as a necessary
expense, be a cost of doing business. It therefore should be included
in "overhead and related expenses" which make up part of the charges GPO
bills its customers. See 44 U.S.C. Section 309(b)(1). Furthermore,
since the revolving fund is to be "credited with all receipts" except
for certain receipts from the sales of Government publications which
must be deposited in the Treasury as miscellaneous receipts, any loan
repayments may be deposited in the revolving fund. See 44 U.S.C.
Sections 309(b)(2), (3); 1509, 1702, and 1708.
Accordingly, GPO may provide financial assistance in order to enable
the cafeteria to be kept open. If this will involve ongoing assistance,
we suggest that GPO bring the matter to the attention of the Joint
Committee on Printing.
Comptroller General
of the United States
B-216940, Nov 27, 1984, 84-2 CPD
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Date basis of protest made known to protester
DIGEST:
Protest to GAO filed more than 10 days after protester knew of basis
for protest is untimely and will not be considered.
Advanced Integrated Technology:
Advanced Integrated Technology protests the award of a contract by
the Department of the Army to Wyvern Computer Systems, Inc., under
solicitation No. DAAD05-84-R-0573, issued by Aberdeen Proving Ground,
Maryland.
We dismiss the protest as untimely.
Under our Bid Protest Procedures, a protester is generally required
to protest within 10 working days after the basis for the protest is
known or should have been known. 4 C.F.R. Sec. 21.2(b)(2) (1984). In
this case, the protester states in its protest letter that it learned
the facts upon which the protest is based in an October 1, 1984,
telephone discussion with a contracting official at Aberdeen Proving
Ground. Eighteen working days later, on October 25, 1984, the protest
letter was filed in our Office, and is, therefore, untimely. COMP GEN
(UP)
FILE: B-216938 DATE: November 12, 1985
MATTER OF: Phillip M. Napier - Request for Reconsideration
DIGEST:
TRANSPORTATION - HOUSEHOLD EFFECTS - WHAT CONSTITUTES
1. An Internal Revenue Service employee was transferred from
Indianapolis, Indiana, to Fairbanks, Alaska. After completion of
a 2-year service period specified in the service agreement, the
employee requested a transfer to Portland, Maine, for personal
reasons. The service did not authorize relocation expenses and the
employee disposed of most of his household effects before
departing Fairbanks. He is claiming an amount equal to the cost
of transporting his household effects to Alaska. The claim may not
be paid since the law and regulations provide for reimbursement on
the basis of the weight of the household effects actually
transported.
OFFICERS AND EMPLOYEES - TRANSFERS - GOVERNMENT V. EMPLOYEE INTEREST
- RELOCATION EXPENSE REIMBURSEMENT - ADMINISTRATIVE DETERMINATION -
FINALITY
2. A former Internal Revenue Service employee seeks
reconsideration of his claim for real estate expenses. Our
decision of January 3, 1985, denied his claim because the employee
requested the transfer for personal reasons. Since the agency
determination that the transfer was not in the interest of the
Government is in accordance with decisions of this Office, and the
employee failed to complete 1 year of service following the
transfer, the prior decision is reaffirmed.
GENERAL ACCOUNTING OFFICE - DECISIONS - RECONSIDERATION - ERROR OF
LAW OR FACT BASIS - NOT ESTABLISHED
3. In order to obtain a reversal of a prior decision, a
material mistake of law or fact must be proven. The claimant has
raised no new arguments in support of his claim for real estate
expenses that were not considered in the prior decision. Mere
disagreement with the previous decision is not a proper basis for
reversal of a decision upon reconsideration.
This action is in response to a request for reconsideration of our
decision Phillip M. Napier, B-216938, January 3, 1985 by Mr. Napier.
The facts of that case are briefly summarized.
Mr. Phillip M. Napier was an employee of the Internal Revenue Service
who was transferred from Indianapolis, Indiana, to Fairbanks, Alaska.
By transportation agreement with Mr. Napier, the Internal Revenue
Service agreed to pay Mr. Napier's travel expenses and the
transportation of his dependents and household effects from Indianapolis
to Fairbanks. In exchange, Mr. Napier agreed to work in Fairbanks for at
least 2 years. Upon completion of this 2-year period, Mr. Napier would
be eligible for payment of the same expenses on return. The
transportation agreement did not authorize the payment of any real
estate expenses to Mr. Napier. These expenses were authorized by a
separate document after the agency determined that the transfer was in
the interest of the Government.
Over 2 years later, Mr. Napier requested and was granted a transfer
to Portland, Maine. Mr. Napier subsequently petitioned for
reimbursement of relocation expenses. The Service agreed to reimburse
him pursuant to the transportation agreement for the cost of travel
expenses and transportation of his household goods from Fairbanks to
Indianapolis. It denied his claim for real estate expenses associated
with the sale of his residence in Fairbanks because it found that the
transfer was not in the interest of the Government.
Mr. Napier then submitted a claim for real estate expenses to the
Claims Group of this Office. This claim was denied. The decision of
the Claims Group was sustained by this Office in the decision cited
above.
Our previous decision in this case held that the payment of the real
estate expenses incident to the transfer from Fairbanks to Portland
could only be authorized under 5 U.S.C. Sec. 5724a (1982). The
authorization provided by section 5724a is separate and distinct from
the authorization in 5 U.S.C. Sec. 5722, which provides for the payment
of only travel and transportation expenses. It was under section 5722
that the transportation agreement provided for reimbursement of the
expenses of moving Mr. Napier, his dependents and his household goods
from Indianapolis to Fairbanks. Likewise, the transportation agreement
was the basis for payment incident to the transfer to Portland of the
constructive cost of the travel and transportation expenses from
Fairbanks to Indianapolis. On the other hand, entitlement to real
estate expenses is dependent upon an agency determination that the
transfer is in the interest of the Government. The record clearly shows
that Mr. Napier's move was at his own request and that he accepted a
reduction in grade in order to facilitate the transfer. Relocation
expenses may not be paid where a transfer is primarily for the
employee's convenience and not in the interest of the Government.
B-174997, April 21, 1972. In light of these facts, we held that the
Service reasonably found that the transfer was not in the Government's
interest and, as such, Mr. Napier was not entitled to real estate
expenses under section 5724a.
In his request for reconsideration Mr. Napier states that the Service
refused to return him to Indianapolis and then denied his claim because
of his request for a "hardship transfer." He asks that the Internal
Revenue Service honor the terms of the service agreement.
Mr. Napier says that upon completion of 2 years of service in
Fairbanks he asked to be returned to Indianapolis. The Internal Revenue
Service denied his request. Mr. Napier apparently believes that under
the service agreement he was entitled to be transferred back to
Indianapolis upon completion of 2 years of service. That assumption is
erroneous. The agreement was not that the Service would transfer him to
Indianapolis but only that the Service would pay certain costs of his
return to the contiguous 48 states after completion of 2 years of
service. He had no right to a retransfer to Indianapolis.
Mr. Napier subsequently requested a transfer to a lower grade
position in Maine. This is the transfer request that he refers to as a
"hardship transfer." The Internal Revenue Service authorized this
transfer as being for Mr. Napier's benefit and not primarily in the
interest of the United States. Therefore, as provided in 5 U.S.C. M
5724 none of the costs of the transfer could be paid by the Government.
However, since he had completed his assignment in Fairbanks, he was
entitled to fall back on the travel and transportation benefits he had
earned pursuant to his employment agreement.
The Internal Revenue Service honored the terms of the service
agreement. The agreement bound the Government to pay Mr. Napier the
travel expenses of himself and his immediate family and the cost of
transporting his household goods from Fairbanks to Indianapolis. The
prior decision noted that these entitlements had been paid. We
understand that Mr. Napier has not been paid any amount for
transportation of his household effects. This is because he disposed of
most of his household effects prior to departing Fairbanks. Despite
this, he has submitted vouchers seeking to be paid an amount equaling
the cost of transporting his household goods to Fairbanks. He stated
that "a similar amount would have been incurred" if the goods had
actually been transported back to Indianapolis. Because the law and
regulations provide for reimbursement on the basis of the weight of
household goods actually transported, Mr. Napier may not be paid an
amount representing the cost that would have been incurred had the goods
been moved. See paragraph 2-8.4, Federal Travel Regulations (Sept. 28,
1981), incorp. by ref., 41 C.F.R. Sec. 101-7.003 (1983).
Mr. Napier also claims real estate expenses. He is not entitled to
these expenses for several reasons. First, the transportation agreement
did not commit the Internal Revenue Service to pay real estate expenses.
Second, and as discussed previously, the Internal Revenue Service's
determination that the transfer from Fairbanks to Portland was not in
the interest of the Government was reasonable. In any event, as noted in
our prior decision, Mr. Napier resigned his position with the Internal
Revenue Service less than a year after his transfer to Portland.
Because he did not complete 1 year of service as required by 5 U.S.C.
Sec. 5724(i), even if he had been entitled to real estate expenses, the
Government would be required by law to recover any amounts paid.
This discussion has merely restated the finding of our prior decision
in an attempt to clarify it. Mr. Napier's letter requesting
reconsideration does not present any new information or argument that
has not already been considered. Instead, he restates his belief that
his claim for reimbursement was denied because of his request for a
hardship transfer. That issue was specifically covered in the prior
decision. Mere disagreement with a previous decision of this Office is
not a proper basis for reversal of a decision upon reconsideration.
Where there is no new evidence to show that there was a material mistake
of law or fact in a prior decision of this Office, we will reaffirm that
decision. Allen Business Machines Company, B-182766, April 19, 1977.
Finally, Mr. Napier asks what course of action is available in the
event that his claim is denied. Decisions of the Comptroller General
are binding upon the executive branch. However, independent of adj
udication by us the United States Claims Court and the appropriate
United States District Court have jurisdiction to consider claims by
individuals to pay or allowances they believe to be due them as
Government employees.
Comptroller General
of the United States
FILE: B-216938
DATE: January 3, 1985
MATTER OF: Philip M. Napier
DIGEST:
OFFICERS AND EMPLOYEES - TRANSFERS - RELOCATION EXPENSES -
ADMINISTRATIVE DETERMINATION - TRANSFER FOR EMPLOYEE'S CONVENIENCE
An Internal Revenue Service employee claims real estate expenses
under a transportation agreement executed incident to his transfer from
Indianapolis, Indiana, to Fairbanks, Alaska. After fulfilling his
2-year commitment to work in Alaska, the employee requested a transfer
to Portland, Maine, for personal reasons. The agency honored the
transportation agreement by agreeing to pay travel and transportation
expenses of employee, his dependents, and their household goods from
Fairbanks to Indianapolis. Although real estate expenses had been
authorized for his transfer to Fairbanks, the agency refused to
authorize these expenses for the Fairbanks to Portland transfer on the
basis the transfer was at the employee's request due to personal
reasons. The employee's claim may not be allowed since the agency's
determination constituted a finding that the transfer was not in the
interest of the Government as required by 5 U.S.C. Section 5724(h).
An employee who returned from Alaska pursuant to a transportation
agreement authorizing reimbursement of travel for the employee and
transportation of his family and household goods also claims real estate
expenses incident to that agreement. /1/ Since reimbursement for real
estate expenses is not authorized under the provision of law which
allows payment of travel expenses upon an employee's completion of a
tour of duty in Alaska, the employee's claim is denied.
Mr. Philip M. Napier was employed by the Internal Revenue Service as
a Revenue Officer at the time of his transfer from Indianapolis,
Indiana, to Fairbanks, Alaska, effective February 12, 1979. Incident to
that.
In response to this letter, Mr. Napier submitted two unitemized
vouchers on May 12, 1983. The first, totalling $10,589.38, sought
expenses incident to the sale of his residence in Fairbanks. The second
voucher, totalling $19,383.27, apparently represented the amount, plus
interest, that Mr. Napier was paid incident to his transfer from
Indianapolis to Fairbanks. The Service advised him in a July 1983
letter that it could not process his claim. It requested that he
complete the voucher in accordance with the Federal Travel Regulations
and noted that itemization with receipts and supporting documentation
was required. Also, the letter stated that his entitlements were
transportation costs and per diem for himself and his dependents to
Indianapolis, and shipment of his household goods to that location.
That letter also advised him that the Service was awaiting a response
from the General Services Administration Concerning his entitlement to
expenses associated with the sale of his Fairbanks residence. By letter
dated September 16, 1983, the Service advised Mr. Napier that real
estate expenses were not reimbursable.
Mr. Napier did not submit any additional vouchers to the Service.
Instead, in a May 10, 1984 letter, he submitted a claim for real estate
expenses to the Claims Group of this Office. By settlement Z-2823690,
August 4, 1984, the Claims Group denied the claim on the basis that the
transfer was at the employee's request and not in the interest of the
United States as required by paragraph 2-1.3 of the Federal Travel
Regulations (Supp. 4, August 23, 1982), incorp. by ref., 41 C.F.R.
Section 101-7.003 (1983).
Mr. Napier's letter appealing the settlement of our Claims Group
speaks in terms of the Service's failure to honor the transportation
agreement executed incident to the transfer from Indianapolis to
Fairbanks. Because Mr. Napier does not appear to understand exactly
what that agreement authorized, we shall begin our analysis there.
The transportation agreement signed by Mr. Napier refers to the
employee's entitlement to return travel as.
The transportation agreement relied on by Mr. Napier is in accord
with the provisions of section 5722, quoted above. The first paragraph
of the agreement states:
"In consideration of the transportation and subsistence for
myself, my dependents and my household goods and personal effects,
from my place of actual residence at time of assignment to my post
of duty noted below, and return, I agree to serve at this post of
duty for two years from my arrival date. * * *"
It is clear from the above that sections 5724(d) and 5722 do not
authorize real estate expenses and nothing in the transportation
agreement purports to do so either. Therefore, we find Mr. Napier's
entitlements under the transportation agreement to be travel expenses
and transportation of his dependents and household goods from
Indianapolis to Fairbanks, and return. We understand that he has been
paid for these entitlements and they are not an issue here. /2/ Since
the agreement does not, and indeed cannot under sections 5724(d) and
5722, authorize real estate expenses, he is not entitled to
reimbursement for these expenses unless authorized by the Service under
a different provision of law. B. L. Gordon, B-204467, June 8, 1982. In
that case, we held that the authority to pay travel and transportation
under 5 U.S.C. Section 5722 to employees transferring to posts of duty
outside of the continental United States is distinct from the authority
to pay real estate expenses under 5 U.S.C. Section 5724a.
It was precisely for this reason that Mr. Napier received a separate
authorization for real estate expenses incident to his transfer to
Fairbanks.
For the reasons stated above, we sustain the Claims Group denial of
Mr. Napier's claim.
Comptroller General of the United States
(1) Mr. Napier is appealing from a settlement of the Claims Group,
General Accounting Office, denying his claim for these expenses.
(2) We have been informally advised by the Western region Office,
Internal Revenue Service, that Mr. Napier was paid $1,354.68 in 1983
representing mileage and per diem for his return trip from Fairbanks.
The record suggests and the Service has confirmed that he disposed of
the majority of his household effects prior to departing Alaska.
B-216936, Nov 26, 1984, 84-2 CPD 562
BIDS - Prices - Below cost - Effect on bidder responsibility
DIGEST:
No basis exists to preclude a contract award merely because the low
bid is below cost. Such bid presents a question of the bidder's
responsibility, a matter which the GAO does not review except in limited
circumstances.
Ambulancias de Emergencias, Inc.:
Ambulancias de Emergencias, Inc. (AEI) protests the award by the
Veterans Administration (VA) of a contract for ambulance service for the
VA hospital in Puerto Rico to the low bidder under IFB 455-140-84. AEI
alleges that the successful bid was below cost, since the bid price is
not high enough to permit the contractor to pay the minimum wage or the
social security taxes for the number of employees necessary for
performance of the contract.
The submission of a below-cost bid is not illegal, and the government
cannot withhold an award merely because a responsive low bid is below
cost. See Beta Construction Company, B-214850, Apr. 18,, 1984, 84-1 CPD
Para. 445. 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. Our Office does not review protests concerning
affirmative determinations of responsibility absent a showing that the
contracting officer may have acted fraudulently or in bad faith or that
definitive responsibility criteria in the solicitation have not been
met. 4 C.F.R. Sec. 21.3(g)(4) (1984); Grace Industries, Inc.,
B-212263.3, Feb. 22, 1984, 84-1 CPD Para. 212. Neither exception is
alleged here.
The protest is dismissed. COMP GEN (UP)
FILE: B-216935
DATE: September 17, 1985
MATTER OF: Ann McCarthy - Home Leave - Failure to Complete Second
Tour of Duty
TRAVEL EXPENSES - OVERSEAS EMPLOYEES - HOME LEAVE - MINIMUM SERVICE
REQUIREMENT
Employees who resign before completion of their second 24-month tour
of duty abroad are not indebted to the Government for home leave granted
based upon completion of their first 24-month tour of duty, but used
during their second tour of duty. So long as they have completed the
24-month of duty upon which the grant of home leave is based, and return
to service abroad after the period of home leave, no refund is required.
Where the circumstances of a particular case give rise to a good faith
doubt concerning the employee's intention to return to service abroad,
the matter may be referred to this Office.
The agency asks if they must recoup home leave earned during an
employee's first 24-month tour of duty where the employee used the home
leave but resigned prior to completion of her second 24-month tour of
duty. We hold that no recoupment is necessary.
This is a request for a decision from Walter G. Lobisser, Assistant
Financial Manager, Department of the Treasury, United States Customs
Service, Boston, Massachusetts, concerning home leave used by Ann
McCarthy.
Ms. McCarthy was assigned to the agency's preclearance station in
Toronto, Canada, for a 2-year tour of duty effective on August 28, 1981.
She was entitled to accrue home leave at the rate of 5 days for each 12
months of service, giving a total of 10 days for her first tour of duty.
5 C.F.R. Section 630.604(a)(5) (1984).
Her first tour of duty ended in August 1983. She asked for and
received another 2-year tour of duty which was to end on August 25,
1985. In November 1983 she used the 10 days of home leave she had been
granted based upon completion of her first tour of duty, and returned to
service in Toronto. On August 4, 1984, approximately 3 weeks before
completion of the first year of her second tour of duty, she resigned to
attend school.
The agency requests a decision on whether Ms. McCarthy is indebted to
the Government for the 10 days of home leave used in November 1983
because she failed to complete the full 2-year period of her second tour
of duty. The agency also requests that we provide guidance on a
specific length of time an employee must return to service abroad to
avoid indebtedness for home leave.
Home leave may be granted to employees who complete 24 months of
continuous service outside the United States and are expected to return
to service outside the United States, based upon 5 U.S.C. Section 6305(
a) (1982). The implementing regulations are issued by the Office of
Personnel Management and published at 5 C.F.R. Sections 630.601-630.607.
An employee's accrual of home leave is without regard to his later
entitlement to be granted use of that leave. 52 Comp. Gen. 860 (1973).
That is, an employee may be earning home leave during a tour of duty
outside the United States but there is no entitlement to be granted use
of that leave until at least two conditions are satisfied. First, the
employee must have completed 24 months of continuous service outside the
United States, and second, it must be expected that the employee will
return to service outside the United States after the period of home
leave. Virginia M. Borzellere, B-214066, June 11, 1984; Estelle C.
Maldonado, 62 Comp. Gen. 545 (1983); Lamoyne J. DeLille, 56 Comp. Gen.
824 (1977).
There is no requirement that the employee actually complete a second
24-month tour of duty abroad in order to avoid recoupment of home leave
accrued during the first 24-month tour of duty. Borzellere, supra, and
5 C.F.R. Section 630.606(e).
In Borzellere, supra, we considered a similar situation. In that
case, the employee had completed her first 24-month tour of duty outside
the United States, used her home leave, and returned to duty outside the
United States for 18 months of a 24-month tour of duty. We held that
the employee had satisfied the statutory and regulatory requirements and
was not indebted to the Government for home leave simply because she
failed to complete the entire period of her second 24-month tour of duty
abroad.
In this case, Ms. McCarthy has also met the statutory and regulatory
requirements and no recoupment of home leave is required. She completed
her first 24-month tour of duty, used the home leave she had accrued
based upon her first tour of duty, and returned to service outside the
United States for a reasonable period, i.e., almost a year. Under such
circumstances no recoupment is necessary.
As long as the employee returns to service outside the United States
for a reasonable period of time, no recoupment of home leave is
required. In the event an employee returns to service outside the
United States for a period which is so brief as to cast doubt on the
employee's intention to return to service abroad, the matter may be
referred to this Office for disposition. Bonzellere, supra.
In view of the above, we hold that Ms. McCarthy is not indebted for
home leave used in November 1983.
Acting Comptroller General of the United States
FILE: B-216933.2 85-1 CPD 38
DATE: January 14, 1985
MATTER OF: Grantex Industries, Inc. -- Reconsideration
DIGEST:
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - RESPONSIBILITY
DETERMINATION - NONRESPONSIBILITY FINDING - REVIEW BY GAO
GAO will not consider a challenge to a contracting officer's
determination that a small business is nonresponsible since by statute
the Small Business Administration is to review such determinations.
Grantex Industries, Inc. requests reconsideration of our decision in
B-216933, Nov. 26, 1984, 84-2 CPD Paragraph 561. In that decision, we
dismissed Grantex's protest that it was not allowed sufficient time to
provide the information required for the Small Business Administration
(SBA) to make a certificate of competency (COC) determination, after the
Defense Logistics Agency (DLA) found Grantex nonresponsible under
request for quotations No. DLA400-84-R-7251-0001. Grantex asks us to
reconsider our decision because we did not address its allegation that
DLA improperly assessed Grantex's delinquency ratio on existing
contracts when making the responsibility determination.
We will not review the DLA's assessment of Grantex's delinquency
ratio. Under 15 U.S.C. Section 637(b)(7) (1982), the SBA has conclusive
authority to determine whether a small business is responsible by
issuing or refusing to issue a COC. Skyspares Parts, Inc., 63 Comp.
Gen. 207 (1984), 84-1 CPD Paragraph 170. Thus, the propriety of DLA's
action was subject to review by the SBA. However, the SBA declined to
issue a COC here because Grantex failed to submit on time certain
information requested by the SBA during the COC consideration. As our
initial decision in this case emphasized, time is of the essence in COC
proceedings, and a small business which fails to complete its COC
application on time forfeits the ability to avail itself of the
protection provided by statute and regulation against the possibility of
an unreasonable responsibility determination by a contracting officer.
Hazel and Mabel's Maid and Cleaning Service, B-207520, July 1, 1982,
82-2 CPD Paragraph 6. Therefore, we will not question a contracting
officer's negative responsibility determination where, as here, the
protester fails to file a timely COC application with the SBA. American
KAL Enterprises, Inc., B-211938, Jan. 11, 1984, 84-1 CPD Paragraph 66.
The prior decision is affirmed.
Controller General of the United States
B-216933, Nov 26, 1984, 84-2 CPD 561
CONTRACTS - Small business concerns - Awards - Small Business
Administration's authority - Certificate of Competency - Conclusiveness
DIGEST:
GAO will not question the Small Business Administration's (SBA)
refusal to issue a certificate of competency where the protester failed
to make a timely response to the SBA's requests for information.
Grantex Industries, Inc.:
Grantex Industries, Inc. protests the rejection of its bid under
Defense Logistics Agency (DLA) Request for Quotations No.
DLA400-84-R-7251-0001. Grantex contends that it was not allowed
sufficient time to provide the information required for the Small
Business Administration to make a certificate of competency (COC)
determination.
The DLA had informally advised our Office that the Grantex bid was
rejected after the form was found nonresponsible. Because Grantex is a
small business concern, the DLA referred the nonresponsibility
determination to the SBA for consideration under SBA's COC procedures,
as required by 15 U.S.C. Sec. 637(b)(7) (1982). When Grantex did not
make a timely response to the SBA's requests for information, the SBA
declined to issue a COC.
Since award proceedings are suspended pending the SBA's consideration
of a COC application, SBA must act promptly to process COC applications.
Hence, time is of the essence in these proceedings. Thus, a small
business which fails to file a timely, acceptable COC application with
the SBA does not avail itself of the possible relief provided by statute
and regulation to afford small business concerns a degree of protection
against unreasonable determinations as to their capacity or credit by
contracting officers. Hazel and Mabel's Maid and Cleaning Service,
B-207520, July 1, 1982, 82-2 CPD Para. 6. Grantex has presented no
evidence showing that the deadline was unfairly applied, or that either
the SBA or the contracting agency failed to consider any relevant
information which was submitted prior to the deadline.
The protest is dismissed. COMP GEN (UP)
FILE: B-216932 85-1 CPD 356
DATE: March 27, 1985
MATTER OF: PetroElec Construction Company, Inc.
DIGEST:
BIDS - INVITATION FOR BIDS - CANCELLATION - AFTER BID OPENING -
DEFECTIVE SOLICITATION
1. Where a material invitation provision is too vague, misleading or
ambiguous to assure that an award will satisfy the government's actual
needs, the IFB may be canceled after bid opening.
BIDS - INVITATION FOR BIDS - CANCELLATION - AFTER BID OPENING -
JUSTIFICATION - INACCURATE SPECIFICATIONS
2. A protester's claim that it bid based on an industry standard
that would have assured performance in accordance with an agency's
requirement not expressed in the IFB does not render improper a
cancellation based on the absence of this requirement where: (1)the
protester submits no evidence, beyond its own unsupported statements,
that the claimed industry standard exists; (2) tasks under the IFB are
such that the agency reasonably assumed that, absent a specific
requirement, bidders would not plan on performing as the agency
intended; and (3) even if the industry standard does exist, the absence
of a specific requirement from the IFB might be viewed by bidders as
relaxing the standard for the particular procurement.
PetroElec Construction Company, Inc. (PetroElec), protests the
cancellation after bid opening of the invitation for bids (IFB) No.
N62474-84-B-9511 issued by the Department of the Navy for maintenance of
lighting fixtures under a requirements contract at the Mare Island Naval
Shipyard, Vallejo, California. PetroElec contends that the IFB
deficiencies cited by the Navy as justifying cancellation do not
constitute a compelling reason to cancel since the government's actual
needs would be served by an award of a contract. We deny PetroElec's
protest.
Six bids were received under the IFB. PetroElec's bid of $172,891
was low, the second low bid being $184,810. Immediately following bid
opening, Navy procurement officials met with PetroElec to review the
company's bid. As the meeting, the Navy raised the possibility of error
in PetroElec's bid because it was inordinately low compared to the
government's estimate of $319,663 for the work. PetroElec, however,
confirmed its bid. Subsequent to the meeting with PetroElec, the Navy
notified all the bidders that the IFB was being canceled because of
inadequate and ambiguous specifications.
The primary reason for cancellation, according to the Navy, was the
omission of a specification from the IFB calling for a journeyman
electrician to be assigned by the contractor to every work order for
lighting repair or maintenance. The Navy declares that after its
meeting with PetroElec, it became apparent that the IFB requirement for
only "one journeyman electrician per crew" did not clearly express the
intended "every work order" requirement. An electrician reportedly must
perform all electrical work due to the danger of fire resulting from
improperly performed electrical work. Citing the vast number of
electrical repair work orders (5,800 out of 16,830 total work orders
last year) and the fact that personnel at the shipyard simply are unable
to inspect the performance of each work order, the Navy claims it can
assure that an electrician will perform all electrical work only if an
electrician initially responds to each work order.
PetroElec argues that this defect is not of such a magnitude that the
government's minimum needs could not be met by an award to PetroElec.
PetroElec asserts taht it interpreted the IFB'S one journeyman
electrician per crew requirement to mean that a journeyman electrician
would respond to every work order to ascertain if electrical circuits
were shut off prior to work being performed by other crew members and to
check after the completion of the work to ensure that it was performed
in a safe manner; it claims this is the industry standard. PetroElec
acknowledges that a journeyman electrician is needed to perform work
involving the repair and maintenance of electrical circuitry, but sees
no need for an electrician to be present to oversee bulb replacement,
washing of reflectors and diffusers, and replacement of sockets and
ballasts. PetroElec maintains that if the Navy is requiring the
presence of a journeyman electrician to supervise all work, whether it
involves electrical circuitry or not, then this requirement exceeds the
government's minimum needs and is not a proper compelling reason for the
cancellation of the IFB.
Federal Acquisition Regulation, 48 C.F.R. Section 14.401-1 (1984),
requires that cancellation of invitations after opening only be
undertaken for compelling reasons. Our Office, too has held that
because of the potential adverse impact on the competitive bid system of
canceling an invitation after all bid prices have been exposed,
cancellation must be based on cogent and compelling reasons. Downtown
Copy Center, 62 Comp. Gen. 65 (1982), 82-2 C.P.D. Paragraph 503. The
procuring agency has broad discretion in determining if a cogent and
compelling reason exists, however, and a decision to cancel an
invitation after bid opening will not be disturbed unless that decision
lacks a reasonable basis. Jackson Marine Companies, B-212882, April 10,
1984, 84-1 C.P.D. Paragraph 402. In general, where the invitation
provisions are too vague, misleading or ambiguous to assure that a
contract award will satisfy the government's real requirements, the
government's interests have been sufficiently prejudiced as to justify
canceling an IFB after opening and resoliciting the requirement.
Com-Tron, Ing., B-209235, May 9, 1983, 83-1 C.P.D. Paragraph 486; Meds
Marketing, Inc., B-213352, Mar. 16, 1984, 84-1 C.P.D. Paragraph 318.
We believe cancellation was justified here. The Navy's stated need
for a journeyman electrician to respond to each work order is warranted
in light of the potential fire danger. Considering the large number of
work orders in the past involving electrical work, the requirement that
an electrician respond to every work order, at least to determine
initially whether his services are necessary, seems to be a reasonable
means of assuring, to the extent possible, that all electrical work will
be performed by electricians. We will not question an agency's
determination of its actual minimum needs unless there is a clear
showing that the agency's determination has no reasonable basis.
Ridg-U-Rak, Inc., B-211395, August 8, 1983, 83-2 C.P.D. Paragraph 179.
We agree with the Navy, furthermore, that the IFB did not adequately
express this requirement. The Navy wanted an electrician to determine
if electrical work was needed but, under the IFB, a contractor could
assign a journeyman electrician to every crew and send one out on a work
order only after some other worker determined that an electrician was
needed. This would not meet the Navy's needs.
PetroElec's assurance that it is industry practice to have a
journeyman electrician respond to every work order is unpersuasive.
PetroElec has submitted no evidence -- beyond its own self-serving
statements -- that any industry standard exists in this area, or that
such a standard alone clearly would be sufficient to bind it or any
other contractor to assign journeyman electricians to every work order
as the Navy intended. In any event, even if the industry standard is as
PetroElec claims, we think the IFB requirement for a journeyman
electrician per work crew could be mistakenly viewed as establishing
some lesser standard for the work here, contrary to the Navy's intent.
We thus think it was reasonable of the Navy to assume that, absent a
specific requirement otherwise, bidders, including PetroElec, would not
plan on sending a journeyman electrician on every work order.
We conclude that the IFB did not adequately set forth the Navy's need
for a journeyman electrician to respond to every work order and that,
since an award therefore would not assure performance in accordance with
the Navy's actual needs, cancellation of the IFB was proper.
PetroElec's protest is denied.
Harry R. Van Cleve
General Counsel
B-216928, Nov 5, 1984, 84-2 CPD 502
CONTRACTS - Protests - General Accounting - Office procedures -
Timeliness of protest - Date basis of protest make known to protester
DIGEST:
Protest against award of contract is untimely when filed more than 10
working days (plus reasonable delivery time) after agency sent notice to
protester of award to another firm.
Edward H. Brumfield:
Edward H. Brumfield protests the award of a contract to ACKCO, Inc.
(AI), under request for proposals No. DE-RP04-84AL26489, issued by the
Department of Energy (DOE).
DOE advised Mr. Brumfield by letter dated September 26, 1984, that
award was being made to AI. Mr. Brumfield's protest was received at our
Office on October 23, 1984.
Our Bid Protest Procedures require protesters to file their protest
not later than 10 working days after the basis for protest is known or
should have been known, whichever is earlier. 4 C.F.R. Sec. 21.2(b)(2)
(1984). Allowing a reasonable time (1 week) for delivery of DOE's
letter advising Mr. Brumfield about the award to AI, Mr. Brumfield's
protest is untimely because it was filed (received) at our Office more
than 10 working days after he should have known of the basis of protest.
See Power Lift/Aero Industries, B-214053, Jan. 23, 1984, 84-1 C.P.D.
Para. 106.
The protest is dismissed. COMP GEN (UP)
B-216926, Nov 5, 1984, 84-2 CPD 501
GENERAL ACCOUNTING OFFICE - Jurisdiction - Contracts -
Nonappropriated fund activities
DIGEST:
GAO will not review the award of a contract which does not involve
the direct expenditure of appropriated funds.
N.W. Johnson:
N.W. Johnson protests the award made by the Washington Area
Contracting Center, Andrews Air Force Base, Department of the Air Force,
the General Aero Products Corp. under Request for Quotations No.
F49642-84-Q5549 for a concession to provide and maintain U.S. Postage
Stamp Vending Machines at the Bolling and Andrews Air Force Bases,
Washington, D.C. The procurement is being made for "NAFIs"
(Nonappropriated Fund Instrumentalities of the United States
Government). The NAFIs will receive a commission based on sales, and no
appropriated funds of the United States will be obligated.
This Office has no authority to take exception to an award which does
not involve the direct expenditure of appropriated funds. Therefore, no
useful purpose is served by our consideration of protests over the award
of the type of contract involved here. Landscapes Unlimited, Inc.,
B-212131, Aug. 25, 1983, 83-2 CPD Para. 251. For this reason, we will
not consider this protest.
The protest is dismissed. COMP GEN (UP)
FILE: B-216921
DATE: April 2, 1985
MATTER OF: L. Fred Glenn
TRAVEL EXPENSES - OFFICIAL BUSINESS - PERSONAL EXPENSES -
REIMBURSEMENT BASIS
An employee who pays for authorized travel costing in excess of $100
with personal funds contrary to the Federal Travel Regulations may be
reimbursed the transportation costs which would have been properly
chargeable to the Government if the transportation service had been
procured with a Government Transportation Request. The fact that the
airline tickets involved were purchased from a travel agent does not
affect his reimbursement in this case since the travel agent was
authorized for use by Government travelers under a contract with the
General Services Administration.
A Federal employee claims reimbursement for travel expenses incurred
when he purchased airline tickets for more than $100 with personal funds
from a travel agent contrary to the provisions of Federal Travel
Regulations, para. 1-10.2(b) (September 1981). /1/ We conclude that the
employee may be reimbursed up to the amount he paid, but not to exceed
the cost of the transportation if it had been procured directly from the
carrier with a Government Transportation Request.
Mr. L. Fred Glenn, an employee of the United States Department of
Agriculture Forest Service, Juneau, Alaska, was authorized travel for
himself and his immediate family from Juneau, Alaska, to Malad, Idaho,
and return while on leave between tours of duty.
Mr. Glenn's wife secured airline tickets in September and November
1983 for the travel which took place in December 1983 and January 1984.
She purchased the tickets from the Travel Center in Juneau, a Travel
Management Center under contract with the General Services
Administration. However, the tickets were not purchased under the
General Services Administration contract using a Government
Transportation Request, but were purchased with personal funds instead.
Mr. Glenn has worked for the Government for several years and is a
frequent traveler. His explanation for the use of cash in excess of
$100 to purchase the transportation states: "Wife purchased tickets. I
was unaware and actually too busy at the time to get involved." The
submission questions the propriety of the cash purchase of
transportation in excess of $100 outside the General Services
Administration contract with the travel agency and its compliance with
the Federal Travel Regulations.
At the time Mrs. Glenn purchased the airline tickets, 4 C.F.R.
Section 53.2 (1984) prohibited the use of travel agents to secure
transportation service by passengers traveling within the United States
at the expense of the Government. However, an exemption from this
particular section of the Code of Federal Regulations was granted when
the General Services Administration was authorized by the Comptroller
General to contract with commercial travel agents to serve Federal
agencies and offices in certain locations. B-203171, July 9, 1981.
Since the Travel Center was a Travel Management Center under contract
with the General Services Administration, the use of this particular
travel agent to obtain Mr. Glenn's airline tickets did not violate the
prohibition against the use of travel agents.
Under the Federal Travel Regulations the tickets should have been
purchased from the carrier or the Travel Center with a Government
Transportation Request. FTR para. 1-10.2. Although Mr. Glenn was an
experienced and frequent Government traveler knowledgeable in the use of
the Government Transportation Request, apparently his wife was unaware
of the requirements and made an inadvertent purchase of the tickets for
cash. Had the tickets been purchased with a Government Transportation
Request, a lower special Government fare under the General Services
Administration contract might have been applicable.
We have held that, except for emergency situations, where an employee
has failed to observe the requirements of paragraph 1-10.2 of the
Federal Travel Regulations requiring, in most cases, the use of a
Government Transportation Request to purchase tickets costing in excess
of $100, reimbursement is limited to the cost of a lower special
Government fare. Marsha Weiss, B-215024, November 13, 1984. Since this
case did not involve an emergency situation, Mr. Glenn's reimbursement
should be limited to the Government fare available had a Government
Transportation Request been used.
The voucher with attachments is returned so payment may be made in
accordance with this decision.
Comptroller General of the United States
(1) C. E. Tipton, Certifying Officer, Forest Service, United States
Department of Agriculture, submitted this request for a decision.
FILE: B-216919 85-1 CPD 33
DATE: January 11, 1985
MATTER OF: NJCT Corporation
DIGEST:
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - SMALL BUSINESS
ADMINISTRATION'S AUTHORITY - SIZE DETERMINATION
1. Small Business Administration is empowered by statute to
conclusively determine matters of size status for federal procurements,
and GAO will neither make nor review such determinations.
BIDS - RESPONSIVENESS - DESCRIPTIVE LITERATURE - INDICATION THAT ITEM
OFFERED FAILED TO MEET SPECIFICATIONS
2. Where descriptive literature accompanying bid fails to show
conformance with salient characteristics specified in solicitation, the
bid is nonresponsive.
NJCT Corporation protests the award of a contract to Anaconda
Refrigeration and Air Conditioning, Inc. (Anaconda) for the purchase of
ice making machines, ice storage bins and user manuals under invitation
for bids (IFB) No. F44650-84-B-0002 issued as a small business set-aside
by the Department of the Air Force.
NJCT contends that the award to Anaconda is improper because Anaconda
is a division of a large business and is not eligible for the award. In
addition, NJCT protests that the contracting officer incorrectly
interpreted and rejected its bid.
We dismiss the protest in part and deny it in part.
Concerning Anaconda's size status, the Air Force reports having
referred this matter to the Small Business Administration (SBA) for
review. Under 15 U.S.C. Section 637(b) (1982), the SBA is empowered by
statute to conclusively determine matters of size status for federal
procurement procedures. Therefore, this Office will neither make nor
review determinations of size status. Extinguisher Service, Inc.,
B-214354, June 14, 1984, 84-1 CPD Paragraph 629; See also GAO's bid
protest procedures, 4 C.F.R. Section 21.3(g)(2) (1984). Accordingly, we
dismiss this portion of NJCT's protest.
With respect to the rejection of its bid, NJCT argues that its bid
met or exceeded all required specifications. The Air Force responds
that NJCT's bid consisted of three alternatives, the first lacking
adequate descriptive literature and the other two accompanied by
literature exhibiting noncompliance with requirements in the
solicitation.
Initially, we note that NJCT does not question the Air Force
rejection of its first alternative bid. AS for the other alternatives,
our examination of the record affirms the Air Force's position. The IFB
specifies that "(ice) cube size must be 1" by 1" by 1" or less, but not
smaller than 3/4" by 3/4" by 3/4"." NJCT's descriptive literature states
that its ice makers feature "quality ice in unique diamond shapes . . .
in 5/8 inch (1.6 cm.) cubelets and 1-1/4 inch (3.2 cm.) cubes," thus
exceeding both the upper and lower size limits. Furthermore, the
solicitation requires that the amperage be from 15 to 20 amps, whereas
NJCT's literature features an ice maker requiring 22 amps. Finally, the
solicitation limits the height of the ice maker, with a storage bin, to
83 inches. NJCT's literature does not clearly show compliance with this
specification.
It is clear from the record that NJCT's descriptive literature
accompanying its bid does not conform to some of the salient
characteristics listed in the solicitation. We have consistently held
that bids which fail to show conformance with the salient
characteristics specified in a solicitation are nonresponsive and cannot
be accepted. The Library Store, Ltd., B-213258, Feb. 9, 1984, 84-1 CPD
Paragraph 162. Moreover, conformance must be determined from the face
of the bid itself without resort to explanations furnished after bid
opening. Le Prix Electrical Distributors, Ltd., B-212518, Dec. 27,
1983, 84-1 CPD Paragraph 26. NJCT's protest is denied in this regard.
Finally, we note that NJCT complains that the Air Force failed to
give 5 days written notice of the intent to reject NJCT's "low bid."
NJCT does not call our attention to such a notice requirement in the
solicitation or the Federal Acquisition Regulation, nor are we aware of
any. In any event, the failure to give such notice, even if required,
would be a procedural deficiency not affecting the validity of the
award. Compare Emerson Electric Co., B-213382, Feb. 23, 1984, 84-1 CPD
Paragraph 233.
Comptroller General of the United States
B-216916, Nov 15, 1984, 84-2 CPD 538
CONTRACTS - Negotiation - Offers or proposals - Rejection - Failure
to meet solicitation requirements
DIGEST:
Protest against rejection of proposal in response to RFP as
unacceptable for failing to submit technical proposal is summarily
denied where RFP adequately informed offerors that technical proposal
was required.
Traffic Marketing Development Services, U.S.A., Inc.:
Traffic Marketing Development Services, U.S.A., Inc. (TMDSUSA), has
protested the rejection of its proposal for freight forwarding services
under request for proposals (RFP) 84-006, issued by the Agency for
International Development (AID), La Paz, Peru.
TMDSUSA states that it has been treated unfairly. It indicates that
its proposal was rejected as unacceptable because it was missing a
technical proposal. TMDSUSA references page 34 of the RFP entitled
"Evaluation Factors for Award" which it believes did not provide that a
technical proposal was required. TMDSUSA contends that it understood
this page to mean that offerors would be "evaluated under a weight
criteria and no technical proposal is requested or understood to be
given and attached to the solicitation." Apparently, TMDSUSA merely
submitted a one-page cover letter and the executed and completed
Standard Form 33, Solicitation, Offer and Award document, to AID in
response to the RFP.
We summarily deny this protest without obtaining an agency report
since the protest is clearly without merit on its face. 4 C.F.R. Sec.
21.3(g) (1984).
Page 34 of the RFP states, in part:
"Evaluation Factors for Award
"The criteria set forth below will serve as the basis upon which your
technical proposal will be evaluated. The relative order of importance
of the technical criteria is indicated by approximate weighting, so that
offerors will know which areas require emphasis in the preparation of
proposals.
"Evaluation Criteria Weight
1. Understanding of the Project as evidenced by technical proposal
17" Thereafter followed a list of other technical criteria, their
respective weights, and information required to be submitted to evaluate
each criterion. Even assuming the RFP did not elsewhere request a
technical proposal, we believe the above-quoted provisions on page 34
adequately informed offerors that a technical proposal was required and
that an offeror who failed to submit information addressing the listed
technical criteria did so at the risk of being rejected as unacceptable.
See Western Graphtec, Inc., B-212971, May 14, 1984, 84-1 C.P.D. Para.
517. COMP GEN (UP)
FILE: B-216901 85-2 CPD 188
DATE: August 19, 1985
MATTER OF: South Central Bell Advanced Systems
DIGEST:
CONTRACTS - AWARDS - ERRONEOUS - EFFECT OF CONTRACT PROTEST
1. GAO denies protest of improper award to an offeror whose proposal
was inconsistent on its face with material solicitation requirement
because protester was not prejudiced by agency action.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
PROPRIETY
2. GAO denies protest alleging noncompliance with mandatory
technical requirements when successful technical proposal states that
awardee will meet the requirements and agency properly evaluated the
proposal.
South Central Bell Advanced Systems protests the award to Northern
Telecom, Inc. (NTI) of a lease with option to purchase a telephone
system at Arnold Air Force Station, Tennessee. South Central Bell
alleges that the NTI proposal, submitted in response to request for
proposals (RFP) No. F11624-84-R-0001, did not meet several mandatory
requirements of the solicitation.
We deny the protest.
Background
The RFP requested offers for three procurement options -- lease,
purchase, and lease with option to purchase. All options were to cover
design, installation, testing, and maintenance of the telephone system.
The RFP provided that the system must be engineered and furnished in
accordance with both the Statement of Work and the Air Force Equipment
Performance Specification for a Base Telephone System (EPS-82-018). The
solicitation further stated that award would be based on technical
factors, life cycle costs, and management/personnel considerations.
The Air Force received five offers on June 14, 1984. It conducted
discussions with each offeror and, after receiving best and final
offers, determined that those of South Central Bell and NTI were
technically acceptable. On August 30, the Technical Proposal Evaluation
Board for the procurement presented a summary of its findings to the Air
Force official responsible for selecting the telephone system
contractor. In that report and in the contracting officer's negotiation
memorandum of September 11, the South Central Bell proposal was rated
slightly higher than the NTI proposal with respect to
management/personnel considerations because of risk attributed to NTI's
schedule management system. With respect to technical evaluation
factors, the two proposals appear to have been considered essentially
equal. On the other hand, the South Central Bell best and final price
proposal, $5,839,099 for lease with option to purchase, was
substantially higher than NTI's price of $4,512,405 for the same option.
On September 28, 1984, the Air Force awarded a lease with option to
purchase contract to NTI. From our review of the procurement record, it
appears that the Air Force selected NTI primarily because of the
difference between its price and the protester's.
South Central Bell's Protest
Both South Central Bell and NTI proposed to include digital switches
manufactured by NTI in their telephone systems. South Central Bell
states that, as an authorized sales agent for NTI, it sought the
assistance of NTI engineers in conducting computer-aided engineering
configurations to determine a suitable switch for the Arnold Air Force
Station system. As a result of those tests, South Central Bell
concluded that an NTI digital switch that it had considered including in
its proposal, model SL-1XN, had insufficient capacity to meet several
Air Force requirements listed in the solicitation. Consequently, the
firm proposed a larger and more expensive NTI switch, model SL-100.
NTI, on the other hand, proposed the model XL-1XN digital switch that
South Central Bell had rejected as too small.
The protester attributes the approximately $1.3 million difference in
price between NTI's proposal and its own to the higher cost of the
switch that it proposed and contends that the SL-1XN switch proposed by
NTI cannot meet the requirements of the RFP. /1/
In considering a protest of this nature, we do not reevaluate
technical proposals or substitute our judgment for that of the agency.
We will not disturb an agency's determination of the technical adequacy
of a proposal absent a clear showing that the determination was
unreasonable or was otherwise in violation of procurement statutes and
regulations. Furthermore, the protester has the burden of affirmatively
proving its case, and mere disagreement with a technical evaluation does
not satisfy this requirement. A.B. Dick Co., B-211119.3, Sept. 22,
1983, 83-2 CPD Paragraph 360, aff'd on reconsideration, B-211119.5, Apr.
17, 1984, 84-1 CPD Paragraph 424.
A. Speed Calling Capability
Paragraph 3.1.3.10.3 of the Statement of Work requires that 50
percent of the lines have capability for individual speed calling. This
feature allows an individual subscriber to select a list of numbers that
can be called by dialing an abbreviated code. South Central Bell
asserts that the memory of the SL-1XN switch can accommodate only 254
speed calling lists of numbers. As a consequence, the individual speed
calling feature is available for 254 lines, and providing this feature
for 2,750 lines, 50 percent of the system maximum, would exhaust the
available memory of the system.
During discussions with the Air Force, NTI stated that the various
line feature requirements "are easily met and complied with." This broad
statement is, however, inconsistent with the NTI proposal. With regard
to the description of the speed calling feature in paragraph 3.3.3.2 of
the Equipment Performance Specification, the NTI proposal stated that
individual speed calling can be provided for a maximum of 255 lines for
each telephone system.
In its report concerning the protest, the Air Force concedes that the
SL-1XN switch only has sufficient memory to provide 255 individual speed
calling lists. The Air Force states, however, that fewer than 250
individual speed calling lists are actually required and that the RFP
overstated the requirement because of a misunderstanding about the
nature of the feature. Apparently, while the agency wants 50 percent of
the lines in the Arnold Air Force Station system to have access to a
speed calling list, it is acceptable for separate lines to share lists
of preselected numbers. As a result, the proposed NTI system with a
maximum capacity of 255 speed calling lists will meet the actual needs
of the Air Force. The Air Force also contends that the speed calling
feature was not a "crucial" item in the procurement, and that South
Central Bell and other offerors were not prejudiced because the feature
can now be added to the NTI system by purchase of automatic dialing
instruments for $50 each. The Air Force states that the automatic
dialing instruments cost approximately $15 more than those proposed by
NTI, and that meeting the RFP speed calling requirement would require a
$37,750 increase in NTI's price.
In negotiated procurement, any proposal that fails to conform to
material terms and conditions of the solicitation should be considered
unacceptable and may not form the basis for an award. AT&T Information
Systems, Inc., B-216386, Mar. 20, 1985, 85-1 CPD Paragraph 326. It is
fundamental that all offerors for government contracts compete on an
equal basis. Applicable regulations require agencies to revise
solicitations and give all offerors an opportunity to submit new or
revised proposals if changes occur in requirements or if the proposal
considered most advantageous to the government involves a departure from
stated requirements. Defense Acquisition Regulation, Section 3-805.4(a)
and (c), reprinted in 32 C.F.R. pts. 1-39 (1983); /2/ see Corbetta
Construction Co. of Illinois, Inc., 55 Comp. Gen. 201, 207-8 (1975),
75-2 CPD Paragraph 144 at 8-10.
Based upon the NTI proposal and the revised Air Force technical
evaluation of the SL-1XN switch, we conclude that the Air Force should
not have accepted the telephone system offered by NTI since it has
insufficient memory to provide the individual speed calling feature
required by the RFP. While the Air Force may not view the speed calling
feature as "crucial," any requirement necessitating the storage of
relatively large amounts of data by a telephone system is clearly
material and may not be waived without providing other offerors with an
opportunity to revise their proposals. On the other hand, the protester
has not contested the agency's assertion that the requirement for speed
calling can be met under the terms of the RFP for far less than the $1.3
million difference between NTI's and South Central Bell's offer. South
Central Bell's only response is that, if the RFP is modified to reduce
the speed calling requirement to that met by NTI, a modified South
Central Bell proposal would be competitive with NTI's price. We doubt
that South Central Bell proposed a digital switch costing over $1.3
million more than the one proposed by NTI solely because of a speed
calling requirement that could be met for less than $40,000 by use of
automatic dialing instruments. Although the Air Force accepted a
proposal inconsistent on its face with a material requirement of the
solicitation, we do not believe that the protester was prejudiced and we
deny the protest on this basis.
B. Grades of Service
Paragraph 3.1.3.1 of the Statement of Work requires that the initial
telephone system have 3,600 main station lines, expandable to 5,500
lines. South Central Bell contends that the maximum number of lines
that can be accommodated by the SL-1XN switch proposed by NTI is 5,000.
Technical literature included in the NTI proposal describing the SL-1XN
switch represents that the switch can accommodate more than 25,000
lines. Thus, we understand that South Central Bell is not arguing that
only 5,000 lines can terminate in the switch, but that the NTI system
cannot meet the grades of service (frequency of blocked or lost calls)
or other traffic handling requirements of the RFP. South Central Bell
also contends that the NTI system cannot meet the required grades of
service because the system contains insufficient call registers, which
are mechanisms for storing information about a call such as the number
called, duration, and time of initiation.
In the portion of its proposal responding to each paragraph of the
Statement of Work, NTI stated that it would install a system expandable
to 5,500 lines. However, in another portion of its proposal, describing
the system's capacity, NTI stated that the SL-1XN switch is capable of
supporting up to 5,000 lines. The Air Force questioned this discrepancy
during discussions with NTI. In a written response, the company stated
that its reference to 5,000 lines was a general description applicable
to the most intensive switching and feature requirements. NTI stated
that its proposed system could easily meet the specific capabilities
required of the Arnold Air Force Station system with 5,500 lines.
NTI's initial proposal also set forth grades of service that fell
below the minimum levels required by paragraph 3.5.1 of the Equipment
Performance Specification for three types of telephone traffic. When
questioned by the Air Force about the three exceptions during
discussions, NTI stated that the proposed grades of service for the
system could be "independently configured," and that the system would
provide the required minimum grades of service for each type of traffic.
Thus, NTI proposed to meet the number of lines and grades of service
required by the RFP and the Air Force found that the NTI system would do
so. In the absence of specific evidence that NTI's system does not meet
these solicitation requirements, we deny South Central Bell's protest on
these bases. See Rack Engineering Co., B-214988, Sept. 10, 1984, 84-2
CPD Paragraph 272.
C. Conference Calls and "Hold" Feature
Paragraphs 3.3.1.1.2 and 3.3.1.1.3 of the Equipment Performance
Specification require the telephone system to permit subscribers to
establish conference calls with pre-selected conferees by dialing an
access code ("preset conferencing") and to set-up conferences at
pre-arranged times ("meet-me conferencing"). Paragraph 3.1.3.4 of the
Statement of Work specifies additional features for "meet-me" and
attendant conferences. South Central Bell contends that the SL-1XN
switch cannot provide these required conferencing features. NTI's
proposal, however, offered to meet the "preset" and "meet-me"
conferencing requirements by supplying additional specified equipment
compatible with the SL-1XN switch. In answer to questions posed by the
Air Force during discussions, NTI explained that the proposed system
would meet the specific conferencing features described in the Statement
of Work. South Central Bell has not established that, with the
additional equipment offered by NTI, the NTI system cannot perform as
represented by the offeror. Thus, we conclude that the NTI proposal
meets the RFP specifications with regard to conferencing features.
The protester has provided one other example of a required feature
that it believes establishes the insufficiency of the SL-1XN memory.
This is the requirement for 5 percent of the lines to place incoming
calls on hold (with an explanatory recorded message) when all facilities
are busy and to distribute the calls when lines become available. South
Central Bell provided no detail regarding the system memory required for
this feature, and we therefore find that it did not meet its burden of
establishing that the NTI proposal is deficient in this respect.
We deny the protest.
Harry R. Van Cleve
General Counsel
(1) In addition, South Central Bell questioned the technical
acceptability of the proposal submitted by AT&T Information Systems.
AT&T's proposal was found technically unacceptable by the Air Force and
this finding was not protested by AT&T. Consequently, AT&T is not in
line for award, and we need not consider South Central Bell's protest in
this regard.
(2) The Defense Acquisition Regulation is applicable to this
procurement because the RFP was issued before the April 1, 1984
effective date of the Federal Acquisition Regulation, 48 C.F.R. Chapter
1 (1984).
B-216899, Oct 31, 1984, 84-2 CPD 494
CONTRACTS - Protest - General Accounting Office procedures -
Timeliness of protest - Solicitation improprieties - Apparent prior to
bid opening/closing date for proposals
DIGEST:
Protest that the procuring agency allowed an insufficient amount of
time to prepare proposals after issuing a significant amendment is
untimely where not filed prior to the amended closing date.
NBI Inc.:
NBI Inc. protests the award of any contract under request for
proposals (RFP) No. SB85NBS0001, issued by the Department of Commerce
for a word processing/text editing system. NBI contends that Commerce
allowed insufficient time for responding to the RFP after issuing a
significant amendment on October 10. The amendment extended the closing
date to October 15. The protest, which was filed on October 22, is
untimely.
Our Bid Protest Procedures require that protests based on alleged
solicitation improprieties which do not exist in the initial
solicitation but which subsequently are incorporated therein be
protested prior to the next closing date for receipt of proposals
following the incorporation. 4 C.F.R. sec. 21.2 (1984). As the alleged
deficiency here concerns the closing date incorporated by the amendment,
it clearly was evident from the face of the amendment. If NBI believed
the closing date was improper, it should have so protested prior to that
date. It did not do so, and its protest at this juncture will not be
considered on the merits. See Colonial Ford Truck Sales, Inc.,
B-214239, Feb. 10, 1984, 84-1 CPD para. 174.
The protest is dismissed.
FILE: B-216898 85-2 CPD 334
DATE: September 25, 1985
MATTER OF: Raytheon Support Services Company
GENERAL ACCOUNTING OFFICE - JURISDICTION - CONTRACTS - IN-HOUSE
PERFORMANCE V. CONTRACTING OUT - COST COMPARISON - APPEAL OF AGENCY
ANALYSIS
1. Agency procedures for administrative review of the results of
Office of Management and Budget Circular No. A-76 cost comparison
studies, including the membership of appeals boards, are matters of
executive policy and not within the scope of review in a bid protest.
CONTRACTS - IN-HOUSE PERFORMANCE V. CONTRACTING OUT - COST COMPARISON
2. In order to prevail on a protest against an agency decision to
perform in-house, rather than contract out, the prospective contractor
must demonstrate not only that the agency failed to follow proper cost
comparison procedures, but also that this failure materially affected
the outcome of the cost comparison.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE FUNCTION -
INDEPENDENT INVESTIGATION AND CONCLUSIONS - LIMITATIONS
DIGEST:
3. General Accounting Office does not conduct investigations in
connection with its bid protest function for the purpose of establishing
the validity of a protester's assertions. Consequently, GAO will not
investigate whether an agency's in-house performance is in accord with
the performance work statement used to determine the cost of contracting
out.
Raytheon Support Services Company protests the Department of the Air
Force's decision to operate the base supply system at Kirtland Air Force
Base, New Mexico, itself, rather than by contracting out. This decision
was a result of the Air Force's evaluation of proposals submitted under
request for proposals (RFP) No. F29650-84-R-0019.
We deny the protest in part and dismiss it in part.
BACKGROUND
The Contracting Center at Kirtland issued the RFP as part of an
Office of Management and Budget (OMB) Circular No. A-76 cost comparison.
It provided that the determination of whether to contract out would be
based upon a comparison of the estimated cost of performing in-house
with the lowest priced, technically acceptable proposal.
Kirtland received 14 proposals by the March 30, 1984, initial closing
date. Following discussions and receipt of best and final offers, the
contracting officer determined that Raytheon's was both technically
acceptable and the lowest priced ($9,492,899 for the 10-month base
period and two 1-year options). Upon completion of a successful
preaward survey, Kirtland notified Raytheon of the possibility of a
contract award.
The government cost estimate, prepared by the Manpower and
Organization Branch at Kirtland, also was submitted on the initial
closing date. The contracting officer held it unopened until completion
of the evaluation of proposals. On May 2, the Headquarters, Military
Airlift Command, notified Kirtland that because offerors had been told
that the cost of furnishing safety shoes should be included in their
proposals, a sealed envelope containing the government's estimate of
this additional cost should be submitted to the contracting officer. On
May 10, however, the Manpower and Organization Branch submitted a second
complete estimate, including additional costs of $6,223.
The contracting officer used this second estimate in conducting the
cost comparison. After adjusting Raytheon's offer as required by cost
comparison procedures, the contracting officer concluded that the total
cost of contracting out would be $10,748, 342, compared with $10,362,026
for performing the work in-house. Due to this $386,316 difference, on
July 24, 1984, Kirtland informed Raytheon that it intended to operate
the supply system in-house.
Raytheon appealed this decision to the Contracting Center, arguing
primarily that it had been improper for the government to revise its
cost estimate completely after the initial closing date; that the
government proposal had not been prepared in accord with the manpower
requirements of the performance work statement; and that the
government's cost comparison had understated the cost of in-house
operation and overstated the adjustments associated with contracting
out. Following an analysis of Raytheon's complaint by a Cost Comparison
Appeal Review Team, the Contracting Center affirmed the original
decision to perform the supply function in-house. Raytheon appealed
this decision to Headquarters, Military Airlift Command. In its appeal,
Raytheon also contended that the Kirtland review team had included some,
if not all, of the same people who had been involved in the original
cost comparison and implied that they therefore were biased. An
Administrative Appeals Review Board concluded that the decision to
perform Kirtland's supply operation in-house had been correct.
Raytheon's subsequent protest to our Office raises the same issues that
the firm presented to the Air Force.
Initially, we note that our role in reviewing agency decisions to
contract for services or to perform them in-house is limited to
ascertaining whether the agency adhered to the procedures set forth in
the procurement regulations and in solicitations issued to obtain offers
that provide the basis for cost comparisons. See D-K Associates, Inc.,
62 comp. Gen. 129 (1983), 83-1 CPD Paragraph 55. However, we consider
agency procedures for administrative review of cost comparison results,
including the establishment of appeals boards pursuant to OMB Circular
No. A-76, to be matters of executive policy and not within the scope of
our review in a bid protest. CF. Joule Maintenance Corp., B-208684,
Sept. 16, 1983, 83-2 CPD Paragraph 333 NGAO will not review allegations
concerning composition of appeals boards when solicitation contains no
criteria for this group). We therefore dismiss Raytheon's protest on
this basis.
In order to prevail on the other grounds, Raytheon must demonstrate
not only that the Air Force failed to follow proper procedures, but also
that this failure materially affected the outcome of the cost
comparison. This requires the presentation of sufficient, unrebutted
evidence to raise a reasonable doubt as to the result of the cost
comparison. See Infosystems, Inc., B-209900, Aug. 2, 1983, 83-2 CPD
Paragraph 155.
REVISION OF GOVERNMENT COST ESTIMATE
Raytheon's first basis of protest is that the second government cost
estimate, submitted after the initial closing date, is, in effect, a
late proposal. Raytheon alleges that its submission violated Air Force
Regulation 26-1 (October 2, 1981), which requires that the in-house cost
estimate be sent to the contracting officer in a sealed envelope by the
time stated in the solicitation for the receipt of proposals and then be
held unopened until the commercial offer most advantageous to the
government has been determined. Raytheon argues that the Air Force may
have completely revised its estimate after it reviewed Raytheon's
proposal, rather than merely adding the cost of the safety shoes.
While the cited regulation prohibits opening or modifying the
document on which the government's original cost estimate is recorded,
we find no restriction on additions or deletions to the government
estimate necessitated by clarification or modifications of the statement
of work. Obviously, requiring the Air Force to include in its estimate
costs that offerors had been instructed to include in their proposals
was necessary to ensure the fairness and accuracy of the cost
comparison. We have reviewed both the original and revised cost
estimates. Since the additional $6,223 in the second is identified as
"operations overhead," it is not clear that the figure represents only
the cost of safety shoes. Nevertheless, the government estimate was
increased, rather than decreased, so that the second submission did not
adversely affect Raytheon in the cost caomparison. We deny Raytheon's
protest on this basis.
MANPOWER REQUIREMENTS
Raytheon next alleges that the government cost estimate was not in
accord with the performance work statement, in that manpower for 23 work
categories is inadequate. Raytheon bases this allegation on differences
between manpower requirements used in preparing the government cost
estimate and those in a study of Kirtland supply activities by an Air
Force consulting group, the Air Force Maintenence, Supply and Munitions
Management Engineering Team.
Using Air Force-wide data, this consulting group prepared an estimate
of the number and categories of civilian personnel required to operate
the supply system at Kirtland and at three other bases where the Air
Force had previously decided it would no longer use military personnel
for this function. The record indicates that Kirtland used the
consulting group's estimates as a baseline in preparing the government
cost estimate, but added or subtracted man-hours as specific local
conditions dictated. These differences are explained in a management
study prepared at Kirtland in order to determine the most efficient and
effective ways of performing the work. (This type of management study
is required by OMB Circular No. A-76.) Raytheon contends that many of
Kirtland's changes from the consulting group's estimate were not
justified, and that the government cost estimate should be increased
accordingly. As we discuss below, Raytheon has not established that the
manpower requirements used in formulating the government estimate are
unreasonable, and we deny the protest on this basis.
1. Automatic Data Processing
Kirtland used the same manpower requirements for automatic data
processing (ADP) and punch card accounting activities as the consulting
group. Raytheon points out that the consulting group assumed the use of
a different computer system than the UNIVAC 1050-II included in the
performance work statement and argues that additional manpower will be
required. The Air Force responds that it discovered this error more
than a month before submission of the government cost estimate and
reevaluated the manpower requirements at that time. Kirtland concluded
that substantial savings could be achieved with decentralized keypunch
activities and that its original manpower estimates were accurate for
the new UNIVAC computer system.
Raytheon's only rebuttal is that Kirtland's detailed justification is
"strictly an opinion on the part of the Government." Such disagreement
with an agency's technical opinion, without more, does not render the
opinion unreasonable. Photonics Technology, Inc., B-200482, Apr. 15,
1981, 81-1 CPD Paragraph 288 at 8. In addition, we note that for this
category of work, Raytheon and Kirtland projected approximately the same
manpower requirements, providing strong evidence that the government
cost estimate is reasonable.
2. Full-time Personnel
Raytheon argues that the government estimate does not include costs
for a full-time stock control manager or chiefs for four different
branches: Management and Procedures, Material Storage and Distribution,
Material Management and Support, and Fuels Management. Raytheon also
contends that the individuals who perform these jobs for Kirtland also
be assigned typing, grounds maintenance, and other duties inappropriate
to their positions. We have reviewed the Kirtland management study that
supports the government cost estimate, and we find that the government
estimate did include these full-time positions and that the individuals
who fill them will perform managerial or supervisory tasks.
3. Indirect Functions
The Air Force consulting group projected a requirement for 17
positions to perform indirect support functions, including
administrative tasks and supervision. In its own management study
supporting the government cost estimate, however, Kirtland stated that
many of these tasks could be performed by personnel performing direct
functions and that, by consolidating organizational subunits,
intermediate supervision could be reduced below the level projected by
the consulting group. As a result, the government cost estimate
included only two indirect support positions.
Raytheon argues that positions to which Kirtland assigned indirect
functions are already fully devoted to direct tasks. The record,
however, indicates that none of the positions included in the government
cost estimate were allocated more than the required maximum number of
hours per week. Raytheon also contends that Kirtland cannot avoid
performance of the indirect requirements identified by the consulting
group. However, that group's manpower estimate was based upon Air
Force-wide tasks and a work center organization not adopted by Kirtland.
4. Miscellaneous Reductions in Manpower
Raytheon has questioned 11 additional manpower reductions in the
government cost estimate. These reductions were identified and
explained in Kirtland's management study. They involved instances in
which the Air Force consulting group included tasks inapplicable to
Kirtland, such as "shipments" in the pickup and delivery work center.
Kirtland also will make reductions through innovations such as the use
of a mobile fuels control center that can both deliver fuel and dispatch
other vehicles.
The protester has established that the government cost estimate was
in error in one reduction. After completion of the consulting group
study, almost all support for Kirtland's civil engineering activities
was omitted from the performance work statement. The government cost
estimate, however, omitted all such support. Raytheon points out that
manpower for the civil engineering support that remained in the
performance work statement should have been included in Kirtland's
estimate. The Administrative Appeals Review Board recognized that
Raytheon was correct, but it differed with the protester regarding the
monthly man-hours attributable to this support. Accepting Raytheon's
contention that an additional 34.56 man-hours a month are involved, and
assuming that this requires an additional employee, we find that the
addition of this employee would not change the result of the cost
comparison in view of the $386,316 differential between in-house
performance and Raytheon's offer.
COST ADJUSTMENTS
Raytheon also argues that the government cost estimate understated
the cost of in-house operation and overstated certain adjustments
associated with contracting out. Specifically, the protester contends
that the government (1) miscalculated the distribution of grade levels
for government civilian employees; (2) failed to escalate certain
government personnel labor costs for inflation; (3) did not provide
sufficient funds to cover overtime for civilian employees; and (4)
failed to calculate accurately the impact of retained pay on either the
government estimate or the cost of contracting out.
1. Distribution of Grade Levels
Raytheon believes that the Air Force may have developed an
unrealistically low labor cost figure for the 155 positions planned for
the government's civilian work force. Projected salaries for 100 of
these positions were at the grade level of vacant positions. Raytheon
assumes that many of these positions have actually been filled by
current Air Force employees whose wages may be higher. Raytheon
attributes $158,565 in underestimated costs to this alleged inaccuracy.
The Air Force states that 75 of the positions cited by Raytheon were
vacant and that the projected salaries for the other 25 were those
actually paid to the incumbents. In our view, Raytheon's supposition is
insufficient to raise a reasonable doubt that correct procedures were
followed by the Air Force.
2. Salary Escalation
Raytheon argues that the labor costs for 12 government management/
supervisory positions should be adjusted upward for the second and third
years of performance to accommodate anticipated inflation. According to
Raytheon, offerors were required to escalate the salaries of certain
management positions for the second and third years because those
positions were not subject to the Service Contract Act. Raytheon
believes that the Air Force should make a similar addition to its cost
estimate.
The Administrative Appeals Review Board concluded that Raytheon might
be correct but, if so, the government cost estimate would increase by
only $31,092. This amount is approximately the same as the adjustment
proposed by Raytheon, and it does not affect the cost comparison
outcome.
3. After-Hours Support and Overtime
Raytheon also alleges that Kirtland proposed insufficient support for
periods outside of regular work hours (after-hours support) and did not
include costs for overtime in the government cost estimate. Kirtland
concluded that after-hours support for pickup and delivery of supplies
did not justify a full-time employee and planned for this activity to be
performed by employees assigned to another function. This practice had
been implemented at the time of the consulting group's study, which
estimated the same need for after-hours support as did Kirtland. Also,
Kirtland estimated that no overtime would be required since no overtime
has been recorded in supply activities for the past years. Some
employees may have worked overtime and Kirtland plans to continue this
practice where necessary. We do not consider the government cost
estimate to be unreasonable in this respect.
4. Retained Pay
OMB Circular No. A-76 requires agencies to include in a cost
comparison as one-time costs added to the contractor's price any
additional direct labor costs that the government will incur as a result
of contracting out. These costs include "retained pay," under which
government employees who have been downgraded are paid their former
salaries for a certain period of time. Raytheon argues that the Air
Force overestimated the number of government employees who would be
downgraded as a result of contracting out, contrasting retained pay
costs for a similar conversion at Peterson Air Force Base, $59,977, with
those estimated for Kirtland, $298,820. The protester believes that
some employees would retain their grades, while others would retire or
find comparable government positions in the Albuquerque, New Mexico,
area.
For 52 of 65 individuals to be displaced by contracting out, retained
pay estimates were added to Raytheon's price. The Air Force argues that
it is speculative to assume that affected employees will retire or find
new positions at their old grade levels. Kirtland considered the
competitive employment area for its employees to be Air Force
organizations located on the base, pointing out that a large new
organization with numerous supply positions is scheduled for Peterson
Air Force Base, so that displaced personnel at Peterson may be employed
at their current grades. Consequently, retained pay costs for the
Peterson conversion are logically much lower than those at Kirtland.
Raytheon also believes that performing the supply function in-house
would believes that performing the supply function in-house would result
in some employees being downgraded and receiving retained pay, and that
this is not reflected in the government cost estimate.
Raytheon also believes that performing the supply function in-house
would result in some employees being downgraded and receiving retained
pay, and that this is not reflected in the government cost estimate.
Kirtland used a mock reduction-in-force to develop its own estimate of
the number and grade levels of employees who would be affected by
performance in-house and by contracting out. It states that the
individuals that would be displaced by in-house performance are targeted
for comparable positions in other organizations at Kirtland, so no
retained pay costs are applicable to the government cost estimate.
In our view, this area is largely a judgmental one. Estimates
regarding retained pay involve complex and somewhat subjective judgments
on an agency's part that our Office is not in a position to
second-guess. Facilities Engineering & Maintenance Corp., B-210376,
Sept. 27, 1983, 83-2 CPD Paragraph 381. A protester's disagreement with
the agency's judgment on the employment outlook for its own employees
therefore does not establish that the judgment is unreasonable. See
Video Visions, Inc., B-210010.2, June 26, 1984, 84-1 CPD Paragraph 667
at 6-7.
TASK DESCRIPTIONS
Raytheon also questions the lack of detail included in the Kirtland
management study upon which the government cost estimate was based.
Offerors were required to address several hundred specific tasks
identified in the performance work statement. The Kirtland study
rearranged these tasks to correspond with the proposed organizational
structure at the base and cross-referenced the work statement where
possible. According to Raytheon, the relationship between these tasks
and the performance work statement is not always clear, and some work
statement tasks are omitted from Kirtland's format. The protester
points out that it took 750 pages in its proposal to explain how it
intended to implement the performance work statement and argues that
Kirtland should have followed the outline of the work statement and
provided the same amount of detail.
OMB Circular No. A-76 requires management studies done for cost
comparison purposes to document the development and extent of the
analytical process used and to record any new organizational structure.
We also have concluded that it is essential for agencies to identify and
document all elements of the comparison. MAR, Inc., B-205635, Sept. 27,
1982, 82-2 CPD Paragraph 278. This requirement helps to ensure that the
government and offerors base their cost estimates upon the same scope of
work. Agencies, however, are not required to provide the same level of
detailed explanation, including use of required formats, as are offerors
preparing bids or proposals. We therefore do not believe the
organization of the tasks or the level of detail with which they are
discussed in the Kirtland management study establishes that the cost
comparison was inaccurate.
COMPLIANCE WITH PERFORMANCE WORK STATEMENT
Finally, Raytheon requests that we check the actual staffing by the
Air Force in performing the supply function at Kirtland and determine
wheter the agency is meeting the requirements of the performance work
statement. Our Office does not conduct investigations in connection
with its bid protest function for the purpose of establishing the
validity of a protester's assertions. Easco tools, Inc.; Easco Hand
Tools, Inc., B-212783, B-212907, Jan. 19, 1984, 84-1 CPD Paragraph 83.
In addition, once an agency undertakes performance as a result of a
valid cost comparison, the method of performance is an internal agency
matter, no longer reviewable in connection with a bid protest.
CONCLUSION
The only possible errors in Kirtland's cost estimate raised by
Raytheon, relating to omission of support for civil engineering and
escalation of salaries for management positions, are relatively minor
and would not affect the validity of the cost comparison because
in-house performance would remain less expensive than contracting out.
Adjustment of the government cost estimate in these areas would not
change the evaluation result.
The protest is denied in part and dismissed in part.
/s/ Harry R. Van Cleve
General Counsel
B-216897, Nov 28, 1984, 84-2 CPD 585
CONTRACTS - Protest - General Accounting Office procedures -
Timeliness of protest - Date basis of protest made know to protester
DIGEST:
Protest that sole-source award of contract was improper is untimely
where filed more than 8 months after date of publication of notice in
Commerce Business Daily (CBD) of decision to negotiate with one source,
since protester is charges with constructive notice of CBD announcement
and protest was not filed within 10 days after basis of protest was know
or should have been known.
OMNI Technology:
OMNI Technology protests the sole-source award of a contract to
Assurance Technology Corp. under request for proposals No.
N00014-84-R-0045 issued by the Department of the Navy, Office of Naval
Research. The contract is for electronic and electromechanical parts
for the payload data management system scheduled for flight aboard the
space shuttle in 1986 and was awarded to Assurance as a modification to
an ongoing contract for services and supplies of the same type. OMNI
contends that it should have been given the opportunity with Assurance
for the award of the contract.
We dismiss the protest in accordance with 4 C.F.R. Sec. 21.3(g)
(1984) of our Bid Protest Procedures, which provides that, where the
propriety of dismissal becomes clear only after information is provided
by the agency, the protest may be dismissed at that time without further
development.
OMNI's protest dated October 18, 1984, was filed with our Office on
October 22. Notice that sole-source negotiations with Assurance would
be conducted was synopsized in the Commerce Business Daily (CBD) of
February 6, 1984. The Navy began negotiations with Assurance in July
and awarded that firm the contract on September 10. Notice of the award
was published in the CBD on October 13.
Our Bid Protest Procedures require that protests be received in our
Office or the contracting agency within 10 working days after the basis
for protest is known or should have been known, whichever is earlier. 4
C.F.R. Sec. 21.2(b)(2) (1984). Moreover, protesters are charged with
constructive notice of announcements published in the CBD. Econometric
Research, Inc., B-213947, Jan. 23, 1984, 84-1 CPD Para. 103. Therefore,
OMNI should have known of the Navy's decision to negotiate on a sole
source basis with Assurance as a result of the CBD notice of February 6.
The fact that OMNI filed this protest on October 22, more than 8 months
later, renders the protest untimely. See WGBH Educational Foundation,
B-211092, July 21, 1983, 83-3 CPD Para. 105. COMP GEN (UP)
B-216896, Nov 26, 1984, 84-2 CPD 560
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Solicitation improprieties - Apparent prior to
bid opening/closing date for proposals
DIGEST:
Protest against solicitation specifications received by GAO after the
time set for bid opening is not timely.
L.A. Spievak Corp.:
L.A. Spievak Corp. (Spievak) protests the specifications under
invitation for bids (IFB) FEP-CP-FO256-A issued by the General Services
Administration (GSA). The solicitation is for the supply of a quantity
of precision measuring devices. No award has been made.
GAO advises that bids under the solicitation were opened at 11 a.m.
on August 10, 1984. On October 11, 1984, Spievak filed its protest that
the solicitation's performance specifications were "arbitrary and
unworkable."
Our Bid Protest Procedures provide that protests of alleged
improprieties in a solicitation which are apparent prior to bid opening
must be filed in our Office prior to that date. 4 C.F.R. Sec. 21.2(b)(
1) (1984). See Carrier Air Conditioning, B-208069, July 12, 1982, 82-2
C.P.D. Para. 46.
Spievak has not provided us with anything which would indicate that
product specifications and any objections thereto were other than
ascertainable from reading the solicitation prior to bid opening.
Therefore, since the basis of Spievak's protest was apparent before bid
opening, but filed after bid opening, Spievak's protest is untimely.
Accordingly, the protest is dismissed. COMP GEN (UP)
FILE: B-216893, B-216908 85-1 CPD 269
DATE: March 4, 1985
MATTER OF: Environmental Science and Services Corporation; NHC Wind
Engineering
DIGEST:
CONTRACTS - PROTESTS - ALLEGATIONS - UNSUBSTANTIATED
1. Protest alleging that awardee's proposal to use a leased wind
tunnel did not conform to solicitation is denied, since solicitation
required only that wind tunnel facilities be available to offerors.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
REASONABLE
2. Protest challenging agency's evaluation of protester's and
awardee's proposals is denied where protester failed to support its
contentions that agency's evaluation of its wind tunnel facilities and
staffing proposal lacked a reasonable basis, and, in any event, agency
found protester's proposal inferior to awardee's on numerous other
grounds not challenged by protester.
CONTRACTS - NEGOTIATION - AWARDS - TO OTHER THAN LOW BIDDER
3. Agency's decision to award contract to higher-cost offeror is
reasonable where cost difference between offers was modest and agency
found that the technical superiority of awardee's proposal justified
award at higher estimated cost.
Environmental Science and Services Corporation (ESSCO) and NHC Wind
Engineering protest the award of a contract to Technology Intergration
and Development Group, Inc. (TIDG), under request for proposals (RFP)
No. DTFH61-84-R-00080, issued by the Federal Highway Administration for
a cost-type contract for a research study related to highway air
pollution. ESSCO contends that the agency improperly evaluated certain
aspects of both its and the awardee's technical proposals. NHC contends
both that TIDG's proposal did not satisfy an alleged requirement in the
RFP that offerors own a wind tunnel, and that the procurement was biased
in favor of TIDG. We deny both protests.
The RFP, issued as a small business set-aside, called for offerors to
conduct a study entitled "Modification of Highway Air Pollution Models
for Complex Terrain and Site Geometry." The purpose of the study is to
develop a new model dealing with air quality evaluations for complex
terrain and road locations. The RFP listed six tasks to be performed by
the contractor involving extensive use of atmospheric wind tunnel tests.
The offerors were to furnish all facilities, materials and personnel
necessary to produce the study. Offers were to include a technical
proposal, staffing proposal, and cost proposal.
The agency received proposals from six offerors, of which five were
found technically acceptable. The initial proposals submitted by TIDG,
ESSCO, and NHC received technical scores of 80, 80, and 79,
respectively. After discussions were conducted, the offerors submitted
their best and final offers, which then were evaluated by the agency.
ESSCO's final offer contained a cost estimate of $209,560, TIDG proposed
an estimate of $231,319 and NHC proposed $238,484. The agency concluded
that ESSCO's final proposal was significantly inferior to its initial
proposal due to changes ESSCO made in the technical, staffing, and cost
components. In comparison, TIDG was found to have maintained the
quality of its initial proposal, and based on its overall technical
superiority, the agency concluded that award should be made to TIDG even
though its cost estimate was not low.
The study called for by the solicitation required extensive use of
wind tunnel facilities. The awardee, TIDG, proposed leasing a wind
tunnel for use in the project. NHC argues that the solicitation
required offerors to own the wind tunnel they would be using, and thus
concludes that TIDG's offer to perform using a leased wind tunnel should
have been rejected.
NHC also contends that TIDG had an unfair advantage over NHC and
other offerors which own wind tunnels because it does not have to bear
the costs associated with ownership. NHC argues that, in light of this
alleged cost advantage, the award to TIDG was contrary to the purpose of
conducting the procurement as a small business set-aside.
As support for its contention that the solicitation required offerors
to own the wind tunnel they proposed to use, NHC relies on the following
provision in part IV, section L of the RFP:
"NOTE: The offeror must have existing appropriate atmosphere wind
tunnel with needed wind controls, geometric forms, and means to
release and measure tracer gas concentrations for steady state
operation."
The agency states that it did not intend to limit the competition to
offerors that own wind tunnel facilities, and in our view this provision
does not require ownership. Rather, as the agency reports, the
provision requires only that offerors have available to them the wind
tunnel facilities necessary to perform the work required. Similarly, we
see no reason why the fact that the procurement was conducted as a small
business set-aside would obligate the agency to require offerors to own
a wind tunnel, or to favor those offerors owning wind tunnels.
As discussed more specifically below, the gist of ESSCO's protest is
that the agency improperly evaluated the technical merit of its and
TIDG's proposals, with ESSCO's proposal being rated too low and TIDG's
too high. Review by our Office of such a challenge to a agency's
technical evaluation is of limited scope. Our function is not to
reevaluate the proposals and make our own determination as to their
relative merits; rather, that function is the responsibility of the
contracting agency which must bear the burden of any difficulties
resulting from a defective evaluation. Foley Company, B-212378.7, Feb.
13, 1984, 84-1 CPD Paragraph 178. In evaluating proposals, contracting
officials enjoy a reasonable range of discretion in determining which
offer should be accepted for award, and their determination will not be
questioned by our Office unless there is a clear showing of
unreasonableness, an abuse of discretion, or a violation of the
procurement statutes and regulations. METIS Corporation, 54 Comp. Gen.
612 (1975), 75-1 CPD Paragraph 44.
The agency concluded that the wind tunnels proposed to be used by
TIDG and ESSCO were equivalent; ESSCO contends that its wind tunnel is
superior to TIDG's. The only evidence ESSCO offers to support its
contention is its general assertion that owning a wind tunnel, as ESSCO
does, is superior to leasing one, as TIDG proposed, due to the greater
degree of control over a wind tunnel's operations which, ESSCO argues,
only an owner enjoys. In our view, however, control over a wind
tunnel's operations does not belong only to the owner of the wind
tunnel; to the contrary, ESSCO has not shown why an offeror like TIDG,
which leases a wind tunnel, would have less control than an owner over
the tunnel's operations for the period of its lease. Consequently, we
see no reason to question the evaluators' judgment in this matter.
ESSCO also asks that we discuss the relative merits of the two wind
tunnels with certain technical experts, implying that they will support
ESSCO's position that TIDG's wind tunnel is inferior. It is not our
practice, however, to conduct such an investigation pursuant to our bid
protest function for the purpose of establishing the validity of a
protester's speculative statements. Austin Company, Advanced Technology
Systems, B-212792, Mar. 1, 1984, 84-1 CPD Paragraph 257.
ESSCO further contends that TIDG's wind tunnel described in its
proposal was not in fact operational at the time proposals were
submitted and that, as of the time of award, the facility did not meet
certain technical requirements of the RFP, and thus will not perform as
required. Here, ESSCO doe not appear to question the agency's relative
assessment of the merits of TIDG's proposal but contests the agency's
determination, made after proposal evaluation, that TIDG actually has
the capacity to perform in accordance with the RFP specifications. See
Delta Data Systems Corp., B-213396, Apr. 17, 1984, 84-1 CPD Paragraph
430. This pertains to the agency's affirmative determination of TIDG's
responsibility. Our Office does not review such determinations except
where there is a showing of possible fraud on the part of the
contracting officials or where the solicitation contains definitive
responsibility criteria which allegedly have not been applied. E.g.,
Gillette Industries, Inc., B-205476.2, Jan. 5, 1982, 82-1 CPD Paragraph
13. ESSCO does not argue that either of these exceptions applies here.
In addition, whether TIDG actually will perform in accordance with the
RFP is a matter of contract administration which is the responsibility
of the contracting agency, and is not considered under our bid protest
procedures. E.g., Decision Sciences Corp., B-205582, Jan. 19, 1982,
82-1 CPD Paragraph 45.
The agency concluded that the principal technical experts named in
TIDG's proposal were equivalent to those proposed by ESSCO, while TIDG's
support staff was found to be considerably better than ESSCO's. ESSCO
contends, however, that TIDG's professional team is inferior to ESSCO's
team because TIDG is a new company consisting of a prime contractor and
three subcontractors. In the absence of any evidence in the record to
support ESSCO's speculation that TIDG's status as a newly-formed
business entity affected the quality of its proposed staff, we see no
reason to question the agency's evaluation of TIDG's professional team.
ESSCO next contends that when the agency reevaluated its proposal on
the basis of its best and final offer, the agency improperly lowered its
rating based on a reduction in the number of work hours ESSCO proposed
to dedicate to the project. ESSCO maintains that its technical rating
should not have been lowered because the reduction in work hours was not
significant -- from 3240 to 3196 hours, a total of 44 hours.
The record shows, however, that ESSCO's elimination of 44 staff hours
was not the principal reason for the lowered rating of its staffing
proposal. Rather, ESSCO's final staffing proposal was downgraded
primarily because ESSCO changed the distribution of total work hours
among its staff members, most significantly by limiting the role of key
technical experts whose proposed participation had accounted for the
higher rating given to ESSCO's initial proposal. Thus, the agency based
its reevaluation of ESSCO's final staffing proposal more on the
qualitative change in its proposed staffing than on the reduction in the
number of total hours, as ESSCO contends.
ESSCO also argues that, in computing the total hours offered, the
agency should have included 700 work hours ESSCO says it expended in
developing certain experimental computer models and data bases included
at no cost as part of ESSCO's proposal. The agency states that,
although it considered the models and data bases as evidence of ESSCO's
general experience and knowledge in the field, it lacked sufficient
familiarity with ESSCO's efforts to develop the models and data bases to
assign them a specific dollar or work hour value. While the agency
properly considered the models and data bases when assessing ESSCO's
general technical expertise, we find nothing in the solicitation which
would further obligate the agency to calculate the number of hours spent
in developing them.
In any event, the agency's downgrading of ESSCO's final proposal was
based not only on the number of work hours and other features of its
staffing proposal, but also on a reduction in the amount of wind tunnel
time proposed by ESSCO and the elimination of any costs for computer
usage, both critical elements in performing the requested work. ESSCO
does not challenge the agency's assessment of these features of its best
and final offer. Thus, in addition to haveing failed to support its
specific contention that its staffing proposal was improperly evaluated,
we find that ESSCO clearly has failed to show that the agency's
evaluation of its proposal as a whole lacked a reasonable basis.
Finally, ESSCO maintains that it should have been selected for award
because it proposed a lower estimated cost than did TIDG. There is no
requirement that an agency award a cost-type contract on the basis of
the lowest proposed cost. Talley Education Services, Inc., B-211936,
Feb. 14, 1984, 84-1 CPD Paragraph 188. 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. SISA
Pharmaceutical Laboratories, Inc., B-214314, Dec. 3, 1984, 84-2 CPD
Paragraph 595. 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 CPD 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 CPD Paragraph 25.
The determining element is the considered judgment of the procurement
officials concerning the significance of the diffenence 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 CPD Paragraph 318.
Here, the RFP provided only that relative costs would be considered
in addition to the technical evaluation criteria. As discussed in
detail above, the agency found TIDG's final proposal technically
superior to ESSCO's in numerous respects. The record also shows that,
in evaluating the two proposals, the agency considered the relative
costs of ESSCO's and TIDG's proposals and condluded that the technical
merit of TIDG's proposal justified award at TIDG's higher estimated
cost. In view of TIDG's technical superiority and the relatively modest
cost differential between the two offers ($21,759), we find no basis on
which to question the agency's selection of TIDG's proposal.
NHC contends that the procurement was biased in favor of TIDG. In
support of this contention, NHC states that, after it received the RFP,
it "heard" that one of TIDG's subcontractors, Environmental Research and
Technology (ERT), had helped write the specifications in the RFP. NHC
also states that it learned that the windtunnel being leased by TIDG had
been donated to Boston University after the solicitation was issued, by
a company associated with a member of TIDG's professional team. NHC
maintains that ERT's alleged participation in drafting the
specifications, and the fact that the timing of the solicitation and
award coincided with donation of the wind tunnel to Boston University,
indicate that award to TIDG was predetermined.
We find NHC's allegations to be without merit. The protester has the
burden of affirmatively proving bias on behalf of the contracting
agency; unsupported allegations do not satisfy this burden. E.g., J.
L. Associates, Inc., B-201331.2; Feb. 1, 1982, 82-1 CPD Paragraph 99.
Here, the agency states that ERT did not participate in drafting the
specifications as NHC contends. NHC offers no evidence to the contrary
beyond its bare allegation, admittedly based on hearsay, that ERT did
participate in the drafting. Further, there is no indication of agency
participation or interest in the donation of the wind tunnel
subsequently leased by TIDG, and we fail to see how the fact that the
donation of the tunnel took place between issuance of the RFP and award
to TIDG possibly could indicate bias on the agency's part.
The protests are denied.
Harry R. Van Cleve
General Counsel
FILE: B-216891 85-1 CPD 443
DATE: April 18, 1985
MATTER OF: Chestnut Hill Construction, Inc.
BIDS - LATE - HAND CARRIED DELAY - REJECTION OF BID
1. GAO denies a complaint against a local housing authority's
rejection of a late bid that was hand carried to the designated office
after the scheduled opening time when there is no evidence that the
lateness was due to improper government action.
BIDS - COMPETITIVE SYSTEM - PRESERVATION OF SYSTEM'S INTEGRITY -
PECUNIARY DISADVANTAGE TO GGOVERNMENT
2. Importance of maintaining the integrity of the competitive
bidding system outweighs any monetary savings that would be obtained by
considering a late bid.
Chestnut Hill Construction, Inc. complains of the award of a contract
to Eckman Construction Company under project No. NH36-P008-003 of the
Housing Authority of Rochester, New Hampshire. The contract to
construct the Wyandotte Mill Project, which is low-rent, multifamily
housing for the elderly, is funded by the Department of Housing and
Urban Development (HUD) under the United States Housing Act of 1937, as
amended, 42 U.S.C. Section 1437 (1982) and the Department of Housing and
Urban Development Act, as amended, 42 U.S.C. Section 3531. Chestnut Hill
contends that the Housing Authority improperly rejected its bid as late.
We deny the complaint.
At the outset, we note that until recently, we have accepted
complaints concerning procurements by local housing authorities and
other recipients of federal financial assistance to ensure that
contracts awarded by them comply with any requirements of law,
regulation, or the terms of the agreement between the federal government
and the recipient of funds. We discontinued our consideration of such
complaints on January 29, 1985. See 50 Fed. Reg. 3978 (1985); The
George Sollitt Construction Co., B-218101, Feb. 6, 1985, 64 Comp. Gen. .
. . , 85-1 CPD Paragraph 150. Since Chestnut Hill's complaint was filed
before that date, however, we will review it.
The record here indicates that bid opening was scheduled for 2 p.m.
on September 11, 1984. A representative of Chestnut Hill signed in at
the Housing Authority's administrative office at 1:58 p.m., but rather
than submitting a bid at that time, went into another office and
telephoned Chestnut Hill to obtain a final quote. She then prepared the
quote sheet and bid bond, proceeded to the room where bids were to be
opened, and placed the sealed bid on the table before the Housing
Authority chairman. HUD reports that this occurred between 2:01 and 2:
03 p.m. The chairman opened three bids, including the apparent low one
from Chestnut Hill. After the second-low bidder, Eckman, protested that
Chestnut Hill's bid should not have been opened because it had not been
submitted by 2 p.m. as required by the solicitation, the Housing
Authority rejected it as late.
Chestnut Hill states that the chairman approached its representative
while she was on the telephone and said, "I must have your bid now or it
will be too late." The firm contends that the bid should have been
accepted since it was submitted before the chairman announced formally
that no more bids would be accepted or, alternatively, that the chairman
waived its lateness by opening it along with the other two
timely-submitted bids. Chestnut Hill further contends that the Housing
Authority is authorized to excuse any irregularities in the bidding and
should consider its bid, even if late, because of a potential $110,000
savings to the government.
The parties have not cited, and we are not aware of, any New
Hampshire statutes concerning competitive bidding on municipal
contracts. In the absence of contrary state law, our Office generally
applies basic tenets of federal procurement law to cases such as this.
See E.P. Reid, Inc., B-189944, May 9, 1978, 78-1 CPD Paragraph 346. In
addition, we will consider the policies set forth in the HUD Handbook
entitled "Low-Rent-Public Housing Construction," which require any bid
received after the time set for opening to be rejected and returned
unopened.
Bids that are in the hands of the bid opening officer or any
designated official by the scheduled opening time may be considered for
award. See Hyster Co., 55 Comp. Gen. 267 (1975), 75-2 CPD Paragraph
176. The absence of formal announcement that no further bids would be
accepted is irrelevant, since a bid opening officer has no authority to
accept a bid clearly submitted after the deadline. See William F.
Wilke, Inc., 56 Comp. Gen. 419 (1977), 77-1 CPD Paragraph 197;
Specialty Maintenance and Construction, Inc., B-205738, Mar. 4, 1982,
82-1 CPD Paragraph 200. The time when a bid is submitted is determined
by the time that the bidder relinquishes control of the bid. Until that
time, even if the bidder is already at the designated bid opening site,
the bid has not been submitted as required by the solicitation. See
Larry Carlson & Associates, Inc., B-211918, Nov. 21, 1983, 83-2 CPD
Paragraph 599. The only time that a late hand-carried bid may be
accepted is where the lateness is due to improper government action and
where its consideration will not compromise the integrity of the
competitive system. See Moore's Cafeteria Services, Inc., B-205943,
Jan. 12, 1982, 82-1 CPD Paragraph 29.
Here, it is clear that Chestnut Hill's bid was late, and there is no
evidence that the lateness was due to improper action on the part of the
Housing Authority. Further, the fact that the chairman opened the late
bid does not mandate consideration of it. Larry Carlson & Associates,
Inc., supra; Gross Engineering Co. -- Reconsideration, B-193953, Apr.
24, 1979, 79-1 CPD Paragraph 285. Therefore, the Housing Authority
properly rejected the bid as nonresponsive.
Chestnut contends that acceptance of its low bid would result in a
substantial savings to the government. Allowing acceptance of late bid
under these circumstances would be detrimental to the competitive
bidding system, however, and we have often stated that maintaining the
integrity of the competitive bidding system outweighs any monetary
savings that would be obtained by consideration of a late bid.
Northwest Instrument, B-200873, Nov. 18, 1980, 80-2 CPD Paragraph 373.
The complaint is denied.
Comptroller General
of the United States
FILE: B-216887 DATE: November 21, 1985
DIGEST
FEDERAL ACQUISITION REGULALTION - PROPOSED REVISION
GAO approves of a proposal to add a sentence to section 9.405(a) of
the Federal Acquisition Regulation stating that debarred or suspended
contractors are excluded from conducting business with the government as
agents or representatives of other contractors.
November 21, 1985
Ms. Margaret A. Willis
FAR Secretariat
General Services Administration
Dear Ms. Willis:
This responds to your letter of November 4, 1985, requesting our
comments on a proposed addition to section 9.405(a) of the Federal
Acquisition Regulation (FAR). The proposed addition would state that
debarred or suspended contractors are excluded from conductinq business
with the government as agents or representatives of other contractors.
This is FAR case No. 84-33.
We entirely approve of the proposed addition. We will respond later
to your request for comments on FAR case No. 85-49.
Sincerelv yours,
Harry R. Van Cleve
General Counsel
B-216887, Nov 5, 1984, Office of General Counsel
FEDERAL ACQUISITION REGULATION - Proposed revision - Bidders -
Debarment, suspension, etc.
DIGEST:
GAO has no objection to proposed change in Department of Defense
Federal Acquisition Regulation Supplement, subpart 9.4 entitled
"Debarment, Suspension and Ineligibility." This change provides that
contractors will generally be debarred for more than 1 year when the
debarment is based on a felony criminal conviction and any decision by a
debarring official not to debar or to debar for less than 1 year must be
approved by the Secretary concerned or, in the case of defense agencies,
the Under Secretary of Defense for Research and Engineering.
Mr. James T. Brannan
Director
Defense Acquisition Regulatory Council
Dear Mr. Brannan:
By letter dated February 15, 1984, with attachment, your requested
our comments on a proposed change in the Department of Defense Federal
Acquisition Regulation Supplement, subpart 9.4, entitled "Debarment,
Suspension and Ineligibility."
The proposed change provides that contractors will generally be
debarred for more than 1 year when the basis for debarment of the
contractor is a felony criminal conviction. The proposed change further
provides that a decision by the debarring official not to debar or to
debar for a period of 1 year or less must be approved by the Secretary
concerned or, in the case of defense agencies, the Under Secretary of
Defense for Research and Engineering.
We have no objection to the proposed change. COMP GEN (UP)
FILE: B-216886 85-1 CPD 247
DATE: February 27, 1985
MATTER OF: ASEA Inc.
DIGEST:
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
COMPETITIVE RANGE EXCLUSION - REASONABLENESS
1. Offer was properly excluded from competitive range for
informational deficiencies so material that major revisions and
addtiions would be required to make offer acceptable.
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - PROTESTOR NOT
IN LINE FOR AWARD
2. GAO will not consider issue raised by a party that would not be
in line for award even if it were to prevail on the issue and that is
not otherwise an interested party under Bid Protest Procedures.
ASEA Inc. protests the award of a contract to Vaisala, Inc., under
request for proposals (RFP) No. NA-84-DGS-00165, issued by the
Department of Commerce. ASEA contends that its proposal was improperly
excluded from consideration and that Vaisala's offer failed to comply
with the requirements of the RFP.
We deny the protest in part and dismiss it in part.
The RFP sought offers for the supply of laser ceilometers required
for use by the National Weather Service in measuring cloud base heights.
Five companies submitted proposals. The Commerce Department determined
that three proposals, including the one submitted by ASEA, were
technically unacceptable, and the agency eliminated those proposals from
further consideration. Best and final offers were requested from the
two remaining offerors, and an award was made to Vaisala.
The RFP required that technical proposals address each specification
requirement, include a statement of compliance with each requirement,
and include analyses of design/capability and compliance with federal
safety requirements for laser products, as follows:
"(1) Proposal Format. The proposal shall be prepared in the
format of the specification in such a manner that it sequentially,
paragraph by paragraph, addresses itself to all requirements in
the specification, and describes in detail the methods and
approaches the offeror will utilize to satisfy the specification
and RFP requirements. In addition, a statement of compliance with
each specification requirement shall be included.
(2) Technical Information. The offeror shall include in his
proposal his own, or his proposed vendor's specifications
describing in detail how each item meets or exceeds the applicable
requirements of the specification. In particular, the offeror
shall provided:
a) A thorough signal and noise analysis of the projector/
receiver design, demonstrating the capability of detecting cloud
base heights to at least 12,000 feet.
b) A rigorous analysis demonstrating that the laser ceilometer
fully complies with Federal Performance Standards for Laser
Products, 21 CFR 1040.1, for a Class 1 device. . . . The offer
shall demonstrate full compliance to all aspects of 21 CFR
1040.1." (Emphasis supplied.)
In his notification to ASEA that the company's proposal was
technically unacceptable, the contracting officer stated that ASEA had
not described its "methods and approaches" for meeting each
specification requirement or included statements of compliance with each
requirement. The contracting officer also stated that ASEA had failed
to provide either the capability/design analysis for the 12,000 feet
capability or the Federal Performance Standard compliance analysis
specifically required by the RFP.
ASEA contends that the contracting officer did not have a reasonable
basis for excluding its proposal from consideration. The protester
argues that virtually all of the information claimed to be absent from
the proposal was actually included in a product bulletin and technical
manual submitted as a separately bound portion of the proposal.
In reviewing complaints about the evaluation of technical proposals,
and the resulting determination of whether a proposal is within the
competitive range, our own function is not to reevaluate the proposal
and to make our determination about their merits. That determination is
the responsibility of the contracting agency, which is most familiar
with its needs and must bear the burden of any difficulties resulting
from a defective evaluation. 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.; ACL-Filco Corporation, B-211053.2;
0-211053.3, Jan. 17, 1984, 84-1 C.P.D. Paragraph 74. In evaluating
proposals agencies may reasonably exclude a proposal from the
competitive range for "informational" deficiencies which 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 C.P.D. Paragraph 35.
The RFP specifies that offered laser ceilometers must be capable of
measuring cloud base heights up to 12,000 feet. ASEA offered a laser
ceilometer which currently measures cloud base heights to 10,000 feet,
with a proposed modification intended to increase the range of the
ceilometer to 12,000 feet. ASEA attached in a separate volume of its
proposal, labeled "Standard Installation, Start Up and Maintenance,"
technical literature and manuals on its ceilometer with a range of
10,000 feet. The only discussions in the ASEA technical proposal
describing the proposed modification to ASEA's standard ceilometer or
discussing its capability of detecting cloud base heights to 12,000 feet
consists of a one page exhibit entitled "Probability Analysis of
Measuring up to 12,000 Feet with the QL1212 Cloud Ceilometer." In
conclusory terms, the exhibit states that, by increasing the power
output from 15 watts to 18 watts and doubling the laser impulse
duration, the range of the ceilometer will extend to 12,000 feet. We
agree with the contracting officer that the one page "Probability
Analysis" and technical literature about ASEA's current ceilometer model
do not meet the RFP requirement for a "thorough signal and noise
analysis of the projector/receiver design, demonstrating the capability
of detecting cloud base heights to at least 12,000 feet.
ASEA also provided no "rigorous analysis" demonstrating that the
ceilometer will fully comply with federal performance standards. The
protester claims that it is possible to determine compliance using
information cohtained in the technical manual for its current model
ceilometer. ASEA states that it accidentally omitted calculations based
on the information about its current model which would demonstrate
compliance. After receiving notice that its proposal was not being
considered, ASEA provided a 5-page mathematical analysis to the
contracting officer. While ASEA calls this omission minor, the analysis
was identified in the RFP as an important requirement and the five pages
of calculations submitted by ASEA show that this was far from a minor
matter. Even if it were possible for someone in the agency to
demonstrate the safety of the ceilometer that ASEA intended to
manufacturer by extrapolating from data on the current model, this was
clearly and properly the responsibility of the protester under the RFP.
The Commerce Department was not obligated, in effect, to draft a major
portion of ASEA's proposal and to assume the risk that its own
projection of the safety of a proposed new ceilometer was accurate.
The ASEA proposal did not contain a statement of compliance with each
specification requirement as called for by the RFP. In its proposal,
ASEA listed the paragraph numbers of the specification and the company's
corresponding comments. ASEA's comments on a few paragraphs of the
specification can be interpreted as statements of compliance and, for a
few paragraphs, ASEA stated that it took exception to the requirement.
For most paragraphs, however, ASEA only noted "No Comment." ASEA argues
that its notations of "no comment" with respect to most specification
requirements were, in effect, statements of compliance, since the
company stated in the cover letter to its proposal that "ASEA has a
ceilometer that now meets your performance specifications" and indicated
that all exceptions to the specifications had been noted. We share the
contracting officer's view that a statement of "no comment" does not
meet the RFP requirement for "a statement of compliance with each
specification requirement."
Further, ASEA contends that the agency erroneously concluded that
ASEA had not described in detail its "methods and approaches" for
meeting each specification requirement. According to ASEA, the required
information can be found in the 257-page technical manual, the technical
description and the product bulletin on ASEA's standard model ceilometer
with a range of 10,000 feet. The ASEA proposal, however, does not state
which of the components in the ceilometer will be changed to extend its
range to 12,000 feet, or which performance characteristics will change
in addition to power output and laser impulse duration. Consequently,
the Commerce Department could not rely on technical descriptions of the
unmodified ceilometer to establish a modified ceilometer's compliance
with specification requirements. We do not agree with ASEA's view that
it was penalized merely for its failure to follow a narrow reading of
the format requirements of the RFP. It is an offeror's obligation to
establish that what it proposes will meet the government's needs. Texas
Medical Instruments, B-206405, Aug. 20, 1982, 82-2 C.P.D. Paragraph 122.
We believe that it was reasonable for the agency to find ASEA's
proposal substantially deficient for failing to describe in detail the
manner in which ASEA would comply with the specification requirements.
The protester asserts that each of the deficiencies in its proposal
is minor, and each would have been quickly remedied had the company been
notified. While some of the deficiencies may not in isolation have been
sufficient reason for excluding ASEA from the competitive range, as a
totality they justify the Commerce Department's conclusion that the
proposal was so materially deficient that major revisions and additions,
tantamount to a new proposal, were required to make it acceptable. The
agency did not eliminate competition by excluding ASEA from further
consideration since two offerors were determined to be in the
competitive range. Also, ASEA proposed the highest price of all five
initial offerors, and its price was almost double the initial price
offered by Vaisala. Thus, it does not appear that eliminating ASEA from
the competitive range deprived the agency of the opportunity to obtain
significant cost savings.
ASEA contends that the agency improperly accepted the Vaisala offer
which allegedly did not comply with an RFP provision that, according to
ASEA, required that any ceilometer submitted for evaluation be
manufactured by the offeror. In the alternative, ASEA argues that
acceptance of the Vaisala offer was, in effect, a change in the RFP
requirements and, as such, ASEA should have been informed of the change
and permitted to restructure its proposal by submitting more extensive
explanatory material.
ASEA would not be in line for an award even if its contention
regarding the Vaisala offer is correct. ASEA was properly excluded from
the competitive range and there is a second offeror in the competitive
range whose offer ASEA has not challenged. As a result, we do not
consider ASEA to be a party "interested" in the issue under the Bid
Protest Procedures which govern this protest. 4 C.F.R. Section
21.1(a)(1984). See D-K Associates, Inc., B-213417, Apr. 9, 1984, 84-1
C.P.D. Paragraph 396. Therefore, we will not consider ASEA's allegation
regarding the Vaisala offer.
Moreover, we find ASEA's argument that it would have submitted a more
extensively explained proposal had it known that the agency would accept
proposals from firms other than manufacturers to be unconvincing. As a
manufacturer of ceilometers, ASEA should have an advantage over offerors
which are not. We fail to see how the knowledge that such firms might
compete would inspire ASEA to submit a more comprehensive proposal.
The protest is denied in part and dismissed in part.
Comptroller General
of the United States
B-216885, Nov 29, 1984
COMPENSATION - Waivers - Prohibition
DIGEST:
Chairman of the Committee on Post Office and Civil Service, House of
Representatives, requests our views on the legality of the Secretary of
Labor, Mr. Raymond Donovan's leave without pay status. Although Mr.
Donovan states he is not performing the duties of his office and will
not receive pay, court decisions and those of the Comptroller General
hold that an officer is entitled to his salary and may not voluntarily
waive the salary so as to estop him from later claiming it. If,
however, Mr. Donovan wishes to waive receipt of the checks he may do so.
The Honorable William D. Ford
Chairman, Committee on Post Office
and Civil Service
House of Representatives
Dear Mr. Chairman:
This replies to your letter of October 10, 1984, in which you ask our
opinion concerning the Secretary of Labor's leave without pay status and
whether the Secretary must continue to be paid the rate of pay
prescribed for his position under 5 U.S.C. sec. 5312 so long as he
occupies the position of Secretary of Labor. It is our view that the
Secretary of Labor, Mr. Raymond Donovan, is legally entitled to the pay
of the office as long as he holds it; he cannot effectively waive his
legal entitlement to the pay. However, based on a precedent established
by our Office, he may decline receipt of his pay checks even though his
legal entitlement to the pay remains.
According to information released by Secretary Donovan, on October 1,
1984, the President has accepted Mr. Donovan's request for a leave of
absence without pay pending the disposition of criminal charges against
him resulting from a grand jury investigation. Mr. Donovan stated that
he expects to resume his duties at some time in the future. The
question you raise is whether the head of a department or agency, such
as Mr. Donovan, has the option to waive his salary.
Section 5312 of title 5, United States Code (1982), sets the rate of
pay for cabinet officers, including the Secretary of Labor. By virtue
of 5 U.S.C. Sec. 6301(2)(x) (1982), cabinet officers are not governed by
the provisions of the Annual and Sick Leave Act of 1951, as amended, 5
U.S.C. Secs. 6301 et seq. Accordingly, they are in a continuous pay
status.
Employees covered by the leave laws are only paid for the hours of
work performed or which may be charged to paid leave, and they may be
placed in leave without pay status when they do not work. Cabinet
officers, however, are entitled to their salaries as a matter of right
regardless of whether they are performing the duties of their office
since the right to payment of their salaries is derived from the fact
that they hold the office and not from whether they perform its duties.
See B-150989, April 17, 1963; S. Rep. No. 294, 83rd Cong., 1st Sess.,
2-3 (1953).
In a view of the above, Secretary Donovan has a statutory entitlement
to his salary as long as he holds office. Judicial decisions and
decisions of our Office have consistently held that statutory
entitlements to compensation cannot be forfeited or waived in a legally
effective manner. See, e.g., United States v. Andrews, 240 U.S. 90
(1915); Glavey v. United States, 182 U.S. 595 (1901); United States v.
Jones, 100 F.2d 65, 68 (8th Cir. 1938); 54 Comp.Gen. 393 (1974), and
cases cited. At the same time, there is no legal barrier to
accommodating Secretary Donovan's desire not to receive salary payments
during the period of his leave absence. Our decision in 28 Comp.Gen.
675 (1949) concerned a Senator who did not wish to receive his retired
pay as a Marine Corps officer. While we held that the Senator could not
waive his right to the retired pay, we instructed the Marine Corps to
discontinue issuing him checks, until the Senator notified the Corps
otherwise, in an effort to accomplish the purpose of a waiver.
In sum, since Mr. Donovan remains in office, he is entitled to his
statutory compensation regardless of whether or not he is performing the
duties of the office. He may choose not to accept such compensation,
and his choice should be honored. However, he cannot effectively waive
his legal entitlement. Thus, for example, he could not be estopped from
later claiming the amounts involved. See 54 Comp. Gen. 393, and United
States v. Andrews, above. COMP GEN (UP)
B-216884-O.M., Nov 26, 1984
RECORDS - Destruction - Department of Health and Human Services -
Health Care Finance Administration
DIGEST:
This Office has no legal objection to Request for Records Disposition
Authority submitted by Health Care Finance Administration (HCFA),
Department of Health and Human Services, proposing to dispose to System
Performance Review file relating to HCFA regional office's annual review
conducted in connection with deciding whether to approve Federal
Financial Participation in funding a share of the state's cost for
developing, installing, and operating if Mechanized Claims Processing
Medicaid Management Information System, since periods proposed are
adequate to protect the legal interest of the United States.
SUBJECT: Request for Records Disposition Authority; Health Care
Finance Administration, Department of Health and Human Services.
Control No. 84-52 - B-216884-O.M.:
This is in response to a memorandum from Shirley Allen, Chief REcords
Management and Analysis Section, forwarding for our review a Request for
Records Disposition Authority (SF 115) submitted by the Health Care
Finance Administration (HCFA), Department of Health and Human Services
proposing to dispose of System Performance REview (SPR) files after
specified periods of time. We have reviewed the SF 115 and have no
legal objection to the proposed disposition of these records.
The SPR files contain workpapers, worksheets, review documents,
reports, correspondence and other records relating to the annual review
by HCFA regional offices of each State's Mechanized Claims Processing
Medicaid Management Information System (MMIS) for the purpose of
determining whether to approve Federal Financial Participation in
funding a share of the state's cost for developing, installing and
operating the MMIS. Where the review results in the reapproval of the
state's MMIS, SPR files are to be disposed of 1 year after the end of
the fiscal year covered by the files. Where the review results in
disapproval of the MMIS, the SPR files will be disposed of 3 years after
the end of the fiscal year in which final action if taken (including any
appeals) as a result of the disapproval. Any records needed for any
legal activity of the Government are excluded from the disposition
authority.
The proposed disposal periods are adequate to protect the legal
interests of the United States and therefore, we have no objection to
their adoption. COMP GEN (UP)
B-216883-O.M., Nov 26, 1984
RECORDS - Destruction - Veteran's Administration - Loan records
DIGEST:
This Office has no objection to proposal by Veterans Administration
to dispose of plans and specifications relating to direct guaranteed or
insured loans 1 year after the expiration of the validity period of a
Master Certificate of Reasonable Value and after final action is
completed on all related loans, since the expiration of the validity
period and completion of action on related loans, the usefulness of the
related plans and specification ceases. Furthermore, receipt of
subsequent requests for determinations of reasonable value on proposed
construction in the same development will require resubmission of plans
and specifications.
SUBJECT: Request for Records Disposition Authority; Veterans
Administration, Control No. RM 84-59 - B-216883-O.M.
This is in response to a memorandum from Shirley Allen, Chief Records
Management and Analysis Section, forwarding for our review a Request for
Record Disposition Authority (SF 115), submitted by the Veterans
Administration (VA), proposing to dispose of plans and specifications
relating to direct, guaranteed or insured loans 1 year after the
expiration of the validity period of a Master Certificate of Reasonable
Value and after final action is completed with all related loans. We
have no legal objection to the proposed disposition period.
The records in question are an integral part of the basis for issuing
a Master Certificate of Reasonable Value (VA Form 26-1843a) which
affixes and sets forth the "reasonable value" for a structure under
construction during the validity period (6-12 months) vis a vis at VA.
The law requires that the principal of VA direct, guaranteed or insured
loans not exceed the reasonable value of the property. 38 U.S. C.
Secs. 1803(d)(2)(B)(i), 1810(b)(5), 1815, 1819(e)(4). Thus, during the
validity period the Master Certificate of Reasonable Value indicates
that one of the program's legal requirements is being met and permits
others to act in reliance thereon.
After passage of the specified period of time following expiration of
the Master Certificate of Reasonable Value and all completion of action
on the properties to which it applies, the usefulness of the related
plans and specifications ceases. Receipt of subsequent requests for
determinations of reasonable value on proposed construction in the same
development will require submission of plans and specifications.
Consequently, we have no objection to their disposal after the time
specified. COMP GEN (UP)
FILE: B-216882
DATE: March 25, 1985
MATTER OF: Paul Hellmich
TRAVEL EXPENSES - ILLNESS - OTHER THAN EMPLOYEE
An Internal Revenue Service employee claims reimbursement of expenses
for travel from a location abroad to the United States in connection
with his father's illness and death. Although the employee contends
that his transportation at Government expense is authorized by State
Department regulations in the Foreign Affairs Manual, these regulations
are inapplicable to the travel of Internal Revenue Service employees.
Further, reimbursement of travel in these circumstances is not
authorized under the provisions of statute applicable to Federal
employees other than Foreign Service employees or the provisions of the
Federal Travel Regulations.
An Internal Revenue Service employee traveled on a round-trip airline
ticket from a location abroad to the United States in connection with
his father's illness and death. We are asking whether he may be
reimbursed the cost of this travel. /1/ Internal Revenue Service
employees are not authorized emergency visitation travel at Government
expense under State Department travel regulations in the Foreign Affairs
Manual, which are issued pursuant to the travel authority applicable to
Foreign Service employees.
Mr. Paul M. Hellmich, an employee of the Internal Revenue Service,
traveled from Jeddah, Saudi Arabia, to Milwaukee, Wisconsin, and return
during the period January 11 through February 8, 1984, in connection
with his father's serious illness and death. A round-trip airline
ticket for emergency travel to the United States was issued at a cost of
$1,423. Mr. Hellmich has submitted a claim for reimbursement of this
cost. He believes that he is entitled to such emergency leave
transportation under paragraph 699.5 of Volume 3, Foreign Affairs
Manual, applicable to members of the Foreign Service stationed abroad.
Representatives of the Department of State have indicated their
belief that the cost of emergency travel may be paid under a Memorandum
of Understanding between the Department of State and the Internal
Revenue Service executed March 5, 1980. This memorandum provides for
medical services to be made available to Internal Revenue Service
employees and their dependents who are stationed at foreign posts. The
memorandum authorizes giving professional advice concerning emergency
visitation travel, but does not declare that such travel is authorized
for Internal Revenue Service employees. Although the agreement does not
specifically authorize emergency visitation travel for Internal Revenue
Service Employees, the Department of State representatives suggest that
entitlement to such travel is implicit in the Memorandum of
Understanding.
Under the specific authority of the Foreign Service Act of 1980 /2/
the Secretary of State may pay the travel and related expenses of
members of the Foreign Service and their families, including costs or
expenses incurred for round trip travel from a location abroad for the
purposes of family visitation in emergency situations involving personal
hardship. 22 U.S.C. Section 4081(9) (1982). Thus, emergency visitation
travel by a member of the Foreign Service stationed abroad is authorized
in instances of serious illness or death within his or her immediate
family. Regulations regarding such travel are in section 699.5 of
Volume 3 of the Foreign Affairs Manual. These travel regulations apply
to members of the Foreign Service in the Department of State and related
agencies which are covered by the Foreign Service Act of 1980.
Since employees of the Internal Revenue Service stationed in foreign
countries are not covered by the Foreign Service Act of 1980, the
special authorities for travel as provided by that act are nto
applicable to them. The authority to pay for the cost of foreign travel
for Internal Revenue Service employees is contained in Chapter 57 of
title 5, United States Code. Allowances for employees, including those
stationed in a foreign country, are covered by Chapter 59 of that title.
There is no provision in those statutes for payment of emergency
visitation travel for employees working in foreign countries.
Accordingly, no agreement between the Departments of State and Treasury
could authorize payment of Government funds for this type of travel.
Accordingly, Mr. Hellmich may not be reimbursed for the cost of his
emergency visitation travel.
Comptroller General of the United States
(1) Mr. Thomas N. Lyall, Authorized Certifying Officer, Internal
Revenue Service, Philadelphia, Pennsylvania, submitted the request for a
decision.
(2) The Foreign Service Act of 1980, Public Law 96-465, October 17,
1980, 94 Stat. 2074, 22 U.S.C. Sections 3901-4226, was derived from the
Foreign Service Act of 1946, as amended, which it replaced effective
February 15, 1981.
B-216880, Nov 7, 1984, Office of General Counsel
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
The Honorable Jim Courter
Member, United States House of Representatives
1 Morris Street
Morristown, New Jersey 07960
Dear Mr. Courter:
This responds to your letter dated October 12, 1984, regarding a
complaint by Mr. Charles J. Fletcher, President of Technology General
Corporation, that the size standard applicable to government
procurements of certain engineering services is too large, and operates
to the detriment of many small companies.
The standard applies to engineering services for military and
aerospace equipment and military weapons, and is a component of Standard
Industrial Classification Major Group 89. The standard, which defines a
small business concern as having average gross annual receipts for the
last three fiscal years not exceeding $13.5 million, 49 Fed.Reg. 5020
and 5037 (1984) (to be codified in 13 C.F.R. Sec. 121.2), is the
product of new regulations promulgated by the Small Business
Administration (SBA) and effective March 12, 1984. It derives from a
$7.5 million standard for all engineering, architectural, and surveying
services except naval architectural and marine engineering services,
which is now replaced by four distinct standards for components of the
industries covered by the old standard.
The Small Business Act gives the Administrator of SBA exclusive
authority to define small businesses for each industry for the purpose
of government procurements. 15 U.S.C. Sec. 632(a) (1982). SBA's notice
of the new regulations states that the new standard was preceded by a
number of notices in the Federal Register describing SBA's efforts to
revise its standards. 49 Fed.Reg. 5024. Those notices invited comments
on the proposed standards and, according to SBA, nearly all the comments
on the standard in issue were favorable. 49 Fed.Reg. 5026. Thus, it
appears that Mr. Fletcher had an opportunity to present his views to the
SBA prior to the promulgation of the new size standard. Any further
request for changing the standard must be directed to the SBA
Administrator.
We enclose a copy of the standard and the accompanying information
from the Federal Register. COMP GEN (UP)
FILE: B-216878 85-1 CPD 419
DATE: April 12, 1985
MATTER OF: AFL-CIO Appalachian Council, Inc.
CONTRACTS - PROTESTS - ALLEGATIONS - BIAS - UNSUBSTANTIATED
1. Protester's contentions that contracting officer provided awardee
with improper financial assistance by awarding sole-source contracts to
other contractors to do part of screening for which contract had been
awarded and that awardee is receiving improper advance payments are not
substantiated by the record.
CONTRACTS - PRE-AWARD AUDITS - WAIVER
2. Contracting officer did not treat offerors unequally by
requesting a copy of a preaward audit performed in connection with a
proposal submitted by the protester in another procurement while
declining to require a preaward audit of the awardee. In any event, the
regulations permit a contracting officer to require a preaward audit of
one proposal while waiving the requirement with regard to another.
CONTRACTS - AWARDS - APPROVAL - HIGHER AUTHORITY APPROVAL
3. Agency requirement that contracting officer's selection of an
awardee be reviewed at a higher level is proper.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - COST
REALISM ANALYSIS - ADEQUACY
4. Awardee's failure to perform up to the required level under the
contract does not necessarily indicate that agency improperly evaluated
the realism of awardee's price.
AFL-CIO Appalachian Council, Inc., protests the award to Women in
Community Service, Inc. (WICS), of a contract for outreach screening
services under request for proposals (RFP) No. 5-JC-912-05 issued by the
Department of Labor, Office of Job Corps, Chicago, Illinois. The
protester contends that the Job Corps provided the awardee with improper
financial assistance, made improper loans to the awardee, and treated
the two offerors in the competitive range unequally in declining to
require a preaward audit of WICS. The protester also maintains that the
agency's national office exercised improper influence over the
contracting officer's selection of WICS. We deny the protest.
The Job Corps received three proposals in response to the RFP for
screening services for the period of October 1, 1984, to September 30,
1985. After receipt of the best and final offers, the Job Corps scored
the final proposals from the two offerors remaining in the competitive
range as follows:
TABLE OMITTED
The Job Corps selected AFL-CIO, the higher priced offeror, for award.
In reaching this conclusion, the Job Corps noted AFL-CIO's satisfactory
past performance record and stated that while WICS was a responsible
offeror, it may not have the capacity to perform because of its other
contracts with the Job Corps. This determination was submitted for
approval to Labor's Employment and Training Administration (ETA)
National Office. ETA returned the determination to the Job Corps,
noting that it contained contradictory conclusions regarding WICS's
responsibility and its capacity to perform and instructing the Job Corps
to make its award selection on a sound and rational basis. The Job
Corps reevaluated its selection based on ETA's advice and reversed its
decision. The Job Corps chose WICS because it concluded that WICS was a
responsible offeror, its offer was substantially equal to that of
AFL-CIO, and priced lower.
AFL-CIO contends that the Job Corps provided improper financial
assistance to WICS by proposing to let three $25,000 sole-source
contracts to other contractors to do part of WICS's required screening
work. AFL-CIO contends that this "bailing out" of WICS shows that the
agency improperly concluded that WICS's price and financial capacity
were adequate to perform the contract and gave WICS an unfair price
advantage.
The agency states that while it considered adding funds on an interim
basis to several existing contracts for the screening services because
the delay in awarding the contract to WICS allowed that firm almost no
startup time, it did not do so. In any event, even if the agency had
decided to supplement other recruitment efforts to compensate for the
late award date and lack of transition period, this would not have
shown, in our view, that the selection of WICS was in any way improper.
AFL-CIO next contends that WICS is receiving improper advance
payments under the contract. The protester argues that WICS's failure
to indicate a need for advance payments in the statement of financial
capacity submitted with its offer constituted a failure to disclose
critical information as to WICS's ability to perform that directly
related to the selection process. Although WICS requested advance
payments on all three of its Job Corps contracts, including the contract
which is the subject of this protest, the agency reports that it has not
provided advance payments under the subject contract since the
solicitation did not contain a clause providing for advance payments.
The fact that the agency has approved advance payments under another of
WICS's contracts is irrelevant to the protest.
Further, AFL-CIO argues that the contracting officer treated the two
offerors unequally by requesting a copy of a preaward audit performed on
another AFL-CIO proposal submitted in a different Job Corps region while
declining to require a preaward audit of WICS's proposal. The agency
points out that the contracting officer waived preaward audits for both
offerors, pursuant to the Federal Acquisition Regulation (FAR), 48
C.F.R. Section 15.805-5(a)(1) (1984). The agency did consider certain
data in the existing audit on the other AFL-CIO proposal. We do not
think that is equivalent to requesting a preaward audit. Even if the
agency had waived the audit for WICS, but not for the protester, that
fact by itself does not show that the agency acted improperly. The
purpose of a preaward audit is to provide the contracting officer with
information sufficient to permit a determination of the reasonableness
of the proposed cost or price. FAR, Section 15-805-5. A preaward audit
may be waived if the contracting officer already has available to him
adequate data on which to base such a determination. Since the
contracting officer could have sufficient information available to
assess the reasonableness of one proposal while lacking adequate
information to assess the reasonableness of another, it would not be
improper for a contracting officer to require a preaward audit of one
proposal, but not of another.
AFL-CIO next argues that if a preaward audit had been performed on
WICS, that firm's lack of financial capacity would have been discovered.
An offeror's financial capacity is addressed in a preaward survey,
rather than a preaward audit. The purpose of a preaward survey is to
gather information upon which to base a determination of responsibility,
FAR, Section 9.106-1, whereas the purpose of a preaward audit is, as we
have noted, to provide information sufficient to permit a determination
of the reasonableness of the proposed cost or price. FAR, Section
15.805-5. Since the considerations set forth by AFL-CIO relate to
WICS's financial ability to perform, matters relating to responsibility,
and not to the reasonableness of its proposed price, they would not have
been addressed in a preaward audit.
AFL-CIO maintains that ETA's National Office exercised improper
influence over the contracting officer by rejecting his selection of
AFL-CIO and requiring that he instead make award to WICS. The protester
regards any requirement that the contracting officer's selection be
reviewed at a higher level to be improper. Further, AFL-CIO maintains
that since the final award selection was based solely on price, it
cannot be justified. The record shows that ETA did not instruct the
contracting officer to make award to WICS. Rather, it found the
contracting officer's selection memorandum to be technically deficient
in that it stated that WICS was a responsible offeror, but based the
award to AFL-CIO on the ground that WICS lacked the capacity to perform
the work. ETA instructed the contracting officer to revise his
memorandum to reflect "a rational and technically sufficient basis for
selecting whichever offeror (he chose)." In any event, we see nothing
improper in the agency's requirement that the proposed award selection
be reviewed by higher agency officials. Agency officials' authority to
direct and supervise all agency functions necessarily encompasses the
procurement operations, including the evaluation of proposals and the
award of contracts, of lower echelon agency components. Bank Street
College of Education, B-213209, June 8, 1984, 84-1 CPD Paragraph 607.
Further, we do not agree with the protester that the final selection
based on price was improper. Where, as here, the agency concludes that
proposals are essentially equal technically, price may become the
determinative consideration in making an award notwithstanding that, in
the overall evaluation scheme, price was not an important factor. The
Singer Company, B-211857; B-211857.2, Feb. 13, 1984, 84-1 CPD
Paragraph 177.
Finally, the protester contends that WICS is not performing up to the
required level under the contract and this shows that the agency did not
properly evaluate the reasonableness or realism of WICS's price as
required by the solicitation. The agency's price analysts concluded the
WICS's price was adequate to perform the contract. Such realism
determinations are necessarily judgmental and, unless they are clearly
unreasonable, we will not object to them. Ocean Data Equipment Division
of Data Instruments, Inc., B-209776, Sept. 29, 1983, 83-2 CPD Paragraph
387. Such determinations are based on the information available at the
time of the evaluation and the fact that problems may arise during
contract performance does not necessarily indicate that the price
evaluation was not done properly.
The protester has made no showing that the agency's selection of WICS
was unreasonable and we deny the protest.
Harry R. Van Cleve
General Counsel
B-216868, Oct 31, 1984, 84-2 CPD 493
CONTRACTORS - Responsibility - Determination - Review by GAO -
Affirmative finding accepted
DIGEST:
1. The capacity of a company to provide supplies or services in
accordance with solicitation requirements concerns a matter of
responsibility. GAO does not review affirmative determinations of
responsibility unless there has been a showing of possible fraud or bad
faith on the part of procurement officials or that the solicitation
contains definitive responsibility criteria that have not been applied.
CONTRACTS - Protests - Contract administration - Not for resolution
by GAO
2. An allegation that a small business contractor will subcontract
the performance of a contract to a large business contrary to the intent
of a small business set-aside is matter of contract administration and
is the responsibility of the procuring agency rather than GAO.
CONTRACTS - Small business concerns - Set-asides - Subcontractor,
supplier, etc. size status
3. Subcontracting with a large business under a service contract
set-aside for small business is not legally objectionable.
Mann Rental Service:
Mann Rental Service (Mann) protests the award of a contract to Big T
Enterprises (Big T) under solicitation No. F08620-84-D0002, issues as a
small business set-aside by the Department of the Air Force for linen
services. The protester contends that the awardee did not have the
facilities to provide the supplies or services required prior to being
awarded the contract, and that, since the award, has subcontracted a
major portion of the contract to a company which does not qualify as a
small business. We dismiss the protest.
Mann's claim that the awardee lacks the ability to provide the linen
supplies or services required by the invitation for bids concerns a
matter of responsibility. Thus, Mann's contention constitutes a protest
against the Air Force's affirmative determination of Big T's
responsibility which is necessarily involved in any decision to award to
Big T. Dixie Bag Corp., B-210898.2, July 15, 1983, 83-2 CPD para. 97.
We do not review affirmative determinations of responsibility unless
there is a showing of possible fraud or bad faith on the part of the
procuring officials or that the solicitation contains definitive
responsibility criteria which have allegedly not been applied. Lake
Shore, Inc., B-213877, Dec. 22, 1983, 84-1 CPD para. 14. Neither
exception applies here.
Mann's allegation that Big T has subcontracted a substantial portion
of the work to a firm that does not qualify as a small business is a
matter of contract administration and is the responsibility of the
procuring agency. The Wenninger Co., Inc., B-205093.3, Aug. 10, 1983,
83-2 CPD para. 194. We do not consider such matters under our Bid
Protest Procedures, 4 C.F.R. part 21 (1984), which are reserved for
determining whether an award or proposed award of a contract complies
with statutory, regulatory and other legal requirements. HSQ
Technology, B-208557.5, July 11, 1983, 83-2 CPD para. 69. In any event,
we note that if the contract in question is a service contract, a
subcontract with a large business firm is not legally objectionable.
See James L. Decker, B-202051, Aug. 20, 1981, 81-2 CPD para. 158.
The protest is dismissed. COMP GEN (UP)
FILE: B-216864
DATE: August 13, 1985
MATTER OF: Leonard Green and Associates, Inc., et al. -- Davis-Bacon
Act Debarment
DIGEST:
BIDDERS - DEBARMENT - LABOR STIPULATION VIOLATIONS - DAVIS-BACON ACT
- WAGE UNDERPAYMENTS - DEBARMENT REQUIRED
The Department of Labor recommended debarment of a contractor under
the Davis-Bacon Act because the contractor had failed to pay required
minimum wages to its employees and to provide required certified
payrolls. Based on our independent review of the record in this matter,
we conclude that the contractor disregarded its obligations to its
employees under the Act. There was a substantial violation of the Act
in that the nonpayment of employees was grossly careless, coupled with
an indication of bad faith. Therefore, the contractor will be debarred
under the Act.
The Assistant Administrator, Employment Standards Administration,
United States Department of Labor (DOL), by a letter dated July 16,
1984, recommended that Leonard Green individually and as President/
partner, Mertis Green individually and as partner, Sylvia Pittman
individually and as partner, Carl Hempel individually and as partner,
Leon McGowan individually and as partner, and Leonard Green and
Associates, Inc. (Green), be placed on the ineligible bidders list for
violations of the Davis-Bacon Act, 40 U.S.C. Section 276a to 276a-5
(1982), which constituted a disregard of obligations to employees under
the Act. For reasons that follow, we concur in DOL's recommendation.
Green performed work under contract N62472-82-C-5104, with the United
States Navy, doing painting and other related work. This contract was
subject to the Davis-Bacon Act requirements that certain minimum wages
be paid. Further, pursuant to 29 C.F.R. Section 5.5(a) (1984), the
contractor was required to pay employees at least once a week and to
submit payroll records certified as to correctness and completeness.
The DOL found as a result of an investigation that certain employees
were not paid any wages. Further, DOL found that certified payrolls
were never submitted. The DOL informed us that a certified letter dated
May 14, 1984, was sent to Green advising in detail of the violations
with which it was charged, and that debarment was possible. Also, Green
was given an opportunity for a hearing on the matter before an
administrative law judge in accordance with 29 C.F.R. Sections 5.11( b)
and 5.12(b) (1984). The DOL reported to us that while the record
indicates that the letter was received, no hearing was requested. After
reexamining the record, DOL found that Green violated the Davis-Bacon
Act without any factors militating against debarment. The DOL also found
that Messrs. Green, Hempel, McGowan and Ms. Pittman have not
demonstrated a responsibility to comply with labor standards provisions
applicable to Federally-funded construction work. Therefore, DOL
recommended that Leonard Green individually and as President/ partner,
Mertis Green individually and as partner, Sylvia Pittman individually
and as partner, Carl Hempel individually and as partner, Leon
Associates, Inc., be placed on the ineligible bidders list for
violations of the Davis-Bacon Act which constituted a disregard of
obligations to employees under the Act.
The Davis-Bacon Act provides that the Comptroller General is to debar
persons or firms whom he has found to have disregarded their obligations
to employees under the Act. 40 U.S.C. Section 276a-2. In Circular
Letter B-3368, March 19, 1957, we distinguished between "technical
violations" which result from inadvertence or legitimate disagreement
concerning classification, and "substantial violations" which are
intentional as demonstrated by bad faith or gross carelessness in
observing obligations to employees with respect to the minimum wage
provisions of the Davis-Bacon Act.
Based on our independent review of the record in this matter, we
conclude that Green disregarded its obligations to its employees under
the Davis-Bacon Act. There was a substantial violation of the
Davis-Bacon Act in that the underpayment of employees was grossly
careless as demonstrated by Green's failure to pay certain of its
employees any wages and to submit required certified payrolls. Further,
Green failed to submit required certified payrolls even after being
reminded of the necessity to do so, which is an indication of bad faith.
Compare Family Construction Company, B-217330, June 7, 1985, 64 Comp.
Gen. . . . We also concur with DOL's findings regarding the individuals
named above.
Therefore, Leonard Green individually and as President/partner,
Mertis Green individually and as partner, Sylvia Pittman individually
and as partner, Carl Hempel individually and as partner, Leon McGowan
individually and as partner, and Leonard Green and Associates, Inc.,
will be included on a list to be distributed to all departments of the
Government. Pursuant to statutory direction (40 U.S.C. Section 276a-2),
no contract shall be awarded to them or to any firm, corporation,
partnership, or association in which they, or any of them, have an
interest until 3 years have elapsed from the date of publication of such
list.
Henry R. Wray
Associate General Counsel
FILE: B-216863
DATE: August 5, 1985
MATTER OF: J & M Electric, aka East Coast Electric Corp. -
Davis-Bacon Act Debarment
DIGEST:
BIDDERS - DEBARMENT - LABOR STIPULATION VIOLATIONS - DAVIS-BACON ACT
- WAGE UNDERPAYMENTS - DEBARMENT REQUIRED
The Department of Labor recommended debarment of a subcontractor
under the Davis-Bacon Act because the subcontractor had failed to pay
the minimum wages and overtime compensation required by the Act and had
falsified certified payroll records. Based on our independent review of
the record in this matter, we conclude that the subcontractor
disregarded its obligations to its employees under the Act. There was a
substantial violation of the Act in that the underpayment of employees
and falsification of records was intentional. Therefore, the
subcontractor will be debarred under the Act.
The Deputy Administrator, Employment Standards Administration, United
States Department of Labor (DOL), by a letter dated April 23, 1982,
recommended that J & M Electric, aka East Coast Electric Corp. (J & M),
and John Essig, individually and as owner, be placed on the ineligible
bidders list for violations of the Davis-Bacon Act, 40 U.S. C. Sections
276a to 276a-5 (1982), and of the Contract Work Hour and Safety
Standards Act, 40 U.S.C. Sections 327-332 (1982), which constituted a
disregard of obligations to employees under these Acts. We concur in
DOL's recommendation.
J & M performed work as a subcontractor under contracts
F-28609-78-C-0027 and DACA51-79-C-0040, with the Departments of the Air
Force and Army doing electrical and other related work. These contracts
were subject to the Davis-Bacon Act requirements that certain minimum
wages be paid. Further, pursuant to 29 C.F.R. Section 5.5(a) (1984),
the firm was to submit payroll records certified as to correctness and
completeness.
The DOL found as a result of an investigation that employees were not
paid the minimum wages required pursuant to the Davis-Bacon Act.
Further, DOL found that certified payrolls were falsified to conceal the
minimum wage violations, and that the subcontractor did not pay its
employees proper overtime compensation. The DOL informed us that a
certified letter dated December 2, 1981, was sent to J & M advising in
detail of the violations with which it was charged, and that debarment
was possible. Further, J & M was given an opportunity to rebut the
allegations at an informal proceeding in accordance with 29 C.F.R.
Section 5.6(c) (1981). The DOL reported to us that the letter to J & M
was returned by the U.S. Postal Service with the notation "forwarding
time expired." After reexamining the record, DOL found that J & M
violated the Davis-Bacon Act without any factors militating against
debarment. Therefore, DOL recommended that J & M Electric, aka East
Coast Electric Corp., and John Essig, individually and as owner, be
placed on the ineligible bidders list for violations of the Davis-Bacon
Act which constituted a disregard of obligations to employees under the
Act.
The Davis-Bacon Act provides that the Comptroller General is to debar
persons or firms whom he has found to have disregarded their obligations
to employees under the Act. 40 U.S.C. Section 276a-2. In Circular
Letter B-3368, March 19, 1957, we distinguished between "technical
violations" which result from inadvertence or legitimate disagreement
concerning classification, and "substantial violations" which are
intentional as demonstrated by bad faith or gross carelessness in
observing obligations to employees with respect to the minimum wage
provisions of the Davis-Bacon Act. Falsification of payroll records is
a basis for debarment under the Davis-Bacon Act. See, e.g., Morgan
Plumbing and Heating, B-217239, June 7, 1985.
Based on our independent review of the record in this matter, we
conclude that J & M disregarded its obligations to its employees under
the Davis-Bacon Act. There was a substantial violation of the
Davis-Bacon Act in that the underpayment of employees was intentional as
demonstrated by J & M's bad faith in the falsification of certified
payroll records. Further, J & M failed to pay its employees proper
overtime compensation. The payroll records were signed by John Essig,
President.
Therefore, J & M Electric, ada East Coast Electric Corp., and John
Essig individually, and as owner of J & M Electric, aka East Coast
Electric Corp., will be included on a debarred bidders list to be
distributed to all departments of the Government. Pursuant to statutory
direction (40 U.S.C. Section 276a-2), no contract shall be awarded to
them or to any firm, corporation, partnership, or association in which
they, or any of them, have an interest until 3 years have elapsed from
the date of publication of such list.
Henry R. Wray
Associate General Counsel
FILE: B-216862 85-1 CPD 123
DATE: January 31, 1985
MATTER OF: North Park Village Homes, Inc.
DIGEST:
BIDS - QUALIFIED - BID NONRESPONSIVE
1. A statement in descriptive literature accompanying a bid
providing that specifications are subject to change provides a bidder
with an option to deviate from the solicitation requirements after award
and is a material deviation rendering the bid nonresponsive where there
is nothing else in the bid indicating that such statement was not
intended to affect the bidder's obligation under its bid.
BIDDERS - QUALIFICATIONS - LICENSE REQUIREMENTS - STATE, ETC.
CERTIFICATIONS
2. Where solicitation does not impose a specific license
requirements, agency may make award without regard to whether bidder is
licensed under local law.
North Park Village Homes, Inc. protests the rejection of its bid
under solicitation No. R3-01-84-066 issued by the Forest Service for
premanufactured housing units for the Apache-Sitgreaves National Forest.
North Park's low bid was determined to be nonresponsive because of a
legend on its descriptive literature, and award was made to the second
low bidder, Commercial Concepts Company. We deny the protest in part
and dismiss it in part.
The solicitation required that bidders submit with their bids
"complete descriptive literature, specifications, and floor plans(s) of
the unit(s) they proposed to furnish."
North Park offered units manufactured by Kaufman & Broad Home
Systems, Inc., and included with its bid descriptive literature from the
Kaufman & Board sales brochure. The manufacturer's brochure contained
the following caption: "Because of continuing progressive product
improvements, prices and specifications are subject to change without
prior notice." The descriptive literature submitted by Commercial
concepts contained a similar legend, but it had been crossed out and
initialed by the company's president. In addition, Commercial Concepts
inserted the following language: "STANDARD SERIES SPECIFICATIONS ARE
USED EXCEPT WHERE GOVERNMENT'S SPECIFICATIONS DIFFER. THIS BID RESPONSE
MEETS ALL OF THE GOVERNMENT's SPECIFICATIONS. NO DEVIATIONS HAVE BEEN
TAKEN]"
The contracting officer decided that the inclusion of the legend in
the descriptive literature furnished by North Park indicated that a firm
bid had not been submitted and that the bidder reserved the right to
change specifications and/or price after the contract was awarded. He
accordingly found the bid submitted by North Park to be nonresponsive
and awarded the contract to Commercial Concepts.
North Park argues that the manufacturer's brochure was not part of
its bid, and that the legend indicating that prices and specifications
were subject to change without notice pertained only to dealers. North
Park notes in this regard that its bids on past procurements were
accepted even though they contained literature with a similar legend.
The protester further contends, presumably in the alternative, that
commercial Concepts did not comply with the solicitation requirements by
crossing out the legend in its descriptive literature. North Park
maintains that the mere striking of the legend did not mean that the
legend was not part of commercial Concepts' bid. The protester
concludes that either its bid was responsive or that the bid of
Commercial Concepts was nonresponsive. We disagree.
The manufacturer's brochure clearly was part of North Park's bid.
The solicitation required that each bidder include descriptive
literature, specifications, and floor plans of the units which it
proposed to furnish. Where descriptive data is required to be supplied
for use in bid evaluation, the data is part of the bid submission and
must be considered in determining if the bid is responsive. Washex
Machinery Corp., B-214591.2, Sept. 25, 1984, 84-2 CPD Paragraph 352.
We have generally held that the reservation in descriptive literature
of the right to alter specifications renders a bid nonresponsive. IFR,
Inc., B-203391.4, Apr. 1, 1982, 82-1 CPD Paragraph 292. Where, however,
it is reasonably clear from the face of the bid that such a provision
was not intended to reserve a right to change the offered product or to
deviate from any material requirement, bid rejection is inappropriate.
IFR, Inc., supra.
In order to determine whether the legend in fact improperly reserved
to the bidder the right to change the item it offered, we must examine
the bid as a whole. Here, although the homes North Park is offering are
not manufactured by it, but by Kaufman & Broad, there is nothing in
North Park's bid such as a cover letter explaining that North Park is
offering units from stock or already manufactured units which meet all
of the specification requirements. See, for example, Burley Machinery,
Inc., 55 Comp. Gen. 592 (1975), 75-2 CPD Paragraph 411. Consequently,
we conclude that the uncontradicted legend on the literature submitted
not only reserved the manufacturer's right to make changes to the units
it supplies to its dealers, but also acted to grant North Park the right
to supply units with characteristics other than those listed in the
descriptive literature. Therefore, we believe that North Park's bid was
properly rejected as nonresponsive. Big Joe Manufacturing Company,
B-182063, Nov. 14, 1974, 74-2 CPD Paragraph 263. The fact that the
agency may in the past have erroneously accepted bids containing such a
legend, of course, does not justify repeating that error here.
Since Commercial Concepts deleted the clause from its descriptive
literature, we see no reason, despite the protester's argument to the
contrary, to view it as part of Commercial Concepts' bid.
Finally, North Park contends that the bid opening date was improperly
extended from September 20, 1984, to September 24 and complains that
Commercial Concepts did not apply for its dealer's license until after
bid opening. The contention regarding bid opening is clearly untimely
under our Bid Protest Procedures as North Park did not raise it until
November 13, almost 2 months after the bid opening date. 4 C.F.R.
Section 21.2(b)(1) (1984). Regarding North Park's license, since the
solicitation here did not impose a specific requirement regarding an
Arizona dealer's license, the contracting officer was free to make award
without regard to whether the bidder was licensed under local law.
Olson and Associates Engineering, Inc., B-215742, July 30, 1984, 84-2
CPD Paragraph 129. We thus dismiss both of these contentions.
We deny the protest in part and dismiss it in part.
Comptroller General of the United States
FILE: B-216855, 216857, 216858 85-1 CPD 377
DATE: March 29, 1985
MATTER OF: Bell Atlanticom Systems, Inc.
DIGEST:
BIDS - INVITATION FOR BIDS - AMBIGUOUS - ALLEGED INCONSISTENT
PROVISIONS
1. Invitation for bids was not ambiguous or unclear in stating
requirements for pricing information in bids.
BIDS - RESPONSIVENESS - FAILURE TO FURNISH SOMETHING REQUIRED -
PRICES
2. Bids which do not include prices for services which may be
required by procuring agency are nonresponsive even though omitted
prices are not used in determining the low bidder.
BIDS - RESPONSIVENESS - FAILURE TO FURNISH SOMETHING REQUIRED -
PRICES
3. Omission of pricing information from bids that was unrelated to
bidder's obligation to perform in accordance with the terms and
conditions of an invitation for bids did not make bids nonresponsive.
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - DIRECT INTEREST
CRITERION
4. Claims that other bids were improperly rejected must be raised by
the parties that submitted those bids.
Bell Atlanticom Systems, Inc. protests the award of contracts to
Universal Communication Systems, Inc. for telephone systems for Veterans
Administration medical facilities in Tampa, Florida; San Antonio,
Texas; and East Orange, New Jersey. The VA used two-step formal
advertising procedures to procure the telephone systems and rejected
Bell Atlanticom's bids under the second step of each solicitation,
invitation for bids (IFB) Nos. 673-40-84 (Tampa), 671-61-84 (San
Antonio) and 561-32-84 (East Orange), for failure to provide certain
pricing information. The protester contends that, under a reasonable
interpretation of the solicitations, it was not required to submit the
disputed information. Bell Atlanticom also contends that the Universal
bids contained similiar information deficiencies but were not rejected.
We deny the protests in part and dismiss them in part.
Offerors submitted technical proposals under the first step of each
solicitation. The VA invited those whose step one proposals were
acceptable to submit bids for any or all of three procurement options --
lease, lease with option to purchase, and purchase. Bell Atlanticom's
technical proposals in each procurement were accepted by the VA. After
submitting its step two sealed bids for the telephone systems, Bell
Atlanticom received a notification from each contracting officer that
ist bid had been declared nonresponsive. Each notification cited the
same three bases for the agency's determination: Bell Atlanticom failed
to identify elements of the price of the initial telephone system; it
failed to specify prices of follow-on services which might be required;
and it failed to include bid prices for some schedule items. Bell
Atlanticom submitted the low bid for each system.
The instructions for preparing bids, identical for each IFB, requires
bidders to submit lengthy bid worksheets. On the bid worksheets,
bidders record their bids for installation and lease and/or purchase of
the initial telephone system, the cost of maintenance for 10 years, and
prices for selected items for additional equipment that the VA
anticipates it will require during the 10-year service period. The VA
includes formulas for determining the present worth of lease,
maintenance and estimated growth costs on the bid worksheet forms. Each
bidder calculates and records its total bid for each procurement option
using the formulas on the bid worksheets. These totals are used by the
VA to compare the cost of the procurement options and to select the low
bidder.
Paragraph 3.0 of the instructions requires bidders to identify on
attachments to the bid worksheets the cost of specified elements of the
initial telephone system, including "single line main stations and
extensions," "power supply/inverter and ancillary equipment," and "labor
to install the initial telephone system." Only the total price of the
initial system is recorded on the bid worksheets themselves. Bell
Atlanticom provided the total initial system price on the bid
worksheets, but did not provide attachments with a breakdown of the
costs for components of the initial system. Instead, the company
responded to each subparagraph of paragraph 3.0, specifying components
of the originial system for which costs were required, by noting on its
bid "Bell Atlanticom understands and will comply."
Paragraph 4.0 of the IFB instructions requires each bidder to include
prices of follow-on services which may be required by the VA, including
"Single line station installation, removal or relocation," "Expansion of
the consol(s) to increase station capacity," and "Expansion of the cross
office traffic capacity." Some of these items were listed by the VA on
the worksheets provided to the bidders, while others were to be provided
by the bidders on attachments to the basic worksheets. The successful
bidder is required to provide equipment for these additional services,
and, for the first year after acceptance of the system, the successful
bidder must sell the follow-on services for the prices quoted in its
bid. Thereafter, prices may not increase by more than the overall
Consumer Price Index.
On the bid worksheets, the protester provided the prices of follow-on
services listed by the VA. Rather than providing an attachment to the
worksheet, specifying its prices for the follow-on services specified in
paragraph 4.0, and not listed on the VA-provided worksheets, Bell
Atlanticom stated in its bid that it understood and would comply with
all the services specified in that paragraph.
Bell Atlanticom argues that the pricing information which it omitted
is not required by the terms of the solicitations. We disagree.
Paragraph 3.0 states taht the cost of specified components of the
initial system must be identified on attachments to the bids. This
direction is repeated in several other paragraphs including paragarph
8.5.3, which states that "Attachments to the Bid Worksheets, detailing a
breakdown of equipment provided with the initial telephone system are
required." Paragraph 4.0 specifies follow-on services which may be
required by the VA, and states that each bid shall include the costs of
such services. Paragraph 8.5.13.1 states:
"For bids to be considered responsive, all paragraphs and
subparagraphs of this Attachment, affecting elements of cost, must
be addressed with the bid submittal (Step-Two). In addition,
information requested by subsequent Enclosures, to include all
items of the applicable Bid Worksheet(s), of this Attachment, must
be addressed. As a minimum, a statement of compliance and
understanding or detailed cost breakdown shall be made for each
paragraph, subparagraph, applicable Enclosure(s), Bid
Worksheet(s), and Attachments."
Bell Atlanticom contends that because paragraph 8.5.13.1 calls for a
statement of compliance and understanding or a detailed cost breakdown,
either is satisfactory. The IFB instructions contain numerous
paragraphs and subparagraphs, some of which state requirements for
prices to be provided by bidders, while others state general obligations
of the successful bidder or how bid prices are to be calculated and
recorded in the bids. We believe that the only reasonable
interpretation of the cited language in paragraph 8.5.13.1 is that it
requires a detailed price breakdown when a paragraph or subparagraph of
the instructions expressly or by clear implication calls for prices
rather than a statement of compliance. Paragraph 8.5.13.1 does not
relieve bidders of the obligation to supply the pricing information
expressly required by paragraphs 3.0 and 4.0.
Bell Atlanticom argues in the alternative that the omitted price
breakdowns are unnecessary to the evaluation of the bids, and that it
explicitly agreed to perform and comply with the requirements of the
solicitation. The company contends that, consequently, the VA's
nonresponsiveness determinations were unreasonable.
We think the agency properly rejected the protester's bid becasue of
Bell Atlanticom's failure to include the required commitment in the bids
to provide follow-on services at established prices. The regulations
authorize rejection of any bid that fails to conform to the "essential
requirements" of an IFB. Federal Acquisition Regulation, 48 C.F.R.
Section 14.404-2(a) (1984). This determination involves the question of
whether a bid is responsive to the IFB. The test for responsiveness is
whether the bid as submitted is an offer to perform, without exception,
the exact thing called for in the IFB, and upon acceptance will bind the
contractor to perform in accordance with all the terms and conditions of
the IFB. 49 Com. Gen. 553, 556 (1970). Unless something on the face of
the bid, or specifically a part of it, either limits, reduces or
modifies the obligation of the prospective contractor to perform in
accordance with the terms of the invitation, it is responsive. Id. at
556.
Anticipated growth during the first 10 years of system operation was
a major concern of the VA in purchasing the three telephone systems.
Bidders were required in step one of the two-step procurement to provide
a written 10-year commitment from the system manufacturer for parts
supply and manufacturing field support. Paragraph 4.0 of the IFB
instructions requires bidders to specify prices for listed follow-on
services and the successful bidder is obligated to provide those
services at the prices included in its bid, with annual increases not to
exceed increases in the Consumer Price Index. Thus, the availability of
components of the telephone system at pre-established prices is one of
the things being purchased by the VA. Bidders that fail to supply the
prices of follow-on services have not offered to perform something
required in the IFB -- providing additional services at pre-established
prices. Bell Atlanticom's bids were, therefore, nonresponsive to the
solicitation.
While the VA properly rejected Bell Atlanticom's bids for failing to
provide prices of follow-on services, we note that the protester's
failure to provide a price breakdown of the initial system components
would not, in itself, have made the bids nonresponsive. The prices of
components of the initial system were not used by the VA in determining
the lowest bidder, and are unrelated to the successful bidder's
obligations to the VA. Bell Atlanticom established the composition of
its initial telephone system in the first step of each procurement, and
by its submission in step two the company offered to provide the system
for the prices bid. The omission of a price breakdown for components of
the system did not qualify Bell Atlanticom's bids or cause a fialure to
conform with " essential requirements" of the solicitations. Therefore,
the protester's failure to include a cost breakdown of the original
system as requested in paragraph 3.0 of the IFB instructions would not
have resulted in the rejection of its bids.
The VA has raised several additional reasons why it believes that the
Bell Atlanticom bids were nonresponsive. In view of our conclusion that
the bids were properly rejected for failing to include prices of
follow-on services, it is unnecessary to consider the additional grounds
for rejection asserted by the agency.
Finally, Bell Atlanticom contends that portions of the Universal bid
for the San Antinio system were corrected by the VA, while the VA did
not correct similiar errors in the bids of Bell Atlanticom. The VA did
correct cost growth calculations by Universal based upon the prices of
equipment provided in the bid. The erroneous calculations were for
purposes of assisting the VA in determining which system would be most
economical over a 10-year period. Universal's errors in the
calculations did not qualify the company's bid price or its obligations
to comply with terms and conditions of the IFB, which were established
elsewhere in the bid. We think that the VA may properly correct such
errors in bidders' growth calculation since the errors consist merely of
failures to work out mathematical formulas using information provided
elsewhere in the bids. Universal Communications Systems, Inc.,
B-205032, Sept. 20, 1982, 82-2 CPD Paragraph 236. Treatment of the
Universal bid was not inconsistent with treatment of the Bell Atlanticom
bids here, since the Bell Atlanticom bids did not require correction of
growth calculations. Rather, the bids were declared nonresponsive for
failure to provide the required pricing information.
The protester also complains that the bids of Centel Business Systems
and Northern Telecom were treated differently than Universals' bids.
Since these bidders were allegedly hampered by the agency's conduct,
they would be the appropriate parties to raise these issues, not Bell
Atlanticom. Sentinel Electronics, Inc., B-212770, Dec. 20, 1983, 84-1
CPD Paragraph 5. We therefore dismiss these issues.
The protests are denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
FILE: B-216848
DATE: April 4, 1985
MATTER OF: Kosmos Ltd. Painting - Substantial Violations of the
Davis-Bacon Act
BIDDERS - DEBARMENT - LABOR STIPULATION VIOLATIONS - DAVIS-BACON ACT
- WAGE UNDERPAYMENTS - DEBARMENT REQUIRED
The Department of Labor recommended debarment of a contractor under
the Davis-Bacon Act because the contractor had falsified certified
payroll records. Based on our independent review of the record in this
matter, we conclude that the contractor disregarded its obligations to
its employees under the Act; there was a substantial violation of the
Act in that the underpayment of employees was intentional as
demonstrated by the contractor's bad faith in the falsification of
certified payroll records. Therefore, the contractor will be debarred
under the Act.
The Deputy Administrator, Employment Standards Administration, United
States Department of Labor (DOL), by a letter dated November 21, 1983,
recommended that the names Kosmos Ltd. Painting (Kosmos) and Peter J.
Tripousis, individually and as owner of Kosmos, be placed on the
ineligible bidders list for violations of the Davis-Bacon Act, 40 U.S.C.
Sections 276a to 276a-5 (1982). For reasons that follow, we concur in
DOL's recommendation.
Kosmos entered into three contracts (N62474-80-C-0878,
N62474-79-C-3290, and N62474-81-B-2409) with the United States Navy to
provide painting services. These contracts were subject to the
Davis-Bacon Act requirements that certain minimum wages be paid.
Further, pursuant to 29 C.F.R. Section 5.5(a)(3) (1984), the contractor
was to submit payroll records certified as to correctness and
completeness.
The DOL found as a result of an investigation that employees
performing work for Kosmos under these contracts were not paid the
minimum wages required pursuant to the Davis-Bacon Act. Further, DOL
found that Kosmos falsified the certified payroll records as to hourly
rates and amounts paid and omitted several employees from those payroll
records. Mr. Peter J. Tripousis, as the owner of Kosmos, by a certified
letter dated September 6, 1983, was given notice in detail of the nature
and extent of the Davis-Bacon Act violations with which Kosmos was
charged, and that debarment sanctions seemed warranted; and was given
an opportunity for a hearing on the matter before an administrative law
judge in accordance with 29 C.F.R. Section 5.12 (1984). The DOL reports
that Mr. Tripousis made no response to this offer, which DOL states its
certified mail receipt indicates he received. Thereafter, DOL
reexamined the entire record, finding that, "the firm has not
demonstrated a current responsibility to comply with the labor standards
provisions applicable to federally funded construction work, and the
record does not indicate any acceptable reason or explanation regarding
these serious violations which would mitigate against debarment action."
The Davis-Bacon Act provides that the Comptroller General is to debar
persons or firms whom he has found to have disregarded their obligations
to employees under the Act. 40 U.S.C. Section 276a-2. The DOL
recommended that Kosmos and Mr. Tripousis, individually and as owner of
Kosmos, be debarred for violations of the Davis-Bacon Act constituting a
disregard of obligations to the employees under the Act. In B-3368,
March 19, 1957, we distinguished between "technical violations" which
result from inadvertence or legitimate disagreement concerning
classification, and "substantial violations" which are intentional as
demonstrated by bad faith or gross carelessness in observing obligations
to employees with respect to the minimum wage provisions of the
Davis-Bacon Act. Falsification of payroll records is a basis for
debarment under the Davis-Bacon Act. See, e.g., Metropolitan Home
Improvement Roofing Co., Inc., B-215945, January 25, 1985.
Based on our independent review of the record in this matter, we
conclude that Kosmos Ltd. Painting and Peter J. Tripousis, individually
and as owner of Kosmos, disregarded their obligations to their employees
under the Davis-Bacon Act; there was a substantial violation of the
Davis-Bacon Act in that the underpayment of employees was intentional as
demonstrated by Kosmos' bad faith in the falsification of certified
payroll records. Therefore, the names Kosmos Ltd. Painting and Peter
J. Tripousis, individually and as owner of Kosmos Ltd. Painting, will be
included on a list to be distributed to all departments of the
Government and, pursuant to statutory direction (40 U.S.C. Section
276a-2), no contract shall be awarded to them or to any firm,
corporation, partnership, or association in which they, or any of them,
have an interest until 3 years have elapsed from the date of publication
of such list.
Comptroller General
of the United States
FILE: B-216846 85-1 CPD 343
DATE: March 25, 1985
MATTER OF: Barber-Nichols Engineering Co.
DIGEST:
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL SUPERIORITY V. COST
1. Where a solicitation for a negotiated procurement advises
offerors that technical factors are more important then cost, award may
be made to an offeror with a superior technical proposal even though its
price is higher than other technically acceptable proposals if the lower
prices are offset by the advantages of the technically superior
proposal.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - DISCUSSION WITH ALL
OFFERORS REQUIREMENT - WHAT CONSTITUES DISCUSSION - REVISION OF PROPOSAL
OPPORTUNITY
2. Protest contending that agency should have been more specific
during discussions in asking for information is denied because it is the
offeror that has the burden of establishing in its proposal that what it
offers will meet the government's needs and the agency's only burden
when conducting discussions is to furnish those offerors whose proposals
are within the competitive range information concerning the areas of
perceived deficiencies in their proposals and to give those offerors the
opportunity to revise their proposals.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL ACCEPTABILITY - BASED ON CONTENT OF PROPOSAL
3. No matter how capable or reputable an offeror may be, the
technical evaluation of the agency must be based on information in, or
submitted with, the proposal and an offeror cannot be considered for
award if it does not submit an adequately written proposal.
Barber-Nichols Engineering Co. protests the award of a
cost-plus-fixed-fee contract by the U. S. Army to Western Gear
Corporation under solicitation No. DAAK7084-Q-0081. Barber-Nichols
contends that its proposal to design, fabricate and deliver a new
gearbox for an experimental personnel carrier was improperly
disqualified and that because Barber-Nichols' price was so much below
that of Western Gear's, the agency should have been more specific in
requesting the information necessary to make Barber-Nichols' proposal
eligible for award.
We deny the protest.
The solicitation, issued on July 3, 1984, indicated that for
evaluation purposes the adequacy of the technical approach was weighted
as 50 percent and that the two remaining criteria -- cost and cost
realism, organization, personnel and facilities -- were weighted at 25
percent each. The solicitation further advised offerors to make their
initial proposals clear and complete and to provide sufficient
information to clearly demonstrate the engineering merit of the proposed
design and its compliance with the specifications. The solicitation
explicitly reserved the right to make award to other than the lowest
offeror because "factors other than estimated cost are collectively of
greater importance." In addition, the solicitation stated that in no
case would use of such words as "We will comply with the requirements of
paragraph . . . ," or equivalent wording, be acceptable.
Three proposals were received and written questions with respect to
each proposal were sent to the offerors. After receipt of best and
final offers, the evaluation resulted in point scores for technical
approach of 350 for Barber-Nichols and 450 for Western Gear -- a
difference of 100 points, or 29 percent. The combined point scores for
technical approach and organization, personnel and facilities were
541.59 for Barber-Nichols and 666.58 for Western Gear -- a difference of
124.99 points, or 23 percent. Barber-Nichols' total price was $120,079
and Western Gear's price was $197,037 -- a difference of $76,958, or 64
percent. The total points for all three evaluation criteria were 729.09
for Barber-Nichols and 841.58 for Western Gear -- a difference of 112.49
points, or 15 percent. The contracting officer determined that the
higher cost proposal of Western Gear was justified by its superior
technical proposal as reflected by the evaluation scores and made an
award to Western Gear. Barber-Nichols then protested to our Office.
Barber-Nichols' contentions that its proposal was unfairly
"disqualified" and that the agency's negotiations were not specific
enough to obtain the information desired to make the proposal acceptable
reflect a possible misunderstanding of the purpose of negotiations and
the respective responsibilities of the offeror and the agency.
The record indicates that Barber-Nichols' proposal was never
disqualified, but remained in the competitive range until after best and
final offers, when the proposal of Western Gear was determined to be
more advantageous to the government than Barber-Nichols' proposal. The
determination that the proposal was within the competitive range clearly
indicated the agency's judgment that the proposal was acceptable or
reasonably capable of being made acceptable without major revisions.
Essex Electro Engnieers, Inc., et al., B-211053.2; B-211053.3, Jan 17,
1984, 84-1 CPD Paragraph 74. A proposal within the competitive range,
however, is not automatically entitled to award even if its price is
low, unless the solicitation so provides. Thus, in negotiated
procurements such as this one, where offerors are on notice that
technical considerations are more important than cost, award can be made
to the offeror with a superior technical proposal even though its price
may be higher than those of other technically acceptable proposals if
the lower prices are offset by the advantages of the technically
superior proposal. In this respect, the cost technical tradeoffs made
by the procuring agency necessarily require the exercise of reasoned
judgment as to the significance of the differences in technical merit
among the proposals. Our office will not question that judgment if it
is reasonable and consistent with the evaluation factors set out in the
solicitation. Systems Development Corp., B-213726, June 6, 1984, 84-1
CPD Paragraph 605.
Also, the offeror has the burden of establishing in its proposal that
what it offers will meet the government's needs. Texas Medical
Instruments, B-206405, Aug. 10, 1982, 82-2 CPD Paragraph 122. This
burden on the offeror remains through the best and final offer phase of
the procurement. See Decision Sciences Corp., B-184438, Aug. 3, 1976,
76-2 CPD Paragraph 114. When an agency decides to conduct discussions,
its burden is to furnish those offerors whose proposals are within the
competitive range information concerning the areas of perceived
deficiencies in their proposals and give those offerors the opportunity
to revise their proposals. The extent and content of such discussions,
however, are matters primarily for the judgment of the contracting
agency and that judgment will not be disturbed by our Office unless it
is without a reasonable basis. Photonics Technology, Inc., B-200482,
Apr. 15, 1981, 81-1 CPD Paragraph 288. On the other hand, the agency
must take care in the conduct of discussions not to prejudice the other
competitors by pointing out weaknesses in one proposal that have
resulted from a lack of diligence or competence. Information Network
Systems, B-208009, Mar. 17, 1983, 83-1 CPD Paragraph 272.
In our view, the questions set to Barber-Nichols fulfilled the
agency's obligations with regard to the discussions by fairly
identifying those areas of the proposal where the agency had concerns
and need for more information. Barber-Nichols' responses, however, did
not meet its burden of establishing that its design and the gearbox
would meet the government's needs. In some instances, Barber-Nichols'
responses were brief and apparently based on the assumption that its
unverifiable assurances should be sufficient for the agency. For
example, when the agency asked if the gearbox's weight could be kept
under 200 pounds, Barber-Nichols' answered that it "expects to meet the
maximum weight goal of 200 pounds." In a second instance, when the
agency asked if the 11-inch width of the gearbox could be reduced to
meet the required 10-inch maximum width, the response stated that the 11
inches was incorrect and should be 10 inches. It then referred to an
attached figure which was not drawn to scale and, therefore, could not
be used to confirm the statement. In a third instance, the agency asked
if the proposal had considered the obstructions relative to the flywheel
housing and, if so, could the required maximum dimensions be met. The
response stated that the maximum dimensions could be met and that the
gearbox would not interfere with the flywheel housing obstructions.
While it is true, as Barber-Nichols insists, that the solicitation
did not specifically require that drawings be to scale or that a
preliminary estimate of the weight of each component of the gearbox be
provided, it is also clear that the solicitation did require clear and
complete information to show the merits of the design and its compliance
with the specifications.
In our view, the agency clearly was reasonable in considering these
answers and others like them to be unsatisfactory, especially as the
solicitation cautioned against we-will-comply-like statements and the
contract was to be awarded on a cost-plus-fixed-fee basis. Under a
cost-based contract, it is the agency, not the contractor, that pays for
the unexpected costs if the contractor cannot perform as promised. We
therefore find no merit to this portion of the protest.
Barber-Nichols also contends that its qualifications and reputation
were so well known to the procuring agency that Barber-Nichols should
have been asked specifically for the information desired. In this
regard, we point out that no matter how reputable or capable an offeror
might be, the technical evaluation by the agency must be based on
information in, or submitted with, the proposal and the offeror cannot
be considered for award if it does not submit an adequately written
proposal. Frequency Engineering Laboratories, B-212516, Feb. 7, 1984,
84-1 CPD Paragraph 151.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-216844-O.M.
DATE: May 10, 1985
BIDDERS - DEBARMENT - LABOR STIPULATION VIOLATIONS - DAVIS-BACON ACT
- SUBCONTRACTORS - DEBARMENT UNWARRANTED
1. As to the subcontractor, its violations of the Davis-Bacon Act
and the Contract Work Hours and Safety Standards Act (CWHSSA) appear to
be due to administrative errors by a company that was having managerial
and financial difficulties. Thus, evidence in the record is
insufficient to establish willfulness of violations and debarment is
unwarranted.
BIDDERS - DEBARMENT - LABOR STIPULATION VIOLATIONS - DAVIS-BACON ACT
- DEBARMENT UNWARRANTED
2. Notwithstanding possible conclusion that employees were underpaid
by the prime contractor, debarment of prime contractor is not warranted
because of DOL assessment that evidence may not be sufficient to
persuade a DOL administrative law judge to recommend debarment under 29
C.F.R. Section 5.12(b) (1984).
TO: Group Director, GGD -- Claims Group
FROM: Acting Associate General Counsel -- Henry R. Wray
SUBJECT: Fortec Constructors, et al, (a Davis-Bacon Case) --
B-216844-O.M.
Returned herewith are your files Z-2851644-1 and Z-2854140. The
Department of Labor (DOL) has recommended that GAO take no further
administrative action on these cases except to distribute the funds on
deposit with your office.
As to the subcontractor, Suburban Electric Co., Inc., there does not
appear to be any evidence of intentional violations of the Davis-Bacon
Act, 40 U.S.C. Sections 276a to 276a-5 (1982) or the Contract Work Hours
and Safety Standards Act (CWHSSA), 40 U.S.C. Sections 327-332 (1982).
Rather, its violations appear to be due to administrative errors by a
company that was having managerial and financial difficulties. Thus, we
concur with the recommendation of DOL that no further administrative
action be taken, and debarment is not warranted. See B-214364-O.M., May
22, 1984; B-206034-O.M., June 1, 1982.
As to the prime contractor, Fortec Constructors (Fortec), DOL has
likewise recommended that this contractor and its officers not be
debarred. Its recommendation is based on DOL's assessment that the
evidence may not be sufficient to persuade a DOL administrative law
judge to recommend debarment under 29 C.F.R. Section 5.12(b) (1984). We
concur with DOL's recommendation and thus we decline to debar Fortec or
its officers.
Accordingly, the funds on deposit with your office to cover the
Davis-Bacon underpayments, as well as those funds administratively
determined by DOL to be due under the CWHSSA, should be disbursed to the
aggrieved workers, as listed in your files, in accordance with
established procedures. Also, please notify DOL when these funds have
been disbursed.
As you may have already noted, this memorandum has been signed by the
Acting Associate General Counsel for Personnel Law Matters, rather than
by the General Counsel. Under GAO Operations Manual Order 0.140.9.53,
April 18, 1985, the authority to sign most dispositive rulings involving
the Davis-Bacon Act and related matters has been delegated to this
Associate General Counsel.
Attachments
B-216841, Nov 30, 1984, 84-2 CPD 593
CONTRACTORS - Protests - General Accounting Office procedures -
Timeliness of protest - Solicitation improprieties - Apparent prior to
bid opening/closing date for proposals
DIGEST:
1. GAO Bid Protest Procedures require that solicitation
improprieties obvious on the face of the solicitation be protested
before bid opening.
CONTRACTORS - Responsibility - Determination - Review by GAO
Affirmative finding accepted
2. GAO does not review protests concerning 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 definitive responsibility criteria have been misapplied.
CONTRACTS - Awards - Notice - To unsuccessful bidders - Erroneous
statements - Effect on award
3. Contracting officer's failure to provide unsuccessful bidder
notice of contract award is a procedural deficiency which does not
affect the validity of the award.
Auchter Industries:
Auchter Industries protests any award under invitation for bids No.
2193, a telegraphic solicitation issued by the Regional Procurement
Office at the American Embassy in Bonn, West Germany, for two types of
carpet. Auchter contends that the solicitation was defective in that it
failed to include a delivery schedule and questions whether the
acquisition should have been solicited by telegram. The protester also
complains that the agency awarded a portion of the requirement to a
bidder offering carpet of Olefin while the solicitation specified nylon
carpet and contends that another portion of the requirement was awarded
to an ineligible firm.
We dismiss the protest.
Our Bid Protest Procedures require that alleged solicitation
improprieties obvious on the face of the solicitation be protested
before bid opening. 4 C.F.R. Sec. 21.2(b)(1) (1984); VANHER
Corporation, B-215725, July 23, 1984, 84-2 C.P.D. Para. 93. Auchter's
protest concerning the lack of a delivery schedule and the nature of the
solicitation was not filed until September 26, 1984, after the August 24
bid opening. We therefore view as untimely this portion of the protest
which clearly relates to alleged obvious solicitation defects.
Auchter states that for the first of the two types of carpet
solicited the agency made award to a bidder offering carpet made of
Olefin at $10.60 per yard. The protester argues, that such an award was
improper because the solicitation specified nylon carpet. Auchter notes
in this regard that it offered an alternate bid of $8.76 per square yard
for Olefin carpet. Thus, the protester concludes that if a bid based on
Olefin is acceptable its alternate bid was low.
By letter dated October 30, however, the agency stated that the award
of this item was made to a bidder offering nylon carpet at $10.60 per
yard. (The protester's price for nylon carpet was $11.40 per yard.) The
protester has provided no basis for its contention, in the face of that
letter, that the award was made on the basis of a nonconforming product.
We therefore will not consider this aspect of the protest further.
Auchter further contends that Douglass Industries, the firm receiving
the award under the second part of the solicitation, was eliminated from
participating in another carpet acquisition "for unknown specific
reasons." Apparently Auchter believes that Douglass should also be
disqualified here. This allegation appears to relate to Douglass'
responsibility as a prospective contractor. Before award, a contracting
officer must make an affirmative determination of the proposed awardee's
responsibility. Our Office does not review protests concerning such
determinations unless there is a showing of possible fraud or bad faith
on the part of contracting officials or an allegation that definitive
responsibility criteria have been misapplied. TECOM Incorporated,
B-215291, June 19, 1984, 84-1 C.P.D. Para. 644. Neither is present
here.
Finally, Auchter complains that the postaward notification that it
received did not comply with the Federal Acquisition Regulation, Sec.
15.1001(c), 48 Fed. Reg. 42,102, 42,218 (1984) (to be codified at 48 C.
F.R. Sec. 15.1001(c)). The contracting officer's failure to give
sufficient notice of award is a procedural deficiency that does not
affect the validity of an otherwise proper award. Technical Fiberglass,
Inc., B-213940, Feb. 1, 1984, 84-1 C.P.D. Para 137.
The protest is dismissed. COMP GEN (UP)
FILE: B-216840
DATE: July 1, 1985
MATTER OF: Vac-Hyd Corporation
DIGEST:
1. When services being procured are of a critical nature and the
agency has only a short timeframe in which to award a new contract, GAO
cannot object on any legal basis to an award to the incumbent
contractor, the only qualified source, even though the solicitation
induced nonapproved sources such as the protester to compete.
2. When an offer from a small business concern is not technically
acceptable because, for example, the offeror is not an approved source,
the Small Business Act does not apply.
3. Although denying a protest against rejection of a proposal from a
nonapproved source, GAO recommends that the agency take immediate and
vigorous steps to qualify any new source that may wish to participate in
future competitive procurements. The agency should only consider
exercising an option under the current contract if no additional sources
become qualified.
4. When a protest is denied GAO will not consider a protester's
request for proposal preparation costs.
Vac-Hyd Corporation protests the rejection of its offer under request
for proposals (RFP) No. F34601-84-R-44555, issued by Tinker Air Force
Base, Oklahoma. The solicitation covered components for repair of
fighter aircraft engines. The Air Force rejected Vac-Hyd's proposal
because the firm was not an approved source and the agency could not
delay the award while Vac-Hyd underwent the qualification process.
We deny the protest, finding the agency was compelled to make an
award to the incumbent contractor, the only qualified source, within a
timeframe that precluded qualifying other sources. Nevertheless, we
recommend that the Air Force take immediate and vigorous steps to
qualify any new nonapproved source that may wish to participate in
future competitive procurements. Only if none become qualified should
the agency consider exercising the option under the current contract.
BACKGROUND
The RFP provided for a requirements-type contract for the repair and
overhaul of TF30 compressor stators, a component of the F-111 fighter
aircraft engine. At the time the RFP was issued, only two companies --
Chromalloy American Corporation (the incumbent contractor) and the
Hamilton Standard Division of United Technologies Corporation -- had
been approved by the Air Force to do this work. Clause M-48 of the RFP
informed potential offerors of this fact and stated that the successful
offeror would have to be an approved source in accord with Air Force
procedures for the repair and overhaul of critical aircraft engine
parts. However, clause M-48 also stated that firms not currently
approved might be considered for award if the offeror submitted proof
that it (1) had received prior Department of Defense (DoD) approval as a
source for the required repair/overhaul work, or (2) had satisfactorily
performed this type of work for a DoD agency, or (3) meets or has met
the criteria established by the responsible engineering activity
concerning qualification for the required repairs. Under this last
category, the Air Force also listed "typical criteria." These included:
"(a) Evidence of satisfactory experience in similar repairs of
similar parts.
"(b) Evidence of satisfactory experience in welding, heat
treating or fabricating aircraft engine material for parts of
similar complexity.
"(c) Evidence of satisfactory experience with special finishing
and coating techniques.
"(d) Evidence of satisfactory experience in repairing aircraft
engine critical parts for other DoD services or commercial
airlines."
"(e) Federal Aviation Administration (FAA) repair or
manufacturing source approval."
Since Vac-Hyd, a small business concern, has no prior DoD experience,
the firm states that it submitted with its proposal evidence that it has
had extensive experience in the repair and overhaul of commercial
aircraft stators, that it is certified by the FAA as an approved repair
station, and that its facility is fully equipped and its personnel fully
trained to perform all the overhaul and repair work required by the RFP.
In addition to this, a week before the September 17, 1984, closing date
for receipt of proposals, Vac-Hyd hand-delivered this same information
to the Office of Contracting and Manufacturing at Tinker Air Force Base.
The firm states that it anticipated that this would speed up the source
approval process, which it believed required about 3 weeks.
Nevertheless, the contracting officer notified Vac-Hyd by letter
dated September 28 that its proposal could not be considered for the
award. The contracting officer stated that the procurement was
"restricted to already approved sources" and that the Air Force's
"current requirements will not permit a delay in award incident to the
evaluation and approval of your company as a source on this
acquisition."
Upon receipt of this letter, Vac-Hyd filed a protest with the Air
Force, requesting that the agency reconsider its decision to exclude
Vac-Hyd from the competition. However, the Air Force did not respond to
this protest, and it was only when Vac-Hyd officials placed a telephone
call to the contracting officer to find out what the Air Force intended
to do that Vac-Hyd learned that on September 28, the same day the agency
had rejected Vac-Hyd's proposal, the agency had awarded Chromalloy a
1-year contract with two 1-year options. Vac-Hyd immediately protested
to our Office.
VAC-HYD'S PROTEST
Vac-Hyd's protest has two major grounds. First, Vac-Hyd argues that
the Air Force's refusal to evaluate its proposal and to initiate
procedures by which it might obtain approved source status disregarded
clause M-48 of the solicitation and violated federal procurement policy
requiring that the government deal fairly and honestly with all
offerors. Second, Vac-Hyd argues that the Air Force violated the Small
Business Act, 15 U.S.C. Section 637(b)(7)(A) (1982), when it failed to
refer the question of Vac-Hyd's ability to perform the overhaul/repair
work to the Small Business Administration (SBA) for possible issuance of
a certificate of competency (COC).
In support of its first ground for protest, Vac-Hyd asserts that the
contracting officer had no right to disregard either the approval
procedures established by the solicitation or the information Vac-Hyd
submitted with its proposal to qualify as an approved source. Vac-Hyd
further argues that the Air Force was required to provide a reasonable
time for source approval, stating that it prepared its offer under the
assumption that the agency had in fact set aside adequate time for this
procedure. This assumption was confirmed, in Vac-Hyd's opinion, when
the solicitation was amended to provide for an offer acceptance period
of 120 days rather than the normal 60 days. The protester concludes
that the Air Force effectively restricted the competition to the two
previously approved sources and in reality brought about a sole-source
award to the only approved source (Chromalloy) competing for the
contract. In Vac-Hyd's opinion, then, the Air Force conducted this
procurement in direct contradiction to the explicit terms of the RFP and
in so doing failed to consider its proposal in a fair and honest manner.
As to its second ground for protest, Vac-Hyd notes that under the
Small Business Act and applicable regulations, whenever a contracting
agency finds a small business nonresponsible, it is required to refer
the matter to the SBA; if the SBA finds the small business responsible
and issues a COC, the determination is binding on the agency. In
Vac-Hyd's opinion, the Air Force's refusal to evaluate its proposal or
to initiate qualification procedures was tantamount to a finding by the
agency that the protester lacks the special qualifications to perform
the stator overhaul/repair work. According to Vac-Hyd, this was a de
facto nonresponsibility determination that should have been referred to
the SBA, and the Air Force's failure to make the referral was,
therefore, a violation of the Small Business Act.
Vac-Hyd requests that the contract be set aside, that Vac-Hyd be
qualified as an approved source, that the requirement be resolicited,
and that Vac-Hyd be reimbursed for its original proposal preparation
costs.
THE AIR FORCE'S RESPONSE
The Air Force responds that the contracting officer, in her initial
evaluation, suspected a mistake in a portion of Vac-Hyd's proposed
prices and also discovered that Vac-Hyd had failed to return the
attachments to the RFP along with the rest of the solicitation
documents. In the Air Force's opinion, this contradicts Vac-Hyd's
assertion that it had submitted a complete proposal that only required
the Air Force to proceed with the source approval. According to the Air
Force, it would have been necessary to conduct discussions with Vac-Hyd
before the agency could have determined whether its proposal was
acceptable. However, since Vac-Hyd was not an approved source, no
discussions were held and no final determination was ever made regarding
the acceptability of the proposal.
As to clause M-48 of the RFP, the Air Force maintains that while it
did specify that nonapproved sources might be considered for award, the
clause also stated that only an offeror that had been approved in accord
with the applicable procedures could ultimately receive the award and
that the approval would have to be accomplished within a timeframe that
met the government's requirements. According to the agency, it was
impossible to evaluate Vac-Hyd in time to satisfy the Air Force's needs
-- the then current contract was about to expire and the availability of
uninterrupted stator overhaul/repair services was of critical
importance.
Regarding the amount of time needed to become an approved source, the
Air Force notes that while clause M-48 allows a nonapproved source such
as Vac-Hyd to submit evidence of prior commercial stator repair
experience to support its request for approved status, the submission of
such evidence does not by itself qualify the offeror. The Air Force
emphasizes that clause M-48 lists "typical criteria" for approved
status, not all the criteria. According to the Air Force, the
responsible engineering activity establishes the full criteria that any
firm must meet to become an approved source, and this normally includes
the offeror demonstrating its ability by performing overhaul/repair work
on Air Force-provided TF30 stators -- a process which can take from 2 to
6 months, not the 3 weeks Vac-Hyd envisioned. In addition, the Air
Force points out that the purpose behind the RFP'S 120-day offer
acceptance period was to require all offerors to hold their prices while
proposals were being evaluated and had nothing to do with providing
additional time for source approval.
Finally, as to whether the question of Vac-Hyd's responsibility
should have been referred to the SBA, the Air Force argues that it never
made a determination concerning Vac-Hyd's responsibility, since Vac-Hyd
was not an approved source. Accordingly, the Air Force denies that it
was required to refer the matter to SBA for consideration under the COC
program.
Even though it concludes that the Vac-Hyd protest is without merit,
the Air Force acknowledges that it could receive the benefit of better
prices in future procurements if additional approved sources were
available to compete for the stator overhaul/repair work. Consequently,
the agency states that it is pressing forward in its effort to qualify
both Vac-Hyd and the other nonapproved source that competed under the
protested procurement. If one or both become approved sources, the Air
Force states that it will issue a new solicitation, rather than exercise
the options under the Chromalloy contract.
VAC-HYD'S REBUTTAL
Responding to the agency's protest report, Vac-Hyd argues that the
Air Force should not be allowed at this stage to maintain that it was
under time constraints that prevented it from holding up the award until
new sources were approved. Vac-Hyd notes that the Air Force should have
been aware that its old contract was for a 3-year period with a specific
expiration date; therefore, the agency should have issued the new
solicitation early enough in the last year of the contract to allow
sufficient time for new sources to be approved. In Vac-Hyd's opinion,
the Air Force should not be allowed to award what is tantamount to a
sole-source contract to the incumbent contractor because of the agency's
own administrative delays.
Vac-Hyd also alleges that the Air Force has been slow to inform
Vac-Hyd what it must do to be approved, and when it told the protester
that it would have to repair government-furnished stators for Air Force
inspection and evaluation, the agency failed to supply those stators
despite a number of requests.
GAO ANALYSIS
It is well established that the government must deal fairly and
honestly with all offerors competing for federal contracts. Keco
Industries, Inc. v. United States, 492 F.2d 1200 (Ct. Cl. 1974). It is
also well established that the prequalification of offerors, as opposed
to the prequalification of products, generally results in an unwarranted
restriction on the full and free competition contemplated by the federal
procurement statutes. D. Moody & Co., Inc., B-185647, Sept. 1, 1976,
76-2 CPD Paragraph 211. Nevertheless, our Office has recognized that,
under certain limited circumstances, the prequalification of offerors
may be allowed. See, for example, Department of Agriculture's Use of
Master Agreements, 56 Comp. Gen. 78 (1976), 76-2 CPD Paragraph 390;
Rotair Industries; D. Moody and Co., Inc., 58 Comp. Gen. 149 (1978),
78-2 CPD Paragraph 410.
Recent legislation, although not applicable to this procurement,
specifically addresses the practice of prequalifying offerors and
establishes a framework for future procurements. /1/ In addition, our
Office has consistently held that when a contracting agency restricts a
contract award to an approved source, nonapproved sources must be given
a reasonable opportunity to qualify. See Hill Industries, B-210093 July
6, 1983, 83-2 CPD Paragraph 59; 40 Comp. Gen. 348 (1960).
Here, the Air Force is not seeking to procure any particular product
or part. Rather, it seeks expert services, and because of the part
being serviced -- i.e., components for fighter aircraft engines -- the
Air Force wants to ensure that the company selected has a high level of
competence and experience. Under these circumstances, the Air Force has
decided that all potential contractors must first be approved before
they can be considered for the award and has established specific
procedures for this process. Nevertheless, the RFP in this case
specifically invited nonapproved sources to submit proposals, provided
that they also submitted evidence of prior experience that the Air Force
was able to evaluate before award.
This prequalification process clearly serves a bona fide need of the
government -- that is, it ensures a high level of maintenance on a
critical aircraft part -- yet it also allows nonapproved sources to
submit proposals and become qualified. We therefore see nothing
improper under the facts presented with the Air Force's basic approach.
See Rotair Industries; D. Moody and Co., Inc., 58 Comp. Gen. 149,
supra. We do question, however, the way the Air Force applied this
procedure to the protester, since it does not appear that Vac-Hyd was
given a reasonable opportunity to become qualified. From the facts
presented by the Air Force, the agency was aware at the time it issued
the solicitation that its existing contract was about to expire. In
addition, it was aware that it could take from 2 to 6 months under its
procedures for a nonapproved source to be qualified. Nevertheless, the
Air Force issued an RFP that in effect encouraged nonapproved sources
like Vac-Hyd to spend time and money preparing proposals that the agency
apparently did not intend to consider.
In its protest report, the agency points out that the TF30 stator
repair program was synopsized in mid-June 1984 and provided a reference
for qualification procedures. Although in theory this means that
Vac-Hyd was on constructive notice of the qualification requirement
several months before the closing date for receipt of proposals, in
reality there is no evidence that even if Vac-Hyd acted more quickly to
initiate the qualification procedures, its proposal would have been
treated any differently by the agency. Clearly, if the full 6 months
that the Air Force states might be required for qualification actually
were required, synopsis in June would not permit a firm to qualify for
award in September.
In view of the foregoing, it is clear that the short timeframe the
Air Force was forced to work under was due largely to its own lack of
planning. As Vac-Hyd has pointed out, the agency should have begun the
procurement process early enough to allow adequate time to evaluate any
offers submitted by nonapproved sources. Nevertheless, the Air Force
did need uninterrupted service for its TF30 compressor stators, and it
was in fact under real time constraints. Moreover, on the date of
award, Chromalloy was the only approved source available to undertake
the overhaul/repair service. Under those circumstances, we cannot
object to the award on any legal basis -- even though we find that
Vac-Hyd's proposal was not treated fairly.
As to whether the Air Force should have referred the question of
Vac-Hyd's acceptability to SBA, when an agency makes a finding that an
offer from a small business concern is not technically acceptable,
because, for example, it is not an approved source, the Small Business
Act does not apply. See Pacific Sky Supply, Inc., B-215189 et al., Jan.
18, 1985, 64 Comp. Gen. . . . (1985), 85-1 CPD Paragraph 53. That is
the case here, since there has been no finding of nonresponsibility.
The protest is denied.
RECOMMENDATION FOR REMEDIAL ACTION
We believe that the Air Force had alternatives to awarding a 1-year
contract with 2 option years to the incumbent contractor. For example,
when the agency realized that it had received offers from two
nonapproved sources but did not have sufficient time to allow them to be
qualified, it could have requested Chromalloy to extend its then-current
contract long enough to allow the approval process to be completed.
The Air Force advises us that if Vac-Hyd and/or the other nonapproved
source that participated in the protested procurement are granted
approved status, it intends to resolicit the requirement rather than
exercise the option under the Chromalloy contract. We recommend that
the Air Force take immediate and vigorous steps to qualify any new
nonapproved source that may wish to participate in a competitive
procurement. Only if none become qualified should the Air Force
consider exercising the option under the current contract.
By separate letter of today, we are informing the Secretary of the
Air Force of our recommendation.
In view of our denial of the protest, we have not considered
Vac-Hyd's request for proposal preparation costs. Orvedahl
Construction, Inc., B-213408, April 10, 1984, 84-1 CPD Paragraph 405.
Comptroller General
of the United States
(1) Under 41 U.S.C.A. Section 253C (West Supp. 1985), as added by
section 202 of the Small Business and Federal Procurement Competition
Enhancement Act of 1984 and 10 U.S.C.A. Section 2319 (West Supp. 1985),
as added by section 1216 of the Department of Defense Authorization Act,
1985, Congress has established standards which should aid nonapproved
sources such as Vac-Hyd in the future. Both acts contain provisions
concerning prequalification, testing, and other quality assurance
procedures. They require, among other things, that the qualification be
justified and standards specified; that potential offerors be provided
an opportunity to demonstrate their ability to meet standards; and that
agencies promptly advise offerors whether qualification was attained
and, if not, why not. Potential offerors generally may not be denied
the opportunity to submit offers and have them considered for award
solely because they are not on lists of qualified bidders or
manufacturers. Moreover, the Department of Defense Authorization Act
states that the opportunity to qualify shall be "on a reimbursable
basis," and both acts state that in certain circumstances, the
contracting agency must bear the cost of testing and evaluation for
small business concerns. However, the acts also provide that the head
of an agency need not delay a proposed procurement in order to provide a
potential offeror with an opportunity to demonstrate its ability to meet
the standards specified for qualification.
The pertinent provisions of the Small Business and Federal
Procurement Competition Enhancement Act apply to solicitations issued
more than 180 days after the date of enactment, which occurred on
October 30, 1984. Those of the Department of Defense Authorization Act
will become effective 1 year after enactment, i.e., on October 19, 1985,
and will apply to all solicitations issued after that date. Thus,
neither act applies to the protested procurement.
FILE: B-216835
DATE: February 22, 1985
MATTER OF: William L. Klockenteger - Real Estate Expenses - Title
Requirements
DIGEST:
OFFICERS AND EMPLOYEES - TRANSFERS - REAL ESTATES EXPENSES - HUSBAND
AND WIFE DIVORCED, ETC. - HOUSE SALE
A transferred employee was reimbursed for only 50 percent of his
claimed real estate expenses because he was divorced from his wife, with
whom he held title to the residence, prior to the date of settlement.
The employee contends that the date to be used to determine eligibility
for reimbursement of such expenses is when the employee is notified of
his impending transfer. The settlement date is the appropriate time to
determine if an individual with whom an employee holds title is a member
of his immediate family. Therefore, the employee may be reimbursed for
only one-half of the otherwise allowable expenses.
This decision is in response to a request from Mr. Richard Martinez,
an authorized certifying officer with the Federal Highway Administration
(FHA), for our decision concerning the entitlement of Mr. William L.
Klockenteger to reimbursement of expenses associated with the sale of
his residence at his former duty station. We concur in the FHA's
determination to reimburse Mr. Klockenteger for only 50 percent of the
expenses he incurred.
On January 24, 1984, Mr. Klockenteger was notified of his transfer
from Washington, D.C., to Denver, Colorado, and it was determined that
he would report for duty on March 12, 1984. Upon notification of his
transfer Mr. Klockenteger put his residence on the market. He accepted
a contract for the sale of the house on March 27, 1984, and settlement
took place on May 25, 1984. Prior to the settlement, on April 6, 1984,
Mr. Klockenteger obtained a divorce.
The FHA found that since Mr. Klockenteger held title to the residence
with his ex-wife at the time of settlement, he did not satisfy the
requirements of paragraph 2-6.1c of the Federal Travel Regulations, FPMR
101-7 (September 1981) (FTR), which provide that, as a prerequisite for
reimbursement of real estate expenses, title to the residence must be in
the name of the employee alone, in the joint names of the employee and
one or more members of his immediate family, or solely in the name of
one or more members of his immediate family. The FHA reimbursed Mr.
Klockenteger for one-half of the expenses in accord with our decisions
which provide that when an employee holds title to a residence with an
individual who is not a member of his immediate family, he may be
reimbursed only to the extent of his interest in the residence. See
Charles R. Holland, B-205891, July 19, 1982; Gerald S. Beasley,
B-196208, February 28, 1980.
Mr. Klockenteger contends that the date to be used to determine
eligibility for reimbursement of real estate expenses is not the date of
sale, but the date on which the employee is notified of his transfer
coupled with the date he contracts with a realtor to sell his house.
Mr. Klockenteger claims that since his family was intact on those dates
and at the time of transfer, he is entitled to full reimbursement.
Immediate family is defined in FTR paragraph 2-1.4d as including:
"(1) Any of the following named members of the employee's
household at the time he/she reports for duty at the new permanent
duty station or performs authorized or approved overseas tour
renewal agreement travel or separation travel:
"(a) Spouse;"
This definition seems to support Mr. Klockenteger's argument
concerning the point of eligibility for reimbursement of real estate
expenses. However, we held in our decision of today, Alan Wood,
B-216206, that since an employee may be reimbursed only for those
expenses he is required to pay and since the expenses of a real estate
transaction are generally paid at settlement, that date is the
appropriate date to use to determine whether the individual with whom an
employee holds title is a member of his immediate family.
In accord with the rule enunciated in Wood, we concur in FHA's
decision that Mr. Klockenteger is entitled only to reimbursement of 50
percent of the claimed expenses. We would like to point out, however,
that even if we were to accept Mr. Klockenteger's view of the
appropriate date for eligibility, he would not be entitled to full
reimbursement. The record contains a copy of the Klockentegers' divorce
decree, dated April 6, 1984, which states that:
"* * * the parties hereto have lived separate and apart without
cohabitation and without interruption since on or about Novem0er
18, 1982; which separation has been continuous and uninterrupted
and without cohabitation for a period of more than one (1) year;
that there has been no reconciliation of any kind between the
parties nor is one possible; * * *"
The Klockentegers were apparently separated well before Mr.
Klockenteger's transfer and even before he was notified of that
transfer. We have held that since a separated spouse is not a member of
an employee's household, such a spouse does not fall within the
definition of immediate family. See William A. Cromer, B-205869, June
8, 1982, and cases cited therein.
Comptroller General
of the United States
FILE: B-216830 85-1 CPD 59
DATE: January 18, 1985
MATTER OF: Lone Star Sanitary Service
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
A protest based upon alleged solicitation ambiguities which are not
apparent until after bid opening is untimely unless filed within 10 days
of when the basis for protest is known or should have been known,
whichever is earlier.
Lone Star Sanitary Service protests the award of a requirements
contract for sanitation services under Department of the Army invitation
for bids (IFB) DAAD07-84-B0041. Lone Star bases its protest on alleged
ambiguities in the specifications, which it asserts were not apparent
until after bid opening.
We dismiss the protest.
The solicitation, issued by White Sands Missile Range in New Mexico
(White Sands), is for furnishing and servicing chemical latrines at
various locations within 70 miles of the missile range headquarters.
The IFB included instructions for computing total bid amounts under the
one-year contract by using estimates of quantities and estimates of the
duration of their use. Lone Star did not understand or follow these
instructions in the way White Sands intended them, and its bid was
therefore re-calculated when bids were opened. Lone Star asserts that
it assumed it correctly understood the bid instructions, and thus did
not protest the ambiguity until after the bids were opened.
White Sands argues that the protest is untimely, since any alleged
improprieties apparent in a solicitation before bid opening must be
protested prior to the opening of bids. 4 C.F.R. Section 21.2(b)(1)
(1984). Lone Star, however, assumed prior to bid opening that it had
correctly understood the specifications, and therefore was completely
unaware of the ambiguity until that time. Where an ambiguity is alleged
as the result of an award under requirements which had initially
appeared unambiguous, a protest to our Office need only be filed within
10 days of when the basis of the protest is known or should have been
known. See Honeywell, Inc., B-199024, Aug. 21, 1981, 81-2 CPD Paragraph
137.
In this case, although Lone Star asserts it had no need to protest
before bid opening, we find that the basis of the protest did become
apparent by September 17, when the protester discussed the IFB terms and
the agency's interpretation of them with the contracting officer and
verified its bid.' Our Bid Protest Procedures require that such protests
either be filed with the agency or with us within 10 working days of
when the basis of the protest is known or should have been known,
whichever is earlier. 4 C.F.R. Section 21.2(a)(2) (1984). In this
case, Lone Star filed its protest orally with the agency on October 2,
confirmed that protest in writing on October 5 and subsequently filed a
protest with our Office on October 15. All of these actions were beyond
the 10 day period after it discussed the IFB terms with the contracting
officer.
The protest is dismissed.
Controller General of the United States
B-216829, Nov 5, 1984, 84-2 CPD 500
BIDS - Invitation for bids - Amendments - Failure to acknowledge Bid
nonresponsive
DIGEST:
Failure to acknowledge a material amendment which contained a Service
Contract Act wage rate determination generally renders a bid
nonresponsive.
BFI of Arkansas:
BFI of Arkansas protest the rejection of its bid as nonresponsive
under invitation for bids (IFB) 598-142-84 issued by the Veterans
Administration (VA) for miscellaneous trash and nonedible garbage
removal. The VA rejected the bid because BFI failed to acknowledge an
amendment incorporating a Service Contract Act wage rate determination.
BFI argues that it was in substantial, if not technical, compliance with
the amendment, since BFI complied with wage rates significantly above
the minimum during 3 previous years of service to the VA.
The failure to acknowledge a wage rate determination is a material
deviation that generally cannot be waived because, not withstanding the
bidder's asserted intent, in the absence of such an acknowledgement the
bidder would not be legally obligated to pay to specified wages to its
employees. See Air Services Co., B-2-4532, September 22, 1981, 81-2 CPD
Para. 240. The only exception is where the impact of the amendment's
wage rates on the bid price is minimal and the bidder is required by
union contract to pay wages not less than those in the wage
determination. Brutoco Engineering & Construction., 62 Comp.Gen. 111
(1983), 83-1 CPD Para. 9; Law Brothers Contracting Corp., B-208877, May
17, 1983, 83-1 CPD Para. 521.
There is nothing in the record which indicates that BFI is legally
required to pay wages at the rate in the wage determination. Under
these circumstances, the VA acted properly in rejecting BFI's bid as
nonresponsive.
We summarily deny the protest. COMP GEN (UP)
B-216827, Oct 24, 1984, 84-2 CPD 466
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Date basis of protest made known to protester
DIGEST:
Protest not received in our Office within 10 working days after
protester knew or should have known the basis of its protest is untimely
and will not be considered.
Estabrook Engineering Inc.:
Estabrook Engineering Inc. (Estabrook) protests the rejection of its
bid under invitation for bids (IFB) No. DAAH01-84-B-A115 issued by the
Department of the Army. By letter dated July 20, 1984, the Army
informed Estabrook that its bid was nonresponsive for failure to
acknowledge an amendment to the solicitation. Subsequently, Estabrook
corresponded with the Army. By letter dated August 1, 1984, the Army
again advised Estabrook that its bid was rejected as nonresponsive.
While there was further correspondence with the Army and a congressman,
Estabrook's protest was not received in our Office until October 15.
Section 21.2(b)(2) of our Bid Protest Procedures, 4 C.F.R. sec.
21.2(b)(2) (1984), provides that a protest must be filed within 10
working days after the basis for the protest is known or should have
been known. Since the protest was received in our Office more than 10
working days after Estabrook received notice that its bid was
nonresponsive, it is untimely and will not be considered.
The protest is dismissed. COMP GEN (UP)
B-216826, Oct 29, 1984, 84-2 CPD 477
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Adverse agency action effect
DIGEST:
Where firm initially protested allegedly unduly restrictive
specifications to contracting agency prior to bid opening, opening of
bids is adverse agency action on protest and subsequent protest to GAO
filed more than 10 working days after protester's actual or constructive
knowledge of bid opening is untimely.
Silent Hoist & Crane Co., Inc.:
Silent Hoist & Crane Co., Inc. protests the provisions of invitation
for bids No. DLA-003-84-B-0020, issued by the Defense Logistics Agency
(DLA) for a 25,000-pound capacity forklift truck to be shipped to a
government depot in Ogden, Utah. Silent Hoist alleges that the
specifications are unduly restrictive. We dismiss the protest as
untimely.
By telex of September 10, 1984 and letter of September 11, Silent
Hoist protested the specifications to the agency and requested that they
be modifies. However, DLA has informally advised us that no amendment
was issued and that bids were opened as scheduled on September 18.
Silent Hoist filed this protest with our Office on October 15.
Our Bid Protest Procedures provide that a protest based on an alleged
impropriety apparent in an invitation for bids must be filed with either
the contracting agency or this Office prior to bid opening. 4 C.F.R.
sec. 21.2(b)(1) (1984). If a timely protest has been filed initially
with the agency, any subsequent protest to this Office must be filed
within 10 working days of actual or constructive notice of initial
adverse action on the agency protest. Id. sec. 21.2(a).
The opening of bids without amendment of the solicitation constituted
initial adverse agency action on Silent Hoist's protest to the
contracting agency. The Trane Co., B-213332, Mar. 15, 1984, 84-1 CPD
para. 309. Since Silent Hoist did not file this protest with our Office
until almost a month after the scheduled bid opening, it is untimely and
will not be considered on the merits.
The protest is denied. COMP GEN (UP)
FILE: B-216825 85-1 CPD 194
DATE: February 13, 1985
MATTER OF: Hoyer Construction Company, Inc.
DIGEST:
BIDS - INVITATION FOR BIDS - CANCELLATION - AFTER BID OPENING -
DEFECTIVE SOLICITATION
1. Decision to cancel solicitation was reasonable where the
specifications were ambiguous and under circumstances provided a
compelling reason to cancel the solicitation.
BIDS - INVITATION FOR BIDS - CANCELLATION - RESOLICITATION - REVISED
SPECIFICATIONS
2. Oral resolicitation after cancellation of invitation for bids is
not objectionable when record indicates use of such procedures was
justified on basis of urgency.
Hoyer Construction Company, Inc. (Hoyer) protests the award of a
contract for removal and replacement of floor coating to Rodenberg's
Floor Coating, Inc. (Rodenberg) by Tinker Air Force Base (Air Force),
Oklahoma, under request for proposals No. F34650-84-R-0115, which was
orally solicited after the cancellation of invitation for bids (IFB) No.
F34650-84-B-0488. We deny the protest.
The IFB was issued on September 10, 1984, with a bid opening date of
September 24, 1984. The urgency of the requirement permitted only 14
days for bid preparation. Rodenberg and Hoyer submitted bids, and
Rodenberg was the apparent low bidder. On September 25, 1984, the Air
Force discovered that the specifications were incorrect; that
88,200-square feet of flooring needed to be removed instead of the
42,000-square feet listed in the solicitation. On September 26, 1984,
the Air Force canceled the solicitation and decided to negotiate orally.
Rodenberg and Hoyer were notified by phone that the initial
solicitation had been canceled due to a change in the specifications and
that oral offers would be accepted, due to the urgency of the
requirement. Rodenberg proposed $127,890 compared to its original bid
price of $63,000. Hoyer proposed the same price it originally offered.
The Air Force recorded this price as $363,384, using the same unit price
Hoyer originally offered, $4.12 per square foot, and multiplying it by
the new quantity. Hoyer contends that it meant its original extended
price of $173,040. We find it unnecessary to resolve this discrepancy
because Hoyer is not low under either offer. Award was made to
Rodenberg.
Hoyer essentially contends that the Air Force acted improperly in
canceling the IFB and resoliciting by oral negotiations. Hoyer advises
that it made a site visit and discovered that the 42,000 square feet was
not the total job. Further, Hoyer states that the contract drawing
showed a figure in excess of 89,000 square feet. Therefore, Hoyer
argues, because its original bid was based on 89,000 square feet, its
bid was the only responsive bid (since Rodenberg also had the
opportunity to make the same observations).
Contracting officers have broad discretion to determine whether a
solicitation should be canceled. However, 0ecause of the potential
adverse impact on the competitive bidding system of canceling after bid
opening, a cogent and compelling reason must support the decision to
cancel. The protester has the burden of showing that the contracting
officer abused this discretion, since we limit our review to the
question of whether the exercise of discretion was reasonable. Pacific
Scientific Company, Gardner-Neotec Division, B-208193, Jan. 18, 1983,
83-1 C.P.D. Paragraph 61.
Generally, the use of specifications which do not adequately describe
the government's actual needs provides a compelling reason for
cancellation, the fact that an invitation is in some way deficient does
not, of itself, constitute a compelling reason to cancel if other
bidders would not be prejudiced by an award under the solicitation and
award would serve the government's actual needs. See id.; Turbine
Engine Services Corp., B-215281.2, Aug. 21, 1984, 84-2 C.P.D. Paragraph
206.
Ue find that the Air Force acted reasonably in canceling the
solicitation and in conducting the reprocurement through oral
negotiations. The specifications at best would have to be labeled as
ambiguous because the figures for the job site and contract drawing were
inconsistent with the 42,000-square feet estimate that appeared in the
solicitation. It is a basic principle of federal procurement law that
specifications must be sufficiently definite and free from ambiguity so
as to permit competition on a common basis. An ambiguity exists if
specifications are subject to more than one reasonable interpretation.
Delta Data Systems Corporation, B-213398, Apr. 17, 1984, 84-1 C.P.D.
Paragraph 430. The specifications here were subject to more than one
reasonable interpretation and thus provided the contracting officer a
compelling reason to cancel. The fact that Hoyer made a site visit and
determined the actual requirements and that Rodenberg could have done so
does not eliminate the ambiguity, since Rodenberg did not make such a
visit nor otherwise learn of the discrepancy in time to base its bid on
what the actual need was. That Hoyer may have su0mitted a bid based on
the actual requirement in this instance is irrelevant.
Given the urgency of the Air Force's requirement, we find that the
use of oral negotiations is not objectionable. All the proper
determinations and findings required by regulation for use of oral
negotiation procedures are in the record, see the Federal Acquisition
Regulation, 48 C.F.R. Section 15.402(f) (1984), and Hoyer was given the
opportunity to compete on the resolicitation. Therefore, we have no
basis to object to the Air Force's handling of this procurement.
The protest is denied.
Comptroller General
of the United States
B-216824, Oct 31, 1984, 84-2 CPD 492
CONTRACTS - Small business concerns - Awards - Small Business
Administration's authority - Size determination
DIGEST:
1. Protest that proposed awardee under small business set-aside
should not be considered a small business firm because a large business
allegedly will perform most of the contract work is dismissed since the
Small Business Administration is empowered to make conclusive
determinations on matters of small business size status.
CONTRACTS - Small business concerns - Awards - Set-asides -
Subcontractor, supplier, etc. size status
2. Subcontracting with a large business in connection with a
construction contract set aside for small businesses is not legally
objectionable.
Burlington Constructors Inc.:
Burlington Constructors Inc. (Burlington) protests the proposed award
of a contract to Adams Contracting (Adams) under invitation for bids
(IFB) No. F30636-84-B0018 issued by the Department of the Air Force for
the repair of hot water lines at the Plattsburgh Air Force Base. The
IFB was set aside for small business concerns and the protester
complains that Adams should not qualify as a small business because a
large business firm allegedly will be doing the majority of the work.
We dismiss the protest.
Under 15 U.S.C. sec. 637(b) (1982), the Small Business Administration
has exclusive authority to determine matters of small business size
status for federal procurement and sales purposes. Lordship Industries,
Inc., B-212056, June 20, 1983, 83-2 C.P.D. para. 7. Therefore, we will
not consider Burlington's suggestion that Adams should not be considered
a small business because of its alleged arrangement with a large
business firm. Automated Datatron Inc., B-205038.2, Dec. 30, 1981, 81-1
C.P.D. para. 513. In any event, we point out that subcontracting with a
large business firm in connection with a construction contract is not
legally objectionable. See Engineering Computer Optecnomics, Inc.,
B-203508, June 22, 1981, 81-1 C.P.D. para. 516. COMP GEN (UP)
FILE: B-216823
DATE: December 10, 1984
Mr. Clyde E. Jeffcoat
Principal Deputy Commander
U.S. Army Finance and
Accounting Center
Indianapolis, Indiana 46249
Dear Mr. Jeffcoat:
This responds to your request that we relieve Major (MAJ) P.J.
O'Hagan, Finance Corps, Finance and Accounting Offices, U.S. Army
Finance and Accounting Center, Fort Sam Houston, and his deputy, Ms. F.
Loux under 31 U.S.C. Section 3527(c) for an improper payment of a
$316.45 check payable to Mr. Otis L.P. Walker, III. The indebtedness
was reduced to $281.92 when U.S. Treasury check number 31,485,587,
representing Mr. Walker's final Army pay check in the amount of $34.53
was cancelled and the proceeds applied to his debt. For the reasons
stated below, relief is granted.
The loss resulted when the payee negotiated both the original and a
substitute check. Both checks were in the same amount. The substitute
check was issued on the basis of the payee's allegation that the
original check had not been received and a request for stop payment had
been made. Both checks were issued by the Army under authority
delegated by the Department of the Treasury. 31 C.F.R. Section 245.8.
The substitute check here was signed by the Finance and Accounting
Officer's deputy, which requires that we relieve the Finance and
Accounting Officer in his supervisory capacity as well as the deputy as
disbursing officer. We have concluded that where a substitute check is
properly issued the supervisor is no more negligent than the deputy who
actually signed the check, B-212576, et al., December 2, 1983.
It appears that the request for stop payment and the issuance of a
substitute check in this case were within the bounds of due care as
established by Army Regulations. See AR 37-103, paras. 4-161, 4-162 and
4-164. There was no indication of bad faith on the part of the
disbursing officers. See 62 Comp. Gen. 91, 94 (1982). Also, aggressive
collection attempts are being made to collect this debt in accordance
with the Federal Claims Collection Act, as amended, 31 U.S. C. Section
3711 et seq., and the procedures outlined in our decision 62 Comp. Gen.
476 (1983). Relief is therefore granted.
Sincerely yours,
Harry R. Van Cleve
General Counsel
B-216813, Nov 6, 1984, 84-2 CPD 509
BIDDERS - Qualifications - License requirement - General v. specific
- Effect on responsibility
DIGEST:
1. Solicitation provision requiring bidders to obtain necessary
licenses and/or permits to perform contract is a general licensing
requirement and is a matter to be resolved between the bidder and state
or local authorities and is not a matter that the contracting officer
must consider in making the award.
BIDS - Prices - Below cost - Not basis for precluding award
2. Submission of allegedly below-cost bid does not provide a basis
for challenging the award of a contract.
CONTRACTORS - Responsibility - Determination - Review by GAO -
Affirmative finding accepted
3. A contract award to a bidder necessarily includes the contracting
officer's finding that the bidder is responsible. GAO does not review
affirmative determinations of responsibility unless there has been a
showing of possible fraud or bad faith on the part of procurement
officials or that definitive responsibility criteria were not applied.
New Texas Corporation:
New Texas Corporation (New Texas) protests the award of a contract to
A & J Security Guard Services (A&J) under the United States Department
of Justice, Immigration and Naturalization Service invitation for bids
(IFB) No. DLS5-85 for unarmed guard services at the Port Isabel Service
Processing Center, Los Fresnos, Texas. New Texas claims that A&J does
not have the requisite Texas permit to perform this contract and that
its bid price is insufficient and unrealistic.
The IFB required the contractor to be licensed as a qualified
guarding service company and to supply a notarized copy of that license
prior to award. The provisions of the IFB further require that the
contractor would be responsible for obtaining all additional necessary
licenses and permits for the State of Texas. New Texas claims that A&
Jhas not obtained a Texas license, and therefore, A&J should not have
been awarded the contract.
An IFB provision which requires a bidder to possess a specific
license constitutes a definitive responsibility criterion, compliance
with which is a necessary prerequisite to award. The specific
requirement that the bidder be licensed as a qualified guarding service
company is such a definitive criterion. A&J is licensed by the State of
Florida and the record shows that a notarized copy of that license was
furnished with the bid as required.
We view the responsibility to obtain necessary additional licenses
required by the State of Texas as a general licensing requirement only.
Compliance with a general licensing requirement is not a matter that the
contracting officer must consider prior to making an award, because that
matter is to be resolved between the contractor and state or local
authorities. Nevertheless, if the contracting officer has reason to
believe that an unlicensed bidder's performance is likely to be
frustrated by the enforcement of state of local licensing requirements,
he may find the bidder nonresponsible. Nor-Cal Security, B-208296,Aug.
3, 1982, 82-2 CPD Para. 107. The award of the contract to A&J indicates
that the contracting officer had no reason to believe that A& J could
not perform the contract as required.
New Texas also alleged that A&J's bid price is unrealistically low,
thereby rendering the bid nonresponsive. This is not a valid basis to
challenge an award since a below-cost bid is not illegal and an award
cannot be withheld merely because the low bid is allegedly below cost.
Zimmerman Plumbing and Heating Co., B-211879, June 24, 1983, 83-2 CPD
Para. 16. Further, whether the low bidder can adequately perform the
contract at the bid price is a matter of responsibility, to be
determined by the contracting officer. Here, the contracting officer's
decision to award a contract to A&J necessarily included a finding that
A&J is responsible. This Office will not disturb a contracting
officer's affirmative determination that a firm is responsible absent a
showing of possible fraud or bad faith on the part of the contracting
officer or that definitive responsibility criteria were not applied.
Lake Shore, Inc., B-213877, Dec. 22, 1983, 84-1 CPD Para. 14. New Texas
has not demonstrated that any of these exceptions applies.
The protest is dismissed. COMP GEN (UP)
FILE: B-216812 85-2 CPD 205
DATE: August 21, 1985
MATTER OF: South County Business Machines
DIGEST:
EQUIPMENT - AUTOMATIC DATA PROCESSING SYSTEMS - ACQUISITION, ETC.
Agency is not required to purchase automatic data processing
equipment under General Services Administration schedule contract where
use of the contract is not mandatory. Open market purchase under small
purchase procedures is proper when price offered is most advantageous to
the government.
South County Business Machines protests the purchase of a word
processing system and typewriter module from Kennedy Business Machines
under delivery order No. N00228-84-F-TE53, issued by the Naval Supply
Center, Oakland, California. South Central contends that the agency
should have purchased the items from the manufacturer, Systel Computers,
Inc., under that firm's General Services Administration (GSA) schedule
contract, No. GS-00K-8401S-5796. South County states that it has
previously supplied the equipment to the Naval Air Station in Alameda,
California, for which it was purchased, and believes that it would have
received a commission from the manufacturer for a sale under the
schedule contract.
We deny the protest.
On August 2, 1984, the Naval Air Station requested that the Naval
Supply Center purchase for it a Systel word processing system and a
module to connect the system to an Olympia typewriter. The Naval Air
Station provided the buying activity with the number of the
manufacturer's automatic data processing (ADP) schedule contract with
GSA. The Naval Supply Center solicited prices by telephone from three
local dealers, including the protester, that were listed in the schedule
contract. On September 13, it issued a delivery order to Kennedy, the
one offering the lowest price, $2,280. The delivery order cited the
Systel schedule contract number and contained the statement, "All terms
and conditions of basic contract apply to this order." Kennedy delivered
the equipment to the Naval Air Station on September 28, and South
County's protest followed.
Although in its report to our Office the Navy maintains that the
purchase was made under the Systel schedule contract, this is not the
case. As the protester points out, the contract states that orders must
be made out to Systel Computers, Inc. and addressed to the firm either
directly or in care of its nearest authorized dealer. Upon receipt of
an order, the manufacturer is to ship new, inspected equipment to the
installing dealer. All payments must be made payable to and submitted
to Systel at its corporate headquarters. The contract states that
government invoices can only be issued by Systel Computers, Inc. and
that local Systel dealers are not authorized to issue invoices or accept
payment.
The record indicates that the delivery order in this case was issued
directly to Kennedy Business Machines, not to Systel. Kennedy invoiced
the Navy directly and delivered the equipment, apparently from its own
stock. In addition, payment was made to Kennedy and not to Systel.
Thus, the Navy bought Systel equipment directly from Kennedy on the open
market, rather than under the Systel schedule contract.
We do not find this improper. The Navy apparently intended to use
the Systel schedule contract to purchase the equipment and failed to do
so through a misunderstanding of or failure to read the contract
provisions. Contrary to the protester's allegations, however, use of
the schedule contract for this procurement was not mandatory. The
Department of Defense (DOD) Supplement to the Federal Acquisition
Regulation (FAR) provides that the small purchase procedures apply when
the aggregate amount of any one ADP equipment requirement does not
exceed $25,000 annually. For small purchases of Federal Supply
Classification Group 70 items, which includes the equipment in question
here, the regulation states that ADP schedule contracts "may be used."
DOD FAR Supp., 48 C.F.R. Section 270.304 (1984). Also, neither the
Systel schedule contract nor applicable FAR provisions restrict the
government from soliciting quotations from dealers in equipment covered
by a GSA schedule contract.
Albeit unknowingly, the buying activity here followed the small
purchase procedures set forth in the FAR. These provide that for
purchases between $1,000 and $25,000, the contracting officer must
solicit quotations from a reasonable number of qualified sources to
ensure that the purchase is advantageous to the government, taking into
account price, the administrative cost of the purchase, and other
factors. 48 C.F.R. Section 13.106(b). We interpret this as meaning
that the Navy was required to use the Systel schedule contract only if
it was determined to be the most advantageous of those sources included
in the competition.
The Navy did not formally determine that accepting Kennedy's offer
was more advantageous than purchasing under the Systel schedule
contract. In fact, the microfiche copy of the Systel contract
maintained by the Naval Supply Center did not contain prices, so a
comparison could not readily have been made. Nevertheless, Kennedy
offered the lowest price of the three Systel dealers -- a price which
was in fact $7 lower than the Systel schedule contract price. Also,
Kennedy apparently agreed to the service and warranty provisions of the
schedule contract, since the delivery order states that the terms and
conditions of the basic contract are applicable. Consequently, we
cannot conclude that the Navy's issuance of the purchase order to
Kennedy was improper or that use of the Systel schedule contract would
have been more advantageous.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-216811 85-1 CPD 167
DATE: February 8, 1985
MATTER OF: Hemford Company
DIGEST:
CONTRACTS - NEGOTIATION - REQUESTS FOR PROPOSALS - CANCELLATION -
REASONABLE BASIS - CHANGED CONDITIONS, NEEDS, ETC.
Agency decision to resolicit requirement after termination of a
contract due to procurement irregularities, rather than to reopen
negotiations with original offerors, is reasonable in light of agency's
unrefuted need to change specification and evaluation criteria.
Hemford Company (Hemford) protests award of a contract to Lees-Haley
Associates under request for proposals (RFP) No. DAAH03-84-R-F062,
issued by the Department of the Army for chapel support services at
Redstone Arsenal, Alabama.
After discussions, the Army determined the Hemford proposal to be
technically unacceptable. No further negotiations were conducted with
Hemford.
As a result of Hemford's protest, the Army terminated the Lees-Haley
contract for the convenience of the government in view of inconsistent
application of the evaluation criteria. Interim supports services are
being procured from Lees-Haley on a month-to-month basis, apparently
under an extension of its prior contract, pending resolicitation of the
requirement.
Hemford argues that the Army should reopen the original RFP rather
than resolicit. The Army reports that it plans to revise the
specification and the evaluation criteria to avoid the ambiguities which
led to the irregularities in the first procurement. Hemford does not
refute the Army's position in this regard.
Cancellation of a negotiated procurement and resolicitation requires
only a reasonable basis. We conclude that the length of time that has
passed since the award, the later termination of the contract under the
original RFP, and the need to revise the specification and the
evaluation criteria are sufficient to support the Army's decision to
resolicit. See Anvan Realty & Management Co., B-214295, May 22, 1984,
84-1 C.P.D. Paragraph 548. However, we expect that the agency will take
steps to resolicit as soon as possible since the terminated contractor
is continuing to perform the services.
The protest is denied.
Comptroller General
of the United States
FILE: B-216807 84-2 CPD 629
DATE: December 5, 1984
MATTER OF: International Shelter Systems, Inc.
CONTRACTS - PROTESTS - ABEYANCE PENDING COURT ACTION
Protest against rejection of bid on basis of material unbalancing
will not be considered where material issues are before a court of
competent jurisdiction and where the court has not expressed interest in
receiving views of GAO.
International Shelter Systems, Inc. (International), protests the
rejection of its bid under Department of the Navy invitation for bids
No. N62472-84-B-1816. The bid was rejected because the agency
determined that the International bid prices were materially unbalanced.
We dismiss the protest.
Subsequent to the filing of the protest, International filed suit in
the United States District Court for Rhode Island. International's
request for a temporary restraining order has been denied, but the
protester is pursuing a court ruling to cancel the contract and reaward
to the protester. The court is cognizant of the protest before our
Office, but has not asked for our opinion on the matter.
It is our policy not to review matters where the material issues are
pending before a court of competent jurisdiction, unless the court
requests, expects or otherwise expresses an interest in receiving our
views. Therefore, pursuant to 4 C.F.R. Section 21.10 (1984), we decline
to consider the protest on its merits. Norfolk Dredging Company,
B-209099, Dec. 22, 1982, 82-2 CPD Paragraph 567.
Harry R. Van Cleve
General Counsel
FILE: B-216804 85-1 CPD 486
DATE: April 30, 1985
MATTER OF: A.O. Stilwell Co., Inc.
BIDS - RESPONSIVENESS - DESCRIPTIVE LITERATURE - INDICATION THAT ITEM
OFFERED FAILED TO MEET SPECIFICATIONS
1. An agency may properly reject a bid as nonresponsive where the
bidder submits descriptive literature that shows that the product it is
offering does not conform to specifications.
BIDS - PRICES - REASONABLENESS - ADMINISTRATIVE DETERMINATION
2. Since agency determinations of price reasonableness are matters
of administrative discretion, GAO will not question such a determination
unless it is unreasonable or there is a showing of possible fraud or bad
faith on the part of contracting officials.
A.O. Stilwell Co., Inc., protests the rejection of its bid and the
award of a contract to Sullivan Sales Corporation under invitation for
bids (IFB) No. 528-57-84, issued by the Veterans Administration (VA).
The solicitation called for storm window replacement at the VA Medical
Center, Buffalo, New York.
We deny the protest.
The VA rejected Stilwell's bid as nonresponsive because the
descriptive literature submitted with it demonstrated that the windows
offered did not conform to specifications or, in some instances, because
the literature lacked sufficient detail to enable the VA to determine
whether they did so.
Stilwell argues that, under the preaward qualification provisions of
the IFB, as amended, the VA required only general descriptive literature
to be submitted by bid opening and that more specific information and a
sample window were to be supplied after bid opening. The protester
further alleges that the award was at an unreasonable price, since
Sullivan's bid was nearly 75 percent higher than its own or that of the
next low bidder.
The VA asserts that the IFB clearly required descriptive literature
to be submitted by bid opening and that Stilwell's was inadequate.
Because Stilwell's bid was nonresponsive, the VA asserts that its
refusal to allow the firm to submit preaward qualification materials
after bid opening was proper, adding that it intended to obtain this
material only from the low, responsive bidder. Moreover, the VA argues
that if the descriptive literature and/or preaward qualification
requirements were unclear, Stilwell should have protested before bid
opening. The VA finally asserts that the contract price was consistent
with the government's estimate.
The VA warned in a Special Notice on the face of the solicitation
that: "BIDDERS MUST SUPPLY DESCRIPTIVE LITERATURE DESCRIBING WINDOWS
BEING OFFERED. SEE CLAUSE ON PAGE 7 OF SOLICITATION, OFFER AND AWARD."
Page 7 included the standard clause set forth in the Federal Acquisition
Regulation (FAR), 48 C.F.R. Section 52.214-21 (1984), which states that:
"(a) 'Descriptive literature' means information (e.g., cuts,
illustrations, drawings, and brochures) that is submitted as part
of a bid. Descriptive literature is required to establish, for
the purpose of evaluation and award, details of the product
offered that are specified elsewhere in the solicitation and
pertain to significant elements such as (1) design; (2)
materials; (3) components; (4) performance characteristics; and
(5) methods of manufacture, assembly, construction, or operation.
The term includes only information required to determine the
technical acceptability of the offered product. It does not
include other information such as that used in determining the
responsibility of a prospective contractor or for operating or
maintaining equipment.
"(b) Descriptive literature, required elsewhere in this
solicitation, must be (1) identified to show the item(s) of the
offer to which it applies and (2) received by the time specified
in this solicitation for receipt of bids. Failure to submit
descriptive literature on time will require rejection of the bid.
. . .
"(c) The failure of descriptive literature to show that the
product offered conforms to the requirements of this solicitation
will require rejection of the bid."
In addition to the foregoing, the IFB at subparagraph 1.02C, section
08523, entitled "Pre-Award Qualifications," stated:
"1. Manufacturers shall submit a demonstration window sample
representative of unit specified, test data, manufacturers
specifications, including a list of any modifications required to
bring stock sample into conformance with requirements of this
section for the contracting officer's conditional approval.
"2. After conditional approval, install a complete window unit
. . .
"3. Test installation in conformance with 'On Site Tests'
following. Submit results to Contracting Officer.
"4. In the event of a successful test, the Veterans
Administration will enter into contract with the manufacturer.
Sample installation shall remain as a standard of quality
throughout the construction period. . . . "
On September 10, 1984, 8 days before the scheduled bid opening, the
VA issued an amendment that, among other things, advised bidders that:
"All Pre-Award Qualifications must be met by 12 noon, September 28,
1984."
The VA received three bids on September 18, 1984, as follows:
A.O. Stilwell Co., Inc. $1,807,988
Cortland Glass Co., Inc. $1,857,850
Sullivan Sales Corp. $3,103,000
After reviewing the descriptive literature submitted with these bids,
the VA found both Stilwell's and Cortland's bids nonresponsive and
concluded that Sullivan had submitted the only acceptable bid; the
agency apparently also proceeded with testing of the window offered by
Sullivan.
On September 27, 1984, Stilwell contacted the contracting officer and
inquired as to where it should deliver its window and additional
literature in order to meet the September 28 deadline for preaward
qualification. The contracting officer informed Stilwell that the time
for submission of descriptive literature had been with its bid and that
she could not accept anything further from Stilwell. The VA awarded the
contract to Sullivan on September 28, 1984, and Stilwell's protest to
our Office followed. The firm seeks our recommendation for award to it
or, alternatively, bid preparation costs, lost profit, and damages.
The question here is whether the VA, after imposing two separate
requirements -- one for descriptive lieterature and another for preaward
qualification materials -- could properly reject bids as nonresponsive
on the basis of the descriptive literature submitted with them.
Stilwell is in effect challenging the adequacy and use of the
descriptive literature clause by arguing that the solicitation required
only general information to be submitted with bids.
A failure to comply with a proper descriptive literature requirement
ordinarily will result in rejection of the bid as nonresponsive.
Wholesale Office Furniture, Inc., B-216081, Dec. 4, 1984, 84-2 CPD
Paragraph 618. This is because responsiveness concerns a bidder's
unequivocal offer to provide supplies or services in conformity with the
material terms and conditions of the solicitation; it must be
determined on the basis of the bid as submitted and not the basis of
information provided after opening. Continental Telephone of
California, B-213255, Apr. 17, 1984, 84-1 CPD Paragraph 428.
Here, in determining responsiveness, the VA compared the descriptive
literature submitted by each bidder with 14 selected requirements from
the solicitation. None of these had previously been identified as those
that would be considered in reviewing the descriptive literature. While
Sullivan's bid was found to meet all 14 criteria, the VA's review of
Stilwell's literature revealed several instances of noncompliance.
Specifically, Stilwell's literature indicates that (1) its windows use
spiral sash balances, which the VA found not acceptable since they are
composed of pressed steel parts not allowed by the specifications; (2)
its weatherstripping was composed of vinyl, at least in part, which
violated the specifications; (3) it proposed a cam-type sash lock for
security and positive lock, which did not comply with a requirement that
locks be integral within the sash and engage automatically; and (4) it
proposed a surface-mounted tilt lock which did not satisfy the
requirement that tilt locks be of integral-type construction.
We will not disturb evaluators' determinations concerning the
adequacy of technical data absent a clear showing of unreasonableness,
an arbitrary 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. We do not believe Stilwell has made such a
showing here.
Some of the additional reasons advanced by the VA for finding the
firm's bid nonresponsive are not supportable. For example, Sullivan
submitted calculations for "moment of inertia" with its bid. The
specifications, however, at subparagraph 1.06A.4, indicated that such
calculations were to be submitted along with shop drawings before the
successful contractor began fabrication of the storm windows. Failure
to provide them in descriptive literature, therefore, would not render a
bid nonresponsive.
Nevertheless, since the storm windows for which Stilwell submitted
descriptive literature did not meet at least the four above-listed
requirements (which we assume are material, since they affect the
quality of the windows, see Ven-Tel, Inc., B-203397, July 1, 1981, 81-2
CPD Paragraph 3), we find that the firm was not prejudiced by the VA's
improper determination of nonresponsiveness with regard to other
requirements.
As for the preaward qualification amendment, we believe that Stilwell
misconstrued this as an extension of the deadline for the submission of
more specific descriptive literature and a sample window. The
amendment, in fact, referred to submission by the law, responsive bidder
of a sample window, test data and manufacturer's specifications,
including a list of any modifications required to bring the stock sample
into conformance with specifications. Such detailed information was
necessary for the agency to determine whether the low, responsive bidder
was responsible, i.e., whether it was qualified to produce the windows
according to specifications, and not to determine whether the bidder had
promised to perform the contract in accordance with the solicitation.
See Jimmie Muscatello's Military and Civilian Tailors, B-211578, Sept.
29, 1983, 83-2 CPD Paragraph 390; Skyline Credit Corp., B-209193, Mar.
15, 1983, 83-1 CPD 257.
The protester also asserts that the awardee's price was not
reasonable and that the bidding process was not truly competitive. The
VA responds that, despite a $1,300,000 differential between the prices
of the two nonresponsive low bidders and that of the awardee, the
contract price was reasonable and consistent with all other available,
relevant cost data. The VA based its determination on a comparison of
the awardee's price with the VA's budget estimates for the project and
with estimates made by an independent architect-engineering firm at two
different stages during development of the specifications; the budget
estimate was $3,600,000, while the architect-engineer's final estimate
was $3,700,000. As noted above, the awardee's bid was $3,103,000.
We will not question a determination of price reasonableness unless
it is shown to be clearly unreasonable or there is a showing of possible
bad faith or fraud on the part of contracting officials, since such
determinations are matters of administrative discretion. Isometrics,
Inc., B-204556, Apr. 13, 1982, 82-1 CPD Paragraph 340. On the basis of
the evidence presented by the VA, we find that the contracting officer's
determination in this regard was reasonable.
The protest and Stilwell's claims for bid preparation costs and other
monies are denied.
Harry R. Van Cleve
General Counsel
FILE: B-216803 85-1 CPD 277
DATE: March 6, 1985
MATTER OF: Aleman Food Service, Inc.
BIDS - OPENING - POSTPONMENT - ADMINISTRATIVE DETERMINATION
1. It is within broad discretion of the contracting officer as to
whether to delay bid opening pending Small Business Administration
ruling on applicable small business size standard.
BIDS - INVITATION FOR BIDS - CHANGEIN PROCEDURES BY AGENCY -
REASONABLENESS
2. Invitation for bids (IFB) provision requiring that protest
concerning terms or conditions of IFB must be filed with issuing
activity at least 5 working days prior to bid opening only applies to
protests filed with agency and in determining whether such protest was
made timely to the contracting agency where there is a subsequent
protest to GAO.
CONTRACTS - PROTESTS - CONFLICT IN STATEMENTS OF PROTESTOR AND
CONTRACTING AGENCY
3. When only evidence of an issue of fact is a protester's statement
which conflicts with that of contracting officials, protester has not
carried its burden of proof.
BIDS - INVITATION FOR BIDS - INTERPRETATION - ORAL EXPLANATION
4. Where invitation for bids states that collective bargaining
agreement is applicable to the contract, bidder is bound to follow the
collective bargaining agreement and any bidder who fails to obtain a
copy of the agreement or relies on oral information without securing a
copy of the agreement to verify the oral advice acts at his own risk.
BIDS - INVITATION FOR BIDS - DEFECTIVE - NOT PREJUDICIAL TO
PROTESTOR, ETC. - CANCELLATION OF IFB NOT JUSTIFIED
5. Fact that statement of work in solicitation erroneously referred
to 78 pages when there were only 73 in a minor informality.
DIGEST:
Aleman Food Service, Inc. (Aleman), protests award of a contract
under invitation for bids (IFB) No. F29650-84-B-0110 issued by the
Department of the Air Force for mess attendant services at Kirtland Air
Force Base, New Mexico.
We deny the protest.
Aleman protests that, despite the fact it appealed the small business
size standard in the IFB to the Small Business Administration (SBA)
before bid opening, the contracting agency opened bids without waiting
for the SBA determination which sustained Aleman's appeal. However,
there is no requirement in the applicable regulations that a contracting
officer delay the opening of bids until receiving an SBA ruling on the
applicable size standard. See the Federal Acquisition Regulation, 48
C.F.R. Section 19.303 (c)(3)(1984. The regulatons recognizes that bid
opening need not be delayed, as it provides that if the SBA ruling is
received after bid opening, the ruling will not apply to the current
procurement and will have prospective effect only. Thus, it is simply
within the contracting officer's broad discretion as to whether to delay
the bid opening. Contract Services Co., Inc., B-210551, Feb 22, 1983,
83-1 C.P.D. Paragraph 176.
Aleman also protests that there was no Department of Labor (DOL) wage
determination in the IFB, that the IFB provided for the collective
bargaining rates of the incumbent contractor being furnished orally and
that the statement of work erroneously referred to 78 pages rather than
73. The contracting agency contends that these protests are untimely
because the IFB provided that protests concerning the terms and
conditions of the IFB must be filed with the issuing activity at least 5
working days prior to bid Aleman filed its protest with our Office on
the bid opening and date. However, the stringent 5-day limit is
applicable only to a protest filed with the Air Force and only in
determining whether the protest so filed was timely when the protest is
subsequently filed with our Office. 4 C.F.R. Section 21.2(a) (1984).
The protests were filed initially in our Office prior to bid opening.
That is all that was required by 4 C.F.R. Section 21.2(a). Therefore,
we will consider these protests.
The contracting agency has stated that there was no DOL wage
provision in the IFB because none was provided by DOL. Three months
after the bid opening, Aleman has provided a copy of a DOL wage
determination dated 17 days prior to bid opening and therefore questions
the validity of the contracting agency's statement. While the wage
determination may be dated prior to bid opening, Aleman has not provided
any evidence that shows that the contracting agency received the wage
determination before bid opening. When the only evidence of an issue of
fact is a protester's statement which conflicts with that of contracting
officials, the protester has not carried its burden of proof.
Simulators Limited, Inc. -- Reconsideration, B-215091.2, B-213046.6,
Sept. 25, 1984, 84-2 C.P.D. Paragraph 355.
Contrary to Aleman's statement, the IFB does not provide for the
collection bargaining rates of the incumbent contractor being furnished
orally. The IFB contains the Department of Defense Federal Acquisition
Regulation Supplement clause which states that the collective bargaining
agreement is applicable to the contract and provides that "copies" of
the agreement can be obtained from the contracting officer. Thus, any
bidder responding to the IFB is bound to follow the collective
bargaining agreement and any bidder who fails to obtain a copy of the
agreement or relies on oral information without securing a copy of the
agreement to verify the oral advice acts at his own risk.
Finally, the fact that the IFB statement of work erroneously referred
to 78 pages when there were only 73 pages is a typographical error and a
minor informality which does not affect the validity of the IFB.
Protest denied.
Harry R. Van Cleve
General Counsel
FILE: B-216801 85-1 CPD 126
DATE: February 1, 1985
MATTER OF: Youth Development Associates
CONTRACTS - PROTESTS - MOOT, ACADEMIC, ETC. QUESTIONS - NO BASIS FOR
RELIEF - DISCLOSURE OF PROPRIETARY INFORMATION, ETC.
An allegation that an agency's inadvertent disclosure of the
protester's proprietary information on one procurement gave another
offeror a possible unfair competitive advantage on a different similar
procurement is dismissed since the protest does not provide a basis upon
which GAO can grant relief.
Youth Development Associates (YDA) protests the potential award of a
cost-reimbursement contract to Singer Career Systems (Singer) based on a
second round of best and final offers (BAFOs) under request for
proposals (RFP) No. 1-JC-403-50, issued by the Department of Labor for
operation of the Northlands Job Corps Center in Vermont. YDA
principally argues that it will be at a competitive disadvantage if
award is based on second BAFOs since some of its proprietary data from
another similar procurement was mailed to Singer by the agency following
submission of initial BAFOs. We dismiss the protest.
Singer (the incumbent contractor) and YDA were the only offerors on
the Northlands procurement, and both were found essentially equal
technically based on their initial proposals (technical factors were of
primary importance), with YDA low as to cost. Discussions relating
largely to cost were held to point out deficiencies in the proposals,
and both YDA and Singer submitted responses by the August 22 deadline
for submitting BAFOs. YDA's proposed costs remained low but Labor found
that YDA had not responded fully to all of its concerns and that,
because its financial proposal was still weak in several respects, the
offer could not be accepted for award. Labor also considered Singer's
proposed costs unaccountably high and thus determined that further
negotiations were needed. These negotiations were held on October 10,
and October 17 was set as the closing date for second BAFOs.
The data disclosure occurred in connection with a procurement for
operation of the Brunswick Job Corps Center in Atlanta. This
procurement was canceled on August 21, the day before the initial BAFOs
were due on the Northlands procurement. When proposals were returned to
the offerors, the business management portion of a proposal submitted by
Aurora Associates (one of two joint venturers comprising YDA in the
Northlands procurement) was inadvertently included in the box of
proposal materials mailed back to Singer, also an offeror on the
Brunswick procurement. Singer states that it immediately returned the
Aurora materials to the procuring activity without examining them.
YDA claims that the data mailed to Singer between the first and
second BAFO closing dates included pricing models and methodologies from
which Singer could determine how YDA calculates its costs. YDA would
accord no weight to Singer's statement that it did not review the Aurora
materials and argues that an award based on second BAFOs would be
improper due to the possibility Singer has gained an unfair competitive
advantage from Aurora's materials. YDA also argues that the disclosure
should be viewed as a technical leveling and that, due to the
disclosure, the second round of BAFOs constituted an improper auction.
YDA asks that award be based on the initial proposals or first BAFOs;
that Singer be excluded from the competition; or that Singer's
Brunswick proposal be given to YDA. Labor advises our Office, however,
that it is proceeding with the second BAFO evaluation, and that it still
intends to base the award on the outcome of this evaluation.
The inadvertent disclosure of YDA's Brunswick proposal materials to
Singer does not in itself provide a basis upon which our Office can
grant relief. Even if we assume that, as YDA alleges, the Brunswick
data was proprietary and, in fact, gave Singer insight into YDA's cost
procedures, the disclosure occurred in connection with another now void
procurement, and we are aware of no remedy appropriate for future
procurements. In other words, there simply is no appropriate means for
eradicating any advantage Singer may have gained for this and future
similar procurements. This line of reasoning was the basis for our
dismissal of the protest in White Machine Co., B-206481, July 28, 1982,
82-2 C.P.D. Paragraph 89. There too, the agency inadvertently disclosed
the protester's pricing information for another procurement to its sole
competitor under an ongoing procurement.
The remedies suggested by YDA are not appropriate under the
circumstances. While an award based on initial proposals or the first
BAFOs would negate any advantage Singer could have gained from YDA's
data, it also would preclude the agency from negotiating in the
government's best interest. As discussed above, Labor called for second
BAFOs only because it found YDA's first BAFO had inadequately addressed
several of the concerns raised as to its proposed costs. The record
indicates YDA's proposed costs remained significantly below Labor's own
2-year estimated budget, and that YDA's score for cost realism, quite
low after the initial evaluation, increased only marginally after first
BAFOs. We have held that an agency properly may call for a second round
of BAFOs when a valid reason exists for the action. See Tymet, Inc;
GTE Telenet Communications Corp., B-209617, B-209617.2 Apr. 12, 1983,
83-1 C.P.D. Paragraph 384. We think Labor's concern with the
reasonableness of YDA's proposed costs (as well as the excessiveness of
Singer's costs) constituted sufficient justification for proceeding with
the second round of BAFOs prior to awarding a cost-reimbursement
contract, even in light of a possible resulting advantage to Singer.
YDA argues in this regard that the second round of negotiations was
unnecessary since it merely restated concerns raised by Labor during the
initial negotiations; YDA believes any remaining discrepancies in
proposed costs could be negotiated with the successful offeror. The
fact that certain points may have been the subject of earlier
discussions, however, does not eliminate the need for further discussion
on the same points where the agency has determined that the offeror's
initial response was unsatisfactory. Given that YDA's BAFO cost
proposal remained significantly below the government estimate, it
appears to us that further discussion of YDA's proposal was warranted.
YDA has not attempted to show why its responses in its first BAFO should
have been deemed fully responsive to Labor's concerns and, thus, has not
established that the second round was unnecessary.
Further, Labor correctly points out that it would have been improper
to afford only the apparent successful offeror an opportunity to modify
its proposal. Since Labor reportedly considered neither proposal
entirely acceptable after the first round, YDA's approach would unfairly
permit one offeror, but not the other, to make its proposal acceptable.
See Windham Power Lifts, Inc./Quality Plus Equipment, Inc. -- Request
for Reconsideration, B-214287.2 June 18, 1984, 84-1 C.P.D. Paragraph
638.
The remaining two remedies YDA suggests -- exclusion of Singer from
the competition altogether or disclosure of Singer's proposal for the
Brunswick procurement -- are equally inappropriate under the facts of
this case. We rejected the former remedy (exclusion) as a viable
alternative in White Machine Co., B-206481, supra, reasoning that
eliminating competition altogether is not a desirable means of removing
a possible competitive advantage gained by one offeror through an
inadvertent agency disclosure. The same reasoning applies here. As for
the latter alternative (disclosure), it would be inappropriate to
require an offeror to disclose its proprietary business information
simply because it may have benefited from an agency's inadvertent
disclosure of another offeror's proposal from another procurement.
YDA cites several of our prior decisions in support of its
recommended remedies. See, e.g., The Franklin Institute, 55 Comp. Gen.
280 (1975), 75-2 C.P.D. Paragraph 194; Swedlow, Inc., 53 Comp. Gen.
139 (1973); TM Systems, Inc., B-185715, May 4, 1976, 76-1 C.P.D.
Paragraph 299. These cases did not involve the inadvertent disclosure
of proprietary business information from a different procurement,
however, and, therefore, are not relevant. In TM Systems, Inc., for
example, the protester's price for the current procurement -- rather
than proprietary data from a different procurement -- was disclosed to a
competitor which thereafter attempted to lower its offered price below
the protester's. Since disclosure did not involve general business
information, competition could be somewhat equalized by requiring the
competitor to reveal its price and then giving both offerors a chance to
submit revised prices. We specifically rejected the alternative remedy
of having the agency base the award on initial proposals since, as here,
the agency was concerned that the prices as submitted were not
reasonable. Swedlow, Inc., involved a similar price leak and, since a
solicitation defect necessitated a resolicitation in any case, we held
only that cancellation was proper; we did not decide whether some other
remedy for the disclosure would have been appropriate. The Franklin
Institute involved an information leak, but not an inadvertent
disclosure by the agency; one firm's employee improperly attended a
technical meeting between the agency and a competitor without
identifying himself. We recommended no specific remedy but, rather,
left it to the agency to decide whether to exclude the firm or amend the
solicitation to eliminate any competitive advantage. YDA does not cite
White Machine Co., B-206481, supra, the case we consider to be
controlling here.
In view of our finding that Labor properly proceeded with a second
round of BAFOs, it follows that we do not consider the reopening of
negotiations an improper auction or the disclosure of YDA's Brunswick
proposal tantamount to improper technical leveling. Technical leveling
occurs when a contracting officer helps bring one offeror's proposal up
to the level of other proposals by pointing out weaknesses resulting
from the offeror's lack of diligence, competence, or inventiveness. See
generally The Advantech Corp., B-207793, Jan. 3, 1983, 83-1 C.P.D.
Paragraph 3. Prohibited auction techniques essentially consist of
indicating one offeror's price to another during negotiations, thereby
promoting direct price bidding between offerors. Federal Acquisiton
Regulation, Section 15.610(d)(3), 48 Fed. Reg. 42,102, 42,203 (to be
codified at 48 C.F.R. Section 15.610(d)(3)). The Northlands contracting
officer used neither of these techniques in conducting negotiations with
Singer and YDA. The inadvertent disclosure of information from a
different procurement is just that and clearly does not fall within the
above prohibitions.
The protest is dismissed.
Comptroller General
of the United States
FILE: B-216800 85-1 CPD 463
DATE: April 23, 1985
MATTER OF: Coulter Electronics, Inc.
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - DIRECR INTEREST
CRITERION
1. The manufacturer of the products offered by a low bidder, its
exclusive distributor to the federal government, is an "interested
party" under GAO's Bid Protest Procedures to protest rejection or
acceptance of bids under an IFB, since it has as direct and substantial
an economic interest in the protest as the bidder.
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - BRAND NAME OR EQUAL -
"EQUAL" PRODUCT EVALUATION - SALIENT CHARACTERISTICS NOT MET
2. Where an "equal" item has not been shown to meet the salient
characteristics of a brand name product in a brand name or equal
procurement, the bid must be rejected as nonresponsive.
CONTRACTS - AWARDS - SEPARABLE OR AGGREGATE - SINGLE AWARD -
PROPRIETY
3. Award may be made in the aggregate, even though the solicitation
language contemplates multiple awards, where separate awards would not
meet the government's requirements for a functional system and the
bidders are not prejudiced.
BIDS - RESPONSIVENESS - BRAND NAME PROCURMENT - COMPLIANCE
REQUIREMENTS
4. Bid that fails to desigante the manufacturer and model number on
line items for certain accessories to brand name system is responsive
where it is clear from the IFB and the bid that the bidder is offering
the brand name accessories.
Coulter Electronics, Inc., manufacturer of the products offered by
Curtin Matheson Scientific, Inc., the low bidder under invitation for
bids (IFB) No. 618-95-84, issued by the Veterans Administration (VA),
Fort Snelling, Saint Paul, Minnesota, protests the rejection of Curtin
Matheson's bid and the award of a contract to Becton Dickinson FACS
Systems, the only other bidder.
We deny the protest.
The IFB called for prices for a cell sorter system, Becton Dickinson
model 440, or equal, and 10 associated options and/or accessories. The
system is to be used for biomedical investigations at the VA Hospital.
The VA determined that Curtin Matheson's bid was nonresponsive because
neither it nor the accompanying descriptive literature clearly
demonstrated that certain of the accessories offered met all salient
characteristics of the brand name equipment. Coulter protests that this
determination was erroneous; it also alleges that Becton Dickinson's
bid was nonresponsive because it failed to designate the manufacturer
and model number for four of the accessories.
The VA contends that Coulter is not an interested party under our Bid
Protest Procedures, 4 C.F.R. Section 21.1(a) (1984), /1/ because it was
not a bidder, but a supplier. Coulter responds that it is interested
because Curtin Matheson is the exclusive distributor of Coulter
instruments to the federal government and because the VA determined that
the Coulter products offered by Curtin Matheson were non-responsive.
Consequently, Coulter contends that it has a direct financial interest
in the procurement.
Under our Bid Protest Procedures, a party must be "interested" before
we will consider its protest. Whether a party is sufficiently
interested to maintain a protest depends upon the degree to which its
interest in the outcome is both established and direct. In general, we
will not consider interest to be sufficient where the protesting party
would not be eligible for award, even if we resolved the issues raised
in its favor. Radix II Inc., B-208557.2, Sept. 30, 1982, 82-2 CPD
Paragraph 302, aff'd on reconsideration, Nov. 29, 1982, 82-2 CPD
Paragraph 484. For example, subcontractors, manufacturers, or suppliers
to bidders generally are not considered interested parties to protest
the responsiveness of individual bids. Id. However, where a bidder is
an authorized agent or exclusive distributor, submitting a quote on
behalf of the manufacturer, we consider the manufacturer's economic
interest to be as direct and substantial as that of the bidder. See
Porta-Fab Corp., B-213356, May 7, 1984, 84-1 CPD Paragraph 511
(manufacturer whose West Coast distributor and authorized agent
submitted a quote on its behalf is an interested party to protest the
award to another bidder). Compare Service and Sales Inc., B-211868,
Oct. 20, 1983, 83-2 CPD Paragraph 469, aff'd on reconsideration, Dec.
28, 1983, 84-1 CPD Paragraph 32 (nonexclusive licensee is not an
interested party to protest disclosure of allegedly proprietary data).
Therefore, we will consider Coulter's protest.
The VA rejected Curtin Matheson's bid because the firm's descriptive
literature failed to show compliance with certain listed salient
characteristics for three of 10 required accessories.
Where a solicitation identifies specific salient characteristics of a
brand name product and requires descriptive literature to establish the
fact that the "equal" product also has these characteristics, the
responsiveness of an "equal" bid depends upon the completeness of the
information submitted or reasonably available. Le Prix Electrical
Distributors, Ltd., B-212518, Dec. 27, 1983, 84-1 CPD Paragraph 26. The
data furnished must permit the contracting agency to establish that each
specified salient characteristic is available. Sutron Corp., B-205082,
Jan. 29, 1982, 82-1 CPD Paragraph 69. In this case, the IFB warned each
bidder to:
"furnish as a part of his bid all descriptive material (such as
cuts, illustrations, drawings, or other information) necessary for
the purchasing activity to (i) determine whether the product
offered meets the salient characteristics requirement of the
invitation for bid, and (ii) establish exactly what the bidder
proposes to furnish and what the Government would be binding
itself to purchase by making an award."
The three areas where the VA found that Curtin Matheson's bid failed
to demonstrate compliance with the solicitation are:
1. The capability of the unit to perform three-color
fluorescence analysis with a third fluorescence channel installed
(the third channel, "EMI Model 9798B or equal," was one of the
designated accessories to the cell sorter system);
2. The substitution of a dual laser optical bench and the
addition of a 4-wat Argon-Ion laser to permit simultaneous use of
two laser beams for dual fluorescence and sorting (another
accessory, no brand name identified); and
3. An external analysis and sort control system that provides
external control of the flow cell sorter and advanced analysis of
non-rectangular regions through interfacing terminals. Also, the
system is to have graphics plotting capability via a printer
terminal (another accessory, "Becton Dickinson Consort 40C or
equal").
Coulter argues that its cell sorter and accessories are equal to the
brand name equipment and that the VA's rationale in determining that
three of the accessory items did not meet salient characteristics was
erroneous.
The overall determination of the technical adequacy of bids or
proposals is primarily a function of the procuring agency, and the
contracting officer has a reasonable amount of discretion in the
evaluation of bids. Bell & Howell Co., B-204791, Mar. 9, 1982, 82-1 CPD
Paragraph 219. Our Office therefore generally accepts the judgment of
the technicians and specialists of the procuring agency as to technical
adequacy unless there is a clear showing of unreasonableness, an abuse
of discretion, or a violation of the procurement statutes and
regulations. Interad, Ltd., B-210013, May 10, 1983, 83-1 CPD Paragraph
497.
With regard to the first area of alleged nonresponsiveness, Coulter
contends that its cell sorter system does have three-color capability.
The descriptive literature in Curtin Matheson's bid showed a third
photomultiplier tube, added by hand to the printed drawing of the basic
Coulter system. Coulter contends that the three offered photomultiplier
tubes may be fitted with filters to allow for three-color fluorescence
or light scatter by simply adding or removing filters.
However, the VA asserts, and our review confirms, that the
descriptive literature submitted by Coulter refers only to two-color
analysis. There is no mention of a third filter or color fluorescence
signal or three-color capability. There is no explanation or
documentation of the technology of the proposed system for processing
and analyzing in three colors. Finally, we agree with the VA that the
hand-drawing of a third photomultiplier tube and mention of an optional
third tube "to allow simultaneous measure of 2-color fluorescence and 90
degree light scatter" in the descriptive literature does not provide
sufficient information to establish that the Coulter unit has the
capability to perform three-color fluorescence analysis.
With respect to the second accessory, Coulter states in its bid that
it was offering an upgraded unit which "includes 5-watt coherent laser,"
and that an "optional 2-watt laser (is) available but not necessary" for
an additional $24,000. Coulter maintains that although its unit
utilized only a single laser, that laster is 5 watts rather than the
standard 2 watts, thereby allowing the Coulter laser to be split into
two beams with the capability for dual fluorescence and sorting.
The VA asserts that a single 5-watt laser does not comply with the
specification for two laser beams. VA also contends, and our review
substantiates, that the descriptive literature does not explain how
Coulter's single 5-watt system would use two laser beams simultaneously
to perform the required dual fluorescence and sorting function and meet
other optical requirements. The proposed modification of the system
with the addition of a 2-watt laser is not discussed in the descriptive
literature, so as to indicate clearly how the Coulter dual laser system
would meet specifications.
Therefore, we find that Curtin Matheson's bid was properly rejected
as nonresponsive, since the "equal" bid did not show conformance to the
salient characteristics of the brand name products or compliance with
solicitation requirements. Interad, Ltd., B-210013, supra.
Coulter also disputes the VA's position with regard to its external
analysis and sort control system accessory. However, in view of the
foregoing conclusions, we need not consider this issue since clearly two
of Coulter's accessories did not meet the salient characteristics.
Additionally, Coulter protests that even if Curtin Matheson's bid on
the three accessories is nonresponsive, it should have received the
award as the low bidder for the basic cell sorter system and the other
seven accessories. In this regard, the IFB provides:
"The VA reserves the right to make an award to the responsible
bidder quoting the lowest aggregate price for all items, for any
group of items, or on an item basis, whichever is more
advantageous to the Government. Bids will be evaluated on the
basis of additional cost to the Government that might result from
making multiple awards. For this purpose, the cost of awarding
and administering each additional contract is estimated to be
$500.00."
However, the VA contends that due to the highly technical, integrated
nature of the cell sorter system and its accessories, a split award
would be unacceptable. That is, the system would not function if one
supplier furnished the system and another supplier furnished the
accessories and options.
From our review, it is clear that each of the accessories for which
Curtin Matheson's bid was found deficient was completely integrated with
the basic cell sorter and that separate awards of these items would not
meet the government's requirement for a functional system. Indeed,
Curtin Matheson's bid and descriptive literature integrate these three
accessories into the basic cell sorter system; two of the accessories
are not separately priced, but are included in the price for the basic
system. Consequently, even though the above-quoted clause indicated
that multiple awards were contemplated, we agree with the VA that an
aggregate award is appropriate. See Blinderman Construction Co.,
B-216298, Dec. 24, 1984, 84-2 CPD Paragraph 688, aff'd on
reconsideration, B-218028, Feb. 20, 1985, 85-1 CPD Paragraph 214 (an
aggregate award is appropriate, even though the solicitation indicates
that multiple awards are contemplated, where such an award is necessary
to satisfy the government's requirements and bidders are not prejudiced
by the erroneous solicitation statement).
Coulter's second allegation is that Becton Dickinson's bid was
nonresponsive because of its failure to designate the manufacturer's
name/brand and model number for four of the options and accessories of
the basic unit.
The IFB states that "unless the bidder clearly indicates in his bid
that he is offering an 'equal' product, his bid shall be considered as
offering the brand name product referenced in the invitation for bids."
The specifications required that item 1, the basic unit, be a "Ecton
Dickinson FACS Model 440 or Equal." After item 1, the following note
appears: "Bid items 2-10 are options and/or accessories of the basic
unit (bid item 1)." Although brand names are stated for six of the
accessories, no specific brand names are given in the IFB for the four
accessories here in question. Becton Dickinson inserted prices on all
bid items.
The VA states that the brand name information on the four items was
unnecessary, since it is clear from the bid that Becton Dickinson
intended to bid the brand name model 440 and the brand name accessories.
The VA contends that by inserting prices for all bid items, Becton
Dickinson bound itself to provide the Becton Dickinson FACS model 440
and its accessories.
We agree. The four items in question are based upon Becton Dickinson
model 440 accessories, and the VA indicates that these accessories do
not have formal model numbers. The solicitation clearly indicates that
the listed accessories are to be used with or in the Becton Dickinson
model 440. There is nothing in the Becton Dickinson bid which shows
that it will not comply with the specifications or that it took
exception to the solicitation. Therefore, the only reasonable
explanation of Becton Dickinson's bid is that it is furnishing its own
brand name accessories. Consequently, since it quoted prices for these
items, Becton Dickinson's failure to list a manufacturer or model number
does not make its bid nonresponsive.
We deny the protest.
Harry R. Van Cleve
General Counsel
(1) These procedures were in effect at the time Coulter's protest was
filed on August 27, 1984. Effective January 15, 1985, they were
superseded by regulations implementing the Competition in Contracting
Act of 1984, Pub. L. No. 98-389, Title VII, 98 Stat. 1199 (1984). For
purposes of bid protests, section 2741(a) of the Act defines "interested
party" as "an actual or prospective bidder or offeror whose direct
economic interest would be affected by the award of the contract or by
failure to award the contract." See also GAO Bid Protest Regulations, 4
C.F.R. Section 21.0(a) (1985).
FILE: B-216799 85-2 CPD 85
DATE: July 25, 1985
MATTER OF: IBI Security Service, Inc.
DIGEST:
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - DISCUSSION WITH ALL
OFFERORS REQUIREMENT - "MEANINGFUL" DISCUSSIONS
1. Allegation that discussions were not meaningful is without merit
where they concerned deficient areas of the offeror's proposal and the
protester had an opportunity to revise its proposal.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - BEST AND FINAL -
ADDITIONAL ROUNDS
2. Where protester's best and final offer, submitted after the two
rounds of discussions, did not sufficiently address deficiencies, the
agency may but is not required to reopen negotiations and allow the
protester another opportunity to revise its proposal.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - BEST AND FINAL -
EVALUATION
3. Agency concerns that (1) offeror would not have necessary staff
or facility before commencement of contract performance and (2) key
employees were only temporatily available are reasonable where
protester's best and final offer merely offers to comply with
requirements without providing plans for their accomplishment.
CONTRACTS - NEGOTIATION - COMPETITION - EQUALITY OF COMPETITION - NOT
DENIED TO PROTESTOR
4. A protest alleging that in evaluating proposals agency gave a
competitive advantage to offerors with a local staff and office is
without merit since any competitive advantage did not result from
preferential or unfair treatment by the government.
IBI Security Service, In. protests the award of a contract to
Argenbright, Inc. under request for proposals (RFP) No. 85-01(N) issued
by the Department of Health and Human Services. The contract covers
security guard services at three facilities of the Centers for Disease
Control (CDC) in Atlanta, Georgia. IBI contends that the agency did not
adequately inform the firm of alleged technical deficiencies in its
proposal during discussions, and that the agency did not evaluate its
technical proposal reasonably.
We deny the protest.
CDC requested offers to provide security services for a 1-year period
and for 4 option years, with performance to begin October 1, 1984. The
RFP provided that, in evaluating offers, cost/price would be given the
same weight as the technical criteria. The latter, listed in descending
order of importance, were (1) personnel, (2) experience and corporate
capability, (3) organization plan, and (4) detailed work plan.
CDC received 10 proposals in response to the solicitation. After
point scoring each, it determined that only Argenbright and IBI were
within the competitive range. Following discussions and evaluation of
revised proposals, CDC conducted a second round of discussions with the
firms, with best and final offers due September 21.
The technical evaluation panel gave the final Argenbright technical
proposal a higher score (92.2 points) than the IBI proposal (64 points).
Argenbright proposed an aggregate price for the basic contract period
and four options of $3,081,329, while IBI proposed $2,778,940. CDC
assigned 100 points to IBI's low offer and assigned Argenbright's offer
a percentage of IBI's score equal to IBI's price divided by
Argenbright's price. Argenbright's combined price and technical score
was 182.2 and IBI's was 164. Based upon these scores, CDC awarded a
contract to Argenbright.
IBI questions the agency's evaluation on two grounds. First, IBI
contends that CDC did not conduct meaningful discussions by failing to
apprise the firm of deficiencies, uncertainties, and omissions in its
proposal and did not provide it with an opportunity to revise its
proposal and cure "minor informalities and deviations" in its best and
final offer. The protester also challenges the agency's conclusions
about the technical merits of the proposal.
Meaningful discussions, either oral or written, are generally
required in negotiated procurements. For discussions to be meaningful,
the contracting agency must furnish offerors information concerning the
deficiencies of proposals and give them an opportunity for revision.
Federal Acquisition Regulation, 48 C.F.R. Section 15.610(c) (1984). The
content and extent of discussions necessary to satisfy the requirement
for meaningful discussions are matters primarily for determination by
the contracting agency, whose judgment we will not disturb unless it is
without a reasonable basis. Trellclean, U.S.A., Inc. B-213227.2, June
25, 1984, 84-1 CPD Paragraph 661. Requests for clarification or
amplification or other statements made during oral discussions that lead
offerors into areas of their proposals that are unclear generally are
sufficient to satisfy the requirement to alert offerors to deficiencies
in their proposals. Health Management Systems, B-200775, Apr. 3, 1981,
81-1 CPD Paragraph 255.
IBI does not identify any deficiencies, uncertainties, or omissions
that contracting officials failed to raise in discussions. In response
to each deficiency discussed in a post-award briefing conducted by CDC,
the protester argues not that CDC failed to discuss its concerns, but
that IBI's response was not properly evaluated. We have reviewed the
evaluation record, and for the reasons indicated below, we conclude that
the firm was adequately apprised of deficiencies, uncertainties, and
omissions that CDC found in its proposal.
CDC gave IBI its lowest relative score for its proposed detailed work
plan. The agency believes that IBI failed to provide a plan tailored to
CDC's Clifton Road facility, the largest and most complex of the
facilities for which security services are required. During the first
discussions with IBI, CDC asked the firm to furnish a detailed work plan
and told IBI that the operational and training material in its proposal
was too general and not sufficiently related to the types of facilities
maintained by CDC. CDC also gave IBI relatively low scores for
personnel and organization. In the second round of discussions, CDC
raised its concern in these areas, questioning IBI about its proposal to
provide only temporary key personnel and about the firm's ability to
hire sufficient guards before October 1. It also asked where and when
an Atlanta Office, required by the solicitation for contract
administration purposes, would be established. After these discussions,
CDC gave IBI an opportunity to revise its proposal. Thus, we believe
that CDC sufficiently informed IBI of its concerns about the proposal
and provided a reasonable opportunity to submit revisions.
IBI seems to argue that after receiving IBI's best and final offer,
the agency should have given IBI a third opportunity to revise its
proposal. However, an agency is not required to help an offeror along
through a series of negotiations so as to improve its technical rating
until it equals that of other offerors. Stewart & Stevenson Services,
Inc., B-213949, Sept. 10, 1984, 84-2 CPD Paragraph 268. While agencies
may reopen negotiations after receipt of best and final offers, there is
no legal requirement that they do so. Louis Berger & Associates, Inc.,
B-208502, Mar. 1, 1983, 83-1 CPD Paragraph 195. CDC was under no
obligation, after receipt of IBI's best and final offer, to notify IBI
of its continued concern or to reopen negotiations.
IBI additionally challenges the reasonableness of several major
concerns of CDC which resulted in relatively low scores for IBI's
propesed organizational plan and personnel. In considering this portion
of IBI'S protest, it is not our function to reevaluate IBI's technical
proposal. The determination of the government's needs and the best
method of accommodating those needs is primarily the responsibility of
the procuring agency. In assessing the relative desirability of
proposals and determining which offer should be accepted for award,
contracting officers enjoy a reasonable range of discretion. Our Office
will not question such a determination unless there is a clear showing
of unreasonableness, abuse of discretion, or a violation of the
procurement statutes or regulations. Louis Berger & Associates, Inc.,
B-208502, supra, 83-1 CPD Paragraph 195.
Specifically, IBI questions CDC's determination that its proposal was
deficient because it did not describe how the firm planned to hire
security guards in Atlanta or establish a local office. While the
proposal stated that IBI would receive local assistance in locating,
interviewing, and training personnel, the source of the assistance was
not identified and details of the hiring plan were not given.
Similarly, IBI stated that an Atlanta office would be established,
without providing any details such as the proposed location. IBI argues
that to require more of an offeror from another area of the country is
unreasonable and gives unfair advantage to Atlanta firms.
Our review of the procurement record discloses that the protester's
proposal was not considered deficient solely because IBI did not already
hired guards or established an Atlanta office. Rather, evaluations were
concerned about the ability of the protester to employ a security force
and establish a local office within a few weeks, since no details
regarding those areas were given in the protester's proposal and
performance was to begin on October 1. The RFP clearly stated that
proposals would be judged on how the offeror planned to organize, staff,
and manage the project. We believe that CDC was reasonable in
considering IBI's proposal deficient for merely offering to perform the
requirements rather than explaining the firm's proposed technical
approach. Moreover, CDC's treatment of IBI's proposal did not give an
unfair competitive advantage to local firms. Agencies are not required
to attempt to equalize competition to compensate for the experience,
resources, or skills that one offeror has obtained in the course of
performing a prior contract or because of one offeror's own particular
circumstances. See Telos Computing, Inc., 57 Comp. Gen. 370, (1978),
78-1 CPD Paragraph 235, and cases cited therein. The test is whether
the competitive advantage enjoyed by a particular firm is the result of
a preference or unfair action by the government. ENSEC Service Corp.,
55 Comp. Gen. 656 (1976), 76-1 CPD Paragraph 34. Here, there is no
evidence that the alleged competitive advantage enjoyed by the awardee
because it already had an office and employees in the locality was the
result of a preference or unfair action by the government.
The protester claims that CDC unfairly awarded the contract to a firm
whose proposal suffered deficiencies similar to those of IBI's proposal.
IBI asserts that Argenbright did not have all required radios and a
four-wheel drive truck on hand until well after award. While the
awardee may have been delayed in providing the new equipment ordered
specifically for the CDC contract, we have no evidence other than IBI's
bare assertion that necessary equipment was not provided by Argenbright
pending receipt of new radios and a four-wheel drive truck. Moreover,
Argenbright's proposal described in detail the radios and vehicles that
it intended to obtain and provide under the contract. Based on
Argenbright's representations, CDC had no basis to question the firm's
ability to provide the necessary equipment. We therefore find that the
agency was not unreasonable in its treatment of Argenbright's proposal
in this respect.
IBI also questions CDC's concern that IBI did not designate a
permanent full-time, on-site supervisor. IBI stated in its proposal
that its supervisor and his assistant would stay for the month of
October to complete the contract transition. Obviously, the agency was
reasonable in giving IBI'S proposal a relatively low score for the
personnel criteria when the individuals being evaluated would only be
available for 1 month. The protester now contends that the firm had no
intention of replacing its key personnel. However, the firm's best and
final offer conveyed the opposite intention. We believe that CDC was
reasonable in considering the IBI proposal to be deficient in this
respect.
Finally, IBI argues that award should have been made to it because it
offered the lowest price. In negotiated procurements such as this one,
unless the solicitation so specifies, there is no requirement that award
be made on the basis of the lowest price. The procuring agency has the
discretion to select a highly rated technical proposal instead of a
lower rated, lower price proposal if doing so is in the best interest of
the government and consistent with the evaluation scheme set forth in
the RFP, so long as the record shows that there was a rational basis for
the selection decision. Louis Berger & Associates, Inc. B-208502,
supra, 83-1 CPD Paragraph 195.
Here, we found no basis to question CDC'S evaluation of IBI'S
technical proposal. Argenbright's final technical score was
considerably higher than IBI'S, and outweighed the higher score IBI
received for its lower price. The agency justified award to Argenbright
based on the firm's combined technical/cost scores, giving each factor
equal weight as specified in the solicitation. Under the circumstances,
we find that there was a rational basis for CDC's decision to award the
contract to the higher-priced, higher-scored Argenbright.
Although not raised by the protester, we note that the contracting
officer apparently has not justified his use of negotiation procedures
in this small business set-aside procurement. Small business set-asides
are a form of negotiation which have been justified under the exception
to formal advertising for contracts which are in the public interest
during a period of national emergency. See 41 U.S.C. Section 252(c)(1)
(1982) and the Federal Acquisition Regulation (FAR), 48 C.F.R. Section
15.201(b)(1)(ii) (1984). Even though set-asides are technically
negotiated procurements (because competition is restricted), the FAR
provisions in effect for this procurement required that these set-asides
be conducted in accordance with formal advertising procedures known as
Small Business Restricted Advertising whenever possible, 48 C.F.R.
Section 19.502-4, with the result that agencies have been required to
justify the use of conventional negotiation procedures in small business
set-asides. See Nationwide Building Maintenance, Inc., 56 Comp. Gen.
556 (1977), 77-1 CPD Paragraph 281.
Since this matter was not raised by the protest, and since the
preference for the use of Small Business Restricted Advertising has been
deleted from the new regulations implementing the Competition in
Contracting Act of 1984, 41 U.S.C.A. Section 253 (West Supp. 1985), see
FAR, Section 19.502-4 (Federal Acquisition Circular 84-5, effective
April 1, 1985), we will not object to the use of negotiation procedures
here.
The protest is denied.
IBI request reimbursement for the costs of preparing its proposal.
However, such costs can only be recovered if the government has acted
arbitrarily or capriciously with respect to the proposal. See Health
Management Systems, B-200775, supra, 81-1 CPD Paragraph 255. In view of
our denial of the protest, there is no basis to award such costs.
Harry R. Van Cleve
General Counsel
FILE: B-216798.2 85-2 CPD 1
DATE: July 1, 1985
MATTER OF: Cincinnati Electronics Corporation
DIGEST:
CONTRACTS - TWO-STEP PROCUREMENT - STEP ONE - OFFERS OR PROPOSALS -
EVALUATION - TECHNICAL ACCEPTABILITY
Where request for technical proposals in first step of two-step
formally advertised procurement required offerors to submit their
proposed technical approach for item being procured, rejection of
technical proposal, which simply referenced incomplete prior performance
history of the firm under a separate contract for the same item, and
which contained inadequate technical data for current evaluation, was
proper.
Cincinnati Electronics Corporation protests the award of a contract
for intercommunication sets under request for technical proposals (RFTP)
No. M0027-84-R-0087, issued by the Marine Corps, Department of the Navy,
as the first-step of a two-step formally advertised procurement. The
technical proposal submitted by Cincinnati was rejected as technically
unacceptable by the Marine Corps. Cincinnati has protested this
determination to our Office. We deny the protest.
In 1981, Cincinnati was awarded a contract by the Marine Corps for
the design, development and production of these same intercommunication
sets. Under the contract, Cincinnati also was responsible for providing
a technical data package to enable the Marine Corps to procure these
items competitively. Cincinnati has performed satisfactorily and has
delivered in excess of 700 sets and associated technical data;
deliveries of these items have continued throughout the course of the
current procurement.
In July 1984, the Marine Corps invited prospective offerors to a
pre-proposal conference where they were shown the current system
manufactured by Cincinnati, as well as the drawings and specifications
generated under Cincinnati's contract. The Marine Corps advised
offerors that the current procurement would be for the purchase of
equipment identical to that of Cincinnati. Further, the solicitation
itself stated, in the statement of work, that the sets would be
"substantially identical" to the models manufactured by Cincinnati.
When it received the solicitation, Cincinnati, as the incumbent and
most qualified potential offeror, was reluctant to commit what it
considered to be "unnecessary bid and proposal expense" /1/ to a largely
"theoretical" exercise in which the firm would formally outline its
technical approach for the various steps necessary in the manufacturing
process to achieve compliance with the technical specifications.
Cincinnati representatives therefore decided merely to reference
Cincinnati's current successful performance under its existing contract
rather than presenting a detailed technical approach as expressly
required by the solicitation.
In October 1984, Cincinnati states that it was orally advised by the
contracting officer's representative and the government's acquisition
project officer that this approach (merely referencing its past
performance) was "the right (way) to go." Thus, for numerous technical
requirements of the solicitation, Cincinnati's proposal, as submitted,
merely stated as follows:
"Verification that these (requirements) will be satisfactory
has been established through first article and production testing
under (the current contract). No changes affecting performance
under these conditions are contemplated."
On December 13, 1984, after receipt of proposals and during
discussions, Cincinnati alleges that the following transpired in a
telephone conversation between Cincinnati and government
representatives:
"(T)he government representatives informed Cincinnati . . .
that its technical proposal was susceptible of being acceptable
but that the company had relied too heavily on its performance
under the existing . . . contract. When pressed for the specific
areas of the proposal that were considered to be deficient, the
government representatives identified only the maintainability
sections of the proposal. The telephone conference concluded with
specific assurances from the government representatives that all
that would be required in order to make the proposal acceptable
was the submission of a satisfactory maintainability plan." /2/
According to Cincinnati, subsequent oral communication with
government representatives confirmed its belief that only the
maintainability plan was required to make its proposal technically
acceptable. Subsequently, Cincinnati hand-delivered a revision to its
proposal which consisted solely of a revised maintainability plan and
which made no changes concerning technical data. The Marine Corps
thereafter rejected the proposal.
Cincinnati alleges that the Marine Corps failed to conduct meaningful
discussions because it was orally led to believe both before and after
receipt of proposals that such a presentation (relying on past
performance) would be acceptable. Cincinnati insists that the firm was
merely trying to save taxpayers' money since its proposal preparation
expenses were reimbursable by the government in any event. Cincinnati
also argues that since the goal of the first step was the qualification
of offerors rather than competition between them, an elaborate proposal
setting forth a precise methodology for achieving compliance would have
been a needless and useless act by virtue of its incumbency. In short,
Cincinnati believes that the Marine Corps had needlessly eliminated the
most competent offeror without rational cause.
The crux of the dispute between the protester and the agency is
Cincinnati's attempt to incorporate is current performance under another
contract for the same item into its proposal rather than submitting a
detailed technical proposal. In this respect, the RFTP stated:
"The technical proposal shall include proposed approach to
performing all work required to satisfy the government's
requirements. The management, engineering and any special testing
techniques, phases, and/or tasks into which you plan to logically
divide the program shall be discussed. The technical proposal
shall not merely offer to comply with the government's
requirements but shall prescribe the approach planned to be used.
Statements which simply state that the offeror will meet the
government's requirement in the following areas shall be reason
for determining the firm's proposal to be unacceptable."
Cincinnati's proposal admittedly failed to conform to this
requirement although Cincinnati argues that this requirement, under the
circumstances, was senseless.
Generally, evaluation to determine the acceptability of a first-step
technical proposal is concerned with the merits of the individual
proposal, not the merits of the firm submitting the proposal. Overall
technical acceptability and desirability, not responsibility, is what is
being determined. Radiation Systems, Inc., B-211732, Oct. 11, 1983,
83-2 CPD Paragraph 434. Thus, no matter how capable an offeror may in
fact be, the firm must submit an adequately written proposal, if it is
to be considered. Id. Nonetheless, we think there are circumstances
where incorporation by reference is acceptable.
Thus a general proposal, incorporating by reference the specifics of
an identical requirement on another contract should suffice as an
adequately written proposal to the extent it covers completely the
requirements of the current solicitation. Where additional requirements
not previously demonstrated are specified in the solicitation, however,
a detailed technical proposal for these additional requirements must be
submitted in accordance with the solicitation.
Here, Cincinnati's proposal did not expressly contain a technical
approach. Thus if we assume that Cincinnati's proposal, as structured,
could have been properly evaluated by examining technical data already
submitted under its current contract and incorporated by reference in
its technical proposal, there were nevertheless requirements that were
not adequately addressed. The technical evaluators specifically found
that:
"Cincinnati Electronics is unacceptable for the following
reasons:
(a) Heavy reliance on plans, tests, etc. approved under 1981
contract. No plans for updating.
(b) No provisions for verifying the drawings against GFM radio.
(c) No provisions for updating the data package.
(d) Only addresses data as "will meet the requirements
specified in the RFTP." No details are given on how this will be
done. Previous experience indicates more detail is needed.
"(I)n paragraphs 6.2.2.4, 6.3.2.4, and 6.4.2.4 of Cincinnati's)
technical proposal, which address maintainability, it is stated
that "The thrust of the program will be performed in accordance
with MIL-STD-470A. The thrust of the program will be directed
toward correction of deficiencies noted during the maintainability
prediction/demonstration phases of the contract. Verification of
the support equipment requirements will be performed under the
maintainability program." This does not state or prescribe a
maintainability plan, but rather, offers to comply with the
government's requirements. In addition, the deficiencies hinted
at in the paragraph have not been identified nor have the proposed
methods of correcting those deficiencies."
In addition to deviating from the solicitation's express
instructions, Cincinnati thus failed to present in its proposal a
current technical approach or updated technical data. The Marine Corps
states that Cincinnati, under its current contract, was required to
provide a complete reprocurement technical data package consisting of
"Level 3" drawings and a final specification in accordance with certain
military standards. While the final specifications were required to be
furnished by March, 1984, the Marine Corps states as follows:
"(N)otwithstanding the efforts of the Marine Corps contracts
and technical personnel to ensure timely delivery of these data
items, Cincinnati Electronics has failed to comply with its
contractual obligations. The Marine Corps has received only a
draft specification; and final specification that meets the
requirements . . . has not been delivered . . . The specification
. . . received (has) been reviewed by government technical
personnel and found to be neither complete nor accurate. Due to
Cincinnati Electronics' untimely and unsatisfactory performance on
these data items . . . the Marine Corps was unwilling to accept
the contractor's blanket assurance that it would meet the data
requirements stated in the RFTP." /3/
The Marine Corps considers Cincinnati's proposal as a "little more
than a blanket offer to comply with the evaluated requirements of the
solicitation." We think it reasonable to conclude that Cincinnati's
proposal, at the very least, needed updating so that it could be
properly evaluated on a current basis. It is admitted that technical
deficiencies, except for the maintainability plan, were never corrected
by Cincinnati in its proposal. Thus, without further correction of
these areas, including technical data, Cincinnati's proposal was
unacceptable whether or not its proposal was adequately structured by
incorporating past contractual data. Consequently, without further
data, such a proposal could not have been properly accepted.
Concerning the discussions that took place after receipt of
proposals, we note that the agency insists that specific deficiencies
were pointed out to Cincinnati in the areas of technical data,
reliability, maintainability and quality assurance. Further, the Marine
Corp's rejection letter stated that Cincinnati's proposal "remained
deficient . . . because technical data requirements were inadequately
discussed." The agency denies having pointed out that only the
"maintainability plan" required correction. Thus, in the final
analysis, we are left with conflicting statements by the agency and the
protester as to what substantive deficiencies were pointed out by the
Marine Corps as needing correction. The Marine Corps' contention that
the deficiencies discussed included inadequate technical data is
supported by the actual evaluation documents which identified this area
as a deficiency in Cincinnati's proposal.
Accordingly, the protest is denied.
Harry R. Van Cleve
General Counsel
(1) Cincinnati states that it is essentially a captive supplier to
the Department of Defense and that therefore its bid and proposal
expenses are ultimately absorbed by the government through the
application of its negotiated overhead rates.
(2) The government disputes this account and maintains that the
deficiencies pointed out as needing correction were not limited, at the
conclusion of the telephone conversation, to the maintainability plan
but also included, among other things, reliability, quality assurance
and technical data.
(3) Cincinnati contends that any delay in submitting these
requirements is due to the Marine Corps' delay in granting final
approval for these data items.
B-216791, Nov 13, 1984, 84-2 CPD 524
BIDS - Responsiveness - Failure to furnish something required -
Descriptive Literature
DIGEST:
Failure to furnish complete descriptive literature required by the
solicitation by bid opening for the evaluation of the bid renders the
bid nonresponsive.
Mahon Inc.:
Mahon Inc. (Mahon) protests rejection of its bid as nonresponsive to
invitation for bids (IFB) No. DAAG02-84-B-0054 issued by the Department
of the Army, Anniston Army Depot, Anniston, Alabama for a robotic paint
finishing system. Mahon's bid was rejected as nonresponsive because the
descriptive literature furnished by Mahon required by the IFB was not
complete.
The IFB provided that descriptive literature was required to
establish, for the purposes of evaluation and award, the details of the
product which the bidder proposed to furnish to satisfy the technical
specifications and had to be submitted before bid opening. Although
Mahon alleged that it would be impractical to include such descriptive
literature for every paragraph of the specifications in its proposal, we
have held that the submission of descriptive literature is used for bid
evaluation, is a matter of responsiveness and when such data is not
furnished prior to bid opening, the bid must be rejected. See John C.
Dorsey, Inc., B-212789, Sept. 20, 1983, 83-2 CPD Para. 350. Since the
descriptive literature furnished by Mahon did not address specific
features specified in the solicitation as requiring descriptive
literature, the bid was properly rejected.
The protest is summarily denied. COMP GEN (UP)
FILE: B-216790 85-1 CPD 82
DATE: January 22, 1985
MATTER OF: Don's Wheelchair & Ambulance Service, Inc.
DIGEST:
BIDS - MISTAKES - UNIT PRICE V. EXTENSION DIFFERENCES - RULE
1. Where protester's bid indicates discrepancy in unit and extended
prices and either price reasonably could have been intended, agency may
not rely on bidder's confirmation of bid. Permitting bidder to elect
between two prices, only one of which will result in award to bidder,
after competitor's bid prices were revealed, allows bidder unfair
advantage contrary to principles of competitive bidding.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
2. Protest alleging improprieties in a solicitation is dismissed as
untimely when filed after bid opening because GAO Bid Protest Procedures
require filing prior to bid opening.
Don's Wheelchair & Ambulance Service, Inc., protests the rejection of
its bid as nonresponsive under invitation for bids (IFB) No. 525-3-85,
issued by the Veterans Administration Medical Center, Brockton,
Massachusetts (VA), for ambulance, hired car, and wheelchair patient
transportation services. Don's also filed suit in the United States
District Court for the District of Massachusetts (Don's Wheelchair and
Ambulance Service, Inc. V. Benaski, Civil Action No. 84-3017-T) seeking
a preliminary injunction. The preliminary injunction was denied, but
the court has requested our opinion on the matter.
We deny the protest in part and dismiss it in part.
Bids were opened on September 19, 1984, and Don's, an incumbent
contractor, was the apparent low bidder for the requirements contract.
However, after reviewing Don's bid, the contracting officer discovered
what appeared to be calculation errors because the total prices bid on
several items did not equal the estimated quantity times the unit cost.
On September 20, 1984 the contracting officer, suspecting a mistake in
bid, called Don's to request bid verification. Don's denied any error,
explaining that its bid indicated a total amount for mileage which it
believed would actually be received, taking into account mileage
deductions imposed by the VA on its current contract. The contracting
officer, believing that, in effect, Don's used lesser estimated
quantities than those listed in the solicitation to calculate its total
price for several bid items, recalculated Don's bid based on the
estimated quantities listed in the solicitation. This calculation
increased Don's price and Don's was no longer the low bidder.
On September 21, the contracting officer informed Don's that it was
not the low bidder. The contracting officer told Don's that it could
not use other than the estimated amount of mileage in the solicitation
to calculate its bid since that would result in its having a lower total
aggregate price than other bidders, even though its unit prices were
higher, and would give it an unfair advantage.
On September 27, Don's protested to VA the September 24 award of the
contract to another bidder. The contracting officer denied the protest
on October 2, on the grounds that Don's bid was nonresponsive for not
complying in all material respects with the IFB.
Don's contends that the contracting officer should not have
determined that it was not low by recalculating its bid prices. Don's
also objects that the solicitation was vague, subject to radically
different interpretations, and confusing.
Although it appears that the contracting officer recalculated Don's
bid prices using the estimated quantities in the solicitation, we need
not address the merits of this basis for rejecting Don's bid since,
under applicable case law, Don's bid could not be considered for award.
Where a protester's bid indicates a discrepancy in unit and extended
prices and either price reasonably could have been intended, an agency
may not rely on the bidder's confirmation of its bid. Permitting the
bidder to elect between two prices, only one of which will result in
award to the bidder, after competitors' bid prices are revealed, allows
the bidder an unfair advantage contrary to principles of competitive
bidding. Hudgins Construction Co., Inc., B-213307, Nov. 15, 1983, 83-2
C.P.D. paragraph 570. In our view, Don's bid was subject to two
reasonable interpretations, and under one it was not low. Under these
circumstances, Don's bid was not eligible for award.
With respect to Don's contention that the solicitation was vague, our
Bid Protest Procedures require that a protest alleging improprieties in
a solicitation which are apparent prior to bid opening be filed prior to
bid opening. 4 C.F.R. Section 21.2(b)(1) (1984); Turbine Engine
Services Corp., B-215281, May 29, 1984, 84-1 C.P.D. paragraph 582.
Further, a bidder may not participate in a procurement by submitting a
bid and complain only after it lost the award. Airco, Inc. V. Energy
Research and Development Administration, 528 F.2d 1294, 1300 (7th Cir.
1975). Since Don's did not protest the alleged improprieties until
after bid opening, its protest on this issue is untimely and will not be
considered.
The protest is denied in part and dismissed in part.
Comptroller General of the United States
FILE: B-216789 85-1 CPD 43
DATE: January 16, 1985
MATTER OF: Robert Wehrli
DIGEST:
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
COMPETITIVE RANGE EXCLUSION - REASONABLENESS
. Agency's failure to include protester's proposal in the
competitive range based on the agency's evaluation of the proposal
regarding understanding of the scope of work, depth of related
experience, and capability of staff was not arbitrary or in violation of
applicable statutes and regulations.
CONTRACTS - NEGOTIATION - AWARDS - NOTICE - TO UNSUCCESSFUL OFFERORS
2. Obligation of agency to notify all bidders of the reasons
awarding a contract to other than the low bidder is inapplicable to
negotiated procurements.
Robert Wehrli protests the award of a cost-plus-fixed-fee contract to
ISC Incorporated under request for proposals (RFP) No. MDA903-84-R-0080
for an "Architects and Engineers Incentive Study" issued by the
Department of the Army, Defense Supply Service -- Washington. Mr.
Wehrli contends that his proposal was not properly evaluated in
accordance with the evaluation criteria in the solicitation.
We deny the protest.
The RFP sought offers for conducting:
"a study of means by which the Department of Defense can
motivate designers of facilities to produce more economical
designs and reward those who are successful."
The solicitation provided that award would be made to the offeror
whose proposal was evaluated as the most superior technically with a
realistic estimated cost. The lowest realistic estimated cost would be
determinative only if two or more proposals were substantially equal.
Technical evaluation factors were listed, in descending order of
importance, as follows: (1) applicability of methodology, (2) depth of
experience in related project activities, (3) understanding the scope of
work, (4) appropriateness of work plan and format for deliverables, and
(5) capability, based upon the qualifications and utilization of staff.
The Army used an evaluation scheme in which these technical factors were
weighed 30 percent, 25 percent, 15 percent, 15 percent and 15 percent,
respectively.
Under this scheme, the Wehrli offer received a technical score of
239, placing seventh out of 20 offers. The technical evaluation panel
did not consider the Wehrli offer to be technically acceptable or
capable of being made so, and thus not within the competitive range.
The Army conducted discussions with the three firms with the highest
initial scores (368, 344 and 317), and, after receiving best and final
offers, awarded a contract to ISC.
The agency conducted a debriefing with Mr. Wehrli at his request, and
explained two major deficiencies in his proposal. Mr. Wehrli's offer
received a relatively low score for the factor of understanding the
scope of work. This was because Mr. Wehrli proposed to examine the
reasons for inaccurate cost estimating rather than exclusively focusing
upon incentives for encouraging economical design. The emphasis upon
cost estimating also resulted in a lower score with respect to the
application of methodology. The Army also concluded that Mr. Wehrli and
his staff had not previously conducted the type of study desired.
Consequently, the Wehrli proposal received relatively low scores for
depth of related experience and for capability based upon staff
qualifications and use.
Mr. Wehrli takes exception to the two deficiencies cited by the Army.
His contentions are generally that the technical evaluation panel
failed to adequately read and understand his proposal, and that, in
particular, the chairman of the panel failed to do so. He also states
that, since he offered the lowest cost, the Army violated its obligation
to inform other bidders that an award had been made to other than the
low bidder. Federal Acquisition Regulation (FAR), Section
14.408-1(a)(3), 48 Fed. Reg. 42184 (1983) (to be codified at 48 C.F.R.
Section 14.408-1(a)(3)).
In reviewing complaints about the evaluation of a technical proposal,
and the resulting determination of whether an offeror is within the
competitive range, our function is not to reevaluate the proposal and to
make our own determination about its merits. That determination is the
responsibility of the contracting agency, which is most familiar with
its needs and must bear the burden of any difficulties resulting from a
defective evaluation. Procuring officials have a reasonable degree of
discretion in evaluating proposals, and we will not question their
decision unless it is shown to be arbitrary or in violation of the
procurement laws and regulations. Essex Electro Engineers Inc.,
ACL-Filco Corporation, B-211053.2; B-211053.3, Jan. 17, 1984, 84-1
C.P.D. Paragraph 74; Information Network Systems, B-208009, Mar. 17,
1983, 83-1 C.P.D. Paragraph 272. Additionally, the protester bears the
burden of affirmatively proving its case -- the that a protester does
not agree with an agency's evaluation does not render the evaluation
unreasonable. Id.
The RFP clearly states that the purpose of the proposed study is to
develop recommended methods for motivating architect-engineers to look
for cost savings in design. The objective of the study is to:
". . . (1) obtain a complete and objective analysis of the
laws, regulations, contract provisions and procedures governing
Architect-Engineer design contracts with the Department of Defense
to determine if they permit, (or should be changed to permit) the
offering of incentives to A-Es for economical design; (2) obtain
the opinions of the professional societies representing A-Es as to
the desirability of offering incentives for economical design and
how such incentives might be developed and (3) develop
recommendations as to the degree and type of incentives that
should be offered to encourage economical design, with objective
and positive means by which good performance in achieving
economical design can be measured and recommendations as to any
changes in law, regulation, contract provisions or procedures
necessary to permit offering incentives and the policy statements
and strategies necessary to put such incentives into effect."
In a discussion of the RFP scope of work requirements in his
proposal, Mr. Wehrli devoted considerable attention to the causes and
consequences of poor cost estimating. The protester contends that the
agency does not know the accuracy of architect-engineer cost estimates,
and that accurate cost estimates are essential for the application and
assessment of incentives for savings in design. Mr. Wehrli also argues
that his intention to include a study of ways for improving the accuracy
of cost estimating should not have lowered his technical score, since he
proposed to submit an issues paper and interim guidelines to the Army
before proceeding with the study. At that time the Army would be able
to redirect his efforts.
While accurate cost estimates may be among the factors which are
important for a system of low cost design incentives to work well, it is
the agency's responsibility to assess its needs, and the solicitation
clearly sought a study of incentives for economical design, not a study
of ways to improve cost estimates. We consider the agency's judgment
that Mr. Wehrli's emphasis on cost estimating is a substantial
deficiency to be reasonable. Mr. Wehrli's proposal to submit study
plans to the Army before proceeding is not relevant to the two technical
evaluation factors affected by his emphasis on cost estimating:
understanding the scope of work and application of methodology. The
evaluation in connection with the agency's competitive range
determination was conducted to determine the merits of MR. Wehrli
proposal as it was submitted and did not concern possible future changes
which could be made.
The Army gave relatively low scores to the Wehrli offer with regard
to depth of experience in related project activities and capability,
based upon the qualifications and utilization of staff. The agency
evaluators did not believe that either Mr. Wehrli or his two
professional assistants had previously participated in studies of
corporate motivation and methods for influencing corporate action. The
protester apparently concedes this fact, but argues that his experience
in complex studies of customer satisfaction based upon direct interviews
was related to the proposed project. Also, based upon statements made
by the chairman of the technical evaluation panel at the debriefing
conference and "zero" scores which the panel chairman gave the Wehrli
proposal for depth of related experience and staff capability, the
protester claims that the chairman did not know that the protester was a
psychologist as well as an architect and an engineer. Mr Wehrli
contends that a misunderstanding of his education and experience caused
the low scores by the panel chairman, which in turn influenced the
scoring by other panel members.
We have reviewed the Wehrli proposal as well as the technical
evaluation panel's scoring records for all proposals, and do not find
irregularities in the evaluation of the Wehrli proposal. It was not
unreasonable or arbitrary for the agency to conclude that Mr. Wehrli's
offer was deficient in the experience and qualification of proposed
staff. The chairman's scores for all proposals were on the average
lower than those of other panelists, and were the lowest for one-half of
the proposals. Scoring of technical proposals is inherently subjective,
and we do not conclude from the chairman's scores or their relation to
other scores that the evaluation was unreasonable. See Devel and
Associates, Inc., B-212962, Apr. 25, 1984, 84-1 C.P.D. Paragraph 477;
Diversified Data Corporation, B-204969, Aug. 18, 1982, 82-2 C.P.D.
Paragraph 146.
The protester states that another deficiency was raised in the
debriefing -- that his proposal did not contain "a psychological and
management approach." He responds by an analysis of the extent to which
the proposal uses psychological and managerial terms and concepts. The
Army's report and the records of the technical evaluation panel do not
reflect a separate issue regarding the absence of a psychological or
management approach.
Mr. Wehrli has not met his burden of establishing that the agency's
evaluation of his proposal was arbitrary or in violation of applicable
statutes or regulations. Further, the regulation that Mr. Wehrli
believes requires the Army to notify all bidders of the reasons for not
awarding to the low bidder, FAR Section 14.408-1(a)(3), applies to
formally advertised procurements and not to negotiated procurements.
The protest is denied.
Comptroller General of the United States
B-216788, Oct 29, 1984, 84-2 CPD 476
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Solicitation improprieties - Apparent prior to
closing date for receipt of quotations
DIGEST:
Protest against procuring activity's failure to include wage rate
determination in Request for Quotations is dismissed as untimely since
it was not filed before the closing date for receipt of initial
quotations.
Workshops for Retarded Citizens, Inc.:
Workshops for Retarded Citizens, Inc. (WRC) protests the failure of
the United States Information Agency (USIA) to include a Service
Contract Act wage rate determination in Request for Quotations (RFQ) No.
137-23-4 for janitorial services to be performed at the Bethany Relay
Station Transmitter Plant, Mason, Ohio. WRC contends that as a result
of the omission of a wage rate determination from the RFQ, the
procedures were unfair. We dismiss the protest as untimely.
The USIA informally advises us that the closing date for receipt of
initial quotations was September 16, 1984. WRC's protest was filed on
October 12, 1984.
Our Bid Protest Procedures provide that protest of alleged
improprieties in an RFQ which are apparent prior to the closing date for
receipt of initial quotations must be filed in our Office prior to that
date. 4 C.F.R. 21.2(b)(1) (1984). The alleged impropriety was apparent
prior to the September 16, 1984 closing date. Since the protest was not
filed until after the closing date, the protest will not be considered.
International Alliance of Theatrical Stage Employees and Moving Machine
Operators of the U.S. and Canada, B-212328, July 28, 1983, 83-2 CPD
para. 140.
The protest is dismissed. COMP GEN (UP)
B-216787, Oct 29, 1984, 84-2 CPD 475
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Solicitation improprieties - Apparent prior to
closing date for receipt of quotations
DIGEST:
Protest against procuring activity's failure to include wage rate
determination in Requests for Quotations is dismissed as untimely since
it was not filed before the closing date for receipt of initial
quotations.
Workshops for Retarded Citizens, Inc.:
Workshops for Retarded Citizens, Inc. (WRC), protests the failure of
the United States Armor Center and Fort Knox, Kentucky, to include a
Service Contract Act wage determination in Requests for Quotations
(RFQs) for janitorial services to be performed at the Brooks-Lawler Army
Reserve Center, Ft. Thomas, Kentucky King's Mills Army Reserve Center,
King's Mills, Ohio, Outcalt Army Reserve Center, Sharonville, Ohio, and
Morrow Army Reserve Center, Cincinnati, Ohio. WRC contends that as a
result of the omission of wage rate determinations in the RFQs, the
procedures were unfair. We dismiss the protest as untimely.
The Army informally advises us that the closing date for receipt of
initial quotations was September 18, 1984 for the Brooks-Lawler, King's
Mills and Outcalt Army Reserve Centers, and September 22, 1984 for the
Morrow Army Reserve Center. WRC's protest was filed on October 12,
1984.
Our Bid Protest Procedures provide that a protest of alleged
improprieties in an RFQ which are apparent prior to closing date for
receipt of initial quotations must be filed prior to that date. 4 C.F.
R. sec. 21.2(b)(1) (1984). The alleged impropriety was apparent prior
to the September 18 and 28, 1984 closing dates. Since WRC's protest was
not filed until after both closing dates, the protest will not be
considered. See International Alliance of Theatrical Stage Employees
and Moving Machine Operators of the U.S. and Canada, B-212328, July 28,
1983, 83-2 CPD para. 140.
The protest is dismissed. COMP GEN (UP)
B-216781, Oct 29, 1984, 84-2 CPD 474
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Solicitation improprieties - Apparent prior to
bid opening/closing date for proposals
DIGEST:
A protest against an alleged solicitation impropriety that was
apparent prior to the closing date for receipt of proposals is untimely
where the protest was not filed until after that date.
STC Corp.:
STC Corp. (STC) protests that request for proposals (RFP) No.
F08637-84-R0060, issued by the United States Air Force, should have
included the clause "Used or Reconditioned Material, Residual Inventory,
and Former Government Surplus Property," Federal Acquisition Regulation
sec. 52.210-7, 48 Fed. Reg. 42,102 (1984) (to be codified at 48 C.F.R.
sec. 52.210-7).
Our Bid Protest Procedures require that alleged solicitation
improprieties obvious on the face of a negotiated solicitation must be
protested before the closing date for receipt of proposals. 4 C.F.R.
sec. 21.2(b)N1) (1984); Flagg Integrated Systems Technology, B-214153,
Aug. 24, 1984, 84-2 C.P.D. para. 221. The closing date for receipt of
proposals was August 30, 1984; however, STC did not protest to this
Office until October 11, 1984. We therefore will not consider this
protest.
The protest is dismissed. COMP GEN (UP)
FILE: B-216777
DATE: April 18, 1985
MATTER OF: Charles J. Adkins
OFFICERS AND EMPLOYEES - TRANSFERS - REAL ESTATE EXPENSES -
REIMBURSEMENT
The employee may not be reimbursed $3,000 real estate expenses
incurred in the sale of his home incident to his transfer. The expenses
were part of the settlement costs charged to the buyer, and the
employing office, with the assistance of the local office of the
Department of Housing and Urban Development, determined that the
seller's assumption of the buyer's obligation for such costs was not
customary in the locality of the sale. Under travel regulations an
employee may be reimbursed only those selling expenses customarily paid
by sellers.
Charles J. Adkins, an employee of the Internal Revenue Service, is
not entitled to real estate expenses he incurred upon the sale of his
home at his old duty station since the costs claimed are buyer's costs
which it was not customary for the seller to pay at the time and place
in question. /1/
Mr. Adkins transferred from Dayton, Ohio, to Louisville, Kentucky, on
March 5, 1984. He sold his home in Dayton on April 27, 1984. According
to the realtor, because of the market conditions then existing, it was
customary in the area of the home for the seller to pay all or a portion
of the buyer's closing costs. In the realtor's opinion, the buyer would
not have purchased the home had Mr. Adkins declined to pay $3,000 of the
closing costs.
The employing office reimbursed Mr. Adkins the real estate broker's
fee and apparently certain other selling expenses. However, the office
denied Mr. Adkins the $3,000 that he paid to cover part of the buyer's
closing costs because that expense failed to satisfy the legal
requirement of being a customary cost incurred by sellers in the local
area of the sale. The certifying officer substantiated this
determination by information from the local office of the Department of
Housing and Urban Development that the payment was not customary. As
legal authority for the denial, the office cited our decisions Owen C.
Strickland, B-185680, August 4, 1976, and William I. Massengale,
B-185863, August 25, 1976.
These decisions point out that under 5 U.S.C. Section 5724a and the
implementing regulations, the seller may be reimbursed certain real
estate expenses to the extent they are customarily paid by sellers in
the locality of the sale. Further, the custom may vary according to the
type of financing obtained for the sale. The implementing regulations
in effect when Mr. Adkins transferred are Federal Travel Regulations,
paragraphs 2-6.2c-d and f (Supp. 4, August 23, 1982), incorp. by ref.,
41 C.F.R. Section 101-7.003 (1984). In a more recent decision directly
relevant to the issue raised in Mr. Adkins' case, we denied
reimbursement to a seller who paid settlement costs imposed on the
purchaser where such payments, although reported by the real estate
agent to be common in a "buyer's market," were not determined to be
customary in the locality. See Burton Newmark, B-190715, March 24,
1978. Compare Christopher S. Werener, B-210351, May 10, 1983.
Finally, the employing office, with the assistance of the local
office of the Department of Housing and Urban Development, has the
responsibility of deciding whether, at the time of the sale, it was
customary for the seller or the buyer to pay a particular item of
expense, as well as determining whether the expense was within the
customary amount. See FTR para. 2-6.3b-c. The certifying officer was
advised by the local Department of Housing and Urban Development office
that sellers did not customarily pay buyer's closing costs in the area.
Accordingly, Mr. Adkins' claim for an additional $3,000 in closing
costs on the sale of his home must be denied.
Comptroller General
of the United States
(1) G. Fannin, Authorized Certifying Officer, Internal Revenue
Service, Central Region, requested an advance decision.
FILE: B-216775 85-1 CPD 25
DATE: January 8, 1985
MATTER OF: Logus Manufacturing Corporation
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
Protest based upon alleged solicitation impropriety which does not
exist in initial solicitation, but which is subsequently incorporated
therein, must be protested not later than the next closing date for
receipt of proposals. Accordingly, protester's contention that agency
improperly extended time period for submission of best and final offers
is untimely because this contention was not reised until after the
closing date for receipt of the best and final offers.
Logus Manufacturing Corporation (Logus), protests the Defense
Logistics Agency's (DLA) decision to extend the time period within which
offerors could submit best and final offers under reguest for proposals
(RFP) No. DLA900-84-R-2030, issued by DLA, Defense Electronic Supply
Center, for supplying electronic synchronizers. Logus contends that
there was no valid reason for the extension.
We dismiss the protest in accordance with 4 C.F.R. Section 21.3(g)
(1984) of our Bid Protest Procedures, which provides that where the
propriety of dismissal becomes clear only after information is provided
by the agency, the protest may be dismissed at that time without further
development.
DLA received proposals from Logus and Microwave Associates, Inc.
(Microwave), on June 11, 1984, the closing date for the receipt of
initial proposals. On July 20, the agency requested that both offerors
submit best and final offers by July 30. However, at the request of
Microwave, the agency extended the closing date for offers to August 31
and it informed Logus of the extension orally on July 26 and in writing
the following day. Logus submitted its best and final offer before it
received this notification and it chose not to revise its offer during
the extended time period. Microwave submitted its best and final offer
by the revised closing date. Microwave submitted the low best and final
offer and DLA awarded the contract to that on September 28. Logus
learned of the award by letter of October 2 and it filed this protest
with our Office on October 11.
Our Bid Protest Procedures provide that protests based upon alleged
solicitation improprieties in negotiiated procurements which did not
exist in the initial RFP, but which are subsequently incorporated
therein, must be filed with either the contracting agency or our Office,
not later than the next closing date for receipt of proposals following
the incorporation of the alleged impropriety. 4 C.F.R. Section
21.2(b)(1) (1984). DLA incorporated the revised closing date for the
receipt of best and final offers into the RFP, and, therefore, any
protest against the extension of the time period for the submission of
best and final offers should have been filed with the contracting agency
or our Office by August 31, the closing date for those offers. Logus,
however, did not protest the extension until October 11, more than 5
weeks after the closing date. Thus, the protest is untimely and not for
consideration by our Office.
Logus also has requested a conference to discuss the merits of its
protest. Where the merits of the protest are not for consideration, we
believe that no useful purpose would be served by holding a conference.
Humanoid Systems, B-211488, June 9, 1983, 83-1 C.P.D. Paragraph 639.
/s/ Harry R. Van Cleve
General Counsel
FILE: B-216772 85-2 CPD 216
DATE: August 23, 1985
MATTER OF: Recyc Systems, Inc.
DIGEST:
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - REJECTION - PROPRIETY
1. An agency's incorrect characterization of the protester's
proposal as "nonresponsive" does not render rejection of the proposal
improper where the agency's determination of unacceptability actually
constituted a reasonable basis for rejecting the protester prior to
award.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - REJECTION - IMPROPER
2. Protester's proposal should not have been rejected for failing to
satisfy minority business enterprise participation requirements in the
solicitation where the proposals of the awardees contained similar
deficiencies, but rejection for this reason did not prejudice the
protester, and thus is not cause for disturbing the awards, since
protester's proposal properly was rejected for another reason.
Recyc Systems, Inc. (Recyc), a member of the joint venture
Driggs-Recyc, protests the award of two 5-year contracts under request
for proposals (RFP) No. 0397-AA-23-N-4-MR, issued by the District of
Columbia (District) for sludge disposal. The contracts were awarded to
joint venture Jones and Artis and Bevard/Bio-Grow (JABB), and joint
venture Ad & Soil, Inc., Enviro-Grow and MTI Construction (ADEM). Recyc
contends its proposal improperly was rejected for failure to meet the
minority business enterprise (MBE) and general permit requirements of
the RFP. We deny the protest.
The RFP, as amended, called for submission of initial proposals by
July 6, 1984, and provided that no single offeror would receive a
contract for disposal of the District's total daily requirement of 1270
wet tons of sludge. The RFP required the contractor to "obtain and
maintain all permits necessary for the performance of the contract" no
later than the July 6 closing date; include a proposal for at least
35-percent MBE participation in the contract revenues; and provide 35
percent of the sludge hauling under the contract be performed by MBEs.
The MBEs that the offerors proposed in order to meet these requirements
were to be certified as such by the District's Minority Business
Opportunity Commission (MBOC) as of the closing date.
Recyc was the apparent low offeror but, on August 9, the District
notified Recyc that its offer was being rejected as "nonresponsive"
because its proposed MBE subcontractor was not certified by the MBOC as
of July 6 and because it lacked off-site sludge storage permits
necessary to perform the contract. Discussions were held with JABB and
ADEM, the only other offerors, and contracts were awarded to those firms
on September 28.
Recyc argues that its proposal sufficiently met the permit and MBE
requirements and thus should not have been rejected. Recyc further
contends that if its proposal properly was rejected, the JABB and ADEM
proposals also should have been rejected based on failure to comply with
the same requirements.
We do not agree with Recyc that its proposal should not have been
rejected. We do find, however, that the awardees' proposals, as well as
Recyc's, did not meet the MBE certification requirement.
The record shows that on June 12, 1984, Recyc received Commonwealth
of Virginia Water Control Board approval to construct a sludge lagoon in
Fauquier County, and that Recyc began constructing the facility.
Fauquier County subsequently disapproved the project, however, and this
disapproval was the basis for the District's determination that Recyc
did not meet the permit requirement. Although Recyc remained in
litigation with the county over the matter at least as late as October
10, Recyc apparently believes its proposal should be found to satisfy
the permit requirement based on its Virginia State approval.
The District, we find, reasonably concluded that Recyc did not meet
the permit requirement, although the District's characterization of the
matter as one involving "responsiveness," which suggests that the
proposal was subject to automatic rejection at the initial submission
date, is not correct.
We consistently have held that an offeror need not satisfy
solicitation provisions which require, generally, that offerors obtain
local, state or federal permits and licenses necessary for performance
in order to be eligible for award. Rather, these matters are for
resolution by the successful offeror and the licensing authority after
award. HSA/Multichem, B-202421, Aug. 11, 1981, 81-2 C.P.D. Paragraph
118. The nature of such a requirement generally is not changed by
solicitation language stating that it must be satisfied as of the offer
submission deadline. Thus, an initial proposal should not automatically
be rejected based on failure to meet a general permit requirement. See
generally A-1 Pure Ice Co., B-215215, Sept. 25, 1984, 84-2 C.P.D.
Paragraph 357.
If it is determined prior to award, however, that an offeror lacks,
and will have difficulty obtaining, specific permits or licenses without
which performance will not be possible or likely will be delayed, the
agency properly may reject that offeror prior to award as
nonresponsible, that is, lacking the present capability to perform if
awarded the contract. See Nor-Cal Security, B-208296, Aug. 3, 1982,
82-2 C.P.D. Paragraph 107.
Here, although the District characterized Recyc's proposal as
nonresponsive to the permit requirement, the record shows that, in fact,
it found the proposal unacceptable only after determining that Recyc
would have great difficulty timely obtaining a Fauquier County sludge
lagoon construction permit. Based on an August 17 letter from Recyc
complaining about its rejection, the District further reviewed the
permit matter. In a September 20 letter response to Recyc, the District
stated that it was advised by the Fauquier County government that
Recyc's permit application was neither considered nor approved by the
county Board of Supervisors at its August 21 (most recent) meeting, and
that the matter of the permit had not been scheduled for future
meetings. According to Recyc, the matter still was being litigated as
of October 10, almost 2 weeks after the awards were made, and, according
to the District, Recyc still had not obtained its permit as of May 1985.
In view of Recyc's problems at the time of award, and considering the
significant subsequent delays in obtaining the permit, we think the
District's determination as to Recyc's permit clearly would have been a
reasonable basis for concluding that Recyc would have difficulty
beginning timely performance and thus could not be considered a
responsible prospective contractor. Recyc thus properly could be
eliminated from the competition on this ground.
Recyc questions the reasonableness of finding the awardees acceptable
in view of Recyc's rejection. Recyc contends that JABB should not have
been found in compliance with the permit requirement because much of the
sludge storage capacity covered by its permits, in fact, has been used.
The District reports, however, that JABB submitted permits representing
2.59 years of storage capacity, five times more capacity than required
by the solicitation. As stated above, the determinative consideration
regarding the permits is whether the agency was satisfied prior to award
that the firm would possess all necessary permits in time to perform as
required. JABB obviously satisfied the District that its permits
covered sufficient storage capacity, and Recyc's speculation as to the
sufficiency of JABB's permits in this regard is not a basis for
questioning the District's specific finding in this regard.
Recyc cites an October 5, 1984, letter from Queen Anne's County as
evidence that ADEM in fact was in much the same position as Recyc with
the respect to certain permits and thus should have been treated the
same. This letter does state that, as of October 5, one of ADEM's joint
venturers lacked a necessary permit to operate a sludge storage/
distribution facility in the county. The letter also goes on to state,
however, that there had been a hearing on the matter October 4, and that
a final decision was due within 30 days. Although this hearing was held
after award, we believe the District reasonably could determine prior to
award that the scheduling of the hearing constituted a sufficient
indication that ADEM was in a different position than Recyc, in that it
could obtain this permit in time to perform as required. Recyc was
eliminated due to the absence of some similar indication that it would
be able to obtain its permit on time.
Recyc's allegation regarding the sufficiency of the awardees' permits
also is based on agency comments during negotiations questioning the
firms on certain permits. The mere fact that questions may have been
raised during negotiations, however, did not automatically render the
proposals unacceptable. Again, it appears from the record that JABB and
ADEM satisfactorily responded to any concerns raised during
negotiations. We consequently find no basis for concluding that the
District improperly or unfairly determined that the awardees had met the
permit requirement, while Recyc had not.
Recyc contends that both the ADEM and JABB proposals failed to
evidence compliance with the MBE certification requirement as of the
July 6 closing date as required by the RFP. Acceptance of the
proposals, Recyc maintains, constituted unequal treatment of offerors
since Recyc's proposal was rejected, in part, based on its failure to
propose an MBE subcontractor certified as such as of the July 6 closing
date. We agree with Recyc.
Although the District indicated in its report on the protest that
JABB and ADEM had proposed properly certified MBE subcontractors by the
July 6 closing date, documentation subsequently furnished by the
District indicates that this, in fact, was not the case.
JABB stated in its proposal that the hauling portion of the contract
would be performed by Bevard Brothers, Inc., which had subcontracted a
substantial portion of the sludge hauling requirement -- presumably at
least 35 percent -- to John A. Hardy & Son, Inc. (Hardy), a certified
MBE. The MBOC certification for Hardy, however, was approved April 6,
1982, and shows an expiration date of April 6, 1984. Hardy thus did not
possess a valid MBOC certification as of the July 6 closing date or the
September 28 award date. The District has not attempted to explain this
discrepancy.
The District has furnished us a copy of a certification for Faith
Construction, Inc. (Faith), which, evidently, was attached to JABB's
proposal. JABB's proposal nowhere states that Faith will be involved in
the sludge hauling, however, and there is no indication in the record
that Faith's certification in any way extends to Hardy. In any case,
even assuming that Faith's certification otherwise would have brought
JABB's proposal into compliance with the 35-percent MBE hauling
requirement, the certificate carries an approval date of November 7,
1984, which was more than 1 month after the award to JABB.
ADEM's proposal also included an inadequate MBE certificate. ADEM's
proposal stated that the 35-percent MBE hauling requirement would be
satisfied through the inclusion of MTI Construction Co. (MTI) in the
joint venture. MTI was covered by two different valid MBOC
certifications, both apparently submitted with ADEM's proposal, but
neither of the certificates covers sludge hauling. One certificate,
dated January 27, 1984, covers two work classifications, excavation and
general contracting. The second certificate, dated February 7, 1984,
covers asphalt paving, building construction, clearing and grubbing,
concrete paving, and demolition. Thus, the MBE that ADEM proposed to
meet the 35-percent sludge hauling requirement was not qualified to haul
sludge as an MBE based on its MBOC certification. Again, the District
offers no explanation as to this deficiency despite Recyc's specific
allegation that the certification was deficient in this manner.
At the same time the District in effect was waiving certain aspects
of the MBE provisions in order to award contracts to JABB and ADEM, it
was strictly enforcing those same provisions to reject Recyc's proposal.
Specifically, the District rejected Recyc's proposal because, in
addition to its noncompliance with the permit requirement, the MBE it
proposed to meet the MBE requirements was not MBOC-certified as of the
July 6 closing date. The firm ultimately was certified on September 12,
more than 2 weeks prior to the awards, but the District advised Recyc in
its September 20 letter that permitting Recyc to satisfy the MBE
requirement at that time would "prejudice the other offerors" and
"compromise the integrity of the procurement process."
A contracting agency cannot enforce a requirement against one offeror
while waiving it for others without violating the fundamental principle
that all offerors must be treated fairly and equally. See generally E.
C. Campbell, Inc., B-205533, July 8, 1982, 82-2 C.P.D. Paragraph 34.
Applying this standard here, we must agree with the protester that, in
view of the District's acceptance of the JABB and ADEM offers despite
MBE certification deficiencies, Recyc's offer, in fairness, should not
have been found lacking in that respect. Nevertheless, since we have
found the District's reliance on Recyc's permit problems a proper basis
for rejecting the firm's proposal, Recyc was not prejudiced by the MBE
certification matter. That is, even if the District had treated Recyc
the same as it treated the competitors as to MBE certification, Recyc
still would not have been entitled to an award because its proposal was
otherwise unacceptable. See Centennial Computer Products, Inc.,
B-211645, May 18, 1984, 84-1 C.P.D. Paragraph 528.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-216767; B-216806 84-2 CPD 660
DATE: December 12, 1984
MATTER OF: Universal Parts and Services, Inc.
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - PROTESTOR NOT
IN LINE FOR AWARD
GAO will not consider a protest when, regardless of the outcome, the
protester is not in line for contract award.
Universal Parts and Services, Inc. protests the failure of the
Department of the Air Force to consider its proposals submitted under
Request for Proposals (RFP) Nos. F34601-84-R-0256 and F34601-84-R-45199
for the repair of J75 and TF33 jet engine vanes and shrouds.
Each of the RFP's indicated that only listed sources would be
considered for award unless satisfactory evidence regarding an unlisted
offeror's experience was submitted and approved in time to meet the
government's requirement. Universal was not a listed source. It
submitted evidence of its experience with its proposals and requested
approval. When Universal perceived a lack of activity regarding this
request, it filed these protests.
The Air Force reports that it intends to award contracts based on
price and that Universal is the second low offeror under RFP No.
F34601-84-R-0256 and the third low offeror under RFP No.
F34601-84-R-45199. Under these circumstances, the protests are academic
since Universal would not receive award under either RFP regardless of
its ability to qualify as a source. See Somers Construction Co.,
B-209843.2, Oct. 25, 1983, 83-2 CPD Paragraph 490.
Universal remains concerned that, unless steps are taken now, it will
not be a qualified source on future procurements. Since the Air Force
has a duty to maximize competition, we would expect that the Air Force
will promptly provide Universal with an appropriate opportunity to
demonstrate its qualifications.
The protests are dismissed.
Harry R. Van Cleve
General Counsel
FILE: B-216761 85-1 CPD 442
DATE: April 18, 1985
MATTER OF: Sargent Industries
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - AMENDMENT -- REQUIRED
FOR CHANGES IN RFP
Where a procurement is transformed from a noncompetitive to a
competitive acquisition by an agency decision to consider an "equal"
product contained in an unsolicited proposal, amendment of the
solicitation with notice to the original offeror is required.
Sargent Industries protests the award of a contract to CEF Industries
for aircraft repair kits under request for proposals (RFP) No.
F09603-84-R-0840, issued by the Warner Robins Air Logistics Center,
Robins Air Force Base, Georgia. Sargent essentially contends that the
Air Force improperly relaxed its requirements without any notice to
Sargent and then awarded the contract to CEF based on an unsolicited
proposal which did not conform to the announced purchase description.
We sustain the protest.
The RFP described the repair kits as National Stock Numbers (NSNs)
1680-00-731-9669LG and 1680-00-163-6025LG, which solely referenced
Sargent part numbers. Further, the RFP also specifically listed in the
purchase description various Sargent part numbers comprising the kits.
The procurement was negotiated under 10 U.S.C. Section 2304(a)(10)
(1982) and the Federal Acquisition Regulation (FAR), 48 C.F.R. Section
15.210(b)(15) (1984), because of the asserted unavailability of data
with which to insure conforming items. A handwritten notation appeared
on the determination and findings (D & F) stating that "rights to use
date for contracting item from other sources are legally unavailable and
cannot be purchased." Further, the solicitation did not provide for the
qualification, consideration or evaluation of equivalent items other
than the specific Sargent parts described in the purchase description.
Thus, from its inception, the procurement was intended and structured as
a sole-source acquisition.
Unknown to Sargent, CEF submitted an unsolicited proposal to the Air
Force for its own parts (described by CFE part numbers) which was
allegedly functionally equivalent to the Sargent parts. Technical
personnel of the Air Force evaluated the unsolicited proposal and found
the parts acceptable. Further, without amending the solicitation or
otherwise notifying Sargent, the Air Force awarded the contract to CEF.
This protest followed.
Sargent argues that it was not provided the opportunity to compete on
an equal basis since it also could have offered less expensive
"substitute parts" had it received notification from the Air Force of
its "less stringent requirements"; that since the Air Force relaxed its
requirements and effectively modified its purchase description, an
amendment should have been issued; that the agency improperly used
proprietary Sargent drawings to evaluate and correct deficiencies in the
unsolicited proposal; and that using activities may mistakenly assume
in the future that defective CEF parts were manufactured by Sargent, the
historical producer, and thereby cause damage to its reputation.
The agency maintains that the contract solicited was the contract
awarded because, except for the part number descriptions, the items in
CEF's unsolicited proposal were "equal" to the designated Sargent parts
and thus the agency's requirements were not "changed." Further, the
agency states that it has no obligation "to notify . . . offeror(s) that
they have competition." Based on the facts of record, we disagree.
FAR, 48 C.F.R. Section 15.606, provides:
"(a) When, either before or after receipt of proposals, the
Government changes, relaxes, increases, or otherwise modifies its
requirements, the contracting officer shall issue a written
amendment to the solicitation . . .
"(c) If the proposal considered to be most advantageous to the
Government . . . involves a departure from the stated
requirements, the contracting officer shall provide all offerors
an opportunity to submit new or amended proposals on the basis of
the revised requirements . . . "
We think the agency failed to follow this regulation.
First, it is evident that the RFP solicited a proposal from Sargent
for items manufactured only by Sargent, and we must therefore assume
that Sargent's proposal was submitted in the belief that only items
manufactured by Sargent would be acceptable and that the procurement was
noncompetitive. Nothing in the solicitation indicated otherwise. It
follows that the agency decision to consider the unsolicited proposal
based upon items determined to be equal to those manufactured by Sargent
operated not only to change the specification requirements but also to
transform the procurement from a noncompetitive to a competitive one.
Under these circumstances, we believe that the above provisions require
amendment of the RFP, notice of the amendment to the supplier initially
solicited, and an equitable opportunity for the supplier to amend its
proposal to reflect such changes as it may consider appropriate in the
light of the changes accomplished by the amendment to the RFP so that it
could compete on an equal basis. See 48 Comp. Gen. 605 (1969); 47
Comp. Gen. 778 (1968). This is not a case where the intended
sole-source was allegedly prejudiced solely because it was unaware of
price competition from other sources and assertedly would have offered a
lower price had it been advised of the competition. Rather, the
protester here asserts that it also had an "equal" product available,
and that it was not permitted to offer its equal product because the
agency failed to advise offerors that anything but the specified parts
were acceptable. We simply note that Sargent may have offered the
government a better bargain on equivalent parts had it been advised of
the government's true requirements. See Scanray Corp., B-215275, Sept.
17, 1984, 84-2 CPD Paragraph 299. Accordingly, we sustain the protest.
Since we sustain Sargent's protest on this ground, we need not consider
Sargent's other asserted protest grounds.
At least partly because the agency was approximately 2 months late in
filing its report on the protest, we are unable to recommend corrective
action since we are advised that the contract is 90 percent complete
from a cost standpoint. However, we think that the Air Force's
acceptance of the unsolicited proposal without any notice to Sargent was
unreasonable and thus arbitrary and capricious. Further, since Sargent
would have been one of but two offerors under a properly conducted
procurement, we find that it would have had a clear and substantial
chance for award. Under the circumstances, we think that the Air Force
should reimburse Sargent for its proposal preparation costs. See
Systems Development Corp. and Cray Research, Inc. -- Reconsideration, 63
Comp. Gen. 275 (1984), 84-1 CPD Paragraph 368. Sargent should submit
substantiating documentation to the Air Force to establish the amount it
is entitled to recover.
The protest is sustained.
Comptroller General
of the United States
B-216760, Oct 22, 1984, 84-2 CPD 444
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Solicitation improprieties - Apparent prior to
bid opening/closing date for proposals
DIGEST:
A protest concerning an alleged solicitation impropriety that is not
filed prior to bid opening is untimely.
Terminal Data Corporation:
Terminal Data Corporation protests the award of a contract to
Consolidated Micrographics under invitation for bids No.
DAAK21-84-B-M338, issued by the Department of the Army. We dismiss the
protest as untimely.
The solicitation was for a high speed duplicator that uses anhydrous
ammonia. Bid opening was set for May 7, 1984. The protester offered to
supply a duplicator using an aqueous process for $33,898, but the agency
rejected the bid as nonresponsive and awarded a contract to Consolidated
at a higher price. Terminal Data filed a protest here on October 10
contending that its lower bid should have been accepted since it is
commonly known in the industry that the aqueous process provides the
same print quality as anhydrous.
The protester's contention concerning the essential equivalence of
anhydrous ammonia and aqueous duplicators is basically an argument that,
in requiring one type of duplicator, the solicitation was unduly
restrictive of competition. As such, the protest is one involving an
alleged solicitation impropriety and, under our Bid Protest Procedures,
should have been filed prior to bid opening. 4 C.F.R. sec. 21.2(b)(1)
(1984). Since this protest was not filed until after bid opening, it is
untimely and will not be considered. Richard A. Schwartz Associates,
Inc., B-214979, June 29, 1984, 84-1 CPD para. 695. COMP GEN (UP)
FILE: B-216758, B-133044
DATE: March 11, 1985
The Honorable Harry N. Walters
Administrator of Veterans Affairs
Veterans Administration
Dear Mr. Walters:
This replies to your letter of October 4, 1984, with enclosures, in
which you request our review and comments in connection with the report
on beneficiary travel allowances which you made under the provisions of
38 U.S.C. Section 111(e) (1982). That provision requires you, in
consultation with the Comptroller General and others, to conduct
periodic investigations of the actual cost of travel (including lodging
and subsistence) to beneficiaries while traveling to or from a Veterans
Administration facility or other place.
The General Services Administration studies of the cost of operating
privately owned vehicles which you enclosed with your request appear to
contain adequate information on which to predicate a determination of
the costs involved in veterans' travel by that means.
Accordingly, we have no suggestion or further comment to offer.
Sincerely yours
Comptroller General
of the United States
FILE: B-216757
DATE: August 14, 1985
MATTER OF: Continental Van Lines, Inc.
DIGEST:
PROPERTY - PRIVATE - DAMAGE, LOSS, ETC.- HOUSEHOLD EFFECTS - CARRIER
LIABILITY - BURDEN OF PROOF
The system used by the Armed Forces for the shipment of household
goods provides for written notice (DD Form 1804) of damage to the goods
discovered after delivery which identifies the shipment and informs the
mover that the owner of the goods intends to file a claim for damages.
The movers have agreed that written notice of damages discovered after
delivery filed with the mover within 45 days of delivery is sufficient
to overcome a prior delivery receipt showing no damage to the goods. DD
Form 1840 plus a later claim by the owner specifically describing the
nature of the damage to the goods establishes a prima facie case of the
mover's liability for the damaged goods. Where the mover furnishes no
evidence to rebut a prima facie case, he is held liable.
Continental Van Lines, Inc., has appealed our Claims Group's denial
of its claim for a refund of $271.32 which the Army withheld from
Continental for loss and damage to the household goods of Captain Robert
J. Kainz.
Continental concedes that the Army has established a prima facie case
of its liability for three damaged articles in the goods amounting to $6
because of damages noted upon delivery. However, Continental argues
that the Army's later actions under its system for shipping household
goods were not effective to establish Continental's liability for the
loss and damage beyond that amount. Continental requests that $271.32
of the $277.32 withheld from payment otherwise due them be returned. We
agree with our Claims Group that the Army established Continental's
liability for the loss and damage to all the goods and affirm the denial
of the claim.
Continental delivered Captain Kainz' household goods on September 21,
1981, and exceptions to the condition of three of the articles were then
stated on the delivery receipt. On October 9, 1981, the Army sent
Continental a DD Form 1840, which notified Continental of additional
loss and damage to the shipment, estimated the amount of damage at over
$100 involving approximately 20 articles, stated that Captain Kainz
would file a claim, and invited Continental to inspect the damaged
goods. Although Continental did not inspect the household goods, the
Army made an inspection on November 17, 1981, and noted loss of or
damage to 40 articles. Captain Kainz claimed reimbursement for loss and
damage from the Army and the Army, under the provision of 31 U.S.C.
Section 3721 (formerly 31 U.S.C. Sections 240-243), paid this claim.
The Army filed a claim against Continental for the amount of the damage
to the goods. The Army's claim is supported by the Army's Inspection
Report and a summary of the repair costs for damaged articles.
Continental denied the claim, so the Army withheld $277.32 from funds
otherwise due Continental. Continental claimed all but $6 of this in
the claim our Claims Group denied, and it has appealed the Claims
Group's denial.
Continental agrees that as a common carrier its liability is
controlled by the Carmack Amendment of 1906, section 20(11) of the
Interstate Commerce Act, 49 U.S.C. Section 11707 (1982), formerly 49 U.
S.C. Section 20(11), which makes carriers liable for the actual loss or
damage caused by them to property they transport. In an action to
recover for the loss or damage to the household goods, the shipper
establishes a prima facie case of carrier liability by showing delivery
of the goods to the carrier in good condition, arrival at the
destination in damaged condition, and the amount of damages. The burden
is then shifted to the carrier to show both that it was free from
negligence and that the damage was due to an excepted cause. Missouri
Pacific Railroad v. Elmore and Stahl, 377 U.S. 134 (1964). Continental
concedes that the Army has established a prima facie case for the three
articles that were shown on the DD Form 619-1 delivery receipt to be
damaged. However, it argues that a prima facie case has not been made
for any other of the goods because the DD Form 1840 notice, submitted to
Continental within 45 days of delivery, did not contain the specific,
itemized exceptions establishing arrival at destination in damaged
condition. Such information was contained only with the DD Form 1843
claim which was submitted to Continental more than 45 days after
delivery. Continental argues that a Military/ Industry Memorandum of
Understanding governing the determination of loss or damage in this case
requires specific, itemized exceptions to be submitted within 45 days.
This argument was rejected in Starck Van Lines, B-213837, March 20,
1984, and Continental Van Lines, Inc., B-215507, October 11, 1984. /1/
The Military/Industry Memorandum of Understanding allows loss or
damage in addition to that shown on the delivery receipt to be included
as part of the shipper's prima facie case as long as the carrier
receives written notice of the loss or damage within 45 days of
delivery. Starck Van Lines, B-213837, supra. And that written notice
need not include specific, itemized exceptions such as are included with
the DD Form 1843 claim later submitted to the carrier. The general DD
Form 1840 notice that was used in this case is sufficient. Continental
Van Lines, Inc., B-215507, supra. We find that the Army's Inspection
Report and schedule filed with its claim against Continental establish a
prima facie case of the mover's liability. And there is nothing in the
Memorandum of Understanding that limits the time within which this
material must be presented to the mover to be legally effective. Since
Continental has done nothing to satisfy its burden of rebutting the
Army's prima facie case, we affirm our Claims Group's denial of
Continental's claim. /2/
Comptroller General of the United
States
(1) In one case we did conclude that the Government's claim for an
item of lost property could not be sustained where the carrier was not
given specific notice of what item was lost until 10 months after
shipment. Continental Van Lines, Inc., B-214554, December 14, 1984.
The present case, however, except for a lost broom which we consider de
minimis, concerns damaged rather than lost property, which the carrier
should have inspected if it wished to rebut the claim.
(2) Continental observes that there is a possibility of false claims
during the indeterminate time gap between notification of loss or damage
discovered after delivery but within 45 days thereof and the
particularization of that loss or damage claim. This has been addressed
in a revised Military/Industry Memorandum of Understanding soon to
become effective. We understand that the Government will be required to
particularize and list all loss or damage discovered after delivery on a
newly developed DD Form 1840 R, but instead of having to file the form
with the mover within 45 days of delivery, the time period has been
extended to 75 days. Until this procedure becomes effective the mover's
only protection is to request an immediate inspection.
FILE: B-216755
DATE: March 15, 1985
MATTER OF: Felix Saucedo, Jr.
AGENTS - GOVERNMENT - GOVERNMENT LIABILITY FOR NEGLIGENT OR ERRONEOUS
ACTS - MILITARY MATTERS
The failure of Government personnel to provide an individual an
opportunity to participate in a short term health plan during process of
separation from the Navy is not a basis for the Government to pay his
claim for medical bills incurred during the period that he would have
been covered by the insurance, since the United States is not liable for
the erroneous acts of its employees even though committed in the
performance of their official duties.
Felix Saucedo, Jr., requests reconsideration of our Claims Group,
July 16, 1984 denial of his claim for payment of medical debts he
incurred within 30 days after his discharge from the Navy. There is no
authority for payment of these debts by the Government.
After completing a period of enlistment Mr. Saucedo was separated
from the United States Navy on July 29, 1983. During the separation
process he indicated that he wished to enroll in an insurance program
known as MAJORCARE 90. MAJORCARE 90 is a commerical short term health
insurance plan for separated service members and their dependents
provided by Mutal of Omaha. Navy instructions require that all Navy
personnel being separated from the service be informed of the
availability of the plan. See NAVMILPERSCOM INSTRUCTION 1760.1A, 17
March 1983. The plan is not Government insurance but purely commercial
insurance which separating members may participate in for their
protection during the first 90 days after separation.
In order to participate in the plan, individuals must enroll by
filling out an application and paying the required premium. The premium
is paid solely by the individual who is being separated and is paid to
Mutual of Omaha.
The Navy is not required to provide any health care plan for those
individuals being separated and the Navy does not endorse the plan.
Although the Navy forwards the application and payment to Mutual of
Omaha, all matters regarding coverage and benefits under the plan must
be directed to Mutual of Omaha and participation in the plan is strictly
a private agreement between the participant and Mutual of Omaha.
In spite of Mr. Saucedo's indication that he wished to participate in
the plan, he apparently did not fill out the required application form
and did not pay the required premium. Since both are required in order
to participate in the plan, Mr. Saucedo was never covered under
MAJORCARE 90.
On August 19, 1983, Mr. Saucedo was involved in a motorcycle accident
and required medical treatment. The accident occurred within the period
he would have been covered by MAJORCARE 90 had his application and
payment been properly processed. Mr. Saucedo alleges that he was not
included in the plan due to the negligence of the personnel who
processed his separation. He argues that, but for the negligence of the
Navy, the medical bills would have been paid under the plan and,
therefore, the medical bills should be paid by the Navy.
As pointed out above, MAJORCARE 90 is a private health care plan
offered to separated individuals by Mutual of Omaha. Although the Navy
informs individuals of the availability of the health plan upon
separation, it has not duty to provide separated members with health
care or to ensure coverage under the plan. Further, there is no
statutory authority which would allow payment of Mr. Saucedo's medical
bills from appropriated funds.
Thus, even if Mr. Saucedo's failure to participate and obtain
benefits under the plan had been due to the negligence of Government
personnel, there is no legal basis for payment of his claim. It has
long been held that, in the absence of specific statutory authority, the
United States is not liable for the negligent or erroneous acts of its
officers, agents or employees, even though committed in the performance
of their official duties. 56 Comp. Gen. 943, 950 (1977), and cases
cited therein. Accordingly, our Claims Group's settlement of July 16,
1984, is sustained.
Comptroller General of the United States
FILE: B-216754 84-2 CPD 646
DATE: December 10, 1984
MATTER OF: EMC Industries, Inc.
CONTRACTS - DISCOUNTS - PAYMENT DATE DETERMINATION
Where a contractual provision specifies that payment is considered to
be made for purpose of earning a prompt payment discount on the date of
the mailing of the government check, the general rule, that that payment
must be received by a vendor on or before the delinquency date, does not
apply.
EMC Industries, Inc. has appealed a settlement by the General
Accounting Office Claims Group (Settlement Certificate on Claim No.
Z-2844305 dated May 17, 1984) which disallowed an EMC claim for
$23,910.60 in prompt payment discounts taken by the Defense Contract
Administration Services Region, Philadelphia (DCASR), Defense Logistics
Agency, under contract No. DAAK01-76-C-5661, issued by the U.S. Army
Troop Support Command, St. Louis, Missouri.
The contract provided for a 1-percent discount for payments made
within 20 days. The contract also specified that payment is deemed to
be made for the purpose of earning the discount on the date of mailing
of the government check.
On December 19, 1980, EMC submitted an invoice to DCASR for
$35,715.43, alleging that the DCASR had taken discounts under the
contract for payments received by EMC after the 20-day discount period.
DCASR initially refunded $9,927.79 and subsequently, after the exact
check issue dates were researched, refunded an additional $1,877.04 of
the discounts claimed by EMC.
EMC submitted the balance of the claim to the GAO Claims Group in
June 1982. In support of the claim, EMC submitted a schedule which
showed that EMC calculated the 20-day period as of the date on which the
government's checks were received by EMC rather than the date on which
the checks were mailed. The Claims Group disallowed the claim noting
that, under the contract, payment is deemed to be made on the date of
mailing of the government check and finding nothing in the record to
support EMC's claim.
The contract clearly specified that payment is considered to be made
for discount purposes on the date of the mailing of the government
check, and this provision controls. See Island Heating and Air
conditioning, B-214948, May 22, 1984, 84-1 CPD Paragraph 553. As for
the refunded discounts, the agency appears to have taken that action
based on the contract provision, and EMC has offered no evidence to the
contrary.
Accordingly, the Claims Group disallowance of EMC's claims is
affirmed.
Comptroller General of the United States
B-216752, Nov 14, 1984
OFFICERS AND EMPLOYEES - Promotions - Temporary - Detailed Employees
- Higher Grade Duties Assignment - Wilson Case
DIGEST:
An employee's claim for a retroactive promotion and backpay for a
detail to a higher grade position is denied on the basis of
Turner-Caldwell III, 61 Comp.Gen. 408 (1982). The fact that the
employee's agency lost or misplaced his claim for a considerable time
does not constitute a basis for consideration of the claim after the
holding in Turner-Caldwell III that no further payments would be made to
individuals detailed to higher grade positions for more than 120 days.
Herbert M. DeLano:
An employee's claim for a retroactive temporary promotion and backpay
based on a detail to a higher grade position in excess of 120 days is
denied. The fact that the employee's agency lost or misplaced the claim
for several years provides no basis for payment of a backpay claim for
an overlong detail which was not settled prior to May 25, 1982. See
Turner-Caldwell III, 61 Comp.Gen. 408 (1982).
BACKGROUND
Mr. Herbert M. DeLano, an employee of the Indian Health Service, U.
S. Public Health Service, filed a claim with his agency on March 7,
1978, for a retroactive promotion and backpay from July 30, 1976, to
February 17, 1977, in the amount of $855.60. His claim was denied by
the Albuquerque Area Office, Indian Health Service, and Mr. DeLano
forwarded the claim to our Claims Division on December 11, 1978. Claims
Division returned the matter to the Public Health Service for further
consideration and notified Mr. DeLano of this action. The matter was
then returned to the Indian Health Service, Albuquerque Area Office.
Apparently the claim was either lost or misplaced by the agency at
this point. In any case, final agency action on the claim did not occur
until January 20, 1984. That action denied the claim. The denial was
based in part on Turner-Caldwell III, 61 Comp.Gen. 408, supra. In
addition, the agency stated the position to which Mr. DeLano claims to
have been detailed was not established or classified.
Mr. DeLano now appeals that denial stating that he was not
responsible for the loss of the paperwork regarding his claim. He also
supplied documentation to support his contention that the position to
which he was detailed was established and classified.
CONCLUSION
Mr. DeLano's claim is based on the Turner-Caldwell decisions, 55
Comp.Gen. 539 (1975), sustained in 56 Comp.Gen. 427 (1977), which held
that employees who were detailed to higher grade positions more than 120
days without prior approval of the United States Civil Service
Commission (now Office of Personnel Management) were entitled to
temporary promotions and backpay beginning on the 121st day of the
detail. Subsequently the United States Court of Claims held in Wilson
v. United States, Ct.Cl. No. 324-81C, Order, October 23, 1981, that
there was no authority under statutory law or the Federal Personnel
Manual to Pay backpay to employees detailed to higher grade positions
for over 120 days. In Turner-Caldwell III, 61 Comp.Gen. 408, supra, we
indicated that we would follow the Wilson decision with respect to all
pending and future claims as of the date of that decision, May 25, 1982.
Mr. DeLano's claim for backpay was not settled as of May 25, 1982.
Accordingly, it must be denied. While it is unfortunate that the claim
was misplaced or lost for a considerable time by his agency, this does
not constitute a basis on which to consider the claim after the holdings
in Wilson and Turner-Caldwell III. In view of the above it is
unnecessary to consider Mr. DeLano's contention that the position was in
fact established and classified. COMP GEN (UP)
B-216747, Oct 22, 1984, 84-2 CPD 443
CONTRACTORS - Responsibility - Determination - Review by GAO -
Affirmative finding accepted
DIGEST:
1. GAO does not review protests concerning 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 definitive responsibility criteria have been misapplied.
CONTRACTS - Negotiation - Prices - Below cost - Effect on
responsibility
2. Absent a finding of nonresponsibility, no basis exists to
withhold contract award merely because the low offeror may have
submitted a below-cost proposal where the contract award is not on a
cost reimbursement basis.
Weldtest, Inc.:
Weldtest, Inc. (Weldtest), protests the award of a contract to
Constructor: Sentos e Matos, Lda. (CSM), under request for proposals
(RFP) No. F61040-84-R0027, issued by the Base Contracting Division, 1605
Military Airlift Support Wing, Lajes Field, Terceira, Azores, Portugal,
for the replacement of water storage tanks. Weldtest argues that the
awardee's price is unrealistically low (i.e., below cost) and that the
CSM does not have the facilities and the experience necessary to perform
the contract work.
We dismiss the protest.
All of Weldtest's allegations relate to CSM's ability to perform, i.
e., the allegations concern matters of responsibility. Before award, a
contracting officer must make an affirmative determination of the
proposed awardee's responsibility. Our Office does not review protests
concerning such determinations unless there is a showing of possible
fraud or bad faith on the part of contracting officials or an allegation
that definitive responsibility criteria have been misapplied. TECOM
Incorporated, B-215291, June 19, 1984, 84-1 C.P.D. para. 644. Neither
exception is applicable here.
Where, as here, the contract is awarded not on a cost reimbursement
basis, but rather on a firm, fixed-price basis, in the absence of a
nonresponsibility determination, no basis exists to withhold contract
award merely because the low offeror may have submitted a below-cost
proposal. Everhart Appraisal Service, Inc., B-213369, May 1, 1984, 84-1
C.P.D. para. 485.
The protest is dismissed. COMP GEN (UP)
B-216746.2, Nov 26, 1984, 84-2 CPD 559
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Solicitation improprieties - Apparent prior to
bid opening/closing date for proposals
DIGEST:
1. Protest of allegedly restrictive specification is untimely where
initial protest with contracting agency was filed after bid opening.
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Solicitation improprieties - Apparent prior to
bid opening/closing date for proposals
2. Bidder had reasonable opportunity to file protest before bid
opening where bidder received solicitation 1 day before bid opening and
was able to prepare and submit its bid before bids opening.
Allen and Vickers, Inc.:
Allen and VIckers, Inc. protests the award of a contract for laundry
equipment to Columbia Laundry Machinery under invitation for bids (IFB)
No. 263-84-B(83)-0172, issued by the National Institutes of Health. We
dismiss the protest as untimely.
The solicitation was for one steam-heated, four-roll flatwork ironer,
American Hypo II brand or equal, and one folder, Central Finishing
Systems Model ELX or equal. The protester, which offered a two-roll
ironer, asserts that the specification requiring a four-roll ironer
unduly restricted competition.
Generally, to be timely under our Bid Protest Procedures, a protest
must be filed with the agency or our Office prior to bid opening, if, as
here, it is based on alleged improprieties in the solicitation which are
apparent on the face of the solicitation. 4 C.F.R. Sec. 21.2(b)(1)
(1984). Where a protest is filed initially with the contracting agency,
a subsequent protest to this Office will be considered only if the
initial protest to the agency was timely. Shell Computer Systems, Inc.,
B-203986, July 23, 1981, 81-2 CPD Para. 58.
Here, bid opening was September 17, 1984. Allen and Vickers filed a
protest with the agency by letter dated October 3, which, according to
the protester, confirmed an oral protest it lodged with the agency be
telephone on October 1. The protest to this Office was filed on October
15. Because the allegedly restrictive specification, which is the basis
of the protest, was apparent prior to bid opening, the initial protest
to the agency, filed after bid opening, would under usual circumstances
be untimely. /1/ As a result, Allen and Vickers' subsequent protest to
this Office would also be untimely.
The protester, however, contends that it did not have sufficient time
to file a protest before bid opening because it did not receive the
solicitation until 1:00 a.m. on September 16, with bid opening set for
the next day at 3:00 p.m. We have recognized an exception to the
requirement that a protest based on alleged improprieties in the
solicitation be filed before bid opening, when, as a result of extremely
limited time periods, circumstances do not permit filing before bid
opening. See, e.g., Ampex Corporation, B-190529, Mar. 16, 1978, 78-1
CPD Para. 212 (time for receipt of proposals was practically
simultaneous with the solicitation, the entire process apparently taking
only 10 minutes); Culligan, Inc., 58 Comp.Gen. 307 (1979), 79-1 CPD
Para. 149 (protester received IFB amendment less than 3 hours before bid
opening).
Here, the protester received the solicitation the day before bid
opening and was able to prepare and submit its bid before bid opening.
The protester offers no reason why it was unable also to file its
protest before bid opening. In view of the fact that the protester
received the solicitation in sufficient time to prepare and submit its
bid in a timely manner, we believe that the protester had a reasonable
opportunity to file its protest before bid opening, either with the
agency of this Office. See Alexandria Graphics & Reproduction Service,
B-200249, Oct. 7, 1980, 80-2 CPD Para. 251. Because the protester did
not do so, we dismiss its protest as untimely.
/1/ We need not decide whether the protest to the agency was
initially lodged by telephone on October 1, as the protester contends,
since both the telephone conversation and the subsequent written protest
to the agency took place after bid opening. COMP GEN (UP)
FILE: B-216746 85-1 CPD 49
DATE: January 17, 1985
MATTER OF: Jensen Corporation
DIGEST:
BIDS - RESPONSIVENESS - SOLICITATION REQUIREMENTS NOT SATISFIED -
DESCRIPTIVE LITERATURE
1. Where protester's descriptive literature submitted with its bid
in response to solicitation specifying a brand name or equal product
shows that protester's "equal" product fails to conform to the salient
characteristics listed in the solicitation, the bid was properly
rejected as nonresponsive.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
2. Contentions that a specification for brand name or equal product
unduly restricted competition, that the brand name product would not
meet the agency's needs and that the solicitation allowed insufficient
time for bid preparation will not be considered since they involve
alleged defects apparent from the face of the solicitation and the
protest was not filed prior to bid opening as required by Bid Protest
Procedures.
Jensen Corporation protests the rejection of its bid under invitation
for bids (IFB) No. 263-84-B(83)-0172 issued by the National Institutes
of Health (NIH) for laundry equipment. Jensen's bid was rejected
because the equipment it offered did not conform to the salient
characteristics listed in the brand name or equal solicitation. Jensen
contends that the equipment it offered is equal to or exceeds the
requirements of the solicitation and argues that the solicitation unduly
restricted competition. Finally, Jensen maintains that the solicitation
did not allow sufficient time to prepare dids. For the reasons that
follow, we deny the protest in part and dismiss it in part.
The IFB solicited bids, in the aggregate for an American Hypro II,
4-Roll, Flatwork Ironer with canopy manufactured by American Laundry
Machine, "or equal," and the Model ELX Folder/Cross folder manufactured
by Central Finishing Systems, "or equal." The solicitation contained the
standard brand name or equal clause stating that any bids offering
"equal" products would be considered for if they fully met the salient
characteristics listed in IFB. Jensen submitted a bid offering its
Superstar, 2-ro No. 399 Steam Ironer and its Constellation, No. 466,
Combination Folder/Crossfolder. The protester included technical
specifications describing the machines with its bid. After reviewing
this information, NIH concluded that Jensen's bid was nonresponsive for
failing to meet three of the listed salient characteristics. According
to NIH, Jensen's literature did not specify that the chests of the
ironer met ASME requirements or indicate that the chests where free
floating as required by the solicitation. Further, in Jensen's
literature failed to specify that had the required canopy covering all
rolls, chests and gap pieces.
The major area of noncompliance concerned the free floating chests or
rolls. The solicitation provided, under "Salient Characteristics for
Item 1," that "Rolls shall be free floating type with the weight of the
rolls designed to give 3/4 psi roll pressure without the use of pressure
springs, roll bearings or any other type of pressure device." Under the
heading "Ironing Pressures," the literature submitted with Jensen's bid
stated that "The chests are raised and lowered by means of 4" (100 mm.)
diameter doubleacting, heavy duty hydraulic cylinders . . . a pressure
regulating valve with a gauge is fitted in the right-hand feed frame to
give indirect pressure control for each chest." Jensen does not dispute
NIH's conclusion that Jensen's machine did not have the required free
floating rolls. It instead maintains that such a characteristic is
available only from American Laundry Machine, and is therefore
restrictive.
When a brand name or equal purchase description is used, it is
incumbent upon the bidder who offers an "equal" product to establish
that its product will meet the salient characteristics of the brand name
product. Where, as here, however, it is clear from the literature
submitted with the bid that the offered item does not conform to the
salient characteristics of the brand name product, the bid must be
rejected as nonresponsive. The E.A. Kinsey Company, B-211832, July 11,
1983, 83-2 C.P.D. paragraph 75. Since the literature submitted with
Jensen's did clearly shows that the ironer it proposed did not conform
to the salient characteristics listed in the solicitation, its bid was
properly rejected as nonresponsive.
Jensen's contentions that the solicitation requirement for free
floating rolls restricted competition, that the brand name machine
specified would not meet NIH's needs and that the solicitation did not
allow sufficient time for preparation of bids are untimely as these
grounds of protest were evident from the face of the solicitation.
Under our Bid Protest Procedures, protests based on alleged
improprieties in a solicitation must be filed prior to bid opening. 4
C.F.R. Section 21.2(b) (1) (1984); Jarrett S. Blankenship Co.,
B-213473, June 25, 1984, 84-1 C.P.D. paragraph 662. Since Jensen's
protest was not filed until after bid opening, these issues are untimely
and will not be considered.
Finally, Jensen complains that the solicitation was issued on August
27, 1984, prior to its announcement in the September 5 Commerce Business
Daily (CBD). This argument also untimely as the protest was not filed
until October 10, more than a month after the CBD notice was published
and after Jensen's bid had been rejected.
The protest is denied in part and dismissed in part.
Comptroller General of the United States
B-216742, Oct 23, 1984, 84-2 CPD 458
CONTRACTS - Negotiation - Prices - Reduction - After best and final
offers - Propriety
DIGEST:
Protest that an offeror was permitted to reduce its price as the
result of the contracting activity's request for best and final offers
is summarily denied, since discussions and best and final offers that
include price changes are a normal aspect of negotiated procurements.
Ron's Welding & Fabricating Inc.:
Ron's Welding & Fabricating Inc. protest the proposed award of a
contract for crane repair to Pacific Marine Ship Repair under
solicitation No. N00406-84-R-2243, issued by the Naval Supply Systems
Command. Ron's Welding complains that Pacific Marine was permitted to
reduce its price as the result of the contracting activity's request for
best and final offers, thus making the firm the low offeror.
In their initial proposals, Ron's Welding offered the second low
price for the work at $88,000, and Pacific Marine offered the high price
at $158,774. However, as the result of the contracting activity's
subsequent request for best and final offers, Pacific Marine reduced its
price by nearly half to $85,008, thus making it the low offeror. One
other offeror reduced its price slightly, Ron's Welding made no price
change, and the firm consequently became the fourth low offeror.
Ron's Welding believes that it was somehow improper for the
contracting activity to permit Pacific Marine to make such a significant
change in its initial offered price. We point out, however, that this
was a negotiated procurement, in which discussions and best and final
offers that may include price changes are normally contemplated.
Federal Acquisition Regulation, secs. 15.610, 15.611, 48 Fed.Reg.
42,102, 42,202, 42,203, (1983) (to be codified at 48 C.F.R. secs.
15.610, 15.611).
Therefore, it was proper for the contracting activity here to request
best and final offers and for Pacific Marine to revise its initial price
in its best and final offer as a result.
The protest is summarily denied. COMP GEN (UP)
FILE: B-216741 85-1 CPD 58
DATE: January 18, 1985
MATTER OF: Rozier, Sidbury & Co., Inc.
DIGEST:
BIDS - RESPONSIVENESS - FAILURE TO FURNISH SOMETHING REQUIRED -
PRICES
Bid that fails to include prices for an option year of services is
nonresponsive and must be rejected, where the invitation requires such
prices and provides that they will be evaluated for award.
Rozier, Sidbury & Co., Inc., protests the Department of the Army's
decision to reject its bid as being nonresponsive under invitation for
bids (IFB) No. DAHC30-84-B-0064, covering the Army's indefinite-quantity
requirements for drycleaning services at Fort Myer, Virginia. The IFB
provided for a basic performance period of 1 year plus an additional
year at the government's option, for which the IFB contained separate
line items for bidders to complete with prices. The IFB further
provided, in the Evaluation Factors for Award section, that an aggregate
award would be made to the responsive, responsible bidder offering the
lowest total price for the basic year plus the option year. The
protester failed to submit definite prices for the option, instead
inserting "Will Negotiate."
We agree with the Army that the failure to offer a definite price for
the option period rendered the protester's bid nonresponsive,
necessitating its rejection, and we therefore deny the protest.
The question of a bid's responsiveness involves whether the bid at
bid opening represents an offer to comply with the IFB's material terms,
which include the requirement for a firm, fixed price. Grosfeld
Enterprises, B-208654, Jan. 31, 1983, 83-1 C.P.D. Paragraph 106. The
requirement for fixed prices extends to options where the IFB requires
prices for those items and provides that such prices will be evaluated
to determine the awardee. JBS, Inc., B-201207, Mar. 18, 1981, 81-1 C.
P.D. Paragraph 211.
That the government may never exercise the option is not relevant to
bid responsiveness where the IFB contemplates a priced, evaluated option
that is to be exercised at the government's sole discretion; a bidder's
failure to submit prices for the option year usurps the government's
prerogative because it leaves the bidder with no obligation to perform
any of the option items at any particular price. See JBS, Inc., supra.
Such failure essentially gives the bidder an opportunity, not afforded
to responsive bidders, to accept or reject the unpriced work after bid
opening. See Space Services of Georgia, Inc., B-214499, Aug. 15, 1984,
84-2 C.P.D. Paragraph 183. Further, because of the lack of obligation
to the government and the prejudice to other bidders, any bid failing to
offer a fixed price for option quantities generally may not be corrected
after bid opening. E. H. Morril Co., 63 Comp. Gen. 348 (1984), 84-1
C.P.D. Paragraph 508; JBS, Inc., supra.
The protester argues that nothing in the IFB expressly required the
submission of prices for the option year. The Evaluation Factors for
Award section, however, clearly notified bidders that any award would be
made in the aggregate based on the lowest total price for the basic year
plus the option year. Moreover, the standard Preparation of Bid clause,
incorporated by reference into the IFB, required bidders to insert a
price for each item offered. We therefore believe that the requirement
to submit prices for the option period was clearly stated, and that the
protester's bid properly was rejected. See JBS, Inc., supra.
While Rozier, Sidbury & Co. also argues that it was against the
government's interest to accept a higher priced (albeit responsive) bid,
the integrity of the competitive bidding process outweighs any monetary
savings the government might accrue by waiving a material deficiency in
any particular bid. See Sierra/Misco, Inc., B-216147, Sept. 18, 1984,
84-2 C.P.D. Paragraph 320.
The protest is denied.
Comptroller General of the United States
FILE: B-216740 85-1 CPD 428
DATE: April 15, 1985
MATTER OF: United Instrument Corporation
CONTRACTS - PROTESTS - ALLEGATIONS - NOT PREJUDICIAL
1. When agency, by amending solicitation, attempts to respond to a
protester's allegations concerning unduly restrictive and/or inadequate
specifications and the protester does not point out any specific
problems that the agency has failed to correct, but merely reiterates
its original, generally worded protest, the protester has not met its
burden of proof.
CONTRACTS - PROTESTS - ALLEGATIONS - NOT PREJUDICIAL
2. Since there is no statute or regulation requiring a procuring
agency to provide offerors with samples of products that are considered
acceptable, GAO finds a protest based on a refusal to do so without
legal merit.
United Instrument Corporation protests the specifications used by the
Defense Logistics Agency's Defense Personnel Support Center (DLA) in
request for proposals No. DLA120-84-R-3380. The solicitation invited
offers for medical forceps to be produced in accord with military
specification No. MIL-F-36796, dated September 14, 1971. United
contends that the military specification, as implemented by the changes
in dimensions and tolerances listed in section "C" of the RFP, is unduly
restrictive. United also contends that the applicable drawing is
inadequately referenced and does not define dimensions, angles, and
radii in sufficient detail to allow for production of required dies.
United also states that its request to the agency for samples of forceps
conforming to the specification has improperly been refused.
We deny the protest.
DLA reports that in response to United's protest, the contracting
officer requested the Technical Operations Division to review the
specifications and drawing for possible inadequacies. This resulted in
an amendment to the solicitation in which the applicable drawing was
revised. According to DLA, United subsequently notified the purchasing
agent that the revision addressed the basic issue that prompted its
protest to our Office. United does not deny this statement or point out
any specific problems that it believes DLA's amendment failed to
correct. Rather, in its comments on the agency report, the firm merely
reiterates its original, generally worded protest.
Where, as here, a protester's general allegations are not supported
by any evidence, the protester has failed to meet its burden of
affirmatively proving its case. Contract International, Inc., B-207602,
May 31, 1983, 83-1 CPD Paragraph 573; SAFE Export Corp., B-205122, Mar.
19, 1982, 82-1 CPD Paragraph 258. We therefore deny the protest on this
basis.
As for DLA's allegedly improper failure to make samples of forceps
(apparently those supplied by United's competitors) available to United,
there is no statute or regulation requiring procuring agencies to
provide offerors with samples of products that are considered
acceptable. Rather, procurements must be accomplished by use of
specifications and/or other purchase descriptions that state the
government's actual minimum needs and encourage maximum practicable
competition. See generally Federal Acquisition Regulation, 48 C.F.R.
Part 10 (1984). United's protest on this basis is without legal merit.
United's protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-216737 85-1 CPD 117
DATE: January 29, 1985
MATTER OF: Walsky Construction Co.
DIGEST:
BIDS - EVALUATION - AGGREGATE V. SEPARABLE ITEMS, PRICES, ETC. -
PROPRIETY
Where solicitation permitted multiple awards on any combination of
eight separate schedules and did not prohibit "all-or none" or similarly
restricted bids, agency erroneously rejected bid conditioned on award of
combination of schedules resulting in minimum dollar amount where award
of schedules meeting this minimum resulted in lowest overall cost to
government, even though one of the schedules awarded was not the lowest
bid.
Walsky Construction Co. (Walsky) protests the award of schedules,
"A," "B," "C" and "G" to other bidders under invitation for bids (IFB)
No. DACA85-84-B-0053 issued by the Army Corps of Engineers (Corps).
Walsky contends that its bid, which conditioned award on receipt of a
minimum total schedule price of $500,000, was improperly rejected.
We sustain the protest.
The IFB, which was for paving roads and streets at Fort Wainwright,
Alaska, contained eight separate schedules. The IFB stated that:
"Award will be made to the low responsive bidder or bidders on schedules
A through H together, separately, or in any combination thereof,
whichever is in the best interest of the Government." Walsky submitted a
bid for all eight schedules with the qualification that its bid was
"based on an award of enough items to equal at least $500,000." Three
other bidders submitted unrestricted bids on all eight schedules.
Walsky's bid was low for schedules "B," "C," "G" and "E." The aggregate
amount of Walsky's bid on these four schedules was $490,474. On schedule
"E," Walsky's bid was $57,342, compared to the next low bid of $140,000,
and Walsky alleged mistake. We note that this price differential was of
sufficient magnitude to put the contracting officer on constructive
notice of the possibility of mistake, and to necessitate verification by
Walsky. However, because Walsky was low on schedules with a total value
of less than the $500,000, the Corps determined not to award any
schedules to Walsky. Instead, the Corps award schedules "A" and "G" to
Harbor Contractors Inc. (Harbor), schedules "B," "C," "F," and "H" to
Seley Incorporated (Seley), and schedules "D" and "E" to Shannon
Construction Company (Shannon). These constituted the low bids for the
individual schedules in question, once Walsky's bid was eliminated from
consideration, for an aggregate price of $1,148,840.
Walsky protests that this was not the lowest price available to the
government. Walsky points out that the lowest price total of
$1,092,165.28 would result from award to Walsky of schedules "A," "B,"
"C" and "G," award of schedules "D" and "E" to Shannon, and award of
schedules "F" and "H" to Seley. This combination would meet Walsky's
$500,000 minimum, and result in a total price of $56,674,72 less than
the combination awarded by the Corps.
The Corps agrees that the combination of schedule awards proposed by
Walsky would meet Walsky's bid limitation and result in the lowest price
to the government. It also concedes that if the bid is governed by the
principles which apply to "all-or-none" bids, Walsky should receive the
award as it proposes. However, the Corps believes that Walsky's
restriction for a minimum amount involves a case of first impression and
requests our determination as to the propriety of award to Walsky.
We believe that Walsky's minimum limitation does not preclude
acceptance of its bid. The limitation falls within the express language
of the award provision, since nowhere else in the solicitation is there
any restriction on the use of "all-or-none" or similarly restricted
bids. The condition is also within the contemplation of the Federal
Acquisition Regulation, Section 14.404-5, which expressly provides that
unless the solicitation provides otherwise, a bidder may condition award
on receipt of all or a specified group of items. Moreover, our office
has specifically upheld the Propriety of such bid conditions. In 42
Comp. Gen. 415, 416 (1963), we stated that:
"The stipulation by bidders of limitations on the acceptance of
items in a bid to various combinations or maximum or minimum
dollar amounts is not unusual in Government procurements. As with
a related form of qualified bid, the all or none bid, we have
consistently taken the position that such limitations are
effective in the absence of a specific provision in the invitation
to the contrary. See 35 Comp. Gen. 383, 385."
We have also approved, in the absence of solicitation provisions to
the contrary, the conditioning of award on the receipt of particular
combinations of schedules (Golden Gate Disposal Company, B-180164, Mar.
12, 1974, 74-1 C.P.D. Paragraph 130); on the receipt of a minimum
percentage of schedule awards (Beta Systems Inc., et al., B-184413, Feb.
18, 1976, 76-1 C.P.D. Paragraph 109); and on the receipt of a maximum
dollar amount (Orvedahl Construction, Inc., B-213408, Apr. 10, 1984,
84-1 C.P.D. Paragraph 405).
In all of these cases where award on a restricted combination or
threshold of schedules is provided for by the bidder, it is an obvious
corollary that the low overall cost to the government is the relevant
award criterion, as is required under 10 U.S.C. Section 2305(c) (1982).
To obtain this result, it is permissible to include award of schedules
or items for which other bidders have submitted lower prices, even where
the solicitation states that award will be made by item. Steel King
Industries, Inc., B-209239, May 5, 1983, 83-1 C.P.D. Paragraph 473.
The Corps has indicated that minimal contract performance has
occurred, and that performance is currently in abeyance because of
winter weather conditions. If Walsky is found responsible, we recommend
that the award to Harbor of schedules "A" and "B," and the award to
Seley of schedules "C" and "G" be terminated for convenience. Award for
these four schedules should be made to Walsky.
Since this decision contains a recommendation that corrective action
be taken, we are furnishing copies to the Senate committees on
Governmental Affairs and Appropriations, and to the House Committees on
Government Operations and Appropriations in accordance with section 236
of the Legislative Reorganization Act of 1970, 31 U.S.C. Section 720
(1982), which requires the submission of written statements by the
agency to the committees concerning the action taken with respect to our
recommendation.
The protest is sustained.
Comptroller General of the United States
FILE: B-216735 85-1 CPD 100
DATE: January 25, 1985
MATTER OF: Second Source Computers, Inc.
DIGEST:
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - PROTESTOR NOT
IN LINE FOR AWARD
A protester challenging a contract award is not an interested party
under GAO Bid Protest Procedures, and its protest thus is dismissed,
where it would not be in line for award if its protest were upheld.
Second Source Computers, Inc. (SSC) protests the award of a contract
to Technical Maintenance Services (TMS) under invitation for bids (IFB)
No. NA-84-IFB-00098, issued by the Department of Commerce for computer
equipment. SSC principally contends that TMS's bid took exception to
certain IFB requirements and thus should have been rejected as
nonresponsive. We dismiss the protest.
Under our Bid Protest Procedures, a party must be "interested" before
we will consider its protest. 4 C.F.R. Section 21.1(a)(1984). 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. Paragraph 226. The record shows that SSC was only
the third low bidder after TMS and Sperry Corporation, and SSC neither
alleges that Sperry's bid was nonresponsive nor asserts any other reason
why Sperry would not be eligible for the award. Under these
circumstances, Sperry, not SSC, would be in line for award if TMS's bid
were rejected as nonresponsive, and SSC therefore is not an interested
party. See Photica Inc., B-211445, July 11, 1983, 83-2 C.P.D. Paragraph
74.
The protest is dismissed.
Comptroller General of the United States
FILE: B-216734 85-2 CPD 237
DATE: August 28, 1985
MATTER OF: North-East Imaging, Inc.
DIGEST:
BIDS - INVITATION FOR BIDS - CANCELLATION - RESOLICITATION - USE OF
PROPER EVALUATION CRITERIA
Where a solicitation is defective because it provides no common basis
for the evaluation of bids, the proper remedy is a resolicitation of the
requirement with appropriate corrections.
North-East Imaging, Inc. protests the Veterans Administration's (VA)
rejection of its bid as nonresponsive under solicitation No. 630-22-85
for servicing X-ray equipment. North-East also protests the agency's
subsequent decision to terminate the contract and resolicit, contending
that it was entitled to receive the award on the basis of its original
bid.
We deny the protest.
The invitation for bids (IFB) required bidders to submit rates for
various types of service and included a clause covering the provision of
parts. The clause provided as follows:
"Parts furnished on a no-charge basis by the contractor, or
parts purchased by the Veterans Administration will be installed
at no added cost. Parts, not in excess of $ . . . ($250 unless
otherwise indicated by the bidder) will be furnished by the
contractor at no added cost. (Bidder to insert dollar amount in
space provided therefor.)"
Three firms submitted the following bids:
BIDS OMITTED
The contracting officer rejected North-East's bid as nonresponsive
because North-East did not bid to provide parts valued at $250 or less.
When North-East protested that each of its bids was responsive, the
VA reexamined the IFB and found that the clause covering the supply of
replacement parts was defective. The VA intended that the clause
require bidders to provide all parts valued at $250 or less without any
additional charge, rather than allowing bidders the option of bidding on
a different amount. While North-East's bid was in fact responsive to
the actual terms of the IFB, the agency determined that award to
North-East would not be proper because the IFB allowed the submission of
bids based on completely different pricing premises and provided no
method for evaluating them on any common basis. The VA therefore
decided to terminate the contract that had been awarded to the low
bidder (Tech-Rad) and to resolicit after revising the defective clause.
North-East argues that although it did not bid on the same basis as
the other bidders, its own bid nonetheless presented the most favorable
total cost to the government and, therefore, should be evaluated as the
low bid. North-East notes that its "Bid Option A," offering to supply
all parts valued at $1 or less at a yearly maintenance fee of $90,000,
presents a lower total figure than Tech-Rad's bid to supply all parts
valued at $250 or less at an annual charge of $120,000. Alternatively,
the protester argues that its "Bid Option B," offering to supply all
parts up to $500 for an annual rate of $132,000, would provide more
parts than Tech-Rad's bid, for a proportionately smaller increase in
cost.
In effect, the protester asks that the VA adopt some method for
evaluating North-East's bid that would allow a basis for comparison with
the other bids. Apparently, North-East believes the VA could evaluate
the bids based on estimated parts usage for parts at the various value
levels bid. It is not clear from the record, however, whether the VA
actually has the necessary information to use such an approach. In any
event, it would be improper for the VA to do so since it is a
fundamental principle of procurement law that all evaluation factors
must be made known in advance of bid opening so that all bidders can
compete on an equal basis. See Apex International Management Services,
Inc., B-212220.2, May 30, 1984, 84-1 CPD Paragraph 584.
Under the circumstances here, where the IFB provided no common basis
for evaluating the bids, the VA simply could not determine which bid was
in fact low. The solicitation, therefore, was clearly materially
defective since award in a formally advertised procurement must be based
on the most favorable cost to the government, but the IFB provided no
assurance that this would in fact occur. See Go Leasing, Inc. et al.,
B-209202 et al., Apr. 14, 1983, 83-1 CPD Paragraph 405.
We find, therefore, that cancellation of the solicitation was
entirely proper. The agency has informed us, however, that despite
advising our Office several months ago that the contract awarded to
Tech-Rad would be terminated and the requirement resolicited, no action
has in fact been taken to terminate the contract. We are concerned that
the agency did not do as it advised and that we were not informed of any
change in the agency's intent to terminate and resolicit. By separate
letter, we are advising the Administrator of Veterans Affairs of these
concerns.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-216733 85-1 CPD 268
DATE: March 4, 1985
MATTER OF: JDL Construction, Inc.
DIGEST:
BONDS - BID - DISCREPANCY BETWEEN BID AND BID BOND - BID
NONRESPONSIVE
Protester's bid accompanied by a bid bond indicating bidder was a
joint venture properly was rejected as nonresponsive because the bid
indicated the bidder was a corporation and therefore the obligation of
the surety is unclear.
JDL Construction, Inc. (JDL), protests award to any other bidder
under invitation for bids (IFB) No. F04605-84-B-0021, issued by March
Air Force Base, California. JDL alleges that its bid was improperly
rejected as nonresponsive.
We deny the protest.
Bid opening was on June 21, 1984, and JDL was the apparent low
bidder. The contracting officer noted that JDL's bid contained a
discrepancy between the bid, which listed JDL as a corporation, and the
bid bond, which listed JDL as a joint venture. When questioned about
the discrepancy, JDL advised that it was a newly formed corporation.
The contracting officer therefore provided JDL the opportunity to submit
a corrected bid bond.
On July 10, 1984, JDL submitted a revised bond; however, the block
referring to the state of incorporation had been whited out and the
state of Washington was typed over the white-out. The contracting
officer contacted the surety -- Mid Century Insurance Company -- about
the correction and was advised that the bond should have listed
California as the state of incorporation and that no change had been
authorized. The surety also advised that a corrected bond would be
forthcoming. When JDL was contacted about the discrepancy, it too
advised that a new bid bond would be sent. The contracting officer
reports that neither JDL nor the surety ever submitted a new bid bond,
which resulted in JDL being rejected as nonresponsive. Award was made
to the next lowest bidder on September 22, 1984.
JDL essentially argues that the bid bond was not altered, but was
whited out to correct a typing error that was made in the bid bond when
it was issued. JDL alleges that it repeatedly attempted to submit a
proper bid bond in response to the contracting officer's request.
However, the Air Force denies receiving a corrected bond. To prove
receipt, JDL has included certified return receipts marked July 10 and
August 17. JDL states that it is receiving unfair treatment because the
contracting officer harbors ill feelings against its company stemming
from a prior procurement.
The discrepancy in JDL's bid and bid bond involved the two boxes
which indicated the legal status of the bidder. The box on the bid form
indicated JDL was a corporation and the box indicating a joint venture
was checked on the bid bond. Both the bid and the bid bond showed the
name of the entity to be "JDL Construction."
Our Office has previously found bids nonresponsive which named a
corporation in the bid and a joint venture in the bid bond. Atlas
Contractors, Inc./Norman T. Hardee, a Joint Venture, B-208332, Jan. 19,
1983, 83-1 C.P.D. Paragraph 69, and Hoyer Construction Company/K.D.
Hoyer, a Joint Venture, B-183096, Mar. 18, 1975, 75-1 C.P.D. Paragraph
163.
This rule is prompted by the rule of suretyship that no one incurs a
liability to pay the debts or perform the duty of another unless he
expressly agrees to be bound. A.D. Roe Company, Incorporated, 54 Comp.
Gen. 271 (1974), 74-2 C.P.D. Paragraph 194. Here, the bid bond
indicated the entity was a joint venture meaning the surety guaranteed
the performance of two firms and could look to the resources of two
firms for any recovery. However, the bid indicated the bidder was a
single entity and therefore the surety's possible recourse would be
limited to the assets of one firm. The only legal theory under which it
would have been proper for the contracting officer to have allowed the
submission of a corrected bond would be that the indication of a joint
venture was a typographical error. Montgomery Elevator Co., B-210782,
Apr. 13, 1983, 83-1 C.P.D. Paragraph 400 and K-W Construction, Inc.,
B-194480, June 29, 1979, 79-1 C.P.D. Paragraph 475. However, since
neither JDL nor the surety submitted a corrected bid bond, although both
had reportedly indicated to the contracting officer that a corrected bid
bond would be sent, the contracting officer had no alternative but to
consider the bid bond as submitted. Federal Acquisition Regulation, 48
C.F.R. Section 14.406-3(g)(5) (1984).
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-216730 85-1 CPD 621
DATE: May 31, 1985
MATTER OF: Richard M. Walsh Associates, Inc.
DIGEST:
CONTRACTS - DAMAGES - LIQUIDATED - ACTUAL DAMAGES V. PENALTY - PRICE
DEDUCTIONS - REASONABLENESS
1. While the failure of an IFB damages provision to establish
varying deduction rates for late performance of work varying in
importance may evidence an impermissible penalty, a provision applying a
single deduction rate for late performance of different record
transcription tasks does not evidence an impermissible penalty where,
although different tasks were assigned time priority over others, the
agency did not consider timely completion of any task more important
than others.
BIDS - ESTIMATES OF GOVERNMENT - REASONABLENESS
2. A contracting agency's quantity estimates in a solicitation will
be deemed reasonably accurate representations of anticipated actual
needs, and thus unobjectionable, when based on the best information
available.
BIDS - INVITATION FOR BIDS - PRICING STRUCTURE - RISK
3. Solicitation provisions are not objectionable merely because they
fail to account for every eventuality during performance and thus may
impose on the contractor some risk of less than full reimbursement for
performance.
BIDS - INVITATION FOR BIDS - INTERPRETATION - AS A WHOLE
4. Where the solicitation is silent as to whether the contractor is
required to use full-time or part-time employees in performing certain
tasks, it is sufficiently clear that the contractor can use either
full-time or part-time employees.
Richard M. Walsh Associates, Inc. (Walsh) protests alleged defective
specifications in invitation for bids (IFB) No. N68836-84-B-0056, issued
by the Department of the Navy. The IFB, a total small business
set-aside, was for equipment and services in transcribing data from
government documents at the Naval Air Station, Key West, Florida, to
computer disk and punch card storage. Walsh, the incumbent contractor,
contends that the speicification deficiencies will reduce competition,
increase the overall cost to the government, and preclude bidders from
competing on an equal basis.
We deny the protest.
Walsh contends that the IFB's system for assessing damages for late
performance through contract payment deductions establishes a penalty
that bears no reasonable relationship to the actual damages or harm that
might be suffered by the government in the event of delayed performance
and thus constitutes an improper liquidated damages provision under
Federal Acquisition Regulation (CFR), 48 C.F.R. Section 12.2 (1984). As
evidence of this lack of reasonable relationship, Walsh points to the
fact that although certain work was given time priority over other work
under the IFB, deductions for late performance of these high and low
priority work items were to be calculated in exactly the same manner: 1
percent of the contract price would be deducted for every 30 minutes of
late performance. Walsh also asserts that the damages provision fails
to include either a maximum dollar amount of liability or a period of
time for the assessment of damages, in alleged violation of the FAR.
The Navy maintains that the damages provision is entirely proper.
The Navy points out that the deduction provision is based on a specified
maximum allowable deviation from acceptable quality levels; quality
assurance methods to be used for evaluating contractor performance were
clearly set forth; and the provision was written in accordance with the
office of Federal Procurement Policy's Guide for Writing and
Administering Performance Statements of Work for Service Contracts. The
Navy also states, in response to the evidence on which Walsh's argument
is based, that the deduction formula is the same for all work because
timely completion is equally important to all the work, no matter the
time priority. The Navy explains that the priorities are established
not based on importance, but as a means to assure that all the work is
completed in the most timely manner.
Initially, we point out that the damages provision clearly imposes
what amounts to liquidated damages for late performance. Such a damages
provision will be deemed to impose liquidated damages wherever, as here,
the solicitation fixes, without proof of actual damages sustained, the
amounts the government can recover from the contractor for a contract
violation. See Environmental Aseptic Services Administration and Larson
Building Care Inc., 62 Comp. Gen. 219 (1983), 83-1 C.P.D. Paragraph 194.
Before we will rule that a liquidated damages provision imposes an
impermissible penalty, however, the protester must show that there is no
possible relationship between the liquidated damages rate and reasonably
contemplated losses. International Business Investments, Inc.,
B-213723, June 26, 1984, 84-1 C.P.D. Paragraph 668. Walsh has not met
this burden.
While the absence of different deduction rates for work of varying
importance may evidence an impermissible penalty, we do not agree with
Walsh's underlying premise that the assigning of time priorities
necessarily indicates that work varies in importance. As Walsh
suggests, quick-turnaround work may be so designated because it concerns
a particularly important matter. On the other hand, a time priority
designation also could reflect an administsrative preference for
immediately performing less important, but less time-consuming, record
transcribing tasks that otherwise might be delayed inordinately while
more important, more time-consuming tasks are performed. In this latter
situation, time priorities do not denote importance, but rather aid in
workload management.
According to the Navy, the installation involved here faces the
latter situation rather than that suggested by Walsh. As indicated, the
Navy reports that it considers timely record transcription equally
important for all the records covered by the IFB, no matter the stated
time of performance. The Navy explains that these time priorities are
established solely for the purpose of managing the workload and assuring
the timeliest possible performance of all the work. In light of the
Navy's position and our view, expressed above, that time priority does
not necessarily indicate relative importance, we cannot agree with Walsh
that the use of a single deduction rate for all late performance
evidences an impermissible penalty.
Walsh maintains that it has made out a prima facie case that the
damages provision imposes an impermissible penalty and that we should
rule in its favor on this issue because the Navy has not responded with
evidence that the provision is reasonably related to anticipated actual
damages due to late performance. We have found Walsh's argument based
on time priorities unpersuasive, however, and the only other portions of
the protest concerning the reasonableness of the deduction rate are
statements by Walsh to the effect that the deduction rate "clearly"
bears no reasonable relation to the possible harm to the government.
Walsh's position notwithstanding, such self-serving conclusory
statements and umpersuasive arguments do not meet the protester's burden
of establishing that there is no possible relationship between the
specified rate and the potential harm. International Business
Investments, Inc., B-213723, supra.
Walsh has not even attempted -- based on its experience as the
incumbent contractor -- to estimate the impact of late performance and
also has not explained why a 1-percent deduction cannot possibly
represent the approximate harm to the Navy from 30 minutes of late
performance. This rate of deduction would amount to approximately $110
per month for 30 minutes of late performance based on the approximate
$11,000 monthly price undewr Walsh's prior contract. This amount does
not appear unreasonable on its face and, since Walsh has not clearly
established to the contrary, we conclude that the damages provision does
not impose an impermissible penalty.
In presenting its case, Walsh relies to a great extent on our
decisions Environmental Aseptic Services Administration, et al., supra,
and Linda Vista Industries, Inc., B-214447, B-214447.2, Oct. 2, 1984,
84-2 C.P.D. Paragraph 380, holding that certain deduction provisions
were improper. Walsh's reliance is misplaced. Those cases, unlike
Walsh's involved maintenance contracts under which the contractor would
have its payment for an entire task deducted if a subtask was
unacceptably performed (e.g., deuction of payment for cleaning a room
for failure to empty one ashtray in the room). We held that this
failure to provide reimbutsement for substantial performance constituted
a penalty: the deduction amount would exceed the value of the
improperly performed work. Here, the 1-percent deduction is related
only to the transcription work not timely performed, and the record does
not establish that the deduction rate will exceed the value of the
improperly performed work.
Walsh's contention that the Navy violated the FAR by failing to
include a maximum dollar amount of liability or a maximum period of time
for the assessment of damages also is without merit since FAR, Section
12.202(b), provides only that such limitations "may" be included in a
liquidated damages clause, not that the limitations must be included.
Walsh asserts that the IFB's estimated annual requirements for the
data entry and transcribing services were overstated because the same
estimate was listed for the bass contract year and each of the 2 option
years despite the fact that, as the prior incumbent contractor, Walsh
experienced a significant downward trend in the government's actual
requirements. Walsh maintains that at the time the Navy issued the IFB,
it had in its possession delivery tickets (submitted for each work
order) from Walsh reflecting this decrease in recording requirements.
Walsh claims the Navy improperly ignored this "most current information
available" in preparing the IFB estimates, and that the estimates
therefore are defective.
Walsh is correct that when an agency solicits bids for a requirements
contract on the basis of estimated quantities, the estimates must be
calculated based on the best information available. There is no
requirement, however, that the estimates be absolutely correct. Rather,
the estimated quantities simply must be reasonably accurate
representations of anticipated actual needs. Space Services
International Corp., B-207888.4, et al., Dec. 13, 1982, 82-2 C.P.D.
Paragraph 525. It is the protester's burden to establish that the
stated estimates are not based on the best information available or
otherwise are deficient. JETS Services, Inc., B-190855, Mar. 31, 1978,
78-1 C.P.D. Paragraph 259. We find Walsh has not met this burden.
The Navy explains that in arriving at its estimates, it took all
avalable resources into consideration, including government historical
data, new recording requirements for fiscal year 1985, and the
experience of certain key data processing pesonnel. Although not clear
from the Navy's initial report, the Navy states in subsequent
submissions that it also relied on Walsh's delivery tickets,
particularly in compiling its estimates for new jobs for which there are
no historical data. The Navy points out that its estimates in fact
represent a decrease of five million keystrokes from the prior contract
and that this decrease was not greater only because the addition of
several new programs is anticipated under this contract.
As the Navy apparently relied on all available information --
including Walsh's delivery tickets -- in formulating its estimates, we
find no basis for Walsh's claim that the Navy did not use the best
information available. Further, while Walsh's performance experience
might indicate a downward trend in requirements for for 1984, the
anticipated addition of new programs reasonably could offset this trend
in 1985. Walsh has not argued or shown otherwise. We conclude that the
estimates have not been proven deficient.
Walsh claims the statement of work is unclear, and thus deficient, in
three respects: it does not set forth criteria establishing new work
priorities and new performance times in the event of equipment downtime;
turnaround times are relaxed for workload increases only when less than
4 hours' notice of the increase is given; and it allows the government
to increase the workload without compensating the contractor. These
contentions are without merit.
The contracting agency, not our Office, is responsible for
determining its needs and the best means of meeting those needs; the
agency is most familiar with the conditions under which supplies,
equipment or services have been used in the past and how they are to be
used in the future. Rack Engineering Co., B-208615, Mar. 10, 1983, 83-1
C.P.D. Paragraph 242. Furthermore, while specifications must describe
the government's needs accurately enough that bidders are able to
compete on a relatively equal basis, Talley Support Services, Inc.,
B-209232, June 27, 1983, 83-2 C.P.D. Paragraph 22, there is no
requirement that an IFB be so detailed as to eliminate completely all
performance uncertainties or address every possible eventuality. See
e.g., Operational Support Services, B-215853, Dec. 3, 1984, 84-2 C.P.D.
Paragraph 607. The fact that the resulting solicitation may impose some
risk on the contractor does not render the IFB improper. Applied Devices
Corp., B-199371, Feb. 4, 1981, 81-1 C.P.D. Paragraph 65.
The establishing of any new work priorities is a matter involving
numerous variables which, according to the Navy, may not become apparent
until rescheduling actually becomes necessary. We do not think it
unreasonable for an agency to deal with such situations when they arise
rather than attempt to address each possible circumstance in an IFB.
Walsh, we note, has offered no suggestions as to the criteria it
believes should be included in the IFB.
We likewise find nothing improper in the turnaround time relaxation
provision. Paragraph C.5.8 of the statement of work provides that the
contractor will be given as much advance notice as possible if the
volume of source documents for a recording job exceeds the normal volume
by 25 percent, and that where at least 4 hours' notice is not given, the
turnaround time will be extended "in equivalence with the number of
documents over the normal submission." This provision for at least 4
hours' notice does not appear unreasonable on its face, and Walsh
neither presents evidence or argument as to why 4 hours is inequitable,
nor indicates the amount of notice it would consider adequate.
Consequently, we cannot conclude that it was improper for the Navy to
specify 4 hours as the minimum notice period before turnaround time
would be adjusted.
The third alleged deficiency concerns paragraph C.5.3, which provides
that the normal workload will fluctuate and is subject to change through
contract modification, and that during an estimated three peak periods
during the year the contractor could be required to perform recording
services in excess of the estimated maximum daily requirement. In our
view, this paragraph does no more than warn of a possible uneven
workload. This is a part of the Navy's requirement and is
unobjectionable. As for the possibility of of undercompensation, the
contract modification procedure referenced in this provision presumably
would entail corresponding price adjustments for adjustments in the
workload. Further, nothing in the provision interferes with the
contractor's right to claim increased reimbursement under the disputes
clause (FAR, Section 52.233-01) incorporated in the IFB by reference.
Again, however, the mere fact that a solicitation may impose a risk that
the contractor may not be able to recover fully for performance does not
render the solicitation improper. International Business Investments,
Inc., B-213723, supra.
Walsh claims that the IFB misstated the work requirements for
government documents in building A-314 at the Naval Air Station by
failing to advise bidders clearly of the need for a full-time employee
in the building. The Navy states that the status of the employees
manning the building is of no concern to the government; whether full-
or part-time employees are hired is purely a matter of business
discretion. As the IFB was silent as to whether the contractor was
required to use full-time or part-time employees to perform the work in
building A-314, we think it was sufficiently clear that the contractor
could use either type of employee.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-216728 85-1 CPD 125
DATE: February 1, 1985
MATTER OF: Sam Gonzales, Inc.
BIDS - MISTAKES - CORRECTION - DENIAL
Agency's refusal to permit upward correction of the protester's low
bid is reasonable and will not be disturbed by GAO where: (1) the
protester's worksheets show that a higher overhead rate was applied to
roofing work allegedly omitted from the original bid price than was
applied to roofing work included in the original bid price; (2) the
correction requested would bring the protester's bid to within 2.5
percent and $6,158 of the next low bid; and (3) the correction would
increase the original bid by 50 percent.
Sam Gonzales, Inc. (Gonzales), protests the United States Army Corps
of Engineers' refusal to allow an upward correction of its bid, and the
subsequent award of a contract to Samuel C. Rosner, General Contractors
(Rosner), under invitation for bids (IFB) No. DACA31-84-B-0106. We deny
the protest.
The IFB called for "Alterations to Building 469, Alterations to Roof,
Building 469," at Fort Meyer, Arlington, Virginia. Two amendments were
issued, Amendment 0001 adding further roofing work. Of seven bids
timely received and opened on September 12, 1984, Gonzales' was low at
$159,574, and Rosner's was second low at $244,357. The government's
estimate was $268,546. The Army requested in a September 13 telegram
that Gonzales verify its bid since it was significantly lower than the
other bids and the estimate. Gonzales telephoned the Army on September
17 to advise that it had made a mistake in calculating its bid.
At a September 18 meeting, Gonzales presented the Army its original
worksheets for the project, the worksheets its roofing estimator used to
prepare the roofing bid items, and an affidavit from the estimator. The
estimator explained (and stated in his affidavit) that the bid mistake
arose in transmitting the roofing work to Gonzales over the telephone.
When Gonzales called for the roofing estimate, the estimator claims he
quoted an amount of $60,960, his estimate for the roofing work under the
original IFB, and that he neglected to also quote an additional amount
of $78,625 for the roofing work added by amendment 0001. The estimator
attributes this oversight to the similarity of the job component titles
used in the IFB and the amendment, and additional confusion from the
fact that he was working on a similar Department of the Navy job at the
time he gave the quote. In a September 17 letter to the Army, Gonzales
requested a $78,625 upward correction of its bid for a total bid of
$238,199 or, alternatively, that it be permitted to withdraw.
In reviewing Gonzales' bidding materials, the Army noted that while
the original worksheets showed a 5-percent overhead rate for the roofing
work included in the bid (at a price of $60,960), the worksheets for the
allegedly omitted amendment 0001 roofing work indicated that a higher
rate of 15-percent was used in calculating the $78,625 amount. Seeking
to understand why different overhead rates would be applied to similar
work, the Army telephoned Gonzales on September 24. Mr. Gonzales
explained that since he treats all roofing work as subcontract
(5-percent overhead) rather than in-house (15-percent overhead) work,
the estimate for the amendment 0001 roofing work should have included 5-
rather than 15-percent overhead. By letter to the Army dated September
24, however, counsel for Gonzales confirmed that Gonzales' intended bid
for the omitted work would have included 15-percent overhead as
indicated in the worksheets.
The Army ultimately determined that while Gonzales had presented
clear and convincing evidence that a mistake had occurred, the evidence
presented did not also constitute clear and convincing evidence of the
actual bid intended due to the uncertainty caused by Gonzales'
inconsistent overhead rates. The Army thus decided Gonzales could
withdraw its bid, but could not correct it and receive the award.
Rosner was awarded the contract on September 28.
Although our Office has retained authority to review agency decisions
regarding the correction of mistakes in bids, the actual authority to
determine whether a bidder should be permitted to correct a mistake
alleged after bid opening, but prior to award, is vested in the
procuring agency. National Heat and Power Corp., B-212923, Jan. 27,
1984, 84-1 C.P.D. Paragraph 125. An agency may permit correction of a
bid where clear and convincing evidence establishes both the existence
of a mistake and the bid actually intended. Aleutian Constructors,
B-215111, July 12, 1984, 84-2 C.P.D. Paragraph 44. Whether the evidence
of the mistake or the bid intended meets the clear and convincing
standard is a question of fact; and we will not question an agency's
decision based on this evidence absent a clear showing that its decision
lacked a reasonable basis. PK Contractors, Inc., B-205482, Apr. 22,
1982, 82-1 C.P.D. Paragraph 368.
Further, the closer an alleged intended bid comes to the next low
bid, the greater the threat correction would pose to the integrity of
the competitive bidding system and, thus, the stronger the evidence must
be to establish such an intended bid. As a result of this increasing
burden, correction often is disallowed on the basis that the corrected
bid would be too close to the next low bid. See Aleutian Constructors,
supra; Crimson Enterprises, Inc., B-213239, May 8, 1984, 84-1 C.P.D.
Paragraph 513.
Because Gonzales' requested correction would bring its bid to within
approximately 2.5 percent (and only $6,158) of Rosner's bid, the Army
determined that a high evidentiary standard should be applied in
deciding whether Gonzales should be permitted to correct. /1/ In doing
so, the Army found that the inconsistency in the overhead rates shown on
Gonzales' worksheets created some doubt as to precisely how Gonzales
would have bid, but for the mistake. Specifically, the Army was
concerned at the absence of any assurance that Gonzales had not (and the
appearance that it might have) purposely increased the overhead for the
omitted work after bids had been opened in order to raise its bid as
close as reasonably possible to the next low bid. Further, given the
magnitude of the requested correction (50 percent of Gonzales' original
bid), it was the Army's view that correction could damage the public
perception of the competitive bidding system, and that the evidence of
the bid intended thus did not meet the clear and convincing standard.
Gonzales believes it has clearly established its intended bid of
$238,199. Gonzales points out that, even if it is unclear whether it
would have used a 15-percent or 5-percent overhead rate, its bid clearly
would have been low under either interpretation (either $238,199 or
$232,041 according to our calculations) and, thus, could be accepted.
Gonzales argues that the 2.5 percent difference between its corrected
bid and Rosner's bid should not be deemed too small to permit correction
since our Office previously has approved correction when the percentage
difference was even smaller.
We cannot conclude that the Army unreasonably determined that
correction of Gonzales' bid was not warranted. Notwithstanding
Gonzales' contrary position, we agree that there is an inconsistency on
the face of Gonzales' worksheets which casts some doubt on the amount
Gonzales would have bid but for the mistake. While Gonzales is correct
that its bid would remain low if either a 5-percent or 15-percent
overhead rate was applied, the doubt raised by this inconsistency
extends beyond these two amounts. The Army's doubt is founded on the
appearance that Gonzales could purposely have increased the overhead on
the worksheets for the omitted work after bid opening, and, thus, that
the firm might have applied an even higher rate had the second low bid
been higher. While there is no evidence other than the overhead
discrepancy itself indicating that Gonzales actually did so, neither is
there evidence that Gonzales did not. Mr. Gonzales himself conceded to
the Army that the 15-percent rate should not have been used. As noted
above, later Gonzales' counsel confirmed that the 15-percent rate was
intended. Even if the resulting doubt seems slight, we cannot say the
Army was required to overlook it as insignificant, at least in light of
the magnitude of the requested correction and the proximity of Gonzales'
corrected bid to Rosner's bid.
Our Office has permitted correction where an intended bid is clearly
and convincingly shown to fall within a range of uncertainty below the
next low bid. See, e.g., Western States Construction Company, Inc.,
B-191209, Aug. 29, 1978, 78-2 C.P.D. Paragraph 149. Under the facts of
this line of cases, however, the alleged intended bid is at the low end
of the range, and the top of the range is significantly below the next
low bid. In Western States, the alleged intended bid was more than
$700,000 below the next low bid and the agency conceded that the
uncertainties in the intended bid would amount to no more than $20,000.
The facts here are quite different. Gonzales' alleged intended bid is
at the top of its claimed range of uncertainty ($232,041 to $238,199)
and the top of the range (i.e., the intended bid) is only 2.5 percent,
or $6,158, below the next low bid. Given these facts, the above line of
cases is not applicable to permit correction here. See Fortec
Constructors, B-203190.2, Sept. 29, 1981, 81-2 C.P.D. Paragraph 264;
Treweek Construction, B-183387, Apr. 15, 1975, 75-1 C.P.D. Paragraph
227.
The fact that, as Gonzales argues, our Office previously has approved
correction to within less than 2.5 percent of the next low bid does not
preclude us from finding that 2.5 percent is too small a difference to
permit correction here or in future cases. There is no specific
percentage difference above which correction automatically must be
permitted. Rather, the significance of a particular percentage
difference in bids depends upon the facts of each case and the
reasonableness of the agency's position. As a result, we may view the
same percentage differently in different cases where we find the
agency's position reasonable in light of the facts. Compare Crimson
Enterprises, Inc., B-213239, supra (upholding agency denial of
correction to within 1.5 percent of next low bid), with G.N.
Construction, Inc., B-209641, June 2, 1983, 83-1 C.P.D. Paragraph 598
(upholding agency decision to permit correction to within 1.5 percent).
The 2.5 percent difference in bids here represents only $6,158; the
requested $78,625 correction would increase the original bid by 50
percent; and there was an inconsistency on the face of the worksheet
which cast doubt on the amount that would have been bid but for the
mistake. Under these circumstances, we believe the Army reasonably
determined that the 2.5 percent difference in bids warranted applying a
strict evidentiary standard and that the evidence presented by Gonzales
was not sufficiently clear and convincing under this standard to warrant
correction of its bid.
The protest is denied.
Comptroller General
of the United States
(1) Gonzales claims its bid would be at least 5 percent below
Rosner's, but our calculations indicate that $6,158 in fact is
approximately 2.5 percent of $244,357.
FILE: B-216726
DATE: January 9, 1985
Digest
ACCOUNTABLE OFFICERS - RELIEF - ILLEGAL OR ERRONEOUS PAYMENTS -
WITHOUT FAULT OR NEGLIGENCE
Relief granted for improper payment solicited from fraudulent
endorsement based on agency findings that Finance and Accounting Officer
had established adequate controls and procedures to safeguard funds for
which accountable, and that cashier had followed prescribed procedures
in cashing checks. Although the record did not include a copy of the
office procedure in effect at the time of the loss or indicate that
identification of the endorser was required when the check was presented
by the forger, since some 2 1/2 years elapsed between the time of the
loss and commencement of the investigation it
is quite possible that records were destroyed that could have shown the
effective operating procedure, and as check cashing is a routine
activity it would be unlikely that anyone would have remembered the
particular check cashed by the forger.
Mr. Clyde E. Jeffcoat
Principal Deputy Commander
U.S. Army Finance and
Accounting Center
Indianapolis, Indiana 46249
Dear Mr. Jeffcoat:
You have requested relief under section 3527(c) of title 31 of the
United States Code for Finance and Accounting Officer Captain Nancy J.
Jempson and Cashier Specialist Four Joseph Sapien for an improper
payment of $376.51. The requested relief is granted.
The improper payment resulted from a check being cashed with a
fraudulent endorsement at the 21st Finance Section, Camp Humphrey,
Korea, in May 1980. The $376.51 check represented a tax refund of John
F. Davis, who maintained that he did not endorse the check. The check
was cashed by Mr. Sapien while Ms. Jempson was the Finance Officer.
The loss was not discovered until early 1982, when Finance Officer
Captain D.A. ward received a Treasury Fiscal Service Form 6536 (Request
for Refund) from the United States Treasury. This form is routinely
used by the Treasury to alert a depositing facility that a Treasury
check has been found to have been cashed with a fraudulent endorsement.
Upon receipt of the form, a $376.51 loss in Mr. Ward's Statement of
Accountability for April 1982 was recorded and an investigation was
begun. You state that collection action cannot be taken since the
person who cashed the check cannot be identified.
On the basis of your investigation, you have determined that the
improper payment was not the result of bad faith or lack of due care of
Ms. Jempson or Mr. Sapien. Based on Ms. Jempson's statement, you
conclude that she had established adequate controls and procedures to
safeguard the funds for which she was accountable. Specifically, Ms.
Jempson stated that during her tenure, cashiers were required to check
the signatures and social security numbers, verified by an
identification card, of individuals presenting checks for payment.
During weekly sessions cashiers were given regular training about the
proper methods and procedures to be followed when making payments. She
stated that this could not be substantiated, however, because the
training schedules and records were destroyed sometime during the 4
years since the incident occurred.
You also rely on Mr. Sapien's statement that he followed all
prescribed procedures in cashing checks. In this regard, Mr. Sapien
stated that his office had the following standard operating procedure
for check cashing: (1) each cashier was required to initial every check
that was cashed; (2) when a check was presented for payment, the only
acceptable identification card was a valid military I.D. card; (3) the
service member would sign the check in Mr. Sapien's presence, Mr.
Sapien would confirm the signature against the card to see that they
matched and then would check to see that the name and the social
security number were correct and the card had not expired; (4) Mr.
Sapien stated he also was required to look at the service member to see
that the face matched the picture on the I.D. card. The record includes
a number of commendations Mr. Sapien received for his finance office
work.
Notwithstanding these statements, you have not been able to locate a
copy of the office procedures in effect at the time of the loss, or
ascertained that identification of the endorser was required when the
check was presented by the forger. Nevertheless, since some 2 1/2 years
elapsed between the time of the loss and commencement of the
investigation, it is quite possible that records were destroyed that
could have shown the effective operating procedures. Furthermore, as
check cashing is a routine activity, it would be unlikely that anyone
would have remembered the particular check cashed by the forger. As
some 4 years elapsed before Ms. Jempson and Mr. Sapien made statements,
this is particularly true of their observations. Under these
circumstances we think sufficient your reliance on the substantially
mutually corroborating statements of Ms. Jempson and Mr. Sapien.
Accordingly, we agree that Ms. Jempson and Mr. Sapien were exercising
due care when the loss occurred, and grant relief to both for the
$376.51 loss.
Sincerely yours,
/s/ Harry R. Van Cleve
General Counsel
FILE: B-216725 85-1 CPD 2
DATE: December 27, 1984
MATTER OF: Epcon Industrial Systems, Inc.
BIDS - RESPONSIVENESS - PRICING RESPONSE NONRESPONSIVE TO IFB
REQUIREMENTS - FAILURE TO BID FIRM, FIXED PRICE
1. Where bidder includes in its bid statement that "crane rental
charges for setting the units in place shall be extra," bid was properly
rejected as nonresponsive for failure to offer firm, fixed price.
BIDS - RESPONSIVENESS - PRICING RESPONSE NONRESPONSIVE TO IFB
REQUIREMENTS - FAILURE TO BID FIRM, FIXED PRICE
2. Protester's blanket statements of conformity with IFB
requirements cannot cure defect created by failure to offer firm, fixed
price, since even assuming full compliance with the IFB, total bid price
for performance cannot be firmly established as required in advertised
procurements.
Epcon Industrial Systems, Inc. (Epcon), protests the rejection of its
bid as nonresponsive to invitation for bids (IFB) No. DAAG47-84-B-0136,
issued by the Department of the Army. The Army rejected Epcon's bid
because it was determined that Epcon had qualified its bid by inserting
a pricing variable. We agree with the Army and deny Epcon's protest.
The IFB was for the acquisition and installation of several pieces of
equipment for a Chemical Resistance Coating Painting System. In its bid
totaling $521,250, Epcon included the following statements: "Crane
rental charges for setting the units in place shall be extra" and
"concrete pads, building and anchor bolt locations shall be the
responsibility of the customer." The Army concluded that these
statements qualified Epcon's bid and that the firm did not bid a firm,
fixed price as required in advertised procurements. Accordingly,
Epcon's bid was rejected as nonresponsive, and award was made to the
second low bidder at $525,225.
Epcon argues that the statements were included only as part of the
firm's standard installation notes and should be considered minor
technicalities. In addition, Epcon contends that statements in its bid
and cover letter, that its bid fully conforms to the requirements of the
IFB, demonstrate that no additional charges were contemplated.
The question of the responsiveness of a bid concerns whether a bidder
has unequivocally offered to provide the requested items and
specification requirements at a firm, fixed price. Grosfeld
Enterprises, B-208654, Jan. 31, 1983, 83-1 C.P.D. Paragraph . . . A bid
that limits the firm's contractual obligations or does not offer to
perform at a firm, fixed price must be rejected. Zero Manufacturing
Co., B-210123.2, Apr. 15, 1983, 83-1 C.P.D. Paragraph 416. Here,
Epcon's statement in its bid that crane rental charges would be extra
clearly qualified the bid price that was submitted. Although Epcon
argues that a crane was not even needed for this job, the Army indicates
that the installation procedures were within the contractor's discretion
and that the units being purchased were sufficiently large that a bidder
could utilize a crane to erect or install the units. A bidder's
intention must be determined from all the bid documents at the time of
bid opening and where the total bid price cannot be determined from bid
evaluation, the bid must be rejected as nonresponsive. Data
Controls/North Inc., B-205726, June 21, 1982, 82-1 C.P.D. Paragraph 610.
Finally, we note that Epcon's blanket statements that the firm
intended to fully conform with the IFB requirements cannot cure the
defect created by its failure to offer a firm, fixed price for contract
performance. Even assuming that Epcon took no exception to the
specifications set forth in the IFB, its total bid price could not be
firmly established and the Army was justified in rejecting Epcon's bid
on this basis alone.
Protest denied.
Comptroller General of the United States
FILE: B-216724 85-1 CPD 231
DATE: February 25, 1985
MATTER OF: Gentex Corporation
DIGEST:
BIDS - INVITATION FOR BIDS - AMENDMENTS - FAILURE TO ACKNOWLEDGE -
WAIVED AS MINOR INFORMALITY
1. Bidder's failure to acknowledge an amendment to an IFB was a
minor informality or irregularity which could be waived or cured where
the amendment had no effect on quantity, quality or delivery and would
slightly decrease price if it affected it at all.
BIDS - EVALUATION - ESTIMATES - PROPRIETY
2. IFB specifically provided government's estimated weights and
dimensions for evaluatio- of transportation costs and IFB specifically
stated that such estimate would be used for evaluation purposes if the
bidder failed to provide such information. Under these circumstances,
GAO rejects bidder's claim that its omission of information on weight
and dimensions should have been evaluated as an offer to transport items
without cost to the government.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
3. Bidder's allegation that Air Force used unrealistic maximum
guaranteed dimensions in IFB for evaluation of transportation costs is
untimely where the objections were first raised after bid opening.
BIDS - EVALUATION - DELIVERY PROVISIONS - GUARANTEED SHIPPING WEIGHT
- BIDDER'S UNDERSTATEMENT
4. Contention that successful bidder provided inaccurate low
guaranteed maximum shipping weight and dimensions will not affect
propriety of award, even if allegations were correct. Practice of
bidders intentionally using guaranteed shipping weight and dimensions
which are less than actual weight and dimensions is considered a
permissible alternative to reducing the price for the procured item.
Gentex Corporation (Gentex) protests the award of a contract to Scott
Aviation (Scott) under invitation for bids (IFB) No. F41608-84-B-0142
issued by the San Antonio Air Logistics Center, Kelly Air Force Base,
Texas. Gentex contends that it and not Scott submitted the low
responsive bid under the solicitation. Gentex also claims bid
preparation costs.
The protest and the claim are denied.
Gentex contends that Scott's bid should have been rejected as
nonresponsive because Scott failed to acknowledge prior to bid opening
its receipt of amendment No. 0001 to the IFB. In addition, Gentex
contends that it and not Scott submitted the low bid under the
solicitation. In this connection, Gentex objects to the agency's
evaluation of transportation costs resulting in the determination that
Scott submitted the low bid.
The IFB requested bids on an f.o.b. origin basis for 26,120 oxygen
mask valve assemblies. Bids were received from two companies -- Gentex
and Scott.
We will first consider Gentex's contention that Scott's bid was
nonresponsive because Scott had not acknowledged receipt of amendment
No. 0001 to the IFB. That amendment made two changes to the
solicitation: (1) it completed the "Qualified Products -- End Items"
clause by inserting the qualified products list (QPL) number and by
providing the name and address of the specification preparing activity
and (2) it changed the packing requirements for the valves by lowering
the required packing level from "B" to "C." The agency determined that
Scott's failure to acknowledge amendment No. 0001 prior to bid opening
was a minor informality or irregularity which did not render Scott's bid
nonresponsive. The changes were found to have either no effect or a
negligible downward effect on price and no effect on quantity, quality,
or delivery of the items to be provided. The agency advises that
subsequent to its determination that Scott's failure to acknowledge
amendment No. 0001 was only a minor informality or irregularity, it
mailed Scott a copy of the amendment. Scott, which apparently had not
received the amendment prior to bid opening, agreed to the changes in
the amendment.
We agree with the agency that Scott's failure to acknowledge
amendment No. 0001 did not affect its bid's responsiveness. The failure
of a bidder to acknowledge receipt of an amendment may be waived or
allowed to be cured by the bidder where the amendment has either no
effect or merely a negligible effect on price, quantity, quality, or
delivery of the item bid upon. See Federal Acquisition Regulation
(FAR), 48 C.F.R. Section 14.405 (1984). We believe that the changes
made by amendment No. 0001 to section M-1 of the solicitation did not
affect the price, quantity, quality or delivery of the valves concerned
since the agency advises that the information concerning the QPL was
already known to Scott, which is a qualified source for the valve.
Gentex does not dispute that Scott is a qualified source and has not
challenged the agency's position that this information was known to the
bidder even in the absence of the amendment. Gentex, however, asserts
that Scott's failure to acknowledge the amendment rendered Scott's bid
nonresponsive since the change in the packing requirement had an effect
on price. As set forth above, the agency determined that the changing
of the packing requirement from level "B" to level "C" would have either
no effect on price or a negligible downward effect, since, in some
cases, the lower level of packing results in a slight decrease in price.
Thus, the agency determined that Scott's failure to acknowledge the
change in packing requirements prior to bid opening was a minor
informality or irregularity. See FAR, Section 14.405. Furthermore, the
failure of a low bidder to acknowledge an amendment which merely results
in a decrease in the cost of performance should be waived as a minor
informality. Conrad Industries, Inc., B-213974.2, Aug. 7, 1984, 84-2
C.P.D. Paragraph 156.
Gentex also contends that it and not Scott submitted the low bid
under the solicitation. The record shows that Gentex submitted the low
unit price of $8.47 per valve while Scott bid a unit price of $8.50.
However, upon evaluating the two bids by factoring costs of
transportation of the valves to the specified destination, the agency
determined that Scott had submitted the lower bid by a total of $372.70.
The agency's evaluation of the two bids was as follows:
TABLE OMITTED
Gentex asserts that the agency acted improperly in evaluating its bid
by adding $1,458.53 for transportation costs to its bid price.
Furthermore, Gentex contends that the agency erroneously added a
transportation cost of only $302.23 to Scott's bid, an amount which does
not accurately reflect the costs of transporting the valves.
Section F-73 of the IFB, entitled "Guaranteed Maximum Shipping
Weights and Dimensions," provides in part as follows:
"(a) Each offer will be evaluated to the destination specified
by adding to the f.o.b. origin price all transportation costs to
said destination. The guaranteed maximum shipping weights and
dimensions of the supplies are required for determination of
transportation costs. The offeror is requested to state weights
and dimensions as part of the offer. If separate containers are
to be banded and/or skidded into a single unit, details must be
described. If delivered supplies exceed the guaranteed maximum
shipping weights or dimensions, the contract price shall be
reduced by an amount equal to the difference between the
transportation costs computed for evaluation purposes based on
offeror's guaranteed maximum shipping weights or dimensions and
the transportation costs that should have been used for offer
evaluation purposes based on correct shipping data.
"(b) If the offeror fails to state guaranteed maximum shipping
weights and dimensions for the supplies as requested, the
Government will use the estimated weights and dimensions, below,
for evaluation; and the Contractor agrees this will be the basis
for any reduction in contract prices as provided in this clause.
The Government's estimated weights (and dimensions, if applicable)
are as follows: . . ."
The IFB provided that the estimated weight and dimensions for the
containers were respectively "0.5 lbs" and "1 X 1 X 2" (inches) per
container. Although Gentex now states in its protest that these
dimensions are unrealistically small, in its bid, Gentex did not submit
guaranteed maximum shipping weight and dimensions for the valves.
Accordingly, as provided by paragraph (b) of section F-73 of the IFB,
the agency evaluated Gentex's bid by using the weight and dimensions set
forth in the solicitation for determining the transportation costs.
Gentex states that the dimensions of each valve are 2 1/2 inches by 1
1/2 inches by 1 1/2 inches and that, considering the packaging and
packing requirements set forth in the solicitation, it believes, based
on its prior experience, that the minimum size package required for each
valve is a 5-inch-by-5-inch vapor-proof envelope. Gentex adds that
these dimensions would be even larger when the valve units are packed in
shipping containers. Gentex states that since the dimensions of the
containers set forth in the IFB were smaller than the actual size of an
individual valve, it presumed that by omitting information on guaranteed
maximum shipping weights and dimensions, no additional charge for
transportation would be added to its bid. This was its "intention,"
Gentex argues, in not inserting in its bid guaranteed maximum shipping
weights and dimensions differing from the government's estimate.
We do not agree with Gentex that the omission in its bid of
information on guaranteed weight and dimensions should be construed as
meaning that transportation of the procured items would be without cost
to the government. As set forth above, the IFB clearly provided in
section F-73 that if the offeror failed to state guaranteed maximum
shipping weights and dimensions, the government would use the shipping
weight and dimensions set forth in the solicitation for the purpose of
bid evaluation. Given the express notice contained in the IFB as to the
exact consequences of a bidder's omission of information on guaranteed
weight and dimensions, we see no merit in Gentex's contention that the
omission of such information was intended to mean that transportation
would be without cost to the government. Accordingly, we find that the
agency's use of the maximum shipping weights and dimensions contained in
the IFB to evaluate Gentex's bid was proper in view of Gentex's failure
to provide such information. See Patty Precision Products Company,
B-188469, July 25, 1977, 77-2 C.P.D. Paragraph 44.
We note that the agency advises that prior to bid opening, Gentex
neither sought clarification of, nor objected to, the IFB's provisions
relating to guaranteed shipping weight and dimensions. Our Office will
not now consider any objections which Gentex has to the specific
guaranteed weights and dimensions listed in the solicitation. Protests
which are based on alleged improprieties in the specifications contained
in an IFB must be filed with either our Office or the contracting office
prior to bid opening. 4 C.F.R. Section 21.2(b)(1) (1984); Certified
Mechanical Contractors, Inc., B-215411, June 20, 1984, 84-1 C.P.D.
Paragraph 654.
Lastly, Gentex contends that Scott's bid was improperly evaluated
because the dimensions listed by Scott in its bid relate only to the
packaging of individual valves and do not reflect actual shipping
weights and dimensions. In its bid, Scott had indicated that the
maximum guaranteed shipping weight and dimensions for each container
would be 0.11 pounds and 2 inches by 2 inches by 3 inches.
Our Office has emphasized that there are two basic purposes of the
guaranteed maximum shipping weight clause -- to enable the government to
accurately determine its total cost under a contract and to establish a
basis upon which to reduce the contract price in the event that the
maximum guaranteed weight or dimensions are exceeded. See Star Line
Enterprises, Inc., B-210732, Oct. 12, 1983, 83-2 C.P.D. Paragraph 450.
We have held that it is proper for bidders to use guaranteed shipping
dimensions which are less than the actual dimensions as a permissible
alternative to reducing the price for the item itself as a means of
meeting competition. General Fire Extinguisher Corporation, B-186954,
Nov. 15, 1976, 76-2 C.P.D. Paragraph 413, and Capital Industries, Inc.,
B-190818, July 7, 1978, 78-2 C.P.D. Paragraph 17. We have recognized
that the guaranteed maximum shipping weights and dimensions clause, such
as is set forth in section F-73 of the IFB, which provides for the
reduction of the contract price where the bidder's guaranteed maximum
shippimg weight and dimensions are exceeded, operates to equalize any
advantage that might come from a bidder's understating the guaranteed
shipping weight or dimensions. See Capital Industries, Inc., B-190818,
supra, 78-2 C.P.D. Paragraph 17 at 5. Accordingly, even if Scott did in
fact understate its shipping weight and dimensions as Gentex alleges,
Scott's bid would still be for evaluation on the basis of the weight and
dimensions specified by Scott.
In view of our conclusion, Gentex is not entitled to recovery of its
bid preparation costs. Jarrett S. Blankenship Co., B-213473, June 25,
1984, 84-1 C.P.D. Paragraph 662.
Harry R. Van Cleve
General Counsel
FILE: B-216723
DATE: August 21, 1985
MATTER OF: James Knapp
DIGEST:
TRANSPORTATION - HOUSEHOLD EFFECTS - PRIVATELY OWNED VEHICLES, ETC.
1. Where employee shipped an automobile together with his household
goods under a Government bill of lading, the formula set forth in
paragraph 2-8.2b(5) of the Federal Travel Regulations should not be used
to determine his liability for shipment of the automobile unless charges
directly attributable to its shipment cannot otherwise be identified and
established. Since an automobile is not an item of household goods, it
was improperly shipped under the Government bill of lading and
procedures for determining an employee's liability for shipping an
excess weight of household goods are not applicable to a case in which
shipping and special charges attributable to the automobile can be
determined.
TRANSPORTATION - HOUSEHOLD EFFECTS - WEIGHT LIMITATION - EXCESS COST
LIABILITY - ACTUAL EXPENSES SHIPMENT - COMPUTATION FORMULA
2. Liability of employee who shipped household goods in excess of
the 11,000 pound weight limit is to be determined under paragraph
2-8.2b(5) of the Federal Travel Regulations based on a proration of the
excess weight to the total weight of the shipment multiplied by the
total charges for the shipment. The employee is not entitled to reduce
the excess weight figure by the weight of 3,500 pounds of household
goods never unpacked from a prior move and to compute his liability for
packing charges separately from his liability for other charges for the
total shipment.
This decision deals with the manner in which an employee's liability
for shipping excess goods by Government bill of lading is to be
determined. /1/ It addresses the employee's argument that packing
charges should not be allocated to any of the excess weight attributable
to goods already packed or to shipment of an automobile which required
no packing. We hold that the employee's liability for shipping the
automobile should be based on only those charges directly attributable
to its shipment, but that the remaining charges should be prorated and
charged to the remaining excess weight.
Mr. James Knapp, an employee of the Department of Justice, moved from
Diamond Bar, California, to his first duty station in Washington, D.C.,
upon his appointment in the Senior Executive Service on December 13,
1982. At that time, the maximum weight of household goods that could be
shipped at Government expense was 11,000 pounds. Mr. Knapp shipped his
automobile and household goods, a total weight of 21,980 pounds, to
Washington on a Government bill of lading.
The Department of Justice sought reimbursement from Mr. Knapp for an
$80 charge related specifically to the shipment of his automobile and
for charges allocable to the excess weight of the goods shipped,
including the weight of the automobile. It computed the amount of Mr.
Knapp's liability in accordance with Federal Travel Regulations, para.
2-8.3b(5) (Supp. 1, September 28, 1981), incorp. by ref., 41 C.F.R.
Section 101-7.003 (1982). That paragraph states:
"(5) Excess weight procedures. When the weight of an
employee's household goods exceeds the maximum weight limitation
(11,000 pounds), the total quantity may be shipped on a Government
bill of lading, but the employee shall reimburse the Government
for the cost of transportation and other charges applicable to the
excess weight, computed from the total charges according to the
ratio of excess weight to the total weight of the shipment."
Consistent with our interpretation of the above regulation in William
L. Brown, et al., B-199780, February 17, 1981, and William A. Schmidt,
61 Comp. Gen. 351 (1982), the agency applied the following formula in
determining the amount of Mr. Knapp's liability:
Employee liability equals excess weight x total charges total
weight
In applying this formula, the agency included the weight of the
automobile in the total weight of the shipment. Since it determined the
excess weight on the basis of the total weight minus 11,000 pounds, the
weight of the automobile is also a component of the excess weight
figure. It computed Mr. Knapp's liability as follows:
Employee liability equals 10,980 lbs. x $9,086.64 21,980 lbs.
$4,539.19
This calculation results in apportioning packing charges of $1,993.75
as well as the remaining shipping and accessorial charges to all of the
excess weight, including the weight of the automobile.
Mr. Knapp believes that the formula should be applied separately to
compute his liability for charges other than packing, and again to
compute his indebtedness for packing charges attributable to the excess
weight shipped. He explains that his automobile weighing approximately
1,900 pounds did not require any packing and that at least 3,500 pounds
of the household goods he shipped had never been unpacked after a
previous move. He believes that the weight of these items, 5,400
pounds, should be disregarded in computing this liability for packing
costs attributable to the excess weight shipped. He would calculate his
liability for packing charges, using a reduced total weight of 16,580
pounds, as follows:
Employee liability equals Excess weight x Packing charges
expense for packing total weight
Employee liability equals 5,580 lbs x $1,993.79 16,580 lbs.
Employee liability equals $671.01 for packing
The employing agency's calculation, based on the total weight
shipped, would result in Mr. Knapp bearing packing charges of $995.97
attributable to an excess weight of 10,980 pounds. The method proposed
by Mr. Knapp would reduce his liability by $326.78.
Under FTR para. 2-8.3b(5) an employee may ship household goods in
excess of the authorized weight on a Government bill of lading subject
to the requirement that he bear the costs applicable to that excess
weight. As has been noted by the Department of Justice, an automobile
is not an item of household goods. It is expressly excluded from the
definition of household goods at FTR para. 2-1.4h and an automobile may
not be shipped within the continental United States at Government
expense. James B. Nickel, B-187233, January 28, 1977. Since FTR para.
2-8.3b(5) only authorizes an employee to ship an excess weight of
"household goods" on a Government bill of lading, Mr. Knapp improperly
included his automobile with the items shipped. Therefore, identifiable
charges attributable to shipment of the automobile should be segregated
and charged to the employee before his liability for shipping the excess
weight of household goods is determined.
While not controlling in this case, we believe it would be
appropriate for the agency to follow the guidance set forth in Joint
Travel Regulations, vol. 2, para. M8007, to determine an employee's
liability for shipping unauthorized articles. That regulation,
applicable to members of the uniformed services, provides as follows:
"1. UNAUTHORIZED ARTICLES. Normally excepted personal
articles * * * shall be transported apart from authorized
household goods and arrangements for separate transportation of
such articles shall be made by the member concerned. When
unauthorized articles erroneously or inadvertently included by a
member or a shipping officer in a household goods movement are
subsequently disclosed, the member shall bear all costs of
transportation * * * of such articles to the extent that they can
be identified and transportation costs thereof established. In
the event the cost of transporting such articles cannot be
definitely established, the weight thereof shall be considered
excess weight and the cost of transportation computed in
accordance with subpar. 2."
When costs cannot be established, these regulations call for cost to
be attributed to the excess weight, inclusive of the weight of
unauthorized articles, in essentially the same manner as required by FTR
para. 2-8.3b(5).
In this particular case, it appears that the costs associated with
shipment of the automobile can be identified and established. The
Department of Justice has already determined that a special charge of
$80 is attributable to shipment of the automobile. Mr. Knapp has
indicated that the actual weight of the automobile can be determined.
Under these circumstances his liability for shipment of the automobile
can be determined as follows:
TABLE OMITTED
The amount of the employee's liability for shipping the automobile
should then be subtracted from the overall charge of $9,661.64 to
determine the total charge to which the excess weight procedures of FTR
para. 2-8.3b(5) apply. In applying those procedures, the weight of the
automobile should be subtracted from the overall weight of 21,980 pounds
to determine the total weight of the shipment of household goods, as
well as the excess weight, to which the formula applies.
Under FTR para. 2-8.3b(5), the employee's liability for packing
charges may not be separately determined and there is no authority to
apportion packing charges to the excess weight of household goods as
reduced by the weight of goods packed other than by the shipper. That
regulation provides that the employee's liability for the excess weight
must be based on the "ratio of excess weight to the total weight of the
shipment" multiplied by the total charges. The 3,500 pounds or more of
household goods which did not require packing comprised a portion of the
"total weight of the shipment" and may not be deducted when applying the
formula. This is so regardless of whether the goods were packed by the
employee, at his expense, or otherwise as the result of a prior move.
We have held that the formula applies to the total weight shipped even
though the employee packs a portion of the household goods transported
under a Government bill of lading. See Alex Kale, 55 Comp. Gen. 779
(1976); William L. Brown and William A. Schmidt, Jr., B-199780,
February 17, 1981; Deane H. Zeller, B-205873, May 4, 1982. Paragraph
2-8.3b(5) has the force and effect of law and may not be waived or
modified regardless of extenuating circumstances. William A. Schmidt,
Jr., 61 Comp. Gen. 341 (1982).
The employing agency should recompute Mr. Knapp's debt for the
shipment of this automobile and excess household goods in accordance
with the above discussion.
Comptroller General
of the United States
(1) Mr. William D. Stavoren, Acting Assistant Attorney General for
Administration, requested our decision.
FILE: B-216722 85-1 CPD 109
DATE: January 28, 1985
MATTER OF: Philips Business Systems, Incorporated
DIGEST:
BIDS - RESPONSIVENESS - SOLICITATION REQUIREMENT NOT SATISFIED
CONFORMABILITY OF EQUIPMENT, ETC. OFFERED
1. Where protester concedes the product offered by its dealer did
not meet specific solicitation requirements, agency properly found
dealer's bid nonresponsive.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
2. Protest against specification requirements, filed after bid
opening, is dismissed as untimely. 4 C.F.R. Section 21.2(b)(1).
Philips Business Systems, Incorporated (Philips), protests the
Veterans Administration's (VA) award of a contract for a central
dictation system to Dictaphone Corporation (Dictaphone) under invitation
for bids (IFB) No. 640-93-84 issued by the VA Medical Center, Palo Alto,
California. Philips sells Norelco products and U.S. Audio is a dealer
offering Norelco products. Philips asserts that only Dictaphone can
meet the specification requirement that offered equipment be on the
Federal Supply Schedule.
We dismiss the protest in part and deny it in part in accordance with
Section 21.3(g) (1984) of our Bid Protest Procedures, which provides for
dismissal without further development where information provided by the
agency justifies this action.
The IFB was issued in early August 1984 and required that equipment
offered, including six transcribers, be on the Federal Supply Schedule.
Bid opening was on September 12, 1984. AT bid opening, U.S. Audio,
bidding Philips' Norelco products, was the low bidder, while Dictaphone
was third low. VA rejected both the low and the second low bids as
nonresponsive to the IFB. U.S. Audio was rejected for failure to
include items (transcribers) specifically called for in the
specifications. Although Philips has offered explanations for U.S.
Audio's failure to bid the required items, it is clear that the items
were called for by the IFB. For example, the IFB required transcribers.
Philips concedes that its transcribers are not available under the
Federal Supply Schedule and cannot be procured without a waiver from the
General Services Administration. Philips clearly was aware of these
alleged specification improprieties before the IFB bid opening.
Philips concedes that its bid did not meet the IFB specifications
and, in out view, properly was determined nonresponsive. This aspect of
the protest is denied.
To the extent Philips is contending that the specifications do not
reflect the agency minimum needs and that the IFB requirements should
have been relaxed to permit Philips to bid its product, Philips' protest
is essentially against solicitation improprieties apparent from the
solicitation. Our Bid Protest Procedures require that a protest based
upon an alleged impropriety in an IFB be filed prior to bid opening. 4
C.F.R. Section 21.2(b)(1) (1984). Moreover, a bidder who participates
in a procurement through the point of bid opening without objection must
be deemed to have accepted the terms and conditions of the IFB. Jordan
Panel System, Corp., B-209469, Dec. 8, 1982, 82-2 C.P. D. Paragraph
523. Since bid opening was September 12, 1984, and philips did not
object to the specifications until its October 9, 1984, protest to GAO,
its protest is clearly untimely and will not be considered.
Comptroller General of the United States
B-216721, Oct 22, 1984, 84-2 CPD 442
CONTRACTS - Protests - General Accounting Office Procedures -
Timeliness of protest - Solicitation improprieties - Apparent prior to
bid opening/closing date for proposals
DIGEST:
Protest alleging improprieties in an IFB apparent prior to bid
opening must be filed before that date with either the contracting
agency or GAO.
Transequip, Inc.:
Transequip, Inc. protests that the methodology for evaluation of
offers was unclear in invitation for bids (IFB) No. FO9603-84-B-001,
issued by the Department of the Air Force Base, Georgia.
The solicitation set bid opening for February 1, 1984. Transequip
initially protested that evaluation methodology to the Air Force in July
1984, and Transequip's protest of the Air Force's denial of its protest
was filed at GAO on October 9, 1984.
Our Bid Protest Procedures require that a protest alleging
improprieties in an IFB that are apparent in an IFB prior to bid opening
must be filed with either the contracting agency or this Office before
bid opening. 4 C.F.R. sec. 21.2(b)(1) (1984); Turbine Engine Services
Corp., B-215281, May 29, 1984, 84-1 CPD para. 582. Since Transequip did
not protest the alleged solicitation improprieties until after bid
opening its protest is untimely and will not be considered.
The protest is dismissed. COMP GEN (UP)
B-216719, Nov 28, 1984, 84-2 CPD 548
CONTRACTS - Protests - Interested party requirement - Potential
subcontractors - Restrictive specifications allegations
DIGEST:
Potential subcontractor is not an interested party entitled to
protest the rejection of a prospective prime contractor's proposal or to
protest the alleged restrictiveness of a solicitation where its protest
is not filed prior to the closing date for receipt of proposals.
Storage Technology Corporation:
Storage Technology Corporation (STC) protests the rejection of a
proposal submitted by Federal Data Corporation under a request for
technical proposals (RFTP) No. N66032-84-B-0010 issued by the Navy's
Automatic Data Processing Selection Office. the Navy issued the RFTP as
the first step of a two-step procurement for plug-to-plug compatible
equipment to support IBM 4341 and Amdahl 470/v7 mainframes used by the
Marine Corps. STC says the RFTP includes a requirement for a cache
memory feature that, as construed by the Navy, is arbitrary and unduly
restrictive. In the alternative, STC argues that its equipment complies
with the specification and the rejection of Federal Data's proposal was
improper. We dismiss the protest.
The Navy has filed a preliminary report in which it requests that we
dismiss the protest. The agency points out that the closing date for
receipt of technical proposals was August 27, 1984, but the protest was
not filed until October5. It contends that the protest is untimely
insofar as STC contends the RFTP was defective. With respect to the
remainder, the Navy asserts that STC is in the position of a prospective
subcontractor and does not have a sufficient direct interest to protest
under our Bid Protest Procedures, 4 C.F.R. part 21 (1984).
STC has submitted comments on the agency report. It contends that
the protest is timely because it was not clear from the RFTP that its
equipment was excluded. STC states it submitted descriptive data to the
agency prior to the closing date for receipt of proposals and was led to
believe the equipment met the RFTP requirement.
Further, STC asserts it is a proper party to protest because no other
party has a greater interest in interpreting the language of the RFTP or
in assuring that the agency properly evaluates the STC equipment. In
this regard, STC points out that Federal Data submitted two proposals,
one offering STC's 8880/8890 controllers and 8380 storage units and the
other offering IBM 3380 technology. Thus, Federal Data was not
eliminated from the competition when its STC-based proposal was
accepted. Finally, STC states that it is the only producer of cache
memory systems of this type, other than IBM.
We do not find it necessary to address the timeliness of STC's
protest concerning restrictiveness because we think STC is not an
interested party with respect to either of the issues raised.
Under our procedures, a party must be "interested" before we will
consider its protest. 4 C.F.R. Sec. 21.1(a). Whether a party is
sufficiently interested depends upon the degree to which its interest in
the outcome is both established and direct. In general, we do not
consider a party's interest to be sufficient where that party would not
be eligible for award were the issues raised resolved in its favor. See
American Hickey Co., B-210252, Mar. 9, 1983, 83-1 CPD Para. 235.
Ordinarily, therefore, our Office does not review subcontractor
protests.
It is consistent with this view that we hold that Federal Data, not
STC, is the directly interested party for the purpose of protesting the
rejection of Federal Data's proposal. See Radix II Inc., B-208557.3,
Nov. 29, 1982, 82-2 CPD Para. 484. Our view, however, that STC is also
not sufficiently interested to assert that the specification, as
construed by the Navy, allowed only IBM products requires some
explanation. While our prior decisions indicate that a protester like
STC which files a protest after bid opening or the receipt of initial
proposals might not be considered to be an interested party (see, e.g.,
Edison Chemical Systems, Inc., B-212048, Mar. 27, 1984, CPD Para. 353,
American Hickey Co., supra) we have considered some potential
subcontractors to be interested for the purpose of protesting allegedly
restrictive specifications.
Generally, a subcontractor may be an interested party when no
intermediate party has a greater interest in the issues raised and the
potential subcontractor's interest would be inadequately protected if
the bid protest forum were not available. Radix II Inc., supra.
Applying this standard, STC would have been an interested party to
protest a defect in the RFTP prior to the closing date for receipt of
technical proposals because, if the RFTP requirement was restrictive,
the restriction would have a significant impact on its ability to
persuade prospective prime contractors to offer STC's product.
We note, however, that once the time for submitting a proposal lapses
the field of competition is set, concern over the propriety of the
specifications usually is incidental to the selection of an awardee, and
the role played by potential subcontractors is reduced to prospective
prime contractors' efforts to obtain award. Normally, the only firms
that retain a sufficient interest to initiate a protest are those that,
having submitted a competitive proposal, remain in consideration for
award. Cf. Vycor Corp., et al., B-212867, et al., Feb. 15, 1985, 84-1
CPD Para. 205 (recognizing that a potential subcontractor's concerns may
be considered where the disappointed offeror files a protest on the same
basis as its potential subcontractor). We therefore do not think that
the exception allowing consideration of subcontractor challenges of
restrictive specifications ordinarily should be applied to protests such
as STC's that are filed after the bid opening or proposal submission
date.
We also reject a related argument by STC that it is an interested
party because, were it to prevail on the merits and were the Navy's
requirement recompeted, it could submit a proposal as a prime
contractor. Had STC wanted to compete in that capacity, it should have
done so initially. STC's discovery after the closing date for receipt
of initial proposals of a possible defect in the Navy's interpretation
of the RFTP caused it no injury and gave rise, in our view, to no new
basis on which it can assert interested party status.
The protest is dismissed. COMP GEN (UP)
FILE: B-216715 85-1 CPD 139
DATE: February 5, 1985
MATTER OF: AT&T Information Systems
DIGEST:
BIDS - PRICES - BELOW COST - NOT BASIS FOR PRECLUDING AWARD
There is no legal basis to object to acceptance of possibly
below-cost bid by grantee.
AT&T Information Systems complains of the award of a federally funded
contract to General Telephone Company of Michigan under solicitation No.
84-MA0142, issued by the State of Michigan Department of Management and
Budget for a telephone system to be installed at Camp Grayling, a
National Guard facility. We consider the complaint in accordance with
the Public Notice entitled "Review of Complaints Concerning Contracts
Under Federal Grants," 40 Fed. Reg. 42406 (1975). AT&T contends that
General Telephone's bid is so low that it cannot provide new telephone
cable as required by the solicitation, and suggests that General
Telephone either plans to request a contract modification allowing use
of the existing telephone cable at Camp Grayling or to sustain a loss on
the contract.
The complaint is denied.
As issued on May 30, 1984, the solicitation provided that the
contractor could negotiate with the owner of the existing telephone
cable at Camp Grayling. If the contractor purchased the existing cable
for less than the cost of new cable, the contract price would be reduced
by 65 percent of the net savings. The existing cable is owned by
General Telephone. In anticipation that the low bidder might be General
Telephone, the solicitation provided that if the owner of the cable
received a contract, the contractor would be paid for the cable an
amount determined to be its "present worth." On June 26, the
solicitation was amended to require that cable was to be "all new."
Before contract award, General Telephone confirmed to the Michigan
Department of Management and Budget its bid price and the fact that the
price was for new cable. AT&T Information Systems contends, however,
that a check of cable prices in Michigan by an independent cable
contractor established that new cable could not be provided for less
than the price bid by AT&T. General Telephone's cable price of $206,084
is considerably less than AT&T's price of $364,640. AT&T concludes that
General Telephone priced its bid on the assumption that it could provide
its existing cable.
We are aware of no Michigan laws or regulations addressing offered
prices which may be below cost. In the absence of contrary state law,
basic tenets of federal procurement law are applicable. E.P. Reid,
Inc., B-189944, May 9, 1978, 78-1 CPD Paragraph 346. Under the laws and
regulations governing procurements by federal agencies, there is no
ground to object to an award on the basis that a bid may be below cost.
Western Waste Management, B-216392, Sept. 24, 1984, 84-2 CPD Paragraph
344. AT&T's concern, that General Telephone may seek to modify its
contract to allow use of existing cable, is not grounds for rejecting a
bid. Contracting officers are, however, required to insure that losses
resulting from below cost bidding, or "buying in," are not recovered
through change orders or otherwise. Id.
The complaint is denied.
Comptroller General
of the United States
FILE: B-216714; B-216714.2 85-1 CPD 274
DATE: March 5, 1985
MATTER OF: Woodward Associates, Inc.; Monterey Technologies, Inc.
DIGEST:
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - BEST AND FINAL - LATE
MODIFICATION
1. A proposal modification submitted after the time set for receipt
of best and final offers by an offeror who did not submit the otherwise
successful proposal may not be accepted.
CONTRACTS - NEGOTIATION - OFERS OR PROPOSALS - DISCUSSION WITH ALL
OFFERORS REQUIREMENT - REOPENED DISCUSSIONS AFTER BEST AND FINAL
2. Agency should reopen negotiations where it appears that the
agency inadvertently may have misled one of the two offerors in the
competitive range concerning its opportunity to revise its proposal in
response to a request for best and final offers.
Woodward Associates, Inc. protests the award of a contract to
Monterey Technologies, Inc. under request for proposals (RFP) No.
JO145034, issued by the Bureau of Mines, Department of the Interior.
Woodward complains that the agency improperly accepted a late
modification of Monterey's proposal which displaced Woodward as the low
offeror. The agency now agrees with Woodward and has instructed
Monterey to stop performance, but prefers not to take corrective action
without the concurrence of this Office. Monterey participated in
Woodward's protest as an interested party and also filed its own protest
contending that the procedures used in this procurement were not proper
and therefore the agency should recompete its requirement.
We sustain both protests. We recommend that the agency reopen
discussions by requesting new best and final offers from both Woodward
and Monterey.
The solicitation sought proposals for a study of the extent to which
industry designs "maintainability" into mining equipment and the effect
of such designs on productivity and injury rates. The solicitation
stated that the government contemplated a cost-reimbursement contract,
but that other types of contracts would be considered. Award was to be
made to that responsible offeror whose conforming proposal was most
advantageous to the government, with technical factors being more
important than cost.
The agency received four technically acceptable proposals in response
to the solicitation. Following an initial round of discussions and the
evaluation of revised proposals, the agency determined that only two
proposals, those of Woodward and Monterey, were in the competitive
range. The firms received technical scores of 878 and 844,
respectively. Woodward's projected cost to the government was $386,638.
Monterey's initial cost proposal totaled $763,476, but the firm
reportedly revised its cost proposal after the first round of
discussions to $623,724 for the work specified in the solicitation and
$104,047 for what Monterey called "Option II," a training package for
the mining industry. The agency conducted cost negotiations with both
Woodward and Monterey and requested that the firms submit best and final
offers by August 2, 1984. Monterey's final cost proposal was for
$376,238, plus $85,186 for Option II. Woodward's proposed cost totaled
$386,638, under a cost-plus-fixed-fee type contract. Woodward also
offered to perform for $422,000 under a firm, fixed-price contract.
The agency was concerned that Monterey's drastic reduction in its
proposed costs might result in cost overruns if the firm were awarded a
cost-reimbursement contract. After receiving assurances that the
statement of work could be modified to accommodate a firm, fixed-price
contract, the contracting officer decided to reopen discussions with
Monterey and Woodward and, by telephone on August 29, sought best and
final offers from the firms on a fixed-price basis. The contracting
officer reportedly set September 7 as the deadline for submission of
best and final offers. Monterey responded by telegram and letter, each
dated August 30. In both, Monterey confirmed its price of $376,238 and
stated that it would accept a firm, fixed-price contract. Woodward
offered a firm, fixed price of $349,000.
On September 18, Monterey's president called the agency to inquire
about the status of the procurement and was surprised to learn that
Woodward had been allowed to submit a lower offer. Apparently, Monterey
had understood the call for new best and final offers as merely a
request for Monterey to confirm the amounts stated in its cost proposal
and to indicate whether it would accept a firm, fixed-price contract.
Monterey says it thought the competitive phase of this procurement was
over and that it was in line for award. The contracting officer reports
that Monterey's request on September 18 for permission to submit a
further best and final offer was refused, but Monterey says such
permission was granted. In any event, by telegram dated September 18,
Monterey reduced its price to $334,547. Based on Monterey's price
reduction, which displaced Woodward as the low offeror, the contracting
officer awarded a contract to Monterey, citing its lower price as the
determinative factor since both firms appeared capable of satisfactory
performance.
The contracting officer reports that at the time of award, Monterey
was considered the low offeror based on the solicitation's Late
Submissions, Modifications, and Withdrawals of Proposals clause, which
stated in relevant part:
". . . a late modification of an otherwise successful proposal
that makes its terms more favorable to the Government will be
considered at any time it is received and may be accepted."
See also the Federal Acquisition Regulations (FAR), 48 C.F.R.
Section 52.215-10(f) (1984). The contracting officer now says, however,
that acceptance of Monterey's late modification was improper because
Monterey did not submit the "otherwise successful proposal." The agency
says that the award should have gone to Woodward because, as of the
September 7 closing date for the second round of best and final offers,
Woodward had submitted the higher-rated technical proposal and had
offered to perform at a lower cost.
We agree with the agency that acceptance of Monterey's late
modification was improper. A proposal modification received after the
time set for receipt of best and final offers may be considered only
under the circumstances stated in the solicitation. See Real Fresh,
Inc., B-204604, Dec. 31, 1981, 81-2 CPD Paragraph 522. The solicitation
clause quoted above allowed the government to accept more favorable
terms only from an offeror that would receive the contract anyway. See
Blue Cross of Maryland, Inc., B-194810, Aug 7, 1979, 79-2 CPD Paragraph
93. In such circumstances, other offerors could not complain because
their relative standing would not be affected. The clause did not,
however, permit acceptance of a late modification from a firm that was
not already in line for award. See Windham Power Lifts, Inc., et al.,
B-214287, Mar 7, 1984, 84-1 CPD Paragraph 278. In this case, the agency
says that Woodward, not Monterey, was the otherwise successful offeror.
Thus, there was no basis for accepting a modification of Monterey's
proposal received after the time set for receipt of best and final
offers. Poli-Com, Inc., B-198494, Nov. 6, 1980, 80-2 CPD Paragraph 341.
We sustain Woodward's protest. Rather than recommending award to
Woodward, however, we recommend that the agency reopen discussions with
both offerors. The reason for our recommendation is that it appears the
agency inadvertently may have misled Monterey concerning its opportunity
to revise its proposal in response to the request for best and final
offers.
Monterey's failure to submit a more price-competitive offer in
response to the contracting officer's August 29 telephone call appears
to have been due to the firm's failure to understand that negotiations
had been reopened. Monterey's position is that it did not receive a
request for a new best and final offer, but only a request that it
confirm its cost proposal and an inquiry regarding the acceptability of
a firm, fixed-price contract. The firm's letter and telegram of August
30 are consistent with this position. Although the agency gives a
different account of the telephone conversation, the record does not
contain a contemporaneous memorandum concerning the call and we are not
otherwise able to determine exactly what was said. Further, assuming as
we did in sustaining Woodward's protest that the agency in fact reopened
negotiations in the August 29 telephone call, the regulations require
that upon completion of discussions the contracting officer "issue" a
request for best and final offers, FAR Section 15.611, a requirement
that, while admittedly somewhat ambiguous, we believe contemplates a
writing. The agency issued no such writing here.
Based on the uncertainty concerning the August 29 telephone call an
on the lack of a written request for best and final offers, we cannot
conclude that Woodward and Monterey each had an equal opportunity to
compete. We recommend therefore that the agency reopen negotiations
with both offerors by requesting new best and final offers. If Woodward
is the low offeror, and award to that firm otherwise would be proper,
the agency should terminate the contract with Monterey for the
convenience of the government and award a contract to Woodward. If
Monterey's offer is lower than its current price, its contract should be
modified accordingly. We recognize that reopening negotiations after
prices have been revealed creates an auction, a situation that generally
is to be avoided, FAR Section 15.610(d) (3); however, we believe that
in this case the need to ensure that both parties have competed on an
equal basis outweighs any potential harmful effect on the competitive
procurement system. See Honeywell Information Systems, Inc., 56 Comp.
Gen. 505 (1977), 77-1 CPD Paragraph 256.
Obviously, this situation would not exist if the August 29 request
for best and finals had been confirmed in writing. Since the FAR
requires only that the contracting officer "issue" a request for best
and final offers, FAR Section 15.611, we are recommending to the FAR
Secretariat that this section be revised to include a specific
requirement that oral requests for best and final offers be confirmed in
writing.
We sustain both protests. Since this decision contains a
recommendation that corrective action be taken, we are furnishing copies
to the Senate Committees on Governmental Affairs and Appropriations, and
to the House Committees on Government Operations and Appropriations.
Section 236 of the Legislative Reorganization Act of 1970, 31 U.S.C.
Section 720 (1982), requires the submission of written statements by the
agency to the Committees concerning the action taken with respect to our
recommendation.
Comptroller General
of the United States
FILE: B-216713 85-1 CPD 318
DATE: March 18, 1985
MATTER OF: Simpson Electric Company
DIGEST:
CONTRACTS - RESPONSIBILITY - DETERMINATION - REVIEW BY GAO -
NONRESPONSIBILITY FINDING
Protest against a nonresponsibility determination is sustained where
the contracting officer's basis is completely unsubstantiated and the
protester has shown that the purported delinquency rate on which it is
based is incorrect, and has been recognized by the procuring agency to
be substantially better.
Simpson Electric Company (Simpson) protests the award of a contract
for voltmeters under request for proposals (RFP) No. DAAJ10-84-R-A078
issued by the United States Army Troop Support Command, St. Louis,
Missouri (Army). Simpson asserts that it was improperly prohibited from
competing because of a premature and unsupported nonresponsibility
determination.
We sustain the protest.
The procurement was negotiated because it was for a source-restricted
item, for which it was impracticable to obtain competition. The RFP
called for a base quantity of 9,132 voltmeters, with an option for the
same quantity. The evaluation criteria incorporated by reference a
provision of the Federal Acquisition Regulation (FAR), 48 C.F.R. Section
52.217-5 (1984), which provides for award on the basis of the total
price for the basic requirement plus the total option quantity. The
Army has made it apparent that although the procurement was negotiated,
price was the only evaluation factor since only approved source
suppliers were competing.
Simpson submitted an offer of $14 per unit for both the base
requirement and the option quantity. Phaostron Instruments (Phaostron)
submitted an offer with a price of $13.93 per unit for the base
requirement and $14.20 per unit for the option quantity. Two other
companies submitted substantially higher prices. In its report, the
Army contends that since only 808 units were exercised at the time of
award under the option provision, Phaostron was the low evaluated
offeror at a total price of $138,682.36, compared to Simpson's total of
$139,160. In fact, under the RFP evaluation clause, Simpson's offer
properly should have been evaluated as $255,696 (equal to 18,264 units
at $14 each), and Phaostron's offer should have been evaluated as
$256,883.16 (equal to 9,132 units at $13.93 and 9,132 units at $14.20).
Thus, under the terms of the RFP, Simpson was the low offeror.
Because of the closeness of the two offers, the Army determined to
"pre-award" both companies. Apparently because of time constraints, the
contracting officer decided to conduct a desk audit rather than a
preaward survey. The contracting officer determined on the basis of
this desk audit that Phaostron was responsible and Simpson was
nonresponsible. The contractor evaluation summary (which is the only
basis for this determination) for Phaostron states:
"Very good contractor. Past performance shows 24 contracts, 5
delinquent 3 less than 30 days. Delivery adequate. Recommend
award . . . Remarks: Based on DCAS comments and records in this
office, recommend award."
The contractor evaluation summary for Simpson states:
"DCAS stated a delinquency rate of 40% for the current year and
55% on in house contracts . . . Remarks: Based on DCAS report of
40% delinquency for the current year and 55% on in house
contracts. Recommend no award based on above remarks and (FAR)
guidance on contracting with poor performance."
Based on this summary, on August 2, 1984, the contracting officer
determined Simpson nonresponsible. The contracting officer's
determination also states that Simpson is a small business firm and
suggests that since DCAS records showed a high delinquency record, no
further action was necessary. In fact, Simpson is a large business, and
so certified on its offer.
Subsequently, the Army determined that it had another requirement for
1,162 voltmeters which were identical items with a different National
Stock Number. By amendment dated September 4, 1984, the activity added
this requirement and requested best and final offers for the new
requirement. Prior to issuing the amendment, the contracting officer
determined that because of the prior nonresponsibility determination, he
would send notice to all the previous offerors, except Simpson, which he
deliberately excluded.
In response to this amendment, Phaostron offered the same prices for
the initial requirement and a unit price of $12.75 for the additional
requirement. A & M Instruments, Inc. (A & M), offered the new
requirement at a unit price of $12.50. The Army determined to award the
initial requirement to Phaostron, and the later requirement to A & M.
By letter dated September 20, 1984, Simpson was advised of this award.
After inquiry to the Army about the basis for award, Simpson protested
to our Office.
Simpson protests that the Army is required under the FAR to conduct a
full preaward survey, not simply a desk audit, that the Army's
delinquency figures are completely inaccurate and without any basis, and
that Simpson was prematurely eliminated from competition by the Army's
exclusion of Simpson from receipt of the notice of the additional
requirement and the final request for best and final offers. As
evidence of its contract performance record, Simpson has submitted
documentation from the Defense Logistics Agency (DLA), which gave
Simpson a Contractor Assessment Program (CAP) award for all of 1982 on
the basis of in-plant evaluations by government personnel of excellence
in the quality of products and services provided. Simpson states that
this award is based on its 98 percent performance rating, which is the
correct figure. In addition, Simpson asserts that it would have been
the low offeror for the additional requirement if it had been provided
with a copy of the amendment and given the same opportunity to compete
as the other offerors.
The Army is correct that under FAR, 48 C.F.R. Section 9-105.1(b)(1),
the contracting officer is not obligated to conduct a preaward survey,
and could rely on a desk audit instead. Manufacturing Systems
International, Inc., B-212173, May 30, 1984, 84-1 C.P.D. Paragraph 586.
However, the contracting officer does not have unbridled leeway in
making a nonresponsibility determination. Although the contracting
officer does have a wide degree of discretion and business judgment in
making a determination of an offeror's responsibility, there must be a
reasonable basis for a negative determination. Dyneteria, Inc.,
B-211525, Dec. 7, 1983, 83-2 C.P.D. Paragraph 654.
Simpson points to the DLA CAP award which it received (and a similar
award for the prior year) as evidence that it has a 98 percent
acceptable or better performance record, and thus does not have a high
delinquency rate. Simpson asserts that the Defense Contract
Administration Services Management Area (DCASMA), Chicago is in
agreement with its position and that the Army's figures are simply
erroneous. At a conference on the protest, we asked the Army to provide
whatever objective evidence it had available to support the figures. In
response, the Army indicates that the record consists of the
above-referenced contractor assessment report which purportedly reflects
telephone information provided by DCASMA, Chicago.
In addition, Simpson states that a subsequent preaward survey was
performed by DCASMA in November 1984. In response to our request to
provide information regarding this survey, the Army responded that no
such preaward survey was conducted, but that a delinquency followup
report was conducted during this time frame, which resulted in a finding
that Simpson was delinquent on 28 percent of its contracts. The Army has
provided no documentation for this assertion. Simpson has provided us
with a copy of a letter dated November 6, 1984, from DCASMA, Chicago,
which references the fact that DCASMA was conducting a preaward survey
of Simpson in conjunction with the solicitation at issue in thie
protest, and requests certain documented financial information from
Simpson. Simpson also states that it has been advised by DCASMA,
Chicago, that it received a favorable recommendation as the result of
this survey.
In our view, Simpson has provided substantial documentation which
supports all of its assertions regarding both its high level of
performance and the actual action taken by DCASMA. By contrast. the
Army's documentation does not support its assertions; in effect, the
only documentation it has is a record of a purported telephone
conversation reporting delinquency percentages, unsupported by actual
numbers, and which is contradicted by later information provided by the
Army with respect to the delinquency percentages. Under these
circumstances, we believe that the contracting officer's
nonresponsibility determination with respect to Simpson had no
reasonable basis. See Dyneteria, Inc., B-211525, supra; Consolidated
Airborne Systems, Inc., 55 Comp. Gen. 571 (1975), 75-2 C.P.D. Paragraph
395.
Accordingly, we sustain the protest.
We have been advised by the Army that Phaostron has delivered
approximately 1800 units to date under Contract Line Items Numbers
(CLINs) 1 and 2, and is delivering at a rate of approximately 800 units
per month through the end of this year. Since the contract calls for a
total of at least 9,132 units, we recommend that this award be
terminated for convenience and award of the balance of the contract
quantity be made to Simpson. Since A & M has virtually completed
performance under the contract for CLIN 3, with final delivery to be
made on March 15, no corrective action is possible with respect to this
CLIN.
Since this decision contains a recommendation for corrective action
to be taken, we are furnishing copies to the Senate Committees on
Governmental Affairs and Appropriations and the House Committees on
Government Operations and Appropriations in accordance with section 236
of the Legislative Reorganization Act of 1970, 31 U.S.C. Section 720
(1982), which requires the submission of written statements by the
agency to the committees concerning the action taken with respect to our
recommendation.
Comptroller General
of the United States
FILE: B-216712 85-1 CPD 471
DATE: April 26, 1985
MATTER OF: U.S. Materials Company
CONTRACTS - PROTESTS - BURDEN OF PROOF - ON PROTESTOR
1. Where agency contention that protester failed to submit a
written, unconditional extension of its bid acceptance period is
supported by apparently contemporaneous memoranda and the protester has
failed to submit anything more than unsupported allegations to the
contrary, protester has not met its burden of affirmatively proving its
case.
BIDS - INVITATION FOR BIDS - CANCELLATION - CHANGE IN DELIVERY
REQUIREMENTS
2. Agency acted properly in canceling invitation for bids (IFB)
where, as a result of unexpected administrative delays after bid
opening, it became impossible for any bidder to meet the delivery
schedule set forth in the IFB.
U.S. Materials Company (U.S. Materials) protests the cancellation of
invitation for bids (IFB) No. 7PN-B-47562-1/H4/7SB, issued by the
General Services Administration (GSA) for the supply of magnesium
carbonate and potassium chlorate. GSA canceled the solicitation after
unexpected administrative delays subsequent to bid opening rendered it
impossible for any awardee to meet the delivery schedule set forth in
the solicitation. GSA contends that U.S. Materials failed to submit a
written, unconditional extension of its bid acceptance period, but
instead insisted on a modification of the delivery schedule. U.S.
Materials, on the other hand, maintains that it expressed a willingness
to accept award under the solicitation by unconditionally extending its
bid in writing and argues that GSA has improperly ignored a certificate
of competency issued by the Small Business Administration (SBA) on
behalf of U.S. Materials.
We deny the protest.
GSA solicited bids on two items -- item No. 1 for the supply of
45,000 pounds of magnesium carbonate and item No. 2 for the supply of
92,243 pounds of potassium chlorate. The solicitation required that the
contractor make initial deliveries of 22,950 pounds of magnesium
carbonate and 28,000 pounds of potassium chlorate by September 24, 1984,
with subsequent deliveries to be made for both items by October 25, and
for item No. 2 by November 26 and December 26. Bidders were requested
to keep their bids open for 60 calendar days after bid opening. Two
bids were received on May 15. After application to the other bid of a
differential under the Buy American Act, 41 U.S.C. Sections 10a-d
(1982), GSA found U.S. Materials bid to be low on both items.
On June 22, GSA requested that a preaward survey be conducted on U.
S. Materials and its proposed subcontractor for item No. 1, Morton
Chemicals Company (Morton). Since the scheduled date for return of the
survey was July 25, more than 60 days after bid opening, GSA requested
U.S. Materials to extend its bid acceptance period. GSA indicates that
while U.S. Materials orally agreed to a bid extension on June 22, as
well as to subsequent 30-day extensions on July 15 and August 15, it
never confirmed these extensions in writing despite repeated requests
from GSA and promises from U.S. Materials to do so. As for the other
bidder, GSA reports that it had indicated an unwillingness to extend its
bid.
Although the preaward survey indicated that Morton was capable of
performing, the firm subsequently informed contracting authorities that
it had not been asked by U.S. Materials for a commitment to act as a
supplier should U.S. Materials receive the contract. In fact, Morton's
representative stated that he was not even familiar with U.S.
Materials. Moreover, the plant facilities report indicates that survey
officials were unable to find U.S. Materials' plant and GSA reports that
U.S. Materials failed to respond to repeated requests for necessary
financial information. Accordingly, the preaward survey indicated that
U.S. Materials was incapable of performing and the contracting officer
determined that the firm was nonresponsible.
Since U.S. Materials is a small business, the contracting officer, on
August 9, referred the matter to the SBA, which, under 15 U.S.C.
Section 637(b)(7) (1982), has authority to determine the responsibility
of small business concerns by issuing or refusing to issue a certificate
of competency (COC). Apparently contemporaneous memoranda prepared by
contracting officials indicate that an official of SBA contacted GSA on
September 14 to express SBA's concern as to the approaching September 24
deadline for initial deliveries under the solicitation and to inform GSA
that the COC application would be evaluated on the basis of a delivery
schedule different from that in the IFB, and under which the first
deliveries would not be due until 70 days after receipt of notice of
award, with subsequent deliveries due every 30 days thereafter. The
contracting officer reportedly replied that GSA could not agree to SBA's
proposed delivery schedule. Nevertheless, on September 20, SBA issued a
COC certifying U.S. Materials' responsibility.
Although U.S. Materials, early on the morning of September 14, had
orally agreed to extend its bid again and to confirm the extension in
writing, later, when it was contacted by GSA following the contracting
officer's discussion with the SBA official, U.S. Materials allegedly
expressed reservations. An apparently contemporaneous GSA memorandum
indicates that when asked about the delivery schedule "designed by him
and SBA," the director of U.S. Materials --
"stated he could not meet the delivery schedule as cited in the
IFB because it was too short and unfair to him. He went on to say
that the alternate schedule would allow time for his suppliers to
ship the raw materials to him. I (i.e., the contracting officer)
informed him that the change in the delivery schedule could not be
allowed because the IFB was formally advertised. However, the
agency may be willing to slightly modify the delivery schedule by
delaying the September date until sometime in November, but he
should not have any trouble meeting the October 24 delivery date.
Momentarily, he didn't think he would have any problems either,
but added he needed to check with his suppliers."
According to GSA, U.S. Materials again promised to supply a written
extension of its bid acceptance period and was warned that award could
not be made without it.
GSA reports that the contracting officer telephoned U.S. Materials on
the morning of September 20, informing the firm of SBA's issuance of the
COC and specifying the new delivery schedule. Under that schedule, the
September 24 deliveries would be delayed until November, but the October
and succeeding deliveries would remain scheduled substantially as
before. According to an agency memorandum, the director of U.S.
Materials responded that he was "uncertain as to whether or not he could
meet the short delivery schedule," but promised to check with his
suppliers and call back the same day with a definite answer as to
whether he could meet the new schedule. The memorandum indicates that
when the director of U.S. Materials agreed to extend its bid until
October 15, promising to extend it in writing, the contracting officer
reminded him that no award would be made without the written extension.
According to GSA, the contracting officer never received a written
extension of U.S. Materials' bid. Nevertheless, in view of the urgent
need for action in order to ensure timely deliveries and in expectation
of finally receiving a written extension, the contracting officer
decided to make award. Accordingly, by mailgram of September 20, she
notified U.S. Materials in writing of the issuance of the COC and stated
that "YOUR FOB DESTINATION OFFERED ON SOLICITATION 7PN-B-47562-1/H4/7SB
IS ACCEPTED." She set forth in the mailgram a "RIGID DELIVERY SCHEDULE"
which was the same schedule allegedly outlined to U.S. Materials that
morning.
What appear to be contemporaneous agency records indicate that the
contracting officer again telephoned U.S. Materials on September 26 to
inquire as to whether U.S. Materials had contacted its suppliers and
could meet the revised schedule. The director of U.S. Materials
allegedly responded that he had been unable to reach his suppliers and
then added that, in any case, GSA could not force him to meet the
revised October 25 deadline for the first deliveries since he had a
different agreement with SBA. GSA reports that when told that he would
have to agree in writing to the new schedule "before an award could be
issued," the director refused to acknowledge the September 20 mailgram
in writing.
GSA accordingly canceled the solicitation on the ground that an
agreement on the delivery schedule could not be reached. U.S. Materials
thereupon filed this protest against the cancellation with our Office.
U.S. Materials disputes GSA's contention that U.S. Materials never
extended its bid in writing, but instead only offered a qualified, oral
extension based on delivery terms differing from those required by GSA.
It indicates that the contracting officer did not ask for a written
confirmation of bid extension until August 15. It claims that in
response to this request and another made on September 14, U.S.
Materials sent GSA a written extension of its bid on September 17. In
support of its claim, U.S. Materials has submitted to our Office what
appears to be the original of a handwritten letter to the contracting
officer extending U.S. Materials' bid to October 31. Moreover, U.S.
Materials denies that it ever suggested a delivery schedule differing
from that set forth in the solicitation.
U.S. Materials maintains that since, in its view, it never qualified
the extension of its bid acceptance period, it remained eligible for
award. U.S. Materials therefore concludes that the subsequent
cancellation of the solicitation in the face of the COC was improper.
We recognize that the record before us is not without uncertainties
and inconsistencies calling into question the contentions of both
parties. Thus, we note that while GSA denies ever having received the
September 17 written bid extension which U.S. Materials alleges that it
sent, the contracting officer, who had repeatedly warned U.S. Materials
that receipt of a written bid extension was a precondition to award,
issued a notice of award on September 20.
On the other hand, while U.S. Materials has submitted to our Office
what appears to be the original of the purported September 17 extension,
it has not provided any explanation as to why we and not the agency were
sent the original, if it is indeed that. Likewise, while U.S. Materials
argues that contracting officials have intentionally sought to delay
this procurement in order to resolicit, we note that the September 20
notice of award was sent on the same day that SBA issued its COC.
Further, while U.S. Materials denies that it ever suggested a
modification of the delivery schedule as set forth in the solicitation,
indicating that it believed that no one had authority to change the
specifications, its version of events gives no indication that it
expressed any concern as to how it could initially deliver in Arkansas
over 50,000 pounds of material to be sent from its plant in New York or
from Morton's plant in Michigan when delivery under the solicitation was
required by September 24.
We have previously held that when the only evidence is conflicting
statements by the protester and the contracting agency, the protester
has not met its burden of affirmatively proving its case. See Alchemy,
Inc., B-207954, Jan. 10, 1983, 83-1 C.P.D. Paragraph 18; Arsco
International, B-202607, July 17, 1981, 81-2 C.P.D. Paragraph 46.
Accordingly, we believe that on balance, U.S. Materials has failed to
carry its burden of demonstrating that GSA's summary of events,
supported by apparently contemporaneous written memoranda prepared by
contracting officials, is other than substantially accurate. Under
these circumstances, cancellation of the solicitation was appropriate.
The extension of a bid acceptance period does not transform an
advertised procurement into a negotiated procurement. See King-Fisher
Company, B-216284, September 24, 1984, 84-2 C.P.D. Paragraph 338. Thus,
we have held that where a bidder qualifies the extension of its bid
acceptance period by conditioning it upon a change in a material term of
its offer, such as price, that bidder is ineligible for award. See S.J.
Groves & Sons Company, B-207172, Nov. 9, 1982, 82-2 C.P.D. Paragraph
423; Steenmeyer Corporation, 61 Comp. Gen. 384 (1982), 82-1 C.P.D.
Paragraph 445; Klein Construction Company, B-201599, Mar. 2, 1981, 81-1
C.P.D. Paragraph 158; Murphree & Lisle, Inc., B-198210, July 18, 1980,
80-2 C.P.D. Paragraph 236; but cf. AGP/GENtech Inc., B-216268, Dec. 17,
1984, 84-2 C.P.D. Paragraph 674 (sole bidder for item). Even if an
agency is willing to award 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 advertising statutes must be made on the
same terms as offered to all bidders. See CRF-A Joint Venture, Etc. v.
United States, 624 F.2d 1054 (Ct. Cl. 1980); Mid-South Electric Co.,
Inc., B-213894, June 14, 1984, 84-1 C.P.D. Paragraph 628.
Moreover, the integrity of the competitive bidding system also
precludes an agency from awarding a contract competed under given
specifications with the intent of changing to materially different
specifications. See Intercomp Company, B-213059, May 22, 1984, 84-1 C.
P.D. Paragraph 540.
We have already alluded to the situation facing the contracting
officer when notified on September 20 of the issuance of the COC, that
is, the inconsistency in awarding a contract with the solicitation
delivery schedule when that schedule required delivery to a distant
location within 4 days of over 50,000 pounds of material. The inherent
improbability of a timely delivery under the solicitation delivery
schedule had become an impossibility by September 26 when the
contracting officer learned of U.S. Materials' unwillingness to meet the
delivery terms communicated to it 6 days earlier.
We therefore believe that since, as a result of unexpected
administrative delays after bid opening, the specifications had become
inadequate because it was impossible for any bidder to meet the delivery
schedule set forth in the solicitation, cancellation of the solicitation
was appropriate. See 53 Comp. Gen. 92 (1973); FAR, 48 C. F.R.
Sections 14.404-1(c)(1) and (2).
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-216709 85-1 CPD 536
DATE: May 13, 1985
MATTER OF: Flight Refueling, Inc.
DIGEST:
BIDS - INVITATION FOR BIDS - CANCELLATION - AFTER BID OPENING -
COMPELLING REASONS ONLY
The use of specifications which do not adequately describe the
government's actual needs provides a compelling reason to cancel an
invitation after bid opening. GAO will not substitute its judgment
about the adequacy of the specifications, and has no basis to object
where the protester has not shown the agency's determination to be
clearly unreasonable.
Flight Refueling, Inc. (FRI) protests the Naval Ocean Systems
Center's cancellation of invitation for bids (IFB) No.
N66001-84-B-0115, a total small business set-aside, for torpedo
fueling/defueling stands and spare parts. We deny the protest.
FRI was the apparent low, responsive bidder under the solicitation
when bids were opened in April of 1984. At the Navy's request, the
Defense Contract Administration Services Management Area, Baltimore
(DCASMA) conducted a preaward survey of FRI. DCASMA recommended that
award be withheld, and the contracting officer found FRI to be
nonresponsible, because of a lack of quality assurance capability and a
lack of financial resources. The Navy referred the question of the
protester's responsibility to the Small Business Administration (SBA),
which declined to issue a Certificate of Competency (COC). SBA
reconsidered this decision in August, when it received additional
financial information from the agency. After reviewing the new
information, SBA informed the agency that it was favorably considering
the issuance of a COC, and asked that it be advised if the agency
objected. DCASMA then conducted another preaward quality assurance
survey and again recommended that no award be made to FRI.
At this point, the Navy reviewed the solicitation and decided that
the IFB specifications needed to be revised. The contracting officer
issued determinations and findings to support a decision to cancel the
solicitation, and notified FRI of the cancellation.
The Navy enumerates three bases for its decision: the use of
inadequate quality control requirements, the lack of a first article
testing requirement, and various deficiencies in the specifications
(including design revisions and parts changes). /1/ The protester
contends that none of these reasons provides a sufficient basis for
canceling the solicitation after bids had been opened.
The Federal Acquisition Regulation, Section 14.404-1(a)(1), provides
that after bids have been opened, award must be made to that responsible
bidder who submitted the lowest, responsive bid, unless there is a
compelling reason to reject all bids and cancel the invitation. 48
C.F.R. Section 14.404-1(a) (1984). Our Office has held that the use of
specifications which do not adequately describe the government's actual
needs generally provides a compelling reason for cancellation. See
e.g., Kings Point Mfg. Co., Inc., B-210757, Sept. 19, 1983, 83-2 CPD
Paragraph 342. We have also held that contracting officials have broad
discretion to decide whether or not appropriate circumstances for
cancellation exist, and our review is limited to considering the
reasonableness of the exercise of that discretion. Professional Carpet
Service, B-212442, et al., Oct. 24, 1983, 83-2 CPD Paragraph 483. In
order to prevail, the protester must demonstrate that the contracting
officer abused this discretion. Id. We therefore will not question a
cancellation where the record provides a rational basis that a
compelling reason justifies cancellation. See Surgical Instrument Co.
of America, B-211368, Nov. 18, 1983, 83-2 CPD Paragraph 583.
The Navy's first reason for canceling the solicitation, that the
quality control requirements must be upgraded to "MIL-Q-9858A", is based
on the agency's determination that improperly manufactured stands (or
stands constructed from improperly manufactured components) represent a
potential hazard to Navy personnel. The Navy points out that the
solicitation is for an initial purchase of a newly designed test stand,
and that the purpose of the stand is to transfer Otto Fuel II to the
MK-46 torpedo safely and efficiently. Thus fuel is reported by the Navy
Bureau of Medicine and Surgery to cause a range of adverse symptoms when
inhaled or absorbed through the skin. The Navy therefore stresses the
importance of preventing exposure of its personnel to the fuel or its
vapors. Indeed, one stated purpose of the procurement is to minimize
the possibility of spills, leaks or other inadvertent exposure to the
fuel. The Navy contends that the known hazards associated with the use
of this fuel warrant the most stringent quality control program.
In explaining the difference between the quality control program
originally required in the IFB and the one required by MIL-Q-9858A, the
Navy gives as an example the fact that the latter requires verification
of the quality of each component used in building the torpedo fueling
stands, whereas the former requires only that the quality of the
completed unit be tested. The Navy contends that testing at the
component level is essential because some defects in individual
components would no longer be visible in the fully assembled stand. The
Navy asserts that only the more stringent quality guidelines provide the
level of quality assurance required to meet the agency's needs. The Navy
notes in this regard that MIL-Q-9858A requires the contractor to have a
complete quality control program, including a quality assurance staff,
an initial planning document addressing quality control methodology, and
quality cost data.
The Navy's assertions that Otto Fuel II presents serious health risks
to personnel, and the importance of preventing any leaks or exposure to
the fuel, are uncontested. However, FRI argues that no inspection
system can guarantee the safety of Navy personnel, and that the original
guidelines would be as effective as MIL-Q-9858A. The protester further
contends that the only real effect of MIL-Q-9858A would be to increase
documentation and recordkeeping requirements. We do not find these
arguments persuasive.
Although the protester objects to the Navy's determination to impose
more stringent quality controls, it has not demonstrated that the Navy's
judgment was clearly unreasonable or arbitrary in this regard. Rather,
the protester has simply asserted that the original quality assurance
program is adequate for the Navy's needs. Mere disagreement with the
agency's determination of its actual needs is not sufficient to
establish that the agency abused its discretion here. Moreover, we find
no basis to question the agency's judgment that a more stringent quality
control standard is necessary, since the equipment being procured
represents a serious safety hazard if improperly manufactured.
FRI also argues that the cancellation was improper because all of the
proposed changes could have been negotiated after award. However, the
general rule in this regard is that the integrity of the competitive
bidding system precludes an agency from awarding a contract competed
under given specifications with the intention of changing to materially
different specifications after award. See Kings Point Mfg. Co., Inc.,
B-210757, supra, 83-2 CPD Paragraph 342 at 3. Both parties agree that
the imposition of the more stringent quality controls would result in
higher costs of production. The protester has even alleged that the use
of MIL-Q-9858A will "drive up the cost to the Government" and will
preclude small business concerns from bidding competitively. /2/ In
this circumstance, we are persuaded that the proposed changes are
substantial and will materially affect the manufacture and cost of the
torpedo stands. Award to the protester under the original
specifications, without material changes, therefore would have been
improper.
Because the change in quality control requirements provides
sufficient justification for canceling the solicitation, we need not
consider whether the other bases advanced by the agency also justify the
cancellation. However, we feel compelled to point out that the need for
stringent quality control requirements should have been apparent prior
to bid opening: the use of Otto Fuel II was envisioned from the start,
and the dangers inherent in that use were well known. Therefore, we
must agree with the protester's complaint that the agency, by requiring
the protester to undergo two preaward surveys and the COC process, has
unnecessarily caused significant expense both to the government and to
the bidder. We do not believe that the agency followed sound judgment
in this respect, and its actions clearly did not enhance the integrity
of the competitive bidding process.
In this connection, we note the similarity between this case and
Intercomp Co., B-213059, May 22, 1984, 84-1 CPD Paragraph 540, which
also involved a Navy procurement. There the agency canceled an IFB long
after bid opening, also following a decision by the SBA to issue a COC
to the protester in that case. After expressing our belief that the
cognizant procurement officials had not followed sound judgment in
failing to cancel the solicitation as early as possible upon discovering
a specification deficiency, we advised the Secretary of the Navy of our
view. Here, although the Navy acted to cancel promptly upon discovering
the deficiency in the specifications, we find the long delay in
recognizing the deficiency equally distrubing. These errors in judgment
cause unnecessary expense to all parties involved, and engender
unnecessary suspicions of unfair treatment. In view of this similar
error some few months after the Intercomp decision was issued, we are
again, by separate letter, advising the Secretary of the Navy of this
situation.
Harry R. Van Cleve
General Counsel
(1) Although the contracting officer also cited an ambiguity in the
option provisions of the solicitation as a basis for cancellation, the
agency report to our Office does not rely on that factor.
(2) We note, however, that the revised solicitation is a total small
business set-aside.
FILE: B-216708
DATE: March 29, 1985
MATTER OF: Department of Energy Consultants
OFFICERS AND EMPLOYEES - STATUS - INTERMITTENT EMPLOYEES
1. The Controller, Department of Energy, asks whether five
consultants designated as intermittent should be identified as
temporary, and thus lose their entitlement to transportation and per
diem. The Controller's doubt arises because consultants worked most
available workdays and moved between ostensibly different positions in
different organizational offices, both of which were headed by the same
person. The determination of each consultant's status must be based on
the facts of the particular situation. Here, the Office of Personnel
Management conducted an investigation and determined that each of the
consultants was properly designated as intermittent. The record
provides a basis for a contrary view of the facts. Therefore, we
conclude that the consultants may be regarded as intermittent and may be
paid transportation and per diem.
OFFICERS AND EMPLOYEES - STATUS - INTERMITTENT EMPLOYEES
2. Intermittent employment may not exceed a total of 180 days in a
service year. Each of five Department of Energy consultants occupied
several different intermittent positions within the Department and the
total number of days worked by each consultant exceeded the 180-day
limit. The Office of Personnel Management states that the service year
limitation relates to the number of days worked in a specific position.
Its view that a new service year is started when an intermittent
appointee receives a new appointment to a different position is upheld.
This action is in response to a request for an advance decision from
the Department of Energy, regarding the status of five individuals whom
it has employed as consultants. /1/ Although several questions are
presented, the basic question is whether the consultants were correctly
treated as intermittent employees, or whether they are in fact temporary
employees. On the basis of the record before us, we would accept a
Department of Energy determination that the consultants were
intermittent employees.
The Department of Energy employed each of the five consultants to
provide services in their respective areas of expertise within two
separate offices, both of which were headed by the same person.
The Controller asked us to determine:
(1) whether any of the consultants should have been identified
as full-time temporary employees on the basis of having worked
nearly all available workdays;
(2) whether the proscription, that an intermittent employee may
not work more than 180 days in a service year, becomes effective
in situations where an appointment is terminated and renegotiated
when similar functions are still being performed in a subordinate
organization under the same principal official;
(3) whether the application of that rule is affected if the
consultant works for the same Government official who serves in
different organizational capacities; and
(4) whether collection action should be taken in situations
where the status of the consultant was incorrect and the
consultant was erroneously paid for transportation, per diem and
other costs?
The answer to the first three questions depends on a determination of
the status of each of the consultants as either intermittent or
temporary employees. Intermittent employment is defined as occasional
or irregular employment on programs, projects or problems. It is
limited to 130 days in a service year. An intermittent employee's
status is automatically changed to temporary when the employee works in
excess of 130 days within the service year. See Federal Personnel
Manual, ch. 304, paragraph 1-2(5) (Inst. 275, January 22, 1982).
The basis for the Controller's concern is that the consultants worked
all or most of the available workdays in each position and that during
the service year some of the consultants received numerous intermittent
appointments to work on similar projects requiring them to report to the
same official. Since the consultants would only be eligible for
transportation between their homes and their official duty stations and
to per diem while at their official duty stations if they were
intermittent rather than temporary employees, the Controller requested
our determination of the status of each individual before she certifies
payment of these expenses.
At the time of the Controller's submission to us, the Office of the
Under Secretary had by letter dated September 17, 1984, requested a
review of the same issues by the Office of Personnel Management (OPM).
We withheld action on this matter pending the completion of OPM's
investigation and receipt of its report. That investigation is now
complete, and we have received Energy's report on its action
implementing the OPM findings.
Briefly, the employment history of each of the consultants is as
follows:
Harry E. Brown -- Mr. Brown was employed by the Office of
Conservation and Renewable Energy on a full time basis from September
18, 1983, to March 19, 1984. He was then appointed on an intermittent
basis to a position in the same office on July 3, 1984. He worked 58 of
61 possible workdays in this position.
Sydney J. Chiswell -- Mr. Chiswell was appointed on an intermittent
basis to a position in the Office of Conservation and Renewable Energy
on January 16, 1984. Of the 142 possible workdays, he worked 129 days.
He was appointed to another intermittent position in the same office, on
August 6, 1984. In this position he worked 27 of 29 available workdays.
George D. Holling -- Mr. Holling was appointed on an intermittent
basis to a position in the Office of Conservation and Renewable Energy
on January 24, 1984, for a maximum of 89 workdays. He worked 89 days in
this position. He was then appointed to a second intermittent position
in the same office, on June 17, 1984. He worked 42 of 42 available
workdays in this position. He was appointed to a third intermittent
position in the Office of Conservation and Renewable Energy on August
26, 1984, and worked 20 of 24 available workdays.
Robert H. Gardner -- Mr. Gardner was given an intermittent
appointment in the Office of the Under Secretary on August 3, 1983. He
worked 43 of 43 possible workdays. The appointment was extended on
October 1, 1983, and he worked 31 of 42 workdays. He was appointed to
another intermittent position in the Office of Conservation and
Renewable Energy on December 1, 1983. On June 9, 1984, his December
1983 appointment was changed to a full-time temporary appointment. On
June 25, 1984, he was appointed to another intermittent position, in the
Office of the Under Secretary where he worked 63 of 69 available
workdays.
Joel B. Stronberg -- Mr. Stronberg was originally appointed to an
intermittent position in the Office of the Under Secretary on August 3,
1983. He worked 43 of 43 available workdays in that position. The
appointment was extended on October 10, 1983, and he worked 31 of 42
available workdays. On December 9, 1983, he received an intermittent
appointment in the Office of Conservation and Renewable Energy, where he
worked 130 of 133 available workdays. This appointment was changed to a
full-time position on June 23, 1984. Mr. Stronberg was then appointed
to another intermittent position in the Office of the Under Secretary on
July 22, 1984, where he worked 63 of 69 available workdays.
We have been informally advised that all of the above consultants'
intermittent appointments were terminated effective November 14, 1984.
As mentioned above, the questions presented to us regarding the
correctness of the intermittent status of each of the consultants were
also presented to OPM for consideration. Pursuant to its review
authority, the OPM conducted an on-site investigation including a review
of pertinent records and interviews.
After its on-site investigation, OPM presented tentative findings to
Energy by letter of October 26, 1984. It found that neither the
identity of the supervisor nor an organizational change, alone, was
determinative in deciding whether or not a position was in fact a new
position or merely a continuation of the original appointment. Instead,
it looked at the type of position and the area of work in which the
consultant was involved. The report noted that there was no evidence
that any of the appointments carried with them the understanding that a
consultant was to work on a regularly scheduled basis.
At the same time, the OPM report indicated that four of the five
consultants had at least one period of service which may have been
improperly designated as intermittent. This finding was based primarily
on the similarity in work descriptions of the various positions. Noting
that these descriptions were very brief, the Office of Personnel
Management stated that "it is likely that more extensive and detailed
descriptions would have noted significant distinctions among the various
projects." OPM instructed Energy to review both the consultant
certifications and the actual work performed and to correct any
certificates that were not accurate.
Energy then provided additional written information regarding the
work done by each of the consultants. This included detailed and
specific information concerning each new position to which the
consultants had been appointed and assurances that none of the
consultants had ever had a regularly scheduled tour of duty with respect
to these positions. In addition, Energy provided information showing
that in all situations, whether the individual consultant made an
organizational change or remained within the same organization, new
positions having different areas of work were involved.
After considering the additional information supplied by Energy, OPM
presented its final conclusions in a letter dated November 19, 1984. It
recognized that each of the appointments could have been in a different
area of work and each appointment could have been to a new position for
purposes of an intermittent appointment. It further stated that when
differences in the type of work did exist, and the agency certified that
the conslutants were appointed to new positions, OPM would not
substitute its own judgment for that of Energy in determining the status
of the positions held by the consultants.
Statutory authority for the employment of experts and consultants on
a temporary or intermittent basis is found at 5 U.S.C. Section 3109
(1982). The OPM provides additional guidance in Chapter 304 of the
Federal Personnel Manual (Inst. 275, January 22, 1982).
Consultants may be employed either as temporary or intermittent
employees. The Office of Personnel Management has defined intermittent
employment as occasional or irregular employment on programs, projects
or problems. An intermittent employee may work up to 130 days in a
service year. Intermittent employees may also be reappointed to the
same position in the following service year.
Temporary employment is defined by OPM as employment for less than
one year, and may include regularly scheduled employment on a full- or
part-time basis. An intermittent employee who is paid for all or any
part of a day more than 130 days in a service year ceases to be an
intermittent employee and automatically becomes a temporary employee.
Employees who work under temporary appointments may not be reappointed
to their positions. Generally, the status of an employee depends upon
the facts of his particular situation, including the type of schedule
worked and the intent of the agency when the individual was appointed.
All of the above rules are set out in FPM Chapter 304.
Whether the status of the consultants here is intetmittent or
temporary depends on the answer to three questions, two of which are
essentially factual. They are (1) whether OPM's definition of "service
year" is correct, (2) whether the successive appointments received by
each consultant were to essentially the same position, and (3) whether
the parties intended that the consultants work on a regularly scheduled
basis.
We do not conduct investigations or hearings into the facts of a
particular case, but instead rely upon the written record. See 53 Comp.
Gen. 824 (1974); 4 C.F.R. Section 31.7. The record in this case
includes a most useful tool, the investigation report of OPM, an
independent organization which both regulates and reviews employment of
consultants and experts in an oversight capacity. Because of its
expertise in personnel matters, including the appointment of experts and
consultants, its interpretation and application of the rules discussed
above to a fact situation is particularly relevant and entitled to great
weight. Udall v. Tallman, 380 U.S. 1 (1965).
As noted above, an intermittent employee may work up to 130 days in a
"service year." The OPM has informally advised us that in preparing its
report to Energy, it defined a service year as beginning at the time of
the appointment and consisting of up to 130 workdays in that position.
Thus, if a consultant serving in an intermittent appointment is then
appointed to a new intermittent position, a new service year begins at
the time of the new appointment. That is, the concept of a service year
as it applies to intermittent employees counts the number of days the
appointee works in a specific position; it does not embrace
intermittent service performed in several different positions during
either a calendar or a fiscal year.
We find this definition reasonable since it accords consistent
treatment between temporary and intermittent employees. A temporary
consultant may not be reappointed to the same position after he has
served one year in that position. However, we have held that a
temporary expert or consultant may be employed under a series of
contracts in one position totaling less than one year, and then
immediately be employed in a different expert position for which he is
qualified. See 28 Comp. Gen. 670 (1949). See also, FPM Chapter 304.
Although that decision dealt with temporary employees, intermittent
employees are appointed under the same statutory authority and we find
no reason why they should be treated dissimilarly. Therefore, we
conclude that a service year for each distinct appointment or position
relates to that position or appointment.
As previously mentioned, OPM's report to the Under Secretary
indicated that OPM would accept his determination that each appointment
was correctly identified as an intermittent appointment to a new
position. Given the above concepts and facts, we find nothing in the
record which compels us to take exception to either Energy's initial
determinations or to OPM's concurrence that each of the questioned
appointments was to a new position with reocgnizably different duties
and responsibilities, thereby starting a new service year. Therefore,
on the basis of the record before us, those appointments may be
considered intermittent. /2/
However, the movement of these experts and consultants within the
agency as described while retaining their intermittent status raises
legitimate concerns. Situations such as those presented may give the
appearance of improper use of experts and consultants as prescribed in
FPM Chapter 304. For this reason, we also agree with OPM's comments
that at some point, the process for ensuring that the appointments of
the consultants were correct, failed in this case. Appendix A of FPM
Chapter 304 presents the requirements for internal agency controls for
the hiring of consultants and experts. See also, Lynn Francis Jones,
B-214432, July 25, 1984, 63 Comp. Gen. . . . They include different
levels of approval and complete and accurate descriptions of the
services required. Appraently Energy has such a process in place, but
failed to submit these appointments to that process. The continued
failure to submit such appoints to agency controls will contribute to
continuing questions concerning the status, and hence entitlement to
transportation and per diem, of consultants and experts hired in the
future.
Basis?
The remaining issue is whether each of the consultants was in fact an
intermittent employee in view of their having worked on most available
workdays. The question is important because transportation from their
homes to their duty station and per diem while there may be paid to the
consultants if they were intermittent, but may not be paid if they were
temporary employees. See 55 Comp. Gen. 199 (1975).
We have held that employment must be occasional or irregular to be
regarded as intermittent. However, we recognize that in certain cases
although an expert of consultant works full time, he may still be
regarded as intermittent if the record shows that intermittent
employment was actually intended and there was an inability to
reasonably anticipate the need for services on a full-time basis.
Hector Avila Morales, Jr., B-193170, May 16, 1979. In addition, in
determining whether employment is intermittent, we have long held that
the establishment of a regular tour of duty prescribed in advance should
be considered. 35 Comp. Gen. 90 (1955); 35 Comp. Gen. 638 (1965). An
established tour of duty has been defined as "a definite and certain
time of day and/or hour of any day during the work week when the
employee regularly will be required to perform duty." Copp Collins, 58
Comp. Gen. 167 (1978).
The question of whether these consultants had regular tours of duty
was addressed directly in the OPM investigation. The record shows that
Energy assured OPM that none of the consultants had a regularly
scheduled tour of duty.
Specifically, OPM reported:
"However, we were unable to identify evidence that any of the
appointments reviewed carried with them the understanding, in
advance, that the consultant was to work on a regularly scheduled
basis (e.g., every workday for several consecutive pay periods.
We are reluctant to infer a regularly scheduled tour of duty
retroactively, solely on the basis of a pattern of days worked.
Further, for most of the periods reviewed, the consultant did not
work every single workday."
Since none of the appointments involved work in excess of 130 days,
if Energy certifies that the employees did not have regularly scheduled
tours of duty and that, when the appointments were made, they were
intended to be intermittent, we would not object to payment of
transportation and per diem expenses to which they are otherwise
entitled.
Comptroller General of the United States
(1) The request was presented in an October 2, 1984 letter from Gail
T. Young, Controller, Department of Energy. The same questions were
also presented by the consultants in a separate letter.
(2) We note that regarding the appointment of Mr. Brown to an
intermittent position on July 3, 1983, the file lacks certification by
the agency that the appointment was in fact to a new, intermittent
position in a different area of work. However, if the agency can
certify that it was a new position, we have no objection to such a
determination.
FILE: B-216706 85-1 CPD 81
DATE: January 22, 1985
MATTER OF: Aurora Films
DIGEST:
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL ACCEPTABILITY - ADMINISTRATIVE DETERMINATION
1. GAO will question a determination concerning the technical merit
of proposals only upon a clear showing of unreasonableness, abuse of
discretion or violation of procurement statutes or regulations.
Protester has failed to make such a showing with respect to agency's
determination that proposals are technically equal.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE FUNCTION -
INDEPENDENT INVESTIGATION AND CONCLUSIONS - LIMITATIONS
2. GAO standard of review in bid protests is not to independently
determine which proposal is most advantageous to the government, but to
consider whether contracting agency's selection is legally
objectionable.
CONTRACTS - AWARDS - PROPRIETY - UPHELD
3. Where agency determines that proposals are technically equal,
agency properly awarded firm, fixed-price contract to lower priced
offeror since, notwithstanding protester's contention that its proposal
represented the "best buy" for the government, protester has not shown
that agency determination that lower priced offer was more advantageous
was unreasonable.
Aurora Films protests the award of a contract to Visuart Enterprises
under request for proposals (RFP) No. R10-84-27, issued by the United
States Forest Service, for the production of an information film for the
Begich-Boggs Visitor Center, Portage Glacier, Chugach National Forest,
Alaska. Aurora contends that its proposal was superior to Visuart's and
that it should have been awarded the contract.
We deny the protest.
The RFP was for a firm, fixed-price contract and advised offerors
that, except for government-furnished property, the contractor would be
responsible for all motion picture production services and materials.
The RFP's technical requirements were divided into three major tasks --
Preproduction Planning/Design, Production Shooting and Post Production.
Each major task was further subdivided into several specific elements
which offerors were requested to address in their proposals.
Technical proposals were evaluated and ranked by a Technical
Evaluation Board. Under the RFP's evaluation scheme, the maximum rating
was assigned to the established reputation and proven ability of the
firm to produce this type of film. An example of a recent film and the
qualifications of the Script Writer, Film Director, Cinematographer,
Sound Editor-Mixer and Music Writer were accorded equal weight and also
evaluated. The RFP stated that price was not controlling but that its
importance would increase if proposals were otherwise rated equally.
The RFP advised offerors that award would be made to the offeror whose
proposal was creatively and technically acceptable and was the most
advantageous to the government.
Nineteen firms submitted proposals. The Forest Service established a
competitive range of the top eight firms. Written discussions were
conducted with these firms by providing them a list of nine items for
consideration in their best and final offers. The Forest Service
indicates that Aurora and Visuart had nearly identical technical ratings
initially and that neither firm submitted any information which would
have materially added to its technical ratings. Both firms were judged
to have the capability to produce a high quality film and both Aurora
and Visuart were much less costly than the only other higher technically
rated firm. The Forest Service states that the selection came down to a
matter of price and, since Visuart's offered price was lower than
Aurora's, the contract was awarded to Visuart.
Aurora argues that its proposal was more advantageous to the Forest
Service since it contained many additional production services, not
offered by Visuart, which would have contributed to a much better film
for the government. For example, Aurora argues that additional film
stock, beyond the 22,000 feet provided by the government, will be
necessary to produce a quality film and that Aurora included in its
budget the cost for an additional 23,000 feet of film stock. Aurora
points out that had it not included this additional film, its price
would have been lower than Visuart's. Similarly, Aurora indicates that
it budgeted for a celebrity narrator, which it argues the RFP required,
and that this also increased its costs. Aurora contends that Visuart's
price was lower simply because it chose less expensive options which
were not responsive to the RFP.
Aurora also questions the Forest Service's technical evaluation of
Visuart's proposal. Aurora contends that Visuart's proposal was
nonresponsive and should have been disqualified because it did not meet
the RFP's minimum requirements for an acceptable offer. Aurora argues
that the RFP required, and Visuart failed to provide, sufficient data on
labor hours, an adequate description of the process it will go through
to produce the film, an adequate description of the facilities and
equipment which will be utilized and, also, did not provide the
celebrity narrator required by the RFP. In addition, Aurora alleges
that Visuart did not adequately budget for the required Dolby stereo
sound and that it has no experience in editing Dolby stereo sound
tracks. (Dolby is a method used to reduce background noise in sound
recording.)
The Forest Service indicates that it found the information furnished
by Visuart to be adequate. The Forest Service states that members of
Visuart's team all had experience working in similar productions with
award-winning success and that they clearly had an understanding of the
scope of this project. The Forest Service indicates that Visuart's
proposal contained definite time commitments from members of its
production team, that Visuart recognized the specialized Dolby
requirement and that the additional sound editing costs were reflected
in Visuart's price proposal. With respect to the description of the
facilities and equipment to be utilized, the Forest Service indicates
that Visuart, as well as several other offerors, interpreted this
requirement as merely requiring a listing of the intended facilities.
The Forest Service States that since this requirement may have been
ambiguous, no offerors were penalized on this basis.
Concerning the additional film stock provided by Aurora, the Forest
Service indicates that offerors were requested in negotiations to submit
a separate cost per foot for any additional film stock which might be
utilized beyond that provided by the government. The Forest Service
states that Visuart submitted a separate price while Aurora decided to
include additional film stock in its best and final offer. In addition,
the Forest Service states that both Visuart and Aurora submitted
acceptable narrator options which met the intent stated in the RFP. The
Forest Service indicates that the proposals submitted by Aurora and
Visuart were presented in different formats and each demonstrated strong
abilities for producing the type of film requested. Visuart's proposal
was judged most advantageous based on its lower cost and the Forest
Service contends this determination was proper.
In considering Aurora's arguments concerning the Forest Service's
evaluation of proposals, our standard of review is limited to
considering whether the selection of Visuart is legally objectionable.
In this regard, we point out that our Office does not independently
review proposals to determine which offer is most advantageous to the
government. The Jonathan Corporation, B-199407.2, Sept. 23, 1982, 82-2
C.P.D. Paragraph 260. Rather, our review is limited to examining
whether the agency's evaluation was fair, reasonable and consistent with
the stated evaluation criteria. We will question a contracting
official's determination concerning the technical merit of proposals
only upon a clear showing of unreasonableness, abuse of discretion or
violation of procurement statutes or regulations. Computer Sciences
Corporation, B-210800, Apr. 17, 1984, 84-1 C.P.D. Paragraph 422.
Furthermore, we note that the concept of "responsiveness" generally does
not apply to negotiated procurements as it does to advertised
procurements. Xtek, Inc., B-213166, Mar. 5, 1984, 84-1 C.P.D.
Paragraph 264.
Based on the record, we cannot find that the Forest Service should
have disqualified Visuart's proposal or that the technical evaluations
conducted by the Forest Service were otherwise unreasonable. With
respect to the alleged informational deficiencies in Visuart's proposal,
we agree with the Forest Service that the information solicited by the
RFP was either explicitly provided by Visuart or else easily discernible
from its proposal. Although Aurora argues that Visuart should have been
required to submit additional information, our review provides no basis
to conclude that Visuart's proposal was so materially deficient that it
should have been rejected.
In addition, our review indicates that the Forest Service did follow
the evaluation scheme set forth in the RFP and Aurora has not shown that
the Forest Service's determination that the proposals were technically
equal was unreasonable. The evaluation criteria indicated that the
firm's established reputation in producing this type of film was most
important and also advised offerors that the qualifications of the
production team would be considered. Although Aurora has questioned
Visuart's ability to edit Dolby stereo sound tracks, Visuart did provide
for significant costs for sound recording and editing, and Aurora has
not established that the evaluation had no reasonable basis. Crown
Point Coachworks and R&D Composite Structures; North American Racing
Company, B-208694, B-208694.2, Sep. 29, 1983, 83-2 C.P.D. Paragraph
386.
With respect to Aurora's contention that its offered price presented
the best value to the government, we note that the contract awarded to
Visuart is a firm, fixed-price contract. A firm, fixed-price contract
is not subject to adjustment based on the contractor's cost experience
during performance and places full responsibility, in terms of profits
or losses for costs above or below the fixed price, directly upon the
successful offeror. Litton Systems, Inc., Electron Tube Division,
B-215106, Sept. 18, 1984, 84-2 C.P.D. Paragraph 317. While Aurora
argues that the Forest Service should have considered the fact that
additional film stock was included in its offer, and thus accounted for
its higher price, the agency's request for best and finals merely
advised offerors that the cost for any additional film stock should be
specified. Offerors were not required to include this in their
proposals and, if Aurora offered to provide more than the solicitation
required, it was not the result of arbitrary or capricious government
action. Pikes Peak Water Company, B-211984, Mar. 16, 1984, 84-1 C.P.D.
Paragraph 315. Moreover, in the best and final offer, Aurora
recommended a "shoot ratio" (the ratio of film used to that actually
incorporated into the final product) two and one-half times the ratio
specified in the RFP; it was not possible to ascertain from Aurora's
offer whether, or to what extent, Aurora's additional film costs may
have been attributable to this recommendation.
Finally, despite Aurora's assertions to the contrary, we do not find
that the RFP required offerors to provide a "celebrity" narrator for the
film. The RFP specified that record narration be performed with a
"nontalent narrator" and also indicated that the narrator should be an
individual of repute known for his ability as a storyteller. In our
view, these provisions permitted offerors to choose among several
acceptable narrator alternatives in submitting their proposals. We
note, for instance, that although Aurora chose the more expensive
celebrity alternative, it also offered an unpriced -- and, therefore,
unevaluated -- opportunity for a less expensive noncelebrity. In our
view, there is nothing unreasonable about the Forest Service's
conclusion that both Aurora and Visuart submitted acceptable narrator
options which conformed to the RFP requirement. Weardco Construction
Corp., B-210259, Sept. 2, 1983, 83-2 C.P.D. Paragraph 296.
Accordingly, the protest is denied.
Comptroller General of the United States
FILE: B-216702.2 85-1 CPD 80
DATE: January 22, 1985
MATTER OF: Oklahoma City University
DIGEST:
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - NONRESPONSIVE
BIDDER
A nonresponsive bidder is not an interested party under GAO Bid
Protest Procedures when the protest is against only the responsivenes of
one bid and there is another bid that could be accepted.
Oklahoma City University (OCU) protests the award of a contract to
A.I.D. Systems, Inc. by the Department of Transportation (DOT) under
invitation for bids (IFB) No. DTFA-02-84-B-00032, the second step of a
two-step formal advertisement for air traffic controller training. OCU
contends that DOT officials were biased in favor of A.I.D. and that A.
I.D.'s bid was fatally unbalanced. We will not consider the protest.
The three technically acceptable step-one proposers submitted bids
under the step two IFB for an initial term of 1 year and four 1-year
options. Bids were evaluated by adding prices for all years. A.I.D.
submitted the low bid, OCU, the second low bid, and the University of
Oklahoma, the third low bid. OCU's bid schedule contained footnotes
which stated "Prices based on 1984 dollar value."
We do not view OCU as an interested party under our Bid Protest
Procedures (4 C.F.R. Section 21.1(a) (1984)). Where a bidder qualifies
its bid for a firm-fixed price contract by allowing an opportunity to
claim price adjustments if certain circumstances occur, the bid must be
rejected as nonresponsive because something other than a firm-fixed
price is being offered. Computer Terminal Sales, B-200366, Jan. 22,
1981, 81-1 CPD Paragraph 37. OCU qualified its bid in this manner by
the language in the footnotes. Consequently, even if OCU's protest were
sustained, OCU would not be in line for award. Moreover, sustaining the
protest apparently would not result in a resolicitation since the file
contains nothing to indicate that the third low bidder would not have
received the award. See Public Entity Underwriters, Ltd., B-213745,
Sept. 20, 1984, 84-2 CPD Paragraph 326; Alchemy, Inc., B-208982.2, July
25, 1983, 83-2 CPD Paragraph 120. Under these circumstances, OCU is not
an interested party.
The protest is dismissed.
/s/ Harry R. Van Cleve
General Counsel
FILE: B-216699 85-1 CPD 1
DATE: December 27, 1984
MATTER OF: O. V. Campbell and Sons Industries, Inc.
BONDS - BID - DISCREPANCY BETWEEN BID AND BOND - BID NONRESPONSIVE
A bid is nonresponsive where the bid bond furnished with the bid
listed one surety company on the face of the bond but the corporate seal
and attached power of attorney for the signer of the bond is from
another surety since it is unclear from the bid documents, including the
bond, whether either surety is bound.
O. V. Campbell and Sons Industries, Inc. protests the rejection of
its low bid under invitation for bids (IFB) No. F01600-84-B-0014, issued
by the Department of the Air Force for new roofs for buildings at an air
base. The agency's contention, which Campbell disputes, is that
Campbell's bid bond was defective and its bid was therefore
nonresponsive. We deny the protest.
The corporate surety listed at the top and bottom of the bid bond was
American Manufacturers Mutual Insurance Company, a Georgia corporation.
The corporate seal affixed to the bid bond, however, was that of the
American Motorists Insurance Company, an Illinois corporation, and the
attached power of attorney was issued by American Motorists designating
the same attorney-in-fact who signed the bond.
The agency contends that this created an uncertainty because while it
was clear that the attorney-in-fact was duly authorized to bind American
Motorists, his authority to bind American Manufacturers was questionable
and that it was unclear which surety the attorney-in-fact intended to
bind. Therefore, the agency argues, either company could deny the bond
if enforcement was attempted.
Campbell points out that the attorney-in-fact was duly authorized by
each surety company and that simple inquiry, beyond the attorney's
control, could have established that he was duly authorized by American
Manufacturers to bind the company. Campbell points that there is no
question that the attorney intended to bind American Manufacturers and
that the power of attorney and the corporate seal go only to the quality
of the evidence of the authority of the attorney. In support of his
position that the bid bond should have been accepted, Campbell cites
Hancon Associates-Request for Reconsideration, B-209446.2, Apr. 29,
1983, 83-1 CPD Paragraph 460 in which we reversed our decision in Atlas
Contractors, Inc., B-209446, Mar. 24, 1983, 83-1 CPD Paragraph 303 and
held that a bid bond naming two different sureties could be accepted
because it then appeared that the intended surety's ability to avoid an
obligation under the bond was too remote in view of other indication on
or accompanying the bond to endanger enforcement if necessary.
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. Montgomery Elevator Co., B-210782, Apr. 13, 1983, 83-1 CPD
Paragraph 400. Thus, the sufficiency of a bid bond depends on whether
the surety is clearly bound by its terms and when the liability is not
clear, the bond is defective. Truesdale Construction Co., Inc.,
B-213094, Nov. 18, 1983, 83-2 CPD Paragraph 591. 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 CPD 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 CPD Paragraph 194. Noncompliance with the bid bond
requirements can only be waived under those conditions specified in FAR,
section 28.101-4, none of which are present in this case.
In the Hancon case, supra, the corporate seal affixed to the bond and
the power of attorney authorizing the attorney-in-fact to sign were from
the same surety whose name was listed at the top of the face of the
bond. The surety listed on the bottom of the bond, however, was that of
another company. We concluded that in view of the seal and the power of
attorney, only the surety listed at the top of the bond could be bound.
The facts here are inapposite to those in the Hancon case because
neither the seal nor the power of attorney support the authority of the
signer to bind the named surety. The bond form specifically requires an
attorney-in-fact to submit with the bond evidence of his authority to
bind the intended bonding company. This was not done here and recourse
to evidence outside the bid documents could not properly be taken.
Thus, there is a legitimate question whether either American
Manufacturers or American Motorists, could be bound and thus the bid was
properly rejected as nonresponsive.
The protest is denied.
Comptroller General of the United States
B-216698, Oct 22, 1984, 84-2 CPD 441
GENERAL ACCOUNTING OFFICE - Jurisdiction - Labor stipulations -
Service Contract Act of 1965
DIGEST:
Protest that awardee will not comply with the wage rate and benefit
provisions of the Service Contract Act is dismissed because enforcement
of the Service Contract Act rests with the Department of Labor, and
whether contract requirements actually are met is a matter of contract
administration, which is a function of the contracting agency.
Commercial Movers, Inc.:
Commercial Movers, Inc. protests award to District Moving and Storage
Company of a contract under solicitation No. MDA904-85-R-2002 issued by
the Department of the Navy for cartage and drayage services at Fort
George G. Meade, Maryland.
Commercial Movers, Inc. contends the District Moving and Storage
Company will not comply with the requirements of the Service Contract
Act of 1965, as amended, 41 U.S.C. sec. 351 (1982), to pay all wages and
fringe benefits required by the applicable wage determination contained
in the solicitation.
The responsibility for the administration and enforcement of the
Service Contract Act is vested with the Department of Labor, not GAO,
and whether contract requirements are met is a matter of contract
administration, which is the function of the contracting agency. Thus,
we will not consider a protest that a contractor is not complying with
the Act. Supreme Laundry Co., B-213269, Nov. 8, 1983, 83-2 CPD para.
543.
The protest is dismissed. COMP GEN (UP)
FILE: B-216687
DATE: March 14, 1985
MATTER OF: Towne Services Household Goods Transportation Company,
Inc.
DIGEST:
TRANSPORTATION - HOUSEHOLD EFFECTS - RATES
A carrier filed an individual tender with the Military Traffic
Management Command containing single-factor rates applicable to the
transportation of Government household-goods shipments. The fact that
the tender was filed under Military Traffic Management Command's
"me-too" rate-making procedure does not bind the Government to its rates
when the tender expressly provides that its rates will not apply where
they exceed rates in an otherwise applicable tender. General Services
Administration's determination of overcharges, based on lower segmented
rates in another applicable tender is, therefore, sustained.
Towne Services Household Goods Transportation Company, Inc. requests
review of deduction action taken by the General Services Administration
to recover overcharges collected by the carrier on 11 interstate
shipments of household goods that were transported from the Naval Air
Station, Jacksonville, Florida, to various points in the United States
during May and June 1982.
We sustain the General Services Administration's action.
The carrier presented its bills and was paid before audit (as
required by 31 U.S.C. Section 3726(a)) on the basis of single-factor
rates /1/ published in Towne's individual rate tender, T-1336. In its
audit, the General Services Administration determined that lower
segmented rates /2/ were published in Government and Military Rate
Tender No. 1-M, ICC No. 41 (MRT-1), and applied those rates in the
computation of the overcharges. MRT-1 is published for numerous
participating carriers, including Towne, by their agent, the Household
Goods Carriers' Bureau.
Towne contends that the Government became obligated to pay the higher
single-factor rates when Tender T-1336 was accepted for filing by the
Military Traffic Management Command. This is on the premise that they
were filed under Military Traffic Management Command's "me-too"
procedure. The carrier also contends that the single-factor rates "were
never intended to be directly competitive with the segmented rates on
file by other carriers during the May-October 1982 cycle."
General Services Administration contends that the form on which
Tender T-1336 rates were filed (MT-HQ Form 43) expressly provides for
the alternate application of lower rates whenever the charges derived
from Tender T-1336 would be higher than rates published in another
applicable tender. The General Services Administration also contends
that the segmented rates in MRT-1 were applicable, and lower.
Under the so-called "me-too" rate-making procedure, the Government
periodically solicits the tender of lower rates than those published in
MRT-1. Carriers are allowed to meet the lowest rates tendered prior to
a specified date. Then, after the effective date, carriers may file
competitive rates only during so-called "me-too" cycles. /3/ Towne
filed Tender T-1336 on an MT-HQ Form 43 which shows that the tender was
filed to meet the individual single-factor rates filed by Van Pac
Carriers in its Tender 82-21, on Codes 1 and 2 traffic. /4/
We find no legal relevance in the fact that the higher single-factor
rates in Tender T-1336 were filed under the "me-too" procedure because,
as contended by GSA, paragraph 27 (the "Alternations" clause) of Form
43, provides that:
"This tender will not apply where charges accruing herein exceed
charges otherwise applicable for the same service."
Towne does not dispute the fact that Tender T-1336 produced charges
exceeding those derived from MRT-1 or that both tenders were in effect
at the time of the shipments in question. Towne's contention that the
single-factor rates in Tender T-1336 were not intended to compete with
segmented rates filed by other carriers, ignores the material fact that
Towne was a participating carrier in MRT-1; therefore, it offered the
rates published therein to the Government.
In view of these circumstances, our resolution of this case is
controlled by the holdings in the similar cases of Towne International
Forwarding, Inc., B-216116, February 12, 1985, and Towne Van Lines,
Inc., B-216117, February 19, 1985. There, we held that by the terms of
the "Alternations" clause (paragraph 27) in the carrier's individual
tender the lower segmented rates in MRT-1 apply.
Accordingly, the General Services Administration's audit action on
the 11 shipments involved in this case is sustained.
Comptroller General
of the United States
(1) Single-factor rates include packing, loading, unloading,
line-haul transportation, unpacking services, tolls, and accessorial
services.
(2) Segmented rates are rates that are separately stated for the
various services, such as transportation and packing.
(3) Generally, when the "me-too" tenders are received, they are
distributed to the various military installations by means of a
printout. In contrast, Military Traffic Management Command receives
numerous individual rate tenders from carriers, which are unsolicited
and, generally, are simply stamped accepted and filed. Towne also
refers to "base-line" rates, but these have no relevance because, as
General Services Administration states, the base-line procedure was not
adopted by Military Traffic Management Command until May 1, 1984, or
long after the shipments moved.
(4) Code 1 refers to shipments of household goods moved from door to
door by motor van. Code 2 involves movement in container service.
FILE: B-216685.2 84-2 CPD 624
DATE: December 4, 1984
MATTER OF: MTR, Inc. -- Request for Reconsideration
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
1. Request for reconsideration of decision holding that protester
has stated no basis of protest is denied where protester has not shown
that prior decision is erroneous.
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 of the date the basis
for protest was known is untimely.
MTR, Inc. requests reconsideration of our decision MTR, Inc.,
B-216685, Oct. 23, 1984, 84-2 CPD Paragraph . . . , in which we
summarily denied its protest concerning the Army's rejection of MTR's
bid as mistaken under invitation for bids DAAA22-84-B-0161.
We denied the protest because on its face it established no basis for
us to conclude that the agency acted improperly. We pointed out that
MTR had not indicated in its protest where it believed the contracting
officer's decision was in error. MTR simply appeared to be unwilling to
acknowledge that an error had been made; we stated that a bid must be
rejected where it is apparent that a mistake has been made despite the
bidder's denial of mistake. Mullins Protective Services, Inc.,
B-208674, Dec. 23, 1982, 82-2 CPD Paragraph 561.
MTR states that it was unaware that protests could be decided
summarily and arques that, had a full report been received from the
contracting activity, the record would have supported its protest. MTR
maintains that its bid was not mistaken and states that the
specifications were defective because they failed to specify the extent
of concrete and reinforcing steel required. MTR also says that one of
the contracting officer's findings, which concerned the pricing of a
special concrete mixture, was in error because MTR's concrete supplier
stated in its quotation that it would supply that special mixture.
Further, MTR contends that the contracting officer also was incorrect
regarding the inclusion of dumping and other miscellaneous costs in its
bid because they were also included in the concrete supplier's
quotation. MTR admits that the contracting officer was correct in
determining that overhead cost was not broken out on its work sheets,
but asserts that this cost was included in its profit margin.
First, concerning the summary denial of the protest, our Bid Protest
Procedures require that a protest state the grounds of protest and that
the protester fully support the protest to the extent feasible. 4 C.F.
R. Section 21.1(2) (1984). Also, the procedures state at section 21.3(
g) that:
"Notwithstanding any other provision of this Section 21.3, when
on its face a protest is clearly without legal merit . . . the
protest shall be summarily denied . . . without a report from the
agency. . . ."
Our procedures thus, clearly provide for summary denial of a protest
in the appropriate circumstances.
Second, MTR has advanced no basis that would justify allowing
reconsideration. A party must establish in its request for
reconsideration that a prior decision contains a misunderstanding of
fact or error of law. 4 C.F.R. Section 21.9. Here, the decision turned
on our conclusion that MTR's protest documents did not establish any
basis for protest. On reconsideration, MTR maintains that the IFB was
defective because it did not adequately state the Army's requirements.
MTR also attempts to explain where it thinks the contracting officer was
in error. These assertions, however, do not concern the correctness of
our prior decision, which turned on MTR's failure at that time to
establish any grounds for protest. MTR has therefore not provided a
basis for reconsidering our decision. Le Prix Electrical Distributors,
Ltd. -- Request for Reconsideration, B-213050.2, Oct. 25, 1983, 83-2 CPD
Paragraph 500.
Alternatively, if we were to treat the request for reconsideration as
a new protest, we would dismiss it as untimely. Our procedures require
that protests 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. Section 21.2(b)(2). MTR states that it knew of the basis of
protest by September 27. It filed its latest submission with our Office
on November 5. The grounds of protest now asserted therefore are
untimely, as independent bases of protest must be individually asserted
in a timely manner. See, Weaver Shipyard & Drydock, Inc. -- request for
Reconsideration, B-210652.2, Apr. 5, 1983, 83-1 CPD 367.
The request for reconsideration is denied.
Comptroller General of the United States
B-216685, Oct 23, 1984, 84-2 CPD 457
BIDS - Mistakes - Apparent to agency
DIGEST:
Protest is denied summarily where protester alleges only that is
should have received award as the low responsive, responsible offeror
and submits documentation showing that agency rejected its bid after
concluding, on the basis of substantial evidence, that bid was obviously
mistaken. A bid must be rejected under such circumstances even though
the bidder refuses to admit the mistake.
MTR, Inc.:
MTR, Inc. protests award under invitation for bids DAAA22-84-B-0161
issued by Watervliet Arsenal, Department of the Army. According to the
protester, it should have received award because it was the low
responsive, responsible bidder.
We deny the protest summarily because the protest, on its face,
establishes no basis on which it could be concluded that the contracting
activity took any improper action. Documentation submitted with the
protest shows that the contracting officer refused to consider MTR's
bid, which was out of line with the government estimate and with other
bids received, because he concluded that the bid was mistaken. The
record shows that, following a meeting with MTR to discuss a possible
mistake, the contracting officer determined the bid was grossly
underestimated because, as he subsequently wrote MTR:
"1. In the area of excavating, it is apparent that neither the depth
of the concrete nor the multiple layers of reinforcing steel were
considered.
"2. The cost for concrete is obviously that for a normal mixture and
not for the special mixture required.
"3. The estimate fails to include clean-up, dumping and barricade
costs as well as the costs for raising manholes, gravel overcut and saw
cutting.
"4. No overhead costs were indicated."
Our examination of two subcontractor quotations MTR submitted with
its bid discloses no apparent contradiction between them and the
contracting officer's findings.
Although MTR refuses to acknowledge an error, and believes that it
therefore should receive award, the rule is well settled that a bid must
be rejected, even though responsive on its face, where it is apparent
that a mistake has been made, and despite the bidder's denial of
mistake. Mullins Protective Services, Inc., B-208674, Dec. 21, 1982,
82-2 CPD para. 561. An exception may be made if it can be clearly shown
that an offeror's intended bid would have been low had the mistake not
been made. Bruce-Andersen Co., Inc., 61 Comp.Gen. 30 (1981), 81-2 CPD
para. 310. MTR, however, does not challenge the Army on this basis or
indicate in its protest how MTR believes the contracting officer's
conclusions, as indicated in the documentation that MTR submitted, are
in error.
The protest is denied. COMP GEN (UP)
B-216684, Oct 18, 1984, 84-2 CPD 422
CONTRACTS - Protests - Authority to consider - Tennessee Valley
Authority procurements
DIGEST:
GAO will not review Tennessee Valley Authority (TVA) procurement
because GAO is precluded by the TVA Act for disallowing credit for
expenditures which TVA Board determines necessary in carrying out TVA
Act.
NCR Corporation:
NCR Corporation protests that solicitation No. J-2-693635, issued by
the Tennessee Valley Authority (TVA) for computer output microfilm
units, is unduly restrictive and biased toward one vendor.
We do not consider protests involving TVA procurements. By statute,
we are precluded from disallowing credit for any expenditure which the
TVA Board determines necessary to carry out the TVA Act. 16 U.S.C.
sec. 831h(b) (1982). Even if we were to disagree with the propriety of
TVA action, we would be unable to effect any remedial action; thus, no
useful purpose would be served by our consideration of the protest.
Bill Conklin Associates, Inc., B-215418, June 12, 1984, 84-1 CPD para.
624.
The protest is dismissed. COMP GEN (UP)
FILE: B-216678 84-2 CPD 636
DATE: December 6, 1984
MATTER OF: American Aerospace Industries, Inc.
CONTRACTS - PROTESTS - ISSUES IN LITIGATION
Protest is dismissed where the material issues are before a court of
competent jurisdiction, judicial relief pending a decision by this
Office has not been requested, and the court has not expressed interest
in GAO decision.
American Aerospace Industries, Inc. (AAI), protest the Department of
Commerce's award of a contract for public relations and promotional work
to publicize the United States Pavilion at the 1985 Paris Air Show
pursuant to invitation for bids number 2185. AAI alleges that the
procurement should have been publicly advertised in accord with section
14.103-1 of the Federal Acquisition Regulation (to be codified at 48 C.
F.R. Section 14.103-1) and that the contract violates provisions of the
Anti-Deficiency Act (31 U.S.C. Section 1341 (1982)).
We will not consider the protest.
Subsequent to protesting to our Office, AAI filed suit against the
government in the United States District Court for the District of
Columbia (Civil Action No. 84-3260) seeking, among other things,
permanent injunctive and declaratory relief. The grounds presented as
the bases for the suit include the bases presented to our Office in
AAI's bid protest. Accordingly, the court's resolution of the issues
before it will control the resolution of the protest. It is our policy
not to decide protests where the material issues are before a court of
competent jurisdiction unless the court requests, expects or otherwise
expresses an interest in our decision. 4 C.F.R. Section 21.10 (1984).
Plaintiff AAI has not requested judicial relief pending a decision by
this Office, and the court has not indicated an interest in our
decision.
We, therefore, dismiss the protest. Numax Electronics Incorporated,
B-214777, Apr. 13, 1984, 84-1 C.P.D. Paragraph 417.
Harry R. Van Cleve
General Counsel
B-216674, Oct 16, 1984, 84-2 CPD 414
CONTRACTS - Labor surplus areas - Evaluation preference - Eligibility
of offeror - Failure to complete eligibility provision - Effect
DIGEST:
1. Offeror which indicates in a "place of performance" clause that
it will perform contract in a city which is in a labor surplus area, but
which does not complete the "Eligibility for Preference As A Labor
Surplus Concern" provision, is not entitled to labor surplus area
evaluation preference because place of performance does not, under
circumstances, establish that offeror is a labor surplus area concern.
CONTRACTS - Negotiation - Competition - Equality of competition - Not
denied to protester
2. Agency's acceptance of an offer that deviated from specifications
provides no basis to sustain protest where protester submitted offer on
same basis as did awardee so that no competitive prejudice accrued to
protester as a result of the acceptance.
Singer Safety Company:
Singer Safety Company protests the rejection of its offer under
request for proposals No. DLA400-84-R-6784 issued by the Defense General
Supply Center, Defense Logistics Agency. Singer primarily complains of
the agency's refusal to evaluate its offer on the basis of a preference
for labor surplus area (LSA) concerns. Singer states that it would have
been the low offeror and therefore the awardee if its proposal had been
evaluated on the basis of the preference. We summarily deny the
protest.
The solicitation contained a provision entitled "Eligibility for
Preference As A Labor Surplus Concern," which stated:
"Each offeror deserving to be considered for award as a labor surplus
area (LSA) concern ... shall indicate below the address(es) where costs
incurred on account of manufacturing or production ... will amount to
more than fifty percent ... of the contract price. ..."
Space was then provided for the entry of the name and address of each
such location. The provision included the following warning:
"Caution: Failure to list the location of manufacture or production
and the percentage, if required, of cost to be incurred at each location
will preclude consideration of the offeror as a LSA concern."
Singer did not fill out this eligibility provision, but asserts that
it was nonetheless entitles to the LSA preference because it indicated
in the "Place of Performance" clause that it intended to perform
entirely at its Chicago location. Chicago, the protester states, is an
LSA.
We have considered previously the situation presented when an offeror
completes a place of performance clause but does not complete the LSA
eligibility provision. In Chem-Tech Rubber, Inc., 60 Comp.Gen. 694
(1981), 81-1 CPD para. 232, we held that the bidder was not entitled to
the LSA preference. We stated:
"This offer by Chem-Tech to perform the contract at its New Haven
plant does not satisfy the requirements of the LSA eligibility clause
set forty in paragraph K17 of the IFB. The place at which the
contractor will perform may be immaterial with respect to the
determination of whether the contractor is an LSA concern if costs
greater than 50 percent of the contract price will be incurred for
subcontracting or purchase of materials. Voss Industries, Inc.,
B-184258, Nov. 12, 1975, 75-2 CPD 298. We have specifically recognized,
for example, that the cost of purchased materials is a cost of
production which alone may be sufficient to qualify or disqualify a firm
as an LSA; the determining factor is the location of the seller. See
41 Comp.Gen. 160, 164 (1961). It appears that significant portions of
the production costs here were attributable to purchases of material and
other non-manufacturing expenses."
On the other hand, in a later case involving the procurement of
coats, with the cloth and buttons furnished to the contractor as
government-furnished material, we held that the bidder was entitled to
the preference because it was clear that a substantial portion of the
contract costs would be for labor, so that the concerns expressed in
Chem-Tech were not applicable. See South Jersey Clothing Co. et al.,
B-204531, et al., Feb. 4, 1982, 82-1 CPD para. 88.
Here, the contractor is to furnish 1,005 welding screens. There is
no indication that the government is furnishing materials for the
manufacturing process, that this is essentially a labor services
contract or that the concerns expressed in Chem-Tech are otherwise not
applicable. We therefore have no basis to conclude that the contracting
officer acted improperly in not affording Singer the LSA evaluation
preference.
Singer also complains that the awardee offered a product that does
not meet one of the specification provisions. Singer states that the
acceptability of the awardee's deviating, lower-cost approach should
have been made known so that offers could have been "more competitive."
It is generally improper, of course, for an agency to accept an offer
that deviates from the specifications without revising the
specifications to provide a common basis for competition. See, e.g.,
Union Carbide Corp., 55 Comp.Gen. 802 (1976), 76-1 CPD para. 134; 52
Comp.Gen. 815 (1973). Here, however, the documents furnished by Singer
indicate that Singer, anticipating the awardee's approach, submitted an
alternate offer based on that same approach, and it is that alternate
offer ($1 lower than the awardee's unit price) to which Singer seeks to
have the LSA preference applied. Obviously, Singer, the only protester
on this procurement, and the awardee did compete on the same basis, and
therefore Singer cannot be said to have been unfairly prejudiced by the
acceptance of its Competitor's offer. While we would anticipate that
the agency will revise its specifications to reflect its actual needs
before again procuring the items here in question, in the absence of
prejudice to Singer we have no basis for sustaining the protest. see,
e.g., H. Esmaili & Associates, Inc., B-198702, Oct. 9, 1980, 80-2 CPD
para. 263.
The protest is summarily denied. COMP GEN (UP)
FILE: B-216673.2, .3, .4, .6, .7, .8, .9 85-1 CPD 1224
DATE: February 1, 1985
MATTER OF: Adams & Associates Travel Inc.; Enzor Travel;
Travelogue, Inc.
CONTRACTS - PROTESTS - COURT ACTION - DISMISSAL
1. GAO will dismiss protests concerning evaluation procedures and
criteria that include allegations which are identical or similar to
contentions made by another firm when that firm is seeking permanent
relief in U.S. District Court. Since protesters' possible remedies are
the same as could be given in the lawsuit, the substance of the protests
are also at issue, even though the protesters are not parties to the
suit and the protest details vary slightly.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
2. GAO will dismiss protests alleging that an agency improperly
failed to set aside an entire procurement for small business when the
protests are filed after the closing date for receipt of initial
proposals. In any event, the decision to set aside a particular
procurement is essentially within the discretion of the contracting
officer, and, with certain exceptions not applicable here, nothing in
the Small Business Act makes it mandatory to set aside any particular
procurement.
Adams & Associates Travel Inc., Enzor Travel, and Travelogue, Inc.,
protest awards under solicitation No. WFCG-E3-N-1137-8-1-84, issued by
the General Services Administration for arrangement of passenger travel
for various federal agencies in the National Capital Region. The
protests generally concern evaluation procedures and criteria, with
allegations that certain criteria were not revealed to the offerors;
that other criteria were not followed; and that financial data was not
fairly evaluated. Additionally, the protests concern GSA's failure to
set aside the entire procurement for small business. For the following
reasons, we dismiss the protests.
On October 16, 1984, Omega World Travel Inc. filed an action in the
United States District Court for the District of Columbia, Omega World
Travel, Inc. v. Ray Kline et al. (Civil Action No. 84-3190), requesting
a temporary restraining order, preliminary injunction, and permanent
relief on five of the awards. Omega had previously filed bid protests
on this solicitation that we dismissed because the court had indicated
no interest in a decision by our Office. See Omega World Travel, Inc.,
B-216672, B-216673, Nov. 6, 1984, 84-2 C.P.D. Paragraph 505. The court
has now denied Omega's request for a temporary restraining order and
preliminary injuction; the request for permanent relief is still
pending. On November 6, 1984, Omega moved to amend its complaint and
add all remaining awards (except those to itself) to the lawsuit.
The Adams, Enzor, and Travelogue protests that are the subject of
this decision concern those awards included in Omega's amended
complaint, specifically line items B-1, B-2, B-4, B-8, B-11, B-14, B-15,
B-16, and B-17 of the solicitation. Each represents a different travel
agency site. The grounds of protest -- allegedly improper evaluation
procedures and criteria -- are identical or similar to these made by
Omega in the lawsuit. For example, both Omega and Adams complain that
GSA made awards on the basis of initial proposals, rather than
requesting best and final offers, and both Omega and Enzor complain that
GSA made awards before receiving requested financial data from them.
In our opinion, these contentions are effectively part of the
litigation, even though these protesters are not parties to it and their
protest details may vary from Omega's. Each protester requests possible
remedies that could result if the court were to find in favor of Omega.
Thus, as a practical matter, Omega's complaint in the court action puts
at issue the substance of Adams', Enzor's and Travelogue's protests.
See Nartron Corp. and D C Electronics, Inc., 53 Comp. Gen. 730 (1974),
74-1 C.P.D. Paragraph 154; Stirling Converting Co., Inc., B-215202.2,
July 3, 1984, 84-2 C.P.D. Paragraph 16; Big Bend Community Colege;
Central Texas Union Junior College, B-196278, B-196278.2, Apr. 23,
1980, 80-1 C.P.D. Paragraph 288. Under such circumstances, since the
court neither requests, expects, nor is interested in our decision, we
dismiss the protest. 4 C.F.R. Paragraph 21.10 (1984); Stirling
Converting Co., Inc., B-215202.2, supra, at 2.
In addition, we dismiss the protests against the failure to set aside
the procurement for small business. These contentions, which are not
before the court, are untimely filed with our Office under our Bid
Protest Procedures, since they deal with an alleged defect apparent on
the face of a solicitation, but were not raised until long after the
closing date for receipt of proposals. See 4 C.F.R. Section 21.2(b)(
1). In any event, we would not review protests on this basis because a
decision whether to set aside a particular procurement is essentially
within the discretion of the contracting officer, and, with certain
exceptions not applicable here, nothing in the Small Business Act or the
procurement regulations makes it mandatory to set aside any particular
procurement. FACE Associates, Inc., 63 Comp. Gen. 86 (1983), 83-2 CPD
Paragraph 643.
While we are still considering protests concerning items B-10, B-12,
and B-13, which were awarded to Omega (see B-216773.5, .10, and .11),
the protests of Adams, Enzor and Traveloque concerning items B-1, B-2,
B-4, B-8, B-11, B-14, B-15, B-16, and B-17 are dismissed.
Harry R. Van Cleve
General Counsel
FILE: B-216673.10; B-216673.11 85-1 CPD 399
DATE: April 8, 1985
MATTER OF: Travelogue, Inc.
CONTRACTS - PROTESTS - ABEYANCE PENDING - COURT ACTION - NO ALL
ISSUES PENDING
GAO dismisses protests alleging that certain line items of a
solicitation were not properly evaluated where the same broad issues
have been raised in a court action involving the same procurement, since
the selection process was completely integrated and the actions or
possible remedies of the court, which is not interested in GAO's
opinion, could affect the protested line items. The fact that the
protested items are not specifically before the court and protester is
not a party to the litigation does not change this result.
Travelogue, Inc. protests the General Services Administration's award
of line items B-12 and B-13 under solicitation No.
WFCG-E3-N-1137-8-1-84 to Omega World Travel, Inc. This procurement is
for the arrangement of passenger travel for various federal agencies in
the National Capitol Region. Each line item represents a different
travel agency site.
We dismiss the protests.
This procurement has been the subject of two earlier decisions of our
Office: Adams Associates Travel, Inc., et al., B-216673.2, et al., Feb.
1, 1985, 85-1 CPD Paragraph 124 and Omega World Travel, Inc., B-216672,
B-216673, Nov. 6, 1984, 84-2 CPD Paragraph 508. In these, we dismissed
protests by a number of firms, including Omega and Travelogue, against
the award of other line items under this procurement because Omega had
filed an action in the United States District Court for the District of
Columbia, Omega World Travel, Inc. v. Ray Kline et al., Civil Action
No. 84-3190, requesting a temporary restraining order, preliminary
injunction, and permanent relief. This action is still pending, and the
court has expressed no interest in our opinion.
This dismissed protests concerned the evaluation procedures and
criteria for this procurement, with allegations identical or similar to
Omega's contentions in the court action. We held that the protest
contentions and the requested possible remedies were effectively part of
the Omega litigation, even for the protesters, who were not parties to
it. Consequently, Omega's complaint in the court action put at issue
the substance of those protests.
Travelogue's protests here concern line item awards to Omega that are
not specifically before the court. Travelogue makes two basic
contentions as to why these awards to Omega are improper. First,
Travelogue contends that only one technical score was given to the
entire proposal of each offeror, although the solicitation had indicated
that line items would be individually scored. Second, Travelogue
contends that an undisclosed evaluation factor was used, in that
additional points were awarded if an offeror listed accounts of $50,000
or more that it had serviced for longer than 3 years. Travelogue
asserts that the solicitation did not indicate that the age of accounts
would be considered in calculating offerors' capabilities, and in fact,
offerors were limited by the solicitation to proposing only their eight
largest accounts regardless of age. Travelogue contends that if it had
been apprised that the age of the accounts was to be evaluated, it could
have listed others valued at more than $50,000 that would have earned
additional points.
The record indicates that offerors indeed received single scores
regardless of the number of line items, i.e., travel agency sites, that
they proposed to serve. Under the solicitation they were asked to
designate which line items they were interested in performing; many
offerors only proposed some. GSA then reviewed the financial
capabilities of the offerors receiving the highest scores to ascertain
how many and which of the line items they should be awarded, and made
multiple awards. Omega challenged most of these in the court action.
Travelogue's first contention regarding the single scoring of
proposals for all line items has been specifically raised by Omega in
the court action. Travelogue's second contention regarding the scoring
of proposals based upon the period of time offerors have serviced
accounts of $50,000 or more apparently has not been specifically raised
in the court action. However, Omega does generally assert the broader
issues in the court action, i.e., that GSA did not adhere to the
evaluation criteria specified in the solicitation and used unstated
criteria in evaluating proposals.
In our opinion, the selection process that led to the award of line
items B-12 and B-13 to Omega is completely integrated with the awards
currently being challenged in the court action. Moreover, the protest
contentions of Travelogue are, in one case, identical and, in the other,
similar to the issues raised in the court action. Consequently, we
believe that whatever action or possible remedy that could be ordered by
the court could also affect the awards to Omega, even though the line
items protested by Travelogue are not specifically before the court and
Travelogue is not a party to the court action. Under the circumstances,
we conclude that, as a practical matter, Omega's complaint in the court
action puts at issue the substance of Travelogue's protests. See
Stirling Converting Co., Inc., B-215202.2, July 3, 1984, 84-2 CPD
Paragraph 16.
Therefore, since the court neither requests, expects, or is
interested in our decision, we dismiss the protests. Adams & Associates
Travel, Inc., et al., supra.
Ronald Berger
Deputy Associate
General Counsel
B-216672, B-216673, Nov 6, 1984, 84-2 CPD 508
CONTRACTS - Protests - Court Action - Protest dismissed
DIGEST:
Protest is dismissed where material issues are before court of
competent jurisdiction, judicial relief pending decision by this Office
has not been requested, and the court has not expressed interest in
receiving GAO's views.
On October 3, 1984, Omega World Travel, Inc. (Omega), protested
various awards under solicitation No. WFCG-E3-N-1137-8-1-84, issued by
the General Services Administration for arrangement of passenger
transportation for various agencies.
On October 16, 1984, Omega filed an action in the United States
District Court for the District of Columbia (Civil Action No. 84-3190,
Omega World Travel, Inc. v. Ray Kline et al.) requesting a temporary
restraining order, preliminary injunction and permanent relief on a
number of awards under the same solicitation, including those protested
to this Office.
The court's resolution of the issues before it will control the
resolution of the protests since the issues are the same. It is our
Office's policy not to consider protests where the material issues are
before a court of competent jurisdiction unless the court requests,
expects or otherwise expresses an interest in our decision. Omega has
not requested judicial relief pending a decision by our Office and the
court, having denied the request for temporary restraining order, has
indicated no interest in our decision.
The protest is dismissed. Harris Data Communications, B-210521, Mar.
22, 1983, 83-1 C.P.D. Para. 291. COMP GEN (UP)
FILE: B-216671.2 84-2 CPD 623
DATE: December 4, 1984
MATTER OF: Scott Fishman Company-- Request for Reconsideration
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
GAO sill deny a request for reconsideration where no new facts or
legal arguments are raised which show that a prior decision was
erroneous.
Scott Fishman Company requests reconsideration of our decision in
Scott Fishman Company, B-216671, Oct. 19, 1984, 84-2 CPD Paragraph . .
. , dismissing a protest against the award of a contract under
solicitation No. GS-03F-40156, issued by the General Services
Administration. We deny the request for reconsideration.
The solicitation called for the installation of a card access and
alarm system in a federal office building in Baltimore, Maryland. In
our prior decision we declined to consider Scott Fischman's protest that
GSA's specifications were unduly restrictive because the protest had not
been filed before the time set for receipt of initial proposals. In its
reconsideration request, the protester contends that it did not have a
reasonable opportunity to protest before this deadline.
The solicitation was issued August 27, 1984 and notice of it was
published in the Commerce Business Daily (CBD) on September 15, 1984.
The closing date for receipt of proposals was published in the CBD as
September 16 but was twice extended by amendment, first until September
21, and then until September 28. Scott Fischman argues that it should
have been given additional time to inspect the contract site and
discover that the specifications were "ambiguous, improper, and
illegal."
While our Bid Protest Procedures generally envision consideration of
protest when they are filed with our Office or the contracting agency
within 10 working days after the basis for them is known or should have
been known, whichever is earlier, 4 C.F.R. Section 21.2(a) (1984), if
the protest concerns an alleged impropriety in a solicitation, it must
be filed before bid opening or the time set for receipt of initial
proposals. 4 C.F.R. Section 21.2(b)(1).
As noted above, the solicitation was published in the September 15,
1984 issue of the CBD. The protester states that upon its receipt of
that CBD issue on September 19, IT contacted the contracting officer,
learned that the closing date had been extended to September 21,
arranged for special messenger pickup of the solicitation, and submitted
its proposal on September 21. Subsequently, on September 26, Scott
Fishman learned that the closing date had been extended to September 28.
According to the protester, its technicians then visited the work site
and discovered that the specifications were defective.
We remain of the view that the protest is untimely. The protester
obviously had an opportunity to file a protest with either the agency
(which would have accepted an oral protest, see Federal Acquisition
Regulation, Section 14.407-8, 48 Fed. Reg. 42102, 42183 (to be codified
at 48 C.F.R. Section 14.407-8)) or this Office prior to the time set for
closing on September 28. The protester did not do so, however, and has
offered no explanation as to why it could not have done so. Therefore,
as our prior decision held, Scott Fischman's protest of the
specifications, filed on October 3, 1984, is untimely.
Scott Fischman further contends that even if its protest is untimely,
it should be considered under our "significant issue" exception. In
order to invoke this exception, the subject matter of the protest not
only must evidence a matter of widespread interest or importance to the
procurement community, but also must involve a matter that has not been
considered on the merits in previous decisions. Sequoia Pacific Corp.,
B-199583, Jan. 7, 1981, 81-1 CPD Paragraph 13. We construe this
exception strictly and use it sparingly to prevent our timeliness rules
from being rendered meaningless. The protest here does not fall within
the exception, since the issue of allegedly restrictive specifications
has been the subject of a number of decisions, for example, Amray, Inc.,
B-208308, Jan. 17, 1983, 83-1 CPD Paragraph 43.
We deny the request for reconsideration.
Comptroller General of the United States
B-216671, Oct 19, 1984, 84-2 CPD 426
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Solicitation improprieties - Apparent prior to
bid opening/closing date for proposals
DIGEST:
Protest that a solicitation contained improprieties is dismissed as
untimely because it was not file prior to the time set for receipt of
proposals.
Scott Fishman Company:
Scott FIshman Company (Scott) protests the award of a contract to any
company other than itself under solicitation No. GS-03F-40156, issued by
the General Services Administration (GSA) for the installation of a card
access and alarm system in a federal office building in Baltimore,
Maryland. Scott asserts that the specifications are unduly restrictive
and that it is "the low bidder" and entitled to award. We find the
protest to be untimely.
The closing date for receipt of proposals was September 28, 1984.
Scott did not protest, however, until October 3. Under our Bid protest
Procedures, 4 C.F.R. sec 21.2(b)(1) (1984), a protest against alleged
improprieties in a solicitation must be filed prior to the time set for
receipt of proposals. Thus, the protest of the specifications filed
here on October 3 is untimely.
With respect to Scott's assertion that it is entitled to award, Scott
does not indicate that in fact its offer has been rejected. We assume
from the nature of the protest, however, that Scott believes the offer
will be rejected because its system does not meet the specifications
even though Scott believes its equipment will satisfy the agency's
needs. The simple answer to that concern is that offers, to be
accepted, must be consistent with the specifications. As indicated
above, any objection Scott has to the specifications should have been
raised prior to the deadline for receipt of proposals.
The protest is dismissed. COMP GEN (UP)
FILE: B-216670
DATE: December 13, 1984
TRANSPORTATION - PASSENGER - OTHER THAN GOVERNMENT PERSONNEL -
AUTHORITY
Transportation provided Vatican Ambassador to the United States in
military aircraft following meeting with the President did not violate
31 U.S.C. 13344(a) which requires that Government aircraft be used only
for official purpose. Separation of church and state was violated
because religious affiliation of Ambassador was not relevant.
The Honorable John W. Warner
United States Senator
805 Federal Building
200 Granby Mall
Norfolk, Virginia 23510
Dear Senator Warner:
This is in response to your September 24, 1984, letter transmitting
an August 29, 1984, letter from your constituent, Dr. Franklin T.
Fowler. Dr. Fowler protests the use of appropriated funds to fly the
Vatican Pro-Nuncio in the United States, the Archbishop Pio Laghi, from
Santa Barbara, California, to St. Thomas in the Virgin Islands to attend
a religious ceremony following a meeting with the President on August 1,
1984. As set forth below, we conclude that the actions of the Executive
Branch in providing air transportation to the Pro-Nuncio in these
circumstances were not legally objectionable.
To assist us in resolving this case, we have sought and received the
enclosed comments from the Counsel to the President. The Counsel
informed us that the President invited the Pro-Nuncio, who is the
Ambassador from the Vatican to the United States, to meet with him in
California to discuss developments in Poland. The Pro-Nuncio apparently
could not have met with the President unless he were assured that he
would be able to keep the prior commitment in the Virgin Islands the
following day. Therefore, according to the Counsel to the President,
the Department of State recommended that Government transportation be
provided.
Your constituent was particularly concerned that the transportation
provided to the Pro-Nuncio, who is a religious functionary as well as
Vatican Ambassador to the United States, in order for him to attend a
religious ceremony, violated the constitutionally-mandated separation of
church and state. We do not agree.
The decision to provide transportation to Archbishop Laghi was
apparently based not on his religious status, but rather on his
officially-recognized status as Ambassador to the United States from a
foreign government, a government which has "highly informed views" about
the situation in Poland, according to the Counsel to the President. He
also informed us that the "same decision would have been made, in
parallel circumstances, for any other foreign ambassador." Similarly,
there is no indication that the religious nature of the Pro-Nuncio's
ultimate destination was in any way a motivating factor in the decision
to provide him transportation. Therefore, we do not think that the
questioned transportation violated the Constitution, although, of
course, such determinations can only be made authoritatively by the
judiciary.
Section 1344(a) of Title 31 of the United States Code requires that
Government aircraft be used only for an "official purpose." Section
1301(a) of Title 31 requires that appropriations "be applied only to the
objects for which the appropriations were made except as otherwise
provided by law."
Based on the Counsel's description of the facts, and the President's
broad authority to manage the conduct of foreign affairs, we cannot
conclude that the transportation of the Pro-Nuncio was not for an
"official purpose;" that is, it was provided for an official reason.
However, we are unaware of any specific appropriation, or other
statutory authority that supports the transportation in question, nor
did the Counsel to the President cite a specific appropriation in
response to our inquiry. Nonetheless, as the Counsel points out, the
transportation of representatives of foreign nations is a common
practice in the day-to-day conduct of American foreign relations. The
provision of such transportation has evidently been a long-standing
practice of the Defense and State Departments. See, e.g., DOD Use of
Official Representation Funds to Entertain Foreign Dignitaries, GAO/
ID-83-7, B-208137, December 29, 1982. Accordingly, in our view, it
would be inappropriate for this Office to challenge this long-standing
practice. Rather, any change in existing practice, if desirable, should
come as a consequence of congressional action.
We hope that we have been of assistance. Unless we hear otherwise
from your office, this letter will be available for release to the
public 30 days from today.
Sincerely yours,
Comptroller General of the United States
Enclosure
FILE: B-216667 85-1 CPD 57U4
DATE: January 18, 1985
MATTER OF: Minority Enterprises, Inc.
DIGEST:
BONDS - BID - FAILURE TO FURNISH - BID NONRESPONSIVE
Where bid bond, required to be submitted by invitation for bids, does
not designate a surety and only indications of identity of surety are an
illegible signature and corporate seal, and accompanying documents do
not clearly relate to this procurement, the agency properly determined
the bond to be defective and the bid nonresponsive, because it is not
clear that a surety intends to be bound.
Minority Enterprises, Inc. (MEI), protests the award of a contract to
any one other than itself under invitation for bids (IFB) No.
DACA31-84-B-0118, issued by the U.S. Army Corps of Engineers for removal
of asbestos from the kitchen and the mechanical rooms at the Dewitt Army
Community Hospital, Fort Belvoir, Virginia. MEI contends that the Corps
improperly rejected its low bid on the basis that its bid bond was
defective.
We deny the protest.
The IFB required each bidder to submit with its bid a bid bond
(Standard Form 24) in the amount of 20 percent of its total bid price or
$3 million, whichever was less. The bid bond penalty amount could be
expressed either in dollars and cents or as a percentage of the total
bid price.
The Corps received four bids, one of which was withdrawn due to a
mistake in bid. MEI's bid was the lowest of the remaining bids. Its
bid was accompanied by a bid bond which at the top of the form
identified MEI as the principal, but the space provided immediately
below that for the name and business address of the surety(ies) was left
blank. The bond indicated that the penal amount was 20 percent of the
bid price and was not to exceed $100,000. The bond was signed on behalf
of the principal by David Giuliani, who was identified as "President."
The space for the signature of individual sureties was left blank. In
the space for the signature of corporate surety there was a signature,
but it was illegible and the spaces provided for name and address, state
of incorporation, liability limit, and typed name and title of the
person signing were all left blank. In the adjoining space for a
corporate seal there was a barely raised impression which was also
illegible. Attached to MEI's bid bond was a Union Indemnity Insurance
Company of New York (Union) power of attorney form, appointing several
individuals as attorney(s)-in-fact with the authority to sign bonds not
exceeding $600,000 on behalf of Union, and a financial statement of
Union. The power of attorney form, a photocopy, included a space in the
upper right corner for designating a bond number, but there was no
number provided and, according to the agency, it appeared that a number
had been deleted, perhaps by correction fluid, from that space.
The Corps determined that the bid bond was defective because there
was insufficient evidence on the face of the bond to conclude with
certainty that the surety intended to be bound for 20 percent of MEI's
bid price as required by the solicitation's bid bond provisions. The
Corps therefore rejected MEI's bid as nonresponsive.
MEI contends that, despite its failure to include the name of Union
as its surety on the bid bond form, Union would in fact be liable on the
bond as written since it was the manifest intent of the surety to be
bound. In support of this contention, the protester asserts that the
bond submitted was executed by Robert A. Nicosia on behalf of Union and,
although Union's name did not appear on the bid bond form, the attached
power of attorney form and financial statement were from Union and,
therefore, the name of the surety should have been obvious. It asserts
that the failure to include the name of the surety on the form is a
minor informality.
MEI also contends that under a previous solicitation, IFB NO.
DACA31-84-B-0096, the Corps accepted a bond with a similar deficiency
after obtaining information from the surety and, therefore, should do
similarly here. MEI offers a letter from its bonding company which
confirms that Union was erroneously omitted as MEI's surety and coverage
with Union was effective as of the bid date.
When required by the IFB, a bid bond is a material part of a bid and,
therefore, must be furnished with the bid. Baucom Janitorial Service,
Inc., B-206353, Apr. 19, 1982, 82-1 C.P.D. Paragraph 356. To view the
bid bond requirement otherwise, so as 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. See Edw. Kocharian & Company, Inc. -- request for
modification, 58 Comp. Gen. 516 (1979), 79-1 C.P.D. Paragraph 326. When
a bidder supplies a defective bond, the bid itself is rendered defective
and must be rejected as nonresponsive. Atlas Contractors, Inc.,
B-209446, Mar. 24, 1983, 83-1 C.P.D. Paragraph 303, reversed on other
grounds sub nom. Hancon Associates -- Request for Reconsideration,
B-209446.2, Apr. 29, 1983, 83-1 C.P.D. Paragraph 460. The determinative
question as to the acceptability of a bid bond is whether the bidding
documents establish that the bond could be enforced if the bidder did
not execute the contract. A.D. Roe Company, Inc., 54 Comp. Gen. 271
(1974), 74-2 C.P. D. Paragraph 194.
In this case, reading all of the bid documents together, we believe
the bid bond did not sufficiently indicate the intent of the surety to
be bound by its terms. The spaces provided for designating a surety on
the bid bond were left blank and the only indications of the identity of
the surety were the illegible signature of a corporate surety and the
illegible corporate seal. The bid bond itself therefore did not
indentify the surety. Although a Union power of attorney form was
attached to the bid, nowhere on the power of attorney form is there a
reference to the particular procurement in question here. Rather, the
power of attorney is a blank conferral of agency on the persons
designated. We cannot conclude that the attachment of this form would
result in the company being bound under the bond, in the absence of any
evidence on the face of the bond which shows that Union intended to act
as surety for the bid. See Baker-Roberts, Inc., B-213148, Feb. 14,
1984, 84-1 C.P.D. Paragraph 195. Furthermore, there is no indication
that the attached financial statement relates to this procurement.
Under these circumstances, the agency properly rejected the protester's
bid on the basis of an inadequate bid bond.
Although MEI submitted a letter from its bonding company affirming
Union's intent to act as surety for the bid, this letter, coming as it
did after bid opening, cannot be considered in determining whether the
bond as submitted is responsive to the solicitation. See Emerald
Electric, B-212460, Oct. 26, 1983, 83-2 C.P.D. Paragraph 505. It is a
well-settled rule that a nonresponsive bid cannot be made responsive
after bid opening through a change or explanation of what was intended.
Baucom Janitorial, Service, Inc., supra.
Finally, the Corps is not estopped by its admitted prior erroneous
actions from rejecting MEI's instant bid as nonresponsive. Emerald
Electric, supra. The bid bond requirements have the force and effect of
law and the Corps is legally bound to reject MEI's bid as nonresponsive.
Comptroller General of the United States
FILE: B-216665 84-2 CPD 677
DATE: December 17, 1984
MATTER OF: Oakwood Industries
CONTRACTS - PROTESTS - CONFLICT IN STATEMENTS OF PROTESTOR AND
CONTRACTING AGENCY
Protester's proposal was properly rejected as late where protester's
evidence of timely submission is in conflict with time/date stamp of
constracting agency, and protester fails to meet any of the conditions
for acceptance of a late proposal under the RFP's late proposal clause.
Oakwood Industries (Oakwood) protests the refusal of the United
States Department of State (State) to consider its proposal under
request for proposals (RFP) No. 1722-420155 for various professional
services relating to East Asian studies. Oakwood maintains that its
proposal was incorrectly considered a late proposal. Because Oakwood
has failed to show that its proposal was submitted on time, or in the
alternative, that it met one of the recognized exceptions for the
consideration of late proposals, the protest is denied.
Proposals were required to be submitted to State's Contracts Branch
in Arlington, Virginia, by 3:00 p.m. on September 14, 1984. On
September 13, 1984, Oakwood dispatched its proposal by United States
Postal Service Express Mail. The Express Mail label indicates that the
package was delivered the next day, September 14, at "6:11" to the State
mailroom.
Oakwood maintains that Express Mail officially uses military time,
and that under that convention, the 6:11 should be read as 6:11 a.m.
The mailroom's time/date stamp reads "P6:15," 3 hours after the 3:00 p.
m. bid opening. Oakwood further points out that a handwritten notation
on the package appearing to read "received 15 9/14/84" indicates its
package was on time, presumably because 3 p.m. would be expressed as
1500 military time. Finally, Oakwood argues in the alternative that if
its package was actually late, State's mailroom clerk erred in accepting
it marked with a 6:11 delivery time because the Express Mail carrier
should have written 1811 under the military time convention.
The late proposal clause prescribed by section 52.215-10 of the
Federal Acquisition Regulation, 48 Fed. Reg. 41,102, 42,504-505 (1983)
(to be codified at 48 C.F.R. Section 52.215-10), was incorporated by
reference in the RFP and provides:
"(e) The only acceptable evidence to establish the time of
receipt at the Government installation is the time/date stamp of
that installation on the proposal wrapper or other documentary
evidence of receipt maintained by the installation."
State's time/date stamp shows the package was received at 6:15 p.m.
The Express Mail delivery label states only 6:11, without a.m. or p.m.
The other handwritten marking noted by Oakwood, "received 15 9/14/84,"
as documentary evidence maintained by the installation, is ambiguous.
Our inspection of the copy of the proposal package shows other markings
preceding the 15 which evidence that the 15 is probably 6:15, consistent
with State's time/date stamp. In any event, Oakwood's evidence of
timely submission is in conflict with that of State's time/ date stamp.
In cases of conflicting evidence regarding timely submission we have
consistently held that the protester has not met its burden of
affirmatively proving that its proposal was timely. United Baeton
International, B-200721, Feb. 2, 1981, 81-1 CPD Paragraph 59.
Under the RFP, there are three limited instances in which a late
proposal will be considered, and none of the three exceptions is
applicable here. In this regard, (1) the proposal was not sent by
registered or certified mail by the fifth calendar day before the
closing date; (2) it was not the only proposal received; and (3)
Oakwood cannot establish timely receipt at the installation, and
accordingly we need not discuss the issue of government mishandling
after receipt at the installation. We find State acted properly in not
considering Oakwood's late proposal. The protest is denied.
Comptroller General of the United States
B-216659, Oct 15, 1984, 84-2 CPD 409
CONTRACTORS - Responsibility - Determination - Review by GAO -
Affirmative finding accepted
DIGEST:
Assertion that a competitor cannot meet the specifications or the
delivery schedules is a challenge to a determination that the competitor
is responsible. GAO does not review such determinations except in
circumstances not present here.
Fluid Systems Division, UOP Inc.:
Fluid Systems Division, UOP Inc., protests award of a contract to
another company under request for proposals No. DAAJ10-84-R-046 issued
by the Department of the Army. Fluid states that it is the only company
that can meet the specifications and the delivery schedules.
The protest represents a challenge to the responsibility of the
awardee. Responsibility determinations reflect the subjective business
judgment of contracting officials, and for that reason we do not
consider protests against an affirmative responsibility determination
unless there is a showing of possible fraud or bad faith on the part of
contracting officials or of a possible failure of contracting officials
to properly apply definitive criteria contained in the solicitation
against which responsibility was to be determined. The Raymond Corp.,
B-215282, May 29, 1984, 84-1 CPD para. 583. Neither exception applies
here.
The protest is dismissed. COMP GEN (UP)
FILE: B-216652
DATE: May 6, 1985
MATTER OF: Samuel Evans
DIGEST:
OFFICERS AND EMPLOYEES - TRANSFERS - GOVERNMENT V. EMPLOYEE INTEREST
RELOCATION EXPENSES REIMBURSEMENT - ADMINISTRATIVE DETERMINATION -
PROPRIETY
An employee is not entitled to relocation expenses when his transfer
is not in the interest of the Government. The rule that when an
employee is transferred under a merit promotion plan he should normally
be allowed relocation expenses is not applicable when the transfer is to
a position at the same grade level without known promotion potential, if
the employee is not otherwise recruited for the position at the new duty
station even though selection may have been on a competitive basis. In
this case the agency decided that the transfer was not in the interest
of the Government, even though the employee was competitively selected
from a list of qualified eligibles furnished by the Office of Personnel
Management. In the circumstance the determination of the agency is not
overruled.
Mr. Samuel Evans, an employee of the Veterans Administration, is not
entitled to relocation expenses incident to his transfer from Fort
Riley, Kansas, to Dallas, Texas, in August 1984. /1/ The transfer was
primarily for his own convenience or benefit rather than primarily in
the Government's interest, since he transferred laterally to a position
in the same grade with no greater promotion potential and he was not
recruited under a merit promotion plan.
An employee is entitled to relocation expenses only if the agency
determines that the transfer is in the interest of the Government and
not primarily for the convenience or benefit of the employee. 5 U.S.C.
Sections 5724(a) and (h). Federal Travel Regulations, para. 2-1.3
(Supp. 1, September 28, 1982), incorp. by ref., 41 C.F.R. Section
101-7.003 (1984).
Unless agency regulations otherwise limit relocation expenses, an
employee who transfers upon his selection under a merit promotion plan
is considered to have been recruited for the position so that his
transfer is in the interest of the Government. Eugene R. Platt, 59
Comp. Gen. 699 (1980), reconsidered 61 Comp. Gen. 156 (1981). On the
other hand, employees often transfer to a position at the same grade as
their previous position without greater promotion potential (lateral
transfer). In such cases the agency must determine, based on the facts
involved, whether the transfer is primarily in the interest of the
Government or is primarily for the employee's benefit or at his request.
We will not substitute our judgment for that of the agency except in
cases where the agency action is clearly erroneous, arbitrary, or
capricious. Julie-Anna T. Tom, B-206011, May 3, 1982. When a lateral
transfer or demotion is involved and the employee is not selected under
a merit promotion plan, if there is no recruitment action resulting in a
transfer for the Government's interest, the transfer may be considered
primarily in the interest of the employee even though the employee
responds to a job vacancy announcement and is competitively selected.
Norman C. Girard, B-199943, August 4, 1981; also, Julie-Anna T. Tom,
B-206011, supra, Curtis E. Jackson, B-210192, May 31, 1983.
It appears that Mr. Evans was competitively selected from a list of
qualified eligibles provided by the Office of Personnel Management.
This selection did not necessarily result in a transfer primarily for
the benefit of the Government. When the individual has applied for a
transfer for personal reasons this may be considered to control the
outcome rather than the Government's need to fill a position. In this
case Mr. Evans responded to an offer of a position at the same grade he
held without the new position having a known promotion potential. The
agency made it clear from the beginning that the offer of the position
was on the condition that no transfer expenses would be paid. In other
words they had determined that the transfer was primarily for the
employee's benefit. Mr. Evans accepted the position knowing that this
determination had been made.
In the circumstances we will not substitute our judgment for that of
the agency. Accordingly, Mr. Evans may not be reimbursed relocation
expenses.
Comptroller General
Of the United States
(1) Mr. C. Wayne Hawkins, Medical Center Director, Veterans
Administration, Dallas, Texas, requested this advance decision.
FILE: B-216651 85-1 CPD 178
DATE: February 11, 1985
MATTER OF: Sooner Defense of Florida, Inc.
DIGEST:
CONTRACTS - NEGOTIATION - NATIONAL EMERGENCY AUTHORITY - EXPANSION OF
MOBILIZATION BASE
1. Participation in an Industrial Mobilization Base does not
guarantee award of any of an agency's current requirements.
CONTRACTS - NEGOTIATION - SOLE-SOURCE BASIS - DELIVERY CAPABILITY
2. Award of a sole-source contract is justified when there is only
one producer which can meet the government's delivery schedule
requirements.
Sooner Defense of Floriday, Inc. (Sooner) protests the modification
of an existing Honeywell, Inc. contract (No. DAAA09-84-G-0022/00101)
with the Army for M758 ammunition fuzes which substantially increased
the quantity of fuzes to be acquired under the contract. We deny the
protest.
Sooner and Honeywell are both listed by the Department of the Army as
Industrial Mobilization Base producers of the M758 fuze. Honeywell
designed the fuze and has always been a producer. The Army is
developing Sooner as a second source. To that end, the Army issued a
contract to Sooner in February 1983 for 300,000 fuzes. The balance of
the fiscal year (FY) 1983 requirement and a small initial quantity of
the FY 1984 requirement were later awarded to Honeywell. In September
1984, the Army modified Honeywell's contract to provide for an
additional 1,058,256 fuzes. In effect, the Army has procured its entire
FY 1984 requirement of 1,272,588 fuzes from Honeywell on a sole-source
basis.
The Army takes the position that its delivery schedule dictated the
award of the entire FY 1984 requirement to Honeywell. The Army argues
that the delivery schedule was critical because the fuze is supplied as
government furnished material (GFM) to ammunition producers and that
stocks of the fuzes were depleted which caused the Army to be late in
furnishing GFM to those producers. The Army contends that Sooner was
experiencing performance problems under its FY 1983 contract, causing it
to be delinquent under that contract. Therefore, in the Army's opinion,
Sooner was not a viable source to meet the Army's critical delivery
schedule.
Sooner attributes its problems under its FY 1983 contract to
allegedly defective Army-furnished specifications. The thrust of this
argument appears to be that, but for the problems caused by the
government's defective specifications, Sooner would have been successful
under its FY 1983 contract. In substance, Sooner contends that the
sole-source to Honeywell could not be justified Since there would have
been two known sources were it not for the Army's own defective
specifications. In addition, Sooner points out that it costs the
government more to procure the entire FY 1984 requirement from Honeywell
since the Honeywell price is approximately 25 percent higher than
Sooner's. Sooner also argues that a part of the FY 1984 fuze
requirement should have been awarded to it because it is an Industrial
Mobilization Base producer of the fuze and it needs the award to
maintain an active production line.
We have held that an entire fiscal year requirement can be awarded to
one of several Industrial Mobilization Base producers regardless of the
impact on dormant producers. See National Presto Industries, Inc.,
B-195679, Dec. 19, 1979, 79-2 CPD Paragraph 418. Although sole-source
procurements are subject to close scrutiny, we will not object to a
sole-source unless it is shown that the agency acted without a
reasonable basis. A sole-source award is justified where time is of the
essence and only one known source can meet the government's needs within
the required time. S.A.F.E. Export Corp., B-207722.2. Apr. 5, 1983,
83-1 CPD Paragraph 358.
We conclude that the Army reasonably determined that a sole-source
award to Honeywell was justified. The protester does not contest the
Army's position that the fuzes were urgently needed to support the
Army's obligation to the ammunition producers. At the time the decision
was made to procure the entire FY 1984 requirement from Honeywell,
Sooner had not demonstrated to the Army that it could successfully
produce the fuzes, regardless of the reasons for the failure, which had
been neither identified nor resolved at that time. We note that this
question is presently the subject of a disputes proceeding. Given the
uncertainty about Sooner's ability to perform at the time the decision
was made, the Army acted reasonably in procuring this urgent requirement
from Honeywell on a sole-source basis. See Introl Corp., B-210321, June
1, 1983, 83-1 CPD Paragraph 591.
The protest is denied.
Comptroller General
of the United States
B-216650, Oct 19, 1984, 84-2 CPD 425
CONTRACTORS - Responsibility - Determination - Review by GAO -
Affirmative finding accepted
DIGEST:
1. GAO does not review an affirmative determination of
responsibility absent a showing of possible fraud or bad faith or
misapplication of definitive criteria against which responsibility is to
be determined.
CONTRACTS - Protests - Allegations - Vague
2. Protest allegation that "missing acknowledgement has far ranging
legal effects and is not a minor informality," without any
identification or what was not acknowledged or other factual statement
or explanation or why something other than a minor informality is
involved, is insufficient as a protest allegation which GAO will review.
Daniel Emergency Medical Services, Inc.:
Daniel Emergency Medical Services, Inc. (Daniel), protest the award
of a contract to another firm by the Veterans Administration under
solicitation No. 674-5-85.
The thrust of Daniel's protest is that the other firm should have
been found nonresponsible. Responsibility determinations are subjective
and are based essentially on business judgement. For that reason, we do
not review challenges to an affirmative responsibility determination
unless there is a showing of possible fraud or bad faith on the part of
contracting officials or of possible failure to apply definitive
criteria contained in the solicitation against which responsibility was
to be determined. Northern Arizona Gas Service, Inc., B-216440, Sept.
24, 1984, 84-2 CPD para. --- . Neither exception applies here.
The protester also states that "the missing acknowledgment has far
ranging legal effects and is not a minor informality." The protester,
however, does not identify the contents of what has not been
acknowledged nor explain why something other than a minor informality is
involved. This protest statement does not provide us with any basis for
evaluating the protester's position, and we therefore will not threat it
as a reviewable basis for protest. See Alice Roofing, B-216277, Sept.
18, 1984, 84-2 CPD para. ---.
The protest is dismissed. COMP GEN (UP)
B-216648, Nov 8, 1984, 84-2 CPD 514
BIDDERS - Qualifications - License requirement - Lacking
DIGEST:
1. Evidence submitted does not support allegations of collusive or
noncompetitive bidding in violation of the Certification of Independent
Price Determination. If protester has additional, specific information,
it should be presented to the contracting officer for possible
forwarding to the Department of Justice in accordance with the Federal
Acquisition Regulation.
BIDS - Prices - Below cost - Not basis for precluding award
2. No basis exists to preclude a contract award merely because
bidders may have submitted below-cost bids. A below-cost bid presents a
question of the bidder's responsibility and GAO does not review
affirmative determinations of responsibility except in limited
circumstances.
CONTRACTS - Protests - Allegations - Unsubstantiated
3. Where solicitation does not require bidder to have a specific
license, allegation that low bidder does not possess the necessary state
operating authority to permit it to perform the trash collection
services required by the solicitation does not affect the eligibility of
the low bidder for award; rather, it raises a matter to be settled
between the contractor and state authorities, not federal officials.
CONTRACTS - Small business concerns - Size standards - Small Business
Adminstration's determination - Not subject to GAO review
4. Protest concerning bidder's qualification as a small business
concern is not for review by GAO since it is a matter for decision by
the Small Business Administration.
Northwest Recovery Systems, Inc.:
Northwest Recovery Systems, Inc. (Northwest), protests an award to
any other bidder under invitation for bids No. 505-10-85, a small
business set-aside, issued by the Veterans Administration Medical Center
at American Lake in Tacoma, Washington, for trash collection and
removal. Northwest alleges that the two other bidders which bid lower
prices than Northwest may have engaged in noncompetitive, collusive
bidding practices. Northwest questions whether Evergreen State Refuse
(Evergreen), the low bidder, can perform the contract requirements at
the price it bid. Northwest also alleges that Evergreen lacks state
operating authority necessary to perform the required hauling. Further,
Northwest contends that Lakewood Refuse Service, the second-low bidder,
is not a small business. Finally, Northwest requests that GAO
investigate the contracting practices of these companies.
We dismiss the protest in part and deny it in part.
Northwest argues that the pattern of bidding for this trash removal
work over the years, combined with the bids submitted this year suggests
illegal, noncompetitive bidding practices which violate the
solicitation's Certification of Independent Price Determination.
Northwest complains that in the past the VA was overcharged by certain
firms and now that Northwest is bidding for the contract, those firms
are bidding too low apparently in collusion.
To support the above contention, Northwest has submitted the abstrast
for bids for this year's procurement and for 1983. The abstrast for
1983 shows that Northwest and Lakewood submitted bids and Northwest was
low. The abstract for this procurement shows bids by Evergreen,
Lakewood and Northwest, with Evergreen being low. No other evidence has
been submitted to support Northwest's charge. We fail to see how this
evidence by itself proves collusive bidding and, therefore, deny this
aspect of the protest. However, if Northwest has specific evidence of
criminal conduct, it should be presented to the contracting officer for
possible forwarding to the Department of Justice in accord with Federal
Acquisition Regulation Sec. 3.303, 48 Fed.Reg. 42,102, 42,110 (1983) (to
be codified at 48 C.F.R. Sec. 3.303). See Medi Coach Inc., B-214034,
May 2, 1984, 84-1 C.P.D. Para. 501.
We will not consider the merits of Northwest's position questioning
Evergreen's ability to perform the work at the price it bid. The
submission of a below-cost bid is not illegal and provides no basis for
challenging the award of a government contract to a responsible
prospective contractor. TECOM Incorporated, B-215291, June 19, 1984,
84-1 C.P.D. Para. 644. Whether the low bidder can perform the contract
at the price bid is a matter of responsibility. Our Office does not
review protests concerning affirmative determinations of responsibility
absent a showing that the contracting officer acted fraudulently or in
bad faith or that definitive responsibility criteria in the solicitation
have not been met. TECOM Incorporated, B-215291, supra. Neither
exception is alleged here.
We similarly will not consider Northwest's allegation that Evergreen
lacks state operation authority. Compliance with applicable state and
local licensing requirements is generally a matter to be settled between
state or local authorities and contractors, not federal officials. See
G.I. Moving & Storage, B-212969, Oct. 3, 1983, 83-2 C. P.D. Para. 408.
We have held that the requirement for operating authority is properly a
matter of responsibility which we will not consider absent conditions
not present here. Lewis & Michael, Inc., B-215134, May 23, 1984, 84-1
C.P.D. Para. 565.
Northwest's final contention, that the second low bidder is not a
small business, is also not for our consideration. Since the second low
bidder is not in line for award, its status as a small business in
academic. In any event, under 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 procurement purposes.
Therefore, our Office does not consider size status protests. Tennier
Industries, Inc., B-215150, May 23, 1984, 84-1 C.P.D. Para. 566.
The protest is dismissed in part and denied in part. COMP GEN (UP)
FILE: B-216646 85-1 CPD 56
DATE: January 18, 1985
MATTER OF: Kisco Company Inc.
DIGEST:
CONTRACTS - NEGOTIATION - PRICES - BEST AND FINAL OFFER -
1. Request for second round of best and final offers is not
objectionable where valid reason exists for the action.
CONTRACTS - PROTESTS - ALLEGATIONS - SPECULATIVE
2. Mere speculation that agency improperly disclosed price
information to eventual successful offeror is rejected in the absence of
evidence of a price leak. GAO does not conduct investigations to
establish validity of such speculative statements.
Kisco Company, Inc., protests the award of a contract for metal boxes
to Ross Bicycles, Inc., under request for proposals (RFP) No.
DAAA09-84-R-0337, issued by the Army Armament, Munitions and Chemical
Command, Rock Island, Illinois. Kisco contends that the agency
improperly requested a second round of best and final offers based not
on agency needs, but rather on the desire to give Ross an opportunity to
lower its price, and thus constituted an auction. Kisco also contends
that the agency, in furtherance of this auction scheme, disclosed
competitive price information to Ross which resulted in the displacement
of Kisco as the low offeror. We deny the protest.
The solicitation, limited to mobilization base producers, was issued
on June 29, 1984. Following initial receipt of offers, the contracting
officer was notified on August 9 that additional quantities of the item
were required. On the following day, the contracting officer
telephonically notified the offerors of this change and subsequently
requested best and final offers by teletype for a quantity of 161,715
metal boxes (the initial quantity had been 76,954). The request for
best and final offers contained a revised delivery schedule and an
increase in the option quantity from 100 percent to 200 percent of the
basic quantity. Prior to the receipt of best and final offers, the
agency identified an additional requirement for 6,875 metal boxes. The
offerors were orally advised of this second change in requirements;
they indicated that they understood the revised quantity requirements.
Upon receipt of best and final offers on August 20, the protester was
evaluated as low. However, sometime between August 20 and 25,
representatives of Ross requested a meeting with the contracting officer
which was held on August 27. During this meeting, Ross pointed out to
the contracting officer that while the government had requested offers
for 161,715 (plus the second supplemental quantity for 6,875 items), the
sum of the individual quantities stated in the delivery schedule equaled
only 135,253. Subsequently, the contracting officer on August 28
determined that the schedule was incomplete and inaccurate and,
therefore, reopened negotiations by requesting a second round of best
and final offers. Ross thereafter submitted the low evaluated proposal,
displacing Kisco as the low offeror. This protest followed an award to
Ross.
Kisco contends that since all offerors, including Ross, were orally
informed of the actual quantity required, there was no rational basis
for the contracting officer to request a second round of best and final
offers which resulted from the meeting between Ross and the contracting
officer. In support of its position that an improper auction occurred,
Kisco also points to the "unusual pattern" of prices submitted by Ross
during the course of the procurement:
TABLE OMITTED
Kisco believes that the higher quantity reflected in the first round
of best and final offers should have elicited a lower, rather than a
higher, price from Ross. Kisco also states that the agency's failure to
initially identify the actual quantity required indicates either
ineptness or a "conscious effort to employ auction procedures."
It is well established that the protester has the burden of proving
its case. International Alliance of Sports Officials, B-211755, Jan.
25, 1984, 84-1 CPD Paragraph 117. We find no support in the record for
any of the protester's allegations. The question of whether an auction
has been conducted through the reopening of negotiations and the
submission of new best and final offers must be determined in the light
of the particular circumstances of each case. The fact that best and
final offers are requested more than once by the contracting agency does
not automatically establish the creation of an auction. System
Development Corporation and International Business Machines, B-204672,
Mar. 9, 1982, 82-1 CPD Paragraph 218. Further, we have upheld agency
determinations to request a second round of best and final offers when a
valid reason exists for the action. Sycor, Inc., B-185566, Apr. 27,
1976, 76-1 CPD Paragraph 284.
The Army denies that it either advised Ross of its competitive
position or conducted the procurement in a manner which gave Ross an
opportunity to lower its price. The contracting officer states that he
considered it prudent to request a second round of best and final offers
based on a complete and accurate delivery schedule for the full
quantity, apparently because he no longer wanted to rely solely on the
earlier oral notification given to offerors concerning the actual
quantity requirements. In this regard, our Office has held that any
oral notification of changed requirements should invariably be followed
by written notification. See Informatics, Inc. et. al., 56 Comp. Gen.
388 (1977), 77-1 CPD Paragraph 152. The contracting officer, by
requesting offers in writing based on the total current quantity, was
merely following this rule. The record thus does not support a finding
that the agency requested a second round of best and final offers merely
to give Ross a competitive advantage.
Kisco further suggests that the agency may have disclosed
competitors' prices to Ross since that firm, in its final offer, revised
its price downward just enough to displace Kisco. The agency denies
that any such disclosure occurred. Nonetheless, Kisco requests that we
conduct an investigation to determine whether its price was leaked.
However, we do not conduct investigations pursuant to our bid protest
function for the purpose of establishing the validity of a protester's
speculative statements. M & H Manufacturing Co., B-191950, Aug. 18,
1978, 78-2 CPD Paragraph 129. Further, the fact that the successful
offeror reduces its price in a best and final offer does not establish
that the protester's price has been revealed. See Nuclear Research
Corporation, B-189790, Feb. 22, 1978, 78-1 CPD Paragraph 147. In the
absence of more probative evidence, we must view the protester's
allegations as merely speculative and conclude that Kisco has not met
its burden of proof.
Next, Kisco alleges, based on a synopsis in the Commerce Business
Daily, that the agency improperly intends to exercise an option under
the awarded contract for more than twice the quantity contained in the
solicitation. The agency has advised our Office that the synopsis was
the result of a clerical error and that a subsequent synopsis for the
proper quantity has been published to correct the error. Further, our
review of the record indicates that the exercise of the option is within
the terms of the amended RFP under which the competition was conducted.
Finally, Kisco also complains that significant errors occurred in the
transportation evaluation factors used to evaluate offers under the
solicitation. However, since Kisco concedes that if the second round of
best and final offers was proper, these errors did not materially affect
the results of the evaluation, we see no reason to further consider the
matter.
The protest is denied.
Comptroller General of the United States
FILE: B-216645 85-1 CPD 218
DATE: February 21, 1985
MATTER OF: G. A. Braun, Incorporated
DIGEST:
BIDS - RESPONSIVENESS - BRAND NAME PROCUREMENT - COMPLIANCE
REQUIREMENTS
1. Bid proposing equal product in response to brand name or equal
solicitation is nonresponsive because it failed to include sufficient
descriptive data to establish that product met one of the salient
characteristics specified in the solicitation.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
2. Contention that a specification for brand name or equal product
unduly restricted competition will not be considered since it involves
an alleged defect apparent from the face of the solicitation and the
protest was not filed prior to bid opening as required 0y Bid Protest
Procedures.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
3. Protest allegation is untimely where basis for allegation could
have been discovered at time of award but protest was not filed until 3
months after award.
BIDS - COLLUSIVE BIDDING - ALLEGATIONS UNSUPPORTED BY EVIDENCE
4. Allegation of collusion among bidders offering brand name product
in brand name or equal procurement is denied where no specific evidence
is submitted to support allegation. However, if protester has specific
information it should be presented to the contracting officer for
possible forwarding to the Department of Justice in accordance with the
Federal Acquisition Regulation.
G. A. Braun, Incorporated (Braun), protests the rejection of its low
bid in response to invitation for bids (IFB) No. 279-84-0026B issued by
the Department of Health and Human Services (HHS) for a Jensen laundry
flatwork finishing system or equal.
We deny the protest in part and dismiss it in part.
Braun offered a Braun brand laundry flatwork finishing system as an
equal product. Braun's bid was rejected after HHS determined that the
descriptive data submitted with Braun's bid did not show that some of
the brand name equipment's salient characteristics listed in the IFB
would be met. For instance, HHS states that, based upon the information
contained in Braun's bid, the agency was unable to determine whether the
Braun system laundry folder included the required 2-bar static
eliminator characteristic. HHS also states that the Braun literature
failed to indicate that the Braun spreader feeder and ironer met the
required production capacity.
Braun argues that a transmittal letter, which the firm included with
its bid stating that its equipment meets or exceeds the solicitation
specifications, constitutes a firm commitment on the part of Braun to
supply equipment which meets the government's needs as specified in the
IFB. Braun maintains that such a commitment takes precedence over the
failure of its preprinted literature to provide certain information or
address some equipment features.
To be responsive to a brand name or equal solicitation, a bid
offering an equal product must contain sufficient descriptive literature
to permit the contracting activity to assess whether the product offered
possesses each salient characteristic specified in the solicitation.
Frontier Manufacturing Company, B-215288, Nov. 14, 1984, 84-2 C.P.D.
Paragraph 529. Thus, we have held that the responsiveness of an equal
bid depends on the completeness of the information submitted or
reasonably available. Frontier Manufacturing Company, B-215288, supra;
Schlegel Associates, Inc., B-213739, June 28, 1984, 84-1 C.P.D.
Paragraph 688; The Library Store, Ltd., B-213258, Feb. 9, 1984, 84-1
C.P.D. Paragraph 162.
In this connection, the IF contained the standard brand name or equal
clause cautioning that it was each bidder's responsibility to furnish
adequate information to permit an evaluation of the characteristics of
an equivalent product where a product other than the brand name was
offered.
Braun's bid falls short of establishing the equality of its product.
While Braun maintains that its product meets the solicitation
specifications, it is not enough that a bidder believes his product is
equal or makes a blanket statement in its bid, as here, that all salient
characteristics are met by its product. Frontier Manufacturing Company,
B-215288, supra. The descriptive data furnished with Braun's bid does
not specify that the Braun laundry folder offered has the required 2-bar
static eliminator. In fact, Braun's bid fails to include any
information whatsoever on a static eliminator. Therefore, we agree with
HHS that Braun's bid failed to include sufficient descriptive data to
establish that this salient characteristic would be met. Since Braun's
bid was nonresponsive on this basis, it is not necessary for us to
address any other basis on which Braun's bid may be nonresponsive.
Frontier Manufacturing Company, B-215288, supra.
Braun also alleges that, since its equipment is equal or superior to
the Jensen equipment, the requirement for equipment with "dimensions
unique" to the Jensen equipment unduly restricts competition.
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 Corporation,
B-215275, Sept. 17, 1984, 84-2 C.P.D. Paragraph 299. Here, the
solicitation clearly informed bidders of the Jensen equipment salient
characteristics which equal equipment was required to meet. Thus, to
the extent Braun is protesting that these specifications are
restrictive, Braun's protest concerning this matter, filed several
months after bid opening, is untimely and not for consideration on the
merits under section 21.2(b)(1) of our Bid Protest Procedures, 4 C.F.R.
Section 21.2(b)(1) (1984), which require that protests based upon
alleged improprieties apparent on the face of the solicitation be filed
prior to bid opening. Jensen Corporation, B-216746, Jan. 17, 1985, 85-1
C.P.D. Paragraph . . .; The E. A. Kinsey Company, B-211832, July 11,
1983, 83-2 C.P.D. Paragraph 75.
Next, Braun alleges that the Jensen (brand name) equipment literature
indicates that the Jensen Equipment fails to conform to a solicitation
specification. Braun, therefore, argues that all bids which included
the Jensen literature, including the bid of the awardee, Standard
Pressing Comapny (SPC), are nonresponsive.
This allegation is also untimely and not for our consideration on the
merits. This issue should have been diligently pursued upon Braun's
receipt of notification of award, but was not protested here until more
than 3 months after Braun received that notification. See Sierra
Pacific Airlines, B-205439, July 19, 1982, 82-2 C.P.D. Paragraph 54;
Resource Technology Services, Inc., B-204976, Mar. 17, 1982, 82-1 C.P.D.
Paragraph 254.
Finally, Braun alleges that the companies which offered Jensen
equipment for this procurement, including SPC and Jensen Corporation,
consulted with one another in arriving at their excessively high prices
in violation of the solicitation's certificate of independent price
determination. Braun's bid price was $135,495 while the prices for the
Jensen equipment ranged from $231,986 to $252,166. In support of its
allegation, Braun states that bid prices submitted by Jensen Corporation
under other recent solicitations for some of the same equipment procured
here were substantially lower than the prices Jensen Corporation bid
under this solicitation. Additionally, Braun states that Jensen
Corporation could have underbid it's supplier SPC, but questionably
failed to do so here. Braun also alleges that the Jensen equipment
suppliers other than SPC, who bid under this solicitation, generally do
not submit bids for contracts in the geographical area specified in the
IFB. Braun, therefore, requests that we investigate this matter.
While Braun alleges collusion on the part of certain bidders in
connection with the bidding on this solicitation, Braun has not provided
any specific evidence in support of its allegation and we therefore deny
this aspect of the protest. See Larrabee Logging Company, B-217007,
Dec. 13, 1984, 84-2 C.P.D. Paragraph 665. Further, under our bid
protest function, we do not conduct investigations for the purpose of
establishing the validity of a protester's assertions. Pluribus
Products, Inc. -- Reconsideration, B-214924.2, July 11, 1984, 84-2
C.P.D. Paragraph 42. However, if Braun has specific evidence of
criminal conduct, it should be presented to the contracting officer for
possible forwarding to the Department of Justice in accordance with the
Federal Acquisition Regulation, 48 C.F.R. Section 3.303 (1984). See
Larrabee Logging Company, B-217007, supra.
Comptroller General
of the United States
FILE: B-216644.3 85-1 CPD 79
DATE: January 22, 1985
MATTER OF: Communications Specialists Company, Inc. --
Reconsideration
CONTRACTS - PROTESTS - COURT ACTION - PROTEST DISMISSED -
Protest is dismissed where same issues before GAO are before court
and court has not requested GAO decision.
DIGEST:
Communications Specialists Company, Inc. (CSC), requests
reconsideration of our decision in Communications Specialists Company,
Inc., B-216644, Nov. 26, 1984, 84-2 C.P.D. Paragraph 558, which
dismissed CSC's protest on the grounds that we did not consider the
denial of a temporary restraining order, without prejudice to a
consideration of a request for a preliminary injunction pending a GAO
decision of its protest, as an expression of court interest in receiving
a GAO decision.
CSC contends that we should decide the protest on the merits
notwithstanding the suit in court. CSC states that the only relief
sought in the suit is injunctive relief pending our decision on the
merits of the protest and that the substantive issues raised in the
protest are not before the court. However, the Assistant United States
Attorney has since filed a motion that includes a request for summary
judgment on the same issues that are before our Office in the protest.
The court's resolution of the motion for summary judgment could control
the resolution of the protest. Accordingly, without the court's request
for our decision, we decline to consider the protest.
CSC has alleged that the court expects a GAO decision. We have
contacted the clerk of the court and been advised that no action has
been taken on CSC's petition that the court request a GAO decision.
Comptroller General of the United States
B-216644, Nov 26, 1984, 84-2 CPD 558
CONTRACTS - Protests - Abeyance pending court action
DIGEST:
Protest is dismissed: (1) where protester, after protesting to GAO,
files suit seeking preliminary injunction pending GAO decision, and (2)
where court has denied a temporary restraining order without prejudice
to request for preliminary injunction, since suit is still pending
before court and court has not expressed any interest in receiving a GAO
decision.
Communications Specialists Company, Inc.:
Communications Specialists Company, Inc. (CSC), protests the
consideration of a bid lower than CSC's bid because CSC's bid was the
apparent low bid at the August 28, 1984, bid opening of invitation for
bids No. M67001-84-B-0022 issued by the Marine Corps, Camp Lejeune,
North Carolina. CSC states that the lower bid was discovered on a
government employee's desk on the day of bid opening and that, at the
time of its discovery, it was not in a sealed envelope or package. CSC
claims that there is no record of what happened to the bid after it was
placed on the desk.
CSC initially protested to the Marine Corps, which awarded the
contract on October 1, 1984, notwithstanding the protest. CSC then
protested to GAO. CSC also filed suit in the United States District
Court for the Eastern District of North Carolina (Court) (Docket No.
84-92-CIV-7) on October 2, 1984, on essentially the same grounds as
asserted in its protest. CSC sought a preliminary injunction pending
our decision on the protest. By order dated October 15, 1984, the Court
denied an application for a temporary restraining order without
prejudice to further consideration of the CSC request for a preliminary
injunction.
The suit is still pending before the Court, and the Court's decision
would take precedence over a GAO decision on the protest. Nartron
Corp., et al., 53 Comp.Gen. 730 (1974), 74-1 C.P.D. Para. 154. Once a
suit is initiated, what is significant from our perspective is not the
protester/plaintiff's intentions, but the Court's. See CSA Reporting
Corporation, B-196545, Dec. 21, 1979, 79-2 C.P.D. Para. 432. It is our
policy not to render a decision where the matter is being litigated in
court unless the court request, expects or otherwise expresses an
interest in our decision. 4 C.F.R. Sec. 21.10 (1984). We do not
consider the denial of a temporary restraining order, without prejudice
to a consideration of a request for a preliminary injunction pending a
GAO decision, as such an expression of interest.
We dismiss the protest. COMP GEN (UP)
FILE: B-216643 85-1 CPD 598
DATE: May 24, 1985
MATTER OF: Arthur Young & Company
DIGEST:
CONTRACTS - NEGOTIATION - COMPETITION - EQUALITY OF COMPETITION
1. Where agency, concerned that competitors for a cost reimbursement
negotiated contract were "buying in," amended solicitation to specify
"170,000 professional hours required," then whether proposed use of
bookkeepers satisfied the requirement was not merely a matter of
contract administration which could be ignored in evaluating offers,
since offerors must be treated equally and provided with a common basis
for the preparation of proposals.
CONTRACTS - NEGOTIATION - REQUESTS FOR PROPOSALS - AMBIGUOUS
2. Protest of award of a cost reimbursement contract is sustained.
The protester's interpretation of RFP as prohibiting use of bookkeepers
to fulfill solicitation requirement for "170,000 professional hours" was
at least as reasonable as agency view that solicitation would be
interpreted as not prohibiting the use of bookkeepers as professionals.
Therefore, the solicitation requirement was at best ambiguous, resulting
in competition on an unequal basis.
CONTRACTS - TERMINATION - CONVENIENCE OF GOVERNMENT - NOT RECOMMENDED
3. GAO sustains protest but will not recommend termination of
improperly awarded contract for a management study where the contracting
agency reports that almost half of the contract amount has been expended
and that any new firm awarded a contract to complete the study will
necessarily have to duplicate much of the work already done, and our
Office cannot conclude with any certainty that if the solicitation had
not been ambiguous award would have gone to another offeror.
Arthur Young & Company (AYC) protests the award of a contract to
Coopers & Lybrand (CL) under request for proposals No.
N00600-84-R-4259, issued by the Department of the Navy for the
undertaking of a management analysis of the Naval Industrial Fund
program and activities. AYC questions the evaluation of CL's proposal,
alleging that the Navy failed to take into account CL's extensive
reliance on the use of temporary personnel, that the Navy failed to
conduct a meaningful cost realism analysis of CL's proposal, and that
the evaluation panel which considered CL's best and final proposal was
improperly constituted. We sustain the protest.
The Naval Industrial Fund Program encompasses a number of commercial
or industrial types of activities, including those concerned with
shipyards, air rework facilities, military sealift, research
laboratories, and printing. The contractor selected to undertake the
study was expected to draw upon the procedures used in the private
sector to make specific recommendations for enhancing the operations of
the individual activities and of the program in general.
The Navy stated in the solicitation that it contemplated awarding a
cost-plus-fixed-fee level of effort contract to the offeror whose
proposal offered the greatest value to the government from the technical
and price standpoints. The solicitation provided that technical
proposals were to be evaluated in regards to the offeror's technical
understanding and approach, its relevant past experience, and the extend
of expertise, education and experience of its proposed personnel.
Although the solicitation indicated that these technical considerations
were to be significantly more important than cost and that price was not
expected to be a controlling factor, nevertheless, offerors were warned
that price was an important factor, the importance of which would
increase with the degree of equality of the proposals with regard to
other factors.
During the course of negotiations, contracting officials became
concerned that several firms were "buying in" by proposing unrealistic
expense rates and numbers of hours of work. In response to this
concern, the Navy amended the solicitation to specity "170,000
professional hours required," to cap the indirect expense rates for the
prime contractor at 2 percent above those proposed in its best and final
offer, and to make the prime contractor responsible for capping the
rates of its subcontractors at 2 percent above the proposed rates.
Best and final offers submitted by CL and AYC received the highest
greatest value scores after adjustment for the realism of the proposed
costs. Although AYC's technical proposal was rated higher than CL's
technical proposal, receiving a technical score of 96.83 in contrast to
CL's technical score of 93.40, AYC proposed a cost of $8,102,895 while
CL proposed a cost of only $7,032,932. For purposes of evaluation, it
would appear that the Navy adjusted the wage rates proposed by offerors,
resulting in an increase in the cost for CL's proposed to $7,045,812.
Contracting officials determined that AYC's 3.43 point technical
advantage over CL was not worth the 1,057,083 additional evaluated cost
of AYC's proposal. Accordingly, award was made to CL as offering the
greatest value to the government. AYC thereupon filed this protest with
our Office.
AYC questions the Navy's evaluation of CL's proposal, especially as
it relates to CL's proposed extensive reliance on the use of a
subcontractor to provide CL with temporary employees for this contract
work.
In its technical proposal, CL stated that it intended to use
"financial research staff" provided by a subcontractor -- Robert Half
Associates (RHA) -- to perform "basic data retrieval." In its cost
proposal, CL indicated that of the required 170,000 professional hours,
it proposed that 39,433 hours would be performed by employees of a
temporary agency. In its proposal CL described these employees as "less
experienced researchers who will focus primarily on the collection of
raw data and entry into our computer system," or bookkeepers.
AYC argues that the Navy failed to consider CL's extensive reliance
on the use of temporary personnel. It questions the qualifications of
RHA and its personnel, including whether RHA's bookkeepers qualify as
professionals such that their work can be counted towards meeting the
mandatory solicitation requirement of "170,000 professional hours." AYC
notes that the Department of Labor (DOL) in its regulations implementing
the Fair Labor Standards Act of 1938, as amended, 29 U.S. C. Sections
201-219 (1982), defines employees employed in a bona fide professional
capacity as those:
"(a) Whose primary duty consists of the performance of:
(1) Work requiring knowledge of an advance type in a field of
science or learning customarily acquired by a prolonged course of
specialized intellectual instruction and study, as distinguished
from a general academic education and from an apprenticeship, and
from training in the performance of routine mental, manual, or
physical processes, or
(2) Work that is original and creative in character in a
recognized field of artistic endeavor . . . or
(3) Teaching . . .; and
(b) Whose work requires the consistent exercise of discretion
and judgment in its performance; and
(c) Whose work is predominantly intellectual and varied in
character (as opposed to routine mental, manual, mechanical, or
physical work) and is of such character that the output produced
or the result accomplished cannot be standardized in relation to a
given period of time. . . ."
29 C.F.R. Section 541.3 (1984). The solicitation incorporated the
DOL definition for purposes of defining professionals under the Service
Contract Act of 1965, as amended, 41 U.S.C. Sections 351-358 (1982), and
of defining professionals for whom a compensation plan must be
submitted.
In response to AYC's claim that temporary bookkeepers are not
professionals, the Navy responds that whether bookkeepers can be used to
satisfy the requirement for 170,000 professional hours involves findings
of fact as to individual circumstances, i.e., whether a bookkeeper is
actually working as a professional, and thus requires determinations to
be made during the administration of a contract rather than before the
award of a contract. In any case, the Navy maintains that its
contracting officials acted reasonably because what constitutes a
professional for this contract's purposes does not necessarily
constitute a professional for purposes of the Service Contract Act.
It is a fundamental principle of federal procurement that offerors
must be treated equally and provided with a common basis for the
preparation of their proposals. In negotiated procurements such as
this, any proposal which ultimately fails to conform with the material
terms of the solicitation should be considered unacceptable and should
not form the basis of award. If an agency wishes to accept such a
proposal, it must place the other offerors on notice of the specific
changes and provide an equal opportunity for all offerors to compete for
the requirement. See McCotter Motors, Inc., B-214081.2, Nov. 19, 1984,
84-2 C.P.D. Paragraph 539; see also CDI Corp., B-209723, May 10, 1983,
83-1 C.P.D. Paragraph 496.
Since proposals were to be evaluated for purposes of award in part
based upon the proposed costs, which in turn depended upon the number of
hours of work and the rate of pay and benefits proposed for each
category of employee, we do not believe that whether proposals complied
with a requirement for 170,000 professional hours is only a matter of
contract administration which can be ignored in evaluating proposals.
See CDI Corp., B-209723, supra, 83-1 C.P.D. Paragraph 496 at 4-5
(contracting agency improperly accepted an offer of a different category
of labor than that specified in the solicitation without amending the
solicitation to give other offerors an opportunity to offer based upon
the relaxed requirement).
We need not, however, decide between AYC's view that the DOL
definition of "professional" defines the employees required in order to
perform "professional hours" and the Navy's contrary interpretation.
If the DOL definition of "professional" is relevant to the issue of
"professional hours" rather than merely to the Service Contract Act and
to the requirement for submission of a professional compensation plan,
then we believe that CL clearly failed to offer all of the professional
hours required. As indicated above, DOL defines a professional as an
employee whose primary duty consists of performing work required
knowledge of an advanced type in a field of science or learning
customarily acquired by a prolonged course of specialized intellectual
instruction and study, rather than training in the performance of
routine mental processes, and requiring the consistent exercise of
discretion and judgment. DOL regulations further indicate that,
"accounting clerks, junior accountants, and other accountants (besides
certified public accountants) . . . normally perform a great deal of
routine work which is not an essential part of and necessarily incident
to any professional work which they may do. Where these facts are found
such accountants are not exempt," i.e., are not professionals. 29 C.F.R.
Section 541.302(f).
Here, CL itself describes the work to be performed by the bookkeepers
as involving only "basic data retrieval," focusing "primarily on the
collection of raw data and entry into our computer system." We are aware
of nothing to indicate that the bookkeepers were to be employed in work
requiring the consistent exercise of discretion and judgment rather than
merely routine mental processes. See Otis v. Mattila, 281 Minn. 187,
160 N.W. 2d 691, 698 (1968) (bookkeeper is not a professional as defined
by DOL since work does not require the consistent exercise of discretion
and judgment and is not predominantly intellectual and varied in
character).
Even if we accept the Navy's interpretation that bookkeepers could
perform professional hours, we believe that it was at least as
reasonable for AYC to interpret the solicitation as requiring offerors
to propose that all of the 170,000 professional hours be performed by
employees who were professionals rather than mere bookkeepers. It is a
basic principle of federal procurement law that specifications must be
sufficiently definite and free from ambiguity so as to permit
competition on a common basis. Since the solicitation requirement here
is at best ambiguous and has resulted in offerors responding to the
Navy's requirement for professional hours based on different, yet
reasonable interpretations as to what the requirement was, the
competition was conducted on an unequal basis. See McCotter Motors,
Inc., B-214081.2, supra,q84-2 C.P.D. Paragraph 539 at 3; Delta Data
Systems Corp., B-213396, Apr. 17, 1984, 84-1 C.P.D. Paragraph 430.
We note that CL indicated in its cost proposal that the use of
research assistants obtained from within CL would cost substantially
more per hour for labor and overhead than would the use of research
assistants obtained from RHA, i.e., the bookkeepers. Had CL been forced
to rely on its own research assistants for the 39,433 hours of work
proposed to be performed by RHA's bookkeepers, CL's proposed cost plus
fee would have increased substantially, thereby reducing CL's greatest
value score substantially. On the other hand, had the Navy told AYC and
other offerors during discussions or by issuance of an amendment that
bookkeepers would be acceptable as professionals, AYC and other offerors
might have been able to restructure the labor force offered to effect
significant reductions in their proposed costs with resulting increases
in their greatest value scores. We cannot calculate what effect this
would have had on the competition, but it is apparent that AYC might
have been unfairly displaced as a result of this solicitation defect,
and, therefore, the award to CL was improper. See McCotter Motors,
Inc., B-214081.2, supra 84-2 C.P.D. Paragraph 539 at 4. Accordingly, we
sustain the protest on this point.
Given our conclusion in this regard, we need not consider AYC's other
allegations, which, for the most part, concern alleged evaluation
deficiencies in connection with CL's use of RHA temporary personnel.
We are unwilling to recommend termination of the contract with CL for
the convenience of the government. The decision whether to recommend
termination of an improperly awarded contract involves consideration of
the cost of termination, the extent of performance, the degree of
prejudice to other offerors or to the competitive procurement system,
and the impact of termination on the procuring agency's mission. Any
one of these factors may be controlling with respect to whether
corrective action is appropriate. See Memorex Corp., B-213430.2, Oct.
23, 1984, 84-2 C.P.D. Paragraph 446.
The Navy has advised us that, as of April 4, in excess of $3.1
million, or over 44 percent of the contract amount, had already been
expended. Further, the Navy maintains that any other firm awarded a
contract to complete the study would need to duplicate a substantial
portion of the work already done by CL, resulting in an additional
direct cost in excess of $2 million. The Navy also suggests that the
likely 1 year delay in completion of the study arising from award to a
different contractor might result in additional indirect costs because
the delay of the management study would allow existing inefficiencies in
Naval Industrial Fund activities to continue.
Finally, we are unable to conclude with any certainty that award
would necessarily have gone to an offeror other than CL if the
solicitation had not been defective, because offers were not made on the
same basis and since point scores in a negotiated procurement are not
necessarily controlling as to award. See Prison Health Services, Inc.,
B-215613.2, Dec. 10, 1984, 84-2 C.P.D. Paragraph 643; cf. Technical
Services Corp., B-214634, Feb. 7, 1985, 64 Comp. Gen. . . ., 85-1 C.P.D.
Paragraph 152. Accordingly, we believe that the high cost to the
government appears to be out of proportion to any benefits received from
termination. See McCotter Motors, Inc., B-214081.2, supra, 84-2 C.P.D.
Paragraph 539 at 4 (although we sustained the protest where the
solicitation defect caused offerors to compete on an unequal basis and
the record suggested that an unsuccessful offeror might have been
unfairly displaced, we refused to recommend termination, since the cost
of termination would have been substantial).
Protest sustained.
Harry R. Van Cleve
General Counsel
FILE: B-216640
DATE: September 18, 1985
MATTER OF: Reconsideration of Frederick Evans, Jr. - Pay for
Firefighters
COMPENSATION - OVERTIME - FIREFIGHTING - FAIR LABOR STANDARDS ACT -
ENTITLEMENT
1. Union of federal firefighters requests reconsideration of prior
decision holding they are entitled to basic pay for 80 hours biweekly
plus premium pay for the remainder of their 144-hour tour of duty.
Under the applicable statutes and regulations, firefighters are not
entitled to basic pay for their entire 144-hour tour of duty.
COMPENSATION - OVERTIME - FIREFIGHTING - TWO-THIRDS RULE APPLICATION
2. Union of federal firefighters requests reconsideration of prior
decision concerning reduction of overtime under Fair Labor Standards Act
(FLSA) for periods of annual or sick leave. Regulations cited by union
concerning overtime for periods of annual or sick leave apply to
overtime under title 5, United States Code, not to overtime under the
FLSA, a separate statutory authority.
The first issue in this decision involves the computation of basic
pay for federal firefighters who work a 144-hour tour of duty during a
2-week period. We sustain our prior decision holding that firefighters
are compensated for 80 hours times their basic wage plus overtime or
premium pay for hours in excess of 80 hours.
The second issue involves whether annual and sick leave may reduce
the employee's entitlement to overtime. We hold that although such
absences do not affect overtime entitlement under title 5, United States
Code, such absences are not considered "hours of work" under the Fair
Labor Standards Act.
This decision is in response to a request from Frederick Evans, Jr.,
President, Local F-100, International Association of Fire Fighters,
Newport Naval Base, Newport, Rhode Island. Mr. Evans requests
reconsideration of our decision in Frederick Evans, Jr., B-216640, March
13, 1985, concerning the computation of pay for Federal firefighters.
In our prior decision, we held that under the applicable statutes and
regulations, federal firefighters are entitled to basic pay for 80 hours
biweekly plus premium pay for standby duty under title 5, United States
Code. We denied the union's claim that the basic pay of firefighters
should be computed on the basis of their 144-hour tour of duty times
their hourly wage. In addition, we held that absences for annual leave
or sick leave do not constitute "hours of work" under the Fair Labor
Standards Act (FLSA) and, therefore, such absence will reduce an
employee's overtime entitlement under the FLSA.
In the request for reconsideration, the union again argues that their
regularly scheduled administrative workweek is 144 hours but that they
are paid for only 80 hours, citing provisions of the Federal Personnel
Manual (FPM). The union also argues that the "two-thirds rule" which
permits deduction of eating and sleeping time is not applicable to
firefighters who receive premium pay for stand-by duty under 5 U.S.C.
Section 5545(c)(1). Finally, the union cites various provisions of the
FPM stating that overtime shall not be reduced by absences for annual
leave or sick leave.
As we stated in our prior decision, we know of no basis to allow the
union's claim that these employees be compensated on the basis of their
144-hour tour of duty times their hourly wage.
Title 5 of the United States Code provides that when an employee
works more than 40 hours in an administrative workweek or more than 8
hours in a day, the employee shall be compensated by overtime or premium
pay. See 5 U.S.C. Sections 5542, 5544, and 5545 (1982). We are unaware
of any statute which authorizes the payment of basic pay in excess of 40
hours in an administrative workweek.
As we cited in our prior decision, section 5545(c)(1) of title 5,
United States Code, provides premium pay up to 25 percent to an employee
" * * * in a position requiring him regularly to remain at, or within
the confines of his station during longer than ordinary periods of duty,
a substantial part of which consists of remaining in a standby status
rather than performing work * * * ." We also stated that this method of
compensating Federal firefighters has long been recognized in decisions
of this Office and the courts.
The union cites provisions of the FPM which state that when an
employee is paid additional pay under section 5545(c)(1), the employee's
regularly scheduled administrative workweek is the total number of
regularly scheduled hours of duty a week. But the length of the
administrative workweek does not allow the employee to receive basic pay
for hours of work in excess of 40 hours per week. As we stated above,
basic pay for purposes of title 5, United States Code, is payable for up
to 40 hours of work per week, and hours in excess of 40 are compensable
by means of overtime or premium pay. Simply put, the hours in excess of
80 hours every two weeks are being compensated, not by means of basic
pay but rather through premium pay. See 5 C.F.R. Sections
550.141-550.144. The purpose for establishing the regularly scheduled
administrative workweek is to determine whether there is irregular,
unscheduled overtime duty in excess of the employee's regularly
scheduled weekly tour which will be compensated at overtime rates. See
5 U.S.C. Section 5545(c)(1), and House Report No. 1870, 85th Cong. 2d
Sess., reprinted in 1958 U.S. Code Cong. & Ad. News 3047, 3048.
With regard to the union's statement that the two-thirds rule is not
applicable to an employee receiving premium pay under 5545(c)(1), we
agree with respect to the employee's regularly scheduled workweek. The
provisions of section 5545(c)(1) were adopted in 1954 with the intention
of replacing the two-thirds rule. See the discussion in Bean v. United
States, 175 F. Supp. 166 (Ct. Cl. 1959). However, the two-thirds rule
may still be applied to a firefighter in determining entitlement to
compensation for irregular overtime in excess of the regularly scheduled
workweek. See Thomas A. Donohue, B-213886, October 2, 1984, 64 Comp.
Gen. 1.
Finally, we note that the union cites various provisions of the FPM
concerning the payment of overtime during periods of annual leave or
sick leave. We agree with the union that for purposes of title 5,
United States Code, leave with pay such as annual leave or sick leave is
deemed employment and does not reduce the amount of overtime pay to
which an employee is entitled during an administrative workweek. See 5
C.F.R. Section 550.112(c).
However, these regulations do not govern overtime computed under
different statutory authority, the FLSA. See 29 U.S.C. Sections 201-219
(1982). Such absences for leave or holidays do not constitute "hours of
work" under the FLSA. See 5 C.F.R. Section 551.401(b). See also Louis
Pohopek, 60 Comp. Gen. 493 (1981); and R. Elizabeth Rew, 55 Comp. Gen.
1035 (1976). Therefore, we sustain our prior decision that annual or
sick leave does not constitute "hours of work" for the purposes of FLSA
overtime.
Accordingly, for the reasons stated above, we sustain our prior
decision.
Acting Comptroller General of the United States
B-216639, Nov 13, 1984, 84-2 CPD 523
CONTRACTS - Protests - Summary dismissal
DIGEST:
1. Protest presenting the same issue that was resolved adversely to
the protester in a recent protest under a different procurement is
summarily denied since it is clear on its face that it has no legal
merit.
BIDDERS - Responsibility v. bid responsiveness - Place of performance
2. Invitation requirement that the bidder designate the place of
performance if it is other than the bidder's address as stated in the
bid generally relates to bidder responsibility, not bid responsiveness,
so that the designation may be made after bid opening.
BIDS - Competitive system - Equal bidding basis for all bidders -
Delivery requirements.
3. Bidder's failure to specify f.o.b. origin point does not render
the bid nonresponsive where the invitation excludes transportation costs
from price evaluation, since the omission had no effect on the
competitive standing of the bidders.
Industrial Design Laboratories, Inc.:
Industrial Design Laboratories, INc. (IDL) protests award to any
bidder other than itself under invitation for bids (IFB) No.
DAAA09-84-B-0753 which was issued by the Department of the Army for
electric heaters for various armored combat vehicles. IDL contends that
the low bidder, the Confederated Salish and Kootenai Tribes, is a
non-existent entity and that an affirmative determination of its
responsibility therefore would be such gross error as to be tantamount
to constructive fraud. IDL also argues that the low bid is
nonresponsive.
We summarily deny the protest.
The bases for the protester's responsibility arguments are the same
as those presented and resolved adversely to IDL in a recent protest
against the proposed award of identical items to the same low bidder but
in a different procurement. See Industrial Design Laboratories, Inc.,
B-215162, Oct. 16, 1984, 64 Comp.Gen. ---, 84-2 CPD Para. ---. We found
that the Tribes' existence and identity were clear and that an
affirmative determination of responsibility was reasonable. We
therefore find no legal merit to this aspect of the current protest.
IDL contends that the Tribes; bid was nonresponsive because it
designated no place of production, or location for purposes of f.o.b.
origin delivery, as required, but only specified a post office box in
Roan Lake, Montana in providing the bidder's name and address.
We reject IDL's contention. CLause K-6 of the IFB, entitled "Place
of Performance," required the bidder to indicate whether it intended to
use any plants or facilities located at addresses other than the address
the bidder indicated in its bid. The Tribes checked the box indicating
that the bidder did not intent to use any other such plants or
facilities, and therefore did not provide any other information under
the provision. While a requirement to designate the place of
performance can relate to bid responsiveness in those rare cases where
the government has a material need to have performance take place at a
certain location, such a requirement usually related to bidder
responsibility. See Keco Industries, Inc., B-199934, Sept. 22, 1980,
80-2 CPD Para. 219. We find no indication in the record here that the
government had any need to have performance take place at any particular
location. Therefore, the matter is one of responsibility, so that
information with regard to the place of performance could be furnished
after bid opening. See Continental Telephone of California, B-213255,
Apr. 17, 1984, 84-1 CPD Para. 428.
As to the Tribes' failure to designate the f.o.b. origin point, the
IFB incorporated the clause at section 52.247-50 of the Federal
Acquisition Regulation, which provided that transportation costs were
not an evaluation factor for award. Therefore the Tribes' omission did
not affect the competitive standing of the bidders and could be waived
without being prejudicial to the other bidders. See Champion Road
Machinery International Corp., B-200678, July 13, 1981, 81-2 CPD Para.
27. Since IDL has not shown that the Tribes otherwise took exception to
any material solicitation terms, which is the test of a responsive bid,
Ven-Tel, Inc., B-203397, July 1, 1981, 81-2 CPD Para. 3, we have no
reason to question the Army's finding that the bid was responsive.
The protest is summarily denied. COMP GEN (UP)
FILE: B-216635 84-2 CPD 676
DATE: December 17, 1984
MATTER OF: Radix II, Inc.
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - SMALL BUSINESS
ADMINISTRATION'S AUTHORITY - CERTIFICATE OF COMPETENCY - PRIME OR
SUBCONTRACTOR STAUS DETERMINATION
1. SBA properly declined to review, under its certificate of
competency program, the contracting officer's rejection of small
business subcontractor offered by surety for completion of default
terminated contract because the certificate of competency program is
reserved for prime contractors only.
CONTRACTS - PROTESTS - CONTRACT ADMINISTRATION - NOT FOR RESOLUTION
BY GAO
2. A contracting officer's determination that the completion
contractor offered by a defaulted firm's surety is not competent and
qualified is not reviewable under GAO's Bid Protest Procedures, which
are reserved for considering the propriety of contract awards and
proposed awards.
Radix II, Inc., protests the failure of the Army Corps of Engineers
to reconsider its rejection of Radix as a completion contractor offered
under Federal Acquisition Regulation (FAR), Section 49.404(c), 48 Fed.
Reg. 41,102, 42,461 (1983) (to be codified at 48 C.F.R. Section 49.404(
c)), and the failure of the Small Business Administration (SBA) to
review the Army's rejection under the SBA certificate of competency
program. See 13 C.F.R. Section 125.5 (1984). The protest is summarily
denied.
The Army awarded contract number DACA 31-82-C-0253 to Margaux
Systems, Inc., for installation of an Energy Monitoring Control System
(EMCS) at the Defense Electronics Supply Center in Dayton, Ohio. St.
Paul Fire and Marine Insurance Company was Margaux's surety on that
contract. Margaux's contract was terminated for default by the Army,
thereby making St. Paul liable under its performance bond.
Under the FAR, St. Paul, as surety, has the right to complete the
contract, as opposed to reimburse the Army for reprocurement costs,
"unless the contracting officer has reason to believe that the persons
or firms proposed by the surety to complete the work are not competent
and qualified and the interests of the Government would be substantially
prejudiced." FAR, Section 49.404(c), supra. St. Paul proposed that
Radix complete the contract. The Army rejected Radix because it was
aware of performance problems on other A Army contracts involving Radix.
Radix requested that the SBA review that rejection, arguing that the
Army's action amounted to a negative responsibility determination.
Simultaneously, Radix sent the contracting officer a letter disputing
the facts he had relied upon as a basis for rejecting Radix, and
requested that he either reconsider his rejection or refer the matter to
the SBA for review under the certificate of competency program.
The contracting officer reaffirmed his position rejecting Radix as a
completion contractor. He also declined to refer the matter to the SBA
since, in his opinion, Radix is not a contractor, as contemplated by the
Small Business Act and the regulations promulgated there under, to which
the certificate of competency program is made available. Likewise, the
SBA itself declined to review the matter because, in its opinion, the
certificate of competency program is only available to potential prime
contractors, not to Radix, which the SBA viewed as a potential
subcontractor. We deny Radix's protest, because we agree with the
positions taken by the contracting officer and by the SBA.
FAR, Section 49.404(c), supra, provides for the possibility of a
takeover agreement between the defaulted contractor, the surety and the
government. If such an agreement is executed, then the surety is said
to stand in the shoes of the original contractor. International
Fidelity Insurance Co., Armed Services Board of Contract Appeals No.
22,309, Mar. 1, 1978, reprinted in 78-1 B.C.A. Paragraph 13,060 (CCH
1978). Thus, at best, Radix would be a subcontractor to St. Paul in the
event the Army accepted the surety's offer to complete Margaux's
contract. Since the SBA reserves the certificate of competency program
for prime contractors only, Radix, as a potential subcontractor, thus
would have no right to a certificate of competency review. See
generally Frederick A. Potts & Co., Inc., 61 Comp. Gen. 379 (1982), 82-1
CPD Paragraph 441.
Further, we will not, under our Bid Protest Procedures, independently
review the Army's decision to reject Radix as a completion contractor,
since those procedures are reserved for considering the propriety of
contract awards and proposed awards. 4 C. F.R. Section 21.1(a) (1984).
The decision in issue is within the province of the contracting officer
in administering the initial contract, and it is our settled position
that we will not review contract administration matters as part of our
bid protest function. See 4 C.F.R. Section 21.3(g). If the surety is
concerned that the contracting officer's decision is inconsistent with
the government's duty to mitigate damages resulting from a default, the
surety can pursue the matter under the Disputes clause of the defaulted
contract. See Diversified Computer Consultants, B-205820, July 13,
1982, 82-2 CPD Paragraph 47.
We summarily deny the protest.
Comptroller General of the United States
FILE: B-216634 85-1 CPD 554
DATE: May 16, 1985
MATTER OF: Coflexip & Services, Inc.
DIGEST:
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
REASONABLE
1. An allegation that the procuring agency incorrectly rated the
awardee's proposal technically superior to the protester's is denied
where the record shows that the agency's determination was reasonable
and consistent with the stated evaluation criteria.
CONTRACTS - NEGOTIATION - REQUESTS FOR PROPOSALS - AMENDMENT - EQUAL
COMPETITIVE BASIS FOR ALL OFFERORS
2. Protest is sustained where the agency relaxed a performance
requirement and the delivery schedule for the awardee without informing
the protester of these changes, which could have had a material impact
on the protester's proposed cost.
MARITIME ADMINISTRATION - CONTRACTS - EXEMPTION FROM COMPETITIVE
PROCUREMENT
3. Maritime Administration's own statutory exemption from
competitive procurement requirements does not excuse improprieties where
there is no indication that it was impracticable to comply with
competitive requirements.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - PREPARATION - COSTS
RECOVERY CRITERIA
4. Protester is entitled to recover its proposal preparation costs
where the agency failed to assure that the protester and the awardee
were competing on an equal basis and the protester had a colorable
chance at receiving the award.
Coflexip & Services, Inc. (Coflexip) protests the award of a contract
to Simplex Wire & Cable Company (Simplex) under request for proposals
(RFP) No. SER-046-RBS, issued by the Department of Transportation,
Maritime Administration (MARAD), on behalf of the Department of the
Navy. /1/ We deny the protest in part and sustain it in part.
The RFP, issued March 2, 1984, called for proposals to furnish all or
any portion of an Offshore POL (petroleum, oil and lubricants) Delivery
System, which would enable the Navy to pump petroleum products from a
tanker to shore. The delivery system consists of three components: a
tanker; a single-point mooring for the tanker; and a flexible pipe
conduit system to connect the tanker to the beachhead manifold. The
Navy designated a tanker for the project and also decided to procure the
single-point mooring by separate procurement. This protest therefore
concerns only the flexible pipe conduit component.
The RFP did not contain detailed design specifications, but instead
set forth minimum performance standards and called on offerors to
propose their best approach for a state-of-the-art system meeting these
standards. The RFP'S cover page stated that "schedule is of the
essence," and that delivery must be such that installation and initial
checkout could be performed prior to the start of testing already
scheduled for August 1984; MARAD also emphasized at a March 14
preproposal conference that time was of the essence. Proposals were to
be evaluated under several criteria: benefits and credibility of the
proposal; understanding the challenge; experience; life cycle cost;
ability to meet the installation time; timeframe for delivery and
demonstration and cost of demonstration; and adaptability for follow-on
procurement. Technical proposals were due March 19, and a budgetary
cost proposal showing the system's life cycle costs was due by March 23.
Six technical proposals were received and initially were forwarded to
four industry experts to verify generally that the proposed systems
could meet the performance requirements. Two proposals were rejected as
a result of this preliminary review. The Simplex and Coflexip proposals
were rated equally acceptable and received the two highest total scores.
These and the other two remaining proposals (along with the cost
proposals) then were forwarded to MARAD which, together with the Navy,
evaluated the proposals against the RFP evaluation criteria. At this
point, the other two proposals were rejected as involving excessive
technical risk, leaving only Simplex and Coflexip in the competition.
The evaluators determined that, compared to the Simplex system,
Coflexip's approach presented several operational limitations. Coflexip
offered a system based on a single-basket concept: the flexible
pipeline would be carried in, and be deployed from, a single large
basket container mounted on the deck of the tanker. The evaluators
found this configuration disadvantageous because the tanker deck would
have to be extensively reinforced to support the 1-million-pound system,
and the dimensions and weight of the basket, as a practical matter,
would prevent the system from being transported across land or
transferred to other ships. As additional limitations, the evaluators
determined that retrieval of the deployed system would be difficult due
to the proposed use of anchoring devices; that damaged conduit could
not easily be repaired; and that additional booster pumps were needed
due to the 5-mile pipeline length (presented by Coflexip as necessary to
span the 4-mile distance specified in the RFP). These limitations were
considered to bear negatively on the "credibility of the proposal" and
"understanding the challenge" evaluation criteria.
Simplex's system was based on a multiple-reel concept under which the
pipeline would be deployed from eight separate reels, each weighing
100,000 pounds. For the same essential reasons that Coflexip's single
basket system was disfavored, Simplex's reels were deemed advantageous:
the reels would be easier to install, operate, maintain, repair,
retrieve, transport and transfer. At the same time, Simplex's proposed
cost was lower than Coflexip's. Simplex proposed a life cycle cost of
$5.4 million over the 20-year system life, while Coflexip proposed a
$5.8 million initial system cost plus $70,000 of projected annual
maintenance costs for a life cycle cost estimate of $7.2 million.
Based on the evaluators' conclusions and Simplex's lower cost, MARAD
and the Navy began final contract negotiations with Simplex after May
30. Simplex was awarded a $5.6 million contract on August 3, with a
9-month delivery schedule.
Coflexip challenges the award to Simplex on several grounds, the most
relevant of which are discussed in detail below.
Coflexip contends that the reasons given by MARAD for selecting
Simplex were invalid and inconsistent with the stated evaluation
criteria. The protester argues that while its single basket may require
extensive tanker modification to support its 1-million-pound weight,
Simplex's eight reels will necessitate reinforcing a substantially
larger deck area. Coflexip seems to concede that transferring its
system from ship to ship would require a substantial effort, but submits
that a similar effort would be required to transfer Simplex's system and
that, moreover, the RFP did not require transformability at all.
Coflexip concedes that its system cannot be transported across land, but
argues that neither can the Simplex system, since that system's
30-foot-diameter reels are too large for truck or rail.
It is neither the function nor the practice of our Office to
determine independently the acceptability or relative technical merit of
proposals. Our review of an agency's evaluation of proposals is limited
to examining whether the evaluation was fair, reasonable and consistent
with the evaluation criteria. We will question an agency's assessment
of the technical merits of proposals only upon a clear showing of
unreasonableness, abuse of discretion, or violation of procurement
statutes or regulations. Georgetown Air & Hydro Systems, B-210806, Feb.
14, 1984, 84-1 C.P.D. Paragraph 186. We do not believe Coflexip has
made such a showing.
MARAD explains in its report that since Simplex's system will be
spread over 3,000 square feet of the deck and the load on any portion of
the deck thus will not be excessive (267 poinds per square foot), the
deck reinforcement can be accomplished by adding light foundation to the
hull. Conversely, the agency states that because Coflexip's
1-million-pound basket will be situated on a 16-foot-diameter area of
the deck (more than 6,000 pounds per square foot), extensive
modifications within the hull would be necessary to reinforce the deck.
We see no basis to question MARAD'S determination that these internal
hull modifications are more involved than the reinforcement needed for
Simplex's system, and Coflexip has offered no contrary evidence beyond
its own unsupported assertions.
Although the RFP did not specify system transferability as a minimum
requirement, neither did it provide that transferability would not be
considered. In view of the RFP's "best approach" format and the broad
evaluation criteria (e.g., benefits of the proposed approach), we think
offerors were sufficiently on notice that innovative system features
would be weighed in the evaluation. The transferability of a system
from ship to ship, in our opinion, reasonably can be viewed as a benefit
of an approach, and it thus was appropriate for MARAD to consider this
system feature in the evaluation.
We also believe MARAD reasonably determined that Simplex's system
could be transferred more easily and quickly than Coflexip's system.
While Coflexip concedes that its system can be transferred from ship to
ship only in a shipyard, Simplex explains that, contrary to Coflexip's
further assertions, its system in fact can be transferred out of port.
Specifically, it claims that its system can be hoisted with 90-ton
cranes (since each of the eight reels weighs only 50 tons) and points
out that the Navy currently has ships in operation equipped with these
cranes. This explanation appears reasonable on its face, and we find no
contrary evidence in the record.
Coflexip's contention that Simplex's system, like its own, is not
transportable across land by rail or truck is based on its understanding
that the Simplex reels are 30 feet in diameter. MARAD and Simplex both
state, however, that the reels actually are only 10 feet in diameter and
10 feet long. Coflexip has not argued that reels of this size are not
easily transportable.
As for pipeline repair capability, Coflexip argues that MARAD ignored
the reapair package offered in its proposal which, Coflexip claims,
included a method of replacing damaged sections of pipe and a repair kit
for lesser damage. We have examined Coflexip's proposal, and while it
does set forth a "maintenance and repair" concept involving a
replacement of damaged 2,200-foot pipe sections, it does not mention any
minor repair procedure. Simplex's proposal did detail both a major
repair procedure and a minor producedure which apparently can be
performed by government personnel in the field while the pipeline is in
service. MARAD considered this an operational advantage, and we find no
basis for concluding otherwise.
We conclude that these several considerations provided a sufficient
basis for MARAD's determination that Simplex's system was technically
superior to Coflexip's system under the RFP's evaluation criteria.
Coflexip believes it should have had "the opportunity to demonstrate
that those factors which MARAD accepted as tipping the balance in
Simplex's favor were illusory or that the Coflexip system was equal or
superior in those respects as well." It is not the purpose of
discussions, however, to afford an offeror an opportunity to establish
that its approach is superior to another offeror's, and it is not
incumbent upon the contracting agency to disclose another offeror's
approach for this purpose. Coflexip was free to attempt to persuade
MARAD as to the merits of its single basket on its own initiative, but
could not rely on the agency to reveal Simplex's or any other offeror's
approach for discussion or any other purpose.
Coflexip maintains that Simplex's proposal should have been rejected
as technically unacceptable because it was based on furnishing exactly 4
statute miles of pipeline. Alternatively, Coflexip argues that MARAD
improperly relaxed the 4-mile standoff requirement for Simplex without
informing Coflexip that the requirement was relaxed. The RFP required
that the conduit be able to "span the distance from the tanker to the
shore manifold, at any mooring location from 2,000 to 21,120 feet (4
miles) offshore." Coflexip argues strenuously that the 4-mile standoff
requirement cannot be met with only 4 miles of of pipe due to the
"catenary effect" (curvature in the deployed pipe) which would be caused
by a 1.5-knot crosscurrent during deployment of the pipe to shore and
the limited pulling capacity of the tugboats used to deploy the pipe.
For this reason, Coflexip explains, it offered a system with 5 miles of
pipeline.
MARAD responds that: (1) it should have been clear from the
preproposal conference that MARAD interpreted the RFP as requiring only
4 miles of conduit; (2) this aspect of the protest is untimely since
the requirement for only 4 miles of pipe was clear from the conference
and Coflexip did not protest the requirement prior to the closing date
for submission of proposals; and (3) MARAD reasonably concluded that
Simplex's system, as offered, could meet the 4-mile standoff
requirement, since its technical experts never found otherwise.
Simplex, basically adopting this latter argument, asserts that MARAD'S
technical experts reasonably concluded that, due to the essentially
straightline deployment possible using Simplex's proposed "floatsink"
deployment method, Simplex can meet the 4-mile standoff requirement with
exactly 4 miles of pipeline.
We find that the RFP required a system capable of spanning 4 miles of
pipe, that MARAD never relaxed this requirement for all offerors, and
that MARAD did not reasonably determine that Simplex's system could meet
this requirement with 4 miles of pipeline.
As already noted, the RFP stated that the system must "span" a 4-mile
distance from a moored tanker to shore; it does not call for 4 miles of
pipeline. We consider this language clear and unambiguous, and while
MARAD may have intended to accept exactly 4 miles of pipe, we find no
evidence that MARAD ever altered this requirement. It is true that some
of the questions posed at the conference included a reference to 4 miles
of pipe, but these were indirect references only -- no offeror asked
whether, or was told that, the RFP called for 4 miles of pipe. Coflexip
therefore had no reason to protest the requirement prior to the closing
date; its interpretation of the RFP was correct. This portion of the
protest thus is not untimely under our Bid Protest Procedures. 4 C.F.R.
21.2(b)(1) (1984).
We find Coflexip's position that more than 4 miles of pipe was
necessary persuasive. Even assuming no catenary effect during
deployment and, thus, a straight-line deployment, exactly 4 miles of
deployed pipeline would be perfectly taut across the surface of the
water for a 4-mile distance. Neither MARAD nor Simplex has attempted to
rebut Coflexip's view that a perfectly taut pipeline would not have the
tensile strength to withstand the various environmental conditions (such
as wind, currents, etc.) likely to be encountered during any period the
pipe would be deployed. Since Simplex actually proposed laying its
pipeline on the sea floor, furthermore, and not in a straight line
across the surface, it seems clear that some additional length of pipe
beyond exactly 4 miles would be needed to allow for the distance from
the sea floor to the mooring connection at the surface. Again, the
record includes no explanation of how MARAD determined that a
straight-line deployment would overcome this apparent need for
additional pipe.
Information furnished MARAD by Simplex during discussions seems to
support Coflexip's view. In a May 14 clarification responding to
certain technical questions posed by Watters, Simplex acknowledges that
extra pipe length will be necessary for the catenary, the exact amount
depending on various factors such as distance to shore, depth beneath
the tanker, and speed of any crosscurrent. Simplex goes on to state
that, allowing for a 1/2 mile "billow" (catenary) in extreme
crosscurrents, as much as "1200 feet of extra pipe will be needed," and
that, "therefore, a 21,120 foot distance to shore will require 22,320
feet of pipe."
We conclude that, whether or not MARAD actually intended to relax the
4-mile standoff requirement, award of a contract to Simplex for exactly
4 miles of pipeline was tantamount to a relaxation of the requirement
only for Simplex. It is a fundamental principle of federal procurement
that a contract award must reflect the requirements upon which the
competition was based, and that a material change in government
requirements may not be negotiated with only the otherwise successful
offeror. Cohu, Inc., 57 Comp. Gen. 759 (1978), 78-2 C.P.D. Paragraph
175. It is inherently unfair to unsuccessful offerors to award a
contract on a basis other than what the government said it wanted in the
solicitation. Coflexip claims that it would have been able to reduce
its proposed cost significantly by eliminating a mile of pipeline as
well as pumping and handling equipment, had it been informed that only 4
miles of pipeline was required. Since the award was based in part in
Simplex's low proposed cost, and Simplex's proposed cost was based on
meeting the relaxed requirement, Coflexip was denied the opportunity to
have its system cost fairly evaluated. See E.C. Campbell, Inc.,
B-205533, July 8, 1982, 82-2 C.P.D. Paragraph 34. We sustain the
protest on this ground.
The RFP required delivery in time for testing scheduled for August
1984, that is, within 5 to 6 months after the planned award. As
indicated above, MARAD emphasized in the RFP and at the preproposal
conference that time was of the essence. Sometime after receipt of the
proposals, MARAD became aware that the scheduled testing would not be
possible due to delays in the single-point mooring procurement being
conducted by the Navy. MARAD apparently never informed Coflexip,
however, that the delivery requirement had been changed. While Simplex
proposed delivery within 8 months after award, Coflexip offered delivery
within 6-1/2 months. The final contract with Simplex established an
even more lenient 9-month delivery schedule (from date of award).
Generally, a delivery schedule or time of performance requirement is
regarded as a material requirement, a change in which -- as with the
4-mile standoff requirement discussed above -- must be communicated to
all offerors. Ford Aerospace & Communications Corp., B-200672, Dec.
19, 1980, 80-2 C.P.D Paragraph 439. Here, the change in the agency's
delivery deadline from August 1984 to May 1985 clearly constituted a
material change which should have been communicated to Coflexip;
Coflexip claims it could have reduced its bid had it not had to plan on
paying premiums to subcontractors for expedited delivery in accordance
with the deadline expressed in the RFP and emphasized at the conference.
While it is unclear precisely what impact the relaxed delivery schedule
would have had on Coflexip's bid price, we recognize that extending
delivery by at least 1-1/2 months could have led Coflexip to reduce its
cost significantly. Coflexip's proposal does clearly indicate an effort
to provide for delivery as close to the testing date as possible.
MARAD argues that improprieties under this procurement should not
constitute a basis for sustaining Coflexip's protest because MARAD has
been exempted from the policies and procedures of the general federal
procurement statute, the Federal Property and Administrative Service Act
of 1949, by the act's provision at 40 U.S.C. Section 474(16) (1982).
That provision states:
"Nothing in this act shall impair or affect any authority of --
* * * *
(16) the Maritime Administration with respect to the
construction, reconstruction, and reconditioning (including
outfitting and equipping incident to the foregoing), the
acquisition, procurement, operation, maintenance, preservation,
sale, lease, or charter of any merchant vessel or of any shipyard,
ship site, terminal, pier, dock, warehouse, or other installation
necessary or appropriate for the carrying out of any program of
such Administration authorized by law, or nonadministrative
activities incidental thereto: Provided, That the Maritime
Administration shall to the maximum extent that it may deem
practicable, consistent with the fulfillment of the purposes of
such programs and the effective and efficient conduct of such
activities, coordinate its operations with the requirements of
this Act, and the policies and regulations prescribed pursuant
thereto. . . ."
By its plain terms, the provision applies only to installations
necessary for carrying out MARAD programs (and nonadministrative
activities incidental to these programs) authorized by law. The conduit
system here is part of a Navy program and is funded entirely by the
Navy. MARAD is merely conducting the procurement at the Navy's request.
In any event, MARAD's exemption from the act is not unqualified. The
legislative history of the act indicates that Congress intended MARAD
and other agencies with exemptions to comply with the act except to the
extent that doing so would actually interfere with the operation of
their programs. See H.R. Rept. No. 670, 81st Cong., 1st Sess. (1949),
reprinted in 1949 U.S. Code Cong. & Admin. News 1475, 1504. MARAD has
not explained how advising Coflexip of the relaxing of material
requirements would have interfered with any MARAD program, and it is not
evident to us that this would have been the case. Moreover, while the
record shows that MARAD deemed it desirable to avoid certain preliminary
competitive requirements (such as the Commerce Business Daily
publication requirement), there is no indication that MARAD ever
determined that it would be impracticable to comply with competitive
procurement requirements generally. Indeed, the fact that MARAD
endeavored to conduct a normal competitive procurement suggests that
MARAD considered it practicable to comply with the act.
We conclude that section 474(16) of title 40 does not provide a basis
for excusing MARAD's failure to advise Coflexip that the 4-mile standoff
requirement and delivery schedule had been relaxed.
Ordinarily, where, as here, an agency has failed to assure that
offerors were competing on an equal basis, we would recommend that
negotiations be reopened to permit offerors to modify their proposals
based on the same requirements, and that a new award be made, if
necessary, based on the results of a reevaluation. We have been advised
by MARAD, however, that Simplex has procured all conduit production
materials; that a subcontractor has begun manufacturing the reel
systems and machinery; that the tanker modifications have been
scheduled; and that termination costs therefore likely would be
significant. Under these circumstances, it would not be in the
government's best interest to terminate Simplex's contract in the event
the reevaluation was favorable to Coflexip; it thus would serve no
purpose to recommend reopening negotiations at this point. See System
Development Corporation and Cray Research, Inc., B-208662, Aug. 15,
1983, 83-2 C.P.D. Paragraph 206; Fitts Construction Co., Inc., 62 Comp.
Gen. 615 (1983), 83-2 C.P.D. Paragraph 190.
Coflexip maintains it has learned from several unnamed sources that
Simplex has experienced undue delays in performing its contract and that
MARAD and the Navy are considering terminating Simplex's contract for
default. Coflexip presumably is attempting to establish that
performance has not progressed significantly, and that it would be
practicable to recommend award to Coflexip. MARAD has informed us,
however, that there have been no unacceptable performance delays, that
Simplex is performing in accordance with the terms of its contract, and
that it is not considering terminating Simplex's contract. As we find
no basis for questioning MARAD's information, we reject any suggestion
by Coflexip that Simplex has not made significant progress under the
contract. We add, for Coflexip's general information, that whether a
contractor is performing in accordance with the terms of its contract is
a matter of contract administration, which is solely the responsibility
of the contracting agency, not our Office. See 4 C.F.R. Section
21.3(g)(1) (1984); Radix II, Inc., B-216635, Dec. 17, 1984, 84-2 C.P.D.
Paragraph 676.
Comflexip claims entitlement to recovery of its proposal preparation
costs. An unsuccessful offeror will be entitled to recover such costs
where the agency has acted improperly in conducting the procurement, and
the claimant would have had a substantial chance of receiving the award
but for the agency's improper action. See Hell-Jet Corporation v.
United States, 2 Ct. Cl. 613 (1983). As we have found that MARAD's
actions were improper here, the determinative question is whether
Coflexip had a substantial chance of receiving the award. We find that
Coflexip did have such a chance.
The award to Simplex was based not only on certain operational
advantages of its system, but also on Simplex's lower proposed life
cycle cost. It thus would seem to follow that, had Coflexip's cost been
lower than Simplex's, one of the reasons for making award to Simplex
actually would have become a reason for making award to Coflexip. Had
Coflexip's cost been far enough below Simplex's, it might have been
veiwed by MARAD as sufficient to offset the operational advantages of
Simplex's system, and thus to warrant an award to Coflexip. Whether
such a tradeoff might have occurred cannot now be determined with
certainty both because Coflexip's cost apparently was significantly
inflated by MARAD's improper action and because the record contains no
contemporaneous evaluation documentation indicating the relative
importance MARAD assigned Simplex's operational advantage vis-a-vis
cost.
We have held that where an agency's improper action makes it
impossible to determine precisely the claimant's chance of receiving the
award, and the claimant had a colorable chance at the award, fairness
dictates that we adopt a presumption favoring the claimant. See System
Development Corporation and Cray Research, Inc. -- Reconsideration, 63
Comp. Gen. 275 (1984), 84-1 C.P.D. Paragraph 368; M.L. MacKay &
Associates, Inc., B-208827, June 1, 1983, 83-1 C.P.D. Paragraph 587.
Coflexip had a colorable chance of receiving the award since it was one
of only two technically acceptable offerors and, but the MARAD's failure
to reveal the relaxed requirements, the firm's cost might have been low
enough to offset Simplex's technical advantage. As we have found it
impracticable to reopen negotiations at this juncture, it is not now
possible to determine whether this would have been the case. Applying
the above rule, we believe fairness requires a finding that Coflexip's
chance at the award was sufficient to support its claim based on MARAD's
improper action.
The protest is denied in part and sustained in part. Proposal
preparation costs are allowed. By letter of today, we are advising the
Secretary of Transporation of our findings and recommending that steps
be taken to assure that similar deficiencies do not occur in future
procurements.
Comptroller General
of the United States
(1) The RFP actually was issued by AMETEK, a company acting as
subagent for Watters Marine Inc. (Watters), MARAD's general ship
operating agent. The Navy asked MARAD to conduct the procurement for
this Navy requirement because a commercial system was being procured,
and MARAD is more familiar with commercial (as opposed to military)
standards.
FILE: B-216633
DATE: March 27, 1985
MATTER OF: John T. Davis - Travel Expenses - Airline Ticket
Purchased with Personal Funds
DIGEST:
TRAVEL EXPENSES - USE OF PERSONAL FUNDS - REIMBURSEMENT
Through a boarding error, an employee used his airline ticket
to travel to the wrong destination. After he discovered the
error, the employee spent $119 in personal funds to secure a
ticket for the proper destination. The employee may be reimbursed
for the cost of the airline ticket, notwithstanding the $100 cash
limitation stated in the Federal Travel Regulations, because the
cash purchase was justified by the circumstances and the employee
has submitted documentation of the cost of the transportation.
Mr. Jutta E. Partyka, an authorized certifying officer of the United
States Department of the Interior, Office of Surface Mining, Reclamation
and Enforcement, requests our decision on the claim of Mr. John T.
Davis. Mr. Davis requests reimbursement for the cost of the airline
ticket he purchased with personal funds. For the reasons stated below,
we hold that Mr. Davis may be reimbursed for the cost of the ticket.
Mr. Davis, who is officially stationed in Homewood, Alabama, was
directed to travel to a conference in Springfield, Illinois, during the
period March 5 to March 8, 1984. His reservations with Delta Airlines,
issued pursuant to a Government Transportation Request (GTR), required
him to travel from Birmingham, Alabama to St. Louis, Missouri, and then
board a connecting flight to Springfield, Illinois.
When Mr. Davis arrived at the St. Louis airport on March 5, 1984,
Delta Airlines directed him to a gate having simultaneous boarding of
three airplanes. One airplane was bound for Springfield, Illinois, and
another for Springfield, Missouri, Mr. Davis mistakenly boarded the
flight for Springfield, Missouri. After he arrived at the wrong
destination, Mr. Davis secured reservations on a flight to Springfield,
Illinois, paying the $119 coach fare with personal funds.
Mr. Davis claimed reimbursement for the $119 ticket, and furnished a
receipt in support of his claim. The agency questions whether there is
a legal basis for paying Mr. Davis' claim.
Ordinarily, agencies must require employees to use a GTR for common
carrier transportation costing over $100, in which case the Government
buys the ticket and no reimbursement or receipt is required. See
Federal Travel Regulations, FPMR 101-7 (September 1981) paras. 1-10.2
and 1-11.3; and 41 C.F.R. Section 101-41.203-2 (1983). However, we
have allowed reimbursement for a ticket exceeding the $100 limitation
purchased with personal funds absent a GTR, provided the employee
submits a receipt, passenger coupon, or other evidence showing that the
amount claimed was actually paid. Patrick G. Orbin, B-215550, October
23, 1984; and Esther O. Kaloa, B-198950, July 18, 1980. Thus, in
Patrick G. Orbin, cited above, we held that an employee who traveled to
the wrong destination through an administrative error in airline
reservations could be reimbursed for the $284 he spent to secure a
ticket for the proper destination.
The circumstances in Mr. Davis' case justify his failure to use a GTR
for travel from St. Louis to Springfield, Illinois. Because of the
confused boarding situation at the St. Louis airport, Mr. Davis used the
GTR which originally had been issued to him to travel to the wrong
destination. Once he discovered the error, Mr. Davis was not in a
position to request the issuance of a new GTR. He had no choice at that
time but to purchase another ticket with his own funds. Under these
circumstances, we hold that Mr. Davis may be reimbursed for the full
cost of the airline ticket he purchased with personal funds.
Accordingly, for the reason stated above, Mr. Davis' claim for
transportation expenses in the amount of $119 may be allowed.
Comptroller General
of the United States
FILE: B-216632 85-1 CPD 246
DATE: February 27, 1985
MATTER OF: Medical Gas & Respiratory Services, Inc.
DIGEST:
CONTRACTS - TERMINATION - PROPRIETY
Agency's decision to terminate award was justified where award was
based on an erroneous evaluation of bids and protester was not entitled
to award on item terminated.
Medical Gas & Respiratory Services, Inc., protests the partial
cancellation of its contract for oxygen concentrators and backup oxygen
services awarded to it by the Veterans Administration (VA) under
invitation for bids (IFB) No. 621-10-84. VA "canceled" Medical Gas'
contract in order to award part of the requirement to Vital Care
Industries after VA discovered that it had made an error in evaluating
Vital Care's bid price under the IFB. Medical Gas contends that it
received a proper award and that, in reliance on that award, it placed
an order for equipment needed under the contract. The protester
maintains that the award to Vital Care should be set aside and the
contract for the entire requirement reawarded to it.
We deny the protest.
The IFB bidding scheme established five geographical zones. Bids
were solicited for oxygen concentrators, backup oxygen and emergency
backup oxygen on a zone by zone basis. For each item within a zone, the
bid schedule provided blanks for a unit price, an estimated quantity and
a blank for an extended price. The IFB also provided a blank for a
total aggregate price for each zone. Further, the solicitation stated
that:
"The Veterans Administration reserves the right to make an
award to the responsible bidder quoting the lowest aggregate price
for all items, for any group of items, or on an item basis,
whichever is more advantageous to the government. Bids will be
evaluated on the basis of additional cost to the government that
might result from making multiple awards. For this purpose, the
cost of awarding and administering each additional contract is
estimated to be $500."
Medical Gas submitted the low bid for zones 2 through 5 and the
second low bid for zone 1. Vital Care submitted the low bid for zone 1.
The contracting officer calculated that the VA would save only $327 by
splitting the award so that Vital Care would receive a contract for zone
1 services and Medical Gas would receive the contract for zones 2
through 5. The contracting officer concluded that the difference did
not offset the $500 differential established in the solicitation for
administering multiple contracts and notified Medical Gas by telephone
on September 5, 1984, and by letter dated September 5, that it was being
awarded all five zones.
Vital Care, however, orally protested to the contracting officer.
The $327 differential, Vital Care complained, was for 1 month only and
on an annual basis would amount to a difference of $3,924. After
examining Vital Care's complaint, the contracting officer decided that
the award was improper. On September 6, Medical Gas was notified that
it should have only been awarded zones 2, 3, 4 and 5 and that VA was
"cancelling" the zone 1 award.
Medical Gas contends that VA acted arbitrarily in "cancelling" the
zone 1 award because it had a binding contract for all five zones based
on the telephone call from the contracting officer and the September 5
award letter. Medical Gas relies on the standard clause set out in
Federal Acquisition Regulation (FAR), 48 C.F.R. Section 52.214-10(d)
(1984), and included in the IFB, which provides:
"A written award or acceptance of a bid mailed or otherwise
furnished to the successful bidder within the (time) for
acceptance specified in the bid shall result in a binding contract
without further action by either party."
Medical Gas also asserts that in reliance on the award, it placed
orders for 120 concentrators, 50 of which were to be used in zone 1.
Initially, we point out that the contract in this instance contained
termination for convenience and disputes clauses and that any claim
Medical Gas may have arising from the "cancellation" of the zone 1 award
is for consideration under the contract disputes procedure and the
Contract Disputes Act of 1978, 41 U.S.C. Section 601 (1982). However,
we review protests against termination of contracts resulting from
alleged deficiencies in the initial contract award. Space Age
Engineering, Inc., B-209543.2, Apr. 19, 1984, 84-1 CPD Paragraph 447.
Where it is discovered shortly after award that an erroneous award
has been made, it is normally appropriate for the government to correct
its mistake by terminating the improper award and making the award that
should have been made in the first place. Such action is proper to
preserve the integrity of the competitive procurement system. Central
Texas College, B-211167.3, Mr. 2, 1984, 84-1 CPD Paragraph 259. VA, in
its report on the protest, justifies its actions on this basis.
The contracting officer based the initial award on computations that
reflect a belief that the estimated quantities indicated on the bid
schedule apply to the entire 12-month contract life. He canceled the
zone 1 award to Medical Gas only after concluding that these estimates
were intended to apply on a monthly basis and that the intended price
for each item had to be multiplied by 12. Consequently, he calculated
the difference between a zone 1 award to Medical Gas and Vital Care as
$3,924.
The IFB, however, did not indicate that the estimated quantities were
stated on a monthly basis. Nevertheless, where all parties treat an IFB
as anticipating bids on a basis that meets the government's needs, no
bidder is prejudiced if bids are evaluated on that basis because bidders
compete equally. Singer Safety Company, B-216674, Oct. 16, 1984, 84-2
CPD Paragraph 414. Medical Gas does not contend that bids were
submitted on other than a monthly basis. The procurement was advertised
and could be properly awarded only on the basis of lowest evaluated
price. Reppert Marine Sales and Service, 60 Comp. Gen. 495 (1981), 81-1
CPD Paragraph 430. Construing the IFB as asking for monthly prices, the
protest has no merit because, as indicated earlier, Medical Gas'
aggregate bid is not low, based on a 12-month period.
Medical Gas argues, however, that if multiple awards by zones are
appropriate, VA should have awarded contracts on an item-by-item basis
within each zone. According to Medical Gas, this would also be allowed
by the IFB's aggregate award clause, in which event Medical Gas points
out, its bid was low on item 2 in zone 1.
According to VA, such a result was not intended. VA explains that it
only intended to reserve the right to make award by geographical zone
and that it would not be reasonable to award on an item-by-item basis
within each zone, because the items, other than item 1 for each zone,
merely fill incidental requirements.
We believe that VA's interpretation of the IFB in this respect is
correct and that award was to be made on an aggregate of all the zones
or on an individual zone basis only. The provision questioned contains
standard form language. Elsewhere, the IFB forbade bids on an
item-by-item basis within zones and required the contractor making
deliveries of incidental items to inspect and maintain the primary
equipment delivered under item No. 1. As VA notes, separate awards of
incidental items within a zone would require one contractor to inspect
and maintain the equipment furnished by other contractors, a result that
was clearly not intended. In the circumstances, we think it is clear
that the IFB did not anticipate separate awards of individual items
within zones.
The protest is denied. By separate letter, however, we are bringing
our concern regarding the adequacy of the IFB statement of estimated
quantities to the attention of the Administrator of Veterans Affairs.
Comptroller General
of the United States
B-216630, B-216630.2, Oct 22, 1984, 84-2 CPD 440
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Solicitation improprieties - Apparent prior to
bid opening/closing date for proposals
DIGEST:
Protests alleging improprieties in an IFB apparent prior to bid
opening, but filed after bid opening, are untimely and not for
consideration.
Smith Machinery Co., Inc.; Todd Machinery, Inc.:
Smith Machinery Co., Inc. (Smith), and Todd Machinery, Inc. (Todd),
protest that the requirements in invitation for bids (IFB) No.
DAAG49-84-B0143 issued by the Tooele Army Depot, Utah, are unduly
restrictive.
Our Bid Protest Procedures provide that a protest alleging
improprieties in an IFB that are apparent prior to bid opening must be
filed with either the contracting agency or this Office before bid
opening. 4 C.F.R. sec. 21.2(b)(1) (1983). The bid opening date in this
instance was September 28, 1984. Smith's & Todd's protests, however,
were not filed until October 1, 1984, and October 5, 1984, respectively.
Therefore they are untimely and not for consideration on the merits.
See Davlin Paint Company, B-214050, Jan. 23, 1984, 84-1 C. P.D. para.
105.
The protests are dismissed. COMP GEN (UP)
FILE: B-216624.2 85-1 CPD 177
DATE: February 11, 1985
MATTER OF: Monthei Mechanical, Inc. -- Reconsideration
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
Prior decision is affirmed on reconsideration where the protester has
not shown any error of fact or law which would warrant reversal of the
decision.
Monthei Mechanical, Inc. (Monthei), requests reconsideration of our
decision, Monthei Mechanical, Inc., B-216624, December 17, 1984, 84-2
C.P.D. Paragraph 675, denying Monthei's protest of the Navy's rejection
of its hand-carried bid as late. We found that a significant cause of
the late delivery of Monthei's bid was the failure of Monthei's
representative to allow sufficient time for delivery. Further, we
concluded that the late delivery of Monthei's bid did not result from
such extraordinary delay or misdirection by government personnel as to
permit its consideration. For the reasons discussed below, we affirm
our decision.
In its request for reconsideration, Monthei asserts that the Navy
counsel has no support for certain facts discussed in the agency report,
e.g., that the bid box was customarily moved prior to bidding, that
Monthei was familiar with this procedure, and that Monthei's
representative did not listen to people attempting to give her
directions. However, the Navy has submitted statements from Navy
personnel in support of facts summarized in its report. For example,
according to Commanding Officer, it is standard procedure to have the
bid opening team and the bid box in the conference room at the time
designated in the invitation for bids for bid opening. There is a
receptionist at the front desk (approximately 50 feet from the
conference room) to direct bidders to the place of bid opening. On bid
opening day, Monthei's representative entered the building, protested
that the Navy had hidden the bid box, and refused to listen to the
receptionist trying to direct her to the conference room. The
Commanding Officer noted that Monthei had bid on 12 projects advertised
by his office in the past several months and was very familiar with the
bid opening procedures.
Monthei also takes issue with our statement that arriving in the
building parking lot 30 seconds before the bid opening deadline does not
ensure sufficient time for delivery. According to Monthei, time of
arrival in the parking lot is immaterial; the only material time is
arrival at the place designated for bid opening, and Monthei claims its
representative arrived at the place designated for bid opening before
the deadline.
Monthei apparently does not fully comprehend the basis of our
decision. The invitation for bids required that all hand-delivered bids
be deposited in the bid box in the contracting office building before
the time set for bid opening. Monthei admits that its bid was delivered
to the bid opening room, where the bid box was, after the bid deadline.
Our Office has stated that a late hand-carried bid may not be considered
unless there is a showing that improper government action was the
paramount cause for the late delivery and consideration of the late bid
would not compromise the integrity of the competitive bidding system.
Saint Louis Tuckpointing and Painting Co., Inc., B-212351.2, Nov. 18,
1983, 83-2 C.P.D. Paragraph 588. In determining whether improper
government action is the paramount cause for late delivery, we consider
whether the bidder significantly contributed to the late delivery by not
acting reasonably in fulfilling its responsibility of delivering the bid
to the proper place by the proper time. James L. Ferry and Sons, Inc.,
B-181612, Nov. 7, 1984, 74-2 C.P.D. Paragraph 245. The arrival of
Monthei's representative in the building parking lot only 30 seconds
before the bid opening deadline, as well as the refusal of Monthei's
representative to listen to directions, uas a factor which we considered
in determining that Monthei significantly contributed to late delivery
of its bid and should not have its bid considered.
Monthei also contends that our decision introduced a new test for
government impropriety causing a bid to be late -- extraordinary delay
or misdirection by government personnel. Monthei ignores our discussion
of extraordinary delay and/or misdirection by government personnel in
such decisions as 34 Comp. Gen. 150 (1954), and James L. Ferry and
Sons, Inc., B-181612, supra, 74-2 C.P.D. Paragraph 245 at 4. In 34
Comp. Gen. 150 (1954), we held that a late bid could be considered where
extraordinary delay by government personnel at a base entrance in
furnishing an entrance pass caused the bid to be late. Conversely, in
James L. Ferry and Sons, we held that a late bid should not be
considered where the bidder failed to allow sufficient time for delivery
and lateness was not attributable to extraordinary delay or misdirection
by government personnel.
Since Monthei has not demonstrated any error of fact or law in our
prior decision, that decision is affirmed.
Comptroller General
of the United States.
FILE: B-216624 84-2 CPD 675
DATE: December 17, 1984
MATTER OF: Monthei Mechanical, Inc.
BIDS - LATE - HAND CARRIED DELAY - REJECTION OF BID
A late hand-carried bid delivered to the bid opening room after the
time set for bid opening may not be considered unless there is a showing
that wrongful government action was the paramount cause of the late
delivery.
Monthei Mechanical, Inc., protests the rejection of its hand-carried
bid as late under invitation for bids (IFB) No. N62474-84-B-0927 issued
by the Department of the Navy, Marine Corps Base, Camp Pendleton,
California. We deny the protest.
The time set for receipt of bids was 10 a.m., September 18, 1984.
The bid box in the Contracting Office, Building 2276, Marine Corps Base,
Camp Pendleton, California, was designated as the place for the
submission of hand-carried bids.
According to the protester, on September 18, 1984, its employee left
her car in front of the door to building 2276 30 seconds before 10 a.m.
As she opened the building door, she noticed that the bid box had been
moved from its customary location near the building entry. When the
employee asked the receptionist where the box was, the receptionist told
her "You're too late," rather than giving her directions to the box
location. Monthei's employee then searched the corridor where the last
opening she attended had been held. Seeing no box, she returned to the
receptionist, who directed her to the bid opening room. The presiding
officer was reading opening remarks when Monthei's employee employee
entered the room and attempted to insert Monthei's bid in the bid box,
which had not yet been opened. A government representative placed her
hand over the box opening and told the employee that she could not put
her bid in the box because she was late. The employee protested that
she was not late that the bid box had been removed from the front office
before 10 a.m. Noting that her watch read 30 seconds after 10 a.m., the
employee asked for a superior to make the decision about the acceptance
of Monthei's bid. The government representative left the room to check
with a superior, returned and informed the employee that Monthei's bid
would be accepted unopened.
In its report to our Office, the Navy states that it is customary to
keep the bid box near the entry to building 2276. The box was moved
from the entry to a nearby conference room shortly before bid opening, a
customary practice, and bids were opened as scheduled at 10 a.m. The
Navy has submitted statements from individuals present at bid opening to
establish these facts. According to the Navy, Monthei has bid on 12
projects advertised by the Officer in Charge of construction in recent
months and was familiar with bid opening procedures. Monthei, though,
contends it was not aware of any policy of moving the bid box prior to
the bid deadline. The Navy also reports that witnesses state Monthei's
employee became hysterical upon entering building 2276 and did not
listen to people attempting to give her directions.
Monthei contends that, under the circumstances, its bid must be
treated as timely even though it may have been delivered to the room in
which bids were being opened a few seconds after the bid deadline.
According to Monthei, hand-delivered bids which arrive late at the place
for bid opening are properly rejected, except where the government has
failed to adequately specify the room where the opening would take place
or has changed the location for the bid depository without giving
adequate instructions to bidders of the new location for the bid
depository. Monthei feels the delivery of its bid falls under this
exception.
Our Office has held that a late hand-carried bid may be considered
where lateness was due to improper action of the government and where
consideration of the late bid would not compromise the integrity of the
competitive procurement system. Saint Louis Tuckpointing and Painting
Co., Inc., B-212351.2, Nov. 18, 1983, 83-2 C.P.D. Paragraph 588.
However, a late bid should not be evaluated if the bidder significantly
contributed to the late receipt by not acting reasonably in fulfilling
its responsibility of delivering a hand-carried bid to the proper place
by the proper time, even though lateness may have been caused, in part,
by erroneous government action or advice. See Priest & Fine, Inc.,
B-213603, March 27, 1984, 84-1 C.P.D. Paragraph 358; Avantek,
Incorporated, 55 Comp. Gen. 735 (1976), 76-1 C.P.D. Paragraph 75.
Upon a review of the circumstances here, it appears that a signifcant
cause of the late delivery of Monthei's bid was the failure of Monthei's
representative to allow sufficient time for delivery. Arriving in the
building parking lot 30 seconds before the bid opening deadline does not
ensure sufficient time for delivery. Furthermore, according to the
Navy's report to our office, Monthei's representative did not listen to
the people attempting to give her directions. We therefore cannot
conclude that late delivery of Monthei's bid resulted from such
extraordinary delay or misdirection by government personnel as to permit
its exception from the rule that a late bid may not be considered for
award.
Monthei cites a number of our previous decisions in support of its
position that the tender of its bid was improperly refused. We think
Monthei's reliance on these cases is Misplaced because there are
significant factual differences.
In 34 Comp. Gen. 150 (1954), we permitted consideration of a late
bid where there had been an extraordinary delay caused by government
personnel at the Base Security Office. The bid was delivered to the
supply Office, prior to the designated bid opening time, was stamped as
timely received by a clerk, and returned to the bidder, who arrived at
the bid opening area 3 minutes late. The situation in Monthei's case is
distinguishable because Monthei has not proven that it was subject to
any extraordinary delay caused by government personnel.
In LeChase Construction Company, B-183609, July 1, 1975, 75-2 C.P.D.
Paragraph 5, the bid opening room was changed without amending the
solicitation, which contained three different room numbers. We
determined that the inconsistency in the solicitation could have led to
the late submission and sustained the protest.
In Dale Woods, B-209459, April 13, 1983, 83-1 C.P.D. Paragraph 396,
the bidder arrived at the building a half hour before bid opening, but
arrived at the bid opening room late. The room had been changed from
that listed in the solicitation without amending the solicitation. We
concluded that the bidder acted reasonably and diligently and did not
significantly contribute to his late arrival; the paramount cause for
the bidder's late arrival was the change of the bid opening room. In
Monthei's case, the solicitation did not incorrectly list the place for
bid opening, and its representative arrived at the building only 30
seconds before bid opening, as compared to the half hour allowed by the
bidder in Dale Woods.
In Saint Louis Tuckpointing and Painting Co., Inc., B-212351.2,
supra, the bidder's representative arrived at the building 5 minutes
before the time scheduled for bid opening, was initially given
insufficient directions by an agency guard, later redirected by the same
guard and arrived at the bid opening room 40 seconds late. We concluded
that the bidder had ample time to deliver the bid if adequate
information had been given by the agency, and the paramount cause for
late delivery was the agency's failure to adequately direct bidders once
they arrived at the general location. Again, we find no support for
Monthei's position in the holding of this case, since here the Navy
reports that Monthei's representative did not listen to people
attempting to give her directions. Similarly, we find no support for
Monthei's position in Baeten Construction Co., B-210681, Aug. 12, 1983,
83-2 C.P.D. Paragraph 203, where the paramount cause for the bid being
late was misdirection of the bidder by an authorized representative of
the contracting officer.
The protest is denied.
Comptroller General of the United States
FILE: B-216620.2 85-1 CPD 19
DATE: January 4, 1985
MATTER OF: Freund Precision, Inc. -- Reconsideration
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
Request for reconsideration is denied where the protester has not
shown that prior decision was erroneous as to fact or law.
Freund Precision, Inc. (FPI), requests reconsideration of our
decision in Freund Precision, Inc., B-216620, Oct. 23, 1984, 84-2 C.P.
D. Paragraph 456, which dismissed its protest against the award of a
contract to United Terex (United) by the Navy Aviation Supply Office
(Navy) under invitation for bids (IFB) No. N00383-84-B-0615. We deny
the request.
In its original protest, FPI contended that United's bid price was
too low to successfully perform the contract and that the Navy awarded
the contract without conducting a preaward survey or an equal
opportunity compliance review as required by Federal Acquisition
Regulation Sections 52.222-24 and 52.222-26, 48 Fed. Reg. 42, 102,
42,171 (1983) (to be codified at 48 C.F.R. Sections 52.222-24 and
52.222-26).
We dismissed the protest because whether the bid price is so low that
the bidder will not be able to perform the contract satisfactorily, as
well as the bidder's ability to comply with the IFB's equal opportunity
clause, concerns the bidder's responsibility. Further, we stated that
the contracting officer must determine the bidder's responsibility
before award and may conduct a preaward survey to help do so, but that a
preaward survey is not a legal prerequisite to ah affirmative
determination of responsibility. We also stated that we will not review
a decision concerning an affirmative determination of responsibility
absent a showing that the contracting officer acted fraudulently or in
bad faith or that definitive responsibility criteria have not been met.
FPI did not present such a case.
In its request for reconsideration, FPI contends that we erroneously
concluded that an award could be made without an equal opportunity
compliance review. In support of its position, FPI cites the following
provision of FAR (Section 52.222-24):
"An award in the amount of $1 million or more will not be made
under this solicitation unless the offeror and each of its known
first-tier subcontractors (to whom it intends to award a
subcontract of $1 million or more) are found, on the basis of a
compliance review, to be able to comply with the provisions of the
Equal Opportunity clause of this solicitation."
We have been advised by the Navy that the contracting officer
received both an oral and written report from an on-site equal
opportunity compliance officer prior to the award to United. Therefore,
the requirements of the above clause were fulfilled.
The request for reconsideration is denied.
Comptroller General of the United States
B-216620, Oct 23, 1984, 84-2 CPD 456
BIDS - Prices - Below cost - Not basis for precluding award
DIGEST:
1. No basis exists to preclude a contract award merely because
bidder submitted a below cost bid. A below cost bid presents a question
of responsibility.
BIDDERS - Qualifications - Preaward surveys - Utilization -
Administrative determination
2. Contracting officer has discretion not to conduct a preaward
survey, and in the absence of fraud or the failure to apply definitive
responsibility criteria, GAO will not review a decision not to conduct a
preaward survey or the contracting officer's affirmative determination
of responsibility.
Freund Precision, Inc.:
Freund Precision, Inc. (FPI), protests the award of a contract for
towbars to United Terex (United) by the Navy Aviation Supply Office
(Navy) under invitation for bids No. N00383-84-B-0615. FPI contends
that United's bid price was too low to successfully perform the contract
and that the Navy awarded the contract without conducting a preaward
survey or an equal opportunity compliance review as required by Federal
Acquisition Regulation secs. 52.222-24 and 52.222-26, 48 Fed.Reg.
41,102, 42,171 (1983) (to be codified at 48 C.F.R. sec. 14.103-1).
We dismiss the protest.
The submission of a below cost bid is not illegal and provides no
basis for challenging the award of a government contract. Whether a bid
price is so low that the bidder will not be able to perform the contract
satisfactorily is a question concerning the bidder's responsibility.
TECOM Incorporated, B-215291, June 19, 1984, 84-1 C.P. D. para. 644.
Similarly, the regulations FPI cites concerning the prospective
awardee's ability to comply with the solicitation's equal opportunity
clause also relate to the bidder's responsibility. The contracting
officer must determine the bidder's responsibility before award and may
conduct a preaward survey to help do so. However, we have held that a
preaward survey is not a legal prerequisite to an affirmative
determination of responsibility. It is within the contracting officer's
discretion not to conduct a preaward survey and our Office does not
review such a decision or protests concerning an affirmative
determination of responsibility absent a showing that the contracting
officer acted fraudulently or in bad faith or that definitive
responsibility criteria have not been met. Xtek, Inc., B-213166, Mar.
5, 1984, 84-1 C.P.D. para. 264. Neither exception is alleged here.
COMP GEN (UP)
FILE: B-216615 85-1 CPD 211
DATE: February 19, 1985
MATTER OF: Spectrum Leasing Corporation
DIGEST:
BIDS - RESPONSIVENESS - "NO CHARGE", ETC. NOTATIONS
Bids which contain "N/C" (no charge) or similar notations instead of
dollar prices for certain items in the schedule are responsive, because
such notations clearly equate with zero dollar costs, and thereby
indicate the bidder's affirmative intent to be obligated to provide the
items at no charge to the government.
Spectrum Leasing Corporation protests the award of a contract to
ISYX, Inc. under invitation for bids (IFB) No. NA-84-IFB-00143, issued
by the Department of Commerce. The procurement was for the acquisition
of an indefinite quantity of personal computers, software, and
peripheral components in various configurations to supplement existing
automatic data processing (ADP) systems, with the right of the
government to extend the term of the contract up to a total of 36
months. Spectrum complains that the agency improperly rejected its bid
as nonresponsive because the firm had inserted "N/C" (no charge)
notations for certain contract line items, in apparent derogation of an
IFB provision which required bidders to provide dollar costs for these
items. We sustain the protest.
Background
The estimated range of purchases for the first 12 months was from 75
to 350 microcomputer systems. Each contract line item was assigned a
weighted value that reflected the estimated quantities of that item the
agency expected to order for system configuration purposes. For
example, for every 50 basic systems (personal computers and internal
disk drive/controllers), the agency expected to order 10 parallel ports,
10 serial ports, 5 clock/calendar boards, 4 file commands, and estimated
quantities of other such peripheral components.
The IFB provided at clause B.2.1, in part, that:
". . . All mandatory items offered must be listed in (the) unit
price tables. If there is no price associated with the item, N/C
(No Charge) shall be inserted. . . ."
However, because the agency, as it states, desired the flexibility to
order individual components along with basic systems so as to be able to
configure complete systems as it saw fit, the following clause was added
to the IFB by amendment, which provided in pertinent part:
C12. Special Pricing Instruction
The offeror must show a price for each contract line item
(being evaluated) . . . Any entry . . . other than a dollar cost
will invalidate the entire bid. . . ."
Spectrum submitted the apparent third low bid, which was rejected as
nonresponsive because the firm had inserted "N/C" notations for nine
contract line items instead of a dollar cost. The apparent low bid was
rejected for essentially the same reason, in that the bidder had
inserted "NSP" (not separately priced) notations for several items. The
apparent second low bid was rejected as nonresponsive because the bidder
had failed to submit a bid on all items, that is, had left blank several
spaces to insert a price. The agency then awarded the contract to ISYX,
which was fourth low, as the remaining low responsive, responsible
bidder. /1/
Spectrum contends that it was improper for the agency to reject its
bid as nonresponsive because it had not provided a dollar cost for the
items in question. The firm asserts that clause B.2.1 expressly allowed
individual items to be priced as "N/C," and that this provision was not
contradicted by clause C12. when the two provisions were read together
in context. As support for its position, Spectrum refers to prior
decisions of this Office in which we held that bids containing "no
charge" or similar notations instead of prices were responsive, since
the bidder was thereby affirmatively indicating its willingness to
provide items or services at no charge or cost to the government.
The agency states that clause B.2.1 was accidentally left in the IFB
and that it should have been deleted because it conflicted with the
special pricing provisions of clause C12. However, the agency believes
that bidders were clearly aware from the general tenor of the
solicitation that the procurement entailed the possible purchase of
individual components, apart from complete systems, and that bidders
were on notice to structure their bids in accordance with the specific
pricing instructions of clause C12. The agency emphasizes that those
special instructions were incorporated into the IFB to prevent
situations where the government conceivably could purchase individual
components under the resulting contract for which the contractor had
offered no price in its bid. The agency contends that no reasonable
bidder would assume that the contractor would be obligated to provide a
large quantity of an item to the government at no charge.
Analysis
As a general rule, a bid must be rejected as nonresponsive if the
bid, as submitted, does not include a price for every item requested by
the IFB. Telex Communications, Inc., et al., B-212385, et al., Jan.
30, 1984, 84-1 CPD Paragraph 127. The reason for this rule is that
where a bidder fails to submit a price for an item, the bidder generally
is not obligated to provide that item as part of the other requirements
for which prices were offered. 52 Comp. Gen. 604 (1973); Con-Chen
Enterprises, B-187795, Oct. 12, 1977, 77-2 CPD Paragraph 284.
However, as indicated earlier, we have recognized an exception to
this rule. In lieu of submitting a price, a bidder may indicate its
intent to be obligated to provide an item by inserting in the
appropriate space in the bid schedule a notation that the item will be
provided at "no cost" or "no charge" to the government. Aardvark/Keith
Moving Co., B-200680, Mar. 6, 1981, 81-1 CPD Paragraph 180; Yonker,
Inc., B-189869, Dec. 22, 1977, 77-2 CPD Paragraph 495. The bidder may
not leave the space blank, but is required to take some affirmative step
-- such as inserting a zero, the appropriate notation, or dashes -- to
establish that it is aware of and willing to commit itself to furnishing
the item in question at no charge. Dyneteria, Inc., et al., 54 Comp.
Gen. 345 (1974), 74-2 CPD Paragraph 240; American International
Rent-A-Car, B-211326, Apr. 22, 1983, 83-1 CPD Paragraph 452.
We agree with Spectrum that clauses 0.2.1 and C12., when read
together in context, are not mutually contradictory. Both clauses
require bidders to insert a price for all contract line items being
evaluated. Consistent with our prior decisions, we believe that the
"N/C" notations inserted by Spectrum clearly equate with zero dollar
costs, the same as if Spectrum had offered "$0" or a purely nominal
amount. That is, they represent the firm's affirmative intent to
obligate itself to provide the nine items in question at no cost to the
government. In Yonker, Inc., supra, the applicable provisions stated
that the bidder must "quote" on all items of the schedule for which a
bid was submitted. We held that the word "quote" did not require that a
specific price be placed next to each item, nor did it preclude the use
of an acceptable symbol unambiguously indicating no charge or cost.
Similarly, in Aardvark/Keith Moving Company, supra, the applicable
provision required bidders to "bid" on all items or subitems; we held
that an item could be "bid" at no charge to the government. We do not
believe that the present situation is fundamentally different.
Furthermore, we note that Spectrum only inserted "N/C" notations for
nine contract line items out of a total requirement for some seventy
various systems and components. The nine items in question are all
peripheral components such as parallel ports, serial ports, clock/
calendar boards, personal editors, fixed disk organizers, and file
commands. From an examination of ISYX's bid, it is obvious that these
particular components are relatively insignificant items given the total
scope and cost of the procurement, since the unit prices ISYX offered
for them only range from $28.00 to $100.00. It is reasonable to assume
that the agency would not order large quantities of such accessories by
themselves in excess of its system configuration needs. An examination
of the solicitation documents shows that the agency never expected to
order these nine items in quantities approaching the number of basic
systems to be ordered. For example, as we indicated earlier, the
estimated ratio of parallel ports to basic systems was only 1:5.
Furthermore in this regard, out of a total delivery order of $493,508
already issued to ISYX, the agency has only purchased two particular
components from ISYX (a BASIC Programming and Development System and an
IBM Personal Editor at a total price of $173.00) for which Spectrum
noted "N/C."
We believe that Spectrum clearly intended to offer these nine items
to the government at no charge as part of its pricing structure, and
thus legally bound itself to do so by inserting the "N/C" notations.
Aardvark/Kieth Moving Company, supra. We fail to see how this pattern
of pricing rendered the firm's bid nonresponsive, and therefore conclude
that the agency improperly rejected the bid.
Since the agency informs us that no additional delivery orders to
ISYX are presently contemplated, we are recommending to the Secretary of
Commerce by separate letter of today that the government's option to
extend the term of the contract not be exercised, and that any future
requirements be resolicited.
The protest is sustained.
Comptroller General
of the United States
(1) The bid prices were as follows:
1. Rehab. Group Inc. $504,825.00
2. Micas, Inc. $538,215.00
3. Spectrum Leasing Corporation $554,925.00
4. ISYX, Inc. $594,612.00
FILE: B-216614 85-1 CPD 322
DATE: March 19, 1985
MATTER OF: Times Fiber Communications, Inc.
DIGEST:
CONTRACTS - AWARDS - MULTIPLE - PROPRIETY
Multiple award is permissible under solicitation where solicitation
language does not prohibit separate awards and tenor of solicitation
does not clearly show that an aggregate award was contemplated.
Times Fiber Communications, Inc. (Times), protests the award of a
contract for cables of varying lengths to Adams-Russell Co., Inc.
(Adams), under request for proposals (RFP) No. N00189-84-R-0083 issued
by the Department of the Navy (Navy).
The Navy awarded Times a contract for front ends of varying type for
use with cables under the same RFP. Times contends that the split award
was not permissible under this RFP, and that Times as the low total
offeror for the items should have received an aggregate award. The Navy
award of two separate contracts resulted in a total cost of $309,554
compared to Times total offer of $381,542.
Times alleges that the solicitation contemplated and authorized a
single, aggregate award for all line items. In support of its view,
Times asserts that solicitation language, including the solicitation
testing requirement for demonstration of cable performance, the delivery
schedule, and the military specification (milspec) incorporated into the
solicitation all show that a single award was contemplated by the navy.
We deny the protest.
The Navy disagrees with Times interpretation of the solicitation and
states that the solicitation did not preclude separate awards of the
solicited items and that the split award resulted in a savings to the
government. The Navy points to paragraph 10(c) of standard form 33A
incorporated by reference into the RFP which permits the government to
"accept any items or group of items of any offer, unless the offeror
qualifies his offer by specific limitations." The Navy further refers to
another clause, which reserved to the Navy the right to make a single
award. The Navy asserts that this language shows its explicit intent to
retain discretion regarding the award since the clause does not require
a single award. The Navy asserts that other clauses referenced by Times
similarly do not preclude split awards. Finally, the Navy states,
notwithstanding Times assertion to the contrary, that the milspec used
in this solicitation does not require a single award. The Navy points
out that the cable assemblies purchased under this solicitation are not
necessarily for use with only the front ends purchased under this
solicitation, and that the cable assemblies may be used with other front
ends purchased under other contracts. In fact, the Navy advises that
while 3,500 front ends were purchased only 1,550 cables were purchased.
Finally, the Navy states that, by amendment to the RFP; it required
compatibility of the components to address the problem of
interchangeability of components purchased under this RFP in the event
the items were not awarded to the same firm.
The protester relies on our decision in General Aero Products
Division, B-191870, July 25, 1978, 78-2 C.P.D. Paragraph 70, in support
of its position that, where the tenor of a solicitation indicates that
an aggregate award is contemplated, an aggregate award should be made
although multiple awards would result in savings to the government. We
do not agree with Times that the tenor of the solicitation showed that
an aggregate award was intended.
In fact, the solicitation did not expressly state that either an
aggregate or split award was intended. However, we think that the more
reasonable reading of the solicitation as a whole is that the Navy was
permitted to make split awards if the split awards resulted in the
lowest cost to the government.
The solicitation schedule broke out the two solicited items, cables
and front ends, as separate line items of supply with each line item
subdivided according to type of cable or front end solicited and called
for prices for each line item and subdivided category. The schedule did
not require a price for the total of all cables or all front ends or a
total price for a combination of cables and front ends. Also, while the
Navy reserved the right under the solicitation to make a single award,
there was no provision requiring that award be made in the aggregate.
Defense Acquisition Regulation Section 2-201(a) section L(vii), Defense
Acquisition Circular No. 76-30, Sept. 30, 1981; see Engineering
Research, Inc., B-188731, June 15, 1977, 77-1 C.P.D. Paragraph 431.
Times also quotes the "evaluation of options" clause as support for
its view that an aggregate award was required by the RFP. The
provision, M105 of the RFP, provides that:
"A. Bids and proposals will be evaluated for purposes of award
by adding the total price for all option quantities to the total
price for the basic quantity. Evaluation of options will not
obligate the Government to exercise the option or options."
In our view, this clause essentially explains that option prices are
to be added to the basic quantity price for evaluation purposes. It
does not indicate that an aggregate award is contemplated. Simply, the
clause would require in the case of two awards that the Navy evaluate
base and option prices for each award.
Furthermore, with regard to the delivery provision, we disagree with
Times contention that, because the solicitation provides one delivery
schedule, this necessarily shows an intent to make an award to only one
source for both items. Under this provision, we think one or more
contractors would be bound to the same delivery schedule.
Times also argues that the testing requirement for items under this
RFP and the milspec provisions make practical sense only if one
contractor provides both the cables and the front ends and these
components are tested together. Times asserts that, if they are not
tested together, the Navy will be accepting front ends that may not work
with the cables supplied under this RFP, which renders the testing
requirement meaningless. Similarly, Times states that the milspecs for
intermediate interface and compatibility contemplates only one
contractor to ensure the components can perform together.
The Navy responds that the testing paragraph at issue requires that
"all cable assemblies be tested with style A, Type 3 replaceable
interface components." Since both companies manufacture interface
components and Adams has agreed to the RFP terms, the Navy believes this
requirement will be met. Also, the Navy points out that both
contractors are obligated to comply with these and all milspec
requirements. In this connection, the Navy, specifically, by amendment,
added a requirement for the interface of cables to be compatible with
the Times front ends. Adams took no exception to this provision and the
Navy is satisfied that Adams will comply with all solicitation
requirements.
We find nothing in the testing or milspec which requires an aggregate
award. For example, one paragraph concerning the interface requirement
states that the manufacturer is responsible for interface between the
cables and front ends, but does not, in our view, require a single
manufacturer for all components. As the Navy suggests, the manufacturer
of each of these items is responsible for ensuring compatibility with
the interface components.
In our view, to the extent the issue remains, it is one of compliance
and administration of the contract which this Office does not review.
See Central Texas College System, B-217491, Jan. 25, 1985, 85-1 C.P.D.
Paragraph 102.
Finally, we note that the second sentence of the testing requirement
provision states:
"After testing the cable assembly shall be packaged separately
from the replaceable interface components as ordered by the
procurement document."
The Navy states this requirement was not intended to preclude
multiple awards, but was intended to benefit the Navy if one contractor
received the award. The Navy advises that, since the front ends and
cables would not necessarily be used as an assembly, it was the desire
of the Navy to receive the items in separate packages.
By requiring that the components be packaged separately after
testing, this language appears to presuppose that the components will be
manufactured by one source which will package the items together.
However, we are not prepared to conclude that this shows the Navy's
intent to award to only one source. We accept the Navy's explanation
that, since the items would not necessarily be used as one unit, this
provision was included to ensure that the items were packaged separately
after testing in the event one contractor received the award. The
provision was intended to meet a specific need for separate packaging
and this need was met by the separate awards. Thus, here the provision
has no effect other than to merely require something that will be
accomplished by the nature of the award and, therefore, we are unable to
conclude it shows that only an aggregate award was intended. While it
clearly applied to an aggregate award, it does not prohibit a multiple
award. Rather, it simply does not apply here.
Harry R. Van Cleve
General Counsel
FILE: B-216613 85-1 CPD 294
DATE: March 11, 1985
MATTER OF: Cullinet Software
DIGEST:
CONTRACTS - NEGOTIATION - SOLE-SOURCE BASIS - ADMINISTRATIVE
DETERMINATION - REASONABLE BASIS
1. Agency's rejection of protester's software, proposed as
functionally equivalent to that described in a Commerce Business Daily
announcement of intent to acquire the software on a sole cource basis
from another vendor under a nonmandatory schedule contract, has a
rational basis when the agency (1) already has acquired the protester's
software and (2) currently seeks an alternate system for its multiple
users.
CONTRACTS - NEGOTIATION - SOLE-SOURCE BASIS - PROCEDURES - COMMERCE
BUSINESS DAILY NOTICE PROCEDURES - INCOMPLETE SYNOPSIS
2. When contracting agency reasonably seeks alternate software for a
computer center with multiple users, offeror whose product already has
been acquired should be apprised of agency's intent, rather than
encouraged to respond to a Commerce Business Daily announcement of
intent to acquire alternate software from another source's nonmandatory
schedule contract.
Cullinet Software protests the U. S. Department of Argiculture's
issuance of a delivery order for various software to be used in its
Washington Computer Center. The order, issued to Applied Data Research,
Inc. on September 28, 1984, was under that firm's nonmandatory automatic
data processing schedule contract, No. GS-00R-840IS5765.
We deny the protest.
The agency announced the proposed order in the Commerce Business
Daily on August 21, 1984, listing the particular software packages that
it intended to acquire from Applied. These included a "Datadictionary";
"Dataquery" for informational requests; "Ideal," which integrates
dictionary, library, programming, editing, and other functions; and
"Datacom/DB," a management system providing for storage and retrieval of
data. The announcement invited vendors that could provide functionally
equivalent software to furnish technical material within 30 days.
The Department of Agriculture previously acquired an earlier version
of Cullinet software, called Release 5.7, for its Washington Computer
Center, and it is continuing to contract with Cullinet to maintain this
software. Cullinet responded to the Commerce Business Daily
announcement by providing data on the updated version of its software,
called Release 10. The agency, however, rejected Cullinet's software by
letter dated September 25, 1984. Apparently no other vendor responded
to the Commerce Business Daily announcement.
Although the Department of Agriculture's report on the protest does
not make this point entirely clear, the agency essentially indicates
that Cullinet would not receive any order for its software pursuant to
the Commerce Business Daily announcement because Argriculture has
already acquired the Cullinet database software. In this regard, the
agency states that the software being acquired from Applied is not
intended as a replacement for the Cullinet software, but as an expansion
of that to be offered to Washington Computer Center users. The center
provides automatic data processing services to a wide variety of
organizations, in both the Department of Agriculture and other agencies.
The determination of tne needs of the government and the methods of
accommodating those needs is primarily the responsibility of the
contracting agencies. Maremont Corp., 55 Comp. Gen. 1362, 1376 (1976),
76-2 CPD Paragraph 181. The record here indicates that the agency is
simply trying to expand software options available to its multiple
users, and that the reasons initially given to Cullinet for not instead
upgrading to Cullinet's Release 10 are only tangentially related to the
acquisition of the Applied software. It is also apparent that the two
vendors' software performs similar but not identical database functions,
with different approaches inherent in their different proprietary
systems. Each system undoubtedly has different strengths and
weaknesses, and thus users may find one or the other more suitable or
cost effective for a particular application. In view of the Washington
Computer Center's status as a multiple user organization, we are unable
to conclude that its goal of having software options is without a
rational basis.
Cullinet states that it is offering to upgrade its software as the
Washington Computer Center from Release 5.7 to Release 10 at no charge
to the government; the agency states that it intends to continue to
maintain existing Cullinet software and will upgrade it to Release 10
when that becomes "final." Thus, it appears that Cullinet will be
providing essentially what it sought to offer in response to the
Commerce Business Daily announcement.
We believe that the Department of Argriculture should have
forthrightly apprised Cullinet of its ineligibility, instead of
encouraging it to respond to the Commerce Business Daily announcement.
Cf. Masstor Systems Corp., B-215046, Dec. 3, 1984, 64 Comp. Gen. . . .,
84-2 CPD Paragraph 598 (potential sources responding to Commerce
Business Daily announcement of proposed sole-source order from
nonmandatory automatic data processing schedule must be advised of
essential requirements before they are rejected as potential sources of
supply). However, since Cullinet is not in a position of being able to
satisfy the agency's need for software other than Cullinet's product,
the rejection of Cullinet here is not legally objectionable.
Cullinet's protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-216607 85-1 CPD 257
DATE: March 1, 1985
MATTER OF: Magnolia INN
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
1. Protest, alleging that IFB was improperly canceled, filed 1 day
after telephonic notice that the contracting officer intended to cancel
the IFB and several days before protester received written notice of
reasons for cancellation, is timely.
BIDS - INVITATION FOR BIDS - CANCELLATION - AFTER BID OPENING -
DEFECTIVE SOLICITATION
2. Contracting officer may properly cancel a solicitation after bid
opening when it is evident that the solicitation does not reflect the
minimum needs of the government.
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - RESTRICTIVE
3. IFB to provide meals and lodging to Army recruits may properly
restrict offers to firms within one-mile radius of processing station
and is not unduly restrictive where the restriction reflects the actual
needs of the Army.
Magnolia Inn (Magnolia), protests the cancellation after bid opening
of invitation for bids (IFB) No. DACA03-84-B-0003, issued by the
Department of Army (Army). The canceled solicitation was a small
business set-aside to furnish meals and lodging for recruits being
processed through the Military Entrance Processing Station (MEPS) in
Little Rock, Arkansas.
For the reasons discussed below, we deny the protest.
Bid opening was August 9, 1984, and Magnolia was the apparent low
bidder. The contracting officer determined that Magnolia was a
responsible bidder for purposes of this solicitation. However, prior to
award, the contracting officer was advised by MEPS that its needs had
changed and the solicitation specifications were now inadequate.
Consequently, the contracting officer decided to cancel the solicitation
and issue a new solicitation incorporating the present needs of MEPS.
Magnolia received telephonic notification on September 27, 1984, that
the contracting officer intended to cancel the solicitation and
resolicit bids from hotels/motels within a one-mile radius of MEPS
instead of within the "15-minute drive" permitted under the IFB.
Magnolia filed its protest in our Office on September 28, 1984. A
written cancellation of the IFB was issued on October 1 to all bidders,
including Magnolia. This letter stated the reasons for the cancellation
of the IFB. In its report to our Office responding to the protest, the
Army further elaborated upon its rationale for cancellation.
The Army first contends that Magnolia did not protest in a timely
manner because Magnolia did not provide an adequate statement of protest
amounting to a "challenge" of the contracting officer's decision until
the firm submitted its comments on the agency report. We disagree.
Under our Bid Protest Procedures, Magnolia had 10 working days to
file a protest from the date the basis or protest was known or should
have been known. 4 C.F.R. Section 21.2(b)(2) (1984). The record before
us does not clearly indicate that Magnolia knew or should have known the
specific reasons for cancellation prior to receipt of the Army's October
1, 1984 letter. In any event, Magnolia filed its initial protest letter
just 1 day after it was notified by telephone of the impending
cancellation. Although the initial protest letter did not deal with the
reasons later provided by the Army in support of its decision to cancel,
it did serve notice that Magnolia was dissatisfied with the contracting
officer's decision to cancel and resolicit within a restricted
geographical area. Consequently, we consider the protest to be timely
filed under our Bid Protest Procedures. We now turn to the merits of
the case.
The crux of Magnolia's protest is that the contracting officer did
not have proper grounds for canceling the solicatation since the stated
reasons for cancellation existed before bid opening and were fully
considered by the contracting officer. Magnolia questions that
cancellation was "due to a change in the requirements of MEPS," the
grounds cited by the Army for cancellation of the procurement. It
asserts, therefore, that the contracting officer's decision was
arbitrary and capricious and should not be sustained.
It is undisputed that contracting agencies have broad discretion in
determining when it is appropriate to cancel a solicitation. Seaward
International, Inc., B-199040, Jan. 16, 1981, 81-1 C.P.D. Paragraph 23.
However, when formal advertising procedures are used and bids have been
opened, cancellation can have an adverse effect on the competitive
bidding system. For that reason, we have often held that in exercising
their discretion, contracting officers must have cogent and compelling
reasons that warrant cancellation. Engineering Research Inc., 56 Comp.
Gen. 364 (1977), 77-1 C.P.D. Paragraph 106. The determination as to
whether such a reason exists is an administrative one that will not be
disturbed unless the protester can demonstrate that the decision was
arbitrary, capricious or not supported by substantial evidence.
McGregor Printing Corp., B-207084, B-207377, Sept. 20, 1982, 82-2 C.P.
D. Paragraph 240.
In this case, the record establishes that the Army had a compelling
reason to cancel the solicitation. In a September 25, 1984 letter to
the contracting officer, MEPS advised that a change in its processing
schedules required that recruits be lodged within walking distance --
i.e., a quarter-of-a-mile or less -- or within a one-mile radius of the
MEPS location if transportation was provided. MEPS expressed concern
that any lodging outside this one-mile limitation could adversely affect
the processing schedules for the recruits as inclement weather or
transportation difficulties could unduly delay the time of arrival at
MEPS. Moreover, MEPS stated that it lost funding for a bus and driver
which was available as back-up transportation if the need arose. In
view of these facts, the contracting officer determined that the pending
solicitation did not adequately reflect the agency's minimum needs.
Therefore, pursuant to the Federal Acquisition Regulation, 48 C.F.R.
Section 14.404-1(c)(2) (1984), the contracting officer issued a written
determination to cancel the solicitation because the specifications
would be revised to reflect the present mimimum needs of the Army.
Although Magnolia has submitted data to our Office to show that
Little Rock usually has mild winters and, therefore, MEPS' concerns
about weather caused delays were not well founded, in view of the
reported lack of snow removal equipment in Little Rock we do not believe
the protester has shown that the Army acted arbitrarily.
Magnolia further contends that the new geographical requirement is
unduly restrictive and should be disallowed. However, we have
consistently held that specifications are not unduly restrictive if they
express the legitimate minimum needs of the government. A&M School Bus
Service, B-208833, Dec. 22, 1982, 82-2 C.P.D. Paragraph 566. Moreover,
we will not question an agency's determination of its minimum needs in
the absence of a clear showing that the determination was arbitrary or
capricious. A&M School Bus Service, B-208833, supra. Magnolia has not
shown this new geographical restriction to be unreasonable.
Finally, Magnolia alleges that acceptance of its proposal would
result in monetary savings to the government. Our Office has taken the
position, however, that the test for cancellation of an IFB after bid
opening is whether the procurement will satisfy the actual mimimum needs
of the government. Commercial Envelope Manufacturing Company, INC.,
B-213272, Feb. 15, 1984, 84-1 C.P.D. Paragraph 206. Therefore, the
propriety of the cancellation does not hinge upon whether the proposal
would yield monetary savings to the government.
The protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-216606
DATE: April 4, 1985
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - DIRECT INTEREST
CRITERION
Protest challlelnging propriety of contract award fjor a research
study is closed without action since it appears that, as a result of a
statutory provision directing agency to award two contracts for the
research study, the protester is to receive award for an identical
research sudy and therefore lacks direct interest in propriety of the
award of the first contract which is the subject of the protest.
Gardner, Beitel, Ohlrich & Boring
1625 Eye Street, N.W.
Suite 406
Washington, .D.C. 20006
Attn: Roger C. Ohlrich, Esq.
Gentlemen:
This is in response to the protest filed with our Office by Yankee
Energy Corporation, challenging the award of a contract to Vulcan
Cincinnati, Inc., under request for proposals (RFP) No.
DTFH61-84-R-00005, issued by the Department of Transportation (DOT).
The RFP was for a research study authorized by section 152 of the
Surface Transportation Assistance Act of 1982, Pub. L. No. 97-424, 96
Stat. 2097, 2132 (1983), regarding the potential for recovering methane
released in the process of off-shore drilling. Yankee challenged the
award to Vulcan principally on the ground that Vulcan's proposal was not
technically acceptable. As explained in detail below, we are closing
our file on the protest in view of our expectation that a second award
will be made to Yankee to conduct the same research study.
The following provision was included in the continuing resolution for
fiscal year 1985, Pub. L. No. 98-473, Section 8114(i), 98 Stat. 1837,
1945 (1984), as part of the fiscal year 1985 appropriations act for DOT:
"For necessary expenses for conducting transportation planning,
research, and development activities, including the collection of
national transportation statistics, and university research and
internships, to remain available until expended, $5,700,000:
Provided, That the Secretary is directed to make simultaneous
competitive study awards for the Phase I proposals, as submitted
by the two technically qualified finalists in the competition to
perform a methane conversion study, as authorized by section 152
of the Surface Transportation Assistance Act of 1982." (Emphasis
added.)
The provision clearly requires that the agency award two research
study contracts. Of the four offerors found technically acceptable by
DOT, Vulcan and Yankee received close scores for technical merit and
were both rated higher than the other two offerors. DOT apparently
selected Vulcan for the first award because if offered a lower price
than Yankee. Yankee received the highest technical rating. As a result
of the statutory provision cited above, we anticipate that DOT will make
the second award to Yankee.
Because it appears that Yankee is to receive the second award for an
identical research study, Yankee would not be eligible for award of the
first contract. The protest thus appears to be academic and we
therefore are closing our file on the protest without further action.
Sincerely yours,
Ronald Berger
Deputy Associate
General Counsel
FILE: B-216605
DATE: March 26, 1985
MATTER OF: Donna J. Safreed -- Retroactive Temporary Promotions --
Nondiscretionary Agency Policy
DIGEST:
OFFICERS AND EMPLOYEES - PROMOTIONS - TEMPORARY - RETROACTIVE
An employee was assigned the duties of a vacant and
higher-graded position, but her temporary promotion to the
position was delayed because of a clerical error. The employee's
temporary promotion may be effected retroactively, because the
agency failed to carry out a nondiscretionary policy of
temporarily promoting each employee who assumed the duties of the
vacant position.
The Director of the Personnel Division, United States Department of
Agriculture, Food and Nutrition Service, requests our decision
concerning Ms. Donna J. Safreed, an employee of the Food and Nutrition
Service. Specifically, the agency questions whether a clerical error
delaying the approval of Ms. Safreed's temporary promotion to a vacant
and higher-graded position provides a basis for effecting the temporary
promotion retroactively. We hold that Ms. Safreed is entitled to a
retroactive temporary promotion because the agency failed to carry out
an established policy of temporarily promoting each employee who
performed the duties of the vacant position.
Ms. Safreed is employed by the Northeast Regional Office ("the
region") of the Food and Nutrition Service as a Supervisory Food Program
Specialist, grade GM-13. In mid-April 1984, the region submitted a
Standard Form 52, Request for Personnel Action, to the agency's central
personnel office, requesting Ms. Safreed's temporary promotion to the
position of Acting Program Director, grade GM-14, effective April 29 to
August 26 1984. The higher-graded position, vacant since April 1983,
had previously been filled through a temporary promotion.
The agency's personnel office received the request for Ms. Safreed's
temporary promotion on April 23, 1984. Before granting the request, the
authorized official forwarded it to the agency's classification branch
for classification approval. The classification branch misplaced the
Standard Form 52, and asked the region to furnish a replacement copy.
Meanwhile, on April 29, 1984, Ms. Safreed began performing the duties of
Acting Program Director, grade GM-14.
In June 1984, the personnel office received a copy of the misplaced
Standard Form 52, and the authorized official approved Ms. Safreed's
temporary promotion effective June 24 to August 26, 1984. After Ms.
Safreed completed her assignment in August 1984, the agency temporarily
promoted another employee to the position of Acting Program Director.
The Food and Nutrition Service states that it would have temporarily
promoted Ms. Safreed effective April 29, 1984, had its classification
branch not misplaced the Standard Form 52. The agency explains that it
has established a pattern of temporarily promoting individuals to fill
the position of Acting Program Director, and that it has not encountered
any problems in effecting other temporary promotions to the position.
While the agency suggests that these factors provide a basis for
implementing Ms. Safreed's temporary promotion retroactively, it
questions the legality of such an action. In this regard, the agency
cites our decision holding that, as a general rule, the loss of a
promotion request prior to approval by the authorized official will not
support the award of a retroactive promotion.
As a general rule, errors in processing a promotion or other
personnel action may not be remedied if they occur prior to approval of
the personnel action by the authorized official. The rule and its
exceptions are set forth in Janice Levy, B-190408, December 21, 1977, at
pages 8-9, as follows:
"As a general rule a personnel action may not be made
retroactive so as to increase the right of an employee to
compensation. We have made exceptions to this rule where
administrative or clerical error (1) prevented a personnel action
from being effected as originally intended, (2) resulted in
nondiscretionary administrative regulations or policies not being
carried out, or (3) has deprived the employee of a right granted
by statute or regulation. See 55 Comp. Gen. 42 (1975), 54 id.
888 (1975), and decisions cited therein."
The facts of this case fall within the second exception recognized in
Levy, relating to the agency's failure to effectuate a nondiscretionary
policy. Specifically, the record shows that the Program Director
position filled by Ms. Safreed was vacant for an extended period.
Before and after her service in the position, the vacancy was filled
through temporary promotions. The circumstances indicate that the
agency had an established policy of temporarily promoting each employee
who served as Acting Program Director, and that these temporary
promotions were granted routinely. Under these circumstances, we
conclude that the agency violated a nondiscretionary policy by failing
to promote Ms. Safreed on April 29, 1984, the date she began serving as
Acting Program Director. See generally B-211784, May 1, 1984; Joseph
Pompeo, B-186916, April 25, 1977; and 54 Comp. Gen. 69 (1974).
Accordingly, for the reasons stated above, we hold that Ms.
Safreed's temporary promotion may be effected retroactively.
Comptroller General
of the United States
FILE: B-216602
DATE: January 4, 1985
DIGEST
VEHICLES - GOVERNMENT - HOME TO WORK TRANSPORTATION - GOVERNMENT
EMPLOYEES - PROHIBITION - EXEMPTIONS
Transportation of Solicitor of Labor between his home and office in a
Government vehicle during his temporary disability would be permissible
under an exception to the general home-to-work prohibition of 31 U.S.C.
Section 1344 in cases where the Government would be deprived of
essential services in an emergency situation in the absence of
Government-provided transportation. See 54 Comp. Gen. 1066 (1975).
However, the Solicitor should be required to reimburse the Government,
at least to the extent of his normal commuting costs.
The Honorable Ford B. Ford
The Acting Secretary of Labor
Dear Mr. Secretary:
This is in response to a letter from Secretary Donovan, dated
september 26, 1984, requesting our opinion regarding the use of a
Government vehicle for the purpose of transporting the Solicitor of
Labor between his residence and his office while he is temporarily
incapacitated for medical reasons. As set forth below, we conclude that
transportation of the Solicitor in these circumstances would be
permissible, provided that the Solicitor reimburses the Government, at
least to the extent of his normal commuting costs.
The letter indicated that Mr. Francis X. Lilly, the Solicitor of
Labor, suffered a serious injury on August 14, 1984, which has required
extensive surgery. Mr. Lilly's doctors estimate that he will be
required to wear a neck brace until at least the middle of November
1984. Further, Mr. Lilly's doctors have forbidden him to drive an
automobile or ride public transportation during that period, because of
the possibility or further injury. The doctors have permitted Mr.
Lilly to return to work during this period, but only on the condition
that he be transported to and from his office. Accordingly, the
Secretary requested the opinion of this Office as to whether Mr. Lilly
may receive transportation in a Government vehicle between his home and
office on an "emergency" basis, "until such time as Mr. Lilly's
physicians determine that he may resume driving his own vehicle or ride
public transportation."
It was pointed out that the Government would be temporarily deprived
of the essential services that the Solicitor of Labor provides the
Department of Labor and the Secretary if Government transportation were
not provided Mr. Lilly. Additionally, the Secretary stated that it is
"essential" that Mr. Lilly be available "in person, on a moment's
notice" and that Mr. Lilly's attendance is required virtually daily at
meetings which necessitate "face-to-face contact."
A vehicle may be operated with appropriated funds "only for an
official purpose," and the term, "official purpose," with few exception,
"does not include" transporting officers or employees of the Government
between their domiciles and places of employment * * *." 31 U.S.C.
Section 1344(a) (1982). Recently, in 62 Comp. Gen. 438 (1983), we
reviewed this area of the law and concluded that some of our previous
decisions included "overly broad language which implied exceptions to
the statutory prohibition (of 31 U.S.C. Section 1344) which we did not
intend." Further, we held that unless certain narrow exceptions apply,
"agencies may not properly exercise administrative discretion to provide
home-to-work transportation for their officers and employees, unless
otherwise provided by statute." Id. at 447.
Nonetheless, we conclude that the transportation of the Solicitor in
the circumstances here under review would be permissible under an
exception to the general prohibition which we have recognized in cases
where the Government would be deprived of essential services in the
absence of Government-provided transportation. In 54 Comp. Gen. 1066
(1975), we approved the provision of home-to-work Government bus
transportation to Social Security Administration (SSA) employees in San
Francisco during a transit strike. In that case, SSA was faced with an
emergency situation when high absenteeism resulting from the strike
effectively prevented the processing of claims of benefit recipients
dependent on weekly payments. accordingly, SSA arranged for bus
transportation for certain essential employees on a temporary basis, in
order to ensure that Social Security recipients would continue to
receive the aid on which they were dependent. We approved the
transportation as a "temporary emergency measure." 54 Comp. Gen. at
1068. See also 62 Comp. Gen. 438, 447 (1983).
The circumstances in the case at hand are comparable to those in 54
Comp. Gen. 1066. It is clear that if Government transportation is not
provided, the Department of Labor will be deprived of the services of
the Solicitor during the period of his incapacitation. Further, as the
letter stated repeatedly, the services of the Solicitor are "essential"
to the Department of Labor and his absence would seriously adversely
impact the operations of the Department.
Accordingly, we conclude that the temporary provision of home-to-work
Government transportation to the Solicitor would be permissible during
the period in which he is medically incapable of otherwise commuting to
and from his office.
We note, however, that unlike the situation in 54 Comp. Gen. 1066 and
62 Comp. Gen. 438, supra, the emergency situation necessitating
Government transportation for the solicitor has persisted for many
months and, according to informal advice from the Department, may need
to continue for an indefinite period. We think it is important to
recognize that commuting expenses, in the absence of a statutory
exception, are personal expenses of the employee involved. It is
therefore not proper to charge public funds for the entire costs of the
Solicitor's transportation. We think that the Solicitor should
reimburse the Government, at least to the extent of the normal commuting
expenses he would otherwise have incurred.
Sincerely yours,
Comptroller General of the United States
B-216597, Oct 30, 1984, 84-2 CPD 483
CONTRACTS - Protests - Abeyance pending court action
DIGEST:
GAO will not consider a protest where the material issues are before
a court of competent jurisdiction and the court has not expressed
interest in GAO'S decision.
Gracon Corporation:
Gracon Corporation protests any award to Western States Construction
Company, Inc. (Western), under invitation for bids (IFB) No.
DACA45-84-B-0067 issued by the Department of the Army for the
dismantlement of the Titan II missile silos at McConnel Air Force Base,
Kansas. Gracon contends that Western's bid is nonresponsive and should
be rejected. The protester has also filed suit in the United State
Claims Court, involving the same issues raised in the protest, seeking
declaratory and injunctive relief.
It is this Office's policy not to render a decision where the
material issues are pending before a court of competent jurisdiction
unless the court expresses an interest in our decision. Joule
Maintenance Corporation, B-212653, Jan. 30, 84-1 C.P.D. para. 128. The
court has not expressed such interest.
The protest is dismissed. COMP GEN (UP)
FILE: B-216596.3 84-2 CPD 652
DATE: December 11, 1984
MATTER OF: COMSEC Systems Corporation -- Reconsideration
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
RECONSIDERATION REQUESTS - ERROR OF FACT OR LAW - NOT ESTABLISHED
1. Where the only reasonable reading of a protest is as an untimely
complaint concerning a solicitation's proposal preparation period a
prior decision dismissing the protest is affirmed when the protester
merely argues that the protest should have been read otherwise.
CONTRACTS - AWARDS - EFFECTIVE DATE - DELAYED
2. An agency's failure to award a contract by its stated target date
is purely a matter of procedure which alone does not invalidate the
procurement or provide a basis of protest for a firm that did not submit
its proposal on time
COMSEC Systems Corporation requests reconsideration of our decision,
COMSEC Systems Corporation, B-216596.2, Nov. 5, 1984, 84-2 CPD Paragraph
. . . . We affirm our prior decision.
In its initial protest, COMSEC complained that an Army solicitation
for facsimile transmission systems, request for proposals (RFP) No.
DAAB07-84-R-K024, did not allow enough time for prospective offerors to
prepare their proposals. COMSEC discounted any claim by the Army that
the procurement was urgent by noting that the target date for award of a
contract has passed without an award having been made. COMSEC urged us
to recommend that the Army cancel the RFP and resolicit the requirement.
We dismissed the protest as untimely because it involved an alleged
solicitation impropriety and, therefore, under our Bid Protest
Procedures, 4 C.F.R. Section 21.2(b)(1) (1984), should have been filed,
but was not, prior to the closing date for the receipt of proposals.
In requesting reconsideration, COMSEC says that we did not consider
all the facts it submitted originally and therefore did not address the
actual basis of its protest. COMSEC does not specify the facts it says
we did not consider, but says that its protest actually was based on the
agency's failure to award a contract by the target date. Since the
agency apparently considered making an award by the target date to be
critical, COMSEC says that the failure to do so renders the procurement
"null and void" and "re-opens and revitalizes the question of
restriction of competition." COMSEC says its arguments in the initial
protest concerning the proposal preparation period were provided only as
background, not as the basis of its protest. In fact, says COMSEC, it
actually did prepare a proposal within the time allowed, but failed to
submit it on time only because of a traffic delay. COMSEC requests a
conference to discuss these matters more thoroughly.
We reviewed again COMSEC's initial submission to this Office, and we
are convinced that the only reasonable reading of that submission is as
a protest concerning the allegedly inadequate proposal preparation
period. For the reasons stated in our prior decision, the protest was
untimely.
We recognize that the protester's initial submission referred to the
fact that the agency had not awarded a contract by the target date and
that our prior decision did not. The reason for this, however, is that
the only possible significance of the failure to make an award by the
target date is that it tends to rebut somewhat the argument that the
proposal preparation period could not be extended because the agency
considered making an award by the target date to be critical. Since the
objection to the proposal preparation period was untimely, there was no
reason to discuss a fact that arguably might indicate that the agency's
refusal to extend the period was not justified. Moreover, an agency's
failure to meet procurement milestones is purely a matter of procedure
and alone does not invalidate the procurement or provide a basis of
protest for a firm that did not submit its proposal on time.
Because COMSEC has not shown that our prior decision was legally
erroneous or did not properly consider the facts presented, we affirm
it. Maintenance Pace Setters, Inc. -- Reconsideration, B-213595.2, June
18, 1984, 84-1 CPD Paragraph 635. In addition, we generally will not
hold a conference in response to a request for reconsideration,
particularly where, as here, the matter can be decided with out one.
Treat Wood Products -- Request for Reconsidertion, B-214041.2, June 1,
1984, 84-1 CPD Paragraph 590.
Comptroller General of the United States
B-216596.2, Nov 5, 1984, 84-2 CPD 499
CONTRACTS - Protests - General Accounting - Office procedures -
Timeliness of protest - Solicitation improprieties - Apparent prior to
(pening/closing date for proposals.
DIGEST:
Protest that a solicitation allowed insufficient time for the
preparation of proposals is untimely when not raised prior to the
closing date for receipt of proposals.
COMSEC Systems Corporation:
COMSEC Systems Corporation protests any award of a contract for
lightweight digital facsimile transmission systems under request for
proposals (RFP) No. DAAB07-84-R-K024, issued by the U.S. Army, Fort
Monmouth, New Jersey. We dismiss the protest as untimely.
The agency issued the RFP on July 19, 1984, and specified August 3 as
the closing date for receipt of initial proposals. The basis for
COMSEC's protest, filed here on October 24, is that the RFP allowed
prospective offerors on 10 working days to prepare proposals in response
to what COMSEC says was a very complex solicitation. COMSEC complains
that the period allowed for preparation of proposals restricted
competition generally and was particularly burdensome on small
businesses, such as itself.
Our Bid Protest Procedures state that protests based upon alleged
solicitation improprieties that are apparent prior to the closing date
for receipt of proposals must be filed prior to that date. 4 C.F.R.
Sec. 21.2(b)(1) (1984). Here, the alleged failure to allow a sufficient
proposal preparation period was apparent from the solicitation. Since
COMSEC did not file its protest until after the closing date for receipt
of proposals, the protest is untimely and will not be considered.
Jensen-Kelly Corp., B-2-8685. et al., Jan. 10, 1983, 83-1 CPD Para. 21.
COMP GEN (UP)
FILE: B-216596 85-1 CPD 620
DATE: May 31, 1985
MATTER OF: Telefax, Inc.
DIGEST:
CONTRACTS - PROTESTS - ALLEGATIONS - UNSUBSTANTIATED
1. Protester failes to show that any unauthorized disclosure of
information regarding its proposal was made to awardee where only
evidence offered is unsubstantiated rumor of disclosure of information
regarding another offeror's proposal and, in any event, there is no
indication that awardee changed its best and final offer based on
information allegedly disclosed.
CONTRACTS - PROTESTS - ALLEGATIONS - BIAS - UNSUBSTANTIATED
2. Protester fails to show that procurement was biased in favor of
awardee where only support offered is a series of internal contracting
agency memos regarding the procurement which show no evidence of bias in
favor of awardee, and there is no evidence that Marine Corps officer who
was a member of technical evaluation team exerted undue influence in
favor of awardee.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL ACCEPTABILITY V. EXCEPTIONALITY
3. Where solicitation provided that offers would be evaluated on the
basis of the extent to which they must contracting agency's technical
rrquirements, it was not inconsistent with the evaluation scheme to rate
awardee's proposal as technically acceptable even though it failed to
comply with one of numerous technical subcriteria.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
4. To the extent protester challenges contracting agency's decision,
evident from the solicitation, not to require total compliance with
specified technical standards, protest is untimely because not filed
before date for receipt of initial proposals.
Telefax, Inc. protests the award of a contract for lightweight
digital facsimile machines to Magnavox Government and Industrial
Electronics Co. under request for proposals (RFP) No. DAAB07-84-R-K024,
issued by the United States Army Communications-Electronics Command,
Fort Monmouth, New Jersey. Telefax argues that its competitive position
was prejudiced by an alleged unauthorized disclosure of information to
Magnavox by a member of the agency's technical evaluation team regarding
Telefax's technical and price proposals. Telefax also contends that the
procurement was biased in favor of Magnavox as a result of both a
conflict of interest by the same member of the technical evaluation team
and improper influence exerted by a superior Army official. Finally,
Telefax contends that Magnavox's proposal was technically unacceptable
for failure to meet one of the operational requirements in the RFP. We
deny the protest.
The RFP was issued on July 19, 1984, with initial proposals due on
August 3. Proposals were submitted by three offerors -- Telefax,
Magnavox, and Val-U-Tec. Equipment demonstration with all the offerors
were held on August 16-21. Discussions also were conducted with each
offeror on September 5-7. Best and final offers were received on
September 14. Based on their final offers, both Telefax and Magnavox
were rated technically acceptable; Val-U-Tec was rated technically
unacceptable. Award to Magnovox was made on March 27, 1985.
Telefax contends that a Marine Corps /1/ member of the technical
evaluation team for the procurement disclosed information regarding
Telefax's technical and cost proposals to Magnavox, which then used the
information to improve its best and final offer. Telefax's allegation
is based on the following assertions: (1) the alleged disclosure was
discussed during a meeting held among the Army and Marine Corps
officials involved in the procurement before the due date for best and
final offers; (2) Marine Corps personnel not connected with the
procurement had information regarding Val-U-Tec's proposal which should
not have been known outside the technical evaluation team; and (3)
during a break in discussions between the Army and Telefax on September
7, the Army project manager asked Telefax's represenative to step
outside the meeting room so that they could converse outside the hearing
of the Marine Corps team member who was present during the discussions.
We find no support in the record for Telefax's contentions. The
protester has offered no direct evidence of an unauthorized disclosure
of information regarding its own proposal. Rather, as detailed above,
the primary basis for Telefax's argument is its assertion that
information regarding another offeror Val-U-tec, was disclosed to Marine
Corps personnel not involved in the procurement. The Army states that
the rumor regarding the alleged disclosure of information concerning the
Val-U-Tec proposal was discussed during the September 7 meeting referred
to by Telefax. All the members of the evaluation team denied making the
alleged disclsoure. In addition, because the rumor involved Marine
Corps personnel, the Marine Corps member of the evaluation team was
questioned individually and denied making any unauthorized disclosre.
His statement is reiterated in an affidavit submitted to our Office in
connection with this protest.
As a result of these inquiries, the Army concluded that the rumor
regarding disclosure of Val-U-Tec information was unfounded. Since
Telefax offers only speculative evidence in support of its contrary
assertion that the disclosure occurred, we find that Telefax has failed
to meet its burden of proof concerning this allegation. See Essex
Electro Engineers, Inc.; ACL-Filco Corp., B-211053.2, B-211053.3, Jan.
17 1984, 84-1 CPD Paragraph 74. In any event, even assuming the rumor
had been substantiated, the alleged disclosure involved information
regarding only Val-U-Tec's proposal, not Telefax's proposal. Lacking
any direct evidence of disclsoure of information regarding its own
proposal, Telefax offers nothing more than its bare and unconvincing
speculation that, in light of the alleeged disclosure of Val-U-Tec
information, information regarding Telefax's proposal must also have
been disclosed.
We find similarly unconvincing Telefax's reliance on the conversation
between the Army's project manager and a Telefax representative during
discussions concerning Telfax's proposal. The Army attributes its
project manager's apparent reluctance to speak in front of the Marine
Corps evaluation team member to the fact that the member was believed to
favor Magnavox's proposal. Regardless of the project manager's
perception of the evaluation team member's position or the reason for
his remark, we find no basis in the remark on which to conclude that the
evaluation team member made an unauthorized disclosure to Magnavox.
Finally, the Army states that there is no indication in Magnavox's
best and final offer that Magnavox made changes to its initial proposal
based on information it received regarding Telefax's proposal. The
Army's position is supported by the fact that there is no significant
difference between the Army's technical evaluation of Magnavox's initial
proposal and its best and final offer. Thus, even if Telefax had been
able to show that disclosure had occurred, there is no indication that
the information allegedly disclosed was used to improve Magnavox's best
and final offer. The Army also states that members of the technical
team had no access to the offerors' price proposals, and , therefore no
techncial team member was in a position to disclose pricing information
to Magnavox.
Telefax argues that the procurement was biased in favor of Magnavox
as a result of undue influence exerted by the Under Secretary of the
Army. Telefax also contends that the Marine Corps technical evaluation
team member had a conflict of interest which tainted the procurement.
We find these contention to be without merit.
Our review of the protester's contentions is limited to determining
whether the individuals referred to by the protester exerted undue
influence which resulted in bias in favor of Magnavox, without regard to
whether they also may have violated conflict of interest statutes or
regulations. See National Service Corp., B-205629, July 26, 1982, 82-2
CPD Paragraph 76. The protester 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 CPD Paragraph 99, nor
does establishing the mere potential for improprieties. Computer
Sciences Corp., B-210800, Apr. 17, 1984, 84-1 CPD Paragraph 422. In
addition, 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, 18-2 CPD Paragraph 446.
Telefax's first allegation of undue influence by the Under Secretary
is based on several internal memos by Army officials not directly
involved in the procurement, written in response to a letter from
Magnavox to the Under Secretary questioning the need for several
requirements included in the RFP. The Under Secretary requested his
subordinates to address the points made by Magnavox. His request was
forwarded through the Army's administrative channels and did not reach
the contracting officer until August 7, after the date on which the RFP
was issued (July 19) and the due date for initial proposals (August 3).
The contracting officer was instructed to disregard a direction in the
memos to stop further progress on the procurement, a direction which
apparently predated issuance of the RFP.
The letter from Magnavox which prompted the memos dealt solely with
the contents of the RFP; it did not discuss or promote the merits of
any particular proposal. We find nothing in the Army's memos to
indicate any bias in favor of the Magnavox proposal or any evidence that
the Under Secretary or his subordinates attempted to influence the
outcome of the procurement. Rather, the memo reflect only the efforts
of Army officials to respond to an inquiry regarding a procurement under
their responsibility.
Telefax next argues that the Marine Corps evaluation team member's
participation in the procurement involved a conflict of interest because
two of the members of the Magnavox team were retired Marine Corps
officers who had a close personal relationship with him. Telefax also
questions the propriety of allowing those retired officers to remain
during discussions of Magnavox's price proposal, even though a former
Army officer also on the Magnavox team was asked to leave.
The Army replies that, during discussions regarding the Magnavox
proposal, only one member of the Magnavox team identified himself as a
former Marine Corps officer. In addition, in his affidavit the Marine
Corps evaluator states that his relationship with the Magnavox employees
was of a professional nature only, and that, in any event, he did not
discuss the proposals submitted under the RFP with an offeror. Further,
the contracting officer states that he was not influenced by an
individual member of the procurement team, including the Marine Corps
team member.
Telefax has not attempted to rebut the Army's finding that no
improper influence in favor or Magnavox was brought to bear by the
Marine Corps evaluator or by the presence of the former Marine Corps
officers during discussions with Magnavox and has itself offered no
support for the allegations of bias made in its first submission to our
Office. As a result, we find that Telefax has failed to show that the
Marine Corps evaluator's participation in any way resulted in bias in
favor if Magnavox.
Telefax argues tht award to Magnavox was inconsistent with the
evaluation criteria in the RFP. Specifically, Telefax contends that
Magnavox's proposal was unacceptable for failure to meet a technical
standard relating to the compatibility of the facsmile equipment with
equipment used by other NATO nations.
According to the Army, the facsimile equipment being acquired was
designated a nondevelopmental item, meaning that the Army would acquire
the equipment from manufacturers' existing models rather than conduct a
research program to develop equipment tailored to the Army's needs. The
desired capabilities of the equipment were set out in a Joint
Operational Requirement (JOR). Because the Army recognized that no
manufacturer's existing equipment could satisfy all the JOR standards,
the RFP stated that offers would be evaluated based on the extent to
which a proposal provided the features listed in the JOR; total
compliance with the JOR was not required and a proposal's failure to
meet a particular requirement in the JOR would not make the entire
proposal unacceptable.
The RFP contained two principal evaluation factors -- technical
consideration and price. The technical considerations factor consisted
of three subfactors -- operational suitability, production readiness,
and management. The standard relating to the equipment's compatibility
with other NATO nations' equipment, called "standards complaince," was
one of 13 criteria making up the operational suitability subfactor. The
record shows that the Magnavox proposal was rated unacceptable under the
standards compliance criterion; Magnavox's noncompliance with that
criterion was not considered serious enough, however, to merit an
unacceptable rating on the broader operational suitability subfactor or
on the overall technical considerations factor. Rather, while the
Army's technical evaluations show that the Telefax proposal was
considered superior on the standards compliance criterion, both the
Telefax and the Magnavox proposals were rated technically acceptable
overall.
An agency must adhere to the evaluation criteria in a solicitation.
See, e.g., Telecommunications Management Corp., 57 Comp. Gen 251 (1978),
78-1 CPD Paragraph 80. We find no support in this case, however, for
Telefax's contention that consistency with the evaluation criteria in
the RFP required Magnavox's proposal to be found technically
unacceptable. Section M.24, II.A, of the RFP, which described the
evaluation factors for award, specifically stated that proposals would
be evaluated on "the extent to which" they met the Army's various
technical requirements: absolute compliance with all the requirements
was not called for. In addition, the standards compliance criterion
which Magnavox failed to meet was only one of numerous subordinate
criteria to be considered by the Army in rating a proposal under one of
three subfactors, which themselves composed the final technical rating.
As a result, we conclude that it was reasonable for the Army to rate the
Magnavox proposal as technically acceptable, despite its failure to meet
the standards compliance criterion.
Moreover, to the extent that Telefax challenges the Army's decision
not to require in the RFP total compliance with the JOR requirements
relating to equipment compatibility, the protest is untimely. As
Telefax concedes, the Army's decision to accept less than full
compliance was clearly reflected in the RFP. Thus, the basis for a
protest of the Army's decision was apparent on the face of the RFP and,
under our Bid Protest Procedures, 4 C.F.R. Section 2.12(b)(1) (1984),
the protest was required to be filed before the date for submission of
initial proposals, August 3. As noted above, Telefax's protest was not
filed until September 28.
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) Some of the machines under this contract will go to the Marine
Corps.
B-216593, Oct 15, 1984, 84-2 CPD 408
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Solicitation improprieties - Apparent prior to
bid opening/closing date for proposals
DIGEST:
1. A protest complaining about allegedly unduly restrictive
specifications filed with GAO after the closing date for receipt of
proposals is untimely under GAO Bid Protest Procedures.
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Adverse agency action effect
2. Even if pre-closing date complaints to the contracting agency
concerning allegedly unduly restrictive specifications could be
considered as a protest, a subsequent protest to GAO filed more than 10
days after the agency received proposals on the closing date without
relaxing the specifications is untimely under GAO Bid Protest
Procedures.
Cessna Aircraft Company:
Cessna Aircraft Company protests the award of a contract for purchase
of an aircraft to Beech Aircraft Corporation under request for proposals
No. 35-84, issued by the Forest Service. We dismiss the protest as
untimely.
The solicitation was issued on June 11, 1984 and, as amended,
specified August 9 as the closing date for receipt of proposals. Prior
to the closing date, Cessna complained to the agency that a number of
the specification provisions contained in the solicitation effectively
excluded certain aircraft manufactured by four firms and requested that
those specification provisions be relaxed. Following a pre-proposal
conference, the agency issued a statement giving its reasons for
including each of the allegedly restrictive provisions; it is not
further amend the solicitation to relax them. The protester informed
the agency prior to the closing date that it was not submitting an offer
because it believed that the specifications reflected the agency's
intent to conduct a sole-source procurement. Award was made to Beech
Aircraft, the sole offeror, and Cessna filed a protest with this Office.
Cessna's protest to this Office, filed here on September 28,
essentially complains about the agency's refusal to amend a solicitation
that Cessna says unduly restricted competition. Our Bid Protest
Procedures provide that protests based upon alleged solicitation
improprieties must be filed, either with the contracting agency or this
Office, prior to the closing date for receipt of initial proposals. 4
C.F.R. Sec. 21.2(b)(1) (1984). If a protest is filed initially with the
agency, any subsequent protest to this Office must be filed within 10
days of when the protester receives actual or constructive notice of
initial adverse agency action on the protest. 4 C.F.R. Sec. 21.2(a).
Obviously, the protest filed here complaining about the
restrictiveness of the specifications is untimely under section 21.2(
b)(1) of our procedures because it was not filed before the closing date
for receipt of proposals. The protester does not contend that it filed
a pre-closing date protest with the agency, but even if its complaints
to the agency could be considered to have been a protest, its subsequent
protest to this Office is nevertheless untimely under section 21.2(a) of
our procedures. The very latest that initial adverse agency action
could be said to have occurred is August 9, the date when proposals were
received with no change in the allegedly restrictive specifications.
See Central Air Service, Inc., B-213205, Feb. 6, 1984, 84-1 CPD para.
147. Cessna's protest here on September 28 was not filed within 10 days
of August 9, and is therefore untimely.
We dismiss the protest. COMP GEN (UP)
FILE: B-216592 85-1 CPD 641
DATE: June 5, 1985
MATTER OF: Unico, Inc.
DIGEST:
CONTRACTS - PROTESTS - CONFLICT IN STATEMENTS OF PROTESTER AND
CONTRACTING AGENCY
A protester has not carried its burden of proof when the only
evidence in the record regarding issues of fact is conflicting
statements between the protester and the contracting agency.
Unico, Inc. (Unico), protests the award of a contract for word
processing equipment by the United States Department of Agriculture,
Soil Conservation Service (SCS), to the IBM Corporation (IBM) under its
ADP schedule contract with the General Services Administration (GSA).
Unico alleges it was denied an opportunity to demonstrate equipment that
could perform the required functions at a lower cost.
The protest is denied.
On July 19, 1984, a notice of intent to purchase word processing
equipment from IBM under its GSA schedule contract appeared in the
Commerce Business Daily. The notice invited firms to "identify their
interest and capability to respond to the requirements or to submit
proposals in response to this notice."
Responding to the notice, Unico met with the contracting officer on
August 16. Unico argues that at this meeting, the contracting officer
informed Unico that pricing data on specific equipment was not required
at that time, but he invited Unico to demonstrate its equipment at a
later date. Unico further contends that after the meeting, it gave the
agency representative a GSA schedule price list for Compucorp, for whom
Unico is a registered dealer. The gist of Unico's protest is that it
offered to give SCS specific pricing information. This was refused in
lieu of a future demonstration. However, the contract was awarded
before the demonstration occurred. By not allowing it to provide
pricing information, Unico argues that SCS made the award arbitrarily.
There is a dispute in the record as to what occurred at this meeting.
SCS maintains that it requested technical and cost information for the
specific hardware and software items it needed. In addition, SCS says
its contracting officer told the Unico representative that an equipment
demonstration was not necessary. Despite its request, SCS contends that
no information was provided by Unico regarding the particular types of
equipment that would meet SCS's requirements.
It is well established that the protester has the burden of proving
its case. International Alliance of Sports Officials, B-211755, Jan.
25, 1984, 84-1 C.P.D. Paragraph 117. Here, the record indicates that
the parties have conflicting views about what occurred during the
meeting between their respective representatives. The protester
contends that the agency rejected its offer of specific information, and
SCS says it requested this data and Unico failed to provide it, but
insisted upon a demonstration. When the only evidence on an issue of
fact is a protester's statement that conflicts with that of contracting
officials, the protester has not carried its burden of proof. Printer
Systems Corp., B-213978, May 22, 1984, 84-1 C.P.D. Paragraph 546.
Nevertheless, the parties agree that Unico gave the contracting
officer a recent GSA schedule contract, along with other information the
agency used to make its award determination. The schedule, however, is
not designed to provide the specific technical and cost information the
agency requested. It simply provides general information about
Compucorp equipment. It does not contain sufficient information for the
agency to make an accurate determination of the acceptability of Unico's
products. For example, it lacks information concerning Unico's ability
to furnish the specific equipment and services required and whether this
equipment will be compatible with existing systems. Despite the lack of
specific information, the contracting officer reviewed and evaluated the
information in the schedule contract before awarding the contract to
IBM. In light of these circumstances, we find the agency's decision
reasonable.
We deny the protest.
Harry R. Van Cleve
General Counsel
B-216591, Oct 18, 1984, 84-2 CPD 421
BIDS - Prices - Below cost - Not basis for precluding award
DIGEST:
1. Submission of a below-cost bid is not illegal and provides no
basis for challenging the award of a government contract to a
responsible bidder.
HEADNOTES-UNAVAILABLE
2. GAO does not review protests challenging affirmative
responsibility determinations except in limited circumstances.
EPD Enterprises, Inc.:
EPD Enterprises, Inc. protests the possible award of a contract to
Southland Waste Systems and Lester Phillips, Incorporated under
invitation for bids (IFB) No. N62467-84-B-2369, issued by the Department
of the Navy for waste disposal services. EPD contends that these firms'
bids are too low to include all of the work described in the
solicitation and thus should be rejected.
The submission of a below cost bid is not illegal and provides no
basis for challenging the award of a government contract to a
responsible prospective contractor. TECOM Inc., B-215291, June 19,
1984, 84-1 CPD para. 644. In order to award a contract to either of the
firms mentioned by the protester the agency must determine that the firm
selected for award is responsible. See Environmental Container Systems,
Inc., B-201739, Feb. 9, 1981, 81-1 CPD para. 83. Although it is unclear
whether such a determination yet has been made here, our Office does not
review protests concerning such affirmative determinations of
responsibility absent that the contracting officer may have acted
fraudulently or in bad faith, or that definitive responsibility criteria
in the solicitation may not have been met. Sun Temporary Services,
B-210557, Feb. 17, 1983, 83-1 CPD para. 167. Neither exception applies
here.
The protest is dismissed. COMP GEN (UP)
FILE: B-216589 85-2 CPD 111
DATE: August 1, 1985
MATTER OF: Del-Jen Inc.
DIGEST:
CONTRACTS - NEGOTIATION - PRICES - UNREALISTICALLY LOW
1. In the absence of a nonresponsibility determination, where a
contract is to be awarded on a firm fixed-price basis, there is no legal
basis to withhold a contract award solely because the offer is believed
to be unreasonably low or even below cost.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - BASIS
FOR EVALUATION - DOCUMENTATION
2. A protest alleging that technical evaluation performed by
contracting agency was improper is without merit where the record
establishes that the agency's evaluation of proposals had a reasonable
basis.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
EXPERIENCE RATING
3. Past performance of an offeror cannot be considered unless this
experience is demonstrated in a written proposal as a technical
evaluation must be based upon the information submitted with the
proposal.
CONTRACTS - PROTESTS - ALLEGATIONS - BIAS - UNSUBSTANTIATED
4. GAO will not attribute bias to a member of a technical evaluation
panel based on inference or supposition.
Del-Jen, Inc. protests the award of a contract to Ogden-HCI Services
under request for proposals (RFP) N00406-84-R-2236, issued by the Naval
Supply Center, Bremerton, Washington. The agency sought offers to
operate the morale, welfare and recreation facilities of the Naval
Submarine Base Bangor, Bremerton, Washington, and the Naval Undersea
Warfare Engineering Station, Keyport, Washington.
Del-Jen contends that the Navy improperly evaluated Ogden's cost
proposal, challenges the Navy's evaluation of its and Ogden's technical
proposals, and contends that one member of the technical evaluation
panel was biased.
We deny the protest.
BACKGROUND
The Navy issued the solicitation on February 10, 1984 for the
management and operation of the officers', chiefs' and enlisted mens'
clubs, a liquor store, and special service functions, including
dependent day care centers, hobby centers, sports and athletic
complexes, and a movie theater, for a 10-month period with two 1-year
options. The RFP set forth, in descending order of importance, the
following evaluation criteria: technical (understanding the required
work and the feasibility of performance plans), price, resources
(personnel and recruiting plans), and management (including experience
and proposed organization and quality assurance plans). The
solicitation provided for a fixed-price contract to be paid for with
appropriated funds, and for the contractor to share in the revenue
received for the services performed. For example, the contractor will
receive a percentage of the price of each drink sold at the officers'
club. The solicitation required each offeror to provide the detailed
cost and revenue estimates that it used to calculate its offered price.
The agency received proposals from Del-Jen and Ogden-HCI Services,
and after holding discussions with both firms, requested that best and
final offers be submitted by August 10, 1984. The Navy rated Ogden's
proposal higher for each technical criterion in both the initial and
final evaluations of proposals. Ogden offered a lower price
($4,304,581) than Del-Jen ($4,880,200). On September 14, the Navy
awarded a contract to Ogden.
Del-Jen's Protest
A. Evaluation of Price Proposals
Del-Jen first contends that Ogden offered a below-cost price proposal
and that the Navy should not have accepted an unrealistically low offer.
The protester alleges that Ogden will seek to increase its price
through contract modifications during performance.
Under the RFP evaluation scheme, offerors were to estimate both the
cost of performing and the revenue to be generated. The proposed
contract price was to be the difference between the cost of performance
and the percentage of generated revenue to be paid the contractor.
Ogden's estimate of the total cost of performing the contract exceeded
Del-Jen's by approximately $350,000. Nevertheless, Ogden was able to
offer a price approximately $575,000 less than Del-Jen's because its
estimate of the revenues to be generated during the term of the contract
was significantly higher than Del-Jen's revenue estimate. Del-Jen
maintains that Ogden's revenue projection was inflated, and that this
can be seen by comparing revenues generated during the previous 3 years
when Del-Jen provided the required services. Del-Jen also states that
the actual revenues generated during the first several months of Ogden's
contract have been significantly lower than anticipated.
Del-Jen points out that while the Defense Contract Audit Agency
(DCAA) audited both price proposals, it reviewed both cost and revenue
estimates submitted by Del-Jen, but upon direction from the Navy, only
reviewed Ogden's cost estimate. Del-Jen maintains that Ogden's inflated
revenue estimate would have been discovered had Ogden's revenue estimate
been audited.
The Navy responds that the review of cost proposals is ultimately the
responsibility of the contracting officer. The agency maintains that he
acted reasonably and could not have rejected Ogden's proposal even if it
were determined to be a below-cost offer. Since Ogden's estimate of
revenues was quite similar to its own, the Navy contends that a limited
review was proper and that an audit of Ogden's revenue estimate by DCAA
was not required.
A firm fixed-price contract is not subject to adjustment based on the
contractor's cost experience during performance and thus places no
obligation on the contracting agency to pay more than the price at which
contract award is made. See Los Angeles Community College District,
B-207096, Aug. 8, 1983, 83-2 CPD Paragraph 175. Moreover, there are
various legitimate reasons for a firm to offer a below-cost price. 50
Comp. Gen. 788 (1971). Accordingly, in the absence of a
nonresponsibility determination, we are aware of no legal basis for an
agency to withhold contract award merely because an offer is perceived
to be unreasonably low, or even below cost, where the contract is not on
a cost reimbursement basis. See Everhart Appraisal Service, Inc.,
B-213369, May 1, 1984, 84-1 CPD Paragraph 485.
We note that Del-Jen is not challenging Ogden's capability of
performing at the price it offered. In fact, the protester asserts that
Ogden is sufficiently large to be able to afford to provide services at
less than their cost. Under the circumstances, we find no basis to
object to the Navy's acceptance of an offer which may be unreasonably
low. Del-Jen's concern, that Ogden may seek to modify its contract to
increase the price, is not grounds for rejecting a proposal.
Contracting officers are, however, required to insure that losses
resulting from below-cost offers are not recovered through change orders
or otherwise. Western Waste Management, B-216392, Sept. 24, 1984, 84-2
CPD Paragraph 344.
We also do not believe that the contracting officer acted
unreasonably in not requiring an audit of Ogden's revenue estimate.
Comparison of proposed prices with an independently developed government
estimate can be an acceptable price analysis technique. Defense
Acquisition Regulation, Section 3-807.2(a)(5), reprinted in 32 C.F.R.
pts. 1-39 (1984). /1/ The extent to which proposed costs are examined
is generally a matter for an agency's discretion even when award of a
cost-based contract is contemplated, Applied Financial Analysis, Ltd.,
B-194388.2, Aug. 10, 1979, 79-2 CPD Paragraph 113, and we do not believe
that the Navy acted unreasonably in relying upon its own revenue
estimate as an analysis technique in this case.
B. Evaluation Of Technical Criteria
Del-Jen contends that the Navy improperly evaluated the technical
proposals with respect to all three of the technical evaluation
criteria. First, Del-Jen questions the superior rating given to Ogden
on the management criterion because, based upon a review of submitted
resumes, the Navy allegedly gave Ogden's top management personnel low
individual ratings. Del-Jen also states that the Navy failed to verify
the commitment of Ogden's proposed management personnel to work on the
contract. Del-Jen next challenges the higher rating afforded Ogden on
the resources criterion. Del-Jen maintains that it demonstrated the
quality of its staffing and recruiting plans during its performance of
the predecessor contract. Del-Jen states that, on the other hand,
Ogden's recruiting plan could only be evaluated by reviewing the quality
of the top management personnel proposed for the contract. Using this
approach, Del-Jen believes that Ogden should have been given a low score
since all of its proposed personnel were either questioned or rejected.
Finally, Del-Jen questions the rating afforded Ogden on the technical
criterion because Ogden had no experience comparable to Del-Jen's
previous performance of the work and, therefore, could not have a
superior understanding of the contract requirements.
The evaluation of technical proposals is a matter within the
discretion of the contracting activity. In reviewing an agency's
technical evaluation, we will not evaluate the proposal de novo, but
will only examine the agency's evaluation to ensure that it had a
reasonable basis. Syscon Corp., B-208882, Mar. 31, 1983, 83-1 CPD
Paragraph 335. In addition, the protester bears the burden of showing
that the agency's evaluation was unreasonable. Essex Electro Engineers,
Inc., et al., B-211053.2, et al., Jan. 17, 1984, 84-1 CPD Paragraph 74.
After examining the procurement record, including the technical
evaluations upon which the source selection official relied, we do not
conclude that the Navy's evaluation of the two proposals was
unreasonable. In its entirety, the record demonstrates that the Navy
conducted a comprehensive evaluation; all aspects of each offeror's
proposal were considered and reviewed in detail.
Both offerors were rated quite high for the management criterion.
Del-Jen's proposal was considered slightly inferior, however, because of
a weakness in its local organizational structure and in the firm's
quality assurance plan. The Navy recognized that Ogden did not have
experience in providing recreational services for government personnel,
but believed that this weakness was off-set by a superior management
structure, supported by excellent quality assurance and training plans.
We cannot conclude that a higher score for Ogden for the management area
was unreasonable.
In evaluating the offerors' resources, the Navy did consider three of
Ogden's management personnel to be unacceptable, primarily because
insufficient information was provided about their education and
experience. Although Del-Jen's management personnel were considered
very good, the Navy found that two were not qualified for the positions
proposed. The Navy noted minor weaknesses in the experience of some
Ogden managers, but found that its staffing and recruiting plans were
superior to those of Del-Jen. Del-Jen's proposal was found to be
deficient in its phase-in plan and the effort proposed below the
management level. The latter weakness prevented an in-depth analysis of
the adequacy of proposed staff.
We conclude that the Navy's rating of the two proposals for this
criterion was reasonable. The record does not support Del-Jen's
allegation that significant numbers of Ogden's senior management were
considered unacceptable or marginally qualified. The Ogden staff
generally lacked experience with governmental organizations, but this
weakness was considered to be minor and outweighed by other strengths.
We also do not agree with Del-Jen that low turnover experienced under
the predecessor contract establishes Del-Jen's superior planning for
staffing and recruiting. Notwithstanding this past performance, the
Navy found that Del-Jen's proposal failed to adequately address the
minimum staffing requirements specified in the solicitation and did not
provide for a phase-in plan. There is no basis for favoring a firm with
presumptions based upon prior performance -- all offerors must
demonstrate their capabilities in their proposals. The Management and
Technical Services Company, a subsidiary of General Electric Company,
B-209513, Dec. 13, 1982, 82-2 CPD Paragraph 571. Additionally, there is
no requirement that the Navy "verify" employment commitments for
offerors' staff as alleged by Del-Jen. The RFP provided for offerors to
submit signed statements of interest by key management personnel. In
some cases in which Ogden neglected to do this, the Navy raised the
matter during discussions. The agency was not obligated to verify such
statements.
With regard to the technical criterion, under which the Navy measured
the offerors' understanding of the work and the feasibility of their
plans, Del-Jen again relies upon its past performance in claiming a
superior understanding of the requirements of the solicitation. As
previously discussed, no matter how capable an offeror may be, the
offeror must demonstrate its capability in a written proposal.
Evaluation of Del-Jen's understanding and proposed plan must depend upon
its demonstrated, not presumed, capability. Moreover, the fact that
Del-Jen disagrees with the Navy's technical judgment concerning the
merits of its plans to perform the work is insufficient to establish
that the agency was unreasonable.
In evaluating Ogden's technical capability, the Navy found that the
Ogden proposal was very strong, comprehensive and complete in details,
and that it clearly established the firm's ability to meet all contract
objectives. Del-Jen also established a high level of understanding with
very good proposed methods and plans for providing the required
services. Del-Jen's proposal, however, was not considered sufficiently
innovative or imaginative, and it was too restrictive in the program
development area. The firm did not address many requirements described
in the RFP, including ones not included in the previous contract. Here,
too, Ogden's proposal was considered superior, and we do not conclude
that this finding had no reasonable basis.
C. Bias of Evaluation Board Member
Del-Jen's final contention is that the Navy improperly allowed a
biased individual to participate as a member of the Source
Recommendation Evaluation Board. This individual previously served as
the contracting officer's technical representative with respect to
Del-Jen's predecessor contract, and Del-Jen alleges that he expressed
disdain towards the firm's management personnel. The protester also
contends that the individual has a close personal relationship with a
proposed member of Ogden's staff. Del-Jen thus concludes that this
individual was a biased technical evaluator.
The composition of a technical evaluation panel is within the
discretion of the contracting agency, and we will not object in the
absence of evidence of fraud, bad faith, conflict of interest, or actual
bias. Western Services, Inc., B-204871, Mar. 19, 1982, 82-1 CPD
Paragraph 257. The protester has the burden affirmatively proving the
existence of bias, and unfair or prejudicial motives will not be
attributed to a procurement official on the basis of inference or
supposition. See Todd Logistics, Inc., B-203808, Aug. 19, 1982, 82-2
CPD Paragraph 157. We find no evidence in the written record to suggest
that the individual cited by Del-Jen acted unreasonably or arbitrarily
in evaluating proposals. The individual's assessment of the two
proposals was consistent with that of the other panel members.
Accordingly, we regard Del-Jen's allegations as mere speculation.
We deny the protest.
Harry R. Van Cleve
General Counsel
(1) The Defense Acquisition Regulation is applicable to this
procurement because the RFP was issued before the April 1, 1984
effective date of the Federal Acquisition Regulation, 48 C.F.R. Chapter
1 (1984).
FILE: B-216587.2 84-2 CPD 622
DATE: December 4, 1984
MATTER OF: Am Tech Export Trading Co., Inc. -- Request for
Reconsideration
GENERAL ACCOUNTING OFFICE - JURISDICTION - COOPERATIVE AGREEMENTS -
AWARDS
Prior decision in which GAO declined to consider complaint of
unsuccessful applicant for cooperative agreements is affirmed where
applicant has not shown that grantor agency improperly used cooperative
agreements instead of contracts to avoid the competitive requirements of
procurement laws or that a conflict of interest exists.
Am Tech Export Trading Co., Inc. (Am Tech), requests reconsideration
of our decision, Am Tech Export Trading Co., Inc., B-216587, Oct. 22,
1984, 84-2 C.P.D. Paragraph . . . , in which we dismissed Am Tech's
complaint in connection with the award of cooperative agreements for
minority export consulting services under project No. 06-1084001-01
issued by the Minority Business Development Agency (MBDA), Department of
Commerce.
In that decision, we refused to consider Am Tech's contention that
MBDA violated laws governing competitive procurements by not awarding
the cooperative agreements to Am Tech, the allegedly low bidder. We
explained that we generally do not review complaints concerning the
award of grants of cooperative agreements, except where there is some
showing that the agency is using that type of assistance instrument
instead of a contract to avoid the statutory and regulatory requirements
for competition or that a conflict of interest exists. Innocept, Inc.,
B-208065, Sept. 13, 1983, 83-2 C.P.D. Paragraph 317; Innocept, Inc. --
Reconsideration, B-209781.2, Mar. 28, 1983, 83-1 C.P. D. Paragraph 315;
Del Manufacturing Company, B-200048, May 20, 1981, 81-1 C.P.D.
Paragraph 390. We limit our review thusly because the award of grants
and cooperative agreements is not significantly controlled by statutes
and regulations having the force and effect of law as in the award of
procurement contracts, and our involvement therefore would result in
interference with the administration by executive branch agencies of
their financial assistance programs. Innocept, Inc., B-208065, supra.
Am Tech had not alleged or shown that cooperative agreements were used
instead of contracts to avoid the statutory and regulatory requirements
for competition or that a conflict of interest exists.
On reconsideration, Am Tech essentially reiterates its initial
argument that award should be made on the basis of price. Am Tech also
believes that contracts should be used where, as here, consulting firms
such as Am Tech compete for the federal grant funds. However, Am Tech
has not shown by any supporting evidence that MBDA improperly used
cooperative agreements to avoid the competitive requirements or
procurement laws or that a conflict of interest exists.
Our prior decision is affirmed.
Comptroller General of the United States
B-216587, Oct 22, 1984, 84-2 CPD 439
GENERAL ACCOUNTING OFFICE - Jurisdiction - Cooperative agreements -
Awards
DIGEST:
Complaint regarding award of cooperative agreements will not be
considered where complainant has not made some showing that contracts
rather than cooperative agreements should have been used or that
conflict of interest was involved.
Am-Tech Export Trading Co., Inc.:
Am-Tech Export Trading Co., Inc. (Am-Tech), complains of the award
and pending award of cooperative agreements for minority export
development consulting sevices in various geographical areas under
Project No. 06-1084001-01 by the Minority Business Development Agency
(MBDA), Department of Commerce. We dismiss the complaint.
Am-Tech contends that the MBDA violated laws governing competitive
procurements by not awarding the cooperative agreements to Am-Tech, the
allegedly "low bidder." MBDA informally has advised us that Am-Tech's
complaint concerns the award of cooperative agreements rather than
procurement contracts.
We generally do not review complaints concerning the award of grants
or cooperative agreements, unless there is some showing that the agency
is using a grant or cooperative agreement where a contract is required,
that is, the agency is using the grant award process to avoid the
competitive requirements of procurement laws, or that a conflict of
interest exists. Innocept, Inc., B-208065, Sept. 13, 1983, 83-2 C.P.D.
para. 317; Innocept, Inc. - Reconsideration, B-209781.2, Mar. 28, 1983,
83-1 C.P.D. para. 315; Del Manufacturing Company, B-200048, May 20,
1981, 81-1 C.P.D. para. 390. We limit our review because the award of
grants and cooperative agreements is not significantly controlled by
statutes and regulations having the force and effect of law as in the
award of procurement contracts, and our involvement therefore would
result in interference with the administration by executive branch
agencies of their financial assistance programs. Innocept, Inc.,
B-208065, supra. In this connection, Am-Tech's allegation provides no
basis for review by this Office since the firm has not alleged or shown
that cooperative agreements were used instead of contracts to avoid
competitive requirements of procurement laws or that a conflict of
interest exists. See Del Manufacturing Company, B-200048, supra.
Complaint dismissed. COMP GEN (UP)
FILE: B-216585
DATE: April 3, 1985
MATTER OF: O. V. Campbell & Sons Industries, Inc.
BIDDERS - QUALIFICATIONS - MANUFACTURE OF DEALER - SELF-CERTIFICATION
1. Protest alleging that low bid is nonresponsive, because low
bidder submitted the name of its roofing subcontractor instead of its
own name on an IFB required manufacturer's certification (designed to
evidence manufacturer's approval for warranty purposes of roofing
installer), is denied where IFB permitted subcontracting and under the
contract contractor can be required to obtain and pass through required
warranties from both subcontractors and manufacturers.
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - SMALL BUSINESS
ADMINISTRATION'S AUTHORITY - SIZE DETERMINATION
2. Small Business Administration has exclusive authority to
determine matters of small business size status for federal procurement
and sales purposes.
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - SET-ASIDES -
SUBCONTRACTOR, SUPPLIER, ETC. SIZE STATUS
3. Subcontracting with a large business in connection with a
construction contract set aside for small business is not legally
objectionable.
O. V. Campbell & Sons Industries, Inc. (Campbell), protests the Air
Force's intent to award a contract to K&L Construction, Inc. (K&L),
under invitation for bids (IFB) No. F23606-84-B-0049, a 100 percent
small business set-aside, for installation of replacement ethylene
propylene diene monomer (EPDM) roofing (a rubberized sheeting) on
existing carports and storage sheds at Whiteman Air Force Base,
Missouri. Bidders were required to submit a certificate from their
proposed EPDM manufacturer evidencing the manufacturer's approval of the
"roofing contractor" who would be installing the roofs. Campbell
contends that K&L's bid is nonresponsive because the manufacturer's
certification accompanying K&L's bid carried the name of Gentges Roofing
& Sheet Metal Company (Gentges) and not K&L's name. Campbell also
contends that Gentges is not a small business and therefore ineligible
as a potential subcontractor.
We deny the protest in part and dismiss in part.
The IFB clearly permitted subcontracting as it only required the
bidder to perform 15 percent of the work called for under the contract,
which included roofing, painting, and minor tree trimming. Although the
IFB did not contain a subcontract listing requirement, it did require
bidders to provide manufacturer's approval of the roofing contractor.
Since K&L was not required to do the roofing work we fail to see how
identifying Gentges as the roofing contractor renders K&L's bid
nonresponsive. Rather, we think the approval statement indicates simply
that K&L intended to subcontract the roofing work to Gentges.
Campbell notes that the IFB requires the bidder to furnish a 10-year
manufacturer's warranty of the installed roofing system. Campbell
argues that there can only be a 10-year warranty if the bidder is the
same party as the approved roofing contractor. We disagree. Although
we have found bids to be materially nonresponsive where the IFB sought a
manufacturer's direct warranty to the purchaser and the bid submitted
failed to provide the required warranty, Engineering Equipment Company,
Inc., B-189310, Oct. 13, 1977, 77-2 C.P.D. Paragraph 293, we do not find
the situation here to be similar.
The IFB requires that the benefits of several warranties be made
available to the Air Force. There is the 10-year manufacturer's
warranty against leaks, under which the manufacturer agrees to repair
any leaks in the roofing system for a period of 10 years after the
roofing contractor's completion of installation and manufacturer's
inspection and acceptance of the installation. There is a parallel
5-year Performance Agreement, under which the roofing contractor agrees
for a period of 5 years after final acceptance to provide emergency roof
repairs within 24 hours of receiving notice that a roof is defective or
leaking. There is also a 20-year manufacturer's warranty against
premature deterioration of the EPDM as a result of weathering. We think
that the IFB's Warranty of Construction (APR 1984), Federal Acquisition
Regulation, Section 52.246-21, 48 C.F.R. Section 52.246-21, insures that
the Air Force will receive the benefits of these warranties when it
provides:
"(g) With respect to all warranties, express or implied, from
subcontractors, manufacturers, or suppliers for work performed and
materials furnished under this contract, the Contractor shall -- *
* * *
"(2) Require all warranties to be executed, in writing, for the
benefit of the Government, if directed by the Contracting Officer,
and
"(3) Enforce all warranties for the benefit of the Government,
if directed by the Contracting Officer.
"(h) In the event the Contractor's warranty under paragraph (b)
of this clause has expired, the Government may bring suit at its
expense to enforce a subcontractor's, manufacturer's, or
supplier's warranty."
We are therefore of the view that under the contract K&L can be
required to obtain the named warranties, in writing, from both the
roofing contractor (i.e., subcontractor Gentges) and the EPDM
manufacturer in such form that the government may benefit therefrom
either through K&L or on its own behalf. Consequently, we find no basis
for Campbell's contention that the Air Force can only enjoy the benefits
of the 10-year manufacturer's warranty if K&L and the approved roofing
contractor are one and the same.
Under 15 U.S.C. Section 637(b) (1982), the Small Business
Administration has exclusive authority to determine matters of small
business size status for federal procurement and sales purposes.
Burlington Constructors Inc., B-216824, Oct. 31, 1984, 84-2 C.P.D.
Paragraph 492. Therefore, we will not consider Campbell's contentions
that Gentges is not a small business. In any event, subcontracting with
a large business in connection with a construction contract set aside
for small business is not legally objectionable. Burlington Constructors
Inc., B-216824, supra.
The protest is denied in part and dismissed in part.
Harry R. Van Cleve
General Counsel
B-216584, Oct 22, 1984, 84-2 CPD 438
CONTRACTORS - Responsibility - Determination - Review by GAO -
Affirmative finding accepted
DIGEST:
1. Bidder's ability to perform contract according to specifications
is a matter of responsibility and GAO does not review a contracting
officer's affirmative determination of responsibility except in limited
circumstances not applicable here.
CONTRACTS - Protests - Contract Administration - Not for resolution
by GAO
2. Whether specification requirements are met during performance of
contract is a matter of contract administration which GAO will not
consider.
MKC Electronics Corp.
MKC Electronics Corp. (MKC) protests the award to Scott aviation of a
subcontract under Department of the Army contract DAAA09-77-C-4002 with
Martin Marietta Aluminum Sales, Inc. (Martin Marietta). Since Martin
Marietta is the prime operating contractor of the government-owned,
contractor-operated Milan Army Ammunition Plant, this protest falls
within the limited circumstances under which this Office reviews
protests of the award of subcontracts. Optimum Systems, Inc.-
Subcontract Protest, 54 Comp.Gen. 767 (1975), 75-1 CPD para. 166.
Martin Marietta issued Request for Quotation No. S-84-1977, for 2,
196 Arresting Cable Assemblies. MKC contends that it is currently the
only supplier of arresting cable assemblies and that only it uses the
sole approved source for one of the key components. Martin Marietta,
however, determined that Scott Aviation was the "lowest evaluated
responsive responsible bidder" and awarded Scott the contract.
MKC's protest raises a question of Scott's responsibility, that is,
the ability of the firm to perform a contract according to the
specifications. The contracting officer must determine that a
prospective contractor is responsible before awarding a contract to any
company, and our Office does not review an affirmative determination of
responsibilty absent a showing that the contracting officer may have
acted fraudulently or in bad faith, or that definitive responsibility
criteria in the solicitation have not been met. Neither exception
appears to be applicable here.
Likewise, Scott Aviation's compliance with its obligations under the
provisions of its contract is a matter of contract administration and
will not be considered under our Bid Protest Procedures, 4 C.F.R. Part
21 (1984). See Mosler Safe Co. B-213864, Feb. 2, 1984, 84-1 CPD para.
144.
The protest is dismissed. COMP GEN (UP)
B-216583, Oct 11, 1984, 84-2 CPD 401
BONDS - Bid - Discrepancy between bid and bid bond - Bid
nonresponsive
DIGEST:
1. Bid of small business bidder who submits bid bond naming large
business as principal is nonresponsive because bid bond does not protect
government's interests.
CONTRACTS - Awards - Erroneous - Effect on subsequent actions
2. Prior improper awards based on bids offering defective bid bonds
do not justify repetition of error of accepting nonresponsive bid for
award.
Intex Insulating Company:
Intex Insulating Company (Intex) protests the rejection of its bid on
invitation for bids (IFB) No. F49642-84-B0376, issued by Andrews Air
Force Base (Air Force), Washington, D.C. Intex state that because it is
a small business, it had a large business obtain the bid bond for this
solicitation in the large business' name, which Intex then submitted
with its bid. The Air Force rejected the bid as nonresponsive due to
the difference in names on the bid and on the bond.
Our Office has consistently held that a bid bond which names a
principal different from the bidder is deficient and the bid must be
rejected as nonresponsive. A.D. Roe Company, Inc., 54 Comp. Gen. 271
(1974), 74-2 C.P.D. para. 194, and cases cited therein. The reason for
this is the rule of suretyship that no one incurs a liability to pay the
debts or perform the duty of another unless he expressly agree to be
bound. See 72 C.J.S. Principal and Surety Sec. 91 (1951); 144 A.L. R.
1267 (1943). In the present case, the surety's liability under the bond
would be contingent upon the bid being submitted by the principal named
on the bid bond. A.D. Roe Company, Inc., 54 Comp. Gen. at 274, 74-2
C.P.D. para. 194 at 5. Therefore, the rejection of Intex's bid as
nonresponsive was proper.
The government policy concerning utilization of small business
concerns does not negate government requirements for proper bid bonds
where such bonds are needed to protest the government's interests.
Executive-Suite Services Inc., B-212416, May 29, 1984, 84-1 C.P.D.
para. 577. Intex does not argue that the bid bond was not necessary,
but apparently contends that its small business status should permit it
to submit bid bonds with another company named as principal. This
contention has no merit since this would negate any protection the
government would obtain under this bid bond. A.D. Roe Company, Inc., 54
Comp. Gen. at 274, 74-2 C.P.D. para. 194 at 5.
Finally, Intex indicates that it has used this method of bidding on
past federal projects, including some where it received an award.
However, an improper award in one or more prior procurements does not
justify repetition of the same error in subsequent procurements. Wright
Tool Company, B-212343, Oct. 12, 1983, 83-2 C.P.D. para. 457; Giant
Lift Equipment Manufacturing Company, Inc., B-213558, May 22, 1984, 84-1
C.P.D. para. 542.
In view of the foregoing, the protest is denied. COMP GEN (UP)
FILE: B-216582 85-1 CPD 42
DATE: January 16, 1985
MATTER OF: Serv-Air, Inc.
DIGEST:
CONTRACTS - NEGOTIATION - REQUEST FOR PROPOSALS - FAILUTRE TO SOLICIT
1. The failure of a prospective offeror to receive notice of the
closing date does not necessitate reopening the solicitation where the
agency made a significant effort to obtain competition, a reasonable
price can be obtained, and there is no evidence of a deliberate attempt
to exclude the firm from competition.
CONTRACTS - PROTESTS - BURDEN OF PROOF - ON PROTESTOR
2. The protester has the burden of proving its case and we will not
attribute improper motives to procurement personnel on the basis of
inference or supposition.
Serv-Air, Inc., protests request for proposals (RFP) DABT51-84-R-0034
issued by the Department of the Army for base operations and maintenance
at Fort Bliss, Texas. Serv-Air alleges that improper conduct by Army
procurement officials precluded Serv-Air's participation in the
competition. We deny the protest.
The Army issued the RFP on March 29, 1984. Proposals were originally
due on July 27, 1984, but later extended by several amendments to
September 28, 1984. On September 14, the Army considered extending the
due date again. Several prospective offerors, including Serv-Air,
contacted the Army's procurement office that day to inquire about the
RFP and were advised that an extension of the due date was being
considered but, if there was to be an extension, it would be confirmed
by written amendment.
On September 17, the Army determined that no extension was required.
The Army states that it therefore called each of the firms that had been
advised on the 14th of the possibility of an extension to confirm that
there would be no extension. Other than Serv-Air, all of the firms
contacted on the 17th, plus five others, submitted proposals by the
September 28 closing date.
Serv-Air disputes the Army's explanation of the September 17
telephone call. In this respect, Serv-Air contends that it was advised
that the closing date would be extended indefinitely, as a result of
which Serv-Air reassigned its proposal preparation personnel to other
activities. Serv-Air states that it did not learn that the September 28
closing date had been confirmed until it again contacted the Army on
September 25 regarding the status of the RFP. Serv-Air contends that as
a result of receiving the advice as to an extension, it was unable to
complete its proposal by the closing date. Serv-Air asserts that the
Army's improper advice on September 17 precluded its participation in
this procurement. Serv-Air asks that a new closing date be set.
In support of its position, Serv-Air offers affidavits from its
employees stating that they were not advised of the reinstatement of the
proposal due date and stating Serv-Air's interpretation of the September
17 conversation with Army personnel. On the other hand, the Army
submits a statement from a procurement official in which he states that
he made the call and apprised Serv-Air that the September 28 closing
date would not be extended. We note also that other offerors, which the
Army states were advised on September 17 that the closing date would not
be extended, did submit proposals by September 28. The record does not
provide a basis for reconciling these differences.
We have held that even the failure of a firm to receive a copy of the
RFP does not prevent award and require resolicitation where the agency
made a significant effort to obtain competition, a reasonable price was
obtained, and there was no deliberate attempt to exclude the firm from
the competition. Vigilantes, Inc., B-213010, Feb. 8, 1984, 84-1 CPD
Paragraph 158. Here, Serv-Air contends that, while it did receive the
RFP, it did not receive notice of the closing date. The effect is the
same as not receiving the RFP in the first place in that Serv-Air has
been excluded from the competition.
Serv-Air does not allege that the Army has not made a significant
attempt to obtain competition. We note that, having received 12
proposals, it would appear that the Army has, in fact, successfully
obtained competition. Serv-Air also does not challenge the ability of
the Army to obtain a fair and reasonable price as a result of the
competition. Serv-Air alleges only that it did not receive notice
confirming the closing date and that the Army procurement officials'
failure to transmit that notice was a deliberate attempt to exclude
Serv-Air from the competition. As to that allegation, we have held that
the protester has the burden of proving its case and we will not
attribute improper motives to procurement personnel on the basis of
inference or supposition. Granite Diagnostics, Inc., B-211711, June 7,
1983, 83-1 CPD Paragraph 620. Since the record contains only Serv-Air's
unsupported allegations and the Army's contradictory account of the
facts, we conclude that Serv-Air has not carried its burden of proof on
this issue. See Bataco industries, Inc. -- Reconsideration, B-212847.2,
Apr. 18, 1984, 84-1 CPD Paragraph 441.
The protest is denied.
Comptroller General of the United States
FILE: B-216580 85-1 CPD 256
DATE: March 1, 1985
MATTER OF: American Marine Decking Systems, Inc.
DIGEST:
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - MINIMUM NEEDS
REQUIREMENT - ADMINISTRATION DETERMINATION - REASONABLENESS
1. It is primarily the contracting agency's responsibility to
determine its mimimum needs, and GAO will not question such a
determination absent a clear showing that it was arbitrary or
capricious. Moreover, an agency is not precluded from correcting or
clarifying a solicitation when its mimimum needs will not be met.
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - ADEQUACY
2. The use of specifications that do not adequately describe the
government's actual needs generally provides a compelling reason for
cancellation of a solicitation.
American Marine Decking Systems, Inc. protests the rejection of its
bid as nonresponsive to invitation for bids (IFB) No. N00244-84-B-5013,
issued by the Naval Supply Center, San Diego, California, for
replacement of terrazzo deck covering. The firm also protests the
Navy's subsequent cancellation and resolicitation, arguing that it
should receive an award under the original IFB.
We deny the protest.
The original IFB, which contemplated a fixed-price,
indefinite-quantity contract for a base and 2 option years, was issued
on July 30, 1984. It required unit and extended prices on a
per-square-foot basis for removal and replacement of deck tile,
terrazzo, and rubber matting on vessels being repaired in the San Diego
area. Bids from five companies were received and opened on August 29,
1984. The Navy rejected American Marine's bid as nonresponsive on
grounds that it failed to identify properly the qualified products to be
provided. After determining that all other bids were also
nonresponsive, the Navy canceled the solicitation on September 14, 1984,
and issued a resolicitation, No. N00244-85-B-0061, on December 28, 1984.
The original IFB required the contractor to:
"Prepare Surraces, Install MIL-D-3134H (a military specification
for deck covering materials that incorporates by reference a
qualified product list (QPL)), Type I, Class 1 or 2 Terrazzo deck
covering as specified on individual delivery orders . . ."
In addition, the solicitation required that all work be in accord
with certain applicable specifications and references, including Naval
Ships (NAVSEA) Technical Manual, chapter 634, Deck Coverings, changes
(1) through (7). Change 7, the only one at issue here, approves certain
alternatives to the deck covering materials listed in the military
specification. It also divides "terrazzo" into latex-type and
resin-type. Bidders were required to list the item name and test
number, if known, of each qualified product to be supplied.
American Marine asserts that its low bid was responsive since it
offered to supply three different resin (class 2) terrazzos that,
according to its reading of the QPL and the alternatives list, could be
used interchangeably with latex (class 1) terrazzo. The protester
alleges that the Naval Supply Center itself has indicated by placement
of delivery orders in the past that it believes the two terrazzos are
equivalent; that the generic term "terrazzo" appears in the NAVSEA
manual as the approved deck covering for different areas of the ship;
that the Commander of the Naval Sea Systems Command, in a letter dated
February 25, 1980, found no significant differences between latex and
resin terrazzo; and that NEGWIT Product MM-T-200, a resin terrazzo that
American Marine offered, is acceptable as an alternative to any type
terrazzo called for under the military specificaiton. In addition,
American Marine asserts that it had no reasonable basis on which to bid
two types of terrazzo, since the solicitation did not include separate
estimated quantities for class 1 and class 2. American Marine concludes
that its bid was responsive and that the original solication therefore
should not have been canceled.
The Navy responds that the solicitation required bidders to offer and
identify two classes ot terrazzo -- latex and resin -- and it had a
legitimate reason for requiring both. Since American Marine failed to
identify a class 1, or latex, terrazzo, the Navy asserts that the bid
was nonresponsive. Navy further contends that any objection to the lack
of precise quantities of each class of terrazzo is untimely, since under
our Office's Bid Protest Procedures, 4 C.F.R. Section 21.2 (1984), any
objection to allegedly deficient specifications must be raised before
bid opening. Because no responsive bids were received, the Navy
contends that it was obliged to cancel the solicitation.
In the resolicitation, as amended, the Navy clarified its
requirements by specifically stating that it reserved the right to
order, on a case-by-case basis, either type I, class 1, or type I, class
2, terrazzo deck covering.
It is clear that contracting officers have broad authority to reject
all bids and cancel a solicitation. However, because of the adverse
effect cancellation can have on the competitive biading system, a
compelling reason must exist to warrant cancellation after bid opening.
Federal Acquisition Regulation (FAR), 48 C.F.R. Section 14.404-1 (1984);
Engineering Research Inc., 56 Comp. Gen. 364 (1977), 77-1 CPD Paragraph
106. The use of specifications that do not adequately describe the
government's actual needs generally provides a compelling reason. See,
e.g., Kings Point Mfg. Co., Inc., B-210757, Sept. 19, 1983, 83-2 CPD
Paragraph 342; Tecom, Inc., B-213815.2, Aug. 6, 1984, 84-2 CPD
Paragraph 152.
In this regard, it is primarily the contracting agency's
responsibility to determine its minimum needs, and we will not question
such a determination absent a clear showing that the determination was
arbitrary or capricious. Winandy Greenhouse Co., Inc., B-208876, June
7, 1983, 83-1 CPD Paragraph 615. An agency thus is not precluded from
correcting or clarifying a solicitation when its minimum needs have not
been met. It is the protester who bears the burden of showing that the
determination to cancel is unreasonable. Surgical Instrument Company of
America, B-211368, Nov. 18, 1983, 83-2 CPD Paragraph 583.
In this case, we have no basis to question Navy's determination that
the solicitation should be reissued with clarificaitons that assure that
its needs will be met. The record indicates that the Navy has
determined through experience that latex and resin terrazzo are not
always interchangeable; it considers latex to be better suited for
certain areas of a ship, such as the galley or mess, and resin to be
better suited to other areas, such as where chemicals are present.
Thus, the agency's decision to require two types of deck material to be
offered and identified appears neither arbitrary nor capricious.
Whether American Marine's bid was or was not responsive to the
original solicitation is irrelevant, since an award under it would not
have met the Navy's needs. We therefore find the cancellation proper,
and we deny the protest.
Harry R. Van Cleve
General Counsel
FILE: B-216579
DATE: February 6, 1985
COMPENSATION - RATES - HIGHEST PREVIOUS RATE - TRANSFERS - RATE
APPLILCABLE
Former employee of the Smithsonian Science Information Exchange which
is not a mixed ownership corporation is not entitled to receive benefits
of the highest previous rate rule under 5 U.S.C. 5334, and 5 C.F.R.
531.203(c), upon obtaining a position at the Internal Revenue Service.
She was paid by private trust funds of the SSIE and not from wholly
appropriated funds and she is therefore not covered by the highest
previous rate rule. 5 U.S.C. 5102(c)(14), 5331 and 5334.
The Honorable Frank R. Wolf
Member, United States House of Representatives
Suite 115
1651 Old Meadow Road
McLean, Virginia 22102
Dear Mr. Wolf:
This replies to your letter of September 12, 1984, in which you ask
us to review a letter from Roseanne B. Mobley, 2328 North Wakefield
Street, Arlington, Virginia 22207. Ms. Mobley believes that she is
entitled to have her pay set at the "highest previous rate" under the
authority of 5 U.S.C. Section 5334 (1982), and 5 C.F.R. Section
531.203(c) (1982), incident to her obtaining a position with the
Internal Revenue Service (IRS). Apparently the IRS has decided that Ms.
Mobley's prior service with the Smithsonian Science Information Exchange
(SSIE), a private corportation, did not qualify her to receive the
highest previous rate.
The highest previous rate rule allows a federal agency to pay an
employee the highest previous rate of basic pay previously paid to that
individual while employed in a position in a branch of the Federal
Government (executive, legislative, or judicial), a mixed ownership
corporation, or the government of the District of Columbia, irrespective
of whether or not the position was subject to the General Schedule. 5
C.F.R. Sections 531.202(f) and 531.203(c). Accordingly, the issue is
whether Ms. Mobley's previous position with SSIE entitles her to the
benefits of the highest previous rate in her current position with the
IRS.
The Office of Personnel Management's (OPM) position on this matter is
that if Ms. Mobley's SSIE position was in fact federally allocated, then
IRS could exercise the option of granting her a pay rate under the
highest previous rate rule. However, OPM points out that the
Smithsonian Institution is unique in that it has authority to hire
employees and pay them from appropriated funds or from nonappropriated
funds. Individuals who are paid from nonappropriated funds are on a
"private roll" and are not considered federal employees. Thus, if Ms.
Mobley is a private roll employee she would for pay purposes be excluded
from the pay laws affecting federal employees. 5 U.S.C. Section
5102(c)(14).
The Smithsonian Institution has advised you that Ms. Mobley was a
private roll employee at the SSIE. As a private roll employee she was
paid from Smithsonsian trust funds. It is the Smithsonian's position
that employees paid with Smithsonian Institution trust funds, regardless
of the origin of those funds, were not eligible for civil service status
or benefits.
Ms. Mobley argues, however, that the SSIE was in effect a "mixed
ownership corporation" since the trust funds were essentially government
appropriated funds as they came from various other departmental
appropriations.
Initially, we note that the SSIE is not a mixed ownership
corporation. 31 U.S.C. Section 856 (1976). As to the SSIE'S origin,
status and funding, it has been described by a federal district court as
follows:
"The Smithsonian Science Information Exchange is a national
repository for science research data. It originated in 1949 as
the Medical Sciences Information Exchange, funded by six
government agencies. In 1953 it became the Biosciences
Information Exchange and came under the aegis of the Smithsonian
Institution. It became the Science Information Exchange in 1960,
and in 1971 was incorporated as a private non-profit corporation
under the laws of the District of Columbia and renamed the
Smithsonian Science Information Exchange.
"The Exchange appears as a line item on the annual Smithsonian
Institution federal budget, from which it receives approximately
60% of its revenues. The remaining 40% is derived from user fees,
of which the majority comes from agencies, grants or contracts.
"Since its inception, SSIE has existed as a private corporation
comprised of private-roll employees." Winston v. Smithsonian
Science Information Exchange, Inc. et al.). 437 F. Supp. 456,
458 (U.S.D.C. D.C. 1977).
Moreover, in our report to Congress entitled "Need to strengthen
Financial Accountability to the Congress, Smithsonian Institution,"
GGD-77-43, to which you refer, we made several findings concerning SSIE
funds. We stated that "(a)ppropriated funds transferred under
agreements with the Smithsonian are private funds in the hands of the
Exchange" GGD-77-43 at 17. We concluded that "(s)ince the Exchange is a
private, nonprofit corporation, it does not have to comply with federal
statutes such as fiscal year limitations and civil service and federal
procurement laws, applicable to the use of appropriated funds."
GGD-77-43 at 17. See also Winston v. Smithsonian Science Information
Exchange, Inc., cited above.
Since Ms. Mobley's position at SSIE was funded by private funds in
the hands of the SSIE which were not considered appropriated funds, and
since SSIE was not a mixed ownership corporation, Ms. Mobley is not
entitled to the highest previous rate benefits provided by 5 U.S.C.
Section 5334, and 5 C.F.R. Section 531.203(c). Her status was not the
same as the civil service employees at the Smithsonian Institution whose
salaries were specifically appropriated by Congress for that purpose.
Accordingly, we conclude that the IRS was correct in denying Ms.
Mobley benefits under the highest previous rate rule.
Sincerely yours,
Comptroller General of the United States
FILE: B-216578
DATE: February 19, 1985
MILITARY PERSONNEL - RESERVISTS - DEATH OR INJURY - DISABILITY -
BENEFITS - AUTHORITY OF SECRETARIES TO DECIDE
By statute, the Secretary of the appropriate militaryor naval
department has all powers, functions, and duties relative to
determinations of service members' fitness for duty and their percentage
of disability, if any. Thus, the Comptroller General has no basis to
question a Navy DEpartment action assigning a Marine Corps reservist a
permanent 10-percent disability rating and separating him from service
with severance pay, notwithstanding the reservist's contention that his
disability percent should have been rated at 30 percent or more and that
he should therefore have been awarded a disability retirement.
PAY - ACTIVE DUTY - RESERVISTS - INJURED IN LINE OF DUTY - PAY AND
LEAVE ENTITLEMENT
Marine Corps reservist injured while performing 2 weeks of required
annual training became entitled by specific provision of statute to
payment of amounts equal to the active duty pay and allowance of a
member of the Regular Marine Corps during the subsequent period of
disability. The reservist was not actually on active duty during that
period, however. Hence, there is no basis to question determination
made by military authorities that he was not entitled to the additional
benefits that accrue to service members ordered to active duty for more
than 30 days, including coverage for dependents under the Civilian
Health and Medical Program of the Uniformed Services.
PAY - ENTITLEMENT - BASED ON APPLICABLE LAWS
It is fundamental that the entitlement of service members to pay is
wholly dependent upon rights prescribed by statute. Hence, Marine Corps
reservist injured during annual 2-week training duty period was entitled
to military pay and allowances authorized by statute for subsequent
period of disability, but was not entitled to additional payments equal
to civilian earnings he claimed to have lost because of the injury since
such additional payments are not authorized by statute.
The Honorable Norman P. Lent
House of Representatives
Dear Mr. Lent:
We refer further to your letters dated April 3 and July 18, 1984,
with enclosures, requesting our review of Mr. Lewis R. Tolley's
entitlement to Federal benefits based on the injury he sustained on May
12, 1982, while participating in a 2-week period of annual training with
the Marine Corps Reserve. In light of the facts presented, we are
unable to conclude that Mr. Tolley is entitled to payments from the
Department of the Navy beyond those he has already received. Any
further claims for Federal benefits he may now have based on the injury
would appear to be primarily within the exclusive jurisdiction of the
Veterans Administration.
It appears that Mr. Tolley initially enlisted in the Regular Marine
Corps in September 1965 at the age of 18, and he served continuously on
active duty during the following 6 years until discharged in September
1971. He held no military status during the next 10 years. In August
1981 he enlisted in the Marine Corps Reserve with the rank of sergeant
(pay grade E-5), and he was assigned to a Reserve unit located near his
home in the State of New York.
The members of this Marine Corps Reserve unit were subsequently
ordered to perform 14 days of annual training duty at Quantico,
Virginia, from May 9 through May 22, 1982. Mr. Tolley was injured in a
fall on an obstacle course on May 12, 1982, while participating in this
14-day active duty assignment.
The lasting symptoms of Mr. Tolley's injury included back pain
radiating down into the left leg and foot. During the 2 years following
the injury he was treated and evaluated at Navy and Veterans
Administration hospitals. The final diagnosis reached by the Navy
medical board convened in his case in January 1984 was "mechanical back
pain" with a possibility of lumbar radiculopathy. The Navy's Central
Physical Evaluation Board then comcluded that he was physically unfit
for military duty and assigned him a permanent disability rating of 10
percent. He accepted the Board's findings on February 27, 1984,
electing not to submit statements in rebuttal or to request a formal
hearing. He received his final discharge from the Marine Corps Reserve
on March 29, 1984.
The payments that Mr. Tolley has received in this matter from the
Department of the Navy have apparently included (1) his active duty pay
and allowances as a sergeant (E-5) for the period May 9-22, 1982; (2)
amounts equal to the active duty pay and allowances of a sergeant (E-5)
of the Regular Marine Corps for the period from May 23, 1982, to March
29, 1984; and (3) final disability severance pay in the amount of
$11,000.
Mr. Tolley indicates that in May 1982 he held civilian employment
providing him with a yearly income of about $40,000 in salary and
bonuses. He had to resign from his civilian position that summer
because of his injury, and he was unemployed most of the time during the
next 2 years. He suggests that the payments made to him by the
Department of the Navy were inadequate to reimburse him for his loss of
civilian income, and in effect he questions whether he may be allowed
additional amounts as compensation for lost civilian earnings.
Mr. Tolley also indicates that while he did not contest the
correctness of the 10-percent disability rating assigned to him by the
Central Physical Evaluation Board, he does not actually agree with that
rating. In effect, he questions whether the rating can be increased to
30 percent or more, so that he might become eligible for monthly
disability retirement payments.
Further, Mr. Tolley indicates that between May 1982 and March 1984 he
spent $6,000 to provide medical care for the members of his family. He
questions whether he may be eligible for reimbursement of that amount
under the Civilian Health and Medical Program of the Uniformed Services
(CHAMPUS).
In addition, you ask for our general review of this matter, and for
our advice concerning any further benefits that might be available to
Mr. Tolley.
It is fundamental that the entitlement of service members to pay is
wholly dependent upon rights prescribed by statute, and neither
equitable considerations nor common law contract principles have a place
in the determination of their pay entitlements. See, for example,
United States v. Larionoff, 431 U.S. 864, 869 (1977); Bell v. United
States, 366 U.S. 393, 401 (1961); Abbott v. United States, 492 F.2d
834, 200 Ct. Cl. 384 (1973), cert. denied 414 U.S. 1024 (1973); Petty
Officer John R. Blaylock, USN, 60 Comp. Gen. 257, 259 (1981);
Veterinary and Optometry Officers, 56 Comp. Gen. 943, 950 (1977).
Provisions of statute codified in chapters 3 and 7 of title 37,
United States Code, generally authorize payment of basic pay and
allowances to service members who are on active duty, computed in
accordance with their pay grades. See, generally, 37 U.S.C. Sections
204(a), 402, and 403. Hence, Mr. Tolley was entitled to basic pay and
allowances as a Marine Corps Reserve sergeant (E-5) during the 14-day
period he was on active duty under orders during the period from May 9
through May 22, 1982.
In addition, under 37 U.S.C. Section 204(i) and 10 U.S.C. Section
6148(a) a member of the Marine Corps Reserve who is ordered to active
duty for any period of time, and who is disabled in line of duty from
injury while so employed, is entitled to the pay and allowances provided
by law for a member of the Regular Marine Corps of corresponding grade.
We have expressed the view that under these and similar statutory
provisions applicable to Reserve components of the other uniformed
services, entitlement to pay and allowances is based upon a reservist's
physical disability to perform normal military duty without regard to
the reservist's capability of engaging in civilian employment, and the
determination concerning how long the disability continues is to be left
to the exercise of sound administrative judgment. In each case the
service concerned is to determine when the injured reservist has
recovered sufficiently to perform normal military duties or to determine
that the individual should be separated for disability. Lance Corporal
Michael A. Curtis, USMCR, 54 Comp. Gen. 33, 36 (1974); 52 Comp. Gen. 99
(1972); 43 Comp. Gen. 733, 737 (1964). We have also consistently held,
however, that although a reservist injured while performing a short tour
of active duty has this specific statutory entitlement to continued pay
and allowances during the subsequent period of disability, the
reservist's active military status otherwise terminates on the last day
of duty prescribed by the original active service orders. See DOD
Military Pay and Allowance Submission No. SS-A-1272, 57 Comp. Gen. 305,
309-310 (1978). See also Lance Corporal Michael A. Curtis, USMCR, 54
Comp. Gen. at 37; 41 Comp. Gen. 706 (1962); and 37 Comp. Gen. 403
(1957). Compare Lanigham v. United States, 5 Cl. Ct. 146, 157 (1984).
In this case, therefore, our view is that Mr. Tolley had a right to
amounts equal to the pay and allowances of a sergeant (E-5) of the
Regular Marine Corps from May 23, 1982, to March 29, 1984. Since his
status was that of a disabled reservist not on active duty during that
period, however, we find that he was otherwise ineligible for the
benefits associated with active military service, for example, leave
accrual and payment for unused accrued leave.
Moreover, we are unaware of any provision of statutory law that
authorizes payment from appropriated funds to reimburse service members
for civilian earnings believed lost on account of physical injuries
sustained in the performance of active military duty. Our view is that
in the absence of such statutory authority, Mr. Tolley may not be
allowed reimbursement based on a claimed loss of civilian income in this
matter.
We are therefore unable to conclude that the Department of the Navy
is liable to Mr. Tolley for additional military pay and allowances for
the period from May 9, 1982, to March 29, 1984, beyond the amounts he
has apparently already been paid, and we also find that no additional
amounts are payable to his as reimbursement for civilian earnings
believed lost on account of the injury during that period.
Provisions of law governing the separation or retirement of members
of the uniformed services for reasons of physical disability are
contained in chapter 61 of title 10, United States Code (10 U.S.C.
Sections 1201-1221). Under 10 U.S.C. Section 1204, a service member who
is called to active duty for 30 days or less, and who sustains a
permanent disability rated at least 30 percent as the result of injury,
is eligible for permanent retirement with monthly payments of military
retired pay. Alternatively, under 10 U.S.C. Section 1206, a service
member injured in such circumstances who receives a permanent disability
rating of less than 30 percent may be separated from service with a
single lump-sum payment of severance pay computed under a prescribed
formula.
By statute, the Secretary of the service concerned has all powers,
functions, and duties incident to the determination of the fitness for
duty of any member of the Armed Forces under his jurisdiction and the
percentage of disability of any such member. 10 U.S.C. Section 1216.
The Federal courts have repeatedly held that under this standard the
disability determinations of military administrative boards may not be
disturbed, absent cogent and clearly convincing evidence of arbitrary or
capricious action. See, for example, Rutherford v. United States, 573
F.2d 1224, 216 Ct. Cl. 163 (1978); and Powell v. Marsh, 560 F. Supp.
636, 641 (D. D.C. 1983). We do not see a sufficient basis in the
information presented for questioning the determinations made in Mr.
Tolley's case.
Provisions of statute governing the Civilian Health and Medical
Program of the Uniformed Services, or CHAMPUS, are codified in chapter
55 of title 10, United States Code (10 U.S.C. Sections 1071-1092).
CHAMPUS has been designated generally as a uniform program of medical
and dental care for active duty and retired service members, and for
their dependents. 10 U.S.C. Section 1071. Concerning the dependents of
active duty service members, coverage is limited to the dependents of
members who are "on active duty for a period of more than 30 days." 10
U.S.C. Sections 1076(a), 1079(a).
This limitation is derived from section 102 of the Dependents Medical
Care Act, Public Law 569, 84th Cong., 2d Sess., approved June 7, 1956,
ch. 374, 70 Stat. 250. The legislative history of the provision
reflects that the Congress was primarily concerned with providing a
career incentive for service members on extended active duty, and that
there was no intent to provide medical care for the dependents of
reservists called or ordered to active duty for period of 30 days or
less. See S. REP. NO. 1878, 84th Cong., 2d Sess. 3, 12, reprinted in
1956 U.S. CODE CONG. & AD. NEWS 2698, 2700, 2709; H.R. REP. NO. 1805,
84th Cong., 2d Sess. 1-8, 28 (1956); 102 CONG. REC. 3847-3858 (1956);
Dependent Medical Care: Hearings on H.R. 9429 before the Senate Comm.
on Armed Services, 84th Cong., 2d Sess. 15-16, 19, 24-27 (1956).
Under 10 U.S.C. Section 1073 the Secretary of Defense is assigned the
primary responsibility for administering CHAMPUS for the Navy and Marine
Corps, and Mr. Tolley indicates that the responsible officials declined
to authorize CHAMPUS coverage for his dependents between May 1982 and
March 1984. We have no basis to question that determination since, as
indicated, he was called to active service for only 14 days in May 1982.
His military status during the remainder of the period lasting until
March 1984 was that of a reservist not on active duty. Hence, it does
not appear that he ever established eligibility for CHAMPUS benefits
under the applicable statutes since he was not a service member "on
active duty for a period more than 30 days."
Other Federal benefits for which Mr. Tolley may be eligible as the
result of his injury would appear to be those primarily within the
jurisdiction of the Veterans Administration. By law, the decisions of
the Administrator of Veterans' Affairs on claims for veterans benefits
are "final and conclusive," and are not subject to review by any other
official or any court of the United States. 38 U.S.C. Section 211(a).
If Mr. Tolley has questions concerning his eligibility for veterans
benefits, the Veterans Administration will be able to provide him with
further advice in the matter.
In answer to your question concerning legislation, it is our opinion
that new legislation would be necessary before reservists who are
injured in circumstances similar to those involved in Sergeant Tolley's
case could be authorized payments as compensation for lost civilian
earnings, or CHAMPUS benefits for their dependents.
We trust this will serve the purpose of your inquiry.
Sincerely yours,
Comptroller General of the United States
FILE: B-216577
DATE: March 11, 1985
MATTER OF: Ellis Slater - Real Estate Expenses - Location of
Residence
DIGEST:
OFFICERS AND EMPLOYEES - TRANSFERS - REAL ESTATE EXPENSES - LOCATION
LIMITATION - PERMANENT DUTY STATION
A transferred employee may not receive reimbursement for the expenses
of selling a house owned by his wife where the house was not located at
his old duty station, he did not reside there at the time he was
notified of his transfer, he did not commute daily from the house to his
duty station, and his marriage took place after he was notified of his
transfer.
This decision is in response to a request from Conrad R. Hoffman,
Director of the Office of Budget and Finance, Veterans Administration
(VA), for our decision concerning the entitlement of Mr. Ellis Slater to
reimbursement of house sale expenses. We hold that Mr. Slater is not
entitled to reimbursement. The house for which he claims house sale
expenses was not located at his old official station, he was not
residing in the house when he was first notified of his transfer, he did
not commute daily to his former duty station from the house, and
although his wife owned and occupied it at the time he was notified of
his transfer, their marriage did not take place until after he was
notified of his transfer.
Mr. Slater was notified orally on September 17, 1982, and in writing
on September 22, 1982, that he was to be transferred from the VA Medical
Center in Tuscaloosa, Alabama, to the VA Medical Center in Gainesville,
Florida. His reporting date was October 17, 1982. On October 3, 1982,
Mr. Slater married Margaret Walker, who owned a house in Biloxi,
Mississippi, which is approximately 235 miles from Tuscaloosa. Mr.
Slater reports that after his marriage he returned to Tuscaloosa on
October 4 to complete his assignments, process out, and move out of his
apartment. On October 14 he returned to Biloxi to collect the household
items he would need when he first arrived in Gainesville. Mr. Slater's
wife remained in Biloxi to put the house on the market, resign her job
and make preparations to join him in Gainesville. The house was sold
and closing took place on January 6, 1984. Mr. Slater subsequently
submitted a claim for reimbursement of house sale expenses in the amount
of $4,540.30.
The Veterans Administration denied Mr. Slater's claim on the grounds
that he did not acquire his interest in the property prior to the date
he was definitely informed of his transfer to the new duty station and
the house was not the one from which he commuted daily to and from his
old duty station. Mr. Slater states that each time he sought advice on
this matter he has been given a different reason as to why he is not
eligible for reimbursement. He claims that he has researched the
Federal Travel Regulations, FPMR 101-7 (September 1981) (FTR), and
Comptroller General decisions and he has been unable to confirm these
reasons but instead, found that the Comptroller General, on occasion,
has allowed reimbursement to employees in situations outside the norm,
and that he is in that category. Mr. Slater argues that he is entitled
to reimbursement because his wife owned and occupied the house at the
time he was first notified of his transfer, and because he could not
occupy the house due to the short period of time between his marriage
and his transfer.
The statutory authority for reimbursement of real estate expenses is
found at 5 U.S.C. Section 5724(a)(a)(4) (1982), which provides for
reimbursement of the expenses for the sale of an employee's residence at
the old duty station and the purchase of a residence at the new duty
station. The regulations which implement that statute are found in
Chapter 2, Part 6, of the FTR, paragraph 2-6.1 of which provides as
follows:
"Conditions and requirements under which allowances are
payable. To the extent allowable under this provision, the
Government shall reimburse an employee for expenses required to be
paid by him/her in connection with the sale of one residence at
his/her old official station, * * * Provided, That:
"b. Location and type of residence. The residence or dwelling
is the residence as described in 2-1.4i, * * *.
"c. Title requirements. The title to the residence or
dwelling at the old or new official station, * * * is 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. For an
employee to be eilgible for reimbursement of the costs of selling
a dwelling * * * the employee's interest in property must have
been acquired prior to the date the employee was first definitely
informed of his/her transfer to the new official station.
"d. Occupancy requirements. The dwelling for which
reimbursement of selling expenses is claimed was the employee's
residence at the time he/she was first definitely informed by
competent authority of his/her transfer to the new official
station."
Paragraph 2-1.4i of the FTR defines official station or post of duty,
including an employee's residence at that post of duty, as follows:
"Official station or post of duty. The building or other place
where the officer or employee regularly reports for duty. * * *
With respect to entitlement under these regulations relating to
the residence and the household goods and personal effects of an
employee, official station or post of duty also means the
residence or other quarters from which the employee regularly
commutes to and from work. * * * (Emphasis added.)
Thus, the prerequisites for reimbursement of house sale expenses are
listed above, and each must be met before reimbursement may be allowed.
First of all, the house the employee sells must be located at the
employee's old duty station and, as provided in FTR para. 2-1.4i, it
must be the one from which the employee commutes on a daily basis to and
from his worksite. Secondly, the employee must have been residing in
the house for which he claims reimbursement of selling expenses at the
time he was notified of his transfer. Finally, title to the house must
be in the name of the employee alone, in the joint names of the employee
and a member of his immediate family or solely in the name of a member
of his immediate family. This provision is qualified by the requirement
that the employee must have acquired his interest in the property prior
to the date he was definitely informed of his transfer.
Mr. Slater's wife's house was not located at his old duty station, he
did not commute from it and it was not his residence at the time he was
notified of his transfer. However, as we have previously pointed out,
Mr. Slater argues that since his wife owned the house at the time he was
notified of his transfer, his situation satisfies the title requirement
of the regulations. While FTR paragraph 2-6.1e provides that an
employee may be reimbursed for house sale expenses where the title is in
the sole name of a member of his immediate family, it also provides that
an employee must have acquired an interest in the property prior to
notification of his transfer. To interpret this regulation as Mr.
Slater suggests would render the latter requirement meaningless, since
any interest Mr. Slater had in the house was derivative from his wife's
interest, and did not arise until after he had been notified of his
transfer. Therefore, we believe that it is not sufficient that Mr.
Slater's wife owned the house at the time he was notified of his
transfer. This interpretation would be in keeping with what we believe
to be the general intent of the regulations -- to prevent an employee
from taking actions after notification of a transfer to increase his
entitlements.
It appears that when Mr. Slater made reference to certain Comptroller
General decisions he might have had 53 Comp. Gen. 90 (1973) in mind. In
that case we allowed reimbursement of house sale expenses to an employee
who, after receiving notice of his transfer, married, and moved into his
wife's house. In allowing reimbursement we held that the regulations
were not intended to be applied in such a situation, where the employee
had in fact established a bona fide residence in his wife's home prior
to transfer.
The situation in 53 Comp. Gen. 90 can be distinguished from Mr.
Slater's situation in that the employee in that case resided for a
significant period of time in a home which was located at his old duty
station and he in fact commuted to and from that home, while Mr.
Slater's house was located 235 miles from his old duty station, he
resided there for only a few days, if at all, and did not commute from
there to his old duty station. Additionally, in 53 Comp. Gen. 90, after
initially receiving notice of his transfer, the actual transfer was then
postponed for almost 6 months. Thus, that case is clearly
distinguishable from Mr. Slater's situation and is not controlling.
Mr. Slater's claim is denied because the house was not located at his
old duty station, he did not reside there at the time he received
notification of his transfer, he never commuted daily from this house to
his old duty station, and his marriage to the woman who owned it took
place after he was notified of his transfer.
Comptroller General
of the United States
FILE: B-216575
DATE: March 26, 1985
MATTER OF: William A. Lewis
DIGEST:
COMPENSATION - ADDITIONAL - HAZARDOUS DUTY - ADMINISTRATIVE
DETERMINATION
The employing agency has the primary responsibility to
determine whether an employee has duties of sufficient risk
performed irregularly and intermittently so as to justify a
hazardous duty pay differential. The Comptroller General will not
overturn the agency's determination that the employee's duties do
not meet the requirements for a hazardous duty pay differential in
a case where the agency's determination was not arbitrary and
capricious. Concerning upward classification of the grade for a
position because of hazardous duties, such position classification
determinations are within the jurisdiction of the employing agency
and the Office of Personnel Management, not the Comptroller
General.
In this case we find that Mr. William A. Lewis, an employee of the
Defense Logistics Agency, is not entitled to hazardous duty pay for the
period May 9, 1982, through February 11, 1984. /1/
Mr. Lewis outlined his claim in documents forwarded to the employing
office by letter of December 30, 1983. He also submitted supplemental
letters dated February 21, and March 4, 1984. He believes that he is
due a 25-percent salary increase because, as a Quality Assurance
Specialist, he was subjected to risks from flammable and explosive
materials, toxic substances, and workplaces requiring him to climb and
enter fuel tanks as well as go into compartments below the decks of
ocean tankers.
Although the workpapers show some difference of opinion over the
question, the agency management responsible for deciding the issue has
determined that the duties of Mr. Lewis' position did not have the
degree of risk warranting a hazardous duty pay differential under 5 U.
S.C. Section 5545(d) and the implementing regulations at 5 C.F.R.
Section 550.901-907. These provisions permit the differential only when
the hazardous duties are irregular and intermitent and not considered in
establishing the grade level of the position. Although denied by Mr.
Lewis, the employing office states that the duties in question were
regularly performed on a recurring basis and were considered in the job
classification process fixing the grade level of the position.
We have held that whether a particular work situation warrants a
hazardous duty differential is primarily a question for decision by the
employing agency, subject to the qualification that it decide without
being arbitrary and capricious. Ordinarily we will not substitute our
judgment for that of the agency officials who are in a better position
to investigate and resolve the matter. Joseph Contarino, et al.,
B-202182, January 19, 1982. In the present case, we are not in a
position to say that agency management acted unreasonably in concluding
that the risk was insufficient and that the duties were regularly
performed on a recurring basis as well as appraised in classifying the
position. Also, it is not obvious to us that work situations described
by Mr. Lewis fit the hazardous tasks enumerated in Appendix A, 5 C.F.R.
Part 550, so as to constitute a risk warranting the salary differential.
Mr. Lewis asks our interpretation of the term "irregular or
intermittent" hazardous duty justifying the differential, as opposed to
regularly and recurring hazardous duty, which is not compensated by the
differential. The standard of "irregular or intermittent duty," as
indicated in 5 U.S.C. Section 5545(d), is that the "physical hardship or
hazard not usually (be) involved in carrying out the duties of" the
position. The pertinent legislative history reads:
"Extra compensation may be provided Classification Act
employees through the regular position classification process when
the unusual physical hardship or hazard is inherent in the
position, when it regularly recurs, and when it is performed for a
substantial part of the working time. * * * " H.R. Rep No. 31,
89th Cong., 1st Sess. (1965), at 2.
In other words, Congress realized the possibility that the position
classification system would compensate the employee by a higher grade
level if hazardous duty regularly recurs and is substantial, in which
case an extra increase by a salary differential would be unwarranted.
The differential applies only when the hazards are infrequent and a
small portion of the work time so that such "irregular or intermittent"
hazardous duties are not considered in evaluating the position for the
proper grade level. However, we point out that even though the position
classification sysstem fails in a particular case to take into account
the hazardous duty in fixing the grade level, there is no entitlement to
the differential if the hazardous duties are regular and recurring.
This result follows from the separate statutory standard that such duty
must be "irregular or intermittent" if the differential is to be paid.
See B-177580, August 21, 1983.
Further, we do not have jurisdiction over position classification
matters. Appeals to raise the grade levels of a position because of the
duties performed by the employee are to be brought before the employing
agency and the Office of Personnel Management. Even if an appeal is
successful, there is no entitlement to backpay for an erroneous
classification. Joseph J. Zarba, B-198473, April 12, 1982; United
States v. Testan, 424 U.S. 392 (1976); 5 C.F.R. Sections
511.101-511.703 (1984).
We note that the record before us indicates that the employing agency
still may be reviewing further the underlying factual issues concerning
the risks inherent in similar positions and the effect of those risks on
position classification or the propriety of paying a hazardous duty
differential. As is indicated above, those are matters properly for
consideration by the agency and the Office of Personnel Management, and
our determination here is not intended to affect the outcome of the
agency's review. However, on the present record, there is no basis for
us to authorize payment of the additional pay Mr. Lewis claims.
Comptroller General
of the United States
(1) The Chief, Accounting and Finance Division, Office of the
Comptroller, Defense Logistics Agency, requested an advance decision
based on an administrative report and working papers submitted by the
Accounting and Finance Officer of the Agency's Defense Contract
Administration Services Region, Los Angeles, California.
FILE: B-216573
DATE: February 11, 1985
MATTER OF: Benjamin C. Hail
COMPENSATION - REMOVALS, SUSPENSIONS, ETC. - BACKPAY - UNJUSTIFIED OR
UNWARRANTED PERSONNEL ACTION - ALLEGATION NOT SUBSTANTIATED
DIGEST: A civilian employee was separated for voluntary retirement
but was later restored because he refused to waive retired military pay
to qualify for a civil service annuity. The separation was not an
unjustified or unwarranted personel action entitling him to backpay
since the personnel office stated that he was informed prior to
separataion that he had to waive his military retired pay to qualify for
optional retirement. Although he contends he was not so advised he
should have known there was a question about the matter. Further, the
agency position must be accepted when there is an irreconcilable
difference between the claimant and the agency.
A civilian employee of the Defense Logistics Agency submitted a
request for voluntary retirement and was separated but refused to waive
military retired pay so that his military service could be added to his
civilian service for civil service retirement purposes. He was denied
immediate retirement by the Office of Personnel Management because,
without the military service, he had insufficient years service to
qualify for an annuity at his age. We are asked whether he is entitled
to backpay from the time he was separated until he was restored to duty
on grounds that his separation was erroneous and considered an
unjustified and unwarranted personnel action. /1/ Since we must
conclude that the employee was informed correctly regarding the waiver
requirement and his application for retirement was processed promptly as
required, the separation was proper and he is not entitled to backpay.
Mr. Benjamin C. Hail, a civilian employee of the Defense Logistics
Agency, applied for voluntary retirement, to be effective February 29,
1980, at which time he would be over age 55 and would have 12 years, 5
months and 17 days of military service, plus 18 years, 5 months and 12
days of civilian service, for a total of 30 years, 10 months and 29
days. Under 5 U.S.C. Section 8332(c), credit is not allowed for
military service which serves as the basis for military retired pay
unless, among other exceptions not relevant here, the retirement pay is
based on a disability caused by an instrumentality of war and incurred
in line of duty during a period of war. However, if an exception is not
applicable, credit may be allowed for military service if military
retired pay otherwise allowable is waived. 5 C.F.R. Section 831.301
(c).
Mr. Hail was receiving disability retired pay based on his military
service at the time he submitted his application for civil service
retirement and, although the facts are not entirely clear, he apparently
did not intend to waive receipt of that pay because he believed that his
military retirement was based upon a disability caused by an
instrumentality of war and incurred in line of duty during a period of
war. A communication from the Office of the Judge Advocate General,
Department of the Navy, dated August 28, 1981, indicates that the Navy
had determined that Mr. Hail's military retirement was not based upon
disability caused by an instrumentality of war and incurred in line of
duty during a time of war. Thus, credit for his military service for
civil service retirement purposes, in the absence of a waiver of
military retired pay, was not authorized.
Subsequently the Office of Personnel Management by letter dated
October 28, 1981, informed Mr. Hail's personnel office of the
disallowance of his application for retirement because he did not meet
the age and service requirements for optional retirement on the date of
his separation. This letter stated that in order to be eligible, he
must be at least 55 years of age and have a minimum of 30 years'
service.
Mr. Hail's personnel office informed the Office of Personnel
Management by letter dated December 10, 1981, that he had in excess of
18 years of civilian service and 12 years of military service, that he
was counseled properly regarding the criteria for optional retirement,
and that they were not informed at the time application was made that he
did not intend to waive military retired pay for the purpose of becoming
entitled to civil service annuity. They indicated further that the
retirement application was not delayed pending receipt of an
acknowledgment of waiver from Mr. Hail's retired pay center, because
Federal Personnel Manual Supplement 831-1 advises agencies not to delay
submission of retirement applications pending receipt of an
acknowledgment of waiver since the Office of Personnel Management
ensures that waiver of retired pay is in effect. Therefore, the agency
does not believe that Mr. Hail's application was processed erroneously
or that he is entitled to backpay since they had complied with existing
regulations.
Mr. Hail was restored to the rolls on January 3, 1982, and on
September 9, 1982, he claimed backpay for the period he was off the
rolls, February 29, 1980, to January 3, 1982.
Backpay is governed by 5 U.S.C. Section 5596 and the implementing
regulations and instructions of the Office of Personnel Management in 5
C.F.R. Section 550.801. These authorities provide that backpay may be
awarded upon a finding, based on an administrative determination or a
timely appeal, by appropriate authority, that an employee has undergone
an unjustified or unwarranted personnel action that has resulted in the
withdrawal or reduction of all or any part of the pay of the employee.
In a prior case an employee alleged that he believed that he could
use his military service to establish eligibility for civil service
retirement without waiving his retired military pay when he applied for
optional retirement. The Office of Personnel Management denied him a
retirement annuity. The agency claimed that it had counseled the
employee with regard to the waiver requirement and that his application
was accepted and processed only upon his assurance that he intended to
make such a waiver. The record in that case, therefore, reflected a
dispute between the parties with regard to a material fact. We denied
the employee's claim for backpay from the date of his separation to the
date he was restored after retirement was denied explaining that, in the
event of a dispute, it is our long-standing practice to resolve the
matter in favor of the Government. This practice results from the rule
that the burden is on a claimant to establish the liability of the
United States and the claimant's right to payment. 4 C.F.R. Section
31.7 (1984). Charles M. Kindick, B-187891, June 3, 1977.
In the present situation Mr. Hail's personnel office has found that
his application for retirement was not processed erroneously in order to
make his separation an unjustified and unwarranted personnel action
under the provisions of 5 U.S.C. Section 5596. They base this finding
on the fact that he had enough creditable service when he applied for
voluntary retirement if he included his military service. His
ineligibility for an immediate civil service annuity resulted solely
from his refusal to waive his military pay.
Mr. Hail contended in a letter dated December 16, 1981, addressed to
the Office of Personnel Management that he was not informed verbally or
in writing at the time he retired that he would receive only a deferred
annuity at the age of 62 if his military service was not creditable.
This information is in direct conflict with the statement of his
personnel office. In view of our long-standing practice the factual
dispute must be resolved in favor of the Government. Charles M.
Kindick, supra; Linnie V. Blevins, June 14, 1982.
Thus, we do not find that Mr. Hail's separation was erroneous or that
he was subjected to an unjustified or unwarranted personnel action
entitling him to backpay. Therefore, Mr. Hail's claim must be denied.
Comptroller General
of the United States
(1) Mr. W. W. Witte, Accounting and Finance Officer, Defense Contract
Administration Services Region Atlanta, Defense Logistics Agency,
submitted this request for a decision.
B-216572, Oct 22, 1984, 84-2 CPD 437
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Adverse agency action effect
DIGEST:
Protest filed with GAO more than 10 working days after initial
adverse action by contracting agency on protest is dismissed as
untimely. Protester's continued pursuit of protest with contracting
agency does not change this result.
Sturm Craft Co., Inc.:
Sturm Craft Co., Inc. (Sturm) protests the award of a contract to
Fall River Electrical Associates Inc. (Fall River) under the Department
of the Navy (Navy) invitation for bids (IFB) No. N62472-84-B-1607.
By letter dated May 31 and June 13, 1984, Sturm protested to the
contracting officer that the Navy had improperly refused to consider
Sturm's bid price modification that was received after bid opening.
According to Sturm, had the modification been considered, its bid would
have been low. By letter dated July 24, 1984, the Navy informed Sturm
of the award to Fall River and denied the protest. Sturm again
protested to the Navy by letter dated July 31, 1984. Subsequently,
Sturm protested to our Office by letter dated September 24, 1984.
Under our Bid Protest Procedures, once a protest has been file 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 on the protest. 4
C.F.R. sec. 21.2(a) (1983); Stark Van Lines of Columbus, Inc.,
B-211361, May 6, 1983, 83-1 C.P.D. para. 476. The fact that a protester
continues to pursue its protest with the contracting agency does not
alter this rule. Id. Consequently, assuming Sturm filed its initial
protest with the contracting agency timely, since Sturm did not file its
protest with our Office within 10 working days after receipt of the
contracting officer's July 24, 1984, denial (initial adverse agency
action), the protest to our Office is untimely and will not be
considered on the merits. Id.
The protest is dismissed. COMP GEN (UP)
FILE: B-216571; B-216571.2; B-216571.3 85-1 CPD 562
DATE: May 17, 1985
MATTER OF: Walsky Construction Co.; A&A Roofing Co., Inc.; Pacific
Rainier Roofing, Inc.
DIGEST:
BIDS - INVITATION FOR BIDS - AMENDMENTS - ACKNOWLEDGEMENT - DEVIATION
FROM REQUIRED PROCEDURE - FORM V. SUBSTANCE
Bid is responsive where bidder acknowledged an amendment transmitting
a revised bid form but submitted its bid on the unamended bid form
because it is clear from the acknowledgement that bidder intended to
comply with amended bid acceptance period requirement and that the use
of the unamended form was merely an oversight.
Walsky Construction Company protests that the bids submitted by A&A
Roofing Co., Inc. and Pacific Rainier Roofing, Inc. under invitation for
bids (IFB) No. DACA85-84-B-0055, issued by the Army Corps of Engineers
are nonresponsive because they were submitted on the improper bid form.
A&A Roofing and Pacific Rainier, on the other hand, maintain the
Walsky's bid under the same solicitation is nonresponsive because it was
qualified as to the amount of work that Walsky would accept.
We deny Walsky's protest and we dismiss A&A Roofing's and Pacific
Rainier's protests because Walsky is not the low bidder.
Background
The solicitation was for roofing work at Fort Wainwright. The
bidding schedule was substantially as follows:
SCHEDULE OMITTED
The solicitation stated: "Award will be made to the low responsive,
responsible bidder or bidders on Schedule A and B together or
separately, whichever is in the best interest of the government.
The solicitation also included Standard Form 21 which contained a
provision stating "the undersigned agrees that, upon written acceptance
of this bid . . . within . . . calendar days . . . after the date of
opening," it will execute and required forms and bonds. The agency
erroneously inserted "10" in the blank, which is normally to be
completed by the bidder. This resulted in an obvious discrepancy with
another solicitation provision stating that bids offering less than 30
days for acceptance would be rejected.
Consequently, the agency issued an amendment to correct the erroneous
bid form. The amendment contained a revised Standard Form 21 which
omitted the "10" in the bid acceptance blank and changed the provision
limiting bid acceptance form 30 days to 60 days. This amendment
required that it be acknowledged but it did not specifically state that
bids should be submitted on the revised form.
The Army received three bids. Although all bidders acknowledged
receipt of the amendment regarding Standard Form 21, A&A Roofing and
Pacific Rainier submitted their bids on the original unamended form.
Walsky's bid, submitted on the amended bid form, contained the following
statement: "Our bid is based on the inclusion of at least one item of
Schedule B. Schedule A will not be accepted alone."
The bids were as follows:
BIDS OMITTED
The Corps maintains that the IFB requires award to be made in the
aggregate or on the basis of schedule A and B separately, whichever
would result in the lowest cost to the government. Walsky's bid is the
lowest aggregate bid. The cost to the government would be lower,
however, if schedule B were awarded to A&A Roofing and schedule A to
Walsky. Walsky's qualification prevented such an award. Therefore, the
Corps proposes to award schedule A to Pacific Rainier, the next low
bidder on that schedule and schedule B to A&A Roofing. This split award
would result in a lower price than an aggregate award to Walsky.
Walsky, however, maintains that it is entitled to the award because the
A&A Roofing and Pacific Rainier bids are nonresponsive. Walsky also
argues that even if the other two bids are responsive, it is entitled to
at least part of the award because an award based on Walsky's bid on
schedule A and item 1 of schedule B along with A&A Roofing's bid on item
2 of schedule B would result in the lowest cost to the government.
Walsky essentially contends that A&A Roofing's and Pacific Rainier's
acknowledgment of the amendment along with their use of the unamended
bid form rendered their bids ambiguous and thus nonresponsive. We
disagree.
A bidder can obligate itself to the contents of some amendments
merely by acknowledging their receipt (amendments changing certain
specifications, for example), Fischer-White-Rankin Contractors, Inc.,
B-213401, Apr. 24, 1984, 84-1 CPD Paragraph 471. It is possible to
argue that by acknowledging the amendment but submitting their bids on
the unamended form including the number "10" in the space provided for
the bidder's offered bid acceptance period, both A&A Roofing and Pacific
Rainier submitted bids which included 10-day bid acceptance periods. We
think it is more reasonable to assume, as the Corps argues, that because
both A&A Roofing and Pacific Rainier acknowledged the amendment, they
intended to comply with the amended 60-day bid acceptance period
requirement and the use of the unamended form was merely an oversight.
In this connection, we note that the amendment did not require that bids
be submitted on the revised form and, in fact, stated that the revised
pages "are substituted for the superseded page(s)." That phrase
certainly implies that the revised form would be incorporated by
acknowledging the amendment.
Regarding Walsky's argument that it is entitled to the award even if
the other bids are responsive based on splitting the award so that
Walsky receives award on schedule A and one item under schedule B, the
solicitation clearly provides for splitting the award only between
schedules A and B. It does not permit an award splitting the two items
under schedule B. The award therefore should be made, if otherwise
appropriate, on the basis set forth by the Corps.
We need not consider Pacific Rainier's and A&A Roofing's protests
that Walsky's bid is nonresponsive since we have concluded that their
bids are responsive and thus Walsky is not in line for award.
We deny Walsky's protest and dismiss those of A&A Roofing and Pacific
Rainier.
Harry R. Van Cleve
General Counsel
B-216566, B-216566.2, Oct 18, 1984, 84-2 CPD 420
CONTRACTS - Small business concerns - Awards - Small Business
Administration's authority - Size determination
DIGEST:
GAO does not consider protests relating to the small business size
status of a concern because the Small Business Administration has
conclusive authority to determine size status.
Carter Construction Company, Inc.:
Carter Construction Company, Inc. protests award under solicitations
DACW03-84-B-0040 and DACW03-84-B-0041, issued by the Little Rock
District, Corps of Engineers. Carter contends that the apparent low
bidder, McAlister Construction Company, Inc., does not satisfy the small
business set-aside restrictions of the solicitations because of its
possible affiliation with other companies causes its annual sales to
exceed to monetary criteria prescribed for small business concerns.
Under 15 U.S.C. sec. 637(b)(6) (1982), the Small Business
Administration (SBA) has conclusive authority to determine matters of
small business size status for federal procurement purposes. Therefore,
our Office does not consider size status protests. 4 C.F.R. sec. 21.3(
g)(2) (1984); Custodial Guidance systems, Inc., B-213920 Dec. 28, 1983,
84-1 CPD para. 36. Under the applicable regulations, a protest of a
bidder's small business size status must be filed with the contracting
officer who in turn forwards the matter to the SBA for resolution.
Federal Acquisition Regulation, sec 19.302, 48 Fed.Reg. 41,102, 42,246
(1983) (to be codified at 48 C.F.R. sec. 19.302).
The protest is dismissed. COMP GEN (UP)
FILE: B-216561 85-1 CPD 203
DATE: February 15, 1985
MATTER OF: North American Automated Systems, Co., Inc.
DIGEST:
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
PROPRIETY
1. It is proper for an agency to refuse to consider one firm's
offered maintenance warranty in evaluating offers, where offerors never
were advised that such warranties would be an evaluation factor; award
may not be based on criteria not made known to prospective offerors.
CONTRACTS - PROTESTS - ALLEGATIONS - UNSUBSTANTIATED
2. An allegation that using equipment purchased from two different
vendors will result in system integration problems is without merit
where the agency found the equipment could be integrated and the
protester presents no evidence to the contrary.
North American Automated Systems Co., Inc. (North American), protests
the award of a contract to ITT Courier Terminal Systems (ITT) for 9 of
12 automatic data processing items under request for proposals (RFP) No.
DABT39-84-R-0166, issued by the Department of the Air Force for IBM "or
equal" equipment. North American also protests the purchase of the
remaining three items from IBM Corporation by purchase order under the
nonmandatory automated data processing equipment schedule.
We deny the protest.
Due to an urgent need for the equipment, the Air Force orally
solicited vendors on an IBM "or equal" basis. ITT was the low offeror
on 9 of the 12 items at a price of $96,724, and IBM's schedule price of
$59,676 was low for the remaining items. Award thus was made to ITT,
and a purchase order was issued to IBM, for a combined total price of
$156,400. North American offered the equipment on an "all or none"
basis for $160,856.80, or $4,456.80 more than the combined ITT and IBM
prices.
North American alleges that its offered price actually was low
because, unlike ITT and IBM, its offer included a 1-year maintenance
warranty, resulting in a lower life-cycle cost than any other
manufacturer. North American also asserts that integration problems
will result from attempting to combine the IBM and ITT equipment.
The Air Force reports that it never requested warranty and
maintenance prices from vendors since past experience had indicated that
each company generally provides a standard commercial warranty varying
from 30 days to 1 year. It is the contracting activity's policy, the
Air Force explains, to include all purchased automatic data processing
equipment in a separate, formally advertised, post-wide maintenance
contract. The Air Force also states that integration of the equipment
to run identified software products was specified as a minimum salient
characteristic and was a factor in evaluating the offers.
Since the record shows that neither maintenance warranties nor
life-cycle costs were intended to be considered in the evaluation, the
Air Force properly refused to consider North American's maintenance
warranty. It is well-established that award may not be based on factors
that prospective offerors were not advised would be considered.
Kirk-Mayer, Inc., B-208582, Sept. 2, 1983, 83-2 C.P.D. Paragraph 288.
North American has presented no evidence in support of its contention
that the IBM and ITT equipment cannot function together as part of an
integrated system. The Air Force, on the other hand, considered that
factor in the evaluation, and concluded that the IBM and ITT equipment
could function together satisfactorily; in fact, the Air Force reports
that the items have been delivered and are in operation, and that no
problems of equipment integration have been encountered. North
American's contention thus provides no basis for questioning the awards.
The protest is denied.
Comptroller General
of the United States
B-216554, Oct 10, 1984, Office of General Counsel
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Congressional transmittal of protest
DIGEST:
GAO declines to issue a decision on the merits of a protest forwarded
by a member of Congress because the protest is untimely under GAO's Bid
Protest Procedures, but advises member for constituent's benefit that a
bid delivered late by a commercial courier does not come within the
"registered or certified mail" exception to the late bid rules.
The Honorable Robert A. Young
Member, United States House of Representatives
4150 Cypress Road
St. Ann, Missouri 63074
Dear Mr. Young:
This is in reply to your letter dated September 18, 1984, in which
you forward and ask for our ruling on the protest of Chemtech
Industries, INc. against the rejection of its bid as late by the
Baltimore District, Army Corps of Engineers, under invitation for bids
No. DACW31-84-B-0026. chemtech's bid was rejected because it was
delivered to the procuring agency by courier the day after bids were
opened.
Accordingly to the documents attached to Chemtech's protest, bids
were scheduled to be opened at 11:15 a.m. on Wednesday, September 5,
1984. Chemtech submitted its bid by a commercial courier service.
Chemtech's bill of lading and the courier service's route manifest both
indicate that the package containing Chemtech's bid was picked up by the
courier at 5:45 p.m. on Friday, August 31, 1984. The package was
delivered to the Baltimore District of the Corps of Engineers at 8:53
a.m. on Thursday, September 6, the morning after bids had been opened.
Upon being advised by the Corps either on the afternoon of September
5 or on September 6 (Chemtech's correspondence is not clear on this
point) that its bid would be rejected as late, Chemtech requested that
its bid be considered under that portion of the late bids clause in the
invitation for bids ("Late Submissions, Modifications and withdrawal of
Bids (APR 1984)", Federal Acquisition Regulation Sec. 52.214-07) which
permits the consideration of a late bid if it:
"(1) Was sent by registered or certified mail not later than the
fifth calendar day before the date specified for receipt of bids. ..."
Stating that its bid had been sent "via a registered mail service
offered by (the courier service", Chemtech argued that it was eligible
for consideration since it had been sent on the fifth calendar day
before the date specified for receipt of bids. Accordingly to Chemtech,
the contracting officer declined to consider its bid on the basis that
the reference in the late bids clause to "registered or certified mail"
was applicable only to bids sent via the United States Postal Service
and not to those delivered by a commercial courier service.
After its request had been denied by the contracting officer,
Chemtech wrote your Office on September 10 and you in turn, by letter of
September 18, (received September 25) specifically asked us for a ruling
on Chemtech's protest.
We will not formally rule upon Chemtech's protest because it is
untimely. Our Bid Protest Procedures, which appear in Part 21, title 4
of the Code of Federal Regulations (a copy of which is enclosed for your
convenience), require that protests (other than those which concern some
defect apparent on the fact of the solicitation) must be filed
(received) within 10 working days from when the basis for protest is
known or should have been known, whichever is earlier. 4 C.F.R. Sec.
21.2(b)(2). If such a protest has been filed initially with the
contracting agency, any subsequent protest to our Office must be filed
within 10 working days of formal notification of or actual or
constructive knowledge of initial adverse agency action. 4 C.F.R. Sec.
21.2(a).
It appears from Chemtech's correspondence that as of September 6, at
the latest, it learned that its bid had not been received prior to bid
opening and that the Corps intended to reject the bid as late. It then
was incumbent upon Chemtech to file a protest with the Corps or our
Office within 10 working days of September 6 - that is, by September 20.
If the firm's "request" that the contracting officer consider its bid
under the "registered or certified mail" exception is considered to be a
"protest" to the contracting agency, Chemtech was required to file any
subsequent protest with our Office within 10 working days of initial
adverse agency action on its protest. Since, from Chemtech's account,
it appears the contracting officer denied Chemtech's request on
September 6, Chemtech's subsequent protest here should have been filed
on or before September 20, which it was not. If the request to the
contracting officer is not considered a protest, then the first protest
of any kind was the one we received on September 25, beyond the
September 20 deadline established by our Procedures.
For your information, we point out that bids sent by commercial
carrier are considered to be hand-carried and do not fall within the
exception for "registered or certified mail." See, for example, our
decision in Moore's Cafeteria Services, Inc., B-205943, Jan. 12, 1982,
82-1 CPD para. 29, copy enclosed. In this regard, we note that
subsection (c) of the late bids clause contained in the present
solicitation provides that:
"The only acceptable evidence to establish the date of mail of a late
bid ... sent either by registered or certified mail is the U.S. or
Canadian Postal Service postmark on the wrapper or the original receipt
from the U.S. or Canadian Postal Service. ... 'Postmark' means (an
impression) readily identifiable without further action as having been
supplied and affixed by employees of the U.S. or Canadian Postal Service
on the date of mailing." COMP GEN (UP)
FILE: B-216551.2
DATE: June 5, 1985
The Honorable Paul B. Henry
House of Representatives
Dear Mr. Henry:
We refer to your letter of May 14, 1985, in which you ask this Office
whether John Cudia and Associates, Inc., of San Jose, California, may
now protest to this Office in connection with a contract award under
solicitation No. DADA16-84-R-0026, issued by the Department of the Army
for the acquisition of surgical ceiling lights.
The correspondence attached to your letter reveals that Cudia and
Associates, by letter of February 1, 1985, had protested to the
contracting officer the award of the contract to another firm, alleging
certain irregularities with respect to the Army's evaluation of
transportation costs in determining the low offeror. By letter of
February 14, the contracting officer denied the protest. The firm then
filed a second protest with the contracting officer, in part on the same
issue, which was denied by the contracting officer by letter of March
22.
Skytron, on behalf of Cudia and Associates, complains that the Army
neglected to inform the firm that it retained the right to protest
directly to this Office within certain time limitations. Skytron
believes that this failure was fundamentally prejudicial to Cudia and
Associates, and, therefore, that the firm is now entitled to have the
matter reviewed by this Office. We cannot agree.
Our Bid Protest Regulations, which implement 31 U.S.C. Section 3351
et seq., as added by section 2741(a) of the Competition in Contracting
Act of 1984 (CICA), Pub. L. No. 98-369, 98 Stat. 1175, 1199, provide
that if an initial protest has been timely filed with the contracting
agency, we will consider a subsequent protest to this Office that is
filed within 10 (working) days after the protester has formal
notification of or actual or constructive knowledge of initial adverse
agency action on the protest. 4 C.F.R. Section 21.2(a)(3) (1985). It
appears that Cudia and Associates' February 1 protest to the contracting
officer regarding the transportation cost issue was timely. Initial
adverse agency action occurred when the contracting officer denied the
protest on February 14. Therefore, it was incumbent upon Cudia and
Associates to file a protest with us no later than 10 working days after
the firm received the February 14 letter of denial. Similarly, if the
other issues in the firm's second protest to the agency were timely
raised, the firm was required to protest to this Office no later than 10
working days after its receipt of the Army's March 22 denial.
Although it may be unfortunate that Cudia and Associates was not
informed by the Army of its procedural rights before this Office, this
does not now entitle the firm to our review of the matter. Our
regulations are published in the Federal Register, and firms seeking to
do business with the government are charged with constructive notice of
their contents. We regard bid protests as serious matters which require
effective and equitable procedures so that all parties to a federal
procurement have an opportunity to present their cases, and so that
protests can be resolved within the strict time frames established by
the CICA and our implementing regulations. Accordingly, we could not
consider the protest submitted by Cudia and Associates at this time.
We are enclosing a copy of a booklet that describes the bid protest
process at GAO. A reprint of our published regulations appear in the
appendix to the booklet. We trust that this response will be helpful to
you.
Sincerely yours,
Harry R. Van Cleve
General Counsel
Enclosure
B-216551, Oct 15, 1984, 84-2 CPD 407
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Solicitation improprieties - Apparent prior to
bid opening/closing date for proposals
DIGEST:
A protest to GAO concerning alleged solicitation defects is untimely
filed where the firm protested to the contracting activity prior to the
closing date for receipt of best and final offers but did not protest to
GAO within 10 working days after the closing occurred. Where an agency
does not take corrective action as requested, a proposal closing
constitutes initial adverse action on the agency-level protest.
Castle/Division of Sybron Corporation:
Castle/Division of Sybron Corporation protests that certain alleged
defects exist in request for proposals No. DADA16-84-R-0026 issued by
the Department of the Army. We dismiss the protest.
Castle initially filed a protest with the contracting activity before
the August 29, 1984 closing date for receipt of best and final offers.
However, the firm's subsequent protest to this Office was not filed
(received) until September 26. Our Bid Protest Procedures at 4 C.F.R.
Sec. 21.2(a) (1984) provide 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, which includes knowledge
that the agency has proceeded with a proposal closing in the face of the
protest. See Ingersoll-Rand Co., Engineered Pump Division, B-207001,
July 12, 1982, 82-2 CPD para. 40. We understand that the closing for
receipt of best and final offers occurred as scheduled, despite the
protest to the agency. Since Castle's protest to this Office was filed
more than 10 working days after the August 29 closing, it is clearly
untimely and will not be considered. See Central Air Service, Inc.,
B-213205, Feb. 6, 1984, 84-1 CPD para. 147.
The protest is dismissed. COMP GEN (UP)
FILE: B-216549 84-2 CPD 628
DATE: December 5, 1984
MATTER OF: Carlson Plumbing and Heating
CONTRACTS - LABOR STIPULATIONS - WAGE UNDERPAYMENTS - CLAIM PRIORITY
- UNDERPAID WORKERS V. COMPETING CLAIMS
1. Amount withheld from contractor for labor standards violations
and for liquidated damages assessed as a result of Contract Work Hours
and Safety Standards Act violations has first priority.
CONTRACTS - PRIORITY - TAX V. COMPETING CLAIMS
2. Tax levy has priority over claim of payment bond surety and
trustee in bankruptcy established after tax levy.
CONTRACTS - PAYMENTS - ASSIGNMENT - SET-OFF - "NO SET-OFF" CLAUSE
3. In order for a lending institution to achieve the status of an
assignee under the Assignment of Claims Act, it has to be shown that the
monies that the institution advanced to the contractor were actually
used in, or at least made available for, the performance of the
contract.
The contracting officer, Ninth Coast Guard District, United States
Coast Guard (Coast Guard), Department of Transportation, requested a
decision from our Office concerning the disposition that should be made
of $8,005.68 withheld from Carlson Plumbing and Heating (Carlson) under
contract DTCG30-82-C-05052.
The Coast Guard indicates that $3,904.15 of the total amount was
withheld as a result of wage and overtime violations discovered by the
Department of Labor under the Davis-Bacon Act, 40 U.S.C. Section 276a
(1982), and the Contract Work Hours and Safety Standards Act (CWHSSA),
40 U.S.C. Section 327 (1982). In addition, $390 in liquidated damages
was assessed against Carlson for the CWHSSA violations.
The Internal Revenue Service (IRS) filed a notice of levy dated
August 10, 1983, for $26,425.97 for taxes owed by Carlson. Three
subcontractors have given notice of claims for work performed for
Carlson. The subcontractors' claims are not for settlement by the
government, but rather are for consideration by the payment bond surety.
K.B.J. Engineering, Inc., B-190181, Dec. 8, 1977, 77-2 C.P.D.
Paragraph 445; 37 Comp. Gen. 116 (1957). American Druggist's Insurance
Company (American) the payment bond surety) has indicated that it
settled two of the three claims and has recently received the third.
American claims the contract balance. American also states that Carlson
has filed for bankruptcy. The bankruptcy petition was filed on October
14, 1983. Charlevoix County State Bank (Charleviox) (an assignee of
Carlson) also claims the contract balance.
The amount withheld for labor standards violations and for liquidated
damages assessed as a result of the CWHSSA violations has first
priority. Cascade Reforestation, Inc., 56 Comp. Gen. 499 (1977), 77-1
C.P.D. Paragraph 250. Therefore, the $3,904.15 withheld to adjust
employee compensation under the Davis-Bacon Act and CWHSSA should be
remitted to the General Accounting Office for disbursement. The $390 in
liquidated damages for CWHSSA violations should be deposited to the
liquidated damages account.
The $4,097.63 balance then remaining from the $8,005.68 withheld
should be remitted to IRS in partial settlement of the $26,425.97 owed
in back taxes. The tax levy has priority over the claim of the payment
bond surety and the trustee in bankruptcy established after the tax
levy. Forest Service Request for Advance Decision, B-211539, September
26, 1983.
The immediate contract has a "no setoff" clause. The presence of a
"no setoff" clause in a contract would give the assignee a priority over
IRS if the contract was validly and properly assigned to an eligible
assignee in accordance with the statutory requirements in the Assignment
of Claims Act, 31 U.S.C. Section 3727 (1982). Reconsideration of 60
Comp. Gen. 510 (1981) Involving Set-Off Authority of Government When
Contract Contains a "No Set-Off Clause," 62 Comp. Gen. 683 (1983), 83-2
C.P.D. Paragraph 474. Here, the security agreement of May 19, 1978,
between Carlson and Charlevoix is in the nature of a blanket agreement
because of its general terms with no reference to any specific contract
and because it covers a variety of security interests in the debtor's
current and future accounts receivable. This, coupled with the fact
that the agreement predates the present contract by 4 years, leads us to
the conclusion that the loan obtained as a result of the assignment was
not used, or available for use, by Carlson in performing the present
contract which was awarded in 1982. Both our Office and the courts have
taken the position that, in order for a lending institution to achieve
the status of an assignee under the Assignment of Claims Act, it has to
be shown that the monies that the institution advanced to the contractor
were actually used in, or at least made available for, the performance
of the contract in question. See Manufacturers Hanover Trust Co. v.
United States, 590 F.2d 893 (Ct. Cl. 1978); Reconsideration of 60 Comp.
Gen. 510 (1981) Involving Set-Off Authority of Government When Contract
Contains a "No Set-Off Clause," supra; General Services Administration
-- Advance Decision, 58 Comp. Gen. 619 (1979), 79-2 C.P. D. Paragraph
151. Thus, Charlevoix is not protected under the Assignment of Claims
Act against a setoff by the IRS.
Comptroller General of the United States
FILE: B-216548 85-1 CPD 324
DATE: March 12, 1985
MATTER OF: Allied Electric Incorporated
DIGEST:
BIDS - LATE - EVIDENCE OF LATE RECEIPT - TIME/DATE STAMP
Only acceptable evidence to establish that the telex bid modification
received late in the bid opening office was received on time at the
government installation is the time/date stamp or other documentary
evidence of receipt maintained by the installation. In the absence of
such evidence, the question of government mishandling after allegedly
timely receipt is irrelevant.
Allied Electric Incorporated (Allied) protests the rejection of its
telegraphic bid modification as late under invitation for bids (IFB) No.
N62472-84-B-0537 issued by the Naval Facilities Engineering Command,
United States Naval Base, Philadelphia, Pennsylvania.
We deny the protest.
Bid opening was scheduled for Friday, September 21, 1984, at 2 p.m.
Because the modification was received in the office designated in the
solicitation for the receipt of bids on Monday, September 24, the
modification was rejected as late. However, Allied, relying on
information furnished by Western Union, alleges that the modification
was received in the naval base telex office at 5:12 p.m., September 20,
the day before bid opening, and that the subsequent late receipt in the
bid opening office was due to government mishandling.
Information from Western Union to establish the time of receipt of
the telex is unacceptable. Cecile Industries, Inc., B-206796, July 7,
1982, 82-2 C.P.D. Paragraph 29. The only acceptable evidence of receipt
at the government installation is the time/date stamp or other
documentary evidence of receipt maintained by the installation. See
Keco Industries, Inc., B-204869, Apr 7, 1982, 82-1 C.P.D. Paragraph 324.
It is reported that apparently Western Union transmitted the
modification by telex and, since there is no telex machine in the
building designated for receipt of bids, the telex was received in
another building on the base. Although mail was picked up from that
building on bid opening day, Allied's modification was not among it and
was not received in the designated office until after bid opening.
However, the naval base has no record of when the modification was
received in the base telex office. Thus, it is not established that the
modification was received at the base prior to bid opening.
Qualimetrics, Inc., B-213162, Mar. 20, 1984, 84-1 C.P.D. Paragraph 332.
Since receipt of the modification prior to bid opening is not
established, the question of mishandling ie irrelevant. See Tom Shaw,
Inc., B-209018, Feb. 3, 1983, 83-1 C.P.D. Paragraph 123; Cecile
Industries, Inc., B-206796, supra.
Allied also questions why its telex was unacceptable when the telex
of another bidder was acceptable. Allied's telex was unacceptable
because it was a bid modification received at the bid opening office
after bid opening and did not fall within the exceptions in the IFB late
bid clause which would have permitted consideration. The other bidder's
telegram, on the other hand, merely confirmed timely submitted bid
prices and, therefore, did not have to be received prior to bid opening.
Harry R. Van Cleve
General Counsel
FILE: B-216547 85-1 CPD 41
DATE: January 16, 1985
MATTER OF: Link Telecommunications, INC.
DIGEST:
BIDS - INVITATION FURNISHING REQUIREMENT - EFFECT OF FAILURE TO
RECEIVE
Even though protester did not receive a copy of the solicitation
until the day of bid opening and after the time set for bid opening,
there is no basis for sustaining a protest when there is no evidence
that the protester was deliberately excluded from bidding or that
adequate competition resulting in reasonable prices was not obtained.
Link Telecommunications, Inc. (Link), protests the award of a
contract for the design and installation of a cable network at the
Anniston Army Depot to Kee, Inc., under invitation for bids (IFB) No.
DAAG02-84-B-0128 issued by the Army. We find the protest without merit.
The IFB was issued on August 23, 1984, with bid opening scheduled for
September 12, 1984. The Army had mailed a copy of the proposed
solicitation for publication in the Commerce Business Daily (CBD) on
August 2, 1984. The notice appeared in the August 31 issue of the CBD.
Bid opening was later extended until 10 a.m. on September 21, by an
amendment issued on September 11, which was necessitated by a change in
the scope of the requirements.
Link states that it received the August 31 CBD on September 4. By
letter dated September 6, received by the Army on September 10, Link
requested a copy of the solicitation. The Army states that an original
mailing of the IFB was sent to 15 contractors on August 23. Copies of
the solicitation were mailed to five additional requesters on September
5 and 6. This mailing exhausted the available copies of the IFB,
including certain requisite drawings. When the Army learned that bid
opening had been extended on September 10, it sought to obtain
additional copies of the drawings. It obtained these drawings on
September 14 and mailed a copy of the complete IFB package to Link on
September 17. Link states that it did not receive the IFB until the
afternoon of September 21, after bid opening. Link contends that this
resulted in it being improperly excluded from competing.
The Army states that all its actions were in accordance with the
applicable sections of the Federal Acquisition Regulation (FAR). In
particular, it points out that it met the requirement contained in FAR,
section 14.203-1,)48 Fed. Reg. 42,102 (1983) (to be codified at 48 C.F.
R. section 14.203-1), of mailing IFB's to sufficient prospective bidders
to ensure adequate competition by its initial mailing of 15 copies of
the IFB to firms on the bidders mailing list. The Army also maintained
five additional copies of the IFB to meet the requirement contained in
the FAR, Section 5.102(a), of maintaining a reasonable number of copies
to supply on request. Finally, the Army states that it met its
publication requirement of 15 days' notice in the CBD prior to issuance
of the IFB, with the contracting officer being permitted to presume that
notice has been published 5 days following transmittal of the synopsis
to CBD. DOD FAR Supplement Section 5.203. In response to the IFB, the
Army received three bids, and award was made to Kee Inc., the low
responsive, responsible bidder, on September 25, 1984.
Link concedes that the Army appears to have acted in accordance with
the FAR requirements in its issuance of the notice of the procurement
and its mailing of copies of the IFB. However, Link contends that the
net result of the Army's conduct of the procurement was to unfairly
eliminate Link from being able to compete for award. In this regard,
our Office has held that the propriety of a particular procurement must
be determined from the government's point of view, considering whether
adequate competition and reasonable prices were obtained -- not whether
every possible prospective bidder was offered an opportunity to bid.
Mar Mac Precision Corporation, B-214604, Aug. 13, 1984, 84-2 C.P.D.
paragraph 164.
Our Office has upheld the awards, such as here, if there was a
significant effor to obtain competition, there was no deliberate attempt
to exclude the protester from competing, and a reasonable price was
obtained. Hartridge Equipment Corporation, B-209061, Mar. 1, 1983, 83-1
C.P.D. paragraph 207. Link does not allege that there was any
deliberate effort to exclude it from bidding, and it does not question
the reasonableness of the contract price. We note that the Army's
mailing of a solicitation to Link on September 17 satisfied the
requirement that a small business, upon its request, shall be provided
with a copy of bid sets and specifications concerning a particular
contract. See Lavelle Aircraft Company -- Reconsideration, B-211479.3,
Nov. 15, 1983, 83-2 C.P.D. paragraph 560, and FAR Section 19.202-4(d).
In light of the Army's comprehensive mailing to prospective bidders
on the agency mailing list and the receipt of three bids, we do not find
that the distribution process was defective, or that the procurement
lacked adequate competition.
Accordingly, we deny the protest.
Comptroller General of the United States
B-216546, Oct 18, 1984, 84-2 CPD 419
BIDS - Late - Mishandling determination - Express mail
DIGEST:
Bid sent by Postal Service express mail that arrives after bid
opening is late and may not be accepted. Fact that Postal Service
promised to deliver bid earlier than it actually did does not constitute
government mishandling at government installation so as to permit
consideration of bid.
Triumph United Corporation:
Triumph United Corporation (Triumph) protests the rejection of its
bid as late and the award of a contract to any other firm under
invitation for bids (IFB) No. DLA-003-84-B-0013, issued by the Defense
Logistics Agency, for maintenance of material handling and vehicular
equipment.
The protest is summarily denied.
Triumph contends that the late arrival of its bid was due to delay
and mishandling by the United States Postal Service (Postal Service).
The bid was sent by Postal Service express mail with a guarantee of
overnight delivery.
Late bids sent by other that registered or certified mail may be
accepted only if the late arrival was caused by government mishandling
after timely arrival at the government installation. Federal
Acquisition Regulation sec. 14.304-1, 48 Fed.Reg. 42,177-42, 178 (1983)
to be codified at 48 C.F.R. sec. 14.304-1). Triumph contends that the
delayed delivery by the Postal Service constitutes government
mishandling in this case.
Triumph's position is without merit. The word "government" in the
late bid clause cited above refers to the procuring agency, not the
Postal Service. Bichler Company, B-213325, Oct. 24, 1983, 83-2 C.P.D.
para 489 . Therefore, before the mishandling contemplated can occur,
the bid package must be delivered to the procuring agency installation.
There is no allegation the mishandling occurred after such delivery.
Therefore, rejection of the bid as late was proper.
Triumph also complains that it had difficulty obtaining bid results,
although it admits that it received such results on September 21, while
bid opening was on September 13. In any case, a delay by the procuring
activity in furnishing bid results would be a procedural deficiency that
has no bearing upon the validity of the award. The Allen Products
Company, B-213318, Nov. 10, 1983, 83-2 C.P.D. para. 548.
The protest is summarily denied. COMP GEN (UP)
B-216545, Nov 26, 1984, 84-2 CPD 557
CONTRACTORS - Responsibility - Determination - Review by GAO
DIGEST:
1. A solicitation provision stating that information concerning a
bidder's proposed staff could be submitted after bid opening relates to
a bidder's responsibility not to the responsiveness of the bid.
CONTRACTORS - Responsibility - Determination - Review by GAO -
Affirmative finding accepted
2. Protest challenging awardee's submission of information regarding
its proposed staff and its ability to provide an adequate staff will not
be considered since GAO does not review affirmative determinations of
responsibility absent showing of possible fraud or bad faith or
allegation that definitive responsibility criteria have not been
applied.
Technical Micronics Inc.:
Technical Micronics Inc. protests the award of a contract to Om-Tech,
Inc. under invitation for bids No. DAKF10-84-B-0107 for the operation of
the Army Oil Analysis Laboratory, Hunter Army Airfield, Savannah,
Georgia. Technical Micronics contends that Om-Tech's bid was not
responsive and that the firm is not responsible as it does not have the
personnel to perform the contract. We dismiss the protest.
Specifically, Technical Micronics maintains that Om-Tech was not
responsive to Section 1.2.2 of the solicitation which stated that:
"the contractor shall furnish the contracting officer or his
authorized representative the names and phone numbers of the project
manager and all management and supervisory personnel not later than
contract award date." The protester contends that the awardee submitted
two names under this provision, but did not have agreements with the
individuals named, and falsely certified that it did.
Where, as here, a bidder had made an unqualified offer to comply with
all the terms and conditions of an IFB, the bid is responsive and the
bidder is legally bound to comply with those terms upon the government's
acceptance of the bid. Tenavision, Inc., B-209261, Dec. 15, 1982, 82-2
CPD Para. 533. The provision stating that information regarding the
contractor's proposed staff could be submitted after bid opening but
prior to award relates to a bidder's responsibility not responsiveness
of a bid which is determined at bid opening. Grace Industries, Inc.,
B-212263.3, Feb. 22, 1984, 84-1 CPD Para. 212. Similarly, whether the
firm is actually able to obtain qualified employees concerns its
capability to perform the contract and is a matter of responsibility.
Our Office does not review protests concerning affirmative
determinations of responsibility absent a showing of possible fraud or
bad faith on the part of contracting officials or that definitive
responsibility criteria in the solicitation have not been met. Grace
Industries, Inc., supra. Neither is alleged here.
While Technical Micronics has requested a conference, one need not be
held where the protest is not reviewable and may be dismissed under 4
C.F.R. Sec. 21.3(g) (1984). James G. Tunison & Co., B-213394, Dec. 29,
1983, 84-1 CPD Para. 38.
The protest is dismissed. COMP GEN (UP)
B-216544, Oct 9, 1984, 84-2 CPD 397
BIDDERS - Qualifications - License requirement - General v. Specific
- Effect on responsibility
DIGEST:
Where a solicitation for ambulance services contains only a general
licensing requirement and does not indicate that a specific state or
city license is required, the responsibility for obtaining whatever
licenses might be necessary is the contractor's, and the contracting
officer need not be concerned with the licensing requirement in
determining the bidder to be responsible.
Medevac Midamerica, Inc.:
Medevac Midamerica, Inc. protests the proposed award of a contract
for ambulance services to the low bidder under invitation for bids (IFB)
No. 677-60-84, issued by the Veterans Administration. We dismiss the
protest.
Medevac contends that the low bidder is not licensed to conduct
ambulance services in Topeka, Kansas and, therefore, is ineligible for
award pursuant to the IFB, which requires the contractor to comply with
"all requirements of Federal, State and/or City codes regarding
operation of this service." Medevac argues that the contracting officer
is aware that the low bidder is unlicensed but has nevertheless found
the low bidder eligible and qualified for award.
Where, as is the case here, the solicitation requires in general
terms that the contractor shall obtain all necessary licenses and
permits (as opposed to requiring a specific license), contracting
officers need not concern themselves with state or local licensing
requirements because contracting officers generally are not competent to
pass upon the question of whether a particular state or local license or
permit is legally required for the performance of federal work.
Compliance is the responsibility of the contractor. See Northwest
Forest Workers Association, B-213132, Oct. 11, 1983, 83-2 CPD para. 443.
Therefore, a finding that the bidder is responsible, that is, capable
of performing, need not involve consideration of local licensing
requirements.
The only exception to the above is where the contracting officer
reasonably determines that attempts to enforce such state rules and
ordinances are likely and could interrupt and delay performance under
the contract. Behavioral Systems Southwest, B-213065, Oct. 11, 1983,
83-2 CPD para. 441. However, we find nothing to indicate that the
exception should be applied here.
The protest is dismissed. COMP GEN (UP)
FILE: B-216542
DATE: June 11, 1985
MATTER OF: Jack G. Petrie
OFFICERS AND EMPLOYEES - TRANSFERS - REAL ESTATE EXPENSES -
REIMBURSEMENT
An employee is limited to the lower house-selling expenses and
household goods transportation permitted on the effective date of his
transfer, prior to the increases authorized by section 118 of Public Law
98-151, November 14, 1983. The effective date of his transfer was the
date he reported for duty at his new official station, August 2, 1982,
but the amended Federal Travel Regulations restrict reimbursement of the
increases under Public Law 98-151 to employees reporting on or after
November 14, 1983. Contrary statements made by congressional sponsors
after enactment are not sufficient to show that the regulation
promulgated by the responsible agency is improper where it is not
arbitrary or capricious nor clearly contrary to the statutory purpose.
Also, earlier amendments of the regulations authorized greater
house-selling expense increases but they did not apply to this employee
because they were limited to employees reporting at their new official
stations on or after October 1, 1982.
In this decision it is determined that reimbursement of the
relocation expenses of Mr. Jack G. Petrie, an employee of the Internal
Revenue Service, is limited to the amounts authorized by law and
regulation in effect when he reported for duty at his new official
station. /1/
Mr. Petrie's permanent duty station was changed from Nashville,
Tennessee, to Cleveland, Ohio, where he reported for duty on August 2,
1982. Effective November 14, 1983, statutory amendments authorized
increased relocation benefits. The increases were provided by
amendments made to 5 U.S.C. Chapter 57 by section 118 of the Joint
Resolution of November 14, 1983, Public Law 98-151, 97 Stat. 977-979.
Mr. Petrie indicates that he sold his home near Nashville on March
23, 1984, and shipped his household goods the same day. He says he
incurred costs of $9,777.79 for the sale, and he shipped 15,790 pounds
of household goods. The Internal Revenue Service limited Mr. Petrie's
reimbursement for the sale of his residence to $8,000, and charged him
for the cost of shipping the amount of his household goods which
exceeded 11,000 pounds because these were the maximums allowable under
the statutes and regulations in effect on the effective date of his
transfer. 5 U.S.C. Sections 5724(a) and 5724a(a) (1982), implemented by
Federal Travel Regulations, paras. 2-6.2g and 2-8.2a (Supp. 1, effective
Nov. 1, 1981), incorp. by ref., 41 C.F.R. Section 101-7.003. The
regulations define the effective date of transfer as the date the
employee reports for duty at his/her new duty station. FTR, para.
2-1.4j. See also James E. Wallace, 61 Comp. Gen. 164 (1981). The $8,000
maximum reimbursement for residence sale expenses was later raised by
amendment to the regulations to the lesser of $15,000 or 10 percent of
the sale price. FTR, para. 2-6.2g (Supp. 4, effective October 1, 1982).
However, that increase did not apply to Mr. Petrie because it was made
applicable only to those employees whose effective dates of transfer
were on or after October 1, 1982, and Mr. Petrie's effective date of
transfer (the date he reported to his new duty station) was August 2,
1982.
Mr. Petrie argues that his claim should now be allowed on the basis
that what he claims is within the maximums authorized by section 118 of
the Joint Resolution of November 14, 1983. Section 118 amended 5 U.S.
C. Section 5724a(a) by adding subsection (a)(4)(B)(i) to permit
reimbursement of the lesser of $10,000 selling expenses or 15 percent of
the sales price and amended 5 U.S.C. Section 5724(a) to allow
transportation of up to 18,000 pounds of household goods.
Mr. Petrie claims full reimbursement of the items under the increased
maximums, since the costs were incurred after enactment of the statutory
amendments. The employing agency, however, limited reimbursement to the
maximums allowable before the increases because it considers that the
amendments apply only if the employee's transfer occurred on or after
the enactment date, that is, November 14, 1983.
Neither section 118 nor any other provision of the Joint Resolution
specified the date of a transaction or event involving relocation, such
as incurring house-selling expenses or reporting at the new duty
station, to be the effective date of the increases. Instead, subsection
118(c) of the Joint Resolution merely stated that the amendments would
be effective on the date of enactment. Subsection 118(c) further
provided that not later than 30 days after enactment the President
should prescribe the implementing regulations to take effect on the date
of enactment, November 14, 1983. In addition, subsection 118(b)
provided that the amendments should be carried out by the use of funds
appropriated or otherwise available for administrative expenses, and
that the amendments did not authorize the appropriation of funds
exceeding the sums already authorized.
Both 5 U.S.C. Section 5724(a) and 5724a(a) state that the relocation
benefits they authorize are to be provided "(u)nder such regulations as
the President may prescribe." The General Services Administration, which
has been delegated the authority to issue the implementing regulations,
did so on March 13, 1984, and made them retroactive to November 14,
1983, as prescribed by subsection 118(c) of the Joint Resolution.
Concerning the effective date of the increases in relation to the
employee's relocation, the new regulations stated:
"Because of successive changes to the provisions of these
regulations governing relocation allowances and the extended
period of time that employees retain eligibility for certain
allowances * * * the reimbursement maximums or limitations * * *
will not be the same for all employees even though claims may be
filed within the same timeframe. The provisions of these
regulations in effect on the employee's or new appointee's
effective date of transfer or appointment (see 2-1.4j) shall be
used for payment or reimbursement purposes." (Emphasis added.)
See the additions to the Federal Travel Regulations, paragraph 2-1.3d
and Appendix 2-A (Supp. 10, March 13, 1984), incorp. by ref., 41 C.F.R.
Section 101-7.003 (1984). The Federal Travel Regulations, paragraph
2-1.4j, referred to in the above quotation, defines "effective date of
transfer or appointment" to mean:
"The date on which an employee or new appointee reports for
duty at his/her new or first official station."
In view of the above, the allowances payable or reimbursable are
those under the FTR provisions in effect when the transferred employee
reports for duty at the new official duty station. Consequently, the
FTR amendments provide that entitlement to the relocation increases
effective November 14, 1983, under the Joint Resolution requires the
employee to have reported at the new official station on or after that
date. /2/
The only remaining question is whether the FTR reporting date
requirement complies with the congressional intent to make the increases
under section 118 of the Joint Resolution effective November 14, 1983.
Absent language of the statute or legislative history clearly indicating
a different outcome, a regulation of the agency responsible for
implementing the statute generally is considered to be consistent with
congressional intent. See Colonel William N. Jackomis, 58 Comp. Gen.
635, 638 (1979), and the court cases it cites.
Mr. Petrie suggests legislative history pointing to an outcome
different from that contained in the FTR amendments. He refers to a
letter of January 26, 1984, from two of the congressional sponsors of
section 118 to the Administrator of the General Services Administration.
The letter relates the sponsors' belief that the increases in section
118 of the Joint Resolution cover employees who on or after November 14,
1983, are undergoing a relocation or are "continuing to incur costs
associated with a government directed move." We interpret this statement
to mean that the sponsors believed that section 118 was clear on the
point and that the General Services Administration should have adopted
this view. The statement does not refer to any formal legislative
history showing congressional intent. In fact, the letter points out
that there were no committee hearings or reports on the legislation.
Ordinarily those are the key portions of the legislative history for
interpreting a statute. Significantly, the sponsors' statement
concerning the effective date was made over 10 weeks after the enactment
of the Joint Resolution. Sponsors' remarks in the formal legislative
history and debate prior to enactment may be important interpretive aids
because the legislative body considered them before passing the measure.
On the other hand, postpassage remarks by sponsors carry less weight
and do not serve to change the legislative intent. See Epstein v.
Resor, 296 F. Supp. 214, 216 (N.D. Cal. 1969), aff'd, 421 F.2d 930 (9th
Cir.), cert. denied, 398 U.S. 965 (1970); Ambook Enterprises v. Time
Inc., 612 F.2d 604, 610 (2d Cir. 1979); 2A SUTHERLAND STATUTES AND
STATUTORY CONSTRUCTION, Section 48.15 (4th ed. 1973).
In the present case, Congress granted the General Services
Administration the authority to designate the transaction or event that
must occur on or after the effective date of section 118 in order to
qualify an employee for the relocation increases. Although the sponsors
requested the General Services Administration to choose a different
event, it selected the employee's entrance on duty at the new official
station. This appears to have been a practical solution to establishing
the effective date and is generally consistent with previous changes
made in the regulations governing these entitlements. We do not find it
to be arbitrary or contrary to the statutory purpose. In addition some
restriction on application of the new provisions to those whose
transfers were authorized prior to the enactment of the statute seems
consistent with the provisions of subsection 118(b) stating that the
amendments do not provide authorization for any additional appropriation
of funds to carry out the new provisions.
Since Mr. Petrie reported for duty at Cleveland prior to the
effective date of the Joint Resolution and the implementing regulations,
he is not entitled to the relocation expense increases he claims.
Comptroller General of the United States
(1) B. Mathews, Authorized Certifying Officer, Internal Revenue
Service, Central Region, requested this decision.
(2) See also paragraph 2 of the Acting Administrator of General
Services' memorandum to Heads of Federal Agencies transmitting the March
10, 1984 amendments to the FTR.
FILE: B-216954 85-1 CPD 555
DATE: May 16, 1985
MATTER OF: Ashland Chemical Company
DIGEST:
CONTRACTS - TERMINATION - SOLICITATION INAPPROPRIATE
Award under a deficient solicitation which omitted the payment due
date does not justify termination of the awarded contract where the
government's needs will be met and there is no evidence in the record
that other bidders were prejudiced.
Ashland Chemical Company protests the award of a requirements
contract for aircraft fuel to Koch Refining Company by the Department of
the Air Force, San Antonio Air Logistics Center, Texas, under invitation
for bids (IFB) No. F41608-84-B-0182. Ashland contends that the Air
Force should resolicit its requirements because no responsive bids were
received under the solicitation and because the Air Force, in any event,
failed to obtain adequate competition and reasonable prices.
Specifically, Ashland maintains that the Air Force should have rejected
Koch's bid, the only one received, as nonresponsive because Koch had
inserted the words "net-15 days" in the solicitation's prompt payment
discount section, allegedly in contravention of the Prompt Payment Act,
31 U.S.C. Sections 3901-3906 (1982). We deny the protest.
The IFB did not establish a specific payment due date under any
resulting contract. The IFB merely incorporated the following clause:
"The Government shall pay the Contractor, upon the submission
of proper invoices or vouchers, the prices stipulated in this
contract for supplies delivered and accepted or services rendered
and accepted, less any deductions provided in this contract . .
."
On the front page of its bid, Koch inserted the following in the
solicitation's prompt payment discount section:
"No discount for early payment. Payment terms-net 15 days from
govt. receipt of invoice."
Under the Prompt Payment Act, supra, which essentially provides that
the government must pay interest penalties on overdue contract payments,
the required payment due date is the specified in the contract, or, if
none is specified, the 30th day after receipt of a proper invoice.
According to Ashland, because the solicitation was silent as to any
required payment date, the 30-day period of the Prompt Payment Act
should be "read into" the solicitation. Alternatively, even if the
solicitation is interpreted as remaining silent on payment terms,
Ashland argues that the Prompt Payment Act by its terms would establish
a 30-day required payment date under the resulting contract. Ashland
therefore believes that Koch either deviated from the statutory implied
terms of the solicitation or attempted to impose on the government a
beneficial additional term which was not contemplated by the agency and
which altered the agency's preexisting obligation to make payment on a
30-day basis. We think that Koch's bid was properly accepted by the Air
Force.
In order to be responsive, a bid must contain an unequivocal offer to
provide the requested items in total conformance with the material terms
of the solicitation, and any bid that does not conform is nonresponsive
and must be rejected. A material deviation is one that affects the
price, quality, quantity or delivery of the goods or services offered.
Fluke Trendar Corp., B-196071, Mar. 13, 1980, 80-1 CPD Paragraph 196.
Ordinarily, a bid which takes exception to a solicitation's express
payment terms is nonresponsive and should be rejected. See Buckeye
Pacific Corp., B-212183, Aug. 30, 1983, 83-2 CPD Paragraph 282 (bid
indicating "net-20" under solicitation incorporating a 30-day payment
term). This is principally because beneficial terms offered by a bidder
that are inconsistent with the solicitation obviously could provide that
bidder with a bidding advantage over its competitors. Id. We note
here, however, that the Prompt Payment Act does not require a minimum
30-day payment term in the contract. Similarly, OMB Circular A-125,
August 19, 1982, which implements the Prompt Payment Act, only requires
that a payment due date be included in a contract. While the government
should specify the payment due date in the solicitation to avoid
disparate bids, it can be reasonably argued that by remaining silent,
the government has tacitly agreed to permit bidders to specify the
payment terms as part of their bids. Hence, it can also be reasonably
concluded that the 15-day payment due date is included in Koch's
contract as a result of the award process consistent with the Prompt
Payment Act and the requirements of OMB Circular A-125. We therefore
find the bid to be responsive since the Prompt Payment Act does not
mandate rejection of the bid.
Nonetheless, because the solicitation was silent as to payment terms,
the solicitation was deficient. We think it is essential that a
solicitation of this type contain a required payment due date so that
different bidders will not potentially offer different payment terms.
By letter of today, we are so advising the Secretary of the Air Force.
However, the fact that a solicitation is deficient in some ways 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. Richard Hoffman Corp. B-212775.2, Dec. 7, 1983, 83-2
CPD Paragraph 656. We think the same principle applies where, as here,
a contract has been awarded under a deficient solicitation. Here, the
awarded contract will admittedly satisfy the government's actual needs
and the agency is agreeable to Koch's payment terms. More importantly,
since Koch was the only bidder, we see nothing in the record to support
a conclusion that award under the IFB prejudiced other bidders.
Finally, the protester contends that the Air Force did not obtain
adequate competition or reasonably prices under this solicitation. We
agree that the propriety of a particular procurement generally depends
on whether the government obtained adequate competition and reasonable
prices. See Space Services International Corporation, B-207888.4, et.
al., Dec. 13, 1982, 82-2 CPD Paragraph 525. However, adequate
competition may still result when only a small number of responsive bids
or even one bid is received, so long as the agency made the required
effort to achieve competition. Reliable Elevator Corp., B-191061, Apr.
27, 1978, 78-1 CPD Paragraph 330. Here, Koch submitted a responsive bid
under the threat of competition (16 potential sources were solicited),
the agency considers Koch's price to be reasonable, and there is no
evidentiary support in the records to find otherwise.
The protest is denied.
Harry R. Van Cleve
General Counsel
B-216540, Oct 22, 1984, 84-2 CPD 436
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Solicitation improprieties - Apparent prior to
bid opening/closing date for proposals
DIGEST:
Protest of amendment making solicitation initially issued as a total
small business set-aside an unrestricted procurement filed with both
contracting agency and our Office after bid opening is untimely since
agency's publication of amendment in Commerce Business Daily placed
protester on notice of basis of protest prior to bid opening.
Clean Keepers Rubbish Removal, Inc.:
Clean Keepers Rubbish Removal, Inc. protests the award of a contract
to Topeka Waste Systems under solicitation No. 677-68-84 issued by the
Veterans Administration (VA) for refuse removal services at the
Colmery-O'Neil VA Medical Center, Topeka, Kansas. Clean Keepers contend
that the agency improperly removed the small business set-aside
restriction on this procurement because there were several small
business concerns available to compete for this contract.
We dismiss the protest as untimely.
The VA issued this solicitation as a total small business set-aside
on July 18, 1984 and the requirement was advertised in the Commerce
Business Daily (CBD) on July 20. The agency, however, subsequently
determined that it could not reasonably expect offers from at least two
responsible small business concerns and it therefore published in the
CBD of August 23 an amendment to this solicitation which provided that
competition would be unrestricted instead of set aside for small
business. Bids were opened on September and the following day Clean
Keepers initially protested the unrestricted nature of the procurement
to the VA. The VA denied that protest by letter of September 12. Clean
Keepers then filed its protest on the same issue with our Office on
September 25.
Our Bid Protest Procedures require that protest based upon alleged
solicitation improprieties which were or should have been apparent prior
to bid opening must be filed with either our Office or the contracting
agency prior to bid opening. 4 C.F.R. sec. 21.2(b)(1) (1984. On the
basis of the record it appears that Clean Keepers saw the notice of the
amendment in the CBD of August 23, but even if it did not, we have held
that publication of a notice in the CBD constitutes constructive notice
of the solicitation and its contents. Detroit Broach and Machine,
B-213643, Jan. 5, 1984, 84-1 CPD para. 55. Clean Keepers therefore is
charged with notice of the VA's amendment of this solicitation from a
small business set-aside to an unrestricted procurement. Thus, Clean
Keepers' protest alleging this apparent solicitation impropriety filed
with both the contracting agency and our Office after bid opening is
untimely.
The protest is dismissed. COMP GEN (UP)
B-216539, Nov 6, 1984, 84-2 CPD 507
CONTRACTS - Protests - General Accounting - Office procedures -
Timeliness of protest - Adverse agency action effect
DIGEST:
Protest filed with GAO more than 10 working days after an oral denial
of an oral agency-level protest is untimely. Moreover, the fact that
the firm continued to pursue the matter with the contracting agency by
filing a written protest does not toil the time to protest to GAO.
Instrument Control Service:
Instrument Control Service (ICS) protests the rejection by the Navy
of a step one proposal it submitted in response for technical proposals
(RFTP) N61339-84-R-0023. The procurement is for the operation and
maintenance of simulators at the Naval Technical Training Center in
Florida. We dismiss the protest.
Documentation the protester has submitted with its protest indicates
that its technical proposal was rejected by letter dated August 14.
Shortly thereafter, ICS called the Navy and orally protested its
rejection by expressing, in its words, "extreme displeasure" concerning
the Navy's action, which ICS characterized as inconsistent with the RFTP
requirements. An August 24, the Navy advised ICS orally that it was
upholding it rejection of ICS's proposal. ICS then filed its protest in
writing with the Navy, to which the Navy responded in a September 21
letter affirming the "verbal denial ... of your verbal protest. ..."
ICS's protest to our Office was filed on September 25.
We dismiss ICS's protest to our Office because it was not filed with
10 working days after ICS learned on August 24 that its oral agency
level protest had been denied. Section 21.2(b)(1) of our Bid Protest
Procedures, 4 C.F.R. Part 21 (1984), requires that if a protest is filed
initially with a contracting activity, a subsequent protest to our
Office must be filed within 10 working days after the protester has
actual or constructive notice of initial adverse agency action.
Consequently, we have held that a protest filed with our Office more
than 10 working days after an oral denial of an oral agency-level
protest is untimely. Air and Pump Co., B-211179, Oct. 11, 1983, 83-2
CPD Para. 431. Moreover, the fact that ICS continued to pursue its
remedies at the agency level, by refiling its protest in writing, does
not toll the time within which ICS was required to file a protest with
our Office. Resource Engineering Inc., B-212453, Feb. 14, 1984, 84-1
CPD Para. 190.
The protest is dismissed. COMP GEN (UP)
FILE: B-216536 85-1 CPD 355
DATE: March 27, 1985
MATTER OF: Singleton Contracting Corp.
DIGEST:
BONDDS - BID - SURETY - AFFIDAVIT (STANDARD FORM 28) - DEFICIENCIES -
NONDISCLOSURE OF OTHER BOND OBLIGATIONS
Agency may properly 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 obligations on their Affidavits of Individual
Surety.
Singleton Contracting Corp. protests the rejection of its bid under
invitation for bids (IFB) No. N62467-83-B-4210, issued by the Naval
Facilities Engineering Command. The solicitation, a 100 percent small
business set aside, covered replacement of a roof at the Marine Corps
Air Station in Beaufort, South Carolina.
Before the August 14, 1984 bid opening, Singleton lowered its bid
from $500,000 to $136,530 by timely telegraphic modification. When the
low bidder was found nonresponsive because if had qualified its bid,
Singleton, as second-low, appeared to be next in line for award. The
Navy, however, rejected Singleton's bid on grounds that the bid bond
submitted with it was deficient. Singleton challenges this
determination and the Navy's subsequent award of a $138,641 contract to
Marshall Roofing Company.
We deny the protest.
Under the IFB, bidders were required to submit bid bonds equal to 20
percent of their bid prices. Because Singleton was bonded by individual
rather than corporate sureties, a completed Affidavit of Individual
Surety (Standard Form 28) for each of its two individual sureties also
was required.
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 Singleton. The sureties disclosed that each
also was serving as a surety on a bid bond in the amount of $52,400,
issued in connection with IFB No. N62467-83-B-2467. After bid opening,
the contracting officer discovered that each of Singleton's individual
sureties had pledged the same assets against payment and performance
bonds totaling $133,678.50 on another contract, N62467-83-C-3016, being
administered by the same procuring activity, i. e., the Southern
Division of the Naval Facilities Engineering Command. In addition, it
appeared that the sureties had failed to list outstanding obligations in
connection with still another procurement. /1/
The contracting officer, by letter dated September 20, 1984, advised
Singleton that its bid had been rejected as "nonresponsive," based on
his determination that the individual sureties had "falsifying"
statements on their Affidavits of Individual Surety.
Singleton contends that its sureties did not disclose the payment and
performance bonds described above because the contract that they secured
had been fully completed, accepted, and paid for by the Navy more than 2
months before bid opening. Singleton also contends that the agency
should have requested the sureties to furnish additional information, as
provided for in item No. 4(b) on the reverse side of the bid bond, which
states that "sureties may be required to furnish additional
substantiating information concerning their assets and financial
capability as the government may require."
We have held that a contracting agency may consider the failure of an
individual surety to disclose outstanding bond obligations as a factor
in determining the responsibility of the bidder. Dan's Janitorial
Service, Inc., 61 Comp. Gen. at 594 (1982), 82-2 CPD Paragraph 217 at 3.
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. 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.
Here, the Navy advises us that the contract secured by the
undisclosed payment and performance bonds contained a 1-year warranty
which runs from June 1984 to June 1985. As indicated on the Performance
Bond (Standard Form 25), the surety remains obligated during the life of
any guarantee required under the contract. Therefore, the performance
bond was an outstanding obligation when Singleton's sureties executed
the bid bond in this case, and should have been disclosed.
The Navy also advises us that it did not make final payment on the
contract secured by the undisclosed payment and performance bonds until
October 3, 1984. Although Singleton contends that the Navy made final
payment in June 1984, the only evidence on this issue is the conflicting
statements of Singleton and the Navy. Singleton therefore has not met
its burden of affirmatively proving its case. See Daniels Manufacturing
Corp., B-215985, November 2, 1984, 84-2 CPD Paragraph 490. Moreover,
the Payment Bond (Standard Form 25-A) states that the surety remains
obligated under that bond until the contractor makes payment to all
persons furnishing labor and/or materials under the contract. Since the
Navy had not made final payment on this other contract at the time
Singleton submitted the bid bond in question, we believe it was
reasonable for the contracting officer to assume that the payment bond
also was an outstanding obligation of the individual sureties. See also
Federal Acquisition Regulation, 48 C.F.R. Sections 53.301-25 and -- 25A
(1984) (standard Forms 25 and 25A.)
Finally, the agency, in its report to this Office, concedes that
Singleton's bid should not have been rejected as nonresponsive.
However, the Navy argues that a nonresponsibility determination was
appropriate, based upon our decision in Dan's Janitorial Service, Inc.
Moreover, since a nonresponsibility determination based on
unacceptability of an individual surety need not be referred to the
Small Business Administration under our decision in Clear Thru
Maintenance, Inc., 61 Comp. Gen. 456 (1982), 82-1 CPD Paragraph 581, the
Navy contends that the distinction between nonresponsiveness and
nonresponsibility has no bearing on the merits of this protest. We
agree.
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) Shortly after submission of the bid in this case, Singleton
responded to IFB No. N62467-84-B-0128, covering miscellaneous repairs at
the Naval Reserve Center, gadsden, Alabama. The Navy rejected that bid,
which was secured by a bid bond with the same individual sureties,
because the sureties failed to disclose the bid bond involved here. See
B-216750, closed without action January 17,1985.
B-216535, Nov 26, 1984, 84-2 CPD 556
CONTRACTS - Small Business concerns - Awards - Responsibility
determination - Nonresponsibility finding - Referral to SBA for COC
mandatory without exception
DIGEST:
GAO will not review rejection of small business bidder as being
nonresponsible where the bidder fails to file an application for a
certificate of competency with the Small Business Administration.
L. A. Spievak Corp.:
L. A. Speivak Corp. (Spievak) protests the contracting officer's
determination that the company was nonresponsible and therefore
ineligible to receive awards under invitation for bids (IFB)
FEP-CP-F0254-A and invitation for bids FEP-CV-F0259-A, issued by the
General Services Administration (GSA). The IFB's were for GSA's
requirements for various types of gauges and squares.
Spievak contends that the preaward survey, upon which the
determination of nonresponsibility was based, was arbitrarily and
incompetently performed and thus contained false information. We
dismiss the protest.
GSA advises that since Spievak is a small business, it referred the
contracting officer's negative responsibility determinations under the
two IFB's to the Small Business Administration (SBA) as required by 15
U.S.C. Sec. 637(b)(7) (1982), for consideration under the SBA's
certificate of competency (COC) procedures. GSA further advises that
despite expressing an initial intent to file for a COC for both
solicitations, Speivak failed to file a COC application on either one.
Consequently, the SBA directed GSA to proceed with the solicitation
awards and closed its files.
It is the responsibility of the small business firm to file a
complete and acceptable COC application with the SBA in order to avail
itself of the possible protection provided by statute and regulation
against unreasonable determinations by contracting officers as to its
responsibility. Greenbrier Industries, Inc., B-191380, Apr. 24, 1978,
78-1 C.P.D. Para. 315. Under 15 U.S.C. Sec. 637(b)(7), supra, the SBA
has the conclusive authority to issue or deny a COC. Where a firm does
not file for a COC with the SBA, we will not review the contracting
officer's determination of nonresponsibility since such a review, in
effect, would amount to a substitution of this Office for the agency
specifically authorized by statute to review these determinations. Jet
International, Inc., B-191183, Feb. 14, 1978, 78-1 C.P.D. Para. 125.
In view of the fact that the protest raises issues which are not
reviewable by this Office, no useful purpose would be served by further
development of this case pursuant to our Bid Protest Procedures, 4 C.F.
R. part 21 (1984).
Accordingly, we dismiss the protest. COMP GEN (UP)
FILE: B-216534 85-1 CPD 78
DATE: January 22, 1985
MATTER OF: Old Dominion Security
DIGEST:
CONTRACTORS - RESPONSIBILITY - DETERMINATION - REVIEW BY GAO -
AFFIRMATIVE FINDING ACCEPTED
1. GAO will not review an affirmative determination of
responsibility absent an allegation of fraud or bad faith on the part of
contracting officials, or that a definitive responsibility criterion was
not met.
BIDS - EVALUATION - PROPRIETY - UPHELD
2. Agency properly did not evaluate the cost of changing contractors
in determining which bid was low since the IFB did not identify that
cost as an evaluation factor.
BIDS - PERSONAL SERVICES - DETECTIVE EMPLOYMENT PROHIBITION -
APPLICABILITY
3. Protest that low bidder is precluded by the Anti-Pinkerton Act
from receiving a contract for security guard services is denied, since
the statute only restricts the government from contracting with firms
that offer quasi-military armed forces for hire, and the protester has
not shown that the low bidder is such a concern.
Old Dominion Security (ODS) protests the award of a contract to
Lipscomb Security Agency (Lipscomb), the low bidder under invitation for
bids (IFB) No DTCG41-84-B-00011 issued by the Coast Guard for security
guard services. ODS, the second low bidder, complains that Lipscomb did
not meet the invitation's experience requirement; that the cost of
changing contractors -- from incumbent ODS to Lipscomb -- outweighs the
difference in the two bids; and that Lipscomb, as a detective or
investigative agency, is preclude by the Anti-Pinkerton Act, 5 U.S.C.
Section 3108 (1982), from being awarded a government contract for
security guard services.
We dismiss the protest in part and deny it in part.
The IFB reserved to the government the right to consider satisfactory
performance "within the last two (2) years of services similar in scope
and type to those required." ODS asserts that Lipscomb has not had a
government contract within the last 2 years and, thus, cannot meet this
requirement.
We dismiss this aspect of the protest. The IFB provision in issue
involves a bidder's responsibility, that is, the firm's ability to do
the job. See Linden-Lorenz Rigging Co., Inc., B-216486, Sept. 28, 1984,
84-2 C.P.D. Paragraph 372. Our Office does not review an affirmative
determination of responsibility absent an allegation of fraud or bad
faith on the part of contracting officials, or that a definitive
responsibility criterion in the solicitation was not met. 4 C.F.R.
Section 21.3(g)(4) (1984).
ODS does not suggest that Coast Guard officials acted fraudulently or
in bad faith in finding Lipscomb responsible. Moreover, to the extent
ODS believes the experience provision reflects a definitive
responsibility factor, we point out that such factors involve specific
and objective criteria, compliance with which is a prerequisite to
award. See J. Baranello and Sons, 58 Comp. Gen. 509, 513 (1979), 79-1
C.P.D. Paragraph 322. The IFB provision here is not stated as imposing
a requirement for award, but only a factor the government might consider
in judging a prospective contractor's ability to perform. In any event,
the provision is not restricted to government contracting experience,
and the record indicates that Lipscomb has recent experience in
providing guard services to commercial organizations. We thus would
have no basis to object to the Coast Guard's finding that Lipscomb has
the experience referenced in the IFB provision.
As to the cost of changing contractors from the protester, which bid
$52,560, to Lipscomb, which bid $52,122, award under the solicitation
was simply to be to the low responsive, responsible bidder. Since the
IFB thus did not include transition costs as a factor in evaluating
bids, it would not have been proper for the coast guard to evaluate
Lipscomb's bid on that basis. See J. F. Pitre Cleaning Corp., B-208032,
July 27, 1982, 82-2 C.P.D. Paragraph 85.
finally, ODS contends that Lipscomb is prevented from receiving the
award by the Anti-Pinkerton Act, which precludes the government from
contracting with detective agencies. The act, however, has been
interpreted to apply to prospective contracts with firms that offer
"quasimilitary armed forces" for hire, see James B. Nolan Co., Inc.,
B-192482, Sept. 26, 1978, 78-2 C.P.D. Paragraph 232, and the fact that a
firm may provide general investigated or detective services, which ODS
suggests applies to Lipscomb, does not thereby qualify it as provider of
such "forces." 57 Comp. Gen. 524 (1978).
The Coast Guard advises that Lipscomb is not the type of firm covered
by the act, and Lipscomb, in commenting on ODS's protest, states that
all personnel assigned to the project are licensed and employed solely
as uniformed security guards. The protester has the burden of proof,
A-1 Pure-Ice Co., B-215215, Sept. 25, 1984, 84-2 C.P. D. Paragraph 357,
and we have no reason under the circumstances to conclude that the
Anti-Pinkerton Act poses an obstacle to an award to Lipscomb.
The protest is dismissed in part and denied in part.
Comptroller General of the United States
FILE: B-216533 85-1 CPD 157
DATE: February 7, 1985
MATTER OF: International Cryogenics, Inc.
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - ADVERSE AGENCY ACTION EFFECT
Protest is dismissed where protester failed within the required
10-working-day period to submit comments on the agency report or to
reqeust consideration of the protest without comment submission.
International Cryogenics, Inc., (ICI), protests the award of a
contract to Beech Aircraft Corporation under request for proposals No.
58-8B-NBS-0149 issued by the Department of Commerce, National Bureau of
Standards, for two cryostats for use in a nuclear reactor.
According to ICI, it received a copy of the agency report
recommending denial of its protest on November 13, 1984, and was advised
in a letter from our Office, received November 21, 1984, that if it
wished to pursue the protest, it must submit to our Office within 10
working days of its receipt of the report its comments on the report or
a written request that we should consider the protest without any
comments. It did neither. Instead, ICI filed its comments on December
6, 1984, more than 10 working days after receipt of the agency report.
Accordingly, pursuant to 4 C.F.R. Section 21.3(d) (1984) of our Bid
Protest Procedures, the protest is dismissed. See ACS Construction
Company, Inc., B-216069.2 Dec. 24, 1984, 64 Comp. Gen. (blank), 84-2 C.
P.D. Paragraph 687; valley Support Service; ABM Services Company;
Sacramento Rehabilitation Facility; E.B. & Son; Edwards Enterprise,
Inc., B-212439, B-212439.2, B-212439.3, Oct. 11, 1983, 83-2 C.P.D.
Paragraph 437.
Comptroller General
of the United States
B-216532, Oct 23, 1984, 84-2 CPD 455
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Date basis of protest made known to protester
DIGEST:
1. Protest filed in GAO more than 10 working days after protester
says it obtained information upon which its protest is based is untimely
under GAO Bid Protest Procedures.
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Solicitation improprieties - Apparent prior to
bid opening/closing date for proposals
2. Protest against failure to set aside procurement exclusively for
small business concerns is untimely under GAO Bid Protest Procedures
since protest was filed after bid opening date.
Aero Tube and Connector Company:
Aero Tube and Connector Company (Aero) protests the award of a
contract to Hydraflow under invitation for bids (IFB) No.
DLA700-84-B-1106 issued by the Defense Logistics Agency (DLA). Aero
states that the IFB solicited prices for a particular stock number item,
but that DLA improperly awarded the contract for another unsolicited
stock number item. Aero also protests DLA's failure to set aside
exclusively for small business participation IFB No. DLA700-84-B-1107.
We dismiss the protests as untimely.
Aero states that on August 17, 1984, it learned of the award under
IFB DLA700-84-B-1106. Under our Bid Protest Procedures, 4 C.F.R. sec.
21.2(b)(2) (1984), protests must be filed (received) in our Office not
later than 10 working days after the basis of protest is known. Since
Aero's protest concerning this matter was received in this Office on
September 24, 1984 (more than a month after the protester states that it
received the information upon which its protest is based), the protest
is untimely and will not be considered on the merits. Holmes Ambulance
Service Corp., B-213743, Feb. 2, 1984, 84-1 C.P.D. para. 143.
Concerning Aero's protest that IFB DLA700-84-B-1107 should have been
set aside exclusively for small business participation, Aero states that
DLA improperly issued the IFB as a 50-percent small business set-aside.
Protests based upon alleged improprieties apparent on the face of the
IFB, such as here, must be filed prior to bid opening. 4 C.F.R. sec.
21.2(b)(1) (1984). Bid opening occurred on August 28, 1984.
Consequently, Aero's protest concerning this alleged impropriety
received by this Office after the August 28, 1984, bid opening date is
untimely. Spacesaver Systems, Inc., B-211817, Aug. 29, 1983, 83-2 C.P.
D. para. 272.
Protests dismissed. COMP GEN (UP)
FILE: B-216530 85-1 cpd 193
DATE: February 13, 1985
MATTER OF: Hewlett-Packard Company
DIGEST:
BIDS - INVITATION FOR BIDS - CLAUSES - MANDATORY - OMMISSION EFFECT
1. Bid accompanied by letter from bidder which deletes "Subcontracts
Under Fixed-Price Contracts" clause is nonresponsive because deletion of
this mandatory clause is a material deviation that restricts the
government's rights and eliminates the bidder's responsibility; any
contract awarded would not be the contract offered all bidders.
BIDS - RESPONSIVENESS - OFFER OF COMPLIANCE AFTER BID OPENING -
ACCEPTANCE NOT AUTHORIZED
2. A bidder is not permitted to make its nonresponsive bid
responsive after bid opening by removing an exception to a mandatory
contract clause because such action would be tantamount to permitting
the bidder to submit a new bid.
Hewlett-Packard Company protests the rejection of its low bid of
$845,000 as nonresponsive under invitation for bids (IFB) No.
DAADO5-84-B-0528, issued by the U.S. Army Test and Evaluation Command,
Aberdeen Proving Ground, Maryland. The IFB called for 21 flash X-ray
systems, complete with gimbal supports, training, and spare parts. The
Army received one other bid from Scandiflash AB in the amount of
$1,237,236. Hewlett-Packard contends that its bid is responsive because
the deletions and changes to certain contract clauses required by the
Federal Acquisition Regulation (FAR) that Hewlett-Packard requested in
its bid are not material. Under the circumstances, Hewlett-Packard
argues, these should be waived as minor informalities.
We deny the protest.
In a letter accompanying its bid, Hewlett-Packard stated:
"Hewlett-Packard's offer is contingent on the following
deletion and changes:
"FAR (Section) 52.244-01 (Subcontracts Under Fixed-Price
Contracts) -- This clause must be deleted in its entirety.
"FAR (Section) 52.249-02 (Termination for Convenience of the
Government (Fixed-Price)) -- This clause is acceptable only if the
following statement is included: 'Notwithstanding any
substitution such as Buyer for Contracting Officer or Government,
only the Government shall have ready access to Contractor's books
of account and cost records.' Additionally, the first two lines of
subparagraph (c) must be deleted." (The sections are corectly
numbered 52.244-1 and 52.249-2.)
The contracting officer rejected Hewlett-Packard's bid as
nonresponsive because he found that the cover letter which accompanied
Hewlett-Packard's bid imposed conditions that limited the rights of the
government under these mandatory contract clauses. FAR Section 44.204(
a)(1)(i), 48 Fed. Reg. 42,102, 42,390 (1983) (to be codified at 48 C.F.
R. Section 44.204(a)(1)(i)), requires the "Subcontracts Under
Fixed-Price Contracts" clause to be included in all fixed-price
contracts expected to exceed $500,000. There are no applicable
exceptions in the FAR permitting exclusion of this mandatory clause in a
covered IFB, and the contracting officer has no authority to delete it.
As indicated by Hewlett-Packard, the subcontracts clause is not
applicable to firm, fixed-price contracts unless and until they are
changed by an unpriced modification. See FAR Section 52.244-1(a). The
clause is then only applicable to certain subcontracts, e.g.,
cost-reimbursement subcontracts expected to exceed $25,000, including
fee, or fixed-price subcontracts expected to exceed $100,000. Id.
Section 52.244-1(b).
Consequently, Hewlett-Packard contends that the deletion of this
clause has a de minimis impact on price, quantity, quality, or delivery
and does not affect the relative standing of the bidders. In this
regard, Hewlett-Packard contends that it will very likely have no
subcontracts which could qualify under FAR Section 52.244-1(b), and the
almost $400,000 savings resulting from an award to it will provide ample
protection against any financial impact that might arise from an
unanticipated unpriced modification. Therefore, Hewlett-Packard argues
that the deviation is not material, is germane only to the
administration of the cntrract, and may be waived as a minor informality
under FAR Section 14.405. Hewlett-Packard, however, sent a letter to
the Army offering to remove the conditions to which the government
objected shortly after bid opening.
It is a fundamental rule of federal procurement that all bidders must
compete for advertised contracts on a common basis. Bidders have a
right to assume that the essential requirements of an invitation are the
same for all bidders. 46 Comp. Gen. 275, 277 (1966); BOARDA, Inc.,
B-204524.5, May 7, 1982, 82-1 CPD Paragraph 438.
Further, to be considered for award, a bid must be responsive, i.e.,
must comply in all material respects with the invitation for bids. See
FAR Section 14.301(a). If a bidder attempts to impose conditions that
would modify requirements of the invitation or limit the bidder's
liability to the government, FAR Section 14.404-2(d) requires the bid to
be rejected, since to allow the bidder to impose such conditions would
be prejudicial to other bidders. The regulation specifically requires
rejection of any bid in which the bidder "limits rights of the
government under any contract clause." See also Channel Disposal Co.,
B-215486, Aug. 17, 1984, 84-2 CPD Paragraph 191; F.M. Gostrovich
Construction Co., B-180362, Feb. 14, 1974, 74-1 CPD Paragraph 74.
Here, by conditioning its bid on the deletion of the "Subcontracts
Under Fixed-Priced Contracts" clause, Hewlett-Packard limited its
liability to the government. Such action by its nature was prejudicial
to other bidders. Dubie-Clark Company, B-186918, Aug. 26, 1976, 76-2
CPD Paragraph 194. Despite its limited applicability as discussed
above, the clause does require the contractor to provide certain
information with respect to the negotiation of covered proposed
subcontracts and to obtain the contracting officer's approval of the
subcontracts. These are material legal rights of the government.
Indeed, the fact that this clause is mandatory for inclusion in
fixed-price contracts over $500,000 establishes its materiality. See
Dubie-Clark Co., supra.
Hewlett-Packard argues that unless the government can show, by
reference to Hewlett-Packard's particular circumstances, that the
deletion has a material impact on price, quality, quantity, or delivery,
it may be waived after bid opening as a minor informality. It is true
that whether the government may exercise its rights under this clause is
speculative, because it depends upon an unpriced contract modification
with a significant subcontract. However, we do not believe a
contracting officer should be required to analyze the particular
situation to ascertain whether changes may or may not be issued and
whether any changes will require significant subcontracting. See
Premier Electric Supply, Inc., B-191184, July 21, 1978, 78-2 CPD
Paragraph 59; Dubie Clark Co., supra, (bidders taking exception to
required warranty and default provisions, respectively, are
nonresponsive, although it is speculative whether the government will
exercise its rights under these clauses in administering the contracts).
Consequently, Hewlett-Packard's deletion of this subcontract clause
indicates that the bidder did not intend to be bound by a material
condition of the IFB, an intent which must be ascertained from the bid
documents only. Giant Lift Equipment Manufacturing, B-213558, May 22,
1984, 84-1 CPD Paragraph 542.
Finally, we find that the Army properly rejected Hewlett-Packard's
attempt to delete the objectionable conditions shortly after bid
opening. The responsiveness of a bid must be determined at the time of
the bid opening, and a bidder may not explain the meaning of a bid after
this time. See Aeroflow Industries, Inc., B-197628, June 9, 1980, 80-1
CPD Paragraph 399. Ue have held that to permit a bidder to make its bid
responsive after bid opening would be tantamount to permitting the
bidder to submit a new bid. Consecraft, Inc., B-201065, July 20, 1981,
81-2 CPD Paragraph 51; Recording Consultants, Inc., B-201629, May 6,
1981, 81-1 CPD Paragraph 355. Since Hewlett-Packard's deletion of the
subcontract clause was a material deviation, the firm could not modify
the objectionable portions of its bid after bid opening. Valley Forge
Co., Inc. B-216108, Sept. 4, 1984, 84-2 CPD Paragraph 251.
In view of the above, we need not decide whether Hewlett-Packard's
proposed changes to the "Termination for Convenience of the Government"
clause are material.
We trust, however, that the Army will review Scandiflash's bid to
assure that its price is reasonable. See FAR Section 14.404-2(f).
The protest is denied.
Comptroller General
of the United States
B-216526, Oct 15, 1984, 84-2 CPD 406
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Solicitation improprieties - Apparent prior to
bid opening/closing date for proposals
DIGEST:
Protest contending that specification was unduly restrictive of
competition is dismissed as untimely because it was not filed prior to
closing date for receipt of initial proposals.
RSS Combustion Corporation:
RSS Combustion Corporation (RSS) protests the heating equipment
specification in contract No. N62472-83-C-4473 awarded by the Department
of the Navy. RSS contends that its own equipment is functionally equal
to or superior to that required by the specification but was rejected
for failure to meet the specification.
Section 21.2(b)(2) of our Bid Protest Procedures, 4 C.F.R. Part 21
(1984), requires that protests based upon alleged improprieties in any
type of solicitation which are apparent prior to bid opening or the
closing date for receipt of initial proposals shall be filed prior to
the bid opening or the closing date. The material submitted with this
protest indicates that RSS did not protest prior to that time.
Therefore, the protest is untimely and is dismissed. COMP GEN (UP)
B-216520, Oct 23, 1984, 84-2 CPD 454
BIDS - Acceptance time limitation - Bids offering different
acceptance periods - Shorter periods - Rejection of bid
DIGEST:
1. Bid offering a 3-day acceptance period when the solicitation
essentially requested a 60-day acceptance period was properly rejected
when award could not be made within the 3-day period. Bidder may not be
permitted to extend that period since such extension would be
prejudicial to other bidders who offered the requested acceptance
period.
BIDS - Competitive system - Compliance requirement - Pecuniary
advantage notwithstanding
2. Possibility that government might realize monetary savings in
particular procurement if bidder is permitted to extend
shorter-than-requested acceptance period is outweighed by importance of
maintaining integrity of the competitive bidding system.
Lane Blueprint Company:
Lane Blueprint Company protests the rejection of its bid under
solicitation No. 1651-S, issued by the Government Printing Office (GPO).
The bid was rejected because Lane had provided for a 3-day bid
acceptance period and GPO was unable to make award within that period.
GPO determined that it could not allow Lane to extend its bid acceptance
period because that would be prejudicial to bidders.
We deny the protest.
The solicitation included the following bid acceptance clause:
... the undersigned agrees, if this bid is accepted within ---
calendar days (60 calendar days unless a different period is inserted by
the offeror) from the date for receipt of bids specified herein, to
furnish any or all item upon which prices are offered ... in the
schedule. Lane entered a 3-day period in the space provided. It
contends that it misunderstood the solicitation provision and that the 3
days represented the period within which work was to be completed. The
protester argues that an extension of its bid acceptance period should
have been granted.
Although the standard acceptance period clause gives bidder to state
a time different from the 60-day period, we view it as essentially a
request for a 60-day acceptance period. American Truss & Mfg. Corp., et
al., B-205692, et al., May 18, 1982, 82-1 CPD para. 477. By limiting
its bid acceptance period to 3 days, Lane not only took the risk that
the government might not be able to make award within that time, but
also avoided the risk of increased performance costs during the
following 57-day period which other bidders assumed by granting a 60-day
bid acceptance period. Timberline Foresters, 59 Comp.Gen 726 (1980),
80-2 CPD para. 195. Thus, allowing Lane to decide, subject to its own
particular interest, whether it wishes to extend the bid or let it
expire would be prejudicial to other bidders who offered the requested
acceptance period and who are therefore bound by their prices for the
entire period. American Truss & Mfg. Corp., et al., supra.
Lane contends that it erroneously inserted the 3-day figure and that
it should be permitted to correct this error. An irregularity or
deviation in a bid may not be waived by the agency where, as here, the
alleged error impacts n a material portion of the bid such as the bid
acceptance period. See Union Metal Manufacturing Company, Electroline
Division, B-209161, Nov. 2, 1982, 82-2 CPD para 402. In any event,
there is nothing on the face of Lane's bid or the surrounding
circumstances to support the contention that Lane's insertion of the
3-day period was not intentional.
Lane contends that it similarly amended its bid under a past
procurement and received the award. While this may have been permitted,
we have held that as a general rule extensions of shorter than required
bid acceptance periods may not be allowed. See American Truss & Mfg.
Corp., et al., supra. Consequently, if Lane was previously permitted to
extend its bid acceptance period under circumstances similar to those
reported here that action was erroneous and cannot estop the government
from properly rejecting Lane's bid in this case. See Wilmington
Shipyard, Inc., B-214467, June 27, 1984, 84-1CPD para. 677.
Lane also argues that the agency should accept its bid to take
advantage of its lower price. The possibility that the government might
realize monetary savings if a material deficiency is allowed to be
corrected or waived is outweighed by the importance of maintaining the
integrity of the competitive bidding system. Union Metal Manufacturing
Company, Electroline Division. supra.
The protest is denied. COMP GEN (UP)
FILE: B-216519 85-1 CPD 135
DATE: February 4, 1985
MATTER OF: Cambridge Filter Corporation
DIGEST:
CONTRACTS - REQUESTS FOR QUOTATIONS - CANCELLATION
Cancellation of RFO issued under small purchase procedures is proper
where agency determines that amount involved will exceed authorized
ceiling for use of small purchase procedures.
Cambridge Filter Corporation protests the cancellation of request for
quotations (RFQ) No. N00104-84-X-8937 for air filters, ussed by the Navy
Ships Parts Control Center. We deny the protest.
On June 7, 1984, the agency issued the RFO for 420 air filters using
the small purchase procedures for procurement of items costing less than
$25,000, set out in the Federal Acquisition Regulation (FAR), part 13,
48 Fed. Reg. 42,102, 42,163 - 42,166 (1983) (to be codified at 48 C.F.R.
part 13). The contracting officer's initial decision to use the small
purchase procedures was based on an incorrect calculation of the cost of
the air filters to be procured. After issuance of the RFQ but before
quotations were due, the contracting officer recalculated the amount
involved based on a recent procurement of similar items, and concluded
that the cost of the air filters would be approximately $73,000, far in
excess of the $25,000 ceiling for small purchases in FAR, Section
13.000(b). As a result, the RFQ was canceled and any quotations
received were destroyed without review of their contents. The agency
now plans to issue a new solicitation for the air filters without using
the small purchase procedures. The agency states that a copy of the new
solicitation will be sent to the protester.
The gist of the protester's argument seems to be that any additional
procedures required for a procurement not conducted under the small
purchase procedures are insignificant in this case, and thus the
cancellation was not necessary. We disagree.
Contracting officers have broad discretion to determine whether a
solicitation should be canceled and, where prices have not been
disclosed, we will not disturb an agency's determination to cancel
unless it is shown to be unreasonable. E.g., Nortec Corporation,
B-198232, Sept. 19, 1980, 80-2 CPD Paragraph 212. Here, the regulations
authorize use of the small purchase procedures only where the amount
involved is less than $25,000. FAR, Section 13.000(b). Thus, once the
contracting officer determined that the amount of the procurement would
exceed the dollar ceiling, the agency was without authority to solicit
the items using the small purchase procedures. See FAR, Section 1.103
(b). Under these circumstances, the agency properly canceled the RFQ.
Since the agency does not have the authority to issue an RFQ under
the small purchase procedures in a situation like this where the amount
involved is more than $25,000, it is not relevant whether, as the
protester argues, the procedures for small purchases spelled out in FAR,
part 13 would not be significantly different in this particular
situation from those to be followed in conducting a non-small purchase
procurement for these items. In fact, however, the standards and
procedures differ significantly. For example, in procurements costing
more than $25,000, the regulations specify use of a uniform contract
format and incorporation of numerous clauses not used under the small
purchase procedures. See FAR, Sections 14.201 and 15.406. In addition,
while the small purchase procedures authorize limiting the solicitation
to three sources, as was done with the RFQ in this case, the regulations
applicable to standard advertised or negotiated procurements require the
agency to solicit offers from all qualified sources necessary to assure
full and free competition in the case of an advertised procurement, or
to maximize competition in a negotiated procurement. See FAR, Sections
13.106(b)(5), 14.103-1(b), and 15.105( a).
The protester also claims that since a prior contract for these same
items was awarded pursuant to a negotiated procurement, authorization
must exist to negotiate this procurement through the use of small
purchase procedures. The contract referred to was awarded under a
non-small purchase solicitation which cited 10 U.S.C. Section 2304(a)(
2) (1982) as the negotiation authority. That authority, which permits
negotiation where the public exigency will not permit the delay incident
to advertising, has nothing to do with whether the cost of a procurement
is such that small purchase procedures may be used in lieu of
advertising pursuant to the authority of 10 U.S.C. Section 2304(a)( 3).
Finally, the protester appears to argue that it has been prejudiced
by the cancellation and planned resolicitation because its competitors
now know it responded to the RFQ and its costs have increased since the
original RFQ was issued. In view of the fact that the protester's
quotation was not disclosed by the agency, we fail to see how the
protester would be prejudiced in any significant way by the cancellation
and resolicitation. In any event, the protester's contentions provide
no basis on which to object to the cancellation or resolicitation, given
that the agency lacked authority to conduct the procurement under the
original RFQ using the small purchase procedures.
The protest is denied.
Comptroller General
of the United States
B-216518, SEP 28, 1984, 84-2 CPD 375
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTER
DIGEST:
PROTEST FILED MORE THAN 10 DAYS AFTER BASIS FOR PROTEST WAS KNOWN IS
UNTIMELY UNDER GAO BID PROTEST PROCEDURES.
OLYMPUS CORPORATION:
OLYMPUS CORPORATION PROTESTS THE AWARD OF A CONTRACT TO ANOTHER FIRM
UNDER REQUEST FOR PROPOSALS NO. N00140-84-R-1132 ISSUED BY THE NAVY.
THE PROTEST IS UNTIMELY. OUR BID PROTEST PROCEDURES REQUIRE A
PROTEST SUCH AS THIS TO BE FILED WITHIN 10 WORKING DAYS OF WHEN THE
BASIS FOR PROTEST IS KNOWN. 4 C.F.R. SEC. 21.2(B)(2) (1984). FILED IS
DEFINED BY OUR PROCEDURES AS "RECEIPT" IN THE CONTRACTING AGENCY OR THIS
OFFICE. 4 C.F.R. SEC. 21.2(B)(3). OLYMPUS STATES THAT IT RECEIVED
NOTICE OF THE AWARD ON SEPTEMBER 5, 1984. ITS PROTEST, HOWEVER, WAS
MAILED ON SEPTEMBER 19 AND RECEIVED HERE ON SEPTEMBER 24. THE PROTEST
THEREFORE DOES NOT SATISFY OUR TIMELINESS REQUIREMENTS, AND WE WILL NOT
CONSIDER IT.
THE PROTEST IS DISMISSED.
B-216515, Oct 23, 1984, 84-2 CPD 453
BIDDERS - Qualifications - License requirement - General v. specific
- Effect on responsibility
DIGEST:
1. Protest alleging apparent low bidder's failure to hold the
necessary state licenses is dismissed since the matter concerns either:
(1) an affirmative determination of responsibility (if the IFB required
a particular license), or (2) a matter between the apparent low bidder
and the licensing authority and/or a matter of contract administration
(if the IFB requires general compliance with applicable licensing
requirements).
BIDS - Responsiveness - Failure to furnish something required -
Affiliates Affidavit - Waiver - Minor informality
2. Protest objecting to apparent low bidder's failure to furnish
with its bid a list of affiliates required by IFB is summarily denied
for lack of legal merit since agency may properly waive failure as minor
informality.
Atlantic Disposal Service, Inc.:
Atlantic Disposal Service, Inc. (Atlantic), protests award to any
firm other than itself under invitation for bids (IFB) No.
F28209-84-B-0049 issued by McGuire Air Force Base, New Jersey, on the
ground that Atlantic is the low responsive, responsible bidder on the
IFB for refuse collection and disposal services.
We dismiss in part and deny the protest in part.
Atlantic specifically objects to an award to the apparent low bidder,
R&E Carting, Inc. (R&E), because: (1) R&E lacked New Jersey licenses
for hauling and disposing of refuse; and (2) notwithstanding an IFB
requirement that bidders submit an affidavit with their bid reflecting
the names and addresses of all affiliates, R&E failed to do so.
Regarding its first objection, we have recognized a distinction
between IFB requirements that the bidder have a particular license and a
general requirement that the bidder comply with any applicable licensing
requirements. Where a particular license is required, compliance with
the requirement is a matter of responsibility. 53 Comp.Gen. 51 (1973);
National Office Moving Company; Keahey Moving and Storage, B-203304 et
al., Jan. 4, 1982, 82-1 C.P.D. para. 4. GAO does not review an agency's
affirmative determination of responsibility except where fraud, bad
faith, or misapplication of a definitive responsibility criterion is
shown, 4 C.F.R. sec. 21.3(g)(4) (1984); American Dredging Company,
B-212212, July 26, 1983, 8302 C.P.D. para 130. On the other hand, where
the IFB only generally requires bidder compliance with any applicable
licensing requirements, we have held that a bidder's failure to possess
a particular license is not necessarily a prerequisite to award since
the need of a license to perform the contract is a matter between the
bidder and the licensing authority. 53 Comp.Gen. 51, supra; National
Office Moving Company; Keahey Moving and Storage, B-203304, et al.,
supra. Moreover, alleged future violations of state law in the course
of contract performance is a matter of contract administration which we
will not review. 4 C.F.R. sec. 21.3(g)(1) (1984); Arlington Ridge
Civic Association, B-181015, Dec. 23, 1974, 74-2 C.P.D. para. 367.
Regarding Atlantic's second objection, we have held that a bidder's
failure to furnish with its bid a list of affiliates, as required by the
IFB, was a minor informality which may be waived or cured after bid
opening. Tombs & Sons, Inc., B-206810.3, July 30, 1982, 82-2 C.P.D.
para. 62. This aspect of the protest is therefore summarily denied for
lack of legal merit. 4 C.F.R. sec. 21.3(g) (1984). COMP GEN (UP)
FILE: B-216512 85-1 CPD 436
DATE: April 17, 1985
MATTER OF: BOW Industries, Incorporated
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
1. Protest that agency improperly failed to send protester a
solicitation is dismissed as untimely when not filed within 10 days
after the closing date for the receipt of proposals published in the
Commerce Business Daily.
CONTRACTS - PROTESTS - MOOT, ACADEMIC,ETC. QUESTIONS - PROTESTOR NOT
IN LINE FOR AWARD
2. Allegation of restrictive specifications is dismissed as academic
where protester failed to submit a proposal or timely protest the
failure to receive a proposal, and thus would not be eligible to receive
the award.
CONTRACTS - NEGOTIATION - CONFLICT OF INTEREST PROHIBITIONS -
INAPPLICABLE
3. Allegation that a contract award was improper because a former
agency employee subsequently was employed by the awardee, indicating a
conflict of interest, is dismissed where the agency denies, and the
protester submits no evidence demonstrating, that the former employee
exerted improper influence on behalf of the awardee, or even
participated in the procurement.
BOW Industries, Incorporated (BOW), protests the award of a contract
for instrumentation tape winder/cleaners to Honeywell, Inc., Test
Instrument Division (Honeywell), under Department of the Navy
solicitation No. N62269-84-R-0438. We dismiss the protest.
The solicitation, synopsized in the Commerce Business Daily (CBD) on
June 11, 1984, requested proposals to supply instrumentation magnetic
tape winder/cleaners, which are used by the Navy to clean and rewind
tape so that it may be reused. The procurement was to be conducted
using two-step formal advertising and the request for technical
proposals initiating step one was issued on July 11, with a closing date
for receipt of proposals of July 31. The closing date subsequently was
changed to August 17. The Navy received only one proposal --
Honeywell's -- and therefore decided to award the contract to Honeywell
by a delivery order under a basic ordering agreement rather than proceed
with step two of the procurement. Award was made on September 12 and we
received BOW's protest on September 21.
BOW first protests the fact that it did not receive a copy of the
solicitation until after the contract had been awarded to Honeywell even
though its name was on the list of firms to be solicited and it orally
requested a solicitation from the contracting officer in mid-July. BOW
alleges that when it made this request, the contracting officer advised
that the closing date for receipt of proposals had been extended to an
unknown date and that BOW would be sent a copy of the solicitation when
it was ready. BOW never received a copy, and thus believes it was
unfairly denied an opportunity to participate in the procurement. This
aspect of the protest is untimely.
To be timely under our Bid Protest Regulations, a protest must be
filed within 10 days after the protester knows or should know the basis
of its protest. 4 C.F.R. Section 21.2(a)(2) (1985). Here, even though
the closing date ultimately was extended, since the CBD announcement
listed July 31 as the closing date for the receipt of proposals, BOW was
or should have been aware that, in order to compete, it would need a
copy of the solicitation by that date. When BOW did not receive the
solicitation by July 31, it was on notice of this basis of protest and
thus should have raised it within 10 days thereafter. It did not do so,
however, and its protest on this point filed on September 21 therefore
is untimely and will not be considered on the merits. See Aurora
Spectrum International, B-214162, Feb. 13, 1984, 84-1 C.P.D. Paragraph
185. The Navy disputes BOW's claim that it requested a copy of the RFP
in mid-July and was informed that the closing date for the receipt of
proposals had been extended indefinitely; the Navy maintains that this
telephone call never occurred and that it thus never informed BOW that
the closing date had been extended. Even if BOW did request a copy of
the solicitation in mid-July, however, we do not think it was reasonable
for BOW to stand idly by until September, without ever again attempting
to obtain additional information on the status of the procurement.
BOW next argues that because the specifications for the tape winder/
cleaners were derived from a tape recorder, and would preclude BOW and
other manufacturers of conventional winder/cleaners from competing, they
unduly restrict competition. BOW submits that only Honeywell can
compete under this specification. Since BOW neither submitted a
proposal nor timely protested its failure to receive a solicitation, it
was not within the field of competition for this procurement and would
not be eligible to receive a contract award. Consequently, it is
academic whether BOW would be able to compete under the specifications.
We will not consider such academic questions on the merits. See
generally, M. Pashelinsky & Sons, Inc., B-214973, Aug. 29, 1984, 84-2
C.P.D. Paragraph 237.
Finally, BOW alleges that Honeywell should not have received the
contract award because a former tape lab department head allegedly
responsible for initiating the current solicitation went to work for
Honeywell, creating a conflict of interest. BOW contends that this
constituted a violation of a statute which prohibits government
employees, for 1 year after terminating employment, from becoming
employed by a contractor on behalf of whom they are in a position to
exert influence over an award. The Navy reports that it has
investigated BOW's charge and that information from the former employee
and the employee's Navy supervisors indicates that, in fact, the
employee neither initiated the acquisition, nor participated in any
matter concerning Honeywell once he bagan negotiating for employment
with Honeywell.
This aspect of BOW's protest provides no basis for questioning the
award to Honeywell. Section 207 of Title 18 of the U.S. Code (1982),
the statute on which BOW relies, imposes criminal penalties on former
government employees who represent parties other than the government on
specific matters in which the employee participated during his
government employment. Since there is no allegation or evidence that
the employee in question represented Honeywell in this procurement,
there is no basis for finding that the statute has been violated. In
any case, we do not consider violations of criminal statutes. Rather,
our interest here is limited to determining whether actions of the
former employee resulted in bias on behalf of the proposed awardee. The
agency has specifically denied that the employee was even in a position
to influence the award, BOW has submitted no documentary or other
evidence to support its assertions that the former employee exerted
influence on behalf of Honeywell, and we find nothing else in the record
indicating that this is the case. The mere coincidence of an employee's
subsequent employment with an awardee is not by itself sufficient to
establish that the award decision resulted from improper influence.
Consequently, we dismiss this basis of BOW's protest. See D.J. Findley,
Incorporated, B-213310.2, Nov. 30, 1984, 84-2 C.P.D. Paragraph 588.
BOW has requested that this office conduct an investigation of the
circumstances surrounding this solicitation and the contract award to
Honeywell. It is not our function, however, to conduct investigations
pursuant to our Bid Protest Regulations. Atlantic Pacific
International, B-206498, Mar. 19, 1982, 82-1 C.P.D. Paragraph 260.
The protest is dismissed.
Robert M. Strong
Deputy Associate General Counsel
B-216511, Oct 9, 1984, 84-2 CPD 396
GENERAL ACCOUNTING OFFICE - Jurisdiction - Patent infringement
DIGEST:
An allegation that a solicitation is improper because it could lead
to the infringement of patents, licenses and proprietary data rights
concerns issues for review by the courts, not by GAO under its Bid
Protest Procedures.
Industrial Co-Generation Systems:
Industrial Co-Generation Systems protests any award under invitation
for bids (IFB) No. DABT15-84-B-0073, issued by the Department of the
Army for a quantity of compact cell filter cassettes. Industrial
asserts that it is the exclusive licensee for distribution of this
product and that the product is covered by several patents. It seems to
argue that the IFB therefore is improper because an award to another
firm could lead to an infringement of its license and these patents, as
well as its rights in certain proprietary data. We dismiss the protest.
Our Office will not consider protests that a patent or license
infringement may result from performance under a contract awarded to
another firm. Honeywell, Inc., B-211247, Apr. 12, 1983, 83-1 CPD para.
388. The exclusive remedy for a patent infringement by a government
contractor is a suit against the government in the United States Claims
Court. See VSI Corp., Aerospace Group, B-211024, Apr. 4, 1983, 83-1 CPD
para. 352. Similarly, the possible improper use of proprietary
information ultimately involves a dispute between two private parties.
Such matters are for consideration by the courts, not our Office. SETAC
Inc., 62 Comp. Gen. 577 (1983), 83-2 CPD para. 121.
The protest is dismissed. COMP GEN (UP)
B-216509, Nov 8, 1984, 84-2 CPD 513
BIDS - Evaluation - Life-cycle cost
DIGEST:
1. GAO finds no merit in protest that the General Services
Administration's (GSA) method for evaluating life cycle costs (LCC), in
conjunction with bids to supply typewriters, is unfair and unreasonable.
The protester fails to show, as it alleges, that 1) the LCC tests,
conducted prior to the procurement, were unreliable, 2) that GSA's
method of determining ribbon replacement costs prejudiced the protester,
or 3) that GSA's method for determining typewriters' residual values, as
an element of LCC, was unreasonable.
BIDS - Responsiveness - Failure to furnish something required - Model
number of offered item - Waiver - As minor informality
2. Bid that fails to provide model number of offered item, as
required, nevertheless is responsive where it otherwise is clear from
the bid precisely what the bidder is offering and what the firm legally
will be obligated to furnish if the bid is accepted.
CONTRACTS - Protests - Interested party requirement - Nonresponsive
bidder
3. Fact that protester might have submitted a nonresponsive bid
would not, by itself, defeat the protester's interest in its pre-bid
opening protest that the specifications were defective.
Olympia USA, Inc.:
This decision responds to a request by the United States Claims Court
that our Office render an advisory opinion on Olympia USA, Inc.'
sprotest under General Services Administration's (GSA) solicitation No.
FGE-D3-75283-A. The protest pertains to the portion of the solicitation
seeking bids, under formally advertised procedures, to meet federal
agencies' normal requirements for single-element electric or electronic
typewriters, /1/ and to the stated methodology for determining the low
bidder based on the projected life cycle costs (LCC) of offered models.
After filing the protest with our Office, Olympia filed a complaint with
the court seeking declaratory and injunctive relief based on essentially
the same grounds as Olympia had raised in its protest. Olympia USA,
Inc. v. United States, Cl. Ct. No. 503-84C.
We find no legal basis to question GSA's LCC analysis.
I. Background
The solicitation provides that the low bidder will be determined
basically by the application of an LCC formula adjusting the offered
purchase price to reflect certain costs, including: the costs of
productivity downtime arising from typewriter failures; the costs of
repair parts and services; the costs of replacing ribbons, correction
tapes and print wheels (hereafter "ribbon replacement"); and a measure
of the machines trade-in value after 10 years ( the machine's "residual
value"). The formula adds projected costs of downtime, repair parts and
services, and ribbon replacement to the offered purchase price, while
subtracting the residual value, in order to arrive at a total realistic
cost to the government for each offered machine.
The projected costs of downtime, repair parts and services, and
ribbon replacement have been predetermined through testing GSA
previously conducted on a sample group of four machines of each model.
The testing subjected each typewriter to 3,000,000 keystrokes (the
estimated number of operations in the expected 10-year useful life of
the machines), using Graphic Products Corporation's
commercially-available Automatic Electric Typewriter Tester TT-200, with
certain modifications. GSA predetermined the residual value of each
model by surveying dealers of used typewriters for the present value of
the machine assuming it was 1 year old, and discounting the average of
the responses to reflect the value after 10 years.
The basic LCC methodology is set forth in an attachment to the
solicitation. Since the procedure for evaluating bids requires
information determined in advance of the procurement, the solicitation
also limits models that may be offered to those models that have already
undergone LCC testing and evaluation.
Prior to this procurement, Olympia had submitted its "Olympia
Standard" model to LCC testing and evaluation, the results of which form
the basis of the protest. Those results were that Olympia's model
incurred projected costs of $892.36 for the costs of downtime, repair
parts and services, and ribbon replacement over a 10-year period. For
evaluation purposes, that was adjusted to reflect the current value of
expenditures to be made in the future, resulting in the addition of
$547.91 to Olympia's bid price. Of that amount, $54.81 will be offset
by the residual value assigned to Olympia's machine.
In contrast, the IBM "Selectric III BO1," offered by IBM in the
current procurement (under which bids were opened after the filing of
Olympia's protest), incurs projected LCC costs of $263.98, adjusted to
add $162.09 to IBM's bid price, while the machine's assigned residual
value is $123.52. /2/ Application of these LCC values to the bid prices
-- $320 by Olympia and $575 by IBM -- results in Olympia's evaluated
price, $813.10, exceeding IBM's, $613.57, by $199.53. In fact, IBM is
in line for the award. /3/
II. Issues
Olympia disputes the validity of the LCC testing and evaluation, and
protests their use to determine the low bidder in this procurement.
Specifically, Olympia raises the following grounds of protest:
(A) Regarding the LCC testing, the protester contends that the
downtime costs and the costs of repair parts and services imputed to its
bid price are not attributable to defects in Olympia model, but to the
alleged failure of GSA to calibrate its automatic testing system
properly or to control the testing procedures.
(B) The protester argues that GSA inflated the costs of ribbon
replacement on Olympia's model by refusing to permit Olympia to offer
prices for supplies to be used with the typewriters being acquired under
this procurement, and instead using commercial price lists to determine
the supplies' costs. Olympia further argues that, at the same time, GSA
understated IBM's ribbon replacement costs by using the lowest listed
price for a compatible ribbon listed in an FSS contract, despite the
fact that IBM's model was not tested using such a ribbon and several
using agencies do not order such ribbons for their IBM machines.
(C) The protester complains that GSA's method for determining
residual value, based on a survey of the current values of machines
after 1 year's use, is arbitrary and bears no reasonable relationship to
the trade-in value that GSA reasonably can anticipate obtaining in 10
years.
(D) The protester maintains that GSA's testing methodology varied
from that listed in the specification regarding the number of keystrokes
during testing.
These grounds are discussed separately below. In addition, we
address, and reject, an argument raised by GSA that Olympia's bid under
the subject solicitation was nonresponsive, and that therefore the
protest is basically academic or moot.
III. Discussion
A. Downtime Costs and Costs of Repair Parts and Services
One of Olympia's contentions is that the TT-200, the machine used to
test the typewriters, abused Olympia's model in a manner unrelated to
normal use, resulting in damages to the keys and the imputation of
downtime and repair costs to Olympia's model that are not typical of
normal use. The TT-200 consists of a control unit connected by a cable
to the typewriter operating module, and which utilizes solenoid plungers
to depress the keys of the typewriter being tested. The machine is
equipped with an impact control which can vary the force with which the
plungers descend. The protester admits that the TT-200 is an "accepted
machine for testing typewriters and for determining the life of
ribbons." /4/ The protester contends, however, that if the machine is
not carefully installed to obtain the proper angle of impact, the impact
control properly calibrated, and the testing carefully monitored for
necessary 4readjustments to the machine and the impact control, then the
test results are totally unreliable. The protester further contends
that GSA's failure to observe these standards caused Olympia's model to
suffer unusual problems.
We do not believe that the protester, who bears the burden of
submitting sufficient evidence to establish its position, see Alchemy,
Inc., B-207954, Jan. 10, 1983, 83-1 CPD Para. 18, has met its burden
with respect to its allegations that GSA failed to observe necessary
testing standards, and that such failure caused Olympia's model to
suffer a typical problems.
The protester's deposition of GSA's supervisor of the testing, who
the protester admits is a "skilled and capable engineer," /5/ states
that the supervisor initially installed the testing machines or did most
of the work. According to the deposition, this entailed setting the
TT-200 operating module in a frame, and adjusting the frame so that the
module was aligned with the keys in a manner that allowed the solenoids
to activate typewriter functions. The impact control apparently was
also adjusted to the point where impact created a clear image.
Thereafter, the testing was continually monitored by part-time
employees, mostly consisting of students, to observe deficiencies or
failures and to check to see if the cause originated in the testing
equipment or with the typewriter. If the cause originated in the
testing equipment, the monitor was to adjust the equipment, whereas if
the cause was in the typewriter, the monitor was to note the deficiency,
and correct it or call a serviceman as needed. For this purpose, the
monitor could consult the manufacturer's instruction manual. If the
monitor had any doubts, he was to discontinue testing and have the
supervisor or an engineer examine the situation. the supervisor, when
not observing the testing, checked the record of noted deficiencies.
/6/
The record does not indicate any problem with the initial
installation of the TT-200, a task performed or overseen by the
supervisor whom the protester concedes is qualified. Concerning the
conduct of the tests, the record contains no evidence, aside from the
protester's self-serving statements, that GSA's procedures are not
sufficient. Since the TT-200 is acknowledged as an acceptable machine
for typewriter testing, we would think that if there existed generally
accepted procedures for such testing more stringent than those observed
by GSA, the protester could present evidence of those procedures. In
the absence of such evidence, the circumstances themselves do not
suggest to us that, after initial installation, monitoring the testing
generally required any special expertise. Rather, it seems to have
basically required observing the operation for obvious failures to
initiate a typewriter function, making judgments about the basic origin
or any failures where the origin was discoverable, and writing notations
in the record. In addition, the monitors could make simple necessary
adjustments to the equipment to correct the failures, while serious
problems were left for the supervisor or an engineer.
Specifically regarding the damaging of keys, the protester complains
that GSA's failure to calibrate the force of the impact and to adjust
the individual solenoid's angle of addressing the keys accounted for the
damage. Nothing in the record, however, establishes that the TT-200 is
even capable of exerting more damaging force than can be expected during
normal use. The mere fact that GSA utilizes an electrically powered
machine to conduct the testing does not indicate to us a likelihood of
unusually destructive force being exerted. Olympia has presented the
results of tests that it allegedly conducted itself on a similar model
(its offered model being only 3 years old), and that purpose to show no
key damages. Aside from the fact that Olympia's own results are subject
to obvious credibility attacks, however, the testing procedures and
results are not explained in sufficient detail to call into serious
question the results of GSA's testing. Moreover, GSA's report points
out, and the protester does not deny, that Olympia's testing results
report other failures not experienced during GSA's testing that support
the net results of GSA's LCC tests.
With respect to the angle of the solenoids, we note that GSA's
testing supervisor stated in his deposition that the operating module
was aligned with the angle of the keyboard and that the angle was
adjusted during testing. The supervisor indicated that any further
adjustment of the individual solenoids would not significant change the
vector force applied to the keys. /7/
The protester also complains that the test results were unreliable
because monitors had unbridled discretion to determine whether failures
were attributable to the typewriters, and whether typewriter failures
were of one of three types, with different impacts on the costs imputed
to the typewriter. As explained in the solicitation, the first type of
failure, "catastrophic" failure, included failures which rendered the
machine unusable for normal typing and required a service call; the
broken keys were of this type. The second type, "degradation" failure,
degraded operation sufficiently to require a service call but did not
preclude normal use of the machine; uneven character impressions, and
loss of use of a seldomly used feature, are examples of such failures.
The third type of failure, ":nuisance" failure, is one that interrupts
operations but does not require a service call. (The solicitation and
the LCC procedures list other examples of the different types of
failures.)
The protester does not allege that broken keys should not have been
classified as catastrophic failures, but seems to question problems
reported with ribbons not functioning properly. We note that the
monitors had the benefit of some instruction and the manufacturer's
instruction manual. To the extent that they were called on to exercise
their discretion, there is no basis to suspect that the monitors'
judgments would result in a more severe assessment of the type of
failure than a typist would make in a normal working environment. The
point of the LCC testing, after all, was to reflect the costs of the
machines under normal use, and not under the use of technicians.
We therefore do not believe that the protester has shown the GSA's
method for testing downtime and repair costs was unreasonable, unfair or
invalid.
B. Ribbon Replacement Costs
The solicitation explains that the prices for ribbons, correction
tapes, and print wheels are to be determined by reference to FSS
contracts, if those items are available from those sources; otherwise,
the ribbons (for which GSA reports it will adjust Olympia's LCC price
slightly to reflect a price available under an FSS contract), supplies
for Olympia's typewriters are not available from FSS contractors, and
GSA therefore used the lowest manufacturers's list price for supplies
compatible with Olympia's model. Olympia complains that this
methodology is unreasonable for several reasons, first of which is that
it precludes Olympia from offering competitive prices for its supplies.
To the extent that Olympia desires to offer ribbon prices, we point
out that GSA is contractually obligated to its FSS contractors to have
ribbons purchased from those sources if the available ribbons will meet
the using agencies' needs. In any event, the protester has not shown
that the methodology prejudiced Olympia in this procurement. In fact,
GSA reports that it recalculated Olympia's LCC using prices Olympia
stated it would have offered for supplies (including even lower prices
than the FSS-listed price for ribbons), but the calculation did not
affect the results of the evaluation. /8/
The protester also complains that GSA unfairly and improperly
utilized the lowest priced ribbon listed on an FSS contract ($ .62) to
calculate IBM's ribbon replacement costs. The protester contends that
that price is unreasonable since GSA had not tested IBM's machine with
the lowest-priced ribbon, and many federal agencies do not order the
lowest priced ribbon for use with IBM's model. Olympia contends that a
fair ribbon price would be about $2.50 per ribbon. While the protester
argues that use of this figure would increase IBM's LCC by $247 (it is
unclear how that figure is reached), our calculation, based on IBM's
model needing an average of 13.4 ribbons per year, is that a price of
$2.50 per ribbon would increase IBM's LCC by approximately $12, /9/ thus
indicating that Olympia was not prejudiced by the evaluation of ribbons.
We do agree with the protester that it does not make much sense to
test typewriters with different ribbons than those for which prices will
be evaluated for use with the machines. In this respect, GSA tested
models using the ribbons supplied by the manufacturer. Nothing in the
record, however, shows that IBM benefited from those procedures or, if
IBM did, that Olympia did not equally benefit.
C. Residual Value
The protester complains that the solicitation provisions and the LCC
methodology for competing and evaluating residual value after an assumed
useful life of 10 years are unreasonable. As previously stated, the
provisions basically credit an offeror with the market value of its
models after 1 year's use ascertained through a survey of companies that
sell large numbers of used typewriters, and then discount that amount to
reflect a compounded yearly 10-percent reduction in value over a 10-year
period. The discount factor was taken from Office of Management and
Budget (OMB) Circular No. A-94, March 27, 1982, which provides for the
application of a compounded yearly 10-percent factor to reflect the
current value of a benefit anticipated over time.
Olympia argues that an estimate of a machine's residual value after
10 years that is based on current market values is unreasonable and
cannot bear any reasonable relationship to the machine's actual value in
10 years. Olympia contends that this is especially so regarding IBM's
model since that model is an electrically powered mechanical typewriter,
which according to Olympia will have practically no value in 10 years
because of the availability of more sophisticated electronic machines
with such features as automatic correcting memory.
We previously have rejected an objection to a similar methodology,
based principally on industry publications, that GSA had employed for
evaluating typewriters' residual values. See Remington Rand
Corporation, et al., B-204085, et al., May 3, 1982, 82-1 CPD Para. 408
at pages 12-13. We held that residual value comprises a cost element
that logically cannot be ignored despited the observed difficulty in
determining the precise residual value of each model, and we found that
GSA had a reasonable, objective approach to the task, Recognizing that
any approach is somewhat speculative, we believe that GSA's method of
attempting to ascertain the current market of a 1-year old machine
objectively, and the discounting it by 10-percent yearly to obtain a
residual value after depreciation, is reasonable and fair.
While we understand that one could argue that for evaluation purposes
the resultant residual value should be further discounted in accordance
with OMB Circular No. A-94 to reflect the current value of the future
trade-in (the downtime repairs and ribbon-replacement costs are
discounted to reflect current value), we note that the OMB Circular does
not expressly require GSA to apply the discount in evaluating the low
bidder under a procurement for tangible personal property. Furthermore,
we have calculated the effect of further discounting residual values,
and find that it would not alter the outcome of the current procurement,
even using the "competitive" prices Olympia contends it would have
offered for its supplies. Therefore, even if GSA's failure to discount
the residual value to reflect the current value of the anticipated
trade-in should be deemed a deficiency, the deficiency would not
prejudice Olympia or pose an obstacle to a valid award under the current
solicitation.
Concerning Olympia's argument that IBM's typewriter will be rendered
obsolete by the advent of electronic typewriters, we are swayed by GSA's
response that the same argument could have been made about mechanical
typewriter being replaced by electric typewriters; yet the government
purchased more than 7,500 of those machines last year. Moreover, the
IBM model has been available for more than 10 years, during which time
electronic models have already become available . Nevertheless, the IBM
model has retained a relatively high trade-in and resale value. /10/
D. Number of Keystrokes
The protester complains that the solicitation's explanation of the
LCC methodology states that the machines will undergo 3 x 10 (to the
fifth power) keystrokes whereas in fact the LCC testing submitted
typewriters to 3 x 10 (to the sixth power), or 3,000,000, keystrokes.
The record, however, indicates that the solicitation contained a
typographical error, since the letters GSA sent to potential offerors
prior to the solicitation, for the purpose of explaining the LCC
methodology and inviting firms to submit typewriters for testing,
identified the number of keystrokes as 3 x 10 (to the sixth power), and
the testing was conducted in that manner. Nothing in the record
indicates that any bidder was misled by the error. In fact, Olympia did
not object to the error until it commented on GSA's report, thus
indicating that Olympia was not previously aware of it or affected by
it. We therefore do not believe this protest ground forms any obstacle
to a valid award under the solicitation.
E. Nonresponsiveness of Olympia's Bid
GSA has determined that Olympia's bid under the subject solicitation
was nonresponsive because it failed to designate the model of the
typewriter for which it was offering a bid, as required by the "ELIGIBLE
PRODUCTS" clause on page 19 of the solicitation. We disagree with GSA's
determination.
The "ELIGIBLE PRODUCTS" clause listed the 14 products that qualified
for award of a contract in the procurement; these 14 were the only
typewriters that had undergone LCC testing. The only Olympia machine
tested, and thus listed, was the Olympia Standard. On page 19-A, a
bidder -- who did not have to be the manufacturer of any listed eligible
typewriter -- was to insert the manufacturer's name and the product's
designation, or model number. Bidders were warned that an offer that
did not identify the eligible product would be rejected as
nonresponsive.
To be responsive, a bid as submitted must represent an unequivocal
offer to perform the exact thing required by the solicitation such that
acceptance of the bid will bind the contractor to perform in accordance
with the solicitation's material terms and conditions. See Federal
Acquisition Regulation (FAR), Sec. 14.301, 48 Fed.Reg. 42,102, 42,177
(1983) (to be codified at 48 C.F.R. Sec. 14.301); Jarrett S.
Blankenship Co., B-213294, et al., Apr. 2, 1984, 84-1 CPD Para. 370.
We think Olympia's bid was responsive. The record shows that in the
bid Olympia identified itself as the manufacturer, and the fact is that
Olympia manufacturers only one model that had been subjected to LCC
testing. We think it unreasonable in such circumstances to believe that
Olympia was offering anything other than its own tested typewriter. See
45 Comp. Gen. 397 (1966). We therefore believe that the identification
of the item offered -- the eligible Olympia Standard -- indeed was
clear, so that acceptance of the bid would bind Olympia to supply that
item. The bid thus was responsive.
Further, we do not believe, as GSA argues, that if the bid was
nonresponsive Olympia would lose the right to pursue its objections,
lodged before bid opening, that the solicitation's LCC methodology is
defective, except to the extent that Olympia contends it should receive
an award under the current solicitation. The reason is that should
Olympia prevail in its obligation to the LCC methodology, testing and
evaluation, the remedy would be cancellation of the current solicitation
and resolicitation under an appropriately revised LCC methodology, or by
other means. See Swintec Corporation, et al., B-212395.2, et al., Apr.
24, 1984, 84-1 CPD Para. 466. The nonresponsiveness of Olympia's bid
under the allegedly defective specifications would not affect its right
to submit an offer under the revised ones.
The protest is denied.
/1/ The resulting contract will be listed in the Federal Supply
Schedule (FSS) 74, part 1, section B, that GSA distributes to federal
agencies. Federal agencies may place orders against FSS contracts
directly with the contractor.
/2/ The LCC amounts used in this decision are those provided in
Exhibits O-1 and O-3 of GSA's October 12 report on the protest.
/3/ The solicitation provides that a 90 percent confidence interval
will be computed, and that if any bidder's LCC fall within the low
bidder's 90 percent confidence interval, then other procedures will be
used to determine the low bidder. Since IBM's 90 percent confidence
interval is $575.83 to $651.30, the provisions for those procedures,
including providing for award based on the lowest offered price without
reference to LCC, do not apply to this procurement.
/4/ Protester's October 26 submission to this Office, at page 4.
/5/ Id.
/6/ Deposition, at pages 63-74.
/7/ Id., at 59.
/8/ GSA's October 12 report on the protest, Exhibit O-2.
/9/ The difference between $2.40 and $.62 ($1.88) multiplied by 13.4,
and then discounted.
/10/ GSA's October 12 report on the protest at page 7. COMP GEN (UP)
FILE: B-216508 85-1 CPD 156
DATE: February 7, 1985
MATTER OF: C.M.P., Inc.
DIGEST:
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL ACCEPTABILITY - SCOPE OF GAO REVIEW
1. GAO will not object to the award of a contract under a request
for proposals (RFP) to the higher priced offeror receiving a higher
technical evaluation if the evaluation is reasonable and in accordance
with the evaluation criteria in the RFP.
FREEDOM OF INFORMATION ACT - DISCLOSURE REQUESTS - RECORDS OF
AGENCIES, ETC. OTHER THAN GAO - AUTHORITY OF GAO TO REQUIRE DISCLOSURE
2. GAO has no authority to determine, in connection with a bid
protest, what information must be disclosed by government agencies. The
protester's recourse, if it believes information has been withheld
improperly, is to pursue the disclosure remedies provided by the Freedom
of Information Act.
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - SMALL BUSINESS
ADMINISTRATION'S AUTHORITY
3. Certificate of competency (COC) procedures generally do not apply
when a small business firm's offer in a negotiated procurement is found
technically deficient relative to other offers, since the COC program is
reserved for reviewing nonresponsibility matters, not the comparative
evaluation of technical proposals.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
4. Protest that procurement should have been formally advertised
instead of negotiated is untimely where filed after the closing date for
receipt of initial proposals.
C.M.P., Inc. (CMP), protests the award of a contract to ViON Corp.
under request for proposals (RFP) No. 84-15-07, issued by the Department
of Energy's (DOE) management and operating contractor For the Argonne
National Laboratory for maintenance services on disk equipment. CMP
alleges that it is entitled to the award because it was found
technically acceptable and offered the lowest price for the first
contract year and for each of the two option years. CMP also argues
that to the extent there were any technical weaknesses perceived in its
proposal, they should have been referred to the Small Business
Administration (SBA) for evaluation under the certificate of competency
(COC) program. Finally, CMP argues that the procurement should have
been conducted using formally advertised procedures rather than
negotiated ones.
We deny the protest in part and dismiss it in part.
The RFP provided that award would be made to the responsive,
responsible offeror proposing the lowest overall cost to the laboratory
as determined through a cost/benefit evaluation. According to the RFP,
after technical points were awarded for the specified technical factors
-- previous performance, guarantee of performance, and remedial and
preventive maintenance service -- the laboratory would assign dollar
values to those points based on the estimated 3-year cost. The cost/
benefit analysis would be completed by subtracting an offeror's assigned
dollar values from the offeror's 3-year price, with the lowest result
representing the lowest overall cost.
ViON's technical proposal was rated the highest of the six acceptable
ones received and CMP's the lowest. Thus, while CMP offered a lower
aggregate price than did ViON, on the basis of the cost/benefit
analysis, ViON's offer was found to be the more advantageous. (CMP's
was rated third.)
In a negotiated procurement, an agency may award a contract to an
offeror with a higher technical rating than other firms even though the
offeror's proposal is not the lowest cost one if the agency determines
that the technical difference sufficiently outweighs the cost
difference, and we will not object to the award as long as the decision
is reasonable and in accordance with the stated evaluation criteria.
National Designers, Inc., B-214032, June 18, 1984, 84-1 C.P.D.
Paragraph 637.
Our in camera review of the evaluation materials (as discussed below,
they have not been released to CMP) shows that the evaluation was
performed in accordance with the criteria set forth in the RFP; that
the cost/benefit analysis was conducted in the manner described to
offerors in the solicitation; and that the laboratory selected the
offer which, based on the cost/benefit analysis, represented the lowest
overall cost. The fact that CMP's offered price was less than ViON's
before the analysis was conducted provides no reason to object to the
award, since the selection basis had to be the same as that on which the
competition was conducted. See National Designers, Inc., B-214032,
supra.
CMP complains that it has not been provided technical and cost
evaluation materials that DOE considers privileged information. (DOE
did provide the materials to our Office for our in camera review.) CMP's
recourse, however, is to puruse the disclosure of the information by DOE
through the Freedom of Information Act, 5 U.S.C. Section 552 (1982), and
not through the bid protest forum. Spectrum Leasing Corp., B-213647.3,
Sept. 10, 1984, 84-2 C.P.D. Paragraph 267. Our Office has no authority
under that statute to decide what information an agency must release.
Id.
Concerning whether there should have been a referral to the SBA under
the COC procedures, the COC program is reserved for reviewing
nonresponsibility determinations, that is, contracting activity
decisions that particular small business firms lack the ability to
perform contracts as required. 15 U.S.C. Section 637(b)(7)(A). CMP,
however, was not judged nonresponsible, but simply lost to a competitor
in an evaluation, pursuant to the RFP's ground rules, of the relative
merits of each offer to perform the requirement in a particular way,
using resources presumably available to the offeror for that purpose.
Moreover, to the extent the proposal evaluation did include some
typical responsibility factors, we have recognized that it is
appropriate in a negotiated procurement to use traditional
responsibility factors as technical evaluation criteria and to judge
proposals on that basis. Anderson Engineering and Testing Co.,
B-208632, Jan. 13, 1983, 83-1 C.P.D. Paragraph 99. As long as those
factors are limited to areas which, when evaluated comparatively, can
provide an appropriate basis for a selection that will be in the
government's best interest, COC procedures do not apply to a deficient
technical proposal. /1/ Delta Data Systems Corp., B-213396, Apr. 17,
1984, 84-1 C.P.D. Paragraph 430. The evaluation factors used here,
which focused on performance quality and the quality of remedial and
preventive maintenance, clearly were appropriate for comparative
evaluation in a negotiated procurement, so that the COC procedures were
inapplicable.
Finally, CMP protests that the procurement should have been formally
advertised instead of negotiated. This issue is untimely. Under oru
Bid Protest Procedures, 4 C.F.R. Section 21.2(a)(1) (1984), this matter
had to be raised before initial proposals were due, since the
procurement approach was evident to CMP when it received the
solicitation. CMP did not protest until after it lost the competition,
and we therefore will not consider the merits of the issue.
The protest is denied in part and dismissed in part.
Comptroller General
Of the United States
(1) Such areas may include experience, available facilities, and
personnel qualifications, but generally not financial capability. Delta
Data Systems Corp., supra.
FILE: B-216505 85-1 CPD 176
DATE: February 11, 1985
MATTER OF: Mantech International Corporation
DIGEST
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - SET-ASIDES -
ADMINISTRATIVE DETERMINATION - REASONABLE EXPECTATION OF COMPETITION
1. Where the contracting officer has a reasonable expectation that
offers will be obtained from at least two responsible small business
concerns and that awards will be made at reasonable prices, GAO will not
object to the decision to set aside a procurement for small business.
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - SET-ASIDES -
SUBCONTRACTOR, SUPPLIER, ETC. SIZE STATUS
2. A small business may subcontract with a large business for a
portion of a contract that has been set aside without endangering its
status as small; however, it may not transfer that status to a joint
venture composed of itself and a large business for the purpose of
competing for set-asides.
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - SMALL BUSINESS
ADMINISTRATION'S AUTHORITY - SIZE DETERMINATION
3. The GAO will not review questions of small business size status,
since the Small Business Administration has exclusive jurisdiction in
this matter.
Mantech International Corporation protests the issuance of request
for proposals (RFP) No. N00019-84-R-0030 by the Department of the Navy,
Naval Air Systems Command (NAVAIR), as a 100 percent small business
set-aside. The solicitation covers support services in the areas of
program planning and analysis, maintenance technology analysis, and
maintenance engineering and logistics support for common avionics, /1/
engines, and aircraft systems. The solicitation is divided into seven
lots, permitting the award of seven separate contracts if necessary, and
contemplates the award of indefinite delivery/indefinite quantity, time
and materials contracts for 1 year with 2 option years.
We dismiss the protest in part and deny the remainder.
Mantech alleges that the set-aside is unlawful because the
contracting officer did not have a reasonable expectation of adequate
business competition or of award at a reasonable price. Mantech also
asserts that award to a small business concern would result in an
unlawful joint venture and that the set-aside has created an "unfair
competitive environment."
Mantech's first contention applies to two of the seven lots. Mantech
argues that the Navy received only one proposal for Lot VI from a small
business that employs Mantech as subcontractor and only two "technically
acceptable" proposals for Lot VII, both from small businesses that
employ Mantech or another large business as subcontractor. (The record
indicates that Mantech previously performed the services covered by
these lots under contracts awarded noncompetitively at a time when it
too was a small business.)
For a total small business set-aside, the Federal Acquisition
Regulation (FAR), 48 C.F.R. Section 19.502-2 (1984), requires that there
be a reasonable expectation that offers will be obtained from at least
two responsible small business concerns and that awards will be made at
reasonable prices. The decision to set aside a procurement is basically
a business judgment within the broad discretion of the contracting
officer, for which we will not substitute our judgment. We therefore
will sustain a decision to set aside, even in a case where only one bid
from a small business is received, absent a clear showing of abuse of
discretion. Burrelle's Press Clipping Service, B-199945, Mar. 2, 1981,
81-1 CPD Paragraph 152; U. S. Divers Co., B-192867, Feb. 26, 1979,
79-1 CPD Paragraph 132.
We have also held that the government may pay a premium price to
small business firms on restricted procurements in order to implement
the purpose of the Small Business Act, 15 U.S.C. Section 631 (1982),
which is "to insure (that) a fair proportion of the total purchases . .
. for the government be placed with small business enterprises;"
however, an excessive and unreasonable price may not be paid. North
American Signal Company, B-190972, May 19, 1978, 78-1 CPD Paragraph 387.
The issue of whether a small business concern's price is excessive and
unreasonable is for the contracting officer to decide, and we will not
disturb it where it is supported by a rational basis. Ling/L.A.B.,
subsidiary of Mechanical Technology, Inc., B-207414, Oct. 15, 1982,
82-2 CPD Paragraph 341.
We believe the contracting officer here reasonably determined that
bids from a sufficient number of responsible small business concerns
would be received. The record indicates that NAVAIR based its decision
on the recommendation of its Small Business Office, the concurrence of
technical personnel, and prior procurement history, which indicated that
five of the seven lots had previously been satisfactorily performed by
small businesses at reasonable prices. Further, after synopsis in the
Commerce Business Daily, the Navy received expressions of interest from
more than 70 small businesses. We therefore will not dispute the
contracting officer's determination that sufficient competition and
reasonable prices were attainable -- a determination that is supported
by the fact that, with the exception of Lot VI, NAVAIR received two or
more proposals for each lot.
Mantech's allegation that award to a small business will result in an
unlawful joint venture is based on its belief that the successful small
business, lacking the requisite expertise to perform, will necessarily
subcontract a substantial portion of the work to a large business
concern. A small business may subcontract with a large business for a
portion of a contract that is set aside without endangering its
eligibility as a small business. However, it cannot transfer or impute
its small business status to a joint venture composed of itself and a
large business for the purpose of competing for set-asides. Loyola
College and NonPublic Educational Services, Inc., a Joint Venture et
al., B-205994.2, et al., May 16, 1983, 83-1 CPD Paragraph 507. The
allegation that a subcontract will result in a joint venture, however,
is essentially a challenge to the size status of the successful small
business offeror. Since under 15 U.S.C. Section 637(b)(6) the Small
Business Administration has exclusive authority to determine matters of
small business size status, we will not review this allegation. See
Putnam Mills Corp., B-207973, July 6, 1982, 82-2 CPD Paragraph 25.
Finally, the alleged "unfair competitive environment" created by the
set-aside refers to the fact that Mantech, and allegedly other large
businesses, have entered into teaming or subcontract arrangements with
various small businesses, and that therefore in some instances Mantech,
as a subcontractor, may be competing against itself. This, however, is
a result of Mantech's business decision to enter subcontracting
arrangements with different small businesses bidding on different lots
within the same contract, rather than the result of any improper
government action. Since such a decision is entirely within Mantech's
control, the situation is of its own making.
We dismiss the protest with regard to the joint venture allegation
and deny the remainder.
Comptroller General
of the United States
(1) Avionics is the development and production of electrical and
electronic devices for use in aviation, especially electronic control
systems for aircraft and airborne weapons. Webster's Third New
International Dictionary at 151 (1966).
FILE: B-216504 84-2 CPD 621
DATE: December 4, 1984
MATTER OF: Phoenix Safety Associates, Ltd.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - GENERAL
ACCOUNTING OFFICE REVIEW
1. In reviewing protests against allegedly improper evaluations, GAO
will not substitute its judgment for that of the contracting agency's
evaluators, who have wide discretion, but rather will examine the record
to determina whether the evaluators' judgments were reasonable and in
accord with listed criteria, and whether there were any violations of
procurement statutes and rebulations.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - DISCUSSION WITH ALL
OFFERORS REQUIREMENT - WHAT CONSTITUES DISCUSSION - REVISION OF PROPOSAL
OPPORTUNITY
2. Meaningful discussions have been held where the agency has
identified those areas in a proposal which are deficient, and has
afforded the oferror an oppotunity to correct those deficiencies in a
revised proposal. The offeror bears the burden to revise its proposal
to accomodate the agency's expressed concerns.
CONTRACTS - NEGOTIATION - AWARDS - TO OTHER THAN LOW OFFEROR
3. In a negotiated procurement, award need not to be made to the low
offerror unless the RFP so epecifies. in the absence of such a
provision, award to the low, but technically inferior, oferror is not
required.
CONTRACTORS - RESPONSIBILITY - DETERMINATION - REVIEW BY GAO -
AFFIRMATIVE FINDING ACCEPTED
4. GAO does nt review affirmative deteminations of responsibility
except in limited circumstances, not present here
Phoenix Safety Associates, Ltd. protests the award of a contract to
HazTrain, Inc. under request for proposals (RFP) No. WA 84-A084, issued
by the Environmental Protection Agency (EPA). The solicitation sought
offers to provide a basic training course for EPA employees performing
various field activities relative to the agency's mission. Phoenix
contends that its proposal was improperly evaluated as technically
inferior, and urges that it should have received the contract award
because it was the low offeror. Phoenix also alleges that HazTrain may
lack the capability to perform the work. We deny the protest in part
and dismiss it in part.
Background
The RFP informed offerors that they were to propose a 3-day basic
training course specifically tailored for EPA field activity employees
performing environmental and pesticide sampling, water and waste water
treatment plant inspections, and hazardous material spills and waste
site investigations. The purpose of the training was to assure that
these employees were aware of the hazards involved, and to provide them
with the skills necessary to minimize health and safety risks to
themselves and the public. The RFP's Statement of Work specified that
proposed courses had to incorporate the following training areas:
. employee rights and responsibilities;
. nature of anticipated hazards;
. emergency help and self-rescue;
. vehicle rules and regulations;
. safe use of field equipment;
. use, handling, storage, and transportation of hazardous
materials;
. use and care of personal protective equipment and clothing;
and
. safe sampling techniques.
Offerors were advised that the technical quality of submitted
proposals would be more important for award purposes than offered price.
Upon evaluation, three of the four initial proposals submitted,
including Phoenix's, were determined to be either acceptable or
reasonably susceptible of being made acceptable through discussions, and
accordingly were included in the competitive range. The EPA conducted
written and oral discussions with Phoenix, pointing out the areas in the
firm's initial proposal that the agency deemed to be technically
deficient. The agency criticized the proposal principally because
Phoenix had emphasized training relative to hazardous material spills
and waste site investigations to the exclusion of training for other
field activities such as environmental sampling and water treatment
plant inspections. Specifically, the EPA objected strongly to the
incorporation of a respiratory training component, involving instruction
in the use of self-contained breathing devices in hazardous material
situations, since this component would entail a full day of training and
was not in fact a requirement for the basic level course being sought.
The EPA then requested best and final offers.
Phoenix upgraded its proposal to some degree in response to the
request for best and finals, but continued to propose the 1-day
respiratory training component. The EPA again determined that this
undue emphasis upon hazardous material activities designated the
technical quality of the proposal with respect to satisfying other basic
training needs. Although Phoenix offered the lowest price of the three
firms in the competitive range, it was not selected for award, since
this remaining technical deficiency caused its proposal to be scored
significantly lower than HazTrain's.
Protest and Analysis
Phoenix contends that its proposal was improperly evaluated as
technically inferior, and believes that it should have received the
award as the low offeror. The firm contends that the RFP indicated that
respiratory training would be a necessary aspect of any proposed
training course, by advising offerors in the Statement of Work that
proposals were to offer instruction in: (1) the use, handling, storage,
and transportation of hazardous materials; and (2) the use and care of
protective equipment and clothing. Phoenix asserts that it did not act
beyond the scope of the solicitation in proposing a 1-day respiratory
training component, since these areas comprised a significant part of
the EPA's field activity training requirements. In addition, Phoenix
alleges that HazTrain may lack the capability to perform the work due to
insufficient staffing and experience. We find no merit in the protest.
In reviewing protests against allegedly improper evaluations, this
Office will not substitute its judgment for the contracting agency's
evaluators, who have wide discretion, but rather will examine the record
to determine whether the evaluators' judgments were reasonable and in
accord with listed criteria, and whether there were any violations of
procurement statutes and regulations. D-K Associates, Inc., B-213417,
Apr. 9, 1984, 84-1 CPD Paragraph 396.
In our view, the RFP clearly advised offerors that their proposals
were to accommodate the training needs of the EPA with respect to a wide
variety of field activities, but not principally to hazardous material
spills and waste site investigations. Phoenix chose to offer a training
component that it believed to be essential, but was informed by the
agency, through written and oral discussions, that such a component was
not required, and that this undue emphasis caused its initial proposal
to be downgraded.
Generally, discussions are to be held with all firms in the
competitive range, that is, those firms whose initial proposals are
determined to be either acceptable or reasonably susceptible of being
made acceptable. See Gould Defense Systems, Inc., et al., B-199392.3,
et al., Aug. 8, 1983, 83-2 CPD Paragraph 174. Meaningful discussions
have been held where the contracting agency has identified those areas
in an offeror's proposal that are considered to be deficient, and has
afforded the offeror the opportunity to correct those deficiencies in a
revised proposal. Logistical Support Inc., et al., B-208722, et al.,
Aug. 12, 1983, 83-2 CPD Paragraph 202.
Here, the EPA fully met its obligation to conduct meaningful
discussions. The burden clearly is on the offeror to furnish
satisfactory responses to concerns raised by the agency when given the
opportunity to revise a deficient proposal. See Control Data Corp.,
B-209166.2, Dec. 27, 1983, 84-1 CPD Paragraph 21. Therefore, the lower
technical score given to Phoenix's revised proposal is not attributable
to any unreasonable or arbitrary action on the EPA's part, but rather
results solely from Phoenix's failure to accommodate the agency's
expressed concern about the respiratory training component.
Phoenix asserts that any technical inferiority in its proposal did
not warrant the contract award to HazTrain. Phoenix points out that its
proposal was still held to be adequate, and that HazTrain's price is
much higher. This was a negotiated procurement, however, in which the
government is not required to make award to the low offeror unless the
solicitation so specifies. A.B. Dick Company, B-207194.2, Nov. 29,
1982, 82-2 CPD Paragraph 478. Although Phoenix's technical proposal was
deemed to be adequate, though inferior to HazTrain's, the RFP stated
unambiguously that technical quality would be more important than price
for purposes of determining the awardee. On a comparative basis,
Phoenix's final technical score was some 24 percent lower than
HazTrain's. Where the RFP clearly indicates that technical excellence
is more important than price, and the agency reasonably determines that
one proposal is technically superior and will provide the greatest
opportunity for value received per dollar spent, award to the low, but
technically inferior, offeror is not required. Ouest Research
Corporation, B-203167, Dec. 10, 1981, 81-2 CPD Paragraph 456.
Phoenix believes that HazTrain may lack the capability to perform the
contract work due to insufficient staffing and experience. Such an
issue, however, essentially is a challenge to the EPA's determination
that HazTrain is a responsible contractor. This office will not review
an agency's affirmative determination of responsibility, which is a
prerequisite to any award, unless the protester alleges fraud on the
part of contracting officials, or the misapplication of definitive
responsibility criteria. Surgical Instrument Company of America,
B-214918, May 22, 1984, 84-1 CPD Paragraph 551. Phoenix has raised
neither allegation here, and therefore we will not consider the matter.
The protest is denied in part and dismissed in part.
Comptroller General of the United States
FILE: B-216502 85-1 CPD 155
DATE: February 7, 1985
MATTER OF: Geiger Company
DIGEST:
BIDS - LATE - MISHANDLING DETERMINATION - IMPROPER GOVERNMENT ACTION
- NOT PRIMARY CAUSE OF LATE RECEIPT - HAND CARRIED DELAY
GAO sustains protest that agency improperly accepted a late bid.
Acceptance is proper only where the government's improper action is the
paramount cause of the lateness, and the rule does not apply if the
bidder has not followed instructions for delivery set forth in a
solicitation. The fact that a government employee may have contributed
to the lateness in some minor way does not affect this result.
The Geiger Company protests the proposed award of a contract to DAC
Construction Inc. under solicitation No. DABT10-84-B-0284, issued by the
Department of the Army for interior painting and miscellaneous repairs
at Fort Benning, Georgia. Geiger, the second-low bidder, alleges that
DAC's low bid was late and therefore was improperly considered for
award.
We sustain the protest.
The invitation for bids set bid opening at 1 p.m. on September 20,
1984; it specified that bids would be received at the Procurment
Division, Building 35, Room 341, Fort Benning.
DAC's bid was hand-carried to Fort Benning by the company's vice
president on September 20, 1984. While proceeding to Building 35, the
vice president realized that he had left the informational package
containing the room number in his car. Instead of retrieving this
material, he went to the office of the chief of the Procurement Division
to inquire as to the appropriate room for delivery. The vice president
entered this office at approximately 12:45 p.m.
Upon entering this office, the vice president asked the secretary,
who was a summer employee, where he should take DAC's bid. The
secretary responded that he should go to conference room 260, located on
the second floor of the building. Following their receipt and time-date
stamping in room 341, bids were to be opened in this conference room.
Following these directions, the vice president went to the conference
room. As this room was not occupied, he returned to the Procurement
Division office and informed the secretary that he could not be late in
submitting DAC's bid. After telephoning the bid opening officer, the
secretary told him to go back to the conference room and wait.
While standing in the hallway outside the conference room a second
time, the vice president told an employee of the Engineering Division
that he was waiting to turn in DAC's bid. This employee escorted the
vice president to room 341, where he met the bid opening officer. It
was then approximately 1:03 p.m.
The bid opening officer initially stated that the bid was late and
therefore not acceptable. After listening to the explanation offered by
the vice president, the officer went to the Procurement Division office
to verify the story; he then referred the matter to the contracting
officer. As stated in the record, the contracting officer decided to
accept DAC's bid because he determined that the bid would not have been
late had the vice president not been misdirected.
Geiger maintains that DAC's bid should not have been accepted because
it is the responsibility of prospective contractors to ensure that bids
are submitted to the proper location. Furthermore, Geiger suggests that
DAC could have obtained a possible advantage by altering its bid after
discovering what other bids had been submitted.
As a gneeral rule, a bidder has the responsibility of assuring the
timely arrival of its bid at the place designated in the solicitation.
However, a hand-carried bid that is received late may be accepted where
improper government action was the paramount cause for the late delivery
and consideration of the bid would not compromise the integrity of the
competitive bidding system. Improper government action may be
misdirection caused by government personnel. A misdirected late bid may
be considered so long as the bidder acted reasonably and did not
significantly contribute to the lateness. Raeten Construction Co.,
B-210681, Aug. 12, 1983, 83-2 CPD Paragraph 203.
We do not believe these rules apply here. As the record indicates,
the solicitation contained clear and concise delivery instructions for
hand-carried bids. Had these directions been followed, DAC's vice
president would not have had to seek the assistance of the secretary,
and most importantly, its bid would have been submitted on time. We
consider the failure of the vice president to recall these delivery
instructions to be the paramount cause of the late bid and the
secretary's actions as only incidently contributing to the late bid,
since once the Army provided explicit directions for delivery of bids in
the solicitation, its obligations towards prospective bidders with
respect to the timely delivery of bids were essentially fulfilled.
We sustain the protest and are recommending that the Army reject
DAC's late bid.
Comptroller General
of the United States
FILE: B-216501.2 84-3 CPD 635
DATE: December 6, 1984
MATTER OF: California Aero Dynamics Corporation -- Request for
Reconsideration
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SIGNIFICANT ISSUE EXCEPTION - NOT FOR
APPLICATION
Untimely protest will not be considered under significant issue
exception to our timeliness rules because issue is one that we have
previously considered.
California Aero Dynamics Corporation (CADC) requests reconsideration
of our decision in California Aero Dynamics Corporation, B-216501, Oct.
19, 1984, 84-2 C.P.D. Paragraph . . . . We dismissed as untimely CADC's
protest that the solicitation of best and final offers under request for
proposals No. F09603-84-R-0425, issued by Robins Air Force Base (Air
Force), Georgia, was improper because it stated that progress payments
would not be allowed until after first article approval. CADC contends
that the protest shoul be considered under our significant issue
exception, 4 C.F.R. Section 21.2(c) (1984).
CADC essentially argues that the Air Force does not have the
discretion to withhold progress payments until first article approval,
citing Federal Acquisition Regulation Sections 32.105, 32.106, 32.107
and 32.502-1, 48 Fed. Reg. 42,102, 42,171 (1983) (to be codified at 48
C.F.R. Sections 32.105, 32.106, 32.107 and 32.502-1).
We do not consider this issue to be significant within the meaning of
4 C.F.R. Section 21.2(c). The significant issue exception, which is
exercised sparingly so that our timeliness rules do not become
meaningless, is limited to issues of widespread interest to the
procurement community, which have not been considered on the merits in
our previous decisions. Western States Management Services, Inc. --
Request for Reconsideration, B-214427.2, Apr. 17, 1984, 84-1 C.P.D.
Paragraph 437.
Although CADC indicates that it was unable to find precedent in this
area, we held that under the then applicable regulations, the discretion
to determine whether or not provisions for progress payments are to be
included in invitations rests with the contracting officer. 45 Comp.
Gen. 809 (1966). Since the current regulations cited by CADC are to the
same effect, we believe that the contracting officer has the same
discretion to determine when and under what terms progress payments will
or will not be included in an invitation. Therefore, we find that the
protest does not warrant review under our significant issue exception.
Our prior decision is affirmed.
Comptroller General of the United States
B-216501, Oct 19, 1984, 84-2 CPD 424
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Solicitation improprieties - Apparent prior to
bid opening/closing date for proposals
DIGEST:
Protest against alleged impropriety in solicitation of best and final
offers made after closing date for best and final offers is untimely.
California Aero Dynamics Corporation:
California Aero Dynamics Corporation (CADC) protests that the
solicitation of best and final offers under request for proposals No.
F09603-84-R-0425 issued by Robins Air Force Base, Georgia, was improper
because it added that progress payments would not be allowed until after
first article approval.
The closing date for the receipt of best and final offers was
September 19, 1984. CADC protested to our Office by letter dated
September 20, 1984.
Since CADC did not protest until after the closing date for best and
final offers, its protest is untimely. See John Crane-Houdaille, Inc.,
B-212899, Jan. 20, 1984, 84-1 C.P.D. para. 89.
The protest is dismissed. COMP GEN (UP)
B-216491, SEP 28, 1984, 84-2 CPD 373
BIDS - PRICES - BELOW COST - NOT BASIS FOR PRECLUDING AWARD
DIGEST:
PROTEST THAT LOW BID PRICE WAS TOO LOW IS DISMISSED BECAUSE
BELOW-COST BIDS ARE NOT ILLEGAL AND AFFIRMATIVE DETERMINATIONS OF
RESPONSIBILITY ARE NOT GENERALLY REVIEWED BY GAO.
ANTHONY GIUNTA CONSTRUCTION:
BY MAILGRAM RECEIVED AT OUR OFFICE ON SEPTEMBER 21, 1984, ANTHONY
GIUNTA CONSTRUCTION COMPANY (GIUNTA) PROTESTS AN AWARD TO ANY OTHER
BIDDER THAN ITSELF UNDER INVITATION FOR BIDS (IFB) NO.
DAAB08-84-B-S984, ISSUED BY THE UNITED STATES ARMY, FORT MONMOUTH, NEW
JERSEY, FOR RENOVATION AND CONVERSION OF CERTAIN BUILDINGS. THE ONLY
BASIS OF PROTEST MENTIONED IS THAT THERE IS AN "INBALANCE" BETWEEN THE
LOW BID OF $230,000 AND THE GOVERNMENT ESTIMATE OF $352,000 AND THE
GIUNTA'S BID OF $347,000.
THE CRUX OF GIUNTA'S PROTEST IS APPARENTLY THAT THE LOW BIDDER IS
BIDDING TOO LOW A PRICE SO NO AWARD SHOULD BE MADE TO THAT BIDDER.
HOWEVER, OUR OFFICE HAS CONSISTENTLY FOUND THAT THE SUBMISSION OF A
BELOW-COST BID IS NOT ILLEGAL, AND THE GOVERNMENT CANNOT WITHHOLD AN
AWARD MERELY BECAUSE A RESPONSIVE LOW BID IS BELOW COST. ELLSWORTH
STREET ASSOCIATES, B-213211, OCT. 24, 1983, 83-2 C.P.D. PARA. 488.
WHETHER A BID PRICE IS SO LOW THAT THE BIDDER WILL NOT BE ABLE TO
PERFORM THE CONTRACT SATISFACTORILY IS A QUESTION CONCERNING THE
BIDDER'S RESPONSIBILITY, A MATTER THAT MUST BE DETERMINED BY THE ARMY
PRIOR TO AWARD. LUIKART PHOTOGRAPHIC ENTERPRISES, B-213244, OCT. 17,
1983, 83-2 C.P.D. PARA. 463.
THIS OFFICE DOES NOT REVIEW AFFIRMATIVE DETERMINATIONS OF
RESPONSIBILITY IN THE ABSENCE OF AN ALLEGATION EITHER OF FRAUD OR BAD
FAITH ON THE PART OF PROCUREMENT OFFICIALS OR THAT DEFINITIVE
RESPONSIBILITY CRITERIA IN THE SOLICITATION WERE NOT MET. 4 C.F.R.
SEC. 21.3(G)(4) (1984); BETA CONSTRUCTION COMPANY, B-214850, APR. 18,
1984, 84-1 C.P.D. PARA. 445. SINCE THERE IS NO DEFINITIVE RESPONSIBILITY
CRITERION OR ALLEGATION OF FRAUD OR BAD FAITH INVOLVED IN THIS PROTEST,
THE PROTEST IS DISMISSED. BETA CONSTRUCTION COMPANY, B-214850, SUPRA.
FILE: B-216489 84-2 CPD 686
DATE: December 21, 1984
MATTER OF: G&L Oxygen & Medical Supply Services
CONTRACTS - AWARDS - LOW BIDDER - ENTITLEMENT TO AWARD - AWARD ON
PRICE AND "OTHER FACTORS CONSIDERED" BASIS
1. Protest alleging that award should be made on the basis of unit
price without regard to total contract cost is denied since it would
result in award to other than the actual low bidder for the entire
contract period which is inconsistent basis of the most favorable cost
to the government.
BIDS - INVITATION FOR BIDS - DEFECTIVE - EVALUATION CRITERIA
2. Award to actual low bidder is proper where there has been no
showing that competition was adversely affected by the absence of an
explicit statement in the IFB that bidders' monthly rental charges would
be extended over the contract term in determining the lowest aggregate
bidder.
G&L Oxygen and Medical Supply Services (G&L) protests the proposed
award of a contract to American Medequip Corporation under invitation
for bids (IFB) 631-3-85, issued by the Veterans Administration (VA) for
home oxygen services and the maintenance of all support equipment for
homebound VA beneficiaries at the VA Medical Center, Northampton,
Massachusetts.
We deny the protest.
The contract is for a 1-year term with two 1-year options. The
solicitation included seven bid items and for each item, the VA
specified an estimated quantity of articles or services that may be
ordered during the contract term. The IFB indicated that award would be
made to the responsible bidder quoting the lowest aggregate price for
all items, for any group of items, or on an item by item basis,
whichever is more advantageous to the government.
Line item 7 was for a liquid oxygen reservoir. This item was listed
as follows on the bid schedule:
"7. Liquid Oxygen Reservoir consisting of a holding unit and a
portable unit
The VA states that a monthly charge was requested because rentals are
normaly billed on a monthly basis. However, in evaluating the overall
cost for this item, the VA extended the total monthly rental cost over
the entire contract term of 12 months. The VA argues that although this
method was not clearly set forth in the IFB, it is consistent with the
requirement that award in an advertised procurement be made to the
lowest responsive, responsible bidder on the total amount of work to be
awarded. The VA contends that there has been no showing that the VA's
evaluation method adversely affected competition and that the
circumstances do not warrant the cancellation and resolicitation of the
present IFB. The VA argues that award should be made to Medequip, the
actual low bidder for the entire contract period.
G&L claims that the VA's bid evaluation method was improper since
there was nothing in the IFB which indicated that the monthly rental
charge would be extended over the 12-month contract term. G&L contends
that the monthly rental charge should have been multiplied by the
estimated quantity and then simply added to the remaining items to
arrive at the total bid price. Under this evaluation method, G&L's bid
would have been evaluated as low.
Our decisions have held that award in an advertised procurement must
be made to the lowest responsive, responsible bidder measured by the
total work to be awarded. Williams Elevator Company, B-210049, Sept.
15, 1983, 83-2 C.P.D. Paragraph 327; Square Deal Trucking Co., Inc.,
B-183695, Oct. 2, 1975, 75-2 C.P.D. Paragraph 206. In addition, we have
clearly stated that where, as here, award is to be for a 1-year period,
an award to a bidder who is low only based on monthly prices without
regard to the extension of bid prices for the total contract term,
cannot be said to have been made to the lowest bidder. Square Deal
Trucking Co., Inc., B-183695, supra.
Here, the low bidder for the total amount of work to be awarded is
clearly Medequip. While the IFB did not explicitly state that the
monthly rental charge would be extended over the 12-month period, we do
not consider this omission critical since we think it unreasonable for
bidders to assume that a contract for a 1-year period will be evaluated
based on the lowest monthly price rather than the overall cost to the
government for the total contract term. Accordingly, we find that the
VA's evaluation methodology, although not specifically set forth in the
IFB, was proper and entirely consistent with the mandate of 41 U.S.C.
Section 253(b) (1982), which requires award on the basis of the most
favorable cost to the government. While G&L assets that the IFB misled
bidders in the preparation of their bids, there has been no showing that
competition was adversely affected. Therefore, award can be made to the
lowest properly evaluated bidder.
The protest is denied.
Comptroller General of the United States
B-216487.2, Oct 30, 1984, 84-2 CPD 482
BIDS - Invitation furnishing - Effect of failure to receive
DIGEST:
Protest that the procuring agency failed to furnish the solicitation
to the incumbent contractor is summarily denied where the protester has
not alleged or shown that competition and reasonable prices were not
obtained and that the failure to furnish the solicitation was the result
of a deliberate or conscious effort to exclude the protester from
competition.
Data Base Incorporated:
Data Base Incorporated (DBI) protests award of a contract under
invitation for bids (IFB) No. 6995 issued by the United States
Geological Survey (Survey), Department of the Interior (Interior).
In accordance with section 21.3(g) of our Bid Protest Procedures, 4
C.F.R. sec. 21.3(g) (1984), we deny the protest without obtaining a
report from the contracting agency, since the protest is without legal
merit on its face.
DBI complains that, although it was the incumbent contractor, the IFB
was mailed by the Survey to the wrong address with the result that DBI
did not receive the IFB. DBI alleges that the correct mailing address
was on file at the Survey, but was overlooked.
Interior informally advised our Office that three bids were received
in response to the IFB.
Although it is unfortunate that DBI did not receive the IFB, we have
held that the failure by an agency to solicit an incumbent contractor
does not require resolicitation where adequate competition resulted in
reasonable prices and where there was no deliberate or conscious intent
on the part of the procuring agency to preclude that incumbent
contractor from competing. U.S. Air Tool Co., Inc., B-214159, Feb. 14,
1984, 84-1 C.P.D. para. 200. DBI has not alleged or shown that
reasonable competition and prices were not obtained or that the Survey
deliberately or consciously intended to exclude DBI from the
competition. COMP GEN (UP)
FILE: B-216487 84-2 CPD 685
DATE: December 21, 1984
MATTER OF: First Federal Data Services
BIDS - INVITATION FOR BIDS - AMENDMENTS - FAILURE TO ACKNOWLEDGE -
WAIVED AS MINOR INFORMALITY
A bidder's failure to acknowledge an amendment formally is properly
waived as a minor informality when the contracting officer receives the
bid with the amendment attached, since acceptance of the bid will bind
the firm to the terms of the solicitation, including the amendment, at
the bid price.
First Federal Data Services (FFDS) protests award of a contract to
either the first or second low bidder under invitation for bids (IFB)
No. 6995 issued by the United States Geological Survey, Department of
the Interior (Interior), to procure storage facilities for
government-owned computer tapes and disks. FFDS contends that the first
and second low bids are nonresponsive because the bidders failed to
acknowledge receipt of amendment No. 1 to the IFB.
We deny the protest.
At the time the IFB was issued, the Wage Rate Determination, which
the contracting officer had requested, had not been received.
Consequently, the Wage Rate Determination was listed on the index page
of section "J" of the IFB, by number and by the page numbers that it
would occupy on receipt. Two pages following the index page of section
"J" were each marked with the legend:
"THIS PAGE HAS BEEN LEFT BLANK FOR THE INSERTION OF WAGE RATE
DETERMINATION NO. 79-219 (REV. 12), WHICH HAS NOT YET BEEN
RECEIVED FROM THE DEPARTMENT OF LABOR. IT WILL BE FORWARDED IN
THE FORM OF AN AMENDMENT UPON RECEIPT."
Amendment No. 1 transmitted the Wage Rate Determination and provided
that bidders must acknowledge receipt either by returning a signed copy
of the amendment with the name and address of the offeror in the proper
box, by acknowledging receipt on each submitted copy of the bid, or by
separate letter or telegram.
Three timely bids were received. U.S. Safe Deposit Co. (USSD) was
the low bidder, Independent Services was second low, and FFDS was the
highest bidder. Interior concedes that neither USSD nor Independent
acknowledged receipt by any of the above three methods. However, USSD's
bid contained the Wage Rate Determination inserted in the proper
location -- in section "J" -- and the bid package was stapled together
and signed by the president of USSD, who is identified on the bid as the
party authorized to sign. Interior and USSD contend that, therefore,
the amendment was constructively acknowledged.
FFDS asserts that the amendment must be acknowledged by one of the
three methods specified by the amendment. FFDS also contends that USSD
may not be bound by the Wage Rate Determination because there is no
evidence as to who inserted the amendment into the bid or whether such
person was authorized to do so.
A bidder's failure to acknowledge an amendment formally is properly
waived as a minor informality where the bid clearly indicates that the
firm received the amendment. Pioneer Fluid Power Co., B-214779, Sept.
4, 1984, 84-2 C.P.D. Paragraph 246. Here, it is obvious that USSD
received the amendment since the bid as submitted to the contracting
officer had the amendment bound into the bid as part of the bid. In
such case, USSD's signature on the bid insures that acceptance of the
bid will, as a legal matter, obligate the firm to perform in accordance
with the terms of the solicitation, including the amendment, at the bid
price. Protimex Corp., B-204821, Mar. 16, 1982, 82-1 C.P.D. Paragraph
247.
We have been informally advised by Interior that USSD has been
determined responsible. Since we have found that the firm's bid was
responsive, the acceptability of the second low bid is academic and need
not be considered.
The protest is denied.
Comptroller General of the United States
B-216486, SEP 28, 1984, 84-2 CPD 372
CONTRACTORS - RESPONSIBILITY - DETERMINATION - REVIEW BY GAO -
AFFIRMATIVE FINDING ACCEPTED
DIGEST:
1. AN ALLEGATION THAT A LOW BIDDER LACKS THE EXPERTISE TO PERFORM A
CONTRACT AND THAT THE LOW BIDDER'S LACK OF UNDERSTANDING OF THE
PERFORMANCE REQUIREMENTS IS REFLECTED IN ITS EXTREMELY LOW BID CONCERNS
THE LOW BIDDER'S RESPONSIBILITY AS A PROSPECTIVE CONTRACTOR.
CONTRACTORS - RESPONSIBILITY - DETERMINATION - REVIEW BY GAO -
AFFIRMATIVE FINDING ACCEPTED
2. GAO DOES NOT REVIEW A CONTRACTING OFFICER'S AFFIRMATIVE
DETERMINATION OF RESPONSIBILITY ABSENT A SHOWING OF POSSIBLE FRAUD OR
BAD FAITH ON THE PART OF CONTRACTING OFFICIALS OR THAT THE SOLICITATION
CONTAINS DEFINITIVE RESPONSIBILITY CRITERIA THAT HAVE NOT BEEN APPLIED.
LINDEN-LORENZ RIGGING CO., INC.:
LINDEN-LORENZ RIGGING CO., INC. PROTESTS THE AWARD OF A CONTRACT FOR
HEAVY RIGGING SERVICES TO LPW, INC. UNDER INVITATION FOR BIDS NO.
DAAA08-84-B-0136, ISSUED BY THE DEPARTMENT OF THE ARMY, ROCK ISLAND
ARSENAL. LINDEN ESSENTIALLY CHALLENGES LPW'S RESPONSIBILITY, THAT IS,
ITS ABILITY TO DO THE JOB, BECAUSE OF THE FIRM'S ALLEGED LACK OF
EXPERIENCE IN PROVIDING HEAVY RIGGING SERVICES. LINDEN NOTES THAT LPW'S
AREA OF EXPERTISE IS MILLWRIGHT SERVICES, AND ASSERTS THAT LPW'S LACK OF
UNDERSTANDING OF THE PERFORMANCE REQUIREMENTS IS REFLECTED IN LPW'S
EXTREMELY LOW BID. WE WILL NOT CONSIDER THE PROTEST.
BECAUSE RESPONSIBILITY DETERMINATIONS ARE LARGELY MATTERS OF SOUND
BUSINESS JUDGMENT AND BY THEIR NATURE ARE VERY SUBJECTIVE, THIS OFFICE
DOES NOT REVIEW AFFIRMATIVE DETERMINATIONS OF A PROSPECTIVE CONTRACTOR'S
RESPONSIBILITY ABSENT A SHOWING OF POSSIBLE FRAUD OR BAD FAITH ON THE
PART OF CONTRACTING OFFICIALS, OR WHERE THERE IS AN ALLEGATION THAT THE
SOLICITATION CONTAINS DEFINITIVE RESPONSIBILITY CRITERIA THAT HAVE NOT
BEEN APPLIED. SEE R. R. MONGEAU ENGINEERS, INC., B-213330, MAR. 20,
1984, 84-1 CPD PARA. 333. NONE OF THESE BASES FOR OUR REVIEW IS PRESENT
IN THIS CASE.
THE PROTEST IS DISMISSED.
FILE: B-216484.2 85-1 CPD 303
DATE: March 12, 1985
MATTER OF: Heckler & Koch, Inc.
DIGEST:
CONTRACTS - NEGOTIATION - SAMPLES - PREAWARD
1. "Request for technicial samples" (RFTS) informed potential
offerors that a request for proposals (RFP) might be issued before
testing was completed and indicated that a firm could be rejected on the
basis of test results even after submitting a proposal under the RFP.
Therefore, there is no impropriety in elimination of the protester from
competition, 4 months after the RFP was issued, based on tests initiated
under the RFTS.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - CRITERIA
2. Protest of the testing and evaluation of a firm's sample weapons
is denied where the record shows that the testing and evaluation were
performed according to criteria established by the RFP.
FREEDOM OF INFORMATION ACT - DISCLOSURE REQUESTS - RECORDS OF
AGENCIES, ETC. OTHER THAN GAO - AUTHORITY OF GAO TO REQUIRE DISCLOSURE
3. GAO is not the proper forum for appeal of an agency's refusal to
release test and evaluation data to the protester. The protester's
recourse is to pursue the disclosure remedies provided by the Freedom of
Information Act.
Heckler & Koch, Inc. (H&K), protests the rejection of its proposal by
the Department of the Army under request for proposals (RFP) No.
DAAA09-84-R-8605 for 9-millimeter (mm) handguns. We deny the protest.
The solicitation was issued to procure a single 9mm "Personal Defense
Weapon" to replace the M1911A1 .45-caliber pistol and various
.38-caliber pistols currently in use. Issuance of the RFP was preceded
by a test program conducted on sample weapons submitted in response to a
"request for technical samples" (RFTS). Testing was still going on when
the RFP was issued, and H&K's weapons were not rejected until after it
had already submitted its technical proposal in response to the RFP.
The RFTS invited interested firms to submit weapons for testing to
determine if they conformed to specified characteristics. These
characteristics were divided into four categories. The RFTS informed
participants that if their sample weapons failed to meet the mandatory
characteristics in categories 1 through 3, the weapons would be
eliminated from further consideration. The weapons submitted by H&K did
not meet two of the mandatory characteristics in category 2. These were
corrosion resistance and reliability. H&K contends that the Army's
rejection of its proposal based on the results of the corrosion
resistance and reliability tests was untimely and improper.
H&K contends that the decision to eliminate it from the competition
was taken at "an untimely moment" because it occurred more than 4 months
after the RFP was issued and less than 1 week before price proposals
were due, causing H&K to incur virtually all the expenses of proposal
preparation. H&K also argues that the rejection of its price proposal
prior to the price evaluation eliminated price competition. We find no
merit to these arguments.
As noted above, the RFTS warned that a weapon's failure to meet
mandatory characteristics would result in elimination from the
competition. Further, the cover letter to the RFTS specifically stated:
"It is possible that the procurement action will be issued prior
to completion of testing. In that event, the solicitation will be
limited to those offerors whose weapons have not been eliminated
from testing. If an offeror's weapon is subsequently eliminated
from consideration, the offeror will be informed as soon as
possible . . ."
Thus, H&K was clearly on notice that it could be eliminated from
consideration on the basis of test results even after submitting a
proposal under the RFP. If H&K considered this improper, it was
required to protest no later than the due date for receipt of technical
samples, which it did not do. See 4 C.F.R. Section 21.2(b)(1) (1984).
In addition, there is nothing in the record which suggests that the Army
did not inform H&K of its elimination from the competition as soon as
possible after the pertinent test results were available. Therefore, we
find no merit to H&K's assertion that the Army acted improperly by
eliminating H&K from consideration after it incurred substantial
proposal preparation costs.
Concerning H&K's cotention that the rejection of its proposal prior
to the price evaluation eliminated price competition, a proposal which
is unacceptable from a technical standpoint cannot be considered for
award and is of no value to the government regardless of price. See
Duroyd Manufacturing Co., Inc., B-195762, Nov. 16, 1979, 79-2 CPD
Paragraph 359. Since the Army considered H&K's weapons unacceptable
because they did not meet two mandatory requirements, the rejection of
H&K's proposal prior to the price evaluation was proper.
H&K argues that the Army's testing and evaluation of its sample
weapons was improper for several reasons. First, H&K asserts that the
rejection of its weapons on the basis of corrosion and stoppages without
parts damage or breakage was improper because these defects are easily
correctable and do not affect the final cost to the government.
Concerning corrosion, the RFTS contained the following mandatory
category 2 requirement: "The weapon must be designed to be
corrosion-resistant under operational conditions to include complete
salt water immersion comparable to the M1911A1 pistol." The test summary
contained in the RFTS provided that the salt water immersion test would
be conducted as follows:
". . . The weapons with safety on and with a fully loaded magazine
inserted and 2 additional loaded magazines are submerged for 60
seconds into a defined salt water solution. After removal and
draining of solution from the bore, all rounds are fired.
Subsequently, a 10 day temperature-humidity test cycle subjects
the same pistols and empty magazines to various combinations of 21
to 40 degrees C temperatures and 90 to 95% relative humidity. In
the third, fifth, eighth and tenth days a full complement of
unconditioned ammunition will be fired for functioning."
The results of the salt water immersion test showed that the mean
rounds between stoppages were 105 for the tested M1911A1s and 7.2 for
H&K's tested weapons. After an analysis of the test data, the Army
concluded that based on a statistical comparison, the protester's
weapons exhibited a significantly higher malfunction rate than the
M1911A1 and, therefore, were not comparable to the M1911A1 in corrosion
resistance.
The RFTS also contained a mandatory category 2 requirement for
reliability. This requirement provided that:
"When using 9mm NATO ammunition per STANAG 4090, the Reliability
of the System over its service life will be superior to the .45
caliber pistol currently in Army stocks (the M1911A1); however,
the desired value is 495 Mean Rounds Between Operational Mission
Failure. This allows a 98% probability of successfully firing a
10-round magazine. An operational mission failure is defined as
any malfunction which results, or would result in any one or a
combination of the following:
"(1) Cessation in weapon operation requiring corrective action.
"(2) Inability to commence or cease a mode of operation."
The test summary contained the following information concerning
reliability testing:
"The most exhaustive test in the entire program is endurance . .
. (E)ndurance establishes the reliability (mean rounds between
operational mission failures) and durability (service life)
information . . . The endurance test is structured around 7
weapons each firing a total of 3,500 rounds and thereafter 3
randomly pre-selected weapons continuing through 7,000 total
rounds fired . . . . "
The results of the endurance test showed that the mean rounds between
operational mission failure were 162 for the tested M1911A1s and 158 for
H&K tested weapons. After statistically analyzing the data, the Army
concluded that H&K's weapons were not superior to the M1911A1.
Based on the above, it is clear that H&K's weapons were eliminated
from the competition in accordance with criteria set forth in the RFTS,
that these criteria provided for rejection of weapons based on corrosion
and stoppages, and that the RFTS clearly allowed for such rejection even
where there was no parts damage or breakage. Accordingly, there is no
merit to H&K's assertion that rejection of its weapon based on corrosion
and stoppages was improper.
Moreover, as the Army points out, the protester was on notice that
failure to comply with category 2 requirements could not be corrected.
The cover letter to the RFTS stated that "failure to meet requirements
in some categories will result in the weapon being dropped from further
testing." This was clarified during a technical conference held to
discuss a draft version of the RFTS, which had been furnished to the
industry for comment. /1/ During the conference, one question was
whether offerors had until the end of category 2 testing cycle to adhere
to the category 2 characteristics and whether offerors could change
their weapons after submission to bring the test samples within the
specified requirements. The government answered that no such changes
would be authorized under any circumstances.
Accordingly, H&K chose to undergo the RFTS testing procedures knowing
that failure to meet category 2 requirements could not be corrected. It
therefore waived its right to object to that procedure. See Cadillac
Gage Co., B-209102, July 15, 1983, 83-2 CPD Paragraph 96.
H&K also questions the degree of randomness employed in selecting the
three weapons retained in the endurance test after completion of the
initial phase of the test (which involved firing seven weapons for a
total of 3,500 rounds each). The Army states that it arbitrarily chose
the three weapons tested to 7,000 rounds from the seven selected for the
first phase of the test. The agency emphasizes that this methodology
had been explained to offerors during the technical conference when the
agency was asked to define the term "randomly pre-selected" as used in
the RFTS explanation of the endurance test.
The record shows that offerors were informed that the three weapons
to be retained in the endurance test after firing 3,500 rounds would be
arbitrarily chosen from among the original seven, and that this would be
done before the endurance test began. Nothing in the record suggests
that the selection was not conducted as described in the conference.
Further, there is no evidence that H&K complained of this approach to
randomly preselecting the weapons at any time prior to the testing, and
it is not entitled to do so after participating in the testing without
complaint. Id. Accordingly, we find no merit to this basis of protest.
H&K argues that its weapons reflect a new technology and, therefore,
that they should not have been tested in the exact same way as the
"other old technology contestants." The testing procedures used by the
Army were set forth in the RFTS and further clarified during the
technical conference. Again, if H&K considered these procedures
inadequate, it was required to protest before participating in the tests
and is not entitled to protest now.
H&K also contends that as part of the salt water immersion test, a
"null set test" should have been performed between all offerors' sample
weapons. We are unclear as to what the protester means by a null set
test between all sample weapons in the context of this procurement. The
RFTS clearly provided for testing of each offeror's sample weapons in
comparison with the M1911A1 control weapons. The RFTS clearly did not
contemplate that the offerors' weapons would be tested against one
another.
The purpose of the salt water immersion test was not to determine
which weapon was best, but rather to determine whether the sample weapon
met a mimimum performance standard established by the M1911A1 control
weapon. Therefore, a "null set test" between all candidate weapons was
not relevant to the purposes of the salt water immersion test, and there
was no necessity for the Army to conduct one.
H&K emphasizes that its weapons have passed previous Army corrosion
resistance tests, and that the samples delivered for testing under the
RFTS were factory tested through 10,000 rounds and performed
satisfactorily. H&K also notes that the same model weapon has been
satisfactorily tested by the Federal Armed Forces of Germany and is used
by the German police and border patrol under conditions including
exposure to salt water. It states that the same weapons are used by the
New Jersey state police, who tested the weapons using procedures
obtained from the Army.
The mere fact that H&K's weapons were considered acceptable under
prior procurements does not establish that the Army's rejection of the
weapons were unreasonable under the facts and circumstances of the
present procurement. See Ensign-Bickford Co., B-211790, Apr. 18, 1984,
84-1 CPD Paragraph 439. Similarly, the fact that the weapons performed
satisfactorily during factory testing does not invalidate the results of
later tests conducted under different conditions. We therefore find no
merit to H&K's contention in this regard.
H&K asserts that its own evaluation of all competitors shows that no
offeror can meet all category 2 requirements. It argues that, as a
result, all offerors should be eliminated from the competition.
The Army states that some competitors did in fact meet all of the
category 2 requirements. It asserts that the protester's alleged
evaluation of the other offerors' weapons is irrelevant since it was
outside the test program established by the RFTS. We agree. H&K's own
evaluation of its competitors' weapons was not conducted on the same
weapons or under the same conditions as the Army tests and must be
viewed as at least potentially self-serving. Therefore, H&K's testing
results provide no basis for concluding that the Army's test results are
invalid.
The Army has refused to release any of the test and evaluation data
to H&K. The firm protests this refusal and complains that another
participant in the competition was given this information.
The Army asserts that the test and evaluation data are not releasable
since they relate to the ongoing negotiated procurement. See Federal
Acquisition Regulation, 48 C.F.R. Section 15.413 (1984). The Army states
that such information has not been released to any competitor, although,
pursuant to a court order, one competitor was permitted to examine its
weapons after testing.
We have consistently honored agency-imposed restrictions on documents
since the documents are those of the agency, not GAO. JGMA Development
Corp., B-200754, Mar, 30, 1981, 81-1 CPD Paragraph 234. Therefore, GAO
is not the proper forum for appeal of the Army's rufusal to release the
test results to H&K. Its recourse is to pursue the disclosure remedies
provided by the Freedom of Information Act, 5 U.S. C. Section 552
(1982). A-B Emblem, B-209634, Apr. 8, 1983, 83-1 CPD Paragraph 375.
We find no merit to any of the allegations raised by H&K's protest.
The protest therefore is denied. Harry R. Van Cleve
General Counsel
(1) H&K attended the technical conference and received a copy of a
letter from the contracting officer containing all questions and answers
discussed there.
FILE: B-216480 85-1 CPD 166
DATE: February 8, 1985
MATTER OF: Gradwell Company, Inc.
DIGEST:
PURCHASES - SMALL - PROTESTS - CONSIDERATION BY GAO
1. Since the purpose of the small purchase procedures is to minimize
administrative costs, a contracting officer is given broad discretion
with respect to making small purchases. The GAO therefore will only
review protests against an agency's approach to defining the field of
competition and will not question such determinations unless it is shown
that the contracting officer acted without a reasonable basis.
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - SET-ASIDES -
ADMINISTRATIVE DETERMINATION - REASONABLE EXPECTATION OF COMPETITION
2. Under regulations covering Small Business-Small Purchase
Set-Asides, a contracting officer may purchase on an unrestricted basis
if there is no reasonable expectation of obtaining quotations from two
or more competitive small businesses.
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - SET-ASIDES -
ADMINISTRATIVE DETERMINATION - REASONABLE EXPECTATION OF COMPETITION
3. Under regulations covering Small Business-Small Purchase
Set-Asides, a contracting officer may limit a solicitation over $1,000
to one source if only that source is reasonably available and it is
impractical to obtain competition.
Gradwell Company, Inc., protests the award of five contracts under
requests for quotations DAKF40-84-F-2786, -F-3559, -M-6092, -M-8136, and
-1152. All were issued by the Department of the Army for maintenance
and repair of Savin, A.B. Dick, Pitney Bowes, 3M, and IBM equipment,
e.g., typewriters and copiers, at Fort Bragg, North Carolina, schools.
Gradwell alleges that it was improperly excluded from competition for
these contracts although it was the incumbent under a contract covering
the various manufacturers' equipment that expired September 30, 1984.
Gradwell also asserts that contracts have been improperly awarded to
large businesses.
We deny the protest.
All of the procurements fall under the small purchase limit of
$25,000, and one is under $1,000. They therefore were conducted under
the simplified procedures outlined in the Federal Acquisition Regulation
(FAR), 48 C.F.R. Part 13 (1984).
The Army states that the Savin and A.B. Dick contracts, for $12,380
and $12,052, respectively, were awarded to small businesses after
Gradwell was solicited orally and failed to respond. The IBM contract,
for $4,675, was awarded to the low offeror, another small business,
although Gradwell submitted a quote. The 3M contract for $900 and the
Pitney Bowes contract for $1,432 were awarded without soliciting
Gradwell.
We limit our consideration of procurements conducted under the small
purchase procedures to protests against the contracting agency's
approach to defining the field of competition. We do so because these
procedures are designed to minimize the administrative cost that
otherwise might be the equivalent of or exceed the cost of acquiring
relatively inexpensive items. In contrast to other procurements, the
procedures therefore permit purchases without the need to maximize
competition. However, once the field of competition is defined, the
procurement must be conducted consistent with the concern for fair and
equitable competition that is inherent in any procurement. R. E. White
& Assoc., Inc., 61 Comp. Gen. 320 (1982), 82-1 CPD Paragraph 294. Under
applicable regulations, purchases under $1,000 may be made without
competitive quotations if the contracting officer considers the price
reasonable; for purchases between $1,000 and $25,000, the contracting
officer must solicit quotations from a reasonable number of qualified
sources, taking into account price and administrative cost of the
purchase, unless he or she determines that only one source is reasonably
available. See FAR Sections 13.106(a) and (b). In addition, oral
solicitations are acceptable. Id.
We shall consider the protester's allegations as applied to each
contract in turn.
The Army and the protester differ on the facts surrounding the Savin
and A.B. Dick contracts. The contracting officer maintains that
although the purchasing agent solicited Gradwell orally on August 2 and
7, 1984, respectively, and left messages with its answering service,
Gradwell did not respond. Gradwell maintains that it was never
solicited for these contracts. Since the protester has the burden of
proving its case, where the only evidence presented is conflicting
statements by the protester and the contracting officer, we have held
that the burden has not been met. Avdin Vector, B-209200, June 2, 1983,
83-1 CPD Paragraph 597. Gradwell has not met its burden in this
instance.
Gradwell was solicited and, in fact, did submit a quotation of $5,154
on the IBM contract. Another small business submitted the low quotation
of $4,675, and award to that firm is contemplated. Since the protester
was not excluded from competing for this contract, it has no cause for
complaint with reference to it.
Gradwell was not solicited for the 3M contract. The purchasing agent
orally solicited three other firms and found the $900 price to be
reasonable. Since she was not even under a duty to secure competitive
quotations, we find that the purchasing agent legitimately awarded the
contract to another small business.
The last contract, Pitney Bowes', was awarded to the manufacturer's
authorized representative, apparently a large business, for $1,432. The
contracting officer maintains that, in the interest of economy and upon
consideration of skill and experience, only this one source was
reasonably available.
Pursuant to FAR Section 13.105(d)(2), covering Small Busines-Small
Purchase Set-Asides, if a contracting officer determines that there is
no reasonable expectation of obtaining quotations from two or more
responsible small business concerns that will be competitive in terms of
market price, quality, and delivery, he or she may purchase on an
unrestricted basis. Further, pursuant to FAR Section 13.106(b)(1), a
contracting officer may limit a solicitatio- for purchases over $1,000
to one source if he or she determines that only one source is reasonably
available and that it is impractical to obtain competition.
We have held that since the purpose of the small purchase procedures
is to minimize administrative costs, a contracting officer is given
broad discretion with respect to making small purchases and, in fact,
may decide to solicit only particular suppliers to the exclusion of
others, so long as this decision is not the result of bad faith.
Security Assistance Forces and Equipment OHG, B-195830, Feb. 8, 1980,
80-1 CPD Paragraph 114. We will only question such determinations if it
is shown that they are without a reasonable basis.
Here, the contract amount was small -- $1,432; the record indicates
that Pitney Bowes copiers had proved difficult for Gradwell to maintain
under the previous service contract, and the contracting officer felt
that the manufacturer's service agent would best provide the necessary
expertise to meet the Army's needs within the required timeframe.
We find that the contracting officer reasonably concluded that
awarding the contract to the manufacturer's authorized representative
would best serve the needs of the government, given the price and
administrative cost of the purchase.
We deny the protest as to all five procurements.
Comptroller General
of the United States
B-216477, Nov 15, 1984
TRAVEL EXPENSES - Temporary duty - Assignment interrupted - Return
expenses, etc. - Illness or death in family
DIGEST:
Employee on a temporary duty assignment for training in Georgia may
not be reimbursed for the cost of round trip travel to West Virginia to
attend his father's funeral. The travel was for personal reasons and
there is no authority under applicable statutes or regulations
authorizing reimbursement for personal travel.
Dwain F. Pridemore - Travel Expenses Incurred Due to Death in
Employee's Family:
An authorized certifying officer with the Internal Revenue Service
(IRS) has requested our opinion concerning the entitlement of Mr. Dwain
F. Pridemore to reimbursement of travel expenses he incurred when he
interrupted his temporary duty to attend his father's funeral. We hold
that since those expenses were incurred incident to personal travel
rather than official business, they may not be reimbursed.
Mr. Pridemore, whose permanent duty station is Akron, Ohio, traveled
to Glynco, Georgia, to attend a training class scheduled to last from
April 25, to June 13, 1984. While attending the training class he was
notified that his father was dying. Mr. Pridemore's brother-in-law
picked him up at 3:30 p.m. on May 11 in Brunswick, Georgia, and drove
him to Logan, West Virginia, where they arrived at 3:30 a.m. on May 12.
His father died shortly after he arrived in Logan and Mr. Pridemore
stayed for the funeral. On May 16 he returned by a commercial airline
flight to his temporary duty station. He apparently had received
approval from the Assistant Regional Commissioner for a cash expenditure
of $242 for the airline ticket.
In addition to requesting reimbursement for the cost of the airline
ticket, Mr. Pridemore claimed entitlement to $124.00 for mileage from
Brunswick, Georgia, to Logan, West Virginia, $26.24 for roundtrip
mileage from Logan, West Virginia, to the Charleston Airport, $2 for
airport parking and $5.75 on May 11 and $2.88 on May 16 for subsistence.
Citing our decision in 45 Comp.Gen. 299 (1965), the certifying officer
denied Mr. Pridemore's claim on the grounds that his trip to West
Virginia was for personal reasons. Mr. Pridemore responded by
requesting our decision on this matter and arguing that he should be
reimbursed because his return to temporary duty was of benefit to the
Government. He points out that if he had not returned to complete the
training, the IRS would have had to reschedule his training and pay
again for the 3 weeks of training he had already received. He
calculated that cost at $1,050, while he is claiming travel and
subsistence expenses of $402.
In 45 Comp.Gen. 299 (1965) we held that expenses incurred by an IRS
employee for roundtrip travel from his temporary overseas duty
assignment to his permanent duty station to attend his father's funeral
could not be reimbursed. In that case we reiterated our longstanding
rule that travel performed by an employee solely because of the illness
or death of a member of his immediate family is regarded as personal to
the employee rather than as travel on official business. We have
consistently denied reimbursement of expenses incurred incident to
personal travel based on the provisions of 5 U.S.C. Sec. 5702(a) (1982)
which provide for reimbursement of per diem only where the employee is
"traveling on official business away from his designated post of duty."
In subsequent cases we have applied this rule when the employee, as
did Mr. Pridemore, returned from a funeral to his temporary duty site to
complete a course of training, or returned to continue representing an
agency at trial. Leonard D. Holman, B-185718, November 9, 1976; Mark
N. Jacobs, B-184496, November 9, 1976. And in Richard R. Rogers,
B-191773, March 6, 1979, we held that an employee could not be
reimbursed for roundtrip travel from his temporary duty station to his
permanent duty station to attend his mother's funeral even though his
supervisor had informed him that his return travel to his temporary
station would be at Government expense.
Mr. Pridemore argues that he is entitled to reimbursement because his
return was of benefit to the Government and his supervisor had
authorized the expenditure for his airline ticket. For the reasons
discussed above, however, his travel did not meet the statutory
requirement of official business. Therefore, we hold that he is not
entitled to reimbursement of the travel expenses he incurred in
connection with the interruption of his temporary duty. We note that
Mr. Pridemore has made a claim for subsistence for the portion of the
day he was at his temporary duty station before leaving for West
Virginia and the portion of the day after he returned. We see no reason
why he may not be reimbursed for those periods of time.
Although we have been compelled to deny claims such as Mr.
Pridemore's under the present statutory framework, we do believe that it
is inequitable to require an employee to pay the costs of travel to his
home and return to his temporary duty station upon the serious illness
or injury, or death of a member of his family since his absence from
home results from the Government's action. In 1978 we recommended a
legislative amendment to the Administrator of the General Services
Administration to correct this situation. (See B-187198, February 28,
1978.) More recently, we commented favorably on a provision in H.R.
4233, 98th Cong., 1st Sess., which proposed to reimburse Federal
employees for their travel expenses when they are traveling on official
business and, with agency approval, they interrupt their travel to
return home because of a personal emergency. We also recommended that
the amendment be broadened to cover the cost of emergency travel to a
location other than the employee's home or regular place of business,
not to exceed the cost of return travel home. (See B-213735, February
27, 1984.) COMP GEN (UP)
B-216474, Oct 9, 1984, 84-2 CPD 395
BIDDERS - Qualifications - Manufacturer or dealer - Administrative
determination - Labor Department review
DIGEST:
GAO does not consider the legal status of a firm as a regular dealer
or manufacturer within the meaning of the Walsh-Healey Act. By law,
this matter is to be determined by the contracting agency in the first
instance, subject to review by the Small Business Administration (if a
small business is involved) and the Secretary of Labor.
Semco, Inc.:
Semco, Inc. (Semco), protests the award of a contract to Ridge, Inc.
(Ridge), under request for proposals No. DAAH01-84-R-0227 issued by the
United States Army Missile Command, Redstone Arsenal. Semco contends
that Ridge is not a manufacturer of the solicited items as required by
the Walsh-Healey Act, 41 U.S.C. Sec. 35-45 (1982).
This Office does not consider the legal status of a firm as a regular
dealer or a manufacturer within the meaning of the Walsh-Healey Act. By
law, this matter is to be determined by the contracting agency in the
first instance, subject to review by the Small Business Administration
(where a small business is involved) and the Secretary of Labor.
Aeroglide Corporation, B-215484, July 2, 1984, 84-2 C.P.D. para. 9;
James S. Scroggins & Co., B-213363, Apr. 17, 1984, 84-1 C.P. D. para.
429.
The protest is dismissed. COMP GEN (UP)
FILE: B-216472 85-1 CPD 342
DATE: March 25, 1985
MATTER OF: Superior Boiler Works, Inc.
DIGEST:
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - PROTESTOR NOT
IN LINE FOR AWARD
1. GAO dismisses protest alleging that certain specifications for
boiler equipment are unduly restrictive, since the protester admittedly
meets the requirements and thus is not an interested party under Bid
Protest Procedures.
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - RESTRICTIVE - BURDEN
PROVING UNDUE RESTRICTION
2. Agency's specification for discharge damper for boilers is not
unduly restrictive where agency makes a prima facie showing that the
specification is reasonable and necessary to meet its minimum needs and
the protester fails to rebut this showing.
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT
3. GAO denies protest alleging that only one manufacturer can
collectively meet all specifications where the allegation is not clearly
supported by the record. In any case, requirements that limit
competition are acceptable so long as they represent legitmate agency
needs.
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - RESTRICTIVE
4. GAO dismisses protest alleging that certain specifications for
boiler equipment do not adequately describe the agency's minimum needs,
since the protester admits that it cannot meet other specifications that
do not unduly restrict competition. In these circumstances, the
protester is not an interested party under Bid Protest Procedures.
Superior Boiler Works, Inc. protests that the specifications used in
invitation for bids (IFB) No. 125-3K15-84 unduly restrict competition
and are inadequate. The IFB, issued by the Department of Agriculture,
solicited bids to furnish and install three boilers in area 3 at the
Agricultural Research Center in Beltsville, Maryland. We dismiss the
protest in part and deny it is part.
The primary contention of Superior, a boiler manufacturer and
prospective supplier to the successful construction contractor, is that
certain of the specifications impose requirements for features that --
in their entirety -- are only available from one boiler manufacturer,
Cleaver Brooks. While other manufacturers can meet individual
specifications, according to the protester, only Cleaver Brooks can meet
them all. Superior also alleges that two specifications do not
adequately describe the agency's minimum needs.
The IFB indicates that specifications are based upon equipment
manufactured by Cleaver Brooks, although "an approved equal will be
accepted." The Department of Agriculture awarded a contract to M&S
Mechanical Corporation on September 28, 1984, and on February 13, 1985,
the contracting officer approved the awardee's shop drawings, including
Cleaver Brooks' boilers.
The record indicates that Superior itself currently meets four of the
six specifications that it alleges are unduly restrictive, and that it
can meet an additional one by special manufacture. We will not consider
the propriety of the four specifications the protester admits it meets.
A protest regarding these specifications is essentially on behalf of
other potential suppliers that would be economically affected by their
allegedly restrictive nature. Our Bid Protest Procedures, 4 C.F.R.
Section 21.1(a)(1984), require that in order for a protest to be
considered, a protester must be an "interested party," as determined by
the nature of the issues raised and the direct or indirect benefit or
relief sought. See Kentucky Building Maintenance, Inc., B-196368, Jan.
16, 1980, 80-1 CPD Paragraph 49. The other potential suppliers, not
Superior, are the proper parties to complain about these specifications.
Superior Boiler Works, Inc., et al., B-215836, et al., Dec. 6, 1984,
84-2 CPD Paragraph 633.
We therefore dismiss Superior's protest concerning these
specifications. We will, however, consider its protest concerning the
alleged restrictiveness of the other specifications.
As a general rule, officials of a contracting agency, who are
familiar with the conditions under which supplies, equipment, or
services have been used in the past and will be used in the future, are
in the best position to know the government's actual needs. Thus, such
officials are best able to draft appropriate "brand name or equal" type
purchase descriptions. American Sterilizer Co., B-202096, Sept. 4,
1981, 81-2 CPD Paragraph 198. When a protester challenges a
specification as unduly restrictive, the procuring agency must make a
prima facie showing that the restriction is needed to meet its actual
needs. If it does so, the burden shifts to the protester to show that
the requirement complained of is clearly unreasonable. See Champion
Road Machinery International Corp., B-206842. et al., Mar. 1, 1983, 83-1
CPD Paragraph 203. Moreover, a contracting agency properly may
establish specifications based on its actual experience. Lucas Machine,
Division of Litton Industrial Products, Inc., B-212982, Feb. 22, 1984,
84-1 CPD Paragraph 217.
The allegedly restrictive specifications that Superior cannot meet
and thus concludes are overly restrictive are (1) the requirement that
each boiler's forced draft blower have "a discharge damper of the high
pressure drop type providing high turbulence" and (2) that each boiler's
door fastening method is of "heavy duty cap screws which thread into
replacement nuts." A fastening in which studs are welded to the boiler
is not acceptable, according to the solicitation.
As to the discharge damper requirement, the agency states that its
experience with this feature "has shown it to be virtually maintenance
free" and, therefore, necessary. Concerning the boiler door fastening
method, the agency states the reason for cap screws is "(r)eplaceable
nuts are easier to replace, and the same bolt can usually be used."
According to the agency, if a threaded hole becomes stripped, the hole
must be rethreaded and a larger bolt used.
In our view, the agency's justification for the forced discharge
damper requirement is reasonable on its face. The protester has not
persuasively rebutted the agency justification and, thus, has failed to
meet its burden of showing that the specification is unreasonable.
The agency has not fully addressed the protest on the boiler door
fastening method since it has not indicated why studs welded to the
boiler are not an acceptable door fastening method. See Cleaver Brooks,
B-213000, June 29, 1984, 84-1 CPD Paragraph 1. However, because the
requirement for the forced draft blower with discharge damper
legitimately precludes Superior from offering its standard equipment,
and because Superior states that it can meet the door fastening
requirement by special manufacture, we cannot find that the firm was
precluded by the specification as written.
As for the protester's allegation that only one manufacturer can
collectively meet all of the protested specifications, this is not clear
from the record. Agriculture received eight bids in response to the
IFB. It does not know what boiler(s) these bidders would have offered,
however, since only the successful contractor was required to provide
shop drawings at some point after award.
In supplemental information requested by this Office, the agency
states that before issuance of the solicitation, representatives of
Kewanee, Superior, and York-Shipley indicated that they could
manufacture boilers to meet the specifications, although their standard
boilers would need modification. Additionally, the agency states that
four other manufacturers indicated they could manufacture boilers that
would require little or no modification to comply with the
specifications. Those manufacturers are Cleaver Brooks, Continental 4
pass unit I.C. burner, Eclipse, and Nebraska Boiler with I.C. burner.
From the record before us, we cannot conclude that the protester has
shown that the specifications are drawn in such a manner as to preclude
any product but that manufactured by Cleaver Brooks. See American
Sterilizer Company, supra. While specifications should be drawn so as
to maximize competition, we have held that requirements which limit
competition are acceptable so long as they represent legitimate agency
needs. In short, a contract awarded on the basis of those needs would
not violate law by unduly restricting competition. Lucas Machine,
Division of Litton Industrial Product, Inc., supra. Moreover, the fact
that one or more potential suppliers may be precluded from competing
does not render the specifications unduly restrictive if they represent
the legitimate needs of the agency. Bowne Time Sharing Inc., B-190038,
May 9, 1978, 78-1 CPD Paragraph 347. We therefore deny the protest on
these bases.
Finally, Superior contends that two specifications of the boiler
control panel did not adequately describe the agency's minimum needs and
prevented bidders from competing on an equal basis. Those
specifications require that the indicating lights and switches of the
panel be "mounted in a hinged drop-panel for eacy access to all wiring"
and that the control panel be in a "dustproof enclosure." Since the
protester admits that its boiler cannot meet the requirement for a
discharge damper, which we have found does not unduly restrict
competition, the firm does not qualify as an interested party for
protesting that other specifications are inadequate. Swintec Corp. et
al., B-212395.2 et al., Apr. 24, 1984, 84-1 CPD Paragraph 466, aff'd on
reconsideration, Aug. 13, 1984, 84-2 CPD Paragraph 161. This is so
because Superior could not qualify for award even if it prevailed on its
protest concerning the alleged inadequacies in the specifications. Id.
Accordingly, the protest is dismissed in part and denied in part.
Harry R. Van Cleve
General Counsel
FILE: B-216469 84-2 CPD 634
DATE: December 6, 1984
MATTER OF: Trans World Maintenance Inc.
BIDS - ACCEPTANCE TIME LIMITATION - BIDS OFFERING DIFFERENT
ACCEPTANCE PERIODS - SHORTER PERIODS - REJECTION OF BID
Agency properly rejected as nonresponsive a bid offering a 60-day bid
acceptance period rather than the 90-day minimum period required by the
solicitation.
Trans World Maintenance Inc. (TWM) protests the rejection of its low
bid for exterior painting and repair under invitation for bids (IFB) No.
DACA83-84-B-0242 issued by the Army Corps of Engineer (Corps). The bid
was rejected as nonresponsive because TWM provided a 60-day bid
acceptance period rather than the minimum 90-day period required by the
IFM.
TWM asserts that, despite the IFB requirement for a 90-day bid
acceptance period, all bidders were aware from the IFB that award was
contingent on the availability of funding in the 1984 fiscal year, and
that the Corps intended to award this contract within the 20 days from
bid opening to the end of the fiscal year to avoid resolicitation in
fiscal year 1985. TWM also points out that in fact funding was
available prior to the end of the fiscal year. TWM concludes that the
90-day period was superfluous after the initial 20-day period for which
TWM was bound and award to TWM would have been proper during this
period.
We deny the protest.
We consistently have held that an IFB requirement that a bid remain
available for acceptance by the government for a prescribed period of
time to be considered for award is a material requirement. Bridgewater
Construction Corp., B-214187, Feb. 14, 1984, 84-1 C.P.D. Paragraph 201.
A failure to comply with such a requirement renders a bid nonresponsive
and ineligible for consideration for award regardless of whether ward is
made within the shorter acceptance period. Ames Construction, Inc.,
B-210578, Feb. 14, 1983, 83-1 C.P.D. Paragraph 156.
To hold otherwise would unfairly permit the bidder, after the
expiration of the time it set for bid acceptance, to accept the contract
or, if intervening circumstances, such as unanticipated cost increases
made acceptance unattractive, to refuse the contract. On the other
hand, bidders complying with the required acceptance period are bound by
the prices bid for the time stated for acceptance by the IFB.
Bridgewater Construction Corp., B-214817, supra.
Essentially, TWM argues that the Corps intended to, and could have,
awarded this contract within the shorter period bid by TWM and thus the
failure to bid a 90-day bid acceptance period was waivable as a minor
informality. However, we have rejected essentially this same argument
in prior decisions. In this connection we have stated that the fact
that an award is made within a period shorter than the bid acceptance
period required of bidders or, as in this case, it could have been made
during the shorter period, is not relevant to the question of the bid's
responsiveness. The purpose of requiring a particular bid acceptance
period is to insure the government adequate time after bid opening for
bid evaluation and other preaward processing. See, for example, Ames
Construction, Inc., B-210578, supra. However, responsiveness is a
matter of a bid's acceptability as submitted and opened. In cannot
depend on the subsequent fortuity that the government completes the
selection process sooner than anticipated by the invitation as issued.
The firm's bid price reflects the bidder's limitation of its risk
through the offer of a shorter acceptance period than its competitors
offered in their proper responses to the IFB. See Hild Floor Machine
Co., Inc., B-196419, Feb. 19, 1980, 80-1 C.P.D. Paragraph 140. Thus,
even if we assume that the Corps may have anticipated award within the
20 days prior to the end of the fiscal year, this does not alter the
materiality of the acceptance period requirement.
Comptroller General of the United States
B-216466, Nov 14, 1984
ORDERS - Cancelled, revoked, or modified - Subsequent orders -
Effective date
DIGEST:
1. Orders of an Army reservist who agrees to perform inactive duty
training and active duty without pay, may not be amended to
retroactively place the member in a pay status if the intent was clearly
that his orders were for duty in a nonpay status. The general rule is
that only when orders are incomplete or ambiguous or when a provision is
omitted through error or inadvertency, may they be amended retroactively
to increase the liability of the Government.
AGENTS - Government - Government liability for negligent or erroneous
acts - Military matters - Erroneous information regarding pay
2. Assurances by superior officers to an Army reservist that if
funds became available he would be paid for duty, when orders are to the
contrary, are not a basis for allowing a claim for pay since, absent
specific authority, the United States is not liable for the erroneous
advice given by its officers, agents, or employees even though given in
the performance of their official duties.
Major Jean-Francois J. Romey, USAR:
Major Jean-Francois J. Romey, USAR, requests reconsideration of our
Claims Group's April 17, 1984 denial of his claim for pay and allowances
for service he performed during the period of March 6 to August 4, 1982.
We find that he is not entitled to the pay he claims.
BACKGROUND
During the period in question, March 6 through August 4, 1982, Major
Romey (then Captain Romey), served at Headquarters, Sixth U.S. Army, as
Reserve mobilization planning officer for a project known as MOBEX 82.
Prior to his beginning this period of duty, the Army informed Major
Romey that funds were not available to pay him. The offer was made to
Major Romey to begin his tour of duty without pay, for an accumulation
of retirement points only. It appears from the record that he was also
told that if funds became available later, an attempt would be made to
put him on an active duty with pay status. Apparently, he was also
advised that in that event an attempt also would be made to pay him for
the duty he had performed without pay.
On March 5, 1982, Major Romey signed an application for active duty
training indicating that he was willing to perform active duty as
mobilization planning officer for retirement points only without pay or
allowances. Although the period of duty he was to perform was
contemplated to be about 179 days, he actually performed the duty under
a series of succeeding orders. The first 60 days were covered by two
orders, each authorizing him to perform 30 days of inactive duty
training. The remainder of the service appears to have been performed
as active duty. All of the orders clearly indicate that the service was
to be without pay.
When funds later became available, the Army amended Major Romey's
orders to place him in pay status beginning in early August 1982. His
organization also attempted to modify prior orders to show that Major
Romey had been in a pay status to allow him to be paid for the period
March 6 through August 4, 1982.
The Finance and Accounting Officer, however, denied payment of
backpay for the period covered by Major Romey's orders which
specifically stated that duty was to be performed without pay. Our
Claims Group also denied the claim noting that Major Romey performed the
duty without pay, as authorized by 10 U.S.C. Sec. 683 and U.S.C. Sec.
4541, under orders specifically providing that the duty was without pay,
and with full cognizance of the fact that immediate payment could not be
made.
ANALYSIS
A Reserve member may be ordered to active duty or other duty without
pay with his consent. 10 U.S.C. Sec. 683(a) (1982). The Secretary of
the Army is authorized to accept the gratuitous services of officers of
the Army Reserve. 10 U.S.C. Sec. 4541 (1982) (formerly 31 U.S.C. Sec.
666 (1976)). The Army may not, however, order a reservist to perform
duty without his consent.
The record shows that Major Romey submitted a signed application for
active duty as mobilization planning officer which specifically stated
that the duty was to be without pay. While the first 60 days were
performed in the highly unusual status (for such a long period) of
inactive duty, he responded to and continued to serve under those orders
and under subsequent active duty orders issued pursuant to that
application which specified that the duty would be without pay.
We do not dispute Major Romey's assertions that he was advised that
once funds became available, he would be paid. In fact, once funds did
become available, Major Romey was placed in a pay status. However, it
is clear that he recognized that funds were not available when he
accepted the duty and the risk that funds would be delayed or perhaps
might not become available.
As to the attempt to amend Major Romey's orders retroactively to show
that he had been in a pay status for the period March 6 through August
4, 1982, it has long been our view that, except where orders are
incomplete or ambiguous or when some provision previously determined and
definitely intended in a particular case has been omitted through error
or inadvertence in preparing them, orders may not be amended
retroactively to increase or decrease the liability of the Government.
See Warrant Officer John W. Snapp, 63 Comp.Gen. 4 (1983); B-169435,
June 16, 1970; B-160194, January 18, 1974; and Comp.Gen. 439 (1944)
While it appears that the Army intended to attempt to obtain funding
for the project and to have Major Romey paid for his service, there is
nothing to indicate that any provisions concerning pay status were
omitted from his orders through error or inadvertence, nor are they
incomplete or ambiguous. To the contrary since no funds were available
when Major Romey performed the duty, to have placed him in pay status
and obligated funds for his pay may have been a violation of the
Anti-Deficiency Act. See 31 U.S.C. Sec. 1341 (1982) (formerly 31 U.S.
C. Sec. 665(a) (1976)). Therefore, placing Major Romey in a nonpay
status was what was intended by the Army in those orders, and they may
not be amended retroactively to show that Major Romey had been in a pay
status. Such a change would constitutes a change of material fact which
would be a matter for consideration by the Army Board for Correction of
Military Records under 10 U.S.C. Sec. 1552.
In addition, while Major Romey may have been led to believe that he
would be entitled to pay for his duty, if funds later became available,
it is well settled that in the absence of specific authority, the United
States is not liable for the erroneous advice given by its officers,
agents or employees even though given in the performance of their
official duties. See Petty Officer John R. Blaylock, 60 Comp. Gen.
257, 260 (1981), and cases cited therein; and Schweiber v. Hansen, 450
U.S. 785 (1981). Accordingly, our Claims Group's disallowance of Major
Romey's claim is sustained.
It has also come to our attention, in reviewing the file in this
manner, that Major Romey apparently participated in inactive duty
training assemblies during five 2-day periods during the period in
question. During 60 days of this period his orders indicated that he
was in an inactive duty for training without pay status. During the
remainder, he was in an active duty without pay status. It appears that
he was paid inactive duty training pay for the drill periods, but it is
not clear whether he also received retirement points for that training
in addition to the points he received for the same days for his other
duty. We are bringing this matter to the attention of the Department of
the Army for their review in view of the inconsistency between his
nonpay status orders and his receipt of pay for drills, and the inherent
conflict in serving in an inactive duty status while on active duty.
Compare 50 Comp.Gen. 868, 871 (1971), concerning National Guard members
in a similar situation. COMP GEN (UP)
FILE: B-216465
DATE: May 22, 1985
MATTER OF: Lieutenant Colonel Paul N. Driggers,
USAF
DIGEST:
SUBSISTENCE - PER DIEM - MILITARY PERSONNEL - HEADQUARTERS -
PERMANENT OR TEMPORARY DUTY
A service member ordered on a permanent change of station
subsequently was issued temporary duty orders to attend a training
course at the new permanent duty station just prior to reporting for his
permanent assignment. Per diem and mileage allowances may not be paid
for the period of temporary duty since the permanent transfer was
effective when he reported for temporary duty and, thus, the member was
not in a travel status performing travel away from his designated post
of duty. While the itinerary on the temporary duty orders included a
return to his old duty station, that appears to have been an error since
his permanent change-of-station orders did not direct his return to the
old permanent station and there was no apparent purpose for him to
return there on public business.
A service member ordered to a permanent change of station
subsequently was ordered to perform temporary duty at a new permanent
duty station and return to his old permanent duty station upon
completion of the temporary duty. We are asked whether temporary duty
allowances may be paid for the period of temporary duty. /1/ Payment
may not be made since the member was not in a travel status performing
travel away from his designated post of duty because he had been
detached from his old permanent duty station and upon arrival at the new
duty station was performing temporary duty at his permanent station for
which such allowances are not authorized.
Lieutentant Colonel Paul N. Driggers was issued orders dated May 4,
1984, directing a permanent change of station (with a permanent change
of assignment) from Goodfellow Air Force Base, Texas, to Squadron
Officer School, Maxwell Air Force Base, Alabama. The orders stated that
the transfer was effective June 1984, that he was authorized delay en
route chargeable as leave, and that he was directed to report for his
new assignment not later than July 31, 1984. Thereafter, he was issued
temporary duty orders dated May 16, 1984, to proceed on or about June 3,
1984, for attendance at the Academic Instructor Course at Maxwell Air
Force Base during the period June 4 through July 6, 1984. On May 18,
1984, he received advance payment of dependents' travel allowance and
dislocation allowance based on his permanent change-of-station orders.
In receiving these allowances he certified that his dependents would
move from Texas to Maxwell Air Force Base with travel beginning May 29,
1984, and estimated to be completed on July 31, 1984.
He departed Goodfellow Air Force Base on May 27, 1985, by private
automobile, presumably with his family. After spending a few days on
leave at Fort Walton Beach, Florida, he arrived at Maxwell Air Force
Base on June 3. Upon completion of the training course at Maxwell Air
Force Base, he was on leave from July 7, 1984, until he returned to
Goodfellow Air Force Base on July 9, 1984. Thereafter, he was on leave
during the period July 11 through July 23, 1984, prior to reporting at
Maxwell Air Force Base for his permanent assignment.
The submission indicates that payments have been made for per diem
and mileage allowances while on temporary duty. The Finance and
Accounting Officer believes that since the temporary duty was performed
at the new permanent duty station, the temporary duty order was issued
erroneously and that actions should be taken to recoup the payments.
/2/ In support of his position he cites our decisions B-161267, August
30, 1967, and B-167060, July 18, 1969, in which it was determined that a
member who, after detachment from his old permanent duty station
performs temporary duty at his new permanent station which is then his
designated post of duty may not be viewed as being away from his
designated post of duty in order to receive per diem during the period
of such temporary duty.
Members of the uniformed services are entitled to travel and
transportation allowances for travel performed when away from their
designated post of duty. 37 U.S.C. Section 404. Members shall be
entitled to travel and transportation allowances only while actually in
a "travel status" and they shall be deemed to be in a "travel status"
while performing travel away from their permanent duty station, upon
public business, pursuant to competent travel orders. Paragraph
M3050-1, Volume 1, Joint Travel Regulations (1 JTR). Consequently,
authority exists for the payment of those allowances incident to
temporary duty when such temporary duty is performed at a point removed
from the member's designated post of duty or permanent station.
The term "temporary duty" is defined as duty at one or more
locations, other than the permanent station, at which a member performs
temporary duty under orders which provide for further assignment, or
pending further assignment, to a new permanent station or for return to
the old permanent station upon completion of the temporary duty.
Appendix J, 1 JTR. No per diem allowance is payable for temporary duty
performed within the limits of the permanent station. 1 JTR para.
M4201-5.
It consistently has been held that when a member is directed to
report for permanent duty at a station following completion of temporary
duty which he is performing at the same place, the station to which he
was ordered becomes his designated post of duty and, in effect, his
permanent station upon receipt of such orders. Therefore, no right to
per diem accrues during the period he performed "temporary duty" from
the time of receipt of the orders, because he was no longer traveling
away from his designated post of duty within the meaning of section
404(a) of title 37, United States Code. Lieutenant Dale C. Peak,
B-180013, October 2, 1974, Captain Jim D. Zinke, B-202319, May 4, 1981,
38 Comp. Gen 697 (1959), and 34 Comp. Gen 427 (1955).
Reading the two orders issued to Colonel Driggers together and
considering the actual facts of the matter, what we have here is the
transfer of Colonel Driggers to Maxwell Air Force Base effective in June
with a training course to be completed there and leave authorized to be
taken prior to his assuming his permanent duties not later than July 31.
Colonel Driggers performed duty at Goodfellow Air Force Base through
May 26, 1984, when he departed from that location. He was on leave from
May 28, 1984 until June 3, 1984, when he reported at Maxwell Air Force
Base for his temporary duty assignment. Since the orders of May 4,
1984, directing a permanent change of station had a transfer effective
date of June 1984, Maxwell Air Force Base was his designated post of
duty, and in effect his permanent station from the time he arrived
there. The permanent change-of-station orders did not direct a return
to Goodfellow Air Force Base for further duty after arrival at the new
permanent duty station. Although the temporary duty orders showed an
itinerary of travel from Goodfellow to Maxwell and return to Goodfellow,
the return portion appears to have been included in error since Colonel
Driggers' transfer under the permanent change-of-station orders was
effective in June 1984, the time when the temporary duty would begin,
and there was no apparent reason for him to return to Goodfellow. Also,
Colonel Driggers had knowledge of his permanent change of station and
permanent change of assignment to Maxwell Air Force Base prior to his
departure for the temporary duty. Master Sergeant Thomas W. Dunning,
B-185851, April 28, 1976, and B-176653, December 13, 1972. Thus, no
right to per diem would accrue to him during the period he performed
duty at Maxwell Air Force Base because he was not traveling away from
his designated post of duty within the meaning of 37 U.S.C. Section 404
and hence was not in a travel status during such duty.
Since Colonel Driggers is regarded as present at his designated post
of duty and permanent duty station during the period June 4, 1984,
through July 6, 1984, he was not entitled to temporary duty allowances,
including per diem, at that location. Also, since there is no apparent
reason for his return to Goodfellow on public business (that is, there
is no indication that he was directed to return for further duty), he
does not appear entitled to travel allowances for return travel to his
old permanent station. The voucher submitted with this request for
decision is being returned for further processing in accordance with
this decision.
Comptroller General
of the United States
(1) Captain John M. Powell, Accounting and Finance Officer,
Headquarters, 3480th Technical Training Wing (ATC), Goodfellow Air Force
Base, Texas, submitted this request for a decision and, it has been
assigned Control Number 85-1 by the Per Diem, Travel and Transportation
Allowance Committee.
(2) The Finance Officer also questions the propriety of paying for
the training course from funds allocated to Goodfellow rather than funds
allocated to Maxwell when the training was related to the officer's new
assignment at Maxwell, not his old assignment at Goodfellow. While the
reason for that is not apparent to us either, that is primarily an
internal matter for review within the Air Force.
FILE: B-216464 85-1 CPD 147
DATE: February 6, 1985
MATTER OF: U.S. Polycon Corp./Sigma Piping Co., Inc.
DIGEST:
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - RESTRICTIVE - UNDUE
RESTRICTION
Solicitation which specifies metallic pipe for an underground steam
distribution system, thereby excluding offer of nonmetallic systems, is
unduly restrictive, where the contracting agency contends only that it
does not require a nonmetallic system, but neither alleges nor shows
that a nonmetallic system is not satisfactory for the intended purpose
or that a metallic system otherwise is necessary.
U.S. Polycon Corp./Sigma Piping Co., Inc. (Polycon/Sigma), a joint
venture, protests award of a contract under invitation for bids (IFB)
No. 125-3K15-84, issued by the Department of Agriculture (Agriculture)
to upgrade the steam distribution system in Area 3 at the Beltsville
Agricultural Research Center, Beltsville, Maryland. Polycon/Sigma
alleges that the specifications are unduly restrictive.
We sustain the protest.
Polycon/Sigma alleges that the specifications require metallic pipe,
thereby excluding the nonmetallic federal-agency-approved "Class A"
piping manufactured and offered by Polycon/Sigma. Agriculture states
that the "Class A" system pertains to piping suitable for nuclear
facilities and asserts that, since it has no such facilities, it does
not require such piping.
We recently sustained a bid protest by U.S. Polycon Corp. on the same
issue, in connection with Agriculture's solicitation of bids (IFB No.
147-3-K15-85) to install steam lines to a building at the Research
Center. U.S. Polycon Corp., B-216185, Dec. 27, 1984, 84-2 C.P.D.
Paragraph (blank). As we stated in that decision, where a solicitation
requirement is challenged as unduly restrictive of competition, it is
incumbent upon the agency to establish prima facie support for the
restriction. PhilCon Corp. -- Reconsideration, B-206641.2, et al., Dec.
30, 1983, 84-1 C.P.D. Paragraph 42. Agriculture contended there as it
contends here: that since the Research Center does not have nuclear
facilities, it does not require the nonmetallic system. We pointed out,
however, that the protester's challenge to the specifications is not
that the specifications should require the protester's system, but that
the specifications improperly exclude such a system from consideration.
We sustained the protest because Agriculture had not suggested that a
nonmetallic steam distribution system would not be satisfactory for the
Research Center's purpose and, indeed, we had no reason to believe that
a system suitable for nuclear facilities is unsuitable for presumably
less demanding applications.
Here, again, Agriculture does not argue that a nonmetallic system is
unacceptable or that there are any other considerations that mandate the
use of metallic conduit. We therefore must conclude that the IFB unduly
restricted competition. See also PittCon Preinsulated Pipes Corp.,
B-209157, June 28, 1983, 83-2 C.P.D. Paragraph 30.
Agriculture awarded the contract to another firm while the protest
was pending. By letter of today to the Secretary of Agriculture, we are
recommending that the agency determine whether a nonmetallic system in
fact would meet its needs. We are further recommending that if such a
system is found acceptable and if feasible at this time, the contract be
terminated for convenience and the requirement resolicited with
appropriately revised specifications.
This decision contains a recommendation for corrective action to be
taken. Therefore, we are furnishing copies to the Senate Committees on
Governmental Affairs and Appropriations and the House Committees on
Government Operations and Appropriations in accordance with section 236
of the Legislative Reorganization Act of 1970, 31 U.S.C. Section 720
(1982), which requires the submission of written statements by the
agecny to the committees concerning the action taken with respect to our
recommendation.
The protest is sustained.
Comptroller General
of the United States
FILE: B-216462 85-1 CPD 341
DATE: March 25, 1985
MATTER OF: ITC-Distribution & Control Division
DIGEST:
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - RESTRICTIVE - UNDUE
RESTRICTION
1. Subcontractor protest, of unduly restrictive specification
contained in IFB for prime contract, is sustained, where agency admits
that restriction protested was not "absolutely necessary."
CONTRACTS - PROTESTS - SUSTAINED - CORRECTIVE ACTION
2. Where IFB for prime contract contains unduly restrictive
specification affecting competition at the subcontractor level, and
protest against restriction is sustained after award, GAO recommends
that agency consider modifying contract to allow subcontractor to
compete.
ITC-Distribution & Control Division (ITC) protested prior to bid
opening a solicitation requirement that "(s)witchgear and (circuit)
breakers shall be manufactured by one manufacturer." The solicitation,
invitation for bids (IFB) No. N62477-82-B-0359, was issued by the Naval
Facilities Engineering Command (Navy) for repair of the Washington Navy
yard electrical distribution system. Award was made under the IFB while
the protest was pending.
ITC, a small business and a potential supplier of switchgear,
contends that the one manufacturer requirement is unjustified and only
serves to eliminate small business switchgear suppliers from competing
because none of them can also manufacture the circuit breaker components
used in the switchgear.
ITC states that it is not seeking termination of the prime contract,
but rather it only asks that the requirement in question be deleted from
the specifications if the prime contractor awardee has not already
purchased the switchgear in reliance on the requirement.
We sustain the protest.
Potential subcontractors on a procurement have sufficient interest to
challenge specifications as being unduly restrictive. Incorporated Door
Systems Co., B-208407, Aug. 19, 1982, 82-2 C.P.D. Paragraph 159.
In its response to the protest, Navy acknowledges that it "cannot
claim that it was absolutely necessary to restrict the source of
switchgear as specified." Nevertheless, Navy takes the position that a
remedy is not appropriate at this time. It argues that the restriction,
although not absolutely necessary, does serve to ensure the delivery of
a safe product. Also, Navy argues that the fact that an award was made
notwithstanding the protest was in large measure attributable "to the
protester's obscure -- at best -- statement of the grounds for its
protest."
We do not agree with Navy that ITC's protest was obscure, nor do we
think that it remained obscure until after award. ITC's initial letter
of protest, dated September 19, 1984, a copy of which was furnished to
the Navy, reads in part:
"By requiring the switchgear and breaker to be manufactured by
one company the specifications have eliminated all independent
small business switchgear manufacturers.
"We are, therefore, protesting the elimination of small
business competition at the supplier level . . . "
We are therefore of the view that Navy made award with knowledge of
the basis of ITC's protest. Moreover, while Navy stated that the one
manufacturer requirement serves to ensure safety, it also acknowledged
that the requirement is not absolutely necessary. We thus must conclude
that safety can be ensured without requiring that the switchgear and
breaker components be manufactured by one manufacturer.
Therefore the Navy should have amended the specification to remove
the unnecessary restriction on competition. See generally Powercon
Corporation, 56 Comp. Gen. 912 at 922 (1977), 77-2 C.P.D. Paragraph 125
at 15 and cases cited therein.
As the protester appears to recognize, it is not practical to
terminate the prime contract at this point. We therefore recommend
that, if the prime contractor has not already purchased the required
switchgear, consideration be given to modifying the prime contract, as
urged by the protester.
Comptroller General
of the United States
FILE: B-216453 84-2 CPD 664
DATE: December 13, 1984
MATTER OF: Integrity Management International, Inc.
BIDS - OPENING - PUBLIC - INFORMATION DISCLOSURE
Public opening of bids under advertised solicitation does not result
in an auction under a prior negotiated solicitation for a cost-plus-fee
contract which used part of the same performance period for cost
comparison purposes, since only some of the services included in the
initial solicitation are in the second and the fixed-price bids are of
limited use in preparing cost proposals under the initial negotiated
solicitation.
Integrity Management International, Inc., protests the issuance of
invitation for bids (IFB) No. DABT35-84-B-0169 by the Department of the
Army for the operation of dining facilities at Fort Dix, New Jersey.
Integrity contends that the public opening of bids in response to the
IFB will create an auction in the Army's negotiation with offerors under
another solicitation which encompasses some of the same services.
The protest is denied.
On March 30, 1984, the Army issued a request for proposals (RFP) for
the management, staffing and operation of dining facilities at Fort Dix
for a base period October 1, 1984, through September 30, 1985, with four
1-year options. The RFP included services which were previously
provided by Army personnel as well as services provided under two
contracts with Integrity. Integrity's contracts were then scheduled to
expire on September 30, 1984, and have since been extended. The RFP is
a part of a cost comparison process to determine whether the services
should all be performed in-house or obtained by contract. The
evaluation process has been delayed, and the agency does not believe
that it will be able to complete the process and begin either in-house
or contractor performance until April 1985. In order to continue the
dining services provided by Integrity after its contracts were
completed, the agency issued the protested IFB on August 27.
In view of the possibility that a contract might be awarded under the
cost comparison RFP for performance to begin in April 1985, the Army
amended the IFB to provide that the Army can terminate any resulting
contract without cost any time after March 31, 1985. The cost
comparison RFP was modified to make clear that the stated performance
period of October 1, 1984, through September 30, 1985, is to be used for
establishing a base for the cost comparison. Any contract awarded as a
result of the RFP will commence on the "approved date of contract
commencement."
The regulations prohibit the government from engaging in "auction
techniques" during negotiations, including informing an offeror that its
price is not low in relation to another offeror. Defense Acquisition
Regulation, Section 3-805.3(c), reprinted in 32 C.F.R. pts. 1-39
(1983). because some of the same services priced for the same time
period are included in both solicitations, Integrity contends that bid
prices under the IFB are clearly related to offerors' prices under the
cost comparison RFP. Thus, Integrity argues that public exposure of
bids submitted in response to the IFB will result in an auction under
the RFP.
Only a small portion of the services covered by the RFP are included
in the IFB. The IFB scope of work calls for operation of three
facilities and for providing attendant services in five facilities. The
RFP contains two alternate schedules. The scope of work for Schedule I
includes operation of seven facilities, providing cooks in six
facilities and providing attendant services in two facilities. The
scope of work for Schedule II includes operation of 13 facilities and
providing attendant services in two facilities. The dining facilities
vary widely in estimated number of meals served, hours of operation and
size. Also, there are significant differences in the nature of prices
to be provided under each solicitation. A firm-fixed-price contract
will result from the IFB. Bidders submit fixed monthly prices for
services in each facility. The cost comparison RFP is for a
cost-plus-award-fee contract. Under it, offerors submit a cost proposal
and detailed supporting data, including documentation of the basis for
each cost element.
Because of the differences in the scope of work and the pricing
information supplied under the two solicitations, bids submitted in
response to the advertised solicitation will be of little use to those
submitting proposals under the RFP. Also, because of these differences,
bids submitted under the advertised solicitation will not inform
offerors how their pricing proposals stand in relation to proposals of
other offerors. Consequently, we do not believe that a public
disclosure of bids submitted under the IFB would lead to an auction
under the RFP.
Integrity asserts that the Army is not dealing with offerors in good
faith by requiring time consuming and expensive responses to two
solicitations for the same work. It also argues that an award under the
IFB will make the time period for performance in the statement of work
contained in the cost comparison RFP inaccurate. As discussed above,
the services, included in the two solicitations differ substantially,
and the periods for performance will not overlap. We have no reason to
question the Army's good faith in seeking competition for needed
services pending completion of the cost comparison process, and find the
protester's contentions in this regard without merit.
The protest is denied.
Comptroller General of the United states
B-216452, Oct 9, 1984, 84-2 CPD 394
BIDDERS - Qualifications - Manufacturer or dealer - Administrative
determination - Labor Department review
DIGEST:
1. GAO does not consider complaint that a firm is not a manufacturer
under the Walsh-Healey Public Contracts Act. By law, such matters are
for determination by the contracting agency in the first instance,
subject to final review by the Small Business Administration (if a small
business is involved) and the Secretary of Labor.
CONTRACTORS - Responsibility - Determination - Review by GAO -
Affirmative finding accepted
2. Allegation that firm does not have adequate facilities to perform
contract concerns affirmative responsibility determination which will
not be reviewed absent circumstances not present here.
Semco Inc.:
Semco Inc. (Semco) protests award of a contract to Ridge, Inc.
(Ridge), under invitation for bids (IFB) DAAH01-84-B-A111 issued by the
United States Army Missile Command, Redstone Arsenal, Alabama. Semco
contends that Ridge is not a manufacturer under the guidelines of the
Walsh-Healey Act and that Ridge lacks the required manufacturing
capability.
We dismiss the protest.
We do not consider complaints that a firm is not a manufacturer under
the Walsh-Healey Public Contracts Act, 41 U.S.C. Secs. 35-45 (1982). By
law, such matters are for determination by the contracting agency in the
first instance, subject to final review by the Small Business
Administration (if a small business is involved) and the Secretary of
Labor. Alabama Metal Products, Inc., B-215176, May 23, 1984, 84-1
C.P.D. para. 569.
Semco's allegation concerning Ridge's lack of manufacturing
capability relates to Ridge's responsibility as a contractor. Prior to
making an award, a contracting agency is required to affirmatively
determine that the prospective awardee has the capability to manufacture
the required goods. We do not review affirmative determinations of
responsibility unless the solicitation contains definitive
responsibility criteria which allegedly have not been applied or the
protester makes a showing of fraud on the part of contract officials.
Courier-Citizen Company, B-192899, May 9, l979, 79-1 C.P.D. para. 323;
Illitron, B-192309, Aug. 7, 1978, 78-2 C.P.D. para. 100.
Neither exception is alleged here. COMP GEN (UP)
FILE: B-216450 85-1 CPD 5
DATE: December 31, 1984
MATTER OF: Aeromech Industries
CONTRACTS - LABOR SURPLUS AREAS - EVALUATION PREFERENCE - ELIGIBILITY
OF BIDDER - PLACE OF SUBSTANTIAL PERFORMANCE - IDENTIFICATION
Where IFB provides that small business firms that are also labor
surplus area (LSA) concerns will be considered for award before other
small business concerns and requests that bidders submit information
concerning their LSA status, a bid, at bid opening, must establish a
bidder's commitment to perform the contract substantially in an LSA.
Information submitted after bid opening may not be considered since it
would constitute an improper late modification of the bid.
Aeromech Industries protests the award of a contract to Penn Metal
Fabricators, Inc., under the set-aside portion of invitation for bids
(IFB) No. DAAJ10-84-B-A149 issued by the Department of the Army for
various air delivery components. The IFB provided that small business
firms which are located in a labor surplus area (LSA) will be given
prioity over other small business concerns. Aeromech, which did not
indicate in its bid that it was an LSa concern, argues that the Army
should have considered information concerning Aeromech's eligibility
which was furnished after bid opening.
We deny the protest.
The IFB contained section 52.219-7 of the Federal Acquisition
Regulation (FAR), 4, Fed. Reg. 42525 (1983) (to be codified at 48 C.F.
R. Section 52.219-7), entitled "Notice of Partial Small Business
Set-Aside." That provision indicated, that in selecting the awardee for
the set-aside portion of the contract, negotiations will first be
conducted with small business concerns that are also LSA concerns.
Other small businesses would be considered only if negotiations with
small businesses that are also LSA concerns were unsuccessful or
otherwise did not result in an award for the entire set-aside portion.
In addition, the IFB contained a clause (I.2) entitled "PREFERENCE
FOR LABOR SURPLUS AREA CONCERNS," which required that each bidder
desiring to be considered as an LSA concern indicate the LSA where a
substantial portion (more than 50 percent) of the contract costs would
be incurred. This provision indicated that an offeror's status as an
LSA concern could affect entitlement to award in case of tie offers or
offer evaluation in accordance with the Buy American Act clause in the
solicitation. Part (b) of I.2 clearly stated that "failure to identify
the location . . . will preclude consideration of the offeror as an LSA
concern."
Aeromech contends that clause I.2 is limited to the specific
circumstances set forth in the provision and does not apply to the
present case. Aeromech argues that the Army is therefore not precluded
from considering the information which was submitted after bid opening
and which demonstrated that Aeromech qualified as an LSA concern.
The commitment to incur more than 50 percent of the contract costs in
an LSA, Which establishes a firm's eligibility as an LSA concern,
affects the relative standing of the bidders and their eligibility for
award. We therefore have held that this commitment is a material term
which must be included with the bid at bid opening and which cannot be
waived as a minot informality. Alchemy, Inc., B-208948, Mar. 22, 1983,
83-1 C.P.D. Paragraph 284; Reynolds Metals Company, B-209042, Oct. 12,
1982, 82-2 C.P.D. Paragraph 328; B-171298, Feb. 8, 1971. To allow a
firm to supplement its bid with additional information concerning its
status after bid opening would be to permit an improper late
modification of its bid. Reynolds Metal Company, B-209042, supra. The
only exception to this rule is when the IFB does not contain a provision
which elicits sufficient information to determine whether a bidder
qualifies for an LSA preference. See, e.g., Allis-Chalmers Corporation,
B-195311, Dec. 7, 1979, 79-2 C.P.D. Paragraph 397.
Here, we find that to have been eligible for consideration as an LSA
concern, Aeromech's bid, at bid opening, would have had to contain
Aeromech's express agreement to perform as an LSA concern. Despite the
apparent restrictive circumstances in which clause I.2 literally
applied, that provision clearly solicited information concerning each
bidder's eligibility as an LSA concern and advised bidders that failure
to furnish such information would preclude consideration of the firm as
an LSA concern. Because the IFB clearly stated that negotiations would
be conducted first with those small business concerns that were also LSA
concerns and because the IFB requested bidders to submit information
concerning their LSA status with their bids, information submitted after
bid opening cannot be considered in determining whether the bidder
qualified as an LSA concern.
Accordingly, the Army correctly refused to consider Aeromech as an
LSA Concern. The protest is denied.
Comptroller General of the United States
FILE: B-216449 85-1 CPD 306
DATE: March 13, 1985
MATTER OF: The Trane Company
DIGEST:
BIDS - INVITATION FOR BIDS - SPECIFICATIONS - MINIMUM NEEDS
REQUIREMENT - ADMINISTRATION DETERMINATION
Agency's specification for a building chiller does not unduly
restrict competition where agency presents explanation why the
restriction is necessary to meet its mimimum needs and protester, while
disagreeing with agency's technical analysis, does show that the
agency's position is clearly unreasonable.
The Trane Company protests that the specifications in invitation for
bids (IFB) No. F41800-84-B-9490, issued by the San Antonio Contracting
Center, San Antonio, Texas, unduly restrict competition. The IFB called
for two 750-ton open drive centrifugal chillers with solid state
starters, to replace two hermetic drive centrifugal chillers located in
building 2841 at Fort Sam Houston, Texas. The protester, which
manufactures hermetic drive chillers with electro-mechanical starters,
contends that the restrictions limiting competition to open drive
chillers with solid state starters were not justified by the agency's
minimum needs. We deny the protest.
The contracting agency cites several technical advantages which it
attributes to the open drive chiller design, including its superior
energy efficiency. The agency's principal reason for limiting the
procurement to open drive chillers, however, is the greater reliability,
in the agency's opinion, of the open drive design when compared to the
hermetic drive design. Use of an open configuration for the chiller's
operating parts in the open drive design -- instead of enclosing the
parts, as in the hermetic drive design -- appears to be the critical
feature which, in the agency's view, makes the open drive chiller more
reliable. In addition, according to the agency, maintenance and repair
to open drive chillers can be performed in-house; in contrast, repairs
to hermetic drive chillers are more difficult and require greater
technical expertise, effectively requiring the agency to use outside
contractors, at greater cost. Reliance on outside repair services also
increases the time during which a malfunctioning chiller is out of
service. As a result, the agency views the open drive chillers as more
reliable and less costly to maintain than the hermetic drive chillers.
The reliability of the chiller is particularly important to the
agency because the building where the chiller is to be located has few
windows and little natural ventilation. The building houses scientific
research laboratories and classrooms. According to the agency, if a
constant temperature is not maintained, the research experiments are
jeopardized, and, particularly in the summer months, there is
insufficient ventilation for the building to be used as classroom space.
Therefore, the agency concludes, it is necessary to have both a
reliable chiller and one which, if it malfunctions, can be repaired
quickly and economically in order to minimize the adverse impact on use
of the building.
The agency based its conclusion regarding the superior reliability of
the open drive chiller on industry literature, the professional judgment
of the agency's engineers, and discussions with mechanical contractors
and consultants. In addition, the agency points to the poor performance
of the hermetic drive chillers currently in use in the building where
the new chillers will be installed; specifically, the hermetic drive
chillers have had a high and costly rate of repair due primarily to
motor burnout, a problem which the agency reports is associated with the
closed configuration used in the hermetic drive design.
The protester disagrees with the agency's conclusions regarding the
comparative merits of the open drive and hermetic drive chillers. Trane
contends that industry experience does not support the agency's
conclusion that open drives are easier to repair, and states that
hermetic drives are currently used for many critical heavy-use
facilities, like nuclear power plants. Trane also questions the
significance of the past performance of the two hermetic drive chillers
now in operation at Fort Sam Houston, on the basis that their poor
performance can be due to factors other than the design of the chiller.
A protester contending that a solicitation requirement is unduly
restrictive has a heavy burden of proof. The contracting agency has
broad discretion in determining its minimum needs and and the best
methods of accomodating those needs. Potomac Industrial Trucks, Inc.,
B-204648, Jan. 27, 1982, 82-1 CPD Paragraph 61. Where, as here, a
protester challenges a specification as unduly restrictive of
competition, the initial burden is on the procuring agency to establish
prima facie support for its position that the restricition imposed was
necessary to meet its minimum needs. Gerber Scientific Instrument Co.,
B-197265, Apr. 8, 1980, 80-1 CPD Paragraph 263. In our review of the
issues, we examine the reasonableness of the agency's determination of
its mimimum needs and the technical judgment forming the basis for that
determination. Philadelphia Biologics Center, B-209660, June 1, 1983,
83-1 CPD Paragraph 589. Once the agency establishes prima facie support
for its restriction, the burden shifts to the protester to show that the
restriction is clearly unreasonable. Walter Kidde, Division of Kidde,
Inc., B-204734, June 7, 1982, 82-1 CPD Paragraph 539.
We find that the agency has established a prima facie case for
restricting this procurement to open drive chillers. The agency
determined that a reliable chiller was critical to its needs at Fort Sam
Houston, and concluded that an open drive chiller would offer superior
reliability because of the technical features of the open drive design.
The agency's conclusion regarding the greater reliability of the open
drive chiller as compared with a hermetic drive chiller is supported by
industry literature, the agency engineers' professional judgment, and
the agency's experience with hermetic drives. For example, the agency
cites an article entitled "Industrial Refrigeration: Compressors" in
the July 1984 issue of Heating/Piping/ Air Conditioning, which
recommends using open drive chillers in heavy-use cooling systems due to
their greater reliability and energy efficiency. The record also
contains detailed analyses by the agency's engineers of the technical
features of the hermetic drive chiller which contribute to malfunctions
due to motor burnout.
The agency and the protester disagree regarding the significance of
the poor performance of the hermetic drive chillers currently in
operation at Fort Sam Houston. Trane contends that the chillers' poor
performance should not be attributed to the hermetic drive design
without examining other factors, like the equipment's age, and comparing
the performance record of hermetic drive chillers in use at other
locations in the same area which, Trane maintains, have been operating
satisfactorily. We disagree. According to the industry literature and
the agency's engineers, the primary problem with the hermetic drive
chillers now in use, motor burnout, is related to the closed motor
design of the hermetic drive chillers. Thus, it was reasonable for the
agency to associate the current chillers' poor performance with their
design. Moreover, while we do not believe the agency was obligated to
compare the performance of hermetic drive chillers used at other
locations, the record shows that the agency was aware of similar
performance problems with hermetic drive chillers in use at Lackland Air
Force Base, located in the San Antonio area.
The agency and the protester also disagree over the number of
manufacturers which produce chillers conforming to the specifications;
Trane maintains there is only one manufacturer, the agency, at least
two. The number of sources of an item does not determine whether a
specification for the item is unduly restrictive, however; to the
contrary, as long as the specification is reasonably related to the
agency's minimum needs, the fact that there is only one source does not
make the specification unduly restrictive. See Gerber Scientific
Instrument Company, supra.
Finally, Trane contends that many of the agency's technical
conclusions regarding the features and performance of open and hermetic
drive chillers are erroneous. While Trane discusses in some detail the
technical errors it perceives in a number of the agency's conclusions,
Trane offers no independent support for its own, contrary conclusions,
even though, as a chiller manufacturer, Trane presumably would have
access to performance statistics and industry literature favorable to
its position. Thus, we find that Trane has failed to meet its burden of
showing that the agency's decision to restrict the procurement to open
drive chillers was clearly unreasonable.
In view of our conclusion that the requirement for open drive
chillers was not unduly restrictive, we need not address the protester's
other contention that the requirement for a solid state starter also was
unduly restrictive, since the requirement for an open drive design
precludes the protester from offering a conforming chiller. See Tooling
Technology, Inc., B-215079, Aug. 6, 1984, 84-2 CPD Paragraph 155.
The protest is denied.
Harry R. Van Cleve
General Counsel
B-216448, Nov 26, 1984, 84-2 CPD 555
CONTRACTS - Protests - Interested party requirement - Direct interest
criterion
DIGEST:
Council members of Kickapoo Indian Tribe are not "interested parties"
under GAO's Bid Protest Procedures since Kickapoo Tribe did not submit a
bid on the questioned procurement and private parties, who do not
represent an entity which participated in the procurement, lack the
requisite direct economic interest in the contract awards in question.
Emery Negonsott and Tom Cadue:
Mr. Emery Negonsott and Tom Cadue protest the award of contracts Nos.
B00C14200461 and B00C14200462 to Mr. Wayne Postoak, Postoak Construction
Company, by the Bureaus of Indian Affairs, United States Department of
the Interior, for the construction of two bridges on the Kickapoo Indian
Reservation. Mr. Negonsott and Mr. Cadue, Tribal Council Members of the
Kickapoo Tribe, contend that the award was improper since Mr. Postoak
was employed by the Bureau of Indian Affairs and may have had access to
bid construction data.
Our Bid Protest Procedures require that a party be "interested" for
its protest to be considered. 4 C.F.R. Sec. 21.1(a) (1984). In
determining whether a protester satisfies the interested party
criterion, we examine the degree to which the asserted interest in both
established and direct. In making this evaluation, we consider that
nature of the issues raised and the direct or indirect benefit or relief
sought by the protester. Professional Helicopter Pilots Association,
B-208031.2, Oct. 22, 1982, 82-2 C.P.D. Para. 363.
As a general rule, the interests involved in whether the award of a
contract is proper are adequately protected by limiting the class of
parties eligible to protest to disappointed bidders or offerors. Die
Mesh Corporation, 58 Comp.Gen. 111 (1978), 78-2 C.P.D. Para. 374. We
have held that private parties , who do not represent an entity which
participated in the questioned procurement, are not "interested parties"
under our Bid Protest Procedures since they are not sufficiently
affected by the procurement. Turbine Engine Services, B-210411.2, Apr.
3, 1984, 84-1 C.P.D. Para. 376.
Here, we understand that the Kickapoo Tribe did not submit a bid on
the procurements which are being protested. In any event, there is no
evidence that the individuals who filed the protest are authorized to
protest on behalf of the Kickapoo Tribe. Under these circumstances, we
find that protesters have not shown the requisite direct interest in the
contract awards in question and, therefore, do not qualify as interested
parties within the meaning of our Bid Protest Procedures.
We dismiss the protest. See 4 C.F.R. Sec. 21.3(g) (1984). COMP GEN
(UP)
B-216447, SEP 27, 1984, 84-2 CPD 364
BIDS - UNBALANCED - PROPRIETY OF UNBALANCE
DIGEST:
1. AN OFFER IS NOT MATERIALLY UNBALANCED MERELY BECAUSE SOLICITATION
ESTIMATES ARE NOT PRECISE; THE ESTIMATES MUST BE INACCURATE, SUCH AS TO
CAST DOUBT ON THE GOVERNMENT'S GETTING THE LOWEST PRICE BY ACCEPTANCE OF
THE UNBALANCED OFFER, FOR THE OFFER TO BE REGARDED AS MATERIALLY
UNBALANCED.
BIDS - PRICES - BELOW COST - NOT BASIS FOR PRECLUDING AWARD
2. A BELOW-COST OFFER, OR "BUY-IN," IS NOT LEGALLY OBJECTIONABLE.
GYRO SYSTEMS CO.:
GYRO SYSTEMS CO. PROTESTS AWARD OF A CONTRACT TO ANOTHER COMPANY
UNDER REQUEST FOR PROPOSALS NO. N00189-84-R-0075 ISSUED BY THE NAVAL
SUPPLY CENTER, NORFOLK, VIRGINIA. GYRO ALLEGES THAT THE AWARDEE'S
PRICES ARE UNREASONABLE BECAUSE THEY ARE "MATERIALLY UNBALANCED" AND
BECAUSE THE HOURLY BID RATE IS "UNREASONABLY LOW."
WE UNDERSTAND THAT THE SOLICITATION CALLED FOR DIFFERENT CATEGORIES
OF LABOR, WITH ESTIMATED HOURS FOR EACH CATEGORY INDICATED. THE
PROTESTER ADVISES THAT IT BID DIFFERENT RATES FOR THE VARIOUS LABOR
CATEGORIES, BUT THAT THE AWARDEE BID ONE RATE FOR ALL CATEGORIES. THE
ALLEGED MATERIAL UNBALANCING COMES FROM THE USE OF THAT SINGLE RATE,
SINCE, AS THE PROTESTER PUTS IT, THE "HOURLY RATE FOR A GYROCOMPASS
MECHANIC SUPERVISOR ON OVERTIME IS THE SAME AS FOR AN APPRENTICE
ELECTRICIAN. ..." AWARD, THE PROTESTER ADVISES, WAS MADE ON THE BASIS
OF PRICE.
A NUMERICALLY UNBALANCED OFFER MAY BE ACCEPTED; IT IS ONLY A
MATERIALLY UNBALANCED OFFER THAT MUST BE REJECTED. A NUMERICALLY
UNBALANCED OFFER WILL BE MATERIALLY UNBALANCED IF THE SOLICITATION
ESTIMATES ARE UNRELIABLE SUCH THAT THERE IS DOUBT THAT ITS ACCEPTANCE
WOULD RESULT IN THE LOWEST COST TO THE GOVERNMENT. EDWARD B. FRIEL,
INC., 55 CMP.GEN. 231 (1975), 75-2 CPD PARA. 164. HERE, THE PROTESTER
STATES ONLY THAT "THE EXACT TYPE OF HOURS ... FOR EACH WORK
CLASSIFICATION" IS NOT KNOWN. THAT, OF COURSE, IS ALWAYS THE SITUATION
WHEN ESTIMATES ARE USED, WHICH IS WHY THE ESTIMATES ARE USED IN THE
FIRST PLACE. SINCE THE PROTESTER ALLEGES ONLY THAT THE ESTIMATES ARE NOT
PRECISE RATHER THAN THAT THEY ARE NOT ACCURATE, THERE WOULD BE NO BASIS
FOR US TO CONCLUDE THAT THE AWARDEE'S OFFER WAS MATERIALLY UNBALANCED.
THE PROTESTER ALSO ASSERTS THAT THE AWARDEE'S SINGLE RATE IS
UNREASONABLY LOW BECAUSE IT CANNOT PROVIDE FOR VARIOUS DIRECT AND
INDIRECT COSTS, AS WELL AS PROFIT, ASSOCIATED WITH PERFORMANCE. THE
PROTESTER STATES THAT THE AWARDEE WAS BUYING-IN BY SUBMITTING A
BELOW-COST OFFER. THERE IS NO LEGAL BASIS TO OBJECT TO AN AWARD ON THE
BASIS OF A BELOW-COST OFFER. TECHNICAL FOOD SERVICES, INC., B-210024,
DEC. 21, 1982, 82-2 CPD PARA. 563. WHETHER THE OFFEROR WILL BE ABLE TO
MEET CONTRACT REQUIREMENTS IN LIGHT OF ITS OFFERED PRICE IS A MATTER OF
RESPONSIBILITY. BEFORE AWARD, AN AGENCY MUST MAKE AN AFFIRMATIVE
DETERMINATION THAT THE OFFEROR IS RESPONSIBLE. BECAUSE THAT IS A VERY
SUBJECTIVE DETERMINATION BASED ON BUSINESS JUDGMENT, WE WILL NOT REVIEW
A CHALLENGE TO SUCH AN AFFIRMATIVE DETERMINATION UNLESS THERE IS A
SHOWING OF POSSIBLE FRAUD OR BAD FAITH ON THE PART OF CONTRACTING
OFFICIALS OR AN ALLEGATION THAT A SPECIFIC RESPONSIBILITY CRITERION SET
FORTH IN THE SOLICITATION WAS NOT MET.
THE FACT THAT A "BUY-IN" MAY BE INVOLVED DOES NOT INVALIDATE THE
OFFER. CONTRACTING OFFICERS, HOWEVER, ARE REQUIRED TO "TAKE APPROPRIATE
ACTION TO ENSURE BUYING-IN LOSSES ARE NOT RECOVERED" THROUGH CHANGE
ORDERS OR OTHERWISE. SEE FEDERAL ACQUISITION REGULATION, SEC.
3.501-2(A), 48 FED. REG. 41.102, 42,112 (1983) (TO BE CODIFIED AT 48
C.F.R. SEC. 3.501-2(A); TOMBS & SONS, INC., B-206810, MAY 10, 1982,
82-1 CPD PARA. 447.
THE PROTEST IS DISMISSED.
FILE: B-216442 85-1 CPD 898
DATE: January 23, 1985
MATTER OF: Cullinet Software, Inc.
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
Protest that was not filed within 10 working days after basis of
protest was known or should have been known is dismissed.
Cullinet Software, Inc. protests a decision of Federal Prison
Industries, Inc. (Department of Justice) to reject its proposal under
solicitation P1-0001-4-SOL for software, and to fill its need by placing
an order with Management Science America, Inc. (MSA) under a General
Services Administration ADP Schedule contract. The proposal was
rejected because the agency concluded that Cullinet's software did not
conform to a requirement for software written in the COBOL language.
Cullinet acknowledges that its online capabilities and some reports are
not written in COBOL but contends that the agency's decision to place an
order with MSA (which uses COBOL) was based on an inadequate
understanding of the protester's product and on unspecified political
considerations.
We dismiss the protest because the record shows that Cullinet knew by
mid-August that the agency had rejected its proposal and knew or should
have known by mid-August that the agency intended to acquire the
software from MSA. On August 9, the agency published a notice in the
Commerce Business Daily (CBD) stating that it planned to order the
software from MSA within 30 days. It appears that Cullinet knew of the
announcement because on September 7 the agency received a letter from
Cullinet reguesting an opportunity to discuss the proposed MSA order.
In any event, publication in the CBD is constructive notice of the
procurement action publicized. See Lab Methods Corp., B-215526, July
17, 1984, 84-2 CPD Paragraph 60. Cullinet filed its protest with our
Office on September 18.
Our Bid Protest Procedures require that protests must be filed within
10 working days after the basis of protest is known or should have been
known. 4 C.F.R. Section 21.2(b) (2) (1984). Since Cullinet knew or
should have known of the agency's action by mid-August, its protest is
dismissed.
/s/ Harry R. Van Cleve
General Counsel
FILE: B-216441 85-1 CPD 526
DATE: May 10, 1985
MATTER OF: Digital Radio Corporation
DIGEST:
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
COMPETITIVE RANGE FORMULA - ADMINISTRATIVE DETERMINATION
1. An agency's determination of whether a proposal is in the
competitive range is a matter of agency discretion which will not be
disturbed absent a clear showing that the determination lacked a
reasonable basis. Moreover, a protester's mere disagreement with the
agency's judgment does not meet its burden of proving that the
evaluation of proposals and competitive range determination were
unreasonable.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - CRITERIA
- APPLICATION JOF CRITERIA
2. Review of record shows that agency technical evaluation was fair,
reasonable and consistent with major evaluation criteria set forth in
the request for proposals (RFP). Although agency gave greater emphasis
to one subfactor than provided for by the evaluation scheme in the RFP,
record indicates that the change in the relative importance of the
subfactor was not prejudicial to protester.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - DISCUSSION WITH ALL
OFFERORS REQUIREMENT - EXCEPTIONS - OFFERORS NOT WITHIN COMPETITIVE
RANGE
3. Allegation that agency should have provided offerors with greater
detail concerning the expected manner of compliance with the request for
proposals' requirements for a research development effort is denied
since there is no requirement that the agency precisely specify the
manner in which offerors are to perform and the RFP clearly set forth
the capabilities and characteristics of the product to be developed.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
ALLEGATION OF BIAS NOT SUSTAINED
4. Protest alleging that agency conducted procurement in bad faith
is denied where agency actions which form the basis of the protester's
complaint -- such as not conducting the procurement under the section
8(a) program -- are not found improper.
Digital Radio Corporation (DIRAD) protests its exclusion from the
competitive range under request for proposals (RFP) No.
N62269-84-R-0032 issued by the Department of the Navy. The RFP was for
a cost-plus-fixed fee research and development contract for the design
and development of a digital sonobuoy receiver for use in Naval aircraft
engaged in anti-submarine warfare. DIRAD contends that the Navy's
technical evaluation of DIRAD'S proposal was unreasonable and that the
Navy failed to adhere to the evaluation scheme set forth in the RFP.
DIRAD argues that the Navy's action in excluding it from the competitive
range was arbitrary and in bad faith and contends that it is entitled to
recover its proposal preparation expenses.
We deny the protest and the claim.
The RFP was issued on February 7, 1984 and specified a closing date
of March 23, 1984. Four proposals were received. The technical
proposals were evaluated by a team of seven engineers which comprised
the source selection board (SSB). The scores assigned to the technical
proposals and the proposed costs were as follows:
TABLE OMITTED
The SSB determined that the proposals submitted by DIRAD and Resdel
should be declared technically unacceptable since a complete rewriting
of their proposals was necessary to render them competitive. In
mid-July, Resdel was eliminated because of its high cost and low
technical standing. However, since DIRAD apparently met the RFP'S
minimum technical requirements and also offered the lowest price, it was
decided not to eliminate the firm from the competition at that time.
Subsequently, the SSB again reviewed the proposals and determined
that DIRAD had no reasonable chance of being selected for award. The
Navy states that from a technical standpoint, DIRAD'S proposal was
considerably weaker than the two other proposals and it did not appear
possible that DIRAD could appreciably improve its technical score. By
letter dated September 7, 1984, the Navy advised DIRAD that it was
eliminated from the competitive range. The Navy conducted discussions
with Rockwell Collins and Hazeltime and on September 12, 1984, awarded a
contract to Rockwell Collins in the amount of $450,000.
The Navy indicates that the sonobuoy received being developed under
the contract is used to receive and demodulate radio signals transmitted
by sonobuoy (buoys deployed at sea which utilize an acoustic sensor to
help detect the presence of underwater targets) and then interfaces with
the acoustic signal processor in the aircraft to help determine the
identity and location of enemy submarines. The Navy states that this
receiver will differ from existing sonobuoy receivers in two key
respects. Frist, the statement of work (SOW) requires an all digital
receiver capable of digital processing and second, a significant
increase in channel capacity. In addition, the Navy indicates that the
RFP required that very high speed integrated circuits technology (VHSIC)
be considered and although not explicitly set forth in the RFP, the Navy
states that it did not believe that the above two requirements could be
achieved without employing this technology.
The RFP provided that proposals will be evaluated on the basis of
"(1) Technical Approach, (2) Experience, (3) Management and (4) Cost,
with major emphasis being placed on the offeror's technical approach."
The specific criteria to be used in the evaluation, in decreasing order
of importance, were listed as follows:
1. Technical Approach
A. Soundness of approach
B. Compliance with requirements
C. Understanding the problem
2. Experience
A. Experience in similar/related fields
B. Personnel assigned
3. Management
A. Resources allocated
4. Cost
The Navy indicates that the actual evaluation plan employed by the
SSB did not precisely mirror the scheme set forth in the RFP. The Navy
states that the emphasis among the four major evaluation factors was in
accordance with the RFP'S evaluation plan. However, the subfactors
under Technical Approach were not in the proper sequence. The Navy
indicates that "Understanding the problem" should have been listed
first, rather than last, with the remaining subfactors each dropping
down a position. The Navy argues that this deviation was inadvertent,
was not prejudicial and was not so material as to require notification
to offerors in an RFP amendment.
In evaluating DIRAD'S technical proposal, the SSB specifically
identified eight major deficiencies. The Navy determined that the front
end design proposed by DIRAD was costly, power consuming and risky. The
Navy states that DIRAD'S response to VHSIC design and application and
its response to the RFP'S requirement for a reliability and
maintainability program was weak. Also, the Navy indicates that DIRAD'S
proposed design provides for only 20 of the 99 output channels which
were required by the RFP. Further, the Navy concluded that DIRAD'S
determination to conduct a computer simulation rather than validate
performance through the use of a partial prototype was unsatisfactory.
Additional deficiencies were also noted and the Navy states that, under
the circumstances, DIRAD had no reasonable chance of being selected for
award and was therefore properly excluded from the competitive range.
DIRAD disagrees with the Navy's technical evaluation. DIRAD contends
that its front end design was not fatally flawed and that the 99 channel
capability could be obtained by a simple adjustment which would not
require a major redesign effort. Although DIRAD acknowledges that it
did not deal with VHSIC technology in its proposal, DIRAD argues that
the RFP did not require that this technology be employed and that the
Navy should have stated in the RFP its belief that a contractor which
did not employ this technology could not satisfactorily perform. Also,
DIRAD complains that the Navy's rejection of digital computer simulation
was improper since this method is widely accepted. Again, DIRAD argues
that if the Navy expected a partial prototype to be developed, this
should have been stated in the RFP. Additionally, DIRAD argues that in
various other areas the Navy did not clearly review its proposed design
and downgraded its proposal for not complying with requirements that
were not clearly set forth in the RFP. DIRAD contends that the delay
between the Navy's initial evaluation and the final decision to exclude
DIRAD demonstrates that the proposal was acceptable and evidences the
Navy's bad faith in excluding the firm from the competitive range.
DIRAD also argues that the Navy's use of an evaluation scheme which
differed from that set forth in the RFP was prejudicial. DIRAD contends
that the emphasis in its proposal was intended to demonstrate the
"soundness of its approach" and had the relative weighting of the
technical subfactors been presented in the order which the Navy
ultimately used, DIRAD'S proposal would have had a vastly different
emphasis.
Finally, DIRAD raises several issues, which, in its view, demonstrate
that the Navy conducted this procurement in bad faith. DIRAD contends
that the Navy's denial of its request to have this procurement conducted
under the Small Business Administration's 8(a) program demonstrates that
the Navy intended to exclude DIRAD. DIRAD argues that there was
disparity in the point scores of the technical evaluators and alleges
that the discrepancies are evidence of bias. Also, DIRAD complains that
the Navy improperly delayed notifying DIRAD of its exclusion from the
competitive range and thereby procluded an effective protest by DIRAD.
Our decisions have clearly established that contracting officials
enjoy a reasonable degree of discretion in the evaluation of proposals
for acceptability, and this Office will not substitute its judgment for
that of a procuring agency by making an independent determination unless
the agency's action is shown to be arbitrary or in violation of
procurement statutes or regulations. Laser Photonics, Inc., B-214356,
Oct. 29, 1984, 84-2 CPD Paragraph 470. Thus, we will not disturb an
agency's initial determination of whether a proposal is in the
competitive range absent clear evidence that the determination lacked a
reasonable basis. Leo Kanner Associates, B-213520, Mar. 13, 1984, 84-1
CPD Paragraph 299. In this regard, a protester's mere disagreement with
the agency's judgment does not meet its burden of proving that the
evaluation of proposals and competitive range determination were
unreasonable. SETAC, Inc., 62 Comp. Gen. 577 (1983), 83-2 CPD Paragraph
121.
Generally, proposals that are to be considered within the competitive
range are those which are technically acceptable or reasonably
susceptible of being made acceptable -- that is proposals which have a
reasonable chance of being selected for award. D-K Associates, Inc.,
B-213417, Apr. 9, 1984, 84-1 CPD Paragraph 396. Even a proposal which
is technically acceptable may be excluded from the competitive range if,
relative to all proposals received, it does not stand a real chance for
award. Hittman Associates, Inc., 60 Comp. Gen. 120 (1980), 80-2 CPD
Paragraph 437.
Initially, we point out that we find DIRAD'S allegations concerning
the adequacy and clarity of the RFP requirements to be without merit.
DIRAD, in effect, is arguing that its proposal would have been different
if the Navy had more precisely defined how it expected offerors to
comply with the RFP'S requirements. In this regard, DIRAD argues, for
example, that the Navy's expectations regarding the application of VHSIC
technology and the use of a partial prototype rather than a computer
simulation should have been explicitly stated in the RFP.
Our decisions recognize, however, that where, as here, the contract
is a research and development project and the RFP'S requirements are
performance oriented, the government is inviting innovative and
independent approaches to the performance requested. Memorex Corp.
B-212660, Feb. 7, 1984, 84-1 CPD Paragraph 153. Although DIRAD may have
preferred that the Navy provide additional information and added detail
prior to submitting its proposal, there is no requirement that the Navy
precisely specify the manner in which offerors are to fulfill the
required tasks. In our view, the RFP clearly set forth the capabilities
and characteristics that the Navy sought to achieve in the digital
sonobuoy receiver which is being developed. The fact that DIRAD'S
response in some areas differed from what the Navy expected to receive
does not render the RFP'S requirements vague or ambiguous.
Concerning the Navy's evaluation of proposals, DIRAD, in our view,
has not established that the Navy's technical conclusions were
unreasonable. The Navy indicates that DIRAD'S proposal was technically
deficient in several areas and stood no real chance of being selected
for award. The Navy found that DIRAD'S proposed design was deficient
and although DIRAD argues that the design could have been improved, an
agency's technical evaluation is dependent upon the information
furnished in the proposal and the burden is upon the offeror to submit
an initial proposal that is adequately written. Marvin Engineering Co.,
B-214889, July 3, 1984, 84-2 CPD Paragraph 15. Although a basic goal of
negotiation is to point out deficiencies so that offerors in the
competitive range may revise their proposals, there is no obligation on
the Navy's part to conduct discussions with an offeror whose initial
proposal is so deficient that it is excluded from the competitive range.
Informatics, Inc., B-194926, July 2, 1980, 80-2 CPD Paragraph 8.
Here, we conclude that the Navy's technical criticisms of DIRAD'S
proposal are valid and despite DIRAD'S assertions to the contrary, these
deficiencies could not have been easily rectified. There is no question
that the proposal was downgraded for deviations and material omissions
as to what the agency required. Therefore, we agree that the Navy could
reasonably determine that DIRAD'S proposal stood no real chance of being
selected for award. Based on the record, we are unable to conclude that
the Navy's determination to exclude DIRAD from further consideration was
improper.
In addition, our review of the record shows that the Navy's technical
evaluation was consistent with the evaluation factors set forth in the
RFP. The RFP indicated that an offeror's technical approach would be
given the most weight and the Navy did follow this evaluation scheme.
While we recognize that the Navy emphasized "Understanding and the
problem" as the most important subfactor under technical approach and
that the RFP indicated it would be the least important of the three
subfactors that were listed, we do not believe DIRAD was materially
prejudiced by this error. See ORI, Inc., B-215775, Mar. 4, 1985, 85-1
CPD Paragraph 266.
The record indicates that the Navy rescored the proposals assigning
the weights-in a manner which more accurately reflects the RFP'S stated
evaluation scheme. The rescoring of the proposals shows that DIRAD'S
overall score does not appreciably increase when compared to the scores
for proposals submitted by Hazeltine and Rockwell Collins. Also, the
deficiencies noted by the Navy, such as DIRAD'S admitted failure to
consider VHSIC technology and a proposed design which would not provide
for the 99 channel capability required by the RFP, are based on the
evaluation of information DIRAD provided with its proposal. Although
DIRAD argues that it would have changed its approach, there is no
indication that its affirmative response in these areas would have
differed had DIRAD been advised of the change in the relative importance
of the subfactor. Accordingly, we do not believe that the Navy's
misapplication of the subfactors under technical approach was
prejudicial and we see no reason to disturb the Navy's determination to
exclude DIRAD from the competitive range.
The remaining issues raised by DIRAD do not substantiate DIRAD'S
claim that the Navy conducted this procurement in bad faith. Although
DIRAD alleges that the Navy's failure to conduct this procurement under
section 8(a) of the Small Business Act demonstrates that the Navy
intended to exclude DIRAD from the competition, a contracting official
is authorized to let contracts under section 8(a) "in his discretion"
and a decision not to set aside a particular procurement does not, by
itself, constitute evidence of bad faith. Ebonex, Inc., B-213023, May
2, 1984, 84-1 CPD Paragraph 495.
Furthermore, we see no evidence in the Navy's scoring of proposals
which reflects bias or bad faith on the part of the evaluation panel.
Relatively low scoring by one member of an evaluation panel does not
establish that the member was biased. Martin-Miser Associates,
B-208147, Apr. 8, 1983, 83-1 CPD Paragraph 373. In addition, we have
long recognized that it is not unusual for individual evaluators to
reach disparate conclusions when judging competing proposals since both
objective and subjective judgments are involved. See Bunker Ramo Corp.,
56 Comp. Gen. 712 (1977), 77-1 CPD 427, affirmed, B-187645, Sales, Co.,
B-205464, Sept. 27, 1982, 82-2 CPD Paragraph 277. There is no evidence
in the record which indicates that the scoring by the technical
evaluation panel reflects anything other than their reasonable judgment
as to the merits of DIRAD'S proposal.
Finally, we do not agree with DIRAD that the Navy did not promptly
notify DIRAD of its exclusion from the competitive range. The record
indicates that there was a disagreement among Navy personnel over
whether DIRAD'S proposal should be excluded at the outset. Although
DIRAD'S proposal was considered weak, the Navy continued to consider the
proposal due to its low cost. However, following audits conducted to
establish the agency's pre-negotiation cost position, it became apparent
that the price differences between the offers would decrease and it was
under these circumstances that the Navy concluded that DIRAD would have
no reasonable chance for award. We see nothing improper in the Navy's
continued consideration of DIRAD'S proposal nor do we find that the
Navy's actions in this regard in any way undermine the Navy's
determination to exclude DIRAD from further consideration. The record
shows that DIRAD was promptly notified of the Navy's determination and
we see no evidence that the Navy's actions were an attempt to preclude
DIRAD from filing a protest before the Navy awarded the contract. In
any event, we regard the failure to give notice to an offeror that its
proposal was excluded from the competitive range a procedural
irregularity which does not affect the legality of an agency's actions
unless it prejudices the offeror. CSR, Inc., B-213058, Mar. 28, 1984,
84-1 CPD Paragraph 364. Since DIRAD'S proposal was properly excluded,
no prejudice was present.
In view of our decision denying the protest, DIRAD'S claim for
proposal preparation costs is denied.
Harry R. Van Cleve
General Counsel
B-216440.2, Nov 19, 1984, 84-2 CPD 541
CONTRACTS - Protests - General Accounting Office procedures -
Reconsideration requests - Error of fact or law - Not established
DIGEST:
Request for reconsideration is denied where no new facts or legal
arguments are raised which show that prior decision was erroneous.
Northern Arizona Gas Service, Inc. - Reconsideration:
Northern Arizona Gas Service, Inc. requests reconsideration of our
decision in Northern Arizona Gas Service, Inc., B-216440, Sept. 24,
1984, 84-2 CPD Para. 348, involving the possible award of contracts to
other bidders by the Bureau of Indian Affairs under solicitation No.
N00-84-40. We affirm our decision.
In our prior decision we dismissed Northern Arizona's protest that
the other bidders should have been found nonresponsible because of their
previous performance records in connection with Buy Indian preferences.
We pointed out that determinations of responsibility reflect the
subjective business judgments of contracting officials, and for that
reason we do not consider a protest of a determination that a bidder is
responsible unless there is a showing of possible fraud or bad faith on
the part of the contracting officials, or that those officials failed to
apply definitive responsibility criteria contained in the solicitation.
In its reconsideration request, the protester reiterates its original
contention that bidders who failed in the past to comply with the Indian
preference requirements should be deemed nonresponsible, and further
claims that successful performance history in that respect constitutes a
definitive responsibility criterion that must be applied by the
contracting officer in the current procurement.
There is no legal merit to the protesters' position. Definitive
responsibility criteria are specific and objective standards established
by an agency for a particular procurement for measuring a bidder's
ability to perform the contract. These special standards limit the
class of bidders to those meeting specified qualitative and quantitative
qualifications necessary for contract performance. Watch Security,
Inc., B-209149, Oct. 20, 1982, 82-2 CPD Para. 353. A definitive
criterion must be met before the bidder can be awarded the contract.
See Hatch & Kirk, Inc., B-214024, June 11, 1984, 84-1 CPD Para. 614.
While the evaluation of a prospective contractor's past compliance
with an Indian preference requirement may well be considered by the
contracting official in reaching a determination of responsibility, a
record of successful performance does not normally equate to an
objective measure of capability or eligibility absent, as here, an
express solicitation statement to that effect. Therefore, the
allegation that a contractor did not meet its obligation under prior
contracts involves the type of challenge to an affirmative determination
of responsibility which will not be reviewed by this Office unless the
protester shows possible fraud or bad faith by procuring officials,
which is not the case here. Newgard Industries, Inc., B-216272, Sept.
24, 1984, 84-2 CPD Para. 337.
We also point out that we do not review whether a contractor actually
complies with an obligation during the performance of a contract, since
that is a matter of contract administration. The protest procedure is
reserved for considering whether an award of a contract complies with
statutory, regulatory and other legal requirements, not with post-award
performance or other administrative matters. ASC Medicar Service, Inc.,
B-213724, Dec. 30, 1983, 84-1 CPD Para. 45.
The protester thus has failed to demonstrate that our prior decision
was based on information not previously considered or on an erroneous
statement of fact or law. See 4 C.F.R. 21.9(a) (1984). Therefore, the
decision is affirmed. COMP GEN (UP)
B-216440, SEP 24, 1984, 84-2 CPD 348
CONTRACTORS - RESPONSIBILITY - DETERMINATION - REVIEW BY GAO -
AFFIRMATIVE FINDING ACCEPTED
DIGEST:
GAO DOES NOT REVIEW AN AFFIRMATIVE DETERMINATION OF RESPONSIBILITY
ABSENT A SHOWING OF POSSIBLE FRAUD OR BAD FAITH OR MISAPPLICATION OF
DEFINITIVE CRITERIA AGAINST WHICH RESPONSIBILITY IS TO BE DETERMINED.
NORTHERN ARIZONA GAS SERVICE, INC.:
NORTHERN ARIZONA GAS SERVICE, INC. PROTESTS THE POSSIBLE AWARD OF
CONTRACTS TO OTHER BIDDERS BY THE BUREAU OF INDIAN AFFAIRS UNDER
SOLICITATION NO. N00-84-40. THE PROTESTER ALLEGES THAT THESE OTHER
BIDDERS SHOULD BE FOUND NONRESPONSIBLE BECAUSE OF THEIR PREVIOUS
PERFORMANCE RECORDS IN CONNECTION WITH BUY INDIAN PREFERENCES.
WE WILL NOT CONSIDER THE PROTEST. DETERMINATIONS OF RESPONSIBILITY
REFLECT THE SUBJECTIVE BUSINESS JUDGMENT OF CONTRACTING OFFICIALS, AND
FOR THAT REASON WE DO NOT CONSIDER PROTESTS OF A DETERMINATION THAT A
BIDDER IS RESPONSIBLE UNLESS THERE IS A SHOWING OF POSSIBLE FRAUD OR BAD
FAITH ON THE PART OF CONTRACTING OFFICIALS OR THAT CONTRACTING OFFICIALS
FAILED TO APPLY DEFINITIVE CRITERIA CONTAINED IN THE SOLICITATION
AGAINST WHICH RESPONSIBILITY WAS TO BE DETERMINED. THE RAYMOND CORP.,
B-215282, MAY 29, 1984, 84-1 CPD PARA. 583. NEITHER EXCEPTION APPLIES
HERE.
THE PROTEST IS DISMISSED.
B-216438.2, Nov 6, 1984, 84-2 CPD 506
CONTRACTS - Protests - General Accounting - Office procedures -
Reconsideration Requests - Error of fact or law - Not established
DIGEST:
Request for reconsideration that basically only reiterates
previously-rejected arguments does not warrant reversal or modification
of the prior decision.
AT&T Information Systems, Inc.-- Reconsideration:
AT&T Information Systems, Inc. requests reconsideration of our
decision dismissing as untimely its protest under the Department of the
Navy's solicitation No. N62474-84-B-4539. AT&T Information Systems,
Inc., B-216438, Sept. 24, 1984, 84-2 CPD Para. 347.
AT&T had protested the Navy's use of formal advertising instead of
negotiated procurement procedures. We found the protest untimely
because it was filed after bid opening whereas our Bid Protest
Procedures require that a protest based on an alleged solicitation
impropriety apparent prior to the bid opening date be filed before that
date. 4 C.F.R. Sec. 21.2(b)(1) (1984). The protester urged that we
nevertheless consider the matter under the exception to our timeliness
rules significant issues, see 4 C.F.R. Sec. 21.2(c), principally because
the protester anticipated the recurrence of this issue in similar
procurements.
We affirm our prior decision.
Our prior decision explained that we will review an untimely protest
under the significant issue exception only where it involves an issue of
widespread interest to the procurement community that we had not already
considered. We expressed our view that the protest did not involve such
an issue, and that AT&T, which had acquiesced in the procurement method
and protested only after finding it was not going to win the
competition, should not be able to invoke this exception simply because
it expected to raise the same issue in other procurements.
AT&T's reconsideration request repeats the protester's previous
arguments for our invoking the significant issue exception, although
this time AT&T describes the specifications it believes are obstacles to
an advertised procurement. The firm further asserts that the original
protest did not concern the method of procurement, but whether the
specifications are sufficiently definite to assure both competition on a
common basis and that acceptance of the low bid will meet the
government's minimum needs.
To the extent that AT&T's reconsideration request reiterates, albeit
in more detail, arguments previously rejected in our prior decision, we
already have reviewed those arguments and found that they did not
warrant invoking the significant issue exception in these circumstances,
and we see no basis to change our view now. The reiteration of a
previously-rejected position does not warrant the reversal or
modification of a prior decision. See 4 C.F.R. Sec. 21.9;
Adams-Keheler, Inc.-- Request for Reconsideration, B-213452.2, Apr. 18,
1984, 84-1 CPD Para. 442.
Moreover, there is little practical difference between AT&T's initial
position that the government's specifications were too indefinite for an
advertised procurement and AT&T's recharacterization of the issue as
whether there existed a common basis for price competition and whether
the Navy's minimum needs will be met. Clearly, the issue as now defined
is raised inherently in a protest that the government's specifications
are inadequate for formal advertising. AT& T's current approach thus
provides no basis for altering our view.
The prior decision is affirmed. COMP GEN (UP)
FILE: B-216437 84-2 CPD 620
DATE: December 24, 1984
MATTER OF: Martel Construction Co., Inc.
CONTRACTS - GRANT-FUNDED PROCUREMENTS - PROTEST TIMELINESS
A complaint concerning the award of a contract under a federal grant
filed with GAO 2 months after notification of adverse action by the
grantor agency and exhaustion of administrative appeal procedures is not
filed within a reasonable time and is dismissed.
Martel Construction Company, Inc. (Martel), complains concerning the
award of a contract for wastewater treatment systems improvement to D&
LBuilding, Inc. (D&L), under Environmental Protection Agency (EPA)
project No. C-560136-03, pursuant to a grant to Riverton, Wyoming.
We dismiss the complaint as untimely.
On April 23, 1984, the city of Riverton's (City) water and sewer
committee recommended award to D&L and on that date Martel lodged a
protest with the City arguing that D&L's bid was nonresponsive. On May
1, 1984, the City rejected Martel's protest and the City Council voted
to make award to D&L. Martel protested to the City again on May 7,
1984, contending, in addition to its other protest points, that D&L's
bid, which contained a mistake, was improperly corrected by the City.
The City Council again denied Martel's protest and on May 9, 1984,
recommended award to D&L. Pursuant to 40 C.F.R. Section 33.1115(a)
(1983), Martel appealed the City's adverse decision to EPA's Region VIII
Administrator. The Regional Administrator, by decision dated July 13,
1984, denied Martel's protest. A certified mail receipt indicates that
Martel received the July 13 decision on July 19. On August 3, 1984,
Martel filed a request for reconsideration with the Regional
Administrator. The Regional Administrator summarily dismissed the
reconsideration request on August 24, 1984. By letter dated September
12, 1984, and filed (received) at GAO on September 17, 1984, Martel
requested that this Office review EPA's decisions.
We consider grant complaints pursuant to our public notice entitled
"Review of Complaints Concerning Contracts Under Federal Grants," 40
Fed. Reg. 42406, September 12, 1975. We do so, however, only where the
complaint has been filed within a reasonable time so that we can
consider an issue while it is still practicable to recommend corrective
action if warranted. O.K. Lumber Company, Inc., B-209741, Feb. 17,
1983, 83-1, C.P.D. Paragraph 165.
We consider Martel's complaint, filed approximately 2 months after
Martel received notice of the EPA's denial of Martel's administrative
appeal, to not have been filed within a reasonable time. O.K. Lumber
Company, Inc., B-209741, supra. We have held that where a grantor, such
as EPA, has established procedures for identifying and resolving
problems concerning grantee procurements, we will not consider a
complaint unless the matter first has been reviewed by the grantor
agency. Long-Puerto Rico, Inc., B-212317, Aug. 29, 1983, 83-2 C.P.D.
Paragraph 275. Since, however, EPA's regulations clearly state that
"the award official's determination shall constitute final EPA action
from which there shall be no further administrative appeal," we view the
July 13, 1984, denial of Martel's complaint by the Regional
Administrator (the award official) to be the point at which Martel
exhausted its administrative remedies for purposes of filing a complaint
with GAO. See 40 C.F.R. Section 33.1145(g) (1983). As stated above,
Martel's 2-month delay in filing its complaint with GAO after exhausting
its administrative remedies is unreasonable and, therefore, we will not
consider the complaint on its merits.
The complaint is dismissed.
Harry R. Van Cleve
General Counsel
B-216436, Oct 22, 1984, 84-2 CPD 435
CONTRACTS - Protests - General Accounting Office procedures -
Timeliness of protest - Adverse agency action effect
DIGEST:
Protest filed more than 10 working days after the protester learned
of the denial of an agency-level protest is untimely.
Bell & Howell Company:
Bell & Howell Company protests request for proposals (RFP)
8-4-4-22-45005 issued by the National Aeronautics and Space
Administration (NASA) for microfiche processing systems. Bell & Howell
objects to NASA's decision to require an automated forms overlay feature
that the protester says is available from only the manufacturer.
We dismiss the protest, filed with our Office on September 17, 1984,
as untimely because it was not filed within 10 working days after Bell &
Howell learned of initial adverse action by NASA with respect to an
earlier Bell & Howell agency-level protest concerning the same subject.
In disposing of Bell & Howell's initial protest, NASA wrote the firm,
clearly stating NASA's reasons for requiring an automatic forms overlay
capable of processing at least five pre-recorded forms. NASA's letter
states:
"the forms overlays feature is necessary to support NASA's heavy
forms workload requirements. ... The activity's computer complex
provides around-the-clock computational support for institutional ,
scientific, and engineering applications. ... the generation of Data
products requires extensive parallel processing. ... Both the
scientific and institutional applications require rapid error-free
selection of forms overlays. This dynamic production environment, which
requires frequent forms changes, dictates that operator intervention to
select and change forms overlays be minimized to avoid delays and
increased costs due to operator error. ..."
NASA's letter to Bell & Howell is dated August 3, 1984, several weeks
before Bell & Howell filed its protest with our Office. Section 21.2(a)
of our Bid Protest Procedures, 4 C.F.R. Part 21 (1984), provides for
consideration of a complaint filed originally at the agency-level only
if a subsequent protest is filed with our Office within 10 working days
after the protester obtains knowledge of initial adverse action
regarding the agency-level complaint. It is apparent that Bell &
Howell's September 17 filing with our Office was not within the required
10-day period.
The protest is dismissed COMP GEN (UP)
B-216428, SEP 24, 1984, 84-2 CPD 346
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - RESPONSIBILITY
DETERMINATION - NONRESPONSIBILITY FINDING - REVIEW BY GAO
DIGEST:
PROTEST OF AGENCY DETERMINATION THAT SMALL BUSINESS OFFEROR IS
NONRESPONSIBLE WILL NOT BE CONSIDERED BY GAO SINCE BY LAW THE SMALL
BUSINESS ADMINISTRATION CONCLUSIVELY DETERMINES THE RESPONSIBILITY OF
SMALL BUSINESS OFFERORS.
BIRKEN MANUFACTURING CO.:
BIRKEN MANUFACTURING CO. PROTESTS THE FINDING THAT IT IS NOT
RESPONSIBLE MADE BY THE NAVAL SUPPLY CENTER, JACKSONVILLE, FLORIDA UNDER
SOLICITATION NO. N68836-84-R-0096.
WE WILL NOT CONSIDER THE PROTEST. BIRKEN STATES THAT IT IS A SMALL
BUSINESS. UNDER THE SMALL BUSINESS ACT, 15 U.S.C. SEC. 637(B)(7)
(1982), THE SMALL BUSINESS ADMINISTRATION (SBA) MAKES CONCLUSIVE
DETERMINATIONS AS TO A SMALL BUSINESS OFFEROR'S RESPONSIBILITY TO
PERFORM A PARTICULAR CONTRACT. (IN FACT, BIRKEN STATES THAT IT IS
APPLYING TO SBA FOR A CERTIFICATE OF COMPETENCY.) CONSEQUENTLY, THIS
OFFICE DOES NOT REVIEW PROTESTS SUCH AS THIS. SEE, E.G., GILBRALTER
INDUSTRIES, INC., B-208130, AUG. 3, 1982, 82-2 CPD PARA. 105.
THE PROTEST IS DISMISSED. B-216438, SEP 24, 1984, 84-2 CPD 347
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
BID OPENING/CLOSING DATE FOR PROPOSALS
DIGEST:
1. PROTEST THAT AGENCY SHOULD HAVE USED NEGOTIATED PROCUREMENT
PROCEDURES INSTEAD OF FORMALLY ADVERTISED ONES, FILED AFTER BID OPENING,
IS UNTIMELY, SINCE IT CONCERNS AN APPARENT SOLICITATION IMPROPRIETY AND
THUS HAD TO BE RAISED BEFORE BIDS WERE OPENED.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SIGNIFICANT ISSUE EXCEPTION
2. GAO WILL NOT CONSIDER AN UNTIMELY PROTEST UNDER THE EXCEPTION TO
GAO'S TIMELINESS RULES FOR SIGNIFICANT ISSUES WHERE THE PROTEST DOES NOT
RAISE AN ISSUE OF WIDESPREAD INTEREST OR IMPORTANCE TO THE PROCUREMENT
COMMUNITY WHICH HAS NOT BEEN CONSIDERED ON THE MERITS IN PREVIOUS
DECISIONS.
AT&T INFORMATION SYSTEMS, INC.:
AT&T INFORMATION SYSTEMS, INC. PROTESTS THE DEPARTMENT OF THE NAVY'S
USE OF FORMAL ADVERTISING INSTEAD OF NEGOTIATED PROCUREMENT PROCEDURES
TO PURCHASE, THROUGH SOLICITATION NO. N62474-84-B-4539, A DIGITAL
ELECTRONIC PRIVATE AUTOMATIC BRANCH EXCHANGE SYSTEM FOR THE MARINE CORPS
AT CAMP PENDLETON, CALIFORNIA. WE DISMISS THE PROTEST.
OUR BID PROTEST PROCEDURES, 4 C.F.R. SEC. 21.2(B)(1) (1984), REQUIRE
THAT A PROTEST BASED ON AN ALLEGED SOLICITATION IMPROPRIETY THAT IS
APPARENT PRIOR TO BID OPENING BE FILED BEFORE THAT DATE. SINCE THE
NAVY'S USE OF FORMAL ADVERTISING WAS EVIDENT WHEN AT&T RECEIVED THE
SOLICITATION, THE PROTEST, FILED AFTER BIDS WERE OPENED, IS UNTIMELY.
AT&T REQUESTS THAT WE NEVERTHELESS CONSIDER THE ISSUE UNDER THE
EXCEPTION TO OUR TIMELINESS RULES FOR SIGNIFICANT ISSUES. SEE 4 C.F.R.
SEC. 21.2(C). THE BASES FOR THE REQUEST ARE THAT THE PROTESTER
"ANTICIPATES PROTESTS OF SEVERAL (SIMILAR) PROCUREMENTS FOR THE SAME
REASON," AND THAT THE ISSUE ALLEGEDLY IS OF PARTICULAR INTEREST BECAUSE
THE RECENTLY-ENACTED COMPETITION IN CONTRACTING ACT OF 1984 "PLACES
NEGOTIATION ON THE SAME LEVEL OF DESIRABILITY AS ADVERTISED
PROCUREMENT," IN CONTRAST TO THE CURRENT STATUTORY PREFERENCE FOR FORMAL
ADVERTISING. SEE 10 U.S.C. SEC. 2304(A) (1982).
WE FIND NO MERIT TO THIS REQUEST. WE WILL REVIEW AN UNTIMELY PROTEST
UNDER THE SIGNIFICANT-ISSUE EXCEPTION ONLY WHERE THE MATTER RAISED IS
ONE OF WIDESPREAD INTEREST TO THE PROCUREMENT COMMUNITY WHICH HAS NOT
BEEN CONSIDERED ON THE MERITS IN PREVIOUS DECISIONS. NORTHROP WORLDWIDE
AIRCRAFT SERVICES, INC., B-212257.2, DEC. 7, 1983, 83-2 CPD PARA. 655.
THE QUESTION OF WHETHER A PARTICULAR PROCUREMENT SHOULD BE CONDUCTED BY
NEGOTIATION OR FORMAL ADVERTISING DEPENDS FOR THE MOST PART ON THE
SPECIAL FACTS AND CIRCUMSTANCES OF EACH CASE. SEE CMD, INC.; DMC, INC.,
B-209742, MAY 25, 1983, 83-1 CPD PARA. 565. THE QUESTION HERE IS NOT,
IN OUR VIEW, OF WIDESPREAD INTEREST TO THE PROCUREMENT COMMUNITY, NOR
DOES IT AFFECT A BROAD CLASS OF PROCUREMENTS, SIMPLY BECAUSE A FIRM THAT
ACQUIESCED IN THE PROCUREMENT METHOD USED, PROTESTING THE METHOD ONLY
AFTER FINDING THAT IT WAS NOT GOING TO WIN THE COMPETITION, EXPECTS TO
RAISE THE SAME ISSUE IN OTHER PROCUREMENTS.
AS TO THE COMPETITION IN CONTRACTING ACT OF 1984, PUB. L. NO.
98-369, 98 STAT. 494 (1984), WHICH IN SECTION 2723 DOES DELETE THE
CURRENT STATUTORY PREFERENCE FOR FORMALLY ADVERTISED PROCUREMENTS, THE
1984 LEGISLATION APPLIES ONLY TO SOLICITATIONS ISSUED AFTER MARCH 31,
1985. (SEE SECTION 2751.) WE DO NOT SEE HOW THE FACT THAT THE LEGAL
FRAMEWORK FOR DECISIONS ON PROCUREMENT APPROACHES WILL CHANGE IN THE
FUTURE MAKES A PROTEST OF THE APPROACH TAKEN UNDER THE CURRENT FRAMEWORK
OF WIDESPREAD INTEREST.
THE PROTEST IS DISMISSED.
B-216426, Oct 9, 1984, Office of General Counsel
DISBURSING OFFICERS - Relief - Erroneous payments - Not result of bad
faith or negligence
DIGEST:
Relief is granted Army disbursing official and his supervisor under
31 U.S.C. Sec. 3527(c) liability for improper payment resulting from
payee's negotiation of both original and substitute military checks.
Proper procedures were followed in the issuance of the substitute check,
there was no indication of bad faith on the part of the disbursing
official and his supervisor, and subsequent collection attempts have
been pursued.
Mr. Clyde E. Jeffcoat
Principal Deputy Commander
U.S. Army Finance and Accounting Center
Indianapolis, Indiana 46249
Dear Mr. Jeffcoat:
This responds to your request that we relieve Major (MAJ) J. P.
Jones, Finance Corps, Finance and Accounting Officer, Fort Sheridan,
Illinois, and his deputy, Captain (CPT) W. H. Anderson under 31 U.S.C.
Sec. 3527(c) for an improper payment of a $456.67 check payable to Mr.
Stephen M. Taylor, Jr. For the reasons stated below, relief is granted.
The loss resulted when the payee negotiated both the original and a
substitute check. Both checks were in the same amount. The substitute
check was issued on the basis of the payee's allegation that the
original check had not been received and a request for stop payment had
been made. Both checks were issued by the Army under authority
delegated by the Department of the Treasury. 31 C.F.R. Sec. 245.8.
This Office has authority under 31 U.S.C. Sec. 3527(c) to relieve a
disbursing officer from liability for a deficiency resulting from an
improper payment upon determining "that the payment was not the result
of bad faith or lack of reasonable care by the official." We have
recognized that in "duplicate check" cases, such as this, the improper
payment "is totally beyond the responsibility and control of the agency
disbursing officer and is something for which he should incur no
liability." 62 Comp. Gen. 91, 94 (1984). Relief is granted 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 one disbursing officer and that a
diligent effort was made to collect the overpayment. Id.
The substitute check here was signed by the Finance and Accounting
Officer's deputy which requires that we relieve the Finance and
Accounting Officer in his supervisory capacity as well as the deputy as
disbursing officer. We have concluded that where a substitute check is
properly issued the supervisor is no more negligent than the deputy who
actually signed the check, B-212576, et al., December 2, 1983.
It appears that the request for stop payment and the issuance of a
substitute check in this case were within the bounds of due care as
established by Army Regulations. See AR 37-103, paras, 4-164 and 4-164.
There was no indication of bad faith on the part of the disbursing
officers.
As we have noted before, the settlement of a disbursing officer's
account does not relieve the agency of its responsibility to pursue
collection action on the debt created by the improper payment.
Since it appears that aggressive collection attempts are being made
to collect this debt in accordance with the Federal Claims Collections
Act, as amended, 31 U.S.C. Sec. 3711 et seq., and the procedures
outlined in our decision 62 Comp. Gen. 476 (1983), relief is granted.
COMP GEN (UP)
FILE: B-216425
DATE: August 21, 1985
MATTER OF: Orville D. Grossarth - Prepayment Penalty for Sewer
Assessment Lien
DIGEST:
OFFICERS AND EMPLOYEES - TRANSFERS - REAL ESTATE EXPENSES -
REIMBURSEMENT
A transferred employee sold his old residence and seeks reimbursement
for a prepayment penalty incurred upon the payoff of a sewerage
improvement lien on his residence. The claim may be allowed under the
Federal Travel Regulations, para. 2-6.2d(1)(g), since the prepayment of
the assessment to satisfy the lien was required by the lending
institution and FHA regulations. Thus, it meets the test that it be
customarily paid by the seller in the locality of the old official
station. V. Stephen Henderson, B-207304, April 15, 1983, distinguished.
The prepayment penalty was required by the municipal code and the
recorded assessment roll which placed a lien on the property was an
"other security instrument" within the meaning of para. 2-6.2d(1)(g).
This decision is in response to a request from the Director for
Fiscal Management, Pacific Northwest Region of the Forest Service, U.S.
Department of Agriculture, requesting a decision in the case of Mr.
Orville D. Grossarth. The matter involves his entitlement to be
reimbursed for a prepayment penalty he paid on the sale of his former
residence. We conclude that Mr. Grossarth may be reimbursed.
Mr. Grossarth is an employee of the Forest Service. Incident to a
permanent change of station in October 1982, he sold his residence in
the area of his old duty station. Included in his claim voucher was an
expense item of $414.10, which was identified as a penalty for
prepayment of a lien for sewer improvements against his residential
property.
That expense was administratively disallowed by the National Finance
Center (NFC), Department of Agriculture. The reason given was that it
was considered to be interest on a sewerage assessment and not a bona
fide prepayment penalty associated with a mortgage or other security
instrument.
On resubmission to the NFC, Mr. Grossarth contended that due to the
nature of that obligation, i.e., one imposed on real estate owners by
municipal code, it qualified as a reimbursable prepayment penalty under
para. 2-6.2d(1)(g) (Supp. 4, Aug. 23, 1982) of the Federal Travel
Regulations (FTR), incorp. by ref., 41 C.F.R. Section 101-7.003 (1984).
The expense was again disallowed by NFC, this time based on decision V.
Stephen Henderson, B-207304, April 15, 1983. That ruling by the NFC is
the basis for the submission here.
In March 1982, well before Mr. Grossarth's transfer, the City Council
of Boise, Idaho, approved and undertook the financing of necessary sewer
improvements in the Local Improvement District (LID) in which Mr.
Grossarth's residence was located.
Pursuant to the Boise Municipal Code, Mr. Grossarth and the other LID
property owners were authorized two methods of payment. The first
method was that property owners could pay all or part of their share of
the assessment within 30 days of its imposition. Second, any amount not
paid by that time would be thereafter financed through the sale of
municipal bonds, secured by a lien upon the property. Mr. Grossarth and
others were informed that if each assessment share was not totally paid
within the 30-day period, such action would be considered as an election
to pay the unpaid assessment in installments, plus interest, over 15
years. Further, since the City of Boise would be committed to the
payment of interest to the bond holders over the entire life of the
bonds, the Code required that an additional amount be paid as a penalty
in the event an assessed property owner should choose to make a lump-sum
payment of his remaining assessment installments.
Mr. Grossarth chose the installment plan, thereby binding the
property and himself, as owner, to the 15 years of payments. These were
the circumstances in which he found himself when he was transferred in
October 1982.
On February 25, 1983, a buyer reached a tentative agreement to
purchase Mr. Grossarth's residence. The salient terms of that agreement
were that the buyer was to put up $500 earnest money and agree to
purchase the residence upon obtaining suitable financing. Further, the
agreement stated: "Seller to pay March 31 sewer LID payment and buyer
will assume future LID payments."
After the buyer applied for financing, Mr. Grossarth was requested to
supply the Idaho Housing Authority with certain information regarding
the property and the terms of the sale. By Affidavit of Seller, dated
March 31, 1983, Mr. Grossarth informed the Authority about the buyer's
agreement to assume the future LID payments. This was changed upon a
determination by the lending institution that all liens against the
property had to be satisfied in full; the sewer assessment could not be
assumed by the purchaser.
Accordingly, an amended sales agreement was prepared, dated April 4,
1983, stating that "(s)eller to pay off sewer LID." The selling price
was not adjusted, thus requiring the seller to bear the full cost of the
assessment. Mr. Grossarth accepted this because of the time already
spent in negotiating the sale.
A representative of the City of Boise Public Works Department advised
the Forest Service that lending institutions in the locality normally
require that all liens be satisfied to produce a free and clear title.
A representative of the lender, First Security Realty Service, also
stated that, at the time in question, the lending institution required
all liens shown on the title report to be satisfied. Finally, an
official of the Boise office of the Department of Housing and Urban
Development (HUD) informed the Forest Service that FHA regulations
required that all liens be satisfied in order to qualify for FHA
financing. /1/
The issues presented for our decision are:
(1) Was the expense incurred by Mr. Grossarth a bona fide prepayment
penalty or was it merely the payment of principal and interest on the
assessment which is barred by our decision in Henderson?
(2) If the charge imposed on Mr. Grossarth for early payoff of the
sewerage assessment is not barred by Henderson, does it qualify for
reimbursement as a "charge for prepayment of a mortgage or other
security instrument" under para. 2-6.2d(1)(g) of the Federal Travel
Regulations?
The Department of Agriculture's National Finance Center concluded
that our decision V. Stephen Henderson, B-207304, April 15, 1983,
requires disallowance. The NFC states that, "since Mr. Grossarth's
claim for a sewer assessment appears to be analogous to the paving lien
in the cited decision, it would be considered a capital improvement and
not reimbursable."
We disagree. In Henderson, the question was whether a paving lien
imposed on the employee's property was a reimbursable seller's expense
due to the fact that it was customary in the locality for sellers to pay
off such liens at the time of sale. We held that it was not a
reimbursable expense. Our basis for so ruling was that even though the
employee, as seller, was required by local practice to pay off the lien,
that was not a sufficient basis to allow reimbursement since the street
improvement was analogous to a capital improvement to the property
itself which is not reimbursable.
The matter at issue in Mr. Grossarth's case, however, is not the
value of the capital improvement. He is not claiming the total amount
of $2,623.78 paid to satisfy the sewerage lien; he is only claiming the
prepayment charge of $414.10 imposed on him as a penalty for paying off
a sewerage improvement lien after it has been financed through the sale
of municipal bonds. Thus, Henderson, which did not involve a prepayment
penalty, is not controlling.
Paragraph 2-6.2d of the FTR (Supp. 4, Aug. 23, 1982), provides, in
part:
"d. Miscellaneous expenses.
"(1) Reimbursable items. The expenses listed below are
reimbursable in connection with the sale * * * of a residence,
provided they are customarily paid by the seller of a residence in
the locality of the old official station * * * to the extent they
do not exceed amounts customarily paid in the locality of the
residence. * * * * *
"(g) Charge for prepayment of a mortgage or other security
instrument in connection with the sale of a residence at the old
official station to the extent the terms in the mortgage or other
security instrument provide for this charge. * * *"
It is clear from the statements provided by the lending institution,
the City of Boise, and the Boise Office of HUD that the expense for
early payoff of the sewerage lien was, at the time in question,
customarily paid by the seller in the Boise locality and that the amount
fixed by law did not exceed the amount customarily paid in that
locality. The difficult issue, however, is whether this expense is a
prepayment charge imposed by a "mortgage or other security instrument."
Those terms are not defined in the FTR. It is clear that a
prepayment penalty incurred by a seller pursuant to the terms of a
mortgage is reimbursable. David J. Connolly, B-194298, August 10, 1979.
We also allowed reimbursement where a prepayment agreement was
contained in a document collateral to a mortgage. Donald F. Reynolds,
B-194892, March 14, 1980. Also, in Charles L. Putnam and Billie L.
Verble, B-183251, May 29, 1975, we ruled that a prepayment penalty under
a second deed of trust, which was placed on the residence a number of
years after the original purchase, qualified as a reimbursable expense
upon the sale of the residence incident to a transfer.
Turning to the present case, the debt created for the sewerage
improvement upon the landowners benefitted thereby is secured by a lien
upon the properties assessed. The Municipal Code, in section 50-1715,
as added in 1976, provides that, upon passage by the City Council of an
ordinance confirming the assessment roll, which ordinance is a final
determination of each assessment contained therein and of the amount
thereof levied upon each lot or parcel of land benefitted, the clerk
shall certify and file the confirmed assessment roll with the treasurer
of the municipality, and that the confirmed assessment roll and the
assessments thereunder shall be a lien upon the property assessed from
the date that notice thereof is filed by the clerk with the county
recorder.
Accordingly, the confirmed assessment roll when notice thereof was
recorded in the land records of the county became a lien upon each
assessed property. Thus, the assessment roll enacted by ordinance of
the Boise City Council, which imposed a lien upon Mr. Grossarth's
residence, qualifies as an "other security instrument" within the
meaning of FTR para. 2-6.2d(1)(g). As noted above, the penalty for
prepayment of the assessment is mandated by the same section 50-1715 of
the Municipal Code that establishes the lien upon the assessed
properties.
Thus, the amount claimed by Mr. Grossarth qualifies as a "charge for
prepayment of a mortgage or other security instrument in connection with
the sale of a residence * * *" under FTR para. 2-6.2d(1)(g). Since the
sewerage assessment lien was required to be paid off by the lending
institution in accordance with both local custom and FHA regulations, it
is clear that this expense meets the test that it be "customarily paid
by the seller of a residence in the locality of the old official station
* * *" as set forth in FTR, para. 2-6.2d(1).
Accordingly, we conclude that Mr. Grossarth is entitled to be
reimbursed for the $414.10 charge he incurred as a prepayment penalty
for paying off the sewerage assessment against his residence.
Comptroller General
of the United States
(1) Subsequent to the time of this transaction, the lending
institution has allowed liens such as the LID sewer assessment to be
passed on to the purchaser, provided the purchaser agrees to such terms.
This is consistent with HUD's advice to the Forest Service that FHA
regulations have been amended to permit assessment liens of this type to
remain on property on the proviso that the buyer agrees in writing to
assume payment of such lien.
B-216424, Oct 9, 1984, 84-2 CPD 393
CONTRACTS - Protests - Subcontractor protests
DIGEST:
Protest against prime contractor's award of subcontract is dismissed
since it concerns contract administration, a function of the procuring
agency, and the protester has not alleged the existence of any of the
limited circumstances under which GAO reviews subcontract awards.
Afftrex, Ltd.:
Afftrex, Ltd. (Afftrex), protests the award of a subcontract to N.R.
Hilbert and Associates of Greenfeld Center, New York, by General
Electric Corporation (General Electric), prime contractor for the
Department of Energy (Energy) for decommissioning Energy's Shippingport
facility. Afftrex alleges that it was denied the opportunity to compete
for the subcontract despite the fact that it had indicated its interest
to Energy and General Electric.
The protest is dismissed.
Our Office considers protests concerning the award of subcontracts by
prime contractors only in the following circumstances: (1) the prime
contractor is acting as the purchasing agent of the government; (2) the
government's active or direct participation in selecting the
subcontractor effectively caused the rejection or selection of potential
subcontractors or significantly limited subcontractor sources; (3) the
protester shows fraud or bad faith in the government's approval of a
subcontract award; (4) the subcontract award is "for the Government";
or (5) a federal agency entitled to an advance decision requests it.
Optimum Systems, Inc., 54 Comp. Gen. 767 (1975), 75-1 C.P.D. para. 166.
Afftrex's protest indicates on its face that the selection of the
subcontractor was General Electric's act. Since neither fraud nor bad
faith on the part of Energy is alleged or shown, review of the
subcontract award would result in our Office becoming involved in
contract administration contrary to Our Bid Protest Procedures. See 4
C.F.R. Sec. 21.3(g) (1984); Sybron Corporation, B-207181, May 20, 1982,
82-1 C.P.D. para. 483.
The protest therefore is dismissed. COMP GEN (UP)
FILE: B-216420 85-1 CPD 40
DATE: January 16, 1985
MATTER OF: Todd Van & Storage, Inc.
DIGEST:
CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - PROTESTOR NOT
IN LINE FOR AWARD
Where third low offeror protests against award to either first or
second low offeror on basis that neither offeror attended prebid site
inspection, protest is dismissed since second low offeror, in fact, did
make the site inspection and was in line for award even if the low
offeror was not. Therefore, the protester, being the third low offeror,
does not have the requisite direct and substantial interest with regard
to award to be regarded as an "interested party" under our Bid Protest
Procedures.
Todd Van & Storage, Inc. (Todd), protests the award of a contract to
any other firm under request for quotations (RFQ) NNSM84-200, issued by
the National Archives and Records Service (NARS), General Services
Administration (GSA).
The above RFQ was issued on August 14, 1984, and requested quotations
for moving substantial numbers of audiovisual and textual records from
one stack to another within the main National Archives building at 7th
and Pennsylvania Avenue, N.W., Washington, D.C. Four quotations were
received before the scheduled due date of September 1, 1984. Elite
Moving and Storage, Inc. (Elite), submitted the low quotation while
Northern Virginia Van Company (Northern Virginia) submitted the second
low quotation. Todd's quotation was third low. On September 13, 1984,
NARS placed an order with Elite to perform the contract work. Todd
filed a protest with our office arguing that neither Elite nor Northern
Virginia is entitled to the award since neither of these firms attended
the tour of inspection required by the specifications.
Todd is not eligible to maintain this protest. A party must be an
"interested party" under our Bid Protest Procedures, 4 C.F.R. Section
21.1(a) (1984), in order to have its protest considered by our Office.
Determining 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., B-195401.2, Feb. 11,
1980, 80-1 C.P.D. Paragraph 119.
According to GSA, Northern Virginia's representative, in fact, did
make the inspection tour. Since Northern Virginia's quotation was
second low and Todd's quotation third low, Todd was never in line for
the award and, therefore, not an "interested party." See International
Business Investments, B-202164.2, June 8, 1981, 81-1 C.P.D. Paragraph
459. In any event, as pointed out by GSA, the failure to make a site
inspection, even where the solicitation so requires, provides no basis
to reject an otherwise responsive bid. Rowe Contracting Service, Inc.,
B-200594, Jan. 22, 1981, 81-1 C.P.D. Paragraph 40.
The protest is dismissed.
Comptroller General of the United States
B-216419, SEP 24, 1984, 84-2 CPD 345
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - ADVERSE AGENCY ACTION EFFECT
DIGEST:
1. PROTEST FILED WITH GAO MORE THAN 10 DAYS AFTER PROTESTER RECEIVES
DENIAL OF PROTEST IT FILED WITH THE CONTRACTING AGENCY IS UNTIMELY.
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SIGNIFICANT ISSUE EXCEPTION
2. PROTEST REGARDING PROPRIETY OF EVALUATION OF COMPETING PROPOSALS
DOES NOT RAISE AN ISSUE SIGNIFICANT TO PROCUREMENT PRACTICES SUCH AS TO
WARRANT INVOKING THE SIGNIFICANT ISSUE EXCEPTION TO GAO BID PROTEST
TIMELINESS REQUIREMENTS.
NDE TECHNOLOGY, INC.:
NDE TECHNOLOGY, INC. PROTESTS THE REJECTION OF ITS PROPOSAL AND THE
AWARD TO ANOTHER COMPANY BY THE AIR FORCE UNDER REQUEST FOR PROPOSALS
NO. F40600-83-R-0008. WE DISMISS THE PROTEST AS UNTIMELY.
THE MATERIAL ACCOMPANYING NDE'S PROTEST LETTER INDICATES THAT NDE (1)
WAS NOTIFIED OF THE REJECTION OF THE PROPOSAL IN JANUARY 1984, (2)
ALLEGEDLY PROTESTER ORALLY AT THAT TIME TO THE CONTRACTING AGENCY, (3)
FILED FREEDOM OF INFORMATION ACT REQUESTS WITH THE AIR FORCE BETWEEN
JANUARY AND JUNE, (4) BY LETTER OF JULY 11, FILED A WRITTEN PROTEST WITH
THE AIR FORCE AGAINST BOTH REJECTION OF ITS PROPOSAL AND THE ACCEPTANCE
OF A COMPETING PROPOSAL, (5) WAS NOTIFIED OF THE REJECTION OF ITS
PROTEST BY AN AIR FORCE LETTER DATED AUGUST 6, AND (6) BY LETTER OF
SEPTEMBER 4, REQUESTED THE AIR FORCE TO REEVALUATE ITS PROTEST. THE
PROTEST WAS FILED HERE ON SEPTEMBER 14.
EVEN ASSUMING THAT NDE PROTESTED ORALLY TO THE AGENCY IN JANUARY (THE
AIR FORCE DOES NOT AGREE THAT THERE WAS SUCH A PROTEST) AND THAT NDE HAD
A VALID REASON FOR WAITING SEVERAL MONTHS THEREAFTER TO PURSUE THAT
PROTEST, THE PROTEST FILED HERE IS NONETHELESS UNTIMELY. OUR BID
PROTEST PROCEDURES REQUIRE THAT IF A PROTEST IS FIRST FILED WITH THE
CONTRACTING AGENCY, ANY SUBSEQUENT PROTEST TO THIS OFFICE MUST BE FILED
WITHIN 10 WORKING DAYS OF WHEN THE PROTESTER KNEW OF INITIAL ADVERSE
ACTION BY THE AGENCY ON THE PROTEST. 4 C.F.R. SEC. 21.2(A) (1984). THE
AUGUST 6 LETTER REJECTING NDE'S PROTEST CLEARLY CONSTITUTED SUCH ADVERSE
ACTION; NDE THEREFORE HAD TO TAKE ITS PROTEST HERE WITHIN 10 DAYS OF
ITS RECEIPT OF THAT LETTER. THE PROTEST WAS NOT FILED HERE, HOWEVER,
UNTIL MORE THAN A MONTH LATER.
NDE SUGGESTS THAT IF ITS PROTEST IS UNTIMELY, WE SHOULD CONSIDER IT
NONETHELESS UNDER AN EXCEPTION TO OUR TIMELINESS RULES FOR CASES RAISING
ISSUES SIGNIFICANT TO PROCUREMENT PRACTICES OR PROCEDURES. SEE 4 C.F.R.
SEC. 21.2(C). WE DO NOT VIEW THIS PROTEST, WHICH ESSENTIALLY INVOLVES
THE VALIDITY OF THE EVALUATION OF COMPETING PROPOSALS, AS RAISING A
SIGNIFICANT ISSUE. SEE CATALYTIC, INC., B-187444, NOV. 23, 1976, 76-2
CPD PARA. 445.
THE PROTEST IS DISMISSED.
B-216413, Oct 10, 1984, 84-2 CPD 398
CONTRACTS - Protests - General Accounting - Office procedures -
Timeliness of protest - Significant issue exception - Not for
application
DIGEST:
Untimely protest does not raise a significant issue so as to warrant
its consideration on the merits where the issue is not of first
impression and does not sufficiently impact on the procurement
community.
Micro Computer Systems, Inc.:
Micro Computer Systems, Inc. (MCSI), protests the proposed award of a
contract by the National Credit Union Administration (NCUA) under
solicitation No. RFP-R-84-006, for systems analysis and design and
software development. MCSI alleges that the solicitation's evaluation
criteria (particularly the requirement for previous experience with
NCUA) favor offerors who have already contracted with NCUA and unfairly
prevents equally qualified offerors without such experience from
competing, contrary to the government's best interest.
We dismiss the protest.
The closing date for the receipt of offers was August 15, 1984. MCSI
filed the protest in our Office on September 14, 1984. MCSI concedes
that the protest is untimely under 4 C.F.R. Sec. 21.2(b)(1) (1984),
which requires that protests based upon alleged solicitation
improprieties which are apparent before the closing date for the receipt
of offers (as was the case here) be filed before that date. However, it
argues that the protest raises issues that are significant to
procurement practices at NCUA and other agencies, making it an issue of
widespread interest, which warrants an exception to our usual timeliness
rules pursuant to 4 C.F.R. Sec. 21.2(c).
We consider untimely protests under the above exception when the
issue or issues raised are of widespread interest to the procurement
community and have not been previously considered. However, in order to
prevent the timeliness requirements from becoming meaningless, the
exception is strictly construed and exercised sparingly. Since MCSI
alleges essentially that the solicitation's specifications are unduly
restrictive, its protest does not present an issue of first impression,
nor, in our view, does it sufficiently impact on the procurement
community, save its impact on this particular procurement. Therefore, we
will not apply our exception here. See Universal Design Systems, Inc. -
Reconsideration, B-211547.3, Aug. 16, 1983, 83-2 C.P.D. para. 220.
The protest is dismissed. COMP GEN (UP)
FILE: B-216408.2 85-1 CPD 640
DATE: June 5, 1985
MATTER OF: Technical Services Corporation
DIGEST:
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTOR
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 - DISCUSSIONS WITH ALL
OFFERORS REQUIREMENT - "MAENINGFUL" DISCUSSIONS
2. While discussions must be meaningful, negotiations that lead
offerors into the areas of their proposals which require amplification
meet this criterion. 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 - GENERAL
ACCOUNTING OFFICE REVIEW
3. GAO will not reevaluate proposals, but rather limits its review
to an examination of whether the agency's evaluation was reasonable and
in accord with listed criteria.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICALLY EQUAL PROPOSALS - PRICE DETERMINATIVE FACTOR
4. When a solicitation states that award will be made to the offeror
whose proposal offers the greatest value in terms of technical
capability and cost, rather than the offeror with the lowest estimated
cost, cost may become the determinative factor when there are close
technical scores.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - COST
REALISM ANALYSIS - ADEQUACY
5. GAO denies a protest alleging that a cost realism analysis was
inadequate because the agency failed to consider the fact that the
awardee would be required to pay its employees at the same rates as the
predecessor contractor, since the Service Contract Act does not require
a successor contractor to do so in the absence of a collective
bargaining agreement.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - COST
REALISM ANALYSIS - ADEQUACY
6. Although agency's initial cost realism analysis allegedly was
deficient, when the results of a second analysis, performed after the
protest was filed, do not change the protester's competitive standing in
relation to the awardee, the protester has not been prejudiced. GAO
therefore denies a protest against an allegedly improper cost
evaluation.
Technical Services Corporation protests the award of a contract to
TECOM, Inc., under request for proposals (RFP) No. EME-84-R-0058, issued
by the Federal Emergency Management Agency (FEMA) for operation and
maintenance of the National Emergency Training Center, Emmitsburg,
Maryland. Technical Services, the incumbent contractor, contends that
discussions were inadequate and that, contrary to the RFP, award was
made on the basis of lowest offered price. Additionally, the protester
asserts that FEMA's cost realism analysis was inadequate because it
failed to consider the fact that the successful contractor would be
required to pay its employees at the "conformed" rates applicable to
Technical Services' contract. /1/ We deny the protest.
The RFP contemplated a 1-year, cost-plus-fixed-fee contract with 2
option years. It provided for evaluation of proposals by a Source
Evaluation Board, based on described technical and cost factors that
were accorded the following weights:
TABLE OMITTED
The RFP provided that award would be made to the offeror whose
proposal offered the greatest value to the government in terms of
technical capability and cost, rather than to the offeror with the
lowest estimated cost; however, it specifically stated that the
importance of cost in relation to the other evaluation factors would
increase with the equality of the proposals.
Twelve proposals were submitted, and FEMA determined that four,
including those submitted by Technical Services and TECOM, were within
the competitive range. For technical factors, TECOM initially ranked
first with 65.3 points, while Technical Services ranked third with 63.1.
Discussions took the form of written questions and answers and, after
reviewing best and final offers, the Source Evaluation Board unanimously
agreed that the overall ranking and scoring of the proposals had not
changed. After cost proposals were reviewed for cost realism, TECOM had
the lowest cost ($3,192,334, adjusted to $3,316,746 for cost realism)
and the highest technical score. Its final combined score was 90.3,
compared with Technical Services' score of 82.8 (based on an evaluated
cost of $4,048,575). FEMA awarded the contract to TECOM on October 5,
1984.
Responding to the protest, FEMA argues that it is untimely because it
was not filed until October 29, more than 10 days after award. However,
it is well settled 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 CPD Paragraph 661. Here, the
debriefing was held on October 15, and arguably it was only at that time
that Technical Services became aware of the alleged inadequacy of
discussions, failure to make award in accordance with the RFP, and
inadequacy of the cost realism analysis. Since the firm filed its
protest with our Office exactly 10 working days after the debriefing, we
will consider these three bases of protest. We will not consider
whether FEMA improperly failed to incorporate the "conformed" rates of
the predecessor contractor into the RFP, since Technical Services
complained of this to the agency, but did not specifically protest on
this basis to our Office. In any event, a protest concerning this
alleged solicitation deficiency would have had to be filed before
closing date for receipt of initial proposals. 4 C.F.R. Section
21.2(b)(1) (1984).
Technical Services' first contention, that discussions were
inadequate, is based on FEMA's alleged failure to notify it of the
perceived weakness of its proposal in the management information area.
In its written questions to the firm, FEMA asked: "How long do you
anticipate it will take for your management information system to be
totally operational and providing meaningful reports? Will the system
be computerized?" The firm complains that this was not sufficient to
direct its attention to the area of its proposal in need of
amplification or clarification. Technical Services argues that its
response, i.e., a statement that the system was operational "today" and
an offer to permit members of the Source Evaluation Board to witness the
system in operation, was more than adequate. In addition, the firm
supplied members of the Board with copies of computerized "meaningful
reports." Technical Services concludes that if the Board had further
questions, it should have conducted a second round of discussions.
FEMA, however, contends that its questions were based on the Board's
evaluation summary, which stated:
"The proposer appears to be going through a major effort to
develop a work processing and management information system (MIS)
that will meet the need of control and visibility of work effort.
However, the proposed computerized work processing and MIS are in
the development process and the testing will be performed on this
project. It may require significant time and effort to make the
system workable at the NETC (National Emergency Training Center).
FEMA further argues that different questions would have led or
coached the protester toward a desirable management and operational
approach, as well as potentially prejudicing the rights of competitors
by technical transfusion or leveling.
Meaningful discussions, either oral or written, are generally
required in federal procurement. In these discussions, the contracting
agency must furnish offerors information concerning deficiencies in
their proposals and give them an opportunity for revision. However, the
content and extent of discussions necessary to satisfy the requirement
for meaningful discussions are matters of judgment, primarily for
determination by procuring officials, and are not subject to question by
our Office unless shown to be clearly without a reasonable basis.
Trellclean, U.S.A., Inc., B-213227.2, supra, 84-1 CPD Paragraph 661. We
have rejected the notion that agencies are obligated to afford offerors
all-encompassing negotiations. All that is necessary is that the agency
lead offerors into the areas of their proposals that require
amplification. Id.
From the record in this case we think that the content and extent of
discussions by FEMA were reasonable. The written questions clearly led
Technical Services into the area of its management information system
and conveyed FEMA's doubts as to the extent to which that system was
operational. The protester seems to be objecting to the fact that after
receiving its response, the agency did not ask further questions about
its management information system or require Source Evaluation Board
members to witness it in operation. However, an agency is not required
to help an offeror along through a series of negotiations so as to
improve its technical rating until it equals that of other offerors.
Decilog, Inc., B-206901, April 5, 1983, 83-1 CPD Paragraph 356.
Underlying this basis of protest appears to be Technical Services'
belief that its initial technical proposal was adequate in the
management information system area. However, it is not the function of
our Office to reevaluate proposals. Rather, we will limit our review to
an examination of whether the procuring agency's evaluation was
reasonable. Trellclean, U.S.A. Inc., B-213227.2, supra, 84-1 CPD
Paragraph 661. While the protester contends that its proposal was not
properly read, based on our in camera review of the proposals and the
Board's raw evaluation sheets, we cannot say that the evaluation in this
case was unreasonable.
Second, Technical Services argues that FEMA did not base the award on
the criteria set forth in the RFP. The protester contends that at the
debriefing, procuring officials stated that award was made to the lowest
offeror within the acceptable technical range. According to Technical
Services, this is not consistent with the RFP statement that award would
be made to the offeror whose proposal offered the greatest value in the
terms of technical capability and cost, rather than the lowest estimated
cost.
Contrary to the protester's assertions, there is no indication that
award to TECOM was made solely on the basis of lowest estimated cost.
The evaluation formula set forth in the RFP accorded cost only 25 of 100
points, but warned that cost could become a determinative factor in the
case of closely ranked technical proposals. We cannot conclude that the
award was not in accord with the RFP, since TECOM's lower cost and
higher technical point score gave it the highest overall rating, and
thus it offered the greatest value to the government. We therefore find
this basis of protest without legal merit.
It also appears to be Technical Services' belief that TECOM will not
be able to perform at its offered price. However, as the protester
acknowledges, whether TECOM will be able to provide the required
services at the price it offered is a matter of responsibility, which
our Office does not generally review unless the protester shows either
possible fraud or bad faith on the part of procuring officials.
Oceanprobe, B-215389, Sept. 4, 1984, 84-2 CPD Paragraph 248. Neither
has been alleged here.
Finally, Technical Services alleges that FEMA's cost evaluation was
inadequate because in considering cost realism, the agency failed to
consider the fact that the successor contractor will be required, under
the Service Contract Act, 41 U.S.C. Section 351 et seq. (1982), to pay
its employees at the "conformed" rates applicable to Technical Services'
contract. According to the protester, this deficiency in the cost
realism analysis placed it, as the incumbent contractor, at a
competitive disadvantage.
There is no dispute that the contract awarded to TECOM is subject to
the Service Contract Act. However, as FEMA points out, under the Act a
successor contractor is bound by the predecessor contractor's
compensation levels only where they are established by a collective
bargaining agreement. J. L. Associates, Inc., B-201331.2, Feb. 1, 1982,
82-1 CPD Paragraph 99. Here, there is no indication that the wages paid
by Technical Services were the result of a collective bargaining
agreement. The agency specifically states that there was no agreement,
and Technical Services, in its cost proposal, stated that its employees
had received increases above the minimums specified in the Department of
Labor wage determination for performing as shop leaders and other merit
considerations. We therefore cannot conclude that, under the Service
Contract Act, TECOM would be required to pay the conformed wages paid by
Technical Services.
To the limited extent that TECOM also proposed to use employees in
classes that were not listed in the wage rate determination applicable
to its contract, it also would have been required to conform their wages
and fringe benefits under the procedures set forth in Department of
Labor regulations. However, this would have been accomplished by means
of a new agreement between TECOM, the affected employees, and the
contracting agency, with the Department of Labor making a determination
if no agreement had been reached. See 29 C.F.R. Section 4.6(b)(2)
(i-iv).
Although it is not clear from the record whether FEMA considered this
in its initial cost realism analysis, the agency performed a second
analysis after submission of the protest. It shows that even if, as
Technical Services' suggests, its own direct labor and labor overhead
costs were applied to TECOM, Technical Services' proposed costs would
exceed TECOM's by more than $290,000. Thus, Technical Services was not
prejudiced by the allegedly deficient initial cost evaluation.
Generally, it is not our policy to disturb a cost realism analysis
unless it clearly lacks a reasonable basis. Raytheon Service Co., et
al., 59 Comp. Gen. 316, 325, (1980) 80-1 CPD Paragraph 214. Under the
circumstances outlined above, we find that FEMA's cost realism analysis
was reasonable.
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) Under regulations implementing the Service Contract Act of 1965,
41 U.S.C. Section 351 et seq. (1982), the minimum wages and fringe
benefits of service employees who are not within the classes established
by the Department of Labor wage determination applicable to a particular
contract must be "conformed" so that there is a reasonable relationship
between the unlisted and the listed classes. See 29 C.F. R. Section
4.6(b)(2)(i)(1984).
FILE: B-216406 85-1 CPD 255
DATE: March 1, 1985
MATTER OF: Ameriko Maintenance Co., Inc.
DIGEST:
CONTRACTS - NEGOTIATION - REQUESTS FOR PROPOSALS - SPECIFICATIONS -
RESTRICTIVE - UNDUE RESTRICTION NOT ESTABLISHED
1. GAO denies a protest alleging that a 2-year experience
requirement in a solication for hospital aseptic management services
unduly restricts competition and exceeds the government's actual needs
where the protester has not demonstrated that the requirement, which the
agency states is necessary to ensure a satisfactory level of cleaning in
the critical areas of a hospital, is unreasonable.
CONTRACTS - PROTESTS - MOOT, ACADEMIC, ETC. QUESTIONS - PROTESTOR NOT
IN LINE FOR AWARD
2. Protest alleging that a solicitation improperly required offerors
to demonstrate compliance with a 2-year experience requirement before or
as of date for receipt of technical proposals, rather than at the
beginning of contract performance, is academic, since the protester
would not have satisfied the requirement even by the later date.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
COMPETITIVE RANGE EXCLUSION - REASONABLENESS
3. Agency's decision to exclude an offeror from the competitive
range is proper where the offeror's technical proposal is so deficent
that it would require major revisions before it could be made
acceptable.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
COMPETITIVE RANGE EXCLUSION - REASONABLENESS
4. GAO will not disturb an agency's decision to exclude a protester
from the competitive range on grounds that it has no reasonable chance
of being selected for award when, considering the relative superiority
of other proposals, this determination was reasonable.
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - SET-ASIDES -
ADMINISTRATIVE DETERMINATION
5. GAO denies a protest alleging that an agency should have set
aside a procurement for small business in accord with FAR Section
19.501(g) where the procurement is not repetitive, but rather entails
different services than were previously acquired.
OFFICE OF MANAGEMENT AND BUDGET - NO. A-76 - CIRCULARS - POLICY
MATTERS - NOT FOR GAO REVIEW
6. GAO will not consider a protest alleging that an agency failed to
conduct a cost comparison as required by OMB Circular No. A-76, because
this is a matter of executive branch policy.
Ameriko Maintenance Company protests the proposed award of a contract
under request for proposals (RFP) No. F33600-84-R-0098, issued by
Wright-Patterson Air Force Base (AFB), for hospital aseptic management
services (HAMS) at three facilities. We deny the protest in part and
dismiss it in part.
Ameriko alleges, first, that a 2-year experience requirement unduly
restricts competition and discriminates against small business concerns,
particulary minority-owned and socially disadvantaged small businesses
and, second, that Ameriko was improperly excluded from the competitive
range. The firm also alleges that the Air Force should not have
included Keesler Aif Force Base, where Ameriko currently is performing
cleaning services, under a small business set-aside, since applicable
regulations require repetitive small business set-asides once services
have been successfully acquired in this manner. Finally, Ameriko
contends that the Air Force failed to perform a cost comparison mandated
by Office of Management and Budget (OMB) Circular No. A-76.
The subject solicitation is for a HAMS program at Lackland, Tinker,
and Keesler Air Force Bases. Under this type of program, the contractor
performs all cleaning services in the medical facility, including
critically defined areas of surgery, labor and delivery, recovery, and
newborn nurseries. Lackland is the only facility currently covered by a
HAMS contract; the other two bases are serviced by a combination of
military and contractor personnel, with the military cleaning critical
areas and the contractor's employees cleaning all other areas.
The fixed-price contract to the awarded covers a base period ending
September 30, 1985, plus 3 option years; its total estimated value is
$19.6 million. The amended closing date for receipt of initial
proposals was August 13, 1984; however, information concerning
offerors' experience was required to be submitted by August 6, so that
according to the solicitation, this experience could be validated before
the technical review board met.
The RFP set forth, in descending order of importance, the following
evaluation criteria:
1. Experience;
2. Quality Assurance Program;
3. Work Distribution and Staffing;
4. Management Support Program;
5. Training Program;
6. Equipment; and
7. Supplies.
Although not stated in the solicitation, the maximum point scores
respectively assigned to these criteria were 300, 275, 175, 150, 50, 25,
and 25.
The solicitation also set forth the minimum requirements for these
seven criteria. With regard to experience, the solicitation provided
that:
"b. Offerors must have obtained experience in managing and
performing a Hospital Aseptic Management System (HAMS) program as
described in the performance work statement entitled 'Hospital
Aseptic Management System'. . . . Ofterors must have been
regularly engaged in the business of providing aseptic services in
the critical areas of surgery (pre-schedule, post-case, and
end-of-day cleaning), labor and delivery, newborn nursery, and
recovery. The mimimum acceptable experience is performance of
hospital aseptic management system services for 24 months within
the previous 36 months from the date established for receipt of
initial proposals. The 24 months may be at a maximum of two (2)
sites and shall not be concurrent." (Emphasis added.)
In its technical proposal, Ameriko submitted documentation
demonstrating its experience at four different military hospitals. The
Air Force found, however, that Ameriko had not provided cleaning
services in certain critical areas, i.e., surgery, at each of these
facilities for the mimimum required period of time. Consequently,
Ameriko did not receive any points for experience.
Additionally, the Air Force found Ameriko's technical proposal to be
deficient in numerous other areas, including infection and quality
control and emergency response. As a result, Ameriko received only 218
out of 1,000 available points for its technical proposal.
The solicitation further provided that award would be made to the
offeror that, as a result of evaluation of technical and cost proposals,
obtained the highest weighted score. Ameriko's weighted score was 365
of a possible 1,000; the scores earned by the other four offerors were
970, 928, 787 and 698. As a result of this evaluation, the Air Force
excluded Ameriko from the competitive range.
A. Propriety of Experience Requirement
Ameriko's first contention is that the experience requirement was
unduly restrictive and thereby discriminatory against small and
minority-owned businesses. Ameriko argues that the requirement for
offerors to deomonstrate performance of HAMS services for 24 months
within the previous 36 months, at a maximum of two sites, and excluding
services performed concurrently, far exceeds the Air Force's mimimum
needs. In support of this position, Ameriko argues that similar
solicitations issued by both the Navy and Army do not contain such
stringent experience requirements.
The Air Force responds that the 2-year experience requirement was
established by its Surgeon General's Office to ensure that "contractors
performing cleaning services in critical areas had previously
demonstrated their ability to maintain aseptic conditions." Given the
critical nature of this work, the Air Force believes that only
contractors with 2 years of experience possess sufficient knowledge and
stability to perform HAMS services.
In Scientific Industries, Inc., B-208307, Apr. 5, 1983, 83-1 CPD
Paragraph 361, our Office addressed a protest alleging that an identical
experience requirement in a solicitation for a HAMS program, also issued
by the Air Force, was unduly restrictive. We cited a long line of cases
setting forth our standard of review, which is generally that we will
not question an agency's determination of its mimimum needs unless there
is a clear showing that the determination has no reasonable basis. We
further stated that once an agency has established prima facie support
for its contention that a challenged requirement is reasonable related
to its needs, the burden of proof lies with the protester to show that
the government's insistence upon it is clearly unreasonable. In
Scientific Industries, we concluded that the Air Force had indeed
established prima facie support for its contention that the 2-year
experience requirement was warranted, noting the importance of
maintaining the highest possible aseptic environment in critical areas
such as surgery, labor and delivery, recovery, and newborn nurseries.
We therefore determined that it was not unreasonable for the Air Force
to insist upon obtaining contractors with at least 2 years of
experience.
Ameriko contends that the present situation is distinguishable
because, while the protester in the Scientific Industries case failed to
demonstrate any experience, Ameriko has demonstrated experience in
providing HAMS service and has satisfied the intended purpose of the
2-year requirement.
While Ameriko correctly asserts that it has greater experience than
the earlier protester, this factor alone does not warrant a different
result. These circumstances necessitating the inclusion of this
requirement in the prior solicitation have not changed: the Air Force
still needs to maintain the highest possible aseptic environment in its
hospitals, and such an environment still can be ensured through the
hiring of only experienced contractors. Accordingly, since the Air
Force again has made a prima facie case for the inclusion of the
experience requirement in the subject solicitation, the burden of proof
shifts to Ameriko to show that the Air Force's continued insistence on
this requirement is unreasonable.
Ameriko has shown that it has satisfactorily performed cleaning
contracts in military hospitals. However, with the exception of one
contract, which by the end of 1984 would have been performed for 10
months, these contracts have not involved the entire panopoly of
services in critical areas which are required under the RFP. This
experience, in our opinion, neither demonstrates conclusively that
Ameriko can maintain the highest possible aseptic environment nor
establishes that the requirement for 2 years of experience exceeds the
Air Force's mimimum needs. We therefore deny Ameriko's protest on this
basis.
Ameriko further contends that there is no reasonable basis for the
requirement that offerors have the requisite experience before receipt
of technical proposals. Ameriko argues that the relevant date for
determining compliance with this requirement should have been the date
for beginning contract performance, i.e., January 1, 1985.
We find it unnecessary to resolve this issue. The record indicates
that Ameriko would have had only 10 months of experience in performing
all of the services required by a HAMS contract as of December 31, 1984.
Consequently, even if we agreed that the relevant date should be the
beginning of performance, Ameriko would not satisfy the 2-year
requirement. Thus, this basis of protest is academic. Cf. Gulf &
Western Healthcare, Inc., B-209684 et al., Aug 25, 1983, 83-2 CPD
Paragraph 248 (protest challenging a specification requirement is
academic where the protester would not be entitled to award even if the
protest were sustained).
With respect to Ameriko's contention that the 2-year experience
requirement discriminates against small businesses, we find that this
allegation is not supported by the record. There is no evidence
suggesting that the Air Force in any way restricted small,
minority-owned, or disadvantaged businesses from competing, and Ameriko
itself acknowledges that three small businesses can meet the 2-year
minimum. Accordingly, we find this basis of protest without merit. Cf.
Railway Systems Engineering Corp., B-208687.2, Sept. 17, 1984, 84-2 CPD
Paragraph 294 (allegation of discrimination against small businesses is
not supported by record where no evidence establishes that such firms
were restricted from competing and two of the four contracts at issue
were awarded to small businesses).
B. Exclusion from Competitive Range
Ameriko's second contention is that it was improperly excluded from
the competitive range. Citing Federal Acquisition Regulation (FAR), 48
C.F.R. Section 15.609(a) (1984), and several of our decisions, Ameriko
states that proposals should be included in the competitive range unles
(1) the deficiencies are such that major revisions and additions would
be required to make the proposal acceptable; or (2) the proposal is so
technically inferior that meaningful discussions would be precluded; or
(3) the proposal would not have a reasonable chance of being selected
for award. Ameriko argues that none of these circumstances was present
in this case and concludes that it was excluded primarily because of
noncompliance with the 2-year requirement.
The Air Force responds that Ameriko's proposal could not have been
made acceptable without complete revision and that it had no reasonable
chance of being selected for award. In addition to the deficiencies
noted above, the Air Force found that Ameriko failed to address many
requirements of the Performance Work Statement; that a majority of its
technical proposal consisted of "off-the-shelf," commercially available
documents that did not demonstrate the interrelationship between
different aspects of a successful HAMS program; and that its quality
control program was not in accord with HAMS requirements.
Generally, offers that are technically unacceptable as submitted and
would require major revisions to become acceptable are not for inclusion
in the competitive range. Potomac Scheduling Co. et al., B-213927.2,
Aug. 13, 1984, 84-2 CPD Paragraph 162. Given the deficencies outlined
above, we conclude that the Air Force acted reasonably in excluding
Ameriko from the competitive range.
It is true that the primary factor in the determination to exclude
Ameriko from the competitive range was the firm's failure to meet the
mimimum acceptable experience requirement. However, Ameriko never
contends that it met the 2-year requirement. Since we have found it
reasonable, we also find the Air Force's determination to not award
Ameriko any points for experience reasonable. Obviously, Ameriko could
not have improved its point score for this criterion through
discussions, since the necessary experience had to have been acquired
before the due date for technical proposals. See Cotton & Co.,
B-210849, Oct. 12, 1983, 83-2 CPD Paragraph 451.
The Air Force also justifies excluding Ameriko from the competitive
range on grounds that its proposal had no reasonable chance of being
selected for award. We have approved this "relative" approach to
determining the competitive range based upon the array or scores
actually obtained by the other offerors. See, e.g., Leo Kanner
Associates, B-213520, Mar. 13, 1984, 84-1 CPD Paragraph 299.
Consequently, even if it is technically acceptable or capable of being
made so, a proposal need not be included in the competitive range when
the agency determines that it has no reasonable chance of being selected
for award. JDR Systems Corp., B-214639, Sept. 19, 1984, 84-2 CPD 325.
Here, Ameriko's proposal received a significantly lower weighted
score, 365, than any of the other four offerors, whose scores ranged
from 698 to 970. Given this disparity, we see no basis for questioning
the Air Force's determination to eliminate Ameriko's proposal, which had
to overcome both a technical and a cost disadvantage, from further
consideration.
C. Inclusion of Keesler AFB in solicitation
Ameriko's third contention is that the Air Force improperly included
Keesler Air Force Base in the solicitation, violating FAR Section 19.501
(g), which requires repetitive small business set-asides for a
procurement once the goods or services have been successfully acquired
under a small business set-aside. At Keesler, Ameriko states, the Air
Force has previously contracted for "medical treatment facilities/
housekeeping services" under a small business set-aside. Ameriko
concludes that the housekeeping services for Keesler covered by the
current solicitation should have been procured separately as a small
business set-aside.
The Air Force, on the other hand, maintains that the cited regulation
only applies to the repetitive acquisition of identical goods or
services. The existing contract at Keesler does not include the
servicing of certain critical areas, such as surgery. Since the scope
of work has been expanded to include these areas, the Air Force argues
that the regulation is inapplicable.
In Norfolk Dredging Co. -- Second Request for Reconsideration,
B-212514.3, Nov 16, 1983, 83-2 CPD Paragragh 575, we held that the
phrase "all future requirements . . . for that particular product or
service" in the then-applicable Defense Acquisition Regulation Section
1-706.1(f), reprinted in 32 C.F.R. pts. 1-39 (1983), did not mean that
an identical product or service must be procured in order for repetitive
set-asides to be required, so long as the contracting officer expects
competition from two or more small businesses. That decision involved
dredging services, which the Army Corps of Engineers had previously
procured under a small business set-aside for "maintenance dredging." We
found that a second procurement, for "maintenance dredging" and "new
work," should be conducted as a set-aside because there was no
meaningful distinction between maintenance and new work.
The present situation is different. There is a meaningful
distinction between the performance of housekeeping services and the
cleaning of critical areas of a hospital; different skills and
different methodologies are required. Further, the decision to procure
all services under a single HAMS contract, rather than contract
separately for housekeeping, is, in our opinion, within the Air Force's
discretion. We therefore conclude that FAR Section 19.501(g) is
inapplicable to the performance of new work at Keesler, and we deny the
protest on this basis.
D. Failure to Conduct Cost Comparison
Ameriko's final contention is that the Air Force improperly failed to
perform a cost comparison as required by OMB Circular No. A-76 before
expanding the scope of work at Keesler to a HAMS system. Since some of
the work to be performed under the HAMS contract is currently being
performed by military personnel, Ameriko maintains that the Air Force
was required to determine whether the hiring of outside contractors is
justified.
The decision whether to perform in-house or contract out is a matter
of executive branch policy that we do not review. DWS, Inc.,
B-211950.2, Feb. 10, 1984, 84-1 CPD Paragraph 164. We consider protests
concerning OMB Circular No. A-76 only when it is alleged that an agency
did not adhere to the rules announced in a solicitation issued for the
purpose of comparing the cost of contracting out to the cost of
performing in-house. Id. No such allegations have been made here.
For the foregoing reasons, the protest is denied in part and
dismissed in part.
Harry R. Van Cleve
General Counsel
B-216405, SEP 28, 1984, 84-2 CPD 371
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - SOLICITATION IMPROPRIETIES - APPARENT PRIOR TO
CLOSING DATE FOR RECEIPT OF PROPOSALS
DIGEST:
PROTEST THAT COMMERCE BUSINESS DAILY SYNOPSIS FOR ORDER AGAINST
GENERAL SERVICES ADMINISTRATION SCHEDULE CONTRACT DID NOT PERMIT
SUFFICIENT TIME FOR SOURCES TO RESPOND WHICH WAS FILED WITH GAO AFTER
CLOSING DATE IS UNTIMELY UNDER 4 C.F.R. SEC. 20.2 (1984).
PHILIPS INFORMATION SYSTEMS:
BY LETTER DATED SEPTEMBER 12, 1984, PHILIPS INFORMATION SYSTEMS
(PHILIPS) PROTESTED THE PROPOSED ORDER BY ACTION OF CERTAIN WORD
PROCESSING SYSTEMS AND ACCOMPANYING SOFTWARE FROM SONY CORPORATION OF
AMERICA (SONY) AGAINST GENERAL SERVICES ADMINISTRATION (GSA) CONTRACT GS
00K840155679.
THIS PROPOSED ORDER WAS SYNOPSIZED IN THE AUGUST 8, 1984, ISSUE OF
THE COMMERCE BUSINESS DAILY (CBD). THE CBD ANNOUNCEMENT STATED THAT
FIRMS COULD PROPOSE COMPARABLE EQUIPMENT TO MEET THE SPECIFIC AGENCY
REQUIREMENTS. THE CBD ANNOUNCEMENT ALSO STATED:
"... IF NO AFFIRMATIVE RESPONSE IS RECEIVED IN WRITING WITHIN FIFTEEN
CALENDAR DAYS AFTER PUBLICATION OF THIS SYNOPSIS TO THE EFFECT THAT A
COMPARABLE SOURCE IS AVAILABLE OR THAT IT IS MORE ADVANTAGEOUS TO THE
GOVERNMENT THAN PURCHASING FROM A SCHEDULE CONTRACTOR, AN ORDER WILL BE
PLACED WITH SONY AS SET FORTH ABOVE. ORAL COMMUNICATIONS CONCERNING THIS
ANNOUNCEMENT ARE NOT ACCEPTABLE."
PHILIPS PROTESTS THAT THIS CBD ANNOUNCEMENT PERMITTING ONLY A 15-DAY
RESPONSE PERIOD WAS A VIOLATION OF FEDERAL PROCUREMENT REGULATIONS, 41
C.F.R. SEC. 1-4.1109-6 (1983), TEMPORARY REGULATION 71, AND PUBLIC LAW
98-72, 97 STAT. 403 (1983), AMENDING SECTION 8(E) OF THE SMALL BUSINESS
ACT. PHILIPS CONTENDS THAT THIS REGULATION AND STATUTE REQUIRE A 30-DAY
RESPONSE PERIOD IN THIS SITUATION.
OUR BID PROTEST PROCEDURES REQUIRE THAT PROTESTS BASED UPON ALLEGED
IMPROPRIETIES APPARENT IN THE SOLICITATION BE FILED PRIOR TO THE CLOSING
DATE FOR RECEIPT OF PROPOSALS. 4 C.F.R. SEC. 20.2 (1984). PHILIPS
ADMITS THAT IT DID NOT RESPOND TO ACTION UNTIL THE SIXTEENTH DAY
FOLLOWING THE CBD SYNOPSIS WHEN IT ORALLY COMMUNICATED WITH THE CONTRACT
SPECIALIST AND ACTION HAS INDICATED NO CONTACT WAS MADE BY PHILIPS PRIOR
TO THE CLOSING DATE STATED IN THE SYNOPSIS. THIS OFFICE HAS HELD THAT
PUBLICATION OF A PROCUREMENT IN A SYNOPSIS IN THE CBD CONSTITUTES
CONSTRUCTIVE NOTICE OF THE SOLICITATION AND ITS CONTENTS. MICRO MIL,
INC., B-202703, MAY 1, 1981, 81-1 C.P.D. PARA. 335. WHERE, AS HERE, THE
SYNOPSIS SERVES AS A SOLICITATION FOR THE AGENCY REQUIREMENTS, THE
PROTESTER'S FAILURE TO OBJECT TO THE TERMS PRIOR TO THE CLOSING DATE FOR
RECEIPT OF OFFERS RENDERS THE PROTEST UNTIMELY. SEE CMI CORPORATION,
B-206349, MAR. 8, 1982, 82-1 C.P.D. PARA. 212, AND DATA GENERAL,
B-197776, JULY 21, 1980, 80-2 C.P.D. PARA. 53, WHICH ALSO CONCERN CBD
SYNOPSES OF ORDERS AGAINST GSA SCHEDULE CONTRACTS.
THEREFORE, PHILIPS' PROTEST AGAINST THE TERMS OF THE SYNOPSIS IS
UNTIMELY AND IS DISMISSED.
FILE: B-216404
DATE: March 25, 1985
MATTER OF: Bryan H. Pridgeon - Forfeiture of Deposit Incident to
Lease with Option to Purchase
DIRECT:
OFFICERS AND EMPLOYEES - TRANSFERS - LEASES - HOUSE LEASE WITH OPTION
TO BUY
An employee who entered into a lease and paid $1,000 as
consideration for an option to purchase the residence forfeited
that sum when he failed to exercise the option prior to a
permanent change of station transfer. Although the right to
purchase under the option did not confer title so as to justify
reimbuseement of the sum as a real estate expense, the forfeited
amount may be partially reimbursed as a miscellaneous expense if
the transfer was the proximate cause of the forfeiture. See
Nathan F. Rodman, B-216075, March 6, 1985.
This decision is in response to a request from a certifying officer
with the Southwest Region of the Bureau of Reclamation, United States
Department of the Interior, for our decision concerning the entitlement
of Mr. Bryan H. Pridgeon to reimbursement of a deposit he forfeited when
he failed to exercise an option to purchase a dwelling he was leasing at
his old duty station. We hold that he may be reimbursed for the deposit
to the extent authorized as a miscellaneous expense allowance if the
transfer was the proximate cause of the forfeiture.
Mr. Pridgeon was stationed in El Paso, Texas, when, on July 15, 1983,
he signed a lease with a 1-year option to purchase the residence. The
agreement provided for $1,000 as "option money," forfeitable if the
agreement was not consummated. The option money was comprised of a $360
security deposit, $500 in earnest money, and $140 in cash paid to the
owner. Effective April 15, 1984, Mr. Pridgeon was transferred from El
Paso to Albuquerque, New Mexico. The record shows that he signed a
service agreement on March 8, 1984. He did not exercise the option
prior to that time. Consequently, he forfeited the $1,000 deposit when
he was transferred.
After his transfer, Mr. Pridgeon filed a travel voucher which
included reimbursement of the forfeited $1,000. He was found to be
entitled to reimbursement of the $360 security deposit as the cost of
settling an unexpired lease and of the remaining $640 as a miscellaneous
expense allowance against the $700 limit for miscellaneous expenses
without receipts. /1/ Since the travel voucher total amount was less
than the sum Mr. Pridgeon was advanced for relocation, the Finance
Officer issued him a bill for collection of $671.45. Mr. Pridgeon
protested this determination since he apparently felt that he should
receive both reimbursement of the forfeited $1,000 in full and an
additional miscellaneous expense allowance of $700.
Upon reconsideration, and based upon Comptroller General decision
B-177595, March 2, 1973, the Regional Finance Officer determined that
the $360 could not be reimbursed as an unexpired lease termination
expense since the security deposit was clearly incorporated as a part of
the option contract. However, he concluded that the $360 could be
counted toward Mr. Pridgeon's miscellaneous expense allowance. He also
concluded that Mr. Pridgeon was entitled to a miscellaneous expense
allowance at the with receipts limit ($807) instead of the without
receipts limit ($700) previously imposed. Thus, Mr. Pridgeon was
allowed reimbursement of $807, instead of $700, and an additional bill
for collection was issued in the amount of $253, which represented the
difference between the $360 disallowed security deposit and the $107
increase in the miscellaneous expense allowance.
The decision upon which the Regional Finance Officer based his final
determination as to treatment of Mr. Pridgeon's forfeited $1,000
involved an employee who entered into a lease-purchase contract,
depositing $1,500 and agreeing to lease the property until the date of
settlement. The employee was transferred and he forfeited his deposit.
He sought reimbursement for the $1,500 deposit. We held that, although
a forfeited deposit on a contract to purchase could not be reimbursed as
a real estate expense since no legal or equitable title had passed, it
could be reimbursed as a miscellaneous expense since the cause of the
forfeiture was the employee's transfer. B-177595, cited above.
In the present case, Mr. Pridgeon entered into a 1-year lease with an
option to purchase and he was not legally bound to purchase the
property. Although Mr. Pridgeon had no legal obligation to exercise his
option, we have held that an employee may be reimbursed for a forfeited
deposit on an option contract as a miscellaneous expense, where the
transfer was the proximate cause of the forfeiture. Nathan F. Rodman,
B-216075, March 6, 1985.
We believe that, applying Rodman, and B-177595, cited above, Mr.
Pridgeon was properly reimbursed for the forfeited option money as a
miscellaneous expense, to the extent authorized by para. 2-3.3 of the
FTR, assuming the agency is satisfied that his transfer was the
proximate cause of the forfeiture. Mr. Pridgeon's claim for expenses in
excess of the maximum amount reimbursable as miscellaneous expenses may
not be paid.
Comptroller General
of the United States
(1) As provided in 5 U.S.C. Section 5724a(b)(1) (1982), and its
implementing regulation, paragraph 2-3.3 of the Federal Travel
Regulations, FPMR 101-7 (Supp. 4, effective October 1, 1982) (FTR), the
limit without receipts for an employee with an immediate family is the
lower of $700 or 2 weeks basic pay ($807 in Mr. Pridgeon's case). When
receipts are provided, the higher of the two amounts applies as the
limit.
FILE: B-216401
DATE: April 22, 1985
MATTER OF: Dr. Mohamed M. Shanbaky
OFFICERS AND EMPLOYEES - TRANSFERS - REAL ESTATE EXPENSES -
REIMBURSEMENT
An employee who sold his residence at his former duty station after
he had been notified that he was to be transferred back to that same
duty station, claims temporary quarters subsistence expenses and
expenses relating to the purchase of a new residence. Since the time
allowed for reimbursement of real estate expenses incident to the
initial transfer had expired some months before he was notified of the
retransfer, the costs of purchasing the new residence and temporary
quarters subsistence expenses may be allowed.
An employee who sold his old residence at his former duty station
after he had been notified that he was to be transferred back to that
same duty station, claims temporary quarters subsistence expenses and
expenses relating to the purchase of a new residence at that duty
station. /1/ Since the employee was notified of his transfer back to
his former station after the time for sale of his residence incident to
the initial transfer had expired, the decision in Warren L. Shipp, 59
Comp. Gen. 502 (1980), is not controlling. See Robert T. Celso,
B-216950, dated today. Accordingly, the costs of purchasing the new
residence and temporary quarters subsistence expenses may be allowed.
Dr. Mohamed M. Shanbaky, an employee of the Nuclear Regulatory
Commission, was transferred in January 1980 from King of Prussia,
Pennsylvania, to Three Mile Island, Pennsylvania. At that time he owned
and resided in a condominium at Royersford, Pennsylvania. He remained
in that residence, commuting to Three Mile Island, until July 1980 when
he purchased a dwelling in Elizabethtown, Pennsylvania. He retained the
condominium in Royersford as a rental property. Dr. Shanbaky was
unsuccessful in efforts to sell the condominium until August 1982 when
he agreed on the selling price with a prospective buyer and made a
verbal agreement for sale of the property. A written sales agreement
was later signed and the sale of the condominium was closed December 31,
1982.
After making the verbal commitment to sell the condominium, but
before a written agreement was signed, Dr. Shanbaky was notified that he
was to be transferred back to King of Prussia. He reported to his
former duty station on October 19, 1982, but continued to reside in
Elizabethtown until September 5, 1983. From that date he and his family
occupied temporary quarters until November 1983 when they moved into a
newly constructed residence at Downingtown, Pennsylvania.
In addition to mileage and per diem for travel to the new duty
station, Dr. Shanbaky claims temporary quarters subsistence expenses for
himself and family from September 5 to October 4, 1983, in the amount of
$3,023.55, and expenses relating to the purchase of the residence at
Downingtown, Pennsylvania, in the amount of $4,775.
The submission refers to Warren L. Shipp, 59 Comp. Gen. 502 (1980),
in which we stated the rule that employees must avoid unnecessary
expenditures when retransferred to their former duty stations. We said
specifically that once an employee is notified that he is being
transferred back to his former duty station, the Government's obligation
to reimburse real estate expenses is limited to the expenses already
incurred and those which cannot be avoided. In a decision issued today,
Robert T. Celso, B-216950, 64 Comp. Gen. . . . , we reexamined the
holding in Warren L. Shipp, 69 Comp. Gen. 502, supra, and limited the
scope of the decision to cover only those employees who are notified of
retransfer to their former duty stations within the maximum period
allowed for completing residence transactions.
Since Dr. Shanbaky transferred to Three Mile Island in January 1980,
his eligibility for real estate expense reimbursement incident to that
transfer expired in January 1982, some months before he was notified of
the retransfer. In that connection we note that the amendment to the
Federal Travel Regulations allowing a maximum of 3 years for real estate
transaction which was promulgated in August 1982 applied only to those
previously transferred employees whose eligibility for reimbursement of
real estate transaction expense had not expired on the date the new
regulation was issued (August 23, 1982). FTR para. 2-6.1( 5).
Accordingly, the limitation imposed on reimbursement of real estate
expenses by the Shipp decision is not applicable in Dr. Shanbaky's case.
It follows that no similar restriction is required with respect to
temporary quarters subsistence expenses. To the extent it is otherwise
allowable under applicable regulations Dr. Shanbaky's claim may be paid.
Comptroller General
of the United States
(1) Angelo S. Puglise, Director, Division of Accounting and Finance,
Nuclear Regulatory Commission, submitted this request for a decision.
FILE: B-216398 85-1 CPD 133
DATE: February 4, 1985
MATTER OF: Avitech, Inc.
DIGEST:
BIDDERS - INVITATION RIGHT - BIDDER EXCLUSION NOT INTENDED
Protest against agency's refusal to extend due date for submission of
revised proposals in the first step of a two-step procurement is denied
where the agency obtained adequate competition and, ultimately,
reasonable prices, and the protester does not allege that the agency
deliberately attempted to preclude the protester from submitting a
proposal.
Avitech, Inc., protests the award of a contract to Bauer/Electro,
Inc. under Department of the Navy request for proposals (RFP) No.
N68836-84-R-0106. Avitech alleges that the Navy did not provide
offerors with sufficient time to submit revised proposals.
The protest is denied.
The procurement, for a J-52 Fuel Control Test Stand, was conducted
using the two-step formal advertising method. The first step entails
the request for, and the submission, evaluation and, if necessary,
discussion of a technical proposal, without pricing, to determine the
acceptability of the items offered. In the second step, bids are
invited from those firms that submitted acceptable proposals in step 1.
See Radiation Systems, Inc., B-211732, Oct. 11, 1983, 83-2 C.P.D.
Paragraph 434.
The Navy issued step 1, the request for technical proposals, on May
14, 1984. A preproposal conference was held on May 30, at which the
Navy answered questions that had previously been submitted concerning
the RFP requirements; the Navy also later issued an amendment to the
RFP which revised certain technical provisions and answered questions
posed by potential offerors at the preproposal conference.
On July 30, the closing date for the receipt of technical proposals,
nine proposals were submitted. These proposals then were evaluated, and
the Navy determined that two proposals were acceptable, six proposals,
including the proposal submitted by Avitech, were capable of being made
acceptable, and one proposal was unacceptable. By letter dated August
24, the Navy notified the six offerors that submitted proposals capable
of being made acceptable of the deficiencies in their proposals and
requested these offerors to submit revised proposals by September 4.
Subsequently, by phone call to each offeror on August 29, and by letter
of August 31, the Navy informed the six offerors that revised proposals
would be due September 10.
On August 30, Avitech sent a telex to the Navy which requested
clarification of the deficiencies the Navy found in Avitech's proposal.
The Navy resoponded to Avitech's questions by telex on September 6. On
September 7, Avitech protested to the contracting officer that there was
not sufficient time to sumbit a revised proposal by September 10, and
requested the Navy to extend the due date for revised proposals until
September 17. The contracting officer denied Avitech's protest on
September 7, and continued with the procurement, including requesting
and evaluating step 2 bids. The Navy awarded the contract on September
27 to Bauer.
Avitech alleges that the Navy's refusal to extend the due date for
submission of revised proposals was arbitrary, violated procurement
regulations, and denied Avitech the opportunity to compete in this
procurement. Avitech requests that we advise the Navy to resolicit the
contract. In response, the Navy states that Avitech's request to extend
the due date for revised proposals was denied basically because the
contracting officer determined that an offeror with the technical
capability to perform the contract would have been capable of submitting
a revised proposal in these circumstances by September 10. In this
regard, the Navy notes that the RFP provided offerors with detailed
instructions for preparing an acceptable technical proposal and with the
Navy's specific requirements. The Navy also asserts that the test
stands were urgently needed and that the Navy could not extend the due
date and thereby delay the purchase.
Choosing the date for bid opening in an advertised procurement, or
for the receipt of proposals in a negotiated procurement -- as indicated
above, two-step procurements include features of both -- is within the
discretion of the contracting officer. See Spede Tool Manufacturing
Co., B-214622, Sept. 11, 1984, 84-2 C.P.D. Paragraph 282; The Kuljian
Corp. B-203717, Aug. 28, 1981, 81-2 C.P.D. Paragraph 185. In this
regard, the propriety of any particular procurement depends on whether
all offerors were treated equally and the government obtained adequate
competition and reasonable prices, rather than on whether a particular
firm was given the opportunity to compete. The Kuljian Corp., B-203717,
supra. We have applied this rule where, for example, the agency has
refused to extend the due date for best and final offers after a
protester has alleged that it had insufficient time to prepare a best
and final offer, because it did not receive an amendment until shortly
before best and final offers were due. We concluded that the agency's
refusal to extend the due date was not objectionable unless the agency
deliberately attempted to preclude the protester from competing. Larry
Napolean Cooper, B-208747, Jan. 31, 1983, 83-1 C.P.D. Paragraph 101;
cf. Essex Electro Engineers, Inc., B-210366, June 13, 1983, 83-1 C.P.D.
Paragraph 650 (where we noted, with respect to whether negotiations had
to be reopened in the first step of a two-step procurement, that an
agency is not required to continue a procurement to permit a single
offeror another chance to improve its proposal).
Here, four of the six offerors who were requested to submit revised
proposals were able to submit acceptable technical proposals within the
required timeframe. Thus, the Navy received six acceptable technical
proposals out of the nine firms that originally submitted offers.
Moreover, competitors had been given more than 2 months to prepare their
initial technical proposals; the due date already had been extended
once; and the need for the test stands, for which bids still had to be
invited and submitted, was urgent. Since Avitech does not allege that
the Navy deliberately attempted to preclude it from competing, and does
not dispute that the Navy obtained adequate competition and, ultimately,
reasonable prices, Avitech's inability to submit a revised proposal
within the required timeframe does not provide a basis for us to object
to the procurement.
The protest is denied.
Comptroller General
of the United States.
FILE: B-216397.2 85-1 CPD 317
DATE: March 18, 1985
MATTER OF: Lamari Electric Company
DIGEST:
BIDS - PREPARATION - COSTS - RECOVERY
1. When agency arbitrarily rejects a small business concern's low
bid as nonresponsive and consequently withdraws its nonresponsibility
determination from consideration by the Small Business Administration,
the firm is entitled to bid preparation costs if it otherwise would have
had a substantial chance for award.
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - RESPONSIBILITY
DETERMINATION - NONRESPONSIBILITY FINDING - REVIEW BY GAO
2. When question of responsibility of a protester claiming bid
preparation costs due to agency's improper withdrawal of a request for a
certificate of competency (COC) has been referred to the Small Business
Administration (SBA) in connection with a more recent procurement on
which the scope of work is similar, GAO will decline to consider the
matter until SBA completes its review.
Lamari Electric Company claims $13,075 in bid preparation costs based
on our decision in Lamari Electric Co., B-216397, Dec. 24, 1984, 84-2
CPD Paragraph 689. In that decision, we sustained Lamari's protest but
did not recommend remedial action. For the reasons indicated below, we
decline to consider the matter at this time.
Our December decision concerned invitation for bids No. 263-84-B(
95)-0142, covering renovations in Building 4 at the National Institutes
of Health (NIH). The Department of Health and Human Services (HHS)
rejected the low bid of Lamari, an individually owned small business, as
nonresponsive because the trade name used by it was different from the
trade name that same individual had used as principal on the bond. We
sustained the protest, finding that the bidder and the principal on the
bid bond were the same legal entity.
In the procurement in question, HHS had found that regardless of
responsiveness, Lamari was not a responsible, prospective contractor,
due to past unsatisfactory performance. HHS initially referred the
matter to the Small Business Administration (SBA) under the certificate
of competency (COC) procedures; it subsequently discovered the
discrepancy between the bid and bid bond. The question of Lamari's
responsibility had not been resolved by SBA before HHS rejected Lamari
on grounds of the purportedly defective bid bond and withdrew the
request for a COC.
In its report on the protest, HHS argued that it would in any event
not have been required to follow the COC procedures because small
business nonresponsibility determinations based upon past performance
are exempt under certain provisions of the Federal Acquisition
Regulation concerning construction contracts. We found HHS's
interpretation of the regulations unreasonable and held that such
determinations "clearly are subject to the COC procedures." However, as
indicated above, we recommended no remedy because of the ongoing
performance and the urgent need for completion of the work.
The standard for entitlement to bid preparation costs is whether the
procuring agency's actions with respect to the claimant's bid were
arbitrary and capricious, i.e., were not taken in good faith, were
contrary to law or regulation, or had no reasonable basis, so that --
but for these actions -- the claimant would have had a substantial
chance of receiving the award. Richard Hoffman Corp., B-212775.3, Apr.
9, 1984, 84-1 CPD Paragraph 393.
We believe HHS's rejection of Lamari's bid as nonresponsive where it
was apparent that the same individual was both the bidder and the
principal on the bid bond, and where the bond clearly referenced and
described the covered work, was unreasonable. See ATD-American Co., 63
Comp. Gen. 549 (1984), 84-2 CPD Paragraph 229. As indicated above, we
also found HHS's arguments as to why it had not referred the matter to
SBA to be unreasonable. See Propper Manufacturing Co. Inc., B-208035,
Mar. 22, 1983, 83-1 CPD Paragraph 279; International Limousine Service,
B-206708, July 26, 1982, 82-2 CPD Paragraph 77.
Consequently, on both grounds HHS's action would justify the award of
bid preparation costs if Lamari otherwise had a substantial chance of
award under the IFB. HHS, however, asserts that Lamari was not a
responsible contractor and therefore that Lamari had no such chance.
We have occasionally reviewed nonresponsibility determinations
concerning small businesses in situations where the SBA declined to
consider the matter because only entitlement to bid preparation costs
was at issue, not the award of a contract based on issuance of a COC.
See Enviornmental Growth Chambers, B-201333, Oct. 8, 1981, 81-2 CPD
Paragraph 286. Here, however, the SBA will have an actual opportunity
to consider the question of Lamari's responsibility in connection with a
more recent procurement for a smiilar building project at NIH. HHS
advises us that it has again found Lamari, the low bidder,
nonresponsible due to past unsatisfactory performance and that on March
7, 1985, it referred the matter to the SBA's Philadelphia Regional
Office.
Under these circumstances, we believe that SBA is the appropriate
agency to review the entire history of Lamari's performance on past
contracts with HHS. The outcome of this review may indicate whether
Lamari had a substantial chance for award in connection with the
procurement for which Lamari is claiming bid preparation costs, since
the scope of work on the two procurements is similar and the elapsed
time between them is relatively short, i.e., about 3 months.
If the SBA issued a COC, it may indicate that Lamari was a
responsible contractor in the first instance, or merely that the
performance problems that let HHS to conclude that Lamari was not
capable of performing the first contract have now been resolved. On the
other hand, a denial of a COC may indicate that the first
nonresponsibility determination was reasonable, so that Lamari would not
have had a substantial chance for award.
In either event, we decline to consider the matter at this time.
When SBA completes its review, Lamari may reinstate its claim and
attempt to show the likelihood that it would have been entitled to award
under the prior procurement.
The claim is dismissed.
Harry R. Van Cleve
General Counsel
FILE: B-216397 84-2 CPD 689
DATE: December 24, 1984
MATTER OF: Lamari Electric Co.
BONDS - BIDS - DISCREPANCY BETWEEN BID AND BID BOND - BID RESPONSIVE
- SAME LEGAL ENTITY
1. Bid in trade name of individual, accompanied by bid bond on which
principal is another trade name of that individual, is responsive where
bid bond correctly identifies solicitation and project and the same
individual is identified as owner on both bid and bond.
CONTRACTS - SMALL BUSINESS CONCERNS - AWARDS - RESPONSIBILITY
DETERMINATION - NONRESPONSIBILITY FINDING - FAILURE TO REFER TO SBA
2. Under Federal Acquisition Regulation, procuring agencies are
required to refed negative responsibility determinations of small
business construction concerns to Small Business Administration for
possible certificate of competency, even when determination is based
upon past unsatisfactory performance. Agency interpretation that such
determination need not be referred to SBA is unreasonable.
Lamari Electric Co. protests the rejection of a bid for certain
building renovations at the National Institutes of Health (NIH),
Department of Health and Human Services (HHS), Bethesda, Maryland. We
sustain the protest.
The apparent low bid on invitation for bids (IFB) No. 263-84-B(95)-
0142, a total small business set-aside, was submitted by a firm
identified as "Lamari Const." and signed by Paul B. Lamari, owner.
However, the bid bond submitted with the bid identified "Lamari,
Electric Co." as the principal; it also showed Paul B. Lamari as the
"owner" of that company. The bond stated the proper IFB number and
correctly identified the project as renovation of suite B-100/B-200 in
NIH Building 41. On both the bid and the bond, the box indicating that
an "individual" was bidding had been checked.
After initially finding that Lamari was not a responsible contractor
because of past unsatisfactory performance and instituting certificate
of competency (COC) procedures, NIH discovered the discrepancy between
the bid and the bid bond when Lamari, in a letter providing financial
and contractual data, stated that its company name was "Lamari Electric
trading as Lamari Construction." NIH subsequently rejected the Lamari
bid as nonresponsive because the bid was by a firm with a different name
(Lamari Const.) than the principal identified in the bid bond (Lamari
Electric Co.). In rejecting the bid NIH reasoned that while each of
these firms appeared to be a sole proprietorship, it could not be
certain either which one it would be making an award to or that the bond
issued to Lamari Electric Co. would guarantee performance by Lamari
Const. On October 10, 1984, based on urgency, NIH authorized award to
the next low bidder (Kaufman Constructors, Inc) despite the pending
protest.
We have consistently held that a bid bond which names a principal
different from the nominal bidder is deficient and that the defect may
not be waived as a minor informality. A. D. Roe Co., Inc., 54 Comp.
Gen. 271 (1974), 74-2 CPD Paragraph 1984, and cases cited therein. On
the other hand, we have recognized that a bid can be accepted, even if
the principal on the bid bond differs from the name of the bidder, if it
can be established from information available at the time of bid opening
that the bidder is the same legal entity as the principal named on the
bid bond. Jack B. Imperiale Fence Co., Inc., B-203261, Oct. 26, 1981,
81-2 CPD Paragraph 339; K-W Construction, Inc., B-194480, June 29,
1979, 79-1 CPD Paragraph 475.
In the present case, the entity who submitted the bid and who was the
principal on the bid bond is the same, i.e., Paul B. Lamari, an
individual. In this regard, it is clear that an entity's use of
different trade names on a bid or a bid bond has no effect on either the
entity's or the bid bond surety's legal obligations. Pedestrian Bus
Stop Shelters, Ltd., 63 Comp. Gen. 265 (1984); 84-1 CPD Paragraph 331;
cf. Las Piedras Construction Corp., B-208555.2, Dec. 27, 1982, 82-2 CPD
Paragraph 579 (change of name of surety). Also, we have found no
provision under Maryland law where an individual, by conducting business
under separate trade names, could be construed as being separate legal
entities for purposes of contracting. The Lamari bid bond clearly
identified the proper IFB and renovation project, as well as listing the
principal as Paul B. Lamari, owner of Lamari Const. and Lamari electric
Co. The surety, in our opinion, would therefore be bound to the
government on the bid bond. See Satellite Services, B-207361.2, Apr. 5,
1983, 83-1 CPD Paragraph 357.
The only case cited by HHS as precedent for rejecting Lamari's bid as
nonresponsive is Martin Co., B-178540, May 8, 1974, 74-1 CPD Paragraph
234, where this Office held that a sole proprietorship could not
properly be substituted after bid opening for a bid in the name of a
corporation. However, as was stated in Ebsco Interiors, B-205526, Aug.
16, 1982, 82-2 CPD Paragraph 130:
"The protester and the (agency) argue that in general a
contract cannot be awarded to any entity other than the one wchich
submitted the bid (citing Martin Co., B-178540, 74-1 CPD Paragraph
234, supra). This rule does not automatically prohibit an award
in cases like this where a bidder uses a trade name instead of its
formal corporate name in its bid. Rather, the rule is generally
to be applied to situations like that in Martin Company, supra,
where it was not clear from the face of the bid which of two or
more legal entities is the bidder. Where trade names are used but
it is possible to sufficiently identify the actual bidder so that
it would not be able to avoid the obligation of the bid,
acceptance of the bid is proper. See Mark II, Inc., B-203694,
Feb. 8, 1982, 82-1 CPD Paragraph 104. . . ."
In this case, only one legal entity is named on both the bid and bid
bond, Paul B. Lamari, the individual. Under such circumstances,
Lamari's bid was clearly responsive and NIH's rejection of its bid
because of the use of differing trade names on the bid and bid bond was
improper.
As noted above, NIH initially determined that Lamari was not a
responsible contractor, based upon alleged past unsatisfactory
performance, and referred this matter to the Small Business
Administration (SBA) for a possible COC before it discovered the
discrepancy between the bid and bid bond. The agency now contends that
even if Lamari's bid is found responsive, it need not refer this matter
to SBA. HHS relies upon a series of Federal Acquisition Regulation
(FAR) provisions, each referencing another, to conclude that in the case
of construction contracts, a nonresponsibility determination based on
past performance is exempt from the requirement for referral based on 15
U.S.C. Section 637(b) (7)(1982), which gives SBA exclusive authority to
determine the competency of small business concerns.
The regulations in question are the following:
"9.103 Policy
"(a) Purchases shall be made from, and contracts shall be
awarded to, responsible prospective contractors only.
"(b) No purchase or award shall be made unless the contracting
officer makes an affirmative determination of responsibility. In
the absence of information clearly indicating that the prospective
contractor is responsible, the contracting officer shall make a
determination of nonresponsibility. If the prospective contractor
is a small business concern, the contracting officer shall comply
with Subpart 19.6, Certificates of Competency and Determinations
of Eligibility. . . . (Emphasis supplied.)
"19.602-1 Referral.
"(a) Upon determining and documenting that a responsive small
business lacks certain elements of responsibility (including, but
not limited to, competency, capability, capacity, credit,
integrity, perseverance, and Tenacity), the contracting officer
shall--
"(2) Refer the matter to the cognizant SBA Regional Office in
accordance with agency procedures except that referral is not
necessary if small purchase procedures are being used or if the
small business concern "(i) Is determined to be unqualified and
ineligible because it does not meet the standard in 9.104-1(g);
provided, that the determination is approved by the chief of the
contracting office; or
"(ii) Is suspended or debarred under Executive Order 11246 or
Subpart 9.4 (Emphasis supplied.)
9.104 Standards
9.104-1 General Standards
"To be determined responsible, a prospective contractor must --
"(g) Be otherwise qualified and eligible to receive an award
under applicable laws and regulationS. For standards pertaining
specifically to construction contracts, see Subparts 36.2, 36.3,
and 36.4 (Emphasis supplied.)
"36.201 Evaluation of contractor performance
"(c) Distribution and use of performance reports . . .
"(2) Before making a determination of responsibility in
accordance with Subpart 9.1, the contracting officer may consider
performance reports in accordance with agency instructions."
HHS argues that the reference in FAR 9.104-1(g) to Far Subpartes
36.2, 36.4 exempts agencies from submitting nonresponsibility
determinations of small business concerns on construction contracts to
the SBA where the determination is based upon past unsatisfactory
performance. These subparts, however, do not contain standards relating
to bidder responsibility, qualifications, or eligibility. Section
36.201 merely addresses the preparation and use of performance reports
which may be used to evaluate bidder responsiblity in general.
Moreover, as confirmed by a review of the historical files in the FAR
secretariat, it is clear that the last sentence of section 9.104-1,
"General Standards," cross-referencing the regulations concerning
construction contracts, was intended to apply to all subsections of that
section. This section 9.104-1, supra, lists all standars which
prospective contractrs must meet in order to be found a responsible
contractor, e.g., adequate financial resource, satisfactory performance
record, etc.
Therefore, we believe the HHS interpretation of the FAR as exempting
it from the statutory requirement of referral to SBA in this case is
unreasonable. Negative responsibility determinations of small
businesses competing for construction contracts clearly are subject to
the COC procedures.
In view of the foregoing, Lamari's protest is sustained. We do not,
however, believe it would be practicable to disturb the award, which was
made more than 2 months ago, since the record indicates that renovation
of Building 41 is urgently required to accommodate both an increase in
the number of investigations and the biological requirements of the
National Cancer Institute laboratories that will occupy it.
Comptroller General of the United States
B-216395, SEP 27, 1984, 84-2 CPD 363
CONTRACTS - SUBCONTRACTS - PROPRIETY - FOREIGN SUBCONTRACTORS
DIGEST:
PROTEST AGAINST PROPOSED AWARD OF CONTRACT TO DOMESTIC FIRM WHICH
ALLEGEDLY INTENDS TO SUBCONTRACT TO BRITISH FIRM IS DISMISSED SINCE
THERE IS NO FEDERAL LAW OR REGULATION PREVENTING DOMESTIC FIRM WHICH
SUBCONTRACTS WORK TO FOREIGN FIRM FROM COMPETING ON GOVERNMENT
CONTRACTS.
SOFTWARE AUTOMATION CORPORATION:
SOFTWARE AUTOMATION CORPORATION (SAC) PROTESTS THE PROPOSED AWARD OF
A CONTRACT TO ADVANCED TECHNOLOGY SYSTEMS (ATS) UNDER REQUEST FOR
PROPOSALS (RFP) NO. 84-01, ISSUED BY THE INSTITUTE FOR DEFENSE ANALYSIS.
SAC ASSERTS THAT ATS, AN AMERICAN FIRM, INTENDS TO SUBCONTRACT THE WORK
TO A BRITISH FIRM USING BRITISH CITIZENS. SAC ARGUES THAT BRITISH
CITIZENS WILL BE "TAKING AMERICAN JOBS." THE PROTESTER CONTENDS THAT
UNDER SUCH CIRCUMSTANCES, ATS SHOULD NOT RECEIVE THE AWARD.
WE DISMISS THE PROTEST.
NEITHER FEDERAL LAW NOR REGULATION PREVENTS FOREIGN FIRMS OR DOMESTIC
FIRMS WHICH SUBCONTRACT ALL OR PART OF THE WORK TO FOREIGN FIRMS FROM
SUBMITTING OFFERS ON GOVERNMENT PROCUREMENTS. SEE DAWSON CONSTRUCTION
COMPANY, INC., B-214070, FEB. 8, 1984, 84-1 C.P.D. PARA. 160. RATHER,
FEDERAL LAW SEEKS MERELY TO EQUALIZE THE COMPETITIVE ADVANTAGE WHICH A
FOREIGN FIRM OR A FIRM SUBSTANTIALLY USING FOREIGN SOURCES MAY POSSESS.
SEE BUY AMERICAN ACT, 41 U.S.C. SECS. 10A-D (1982); OMEGA MACHINE CO.,
B-204471, DEC. 3, 1981, 81-2 C.P.D. PARA. 441. IN THE ABSENCE OF ANY
SPECIFIC ALLEGATION CONCERNING HOW THE PROVISIONS OF THE BUY AMERICAN
ACT OR IMPLEMENTING REGULATIONS MAY HAVE BEEN VIOLATED, WE WILL NOT
CONSIDER THE PROTEST.
B-215392.2, AUG 15, 1984, OFFICE OF GENERAL COUNSEL
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTER
DIGEST:
PROTEST CONCERNING REJECTION OF PROPOSAL FILED WITH GAO MORE THAN 10
WORKING DAYS AFTER PROTESTER RECEIVED WRITTEN NOTICE FROM THE AGENCY OF
THE BASIS FOR REJECTION IS UNTIMELY AND NOT FOR CONSIDERATION ON THE
MERITS.
THE HONORABLE JAMES A. MCCLURE UNITED STATES SENATOR ROOM 149 BORAH
STATION BOISE, IDAHO 83702:
THIS IS IN REPLY TO YOUR CORRESPONDENCE OF JULY 27, 1984, REGARDING
THE ADDITIONAL MATERIALS SUBMITTED TO YOU BY THE GRANGEVILLE CHAMBER OF
COMMERCE AND WHETHER THAT CORRESPONDENCE PROVIDES A BASIS FOR REVERSING
OUR DECISION IN GRANGEVILLE CHAMBER OF COMMERCE, B-215392, JUNE 27,
1984, 84-1 C.P.D. PARA. 682. OUR DECISION DISMISSED AS UNTIMELY A
PROTEST FILED BY GRANGEVILLE CONCERNING THE FEDERAL AVIATION
ADMINISTRATION'S (FAA) DETERMINATION THAT GRANGEVILLE DID NOT MEET THE
MINIMUM REQUIREMENTS FOR THE ESTABLISHMENT OF AN AUTOMATED FLIGHT
SERVICE STATION.
IN YOUR LETTER, YOU ASK WHETHER CONSIDERATION OF GRANGEVILLE'S
PROTEST IS POSSIBLE SINCE GRANGEVILLE ADVISED THE FAA OF ITS INTENT TO
PROTEST AND REQUESTED INFORMATION CONCERNING THE PROCEDURES TO FOLLOW
WITHIN 10 WORKING DAYS OF BEING NOTIFIED OF THE FAA'S DECISION. IN OUR
VIEW, GRANGEVILLE'S LETTER DATED MARCH 23, WHICH WAS IN RESPONSE TO THE
FAA'S NOTIFICATION OF MARCH 13 THAT GRANGEVILLE WOULD NOT BE CONSIDERED,
MERELY INDICATED AN INTENTION TO FILE A PROTEST IN THE FUTURE AND CANNOT
BE USED TO FIX THE DATE OF THE PROTEST FOR TIMELINESS PURPOSES. SEE JRS
INDUSTRIES, INC., B-208867, APR. 4, 1983, 83-1 C.P. D. PARA. 348.
HOWEVER, EVEN IF WE WERE TO FIND THAT THE LETTER CONSTITUTED THE
FILING OF A PROTEST WITH THE FAA, GRANGEVILLE'S PROTEST TO OUR OFFICE IS
STILL UNTIMELY. SECTION 21.2(A) OF OUR BID PROTEST PROCEDURES, 4 C.
F.R. SEC. 21.2(A) (1984), REQUIRES THAT WHEN A PROTEST IS INITIALLY
FILED WITH THE CONTRACTING AGENCY, A SUBSEQUENT PROTEST TO OUR OFFICE
MUST BE FILED WITHIN 10 WORKING DAYS OF THE PROTESTER'S KNOWLEDGE OF THE
INITIAL ADVERSE AGENCY ACTION ON THE PROTEST. BY LETTER DATED APRIL 17,
THE FAA ADVISED GRANGEVILLE THAT ITS OFFER WAS UNACCEPTABLE AND SINCE WE
DID NOT RECEIVE GRANGEVILLE'S PROTEST IN OUR OFFICE UNTIL MORE THAN 10
WORKING DAYS AFTER THIS DATE, IT IS UNTIMELY.
WITH RESPECT TO GRANGEVILLE'S ALLEGATION THAT IT HAD NEVER BEEN
ADVISED OF OUR PROTEST PROCEDURES, OUR BID PROTEST PROCEDURES ARE
PUBLISHED IN THE FEDERAL REGISTER (AT 40 FED. REG. 17979 (1975), AS
AMENDED BY 48 FED. REG. 1931 (1983)) AND THE CODE OF FEDERAL REGULATIONS
(AT 4 C.F.R. PART 21 (1984)), AND THE PUBLIC IS ON CONSTRUCTIVE NOTICE
OF THEIR CONTENTS. STARCK VAN LINES OF COLUMBUS, INC. -
RECONSIDERATION, B-211361.2, JUNE 8, 1983, 83-1 C.P.D. PARA. 627.
POTENTIAL PROTESTERS THEREFORE HAVE FAIR NOTICE OF OUR FILING
REQUIREMENTS, SEE COVENTRY MANUFACTURING COMPANY, INC., B-201626, APR.
21, 1981, 81-1 C.P.D. PARA. 304, AND CANNOT RELY ON THEIR UNAWARENESS OF
OUR PROCEDURES OR ON THE ALLEGEDLY ERRONEOUS ADVICE, OR LACK THEREOF, OF
CONTRACTING PERSONNEL TO EXCUSE THE FAILURE TO COMPLY WITH THE
TIMELINESS RULES. IMPACT INSTRUMENTATION, INC.--RECONSIDERATION,
B-198704, OCT. 3, 1980, 80-2 C.P.D. PARA. 239.
ACCORDINGLY, WE REMAIN OF THE VIEW THAT GRANGEVILLE'S PROTEST WAS NOT
TIMELY FILED.
B-216392, SEP 24, 1984, 84-2 CPD 344
BIDS - PRICES - BELOW COST - NOT BASIS FOR PRECLUDING AWARD
DIGEST:
1. THERE IS NO LEGAL BASIS TO OBJECT TO A BELOW-COST BID. WHETHER A
BIDDER CAN MEET CONTRACT REQUIREMENTS IN LIGHT OF ITS LOW PRICE IS A
MATTER OF BIDDER RESPONSIBILITY, THE AFFIRMATIVE DETERMINATION OF WHICH
IS NOT REVIEWED BY GAO EXCEPT IN CIRCUMSTANCES NOT PRESENT IN THIS CASE.
BIDS - "BUYING IN" - LOSSES - RECOVERY
2. WHEN A "BUY-IN" IS SUSPECTED, CONTRACTING OFFICER MUST TAKE
APPROPRIATE ACTION TO ENSURE THAT BUY-IN LOSSES ARE NOT RECOVERED
THROUGH CHANGE ORDERS OR OTHERWISE.
WESTERN WASTE MANAGEMENT:
WESTERN WASTE MANAGEMENT PROTESTS AWARD TO ANOTHER FIRM UNDER
SOLICITATION NO. DAEA18-84-B-0135 ISSUED BY THE ARMY. WE DISMISS THE
PROTEST.
WESTERN'S BASIS FOR COMPLAINT IS THAT THE OTHER BIDDER'S PRICE IS TOO
LOW. WESTERN STATES THAT THE AWARDEE'S PRICE IS NEARLY 20 PERCENT BELOW
THE GOVERNMENT ESTIMATE AS WELL AS LOWER THAN THE AWARDEE'S PRICES FOR
PRIOR YEARS. WESTERN "SUSPECTS" THAT THE AWARDEE WILL SEEK TO RECOVER
ITS LOSSES FROM ITS LOW BID BY "RAISING OTHER COSTS TO THE BASE."
WESTERN ALSO REFERS TO SECTION 9.103(C) OF THE FEDERAL ACQUISITION
REGULATION (FAR), WHICH WARNS THAT "AWARD OF A CONTRACT ... BASED ON
LOWEST EVALUATED PRICE ALONE CAN BE FALSE ECONOMY. ..."
THERE IS NO LEGAL BASIS TO OBJECT TO AN AWARD ON THE BASIS OF A
BELOW-COST OFFER. TECHNICAL FOOD SERVICES, INC., B-210024, DEC. 21,
1982, 82-2 CPD PARA. 563. WHETHER THE BIDDER WILL BE ABLE TO MEET
CONTRACT REQUIREMENTS IN LIGHT OF ITS OFFERED PRICE IS A MATTER OF
RESPONSIBILITY. BEFORE AWARD, AN AGENCY MUST MAKE AN AFFIRMATIVE
DETERMINATION THAT THE BIDDER IS RESPONSIBLE. BECAUSE THAT IS A VERY
SUBJECTIVE DETERMINATION BASED ON BUSINESS JUDGMENT, WE WILL NOT REVIEW
A CHALLENGE TO SUCH AN AFFIRMATIVE DETERMINATION UNLESS THERE IS A
SHOWING OF POSSIBLE FRAUD OR BAD FAITH ON THE PART OF CONTRACTING
OFFICIALS OR AN ALLEGATION THAT A SPECIFIC RESPONSIBILITY CRITERION SET
FORTH IN THE SOLICITATION WAS NOT MET. NEITHER IS APPLICABLE HERE.
IT IS NOT CLEAR WHAT WESTERN MEANS BY ITS STATEMENT THAT THE AWARDEE
WILL SEEK TO RAISE "OTHER COSTS TO THE BASE." THE SUBMISSION OF A BELOW
COST OFFER, WITH THE EXPECTATION OF AN INCREASE IN THE CONTRACT AMOUNT
THROUGH UNNECESSARY OR EXCESSIVELY PRICED CHANGE ORDERS OR OF RECEIVING
FOLLOW-ON CONTRACTS AT ARTIFICIALLY HIGH PRICES, IS KNOWN AS
"BUYING-IN." SUCH A BIDDING APPROACH IS NOT ILLEGAL. CONTRACTING
OFFICERS, HOWEVER, ARE REQUIRED TO "TAKE APPROPRIATE ACTION TO ENSURE
BUYING-IN LOSSES ARE NOT RECOVERED" THROUGH CHANGE ORDERS OR OTHERWISE.
SEE FEDERAL ACQUISITION REGULATION, SEC. 3.501-2(A), 48 FED.REG.
41,102, 42,112 (1983) (TO BE CODIFIED AT 48 C.F.R. SEC. 3.501-2(A));
TOMBS & SONS, INC., B-206810.2, MAY 10, 1982, 82-1 CPD PARA. 447.
FINALLY, WE POINT OUT THAT THE FAR PROVISION CITED BY THE PROTESTER
IS PART OF A SECTION WHICH MERELY INDICATES THAT A BIDDER MUST BE FOUND
RESPONSIBLE BEFORE AWARD TO THAT BIDDER, REGARDLESS OF ITS PRICE, CAN BE
MADE. IT DOES NOT PRECLUDE ACCEPTANCE OF A BELOW-COST BID IF THE BIDDER
IS FOUND TO BE RESPONSIBLE.
THE PROTEST IS DISMISSED.
B-216388, SEP 26, 1984, 84-2 CPD 361
BIDS - UNBALANCED - PROPRIETY OF UNBALANCE
DIGEST:
1. AN ALLEGATION THAT A BID PRICE ON ONE ITEM WAS TOO LOW DOES NOT
ESTABLISH THE EXISTENCE OF AN UNBALANCED BID, WHICH INCLUDES PRICES ON
ITEMS WHICH ARE UNREASONABLY LOW AND PRICES ON OTHER ITEMS WHICH ARE
UNREASONABLY HIGH.
BIDS - UNBALANCED - PROPRIETY OF UNBALANCE
2. SUBMISSION OF A BELOW-COST BID IN RESPONSE TO AN INVITATION
CONTAINING A WAGE DETERMINATION DOES NOT MEAN THAT THE BIDDER WOULD NOT
BE OBLIGATED TO ADHERE TO THE SPECIFIED WAGE RATES.
CENTRAL TEXAS COLLEGE:
CENTRAL TEXAS COLLEGE PROTESTS THE AWARD OF A CONTRACT BY FORT HOOD
FOR EDUCATIONAL SERVICES UNDER INVITATION FOR BIDS NO.
DAKF48-84-B-0066. CENTRAL COMPLAINS THAT THE AWARDEE'S BID WAS
UNBALANCED AND THEREFORE SHOULD NOT HAVE BEEN ACCEPTED. WE DISMISS THE
PROTEST.
THE PROTESTER STATES THAT THE BID WAS UNBALANCED BECAUSE IT REFLECTED
A PRICE WHICH IS INCONSISTENT WITH THE WAGE DETERMINATION INCLUDED IN
THE INVITATION. ACCORDING TO CENTRAL, THE AWARDEE BID $26.80 FOR ONE
ITEM, A FOUR HOUR SESSION OF PRE-TESTING TO BE CONDUCTED BY A "PROCTOR,"
WHILE THE WAGE DETERMINATION IMPOSED A WAGE RATE OF $8.22 PER HOUR FOR
INSTRUCTORS. CENTRAL STATES THAT IT VIEWS THE INVITATION AS DEFINING A
"PROCTOR" AS AN INSTRUCTOR, THEREBY REQUIRING PAYMENT OF THE INSTRUCTOR
RATE.
THE FACTS ASSERTED BY CENTRAL DO NOT ESTABLISH THAT THE AWARDEE'S BID
WAS UNBALANCED. AN UNBALANCED BID IS ONE IN WHICH AN UNREASONABLY LOW
PRICE IS SUBMITTED ON SOME ITEMS AND A HIGH PRICE IS SUBMITTED ON
OTHERS. EVERETT DYKES GRASSING CO., ET AL., B-210223.4, B-210223.5,
FEB. 13, 1984, 84-1 CPD PARA. 176. WHILE CENTRAL STATES THAT THE
AWARDEE'S BID FOR ONE ITEM WAS LOWER THAN CENTRAL THINKS IT HAD TO BE IN
LIGHT OF THE WAGE DETERMINATION, IT DOES NOT ALLEGE THAT THE AWARDEE
PRICED OTHER ITEMS UNREASONABLY HIGH. THEREFORE, CENTRAL HAS NOT IN
FACT ALLEGED THE EXISTENCE OF AN UNBALANCED BID.
MOREOVER, EVEN IF THE BID WERE MATHEMATICALLY UNBALANCED, IT COULD BE
ACCEPTED. ONLY WHEN A BID IS MATERIALLY UNBALANCED, (I.E., BECAUSE A
SOLICITATION ESTIMATE "IS NOT A REASONABLY ACCURATE REPRESENTATION OF
ACTUAL ANTICIPATED NEEDS," ACCEPTANCE OF AN UNBALANCED BID WOULD PROVIDE
NO ASSURANCE THAT THE AWARD WOULD RESULT IN THE LOWEST COST TO THE
GOVERNMENT) MUST THE BID BE REJECTED. EDWARD B. FRIEL, INC., 55
COMP.GEN. 231 (1975), 75-2 CPD PARA. 164. CENTRAL HAS MADE NO
ALLEGATION THAT SUCH MATERIAL UNBALANCING EXISTS.
CENTRAL'S ACTUAL CONCERN SEEMS TO BE THAT THE AWARDEE BID LOWER ON AN
ITEM THAN WHAT ITS COST WILL BE BECAUSE OF IGNORED THE WAGE
DETERMINATION. THE FACT THAT THE AWARDEE THE WAGE DETERMINATION
(ASSUMING THE PROTESTER IS CORRECT IN STATING THAT THE INSTRUCTOR RATE
APPLIES TO THE ITEM IN QUESTION) DOES NOT MEAN THAT THE AWARDEE IS NOT
OBLIGATED TO PAY THE REQUIRED WAGE RATES. K & P INC. ET AL., B-212263,
B-212263.2, OCT. 11, 1983, 83-2 CPD PARA. 436. THE LOW BID PRICE MAY
MEAN ONLY THAT THE AWARDEE SUBMITTED A BELOW-COST BID ON THAT ITEM,
SOMETHING WHICH IS NOT LEGALLY OBJECTIONABLE. K & P INC., ET AL.,
SUPRA. THE AWARDEE'S COMPLIANCE WITH THE WAGE DETERMINATION DURING
CONTRACT PERFORMANCE, OF COURSE, IS A MATTER FOR THE CONTRACTING OFFICER
AND THE DEPARTMENT OF LABOR.
THE PROTEST IS DISMISSED.
FILE: B-216386 85-1 CPD 326
DATE: March 20, 1985
MATTER OF: AT&T Information Systems, Inc.
DIGEST:
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - PRICES - NOT FIXED
1. When proposal indicates that offered price does not include
mandatory technical requirement for interfacing communications system to
government-furnished generators for emergency use, offeror has not
proposed "fixed" or "finitely determinable" price as required by RFP.
Award based on such a proposal is therefore improper.
CONTRACTORS - RESPONSIBILITY - DETERMINATION - REVIEW BY GAO -
AFFIRMATIVE FINDING ACCEPTED
2. GAO will not consider a protest alleging that the successful
offeror cannot meet an installation requirement, since this is a matter
of responsibility. The only exceptions are when there is a showing of
possible fraud or bad faith on the part of the contracting officer or a
failure to meet definitive responsibility criteria.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL ACCEPTABILITY
3. GAO will deny protest alleging noncompliance with mandatory
technical requirements when in camera review of successful technical
proposal indicates that awardee proposed to meet the requirements and
that the agency properly evaluated the proposal.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION -
TECHNICAL ACCEPTABILITY
4. Agency's failure to require a demonstration of the awardee's
communications systems, even though such a demonstration may have been
contemplated by the solicitation, does not prejudice the protester or
violate any law or regulation where (1) the agency's review of the
successful technical proposal indicates compliance with technical
requirements and (2) the scope, method and purpose of the demonstration
were not stated in the solicitation.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - POINT
RATING - PROPRIETY OF EVALUATION
5. GAO will deny a protest alleging that the protester's proposal
was wrongfully downgraded in three areas where in camare review of the
evaluators' worksheets supports the point scores awarded to the
protester.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - EVALUATION - PRICE
CONSIDERATION - IMPROPER EVALUATION METHOD
6. GAO will deny a protest alleging that the agency wrongfully
shifted a price proposed by protester from "month 1" to "month 0" for
purpose of determining present value where the protester would not be
successful even if its price were evaluated as originally proposed.
CONTRACTS - PROTESTS - SUSTAINED - CORRECTIVE ACTION
7. Although GAO will sustain a protest against award of a
communications system because the awardee's price failed to include one
RFP requirement, it will not recommend corrective action when (1) other
grounds of protest are not meritorious, (2) record does not show that
the price impact of compliance would be significant enough to change
relative standing of offerors, and (3) system has been purchased and
installed.
AT&T information Systems, Inc. protests the award of a contract for
the acquisition and maintenance of private automatic branch exchange
(PABX) communications systems for six Internal Revenue Service (IRS)
service centers. The request for proposals (RFP), No. 83-193,
specifically noted the possibility of separate awards for each service
center.
We sustain the protest in part and deny the remainder.
Six firms, including AT&T and Universal Communication Systems, Inc.,
submitted proposals by February 24, 1984, the closing date for receipt
of proposals. The evaluation scheme set forth in the RFP further
indicated that a maximum of 30 points were available for the technical
capabilities while 70 points were assigned to price; for the latter,
the low offeror for each service center was to receive the full 70
points and each higher offeror was to receive a weighted score equal to
its offered price divided by the low price, then multiplied by 70.
After initial technical evaluation, three offerors were found to meet
all mandatory technical requirements and were included in the
competitive range. After IRS evaluators made site visits to these
three, the final technical evaluation was completed on May 15, 1984.
AT&T received a significantly higher technical score than Universal.
Best and final price proposals were submitted by July 3, 1984, and
Universal's purchase plan (lease and lease-to-purchase plans had also
been sought) was evaluated as the lowest priced for each service center.
When the cost and technical scores were combined in accord with the
RFP, Universal received the highest score for each service center.
Consequently, IRS awarded the protested contract to it on September 5,
1984.
AT&T protests on seven different grounds, alleging that (1) Universal
cannot meet a 120-day cutover requirement to start up the PABX system;
(2) Universal cannot meet various mandatory technical requirements; (3)
IRS failed to conduct a product demonstration or benchmark of
Universal's system as required by the RFP; (4) IRS conducted a faulty
present value analysis in evaluating the purchase option in AT&T's price
proposal; (5) IRS may have disregarded or failed to correct an error in
AT&T's price proposal that had been brought to its attention; (6) IRS
wrongfully dowgraded AT&T's technical proposal in a number of areas;
and (7) Universal's price did not include an amount for interfacing
government-provided generators for use in emergencies and thus was
evaluated too low.
We sustain the protest on the last ground because, by failing to
include an amount for this mandatory technical requirement, Universal
also failed to comply with the RFP requirement for a fixed or finitely
determinable price.
Paragraph F.10.1 of the RFP states that the "contractor shall provide
the requirements for interfacing government-provided generators for use
as a direct source of emergency back-up power." In its technical
proposal, Universal responded as follows to this requirement:
"F.10.1 - Emergency Generator Back-up Power -- (Universal)
understands and will comply. Based on the unknown led
requirements of these geneators, (Universal) would reserve pricing
prior to contract signing."
However, special provision E.3.2.1 of the RFP states:
"To be considered acceptable under the solicitation, offerors
must offer fixed prices for the initial contract period for the
initial system or items being procured. Fixed prices, or prices
which can be finitely determined, must be quoted for each separate
option period and must remain in effect throughout that period.
Where optional quantities are offered, prices must be fixed or
finitely determinable."
We have held that this clause requires offerors to propose "fixed" or
"finitely determinable" prices for all services to be provided under the
entire initial contract and evaluated option periods. See, e.g., PRC
Information Sciences Co., 56 Comp. Gen. 768, 781 (1977), 77-2 CPD
Paragraph 11; Burroughs Corp., 56 Comp. Gen. 142, 150 (1976), 76-2 CPD
Paragraph 472; Computer Machinery Corp., 55 Comp. Gen. 1151 (1976),
76-1 CPD Paragraph 358, aff'd sub nom C3, Inc., B-185592, Aug. 5, 1976,
76-2 CPD Paragraph 128, in which our Office found offerors' failures to
propose fixed prices under substantially identical fixed price clauses
unacceptable. Cf. American Telephone & Telegraph Co., 60 Comp. Gen.
654 (1981), 81-2 CPD Paragraph 157 (tariffed carrier, offering rates
that are subject to change, cannot be considered for award of a
fixed-price contract).
Our in camera review of the record reveals that at least one IRS
technical evaluator noted that this exception by Universal was
unacceptable and that this service was required to be included in
Universal's fixed price. However, IRS confirms that this discrepancy
was neither discussed with Universal nor resolved before award.
Under these circumstances, we cannot conclude that Universal's
contract price includes compliance with the emergency power
requirements. In negotiated procurements, any proposal that fails to
conform to material terms and conditions of the solicitation should be
considered unacceptable and not form the basis for award. Federal Data
Corp., 60 Comp. Gen. 584, 589 (1981), 81-2 CPD Paragraph 28; Computer
Machinery Corp., 55 Comp. Gen. supra at 1154. We do not believe that
Universal has offered a "fixed" or "finitely determinable" price for all
services covered by the RFP.
We therefore sustain the protest on this ground. However, for the
reasons indicated below, we deny the remainder of AT&T's protest.
First, AT&T's allegation that Universal cannot meet the 120-day
installation requirement is a matter of responsibility. This Office
will not review an affirmative determination of responsibility where, as
here, possible fraud or bad faith by the contracting officer has not
been shown and no allegation has been made that definitive
responsibility criteria have not been applied. Ikard Manufacturing Co.,
63 Comp. Gen. 239, 240 (1984), 84-1 CPD Paragraph 266 at 2-3.
Next, AT&T protests that Universal's system cannot meet mandatory
technical requirements for (1) transmitting and switching data in a
digital format at specified rates; (2) direct data access at a
specified internal transmission speed; (3) direct interface with
automated office and electronic mail equipment; (4) modem pooling
common use modems; and (5) hourly station usage data.
We have reviewed Universal's technical proposal and the IRS technical
evaluation. We find that Universal proposed to meet all of these
technical requirements, and IRS found that the system did comply with
them. In the absence of specific evidence that Universal's system does
not meet the mandatory technical requirements, we deny AT&T's protest on
this point. See Rack Engineering Co., B-214988, Sept. 10, 1984, 84-2
CPD Paragraph 272.
AT&T asserts that if IRS had required Universal to demonstrate its
system, as indicated in the RFP, Universal's inability to meet the above
requirements would have been apparent. However, the only place that the
RFP indicated that such a demonstration was contemplated was IRS's
response to a preproposal conference question, set out in amendment 4 of
the RFP:
". . . is it anticipated that IRS will require a product
demonstration (of) an existing installed system? If so, what will
be the scope of the required demonstration, and when? In
competitive government procurements of this size and nature, this
is a normal procedure.
"A. Yes, product demonstration will be required. Times and
dates shall be coordinated with the various vendors prior to
contract award."
IRS admits that Universal did not completely demonstrate its system,
but argues that this failure resulted in Universal's receiving a lower
score under the evaluation criterion for "capacity and capability of
vendor's equipment." AT&T, on the other hand, received a higher score
for this criterion, in part because its system was more completely
demonstrated. In any case, as noted above, IRS states that it was
satisfied from its technical evaluation that Universal's system met RFP
requirements.
Although, we agree that the RFP contemplated some sort of performance
demonstration or benchmark, neither the scope and method to be employed
nor the purpose of the demonstration was stated. We have held that the
primary purpose of a benchmark is to show whether an offeror's equipment
is capable of performing the desired functions, not to substitute for
the contents of a technical proposal. See Lanier Business Products,
Inc., B-205934, Jan. 30, 1982, 82-1 CPD Paragraph 625 at 5;
Informatics, Inc., B-194926, July 2, 1980, 80-2 CPD Paragraph 8 at 8.
As discussed above, we cannot disagree with IRS's determination that
Universal's technical proposal showed that the system met RFP
requirements. Consequently, since the establishment of tests and the
determination of product acceptability are within the ambit of the
expertise of cognizant agency personnel, we cannot find that AT&T was
prejudiced by IRS's failure to require a more complete demonstration of
Universal's system or that this failure violated any law or regulation.
Rack Engineering Co., B-214988, supra; Andrews Tool Company, B-214344,
July 24, 1984, 84-2 CPD Paragraph 101.
AT&T protests the technical evaluation of its own proposal in three
areas. AT&T states that its technical proposal was wrongfully
downgraded (1) for its training programs; (2) because of an alleged
lack of detailed information concerning the expansion capabilities of
its "modem pool"; and (3) because of an alleged lack of detailed
information on the simplicity of making moves and changes.
In reviewing these contentions, we have examined the individual
evaluators' worksheets that formed the basis for offerors' final
technical scores. Our review indicates that AT&T received the maximum
points allocated to training and the expansion capabilities of the
"modem pool." It is true that the IRS evaluation summary mentions the
"model pool" details as a negative factor; however, this statement is
apparently erroneous. The primary reason for AT&T's loss of points on
this criterion relates to the expansion capability of its "protocol
converter." This deficiency was also noted in the IRS evaluation
summary, but AT&T did not comment on it in the protest. Also, we cannot
say that IRS's exercise of administrative discretion in the relatively
minor deduction of points fo an alleged lack of details on the
simplicity of making moves and changes was arbitrary or capricious or
that AT&T was prejudiced by the evaluation. See Litton Systems, Inc.,
Electron Tube Division, B-215106, Sept. 18, 1984, 84-2 CPD Paragraph
316. In this regard, Universal was unanimously and more severly
downgraded for this same subcriterion. Consequently, we deny AT&Ts
protest on this point.
With regard to AT&T's contention that an arithmetic error that it
made in totaling its proposed price may not have been taken into account
in evaluating its proposal, the record shows that IRS evaluated AT&T's
corrected price. This basis of protest therefore is without merit.
AT&T also protests that IRS used a faulty present value analysis in
evaluating its proposed purchase option. The RFP stated that prices
would be evaluated according to the present value discount factors
identified in a matrix in the RFP, based on when payments were due.
This means that the present value of payments made after the beginning
of the contract was to be evaluated as a percentage of the proposed
price.
AT&T, in its purchase option proposal, priced equipment in "month 1";
the other offerors priced the same items in "month 0." IRS states that
since the RFP required such charges to be proposed for "month 0", it
transferred AT&T's "month 1" prices for the purchased equipment to
"month 0" for evaluation purposes, thus permitting offerors to be
evaluated on a common basis. We find, however, that the RFP does not
clearly require this pricing structure. "Month 0" charges are to be
evaluated at the full price proposed, while "month 1" charges are
multiplied by the present value factor .992089.
IRS's calculations, which we have reviewed, show that even if AT&T's
price for equipment were evaluated using the .992089 present value
factor, it still would not be reduced enough to change the relative
ranking of AT&T and Universal for any service center. Therefore, even
assuming that IRS incorrectly adjusted AT&T's price in its present value
analysis, AT&T would not have been in line for award, and we also deny
its protest on this point. See Canon U.S.A., Inc., B-213554, Aug. 20,
1984, 84-2 CPD Paragraph 195 at 8.
Although we have sustained AT&T's protest on one ground, we do not
believe that it would be in the government's best interest to recommend
either termination of Universal's contract or nonexercise of the
maintenance options. AT&T's final point scores were significantly lower
than Universal's on four of the six service centers, even taking into
account the present value of AT&T purchase price as it was proposed.
AT&T's final point score is close, but still not high on the remaining
two service centers, also taking into account AT&T's proposed present
value. From the record before us, we cannot determine the price impace
of Universal's failure to price the requirement for interfacing with
government-furnished generators for emergency backup power and we cannot
conclude that it was significant enough to have allowed AT&T to become
the successful offeror for any service center. In this regard, AT&T has
made no allegations as to the potential price impact of this item.
Moreover, IRS has purchased the Universal PABX system, and
termination of the contract would undoubtedly be extremely costly.
Also, the RFP clearly contemplated that maintenance would be performed
by the firm from which the government acquired the PABX system.
Under the circumstances, we cannot make any recommendation for
corrective action. However, we are advising the Commissioner, by
separate letter, that in negotiating and awarding fixed-price contracts
in the future, IRS should take action to assure that all mandatory
requirements are included and priced.
The remainder of the protest is denied.
Harry R. Van Cleve
General Counsel
FILE: B-216384
DATE: December 4, 1984
CONTRACTS - GRANT-FUNDED PROCUREMENTS - GENERAL ACCOUNTING OFFICE
REVIEW - SIGNIFICANT FEDERAL FUNDS REQUIREMENT
1. GAO generally will review grant complaints unless the federal
funds in the project as a whole are insignificant.
CONTRACTS - GRANT-FUNDED PROCUREMENTS - COURT ACTION - COMPLAINT,
ETC. DISMISSED
2. Federal grant complaint is dismissed when the issue in the
complaint is pending before a court of competent jurisdiction unless the
court expresses an interest in obtaining the views of GAO.
CRIMINAL LAW VIOLATIONS - JURISDICTION - GENERAL ACCOUNTING OFFICE V.
ATTORNEY GENERAL
3. Assertions which are of a criminal nature should be referred by
protester to the Department of Justice.
The Honorable Lawton Chiles
United States Senator
Federal Building
Lakeland, Florida 33801
Dear Senator Chiles:
We refer to your correspondence dated September 4 and October 19,
1984, requesting our views on the complaint of W. R. Pritchett,
president of American Conveyor Corporation (ACC). Mr. Pritchett alleges
that ACC was the apparent low bidder under a procurement for
construction of a vegetable packinghouse in Guanica, Puerto Rico.
According to Mr. Pritchett, the award was made at a higher price to
International Consultants, a firm from Israel. Mr. Pritchett alleges he
has been fraudulently deprived of this contract and further alleges that
a United States agency is furnishing the $1.5 million funding for this
project. ACC has filed a civil suit against this award in court in
Puerto Rico, but states this is a costly procedure which has a "slight"
chance of success. ACC requests your assistance.
In response to your first letter, which enclosed a letter from ACC
alleging this procurement was funded with federal money, we attempted to
identify the agency involved for the purpose of considering ACC's
complaint under our grant complaint procedures. We generally will
consider complaints against grantee awards unless federal funds in the
project as a whole are insignificant. Mid-State Ag Service, Inc.,
B-213200, Mar. 12, 1984, 84-1 C.P.D. Paragraph 283. On September 20,
1984, we informally requested this information from ACC. However,
neither Mr. Pritchett nor ACC's attorney was able to identify the
federal agency and to date have not supplied this information. We also
contacted the Department of Agriculture (Agriculture) to determine if
the grant was issued by that Department since the procurement appeared
to concern an agriculture matter. Agriculture has been unable to
determine that this project was funded by it. On October 15, 1984, we
advised Mr. Harrison of your staff of our efforts.
In any event, ACC states that it has filed suit in court seeking to
reverse the award decision. We note that this Office will dismiss a
federal grant complaint when the issue in the complaint is pending
before a court of competent jurisdiction unless the court expresses an
interest in obtaining the views of GAO. Black Construction Corporation,
B-213823, Apr. 6, 1984, 84-1 C.P.D. Paragraph 387.
Finally, to the extent ACC alleges that the award involves criminal
misconduct by federal officials, these alleged violations of a criminal
nature are properly for referral by the complainant to the Department of
Justice. See Reliability Sciences, Incorporated, B-212852, May 2, 1984,
84-1 C.P.D. Paragraph 493.
The enclosure to your correspondence is returned as requested.
Sincerely yours,
Comptroller General of the United States
Enclosure
B-216383, SEP 28, 1984, OFFICE OF GENERAL COUNSEL
CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES -
TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTER
DIGEST:
COMPLAINT CONCERNING REJECTION OF A BID BECAUSE OF THE USE OF A
RUBBER STAMP SIGNATURE FORWARDED TO GAO BY A CONGRESSMAN WILL NOT BE
CONSIDERED BECAUSE IT DOES NOT MEET THE TIMELINESS REQUIREMENTS OF GAO'S
BID PROTEST PROCEDURES IN THAT THE COMPLAINT WAS NOT FILED WITHIN 10
WORKING DAYS OF WHEN THE BASIS FOR PROTEST WAS KNOWN.
THE HONORABLE JIM COURTER
MEMBER, UNITED STATES HOUSE OF REPRESENTATIVES
1 MORRIS STREET
MORRISTOWN, NEW JERSEY 07960
DEAR MR. COURTER:
THIS IS IN RESPONSE TO YOUR LETTER OF SEPTEMBER 6, 1984, FORWARDING
CORRESPONDENCE FROM THE UNITED RING AND SEAL CORPORATION CONCERNING THE
REJECTION OF ITS BID BY THE U.S. ARMY ARMAMENT, MUNITIONS AND CHEMICAL
COMMAND. THE CORRESPONDENCE INDICATES THAT UNITED'S BID WAS REJECTED
BECAUSE OF THE USE OF A RUBBER STAMP SIGNATURE AND THAT UNITED HAS
PROTESTED THE REJECTION TO THE ARMY.
UNITED'S COMPLAINT IS OF THE TYPE WE CONSIDER UNDER OUR BID PROTEST
FUNCTION. WE MUST DECLINE TO CONSIDER THIS PARTICULAR COMPLAINT,
HOWEVER, BECAUSE IT DOES NOT MEET THE TIMELINESS REQUIREMENTS OF OUR BID
PROTEST PROCEDURES CODIFIED AT 4 C.F.R. PART 21 (1984). THOSE
PROCEDURES REQUIRE THAT A PROTEST BE FILED EITHER WITH THIS OFFICE OR
THE CONTRACTING AGENCY WITHIN 10 WORKING DAYS OF WHEN THE BASIS FOR
PROTEST IS KNOWN. 4 C.F.R. SEC. 21.2(B)(2). UNITED'S CORRESPONDENCE
INDICATES THAT THE ARMY ADVISED UNITED OF THE REJECTION OF ITS BID, AND
THE REASON THEREFOR, BY LETTER OF JULY 31, 1984, BUT THAT UNITED DID NOT
PROTEST TO THE ARMY UNTIL IT SENT ITS LETTER DATED AUGUST 22. THUS, IT
APPEARS THAT THE PROTEST WAS NOT FILED WITH THE ARMY WITHIN THE REQUIRED
10-DAY PERIOD, SO THAT THE MATTER NOW REFERRED HERE MUST BE VIEWED AS
UNTIMELY.
FILE: B-216381 85-1 CPD 647
DATE: June 6, 1985
MATTER OF: Aerodyne Systems Engineering Ltd.
DIGEST:
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
1. Where protester protests to the agency within 10 working days of
the agency's rejection of its technical proposal, its subsequent protest
to GAO within 10 working days of the agency's denial of its protest is
timely.
CONTRACTS - NEGOTIATION - OFFERS OR PROPOSALS - CONSTRUCTION -
READING ALL PROVISIONS TOGETHER RULE - PRESUMPTION AGAINST CONFLICT
2. Protest of the agency's rejection of the protester's technical
proposal for noncompliance with a mandatory requirement contained in
"Attachment 1" to the solicitation, when the soliciation referred only
to "Attachment D1," is denied. The RFP and its amendments, when read as
whole, clearly conveyed the agency's intent that proposals must comply
with the requirement in order to be acceptable.
CONTRACTS - PROTESTS - ALLEGATIONS - UNSUBSTANTIATED
3. Where the RFP required that a target helicopter be based on a
small, commercially available, two-person civilian helicopter, a protest
contending that the awardee's target helicopter was based on a
five-person helicopter is denied since the record indicates that
awardee's proposed target helicopter was based on a small, commercially
available, two-person civilian version of its five-person helicopter.
Aerodyne Systems Engineering Ltd. protests the award of a contract by
the Department of the Army to Hynes Aviation Industries, Inc. under
request for proposals (RFP) No. DAAH01-84-R-0168 for four "TEST AND
EVALUATION ROTARY-WING TARGET" (TERT) helicopters, with an option for
six more. We deny the protest.
Aerodyne contends that its proposal was improperly rejected for
failure to base its TERT on a small, commercially available, two-person
civilian helicopter. Aerodyne insists this was not a critical
requirement under the specified evaluation factors. Aerodyne also
alleges that Hynes' proposal was based on a five-person helicopter and
thus itself did not comply with the RFP requirements. In addition,
Aerodyne alleges that Hynes' proposed helicopter does not meet the
specifications for diameter of the main rotor, overall fuselage length,
rate of climb and hovering ceilings.
The RFP, which was issued on March 30, 1984, stated in Attachment 1,
entitled "Technical Requirement," that the TERT "shall be based on a
small, commercially available two-person civilian helicopter but shall
be furnished in a drone flight-only configuration." This attachment also
set out the specifications that the TERT would have to meet after the
helicopter on which it was based was modified. The evaluation criteria
in section M-3 listed several "critical" technical items and stated that
the failure to meet any one of them could result in the proposal being
classified as unacceptable. The requirement in Attachment 1 that the
TERT be based on a small, commercially available, two-person civilian
helicopter was not listed as a critical item in Section M-3.
Proposals were received on June 15. Aerodyne offered to furnish a
TERT based on a military helicopter that was already in a drone
configuration, and to modify it as required by the specifications. In a
letter to Aerodyne dated July 20, the agency stated that Aerodyne's
proposal indicated that its proposed TERT was based on a drone that was
not yet commercially available and asked Aerodyne to explain how its
drone complied with the requirement that the TERT be based on a small,
commercially available, two-person civilian helicopter.
Aerodyne replied that there was no commercially available two-person
helicopter designed to meet the specifications of this procurement
without major modifications, that the TERT built to such specifications
would bear little resemblance to any existing commercially available
helicopter, and that it was irrelevant whether the helicopter on which
the TERT was based was for two people or not, since people would not be
transported in the TERT. Aerodyne also stated that although its
proposal said that the drone was not yet commercially available, this
was so only in the sense that it was not an off-the-shelf item but that,
in fact, the drone was commercially available on special order.
By letter of August 17, the agency notified Aerodyne that its
proposal was technically unacceptable because its TERT was not based on
a small, commercially available, two-person civilian helicopter. The
letter also stated that this was required because such a helicopter
would already have been certified by the Federal Aviation Administration
(FAA), thereby eliminating the need for reserach and development testing
as would be required if Aerodyne's drone was modified to comply with the
specifications.
The agency argues that as Aerodyne was informed by letter of August
17 that its proposal had been rejected, but did not protest until
September 12, its protest is untimely under our Bid Protest Procedures,
4 C.F.R. Section 21.2(b)(2) (1984), which required that a protest be
filed with our Office within 10 working days after the basis for protest
is known, or should have been known.
When, however, a protest is filed initially with the contracting
agency, we will consider a subsequent protest to our Office filed within
10 working days of notification of initial adverse agency action, if the
original protest was timely filed. 4 C.F.R. Section 21.2(a). Here, the
record indicates that Aerodyne called the agency on August 23 and sent a
telegram on the same day notifying the agency that it was "appealing the
disqualification" and would send additional information within 5 days.
The telegram was confirmed by letter of August 24, which stated that
Aerodyne would forward a detailed brief "in support of our protest." On
September 4, Aerodyne delivered the details of its protest to the
agency. The agency's denial of September 10 was protested to our Office
on September 12; the protest is therefore timely and will be reviewed
on its merits. See Radiation Systems, Inc., B-211732, Oct. 11, 1983,
83-2 CPD Paragraph 434.
To the extent, however, that Aerodyne argues that there was no
reasonable basis for the base helicopter requirement, its protest is
untimely since it did not protest on this ground before the closing date
for receipt of proposals. See 4 C.F.R. Section 21.2(b)(1). While
Aerodyne argues that the requirement was not "critical," the requirement
was apparent on the face of the solicitation, and therefore Aerodyne's
objections to its reasonableness had to be protested prior to the
closing date for receipt of proposals in order to be timely. Id.
Aerodyne contends that the rejection of its proposal as technically
unacceptable for failing to base its TERT on a small, commercially
available, two-person civilian helicopter was improper because the
requirement was not a critical evaluation factor, and its drone will
meet the specifications for the TERT. Aerodyne does not argue, however,
that its drone meets the requirement for the helicopter on which the
TERT must be based. In fact, Aerodyne stated in the letter to the
agency, containing the details of its protest, that if the utilization
of a commercially available, two-person helicopter was a critical
requirement, its proposal would be technically unacceptable.
Aerodyne contends that the requirement was not critical because the
paragraph in Attachment 1, where it appeared, is captioned "General,"
and because it was not incorporated into the RFP's evaluation provision
(M-3) as a critical factor. Aerodyne also maintains that section L-21
of the RFP, which required that in order to be acceptable, proposals
must reflect a complete understanding "of the requirements of the scope
of work (SOW), Attachments D1 and D2," did not incorporate the base
helicopter requirement in Attachment 1, because it did not refer to
Attachment 1. Thus, Aerodyne insists that it was free to base its TERT
on its drone.
We think that Aerodyne's arguments are overly literal and without
legal merit. There were no Attachments D1 and D2 to the RFP, but there
were Attachments 1 and 2, and the preproposal questions and answers that
were incorporated into the RFP by amendments refer several times to the
Technical Requirement and Attachments 1 and 2, not to Attachments D1 and
D2. Both the requirement for the helicopter on which the TERT must be
based and the design and performance specifications for the TERT were
contained in Attachment 1. Although only Attachment 2 was entitled
"Scope of Work," /1/ we believe it is obvious that the reference in
section L-21 to the SOW, Attachments D1 and D2, was meant to include
both Attachment 2 and Attachment 1, the Technical Requirement. Further,
by its use of the word "shall," the Technical Requirement clearly
established the requirement that the TERT be based on a commercially
available, two-person civilian helicopter as mandatory and we know of no
reason why a mandatory requirement cannot be listed under a heading of
"General." Moreover, before listing the critical and noncritical
evaluation factors, section M-3 provided that the proposal evaluation
would be made "in accordance with the performance specifications and the
(SOW)."
We have held that solicitations must be interpreted as a whole, and
whenever possible, effect must be given to each word, clause, or
sentence. JVAN, Inc. B-202357, Aug. 28, 1981, 81-2 CPD Paragraph 184.
Acceptance of Aerodyne's position is inconsistent with this rule and
would lead to the unreasonable conclusion that the agency, by not
repeating the base helicopter requirement in the evaluation provision,
intended to make the otherwise mandatory requirement a matter of
discretion. Accordingly, we find no merit to this position. Rather, we
find that read as a whole, the RFP clearly conveyed the agency's intent
that only those proposals whose TERTs were based on a small,
commercially available, two-person civilian helicopter would be
considered technically acceptable.
Aerodyne also argues that if the requirement that the TERT must be
based on a small, commercially available, two-person helicopter is
mandatory, then the agency acted unfairly and improperly by accepting
Hynes' proposal, which allegedly is based on a five-person helicopter.
Because Aerodyne did not have access to Hynes' proposal, Aerodyne's
protest also devotes considerable discussion to the possibility that
Hynes offered its model 2B2. Hynes, however, did not in fact offer this
model as the base, and therefore we need not address Aerodyne's
allegations that the model 2B2 does not meet critical RFP requirements.
In support of its contention, Aerodyne has submitted a Hynes' news
release announcing that it had been awarded a contract to furnish new
model H-5 helicopters, and stating that the H-5 is certified to carry
five persons, but for this contract will carry a full load of electronic
equipment. Aerodyne contends that there is no FAA certified H-5
helicopter, but that there is a certified Brantley-Hynes Model 305,
which is the model pictured in a news article about the award to Hynes
for H-5 helicopters. Aerodyne also has submitted an extract from Jane's
"All the World's Aircraft" (1980-81 ed.) describing Hynes' model 305 as
a five-seat light helicopter. Aerodyne argues that if the Hynes' TERT
was based on a five-person helicopter, the contracting officer must have
authorized an exception to the two-person requirement, and contends that
the five-person model would not comply with the other specifications.
Hynes' proposal in fact offered to modify its "model H-5, also known
as the model 305." Hynes denies, however, that it based its TERT on a
five-person helicopter and explains that it holds two FAA certificates
under which it has developed more than 40 model variations. Hynes
states that it will base the TERT on its two-seat version of its model
H-5, which is one of the many models developed under certificate No.
H3SW. Hynes contends that the description in Jane's of its model 305 is
irrelevant because the model described in Jane's is not the variation
Hynes proposed as the base for its TERT.
Although the agency concedes that the helicopter model on which the
Hynes' TERT is based is capable of carrying more than two persons, it
emphasizes that Hynes based its TERT on a two-person configuration of
that model. The agency states that there were two other proposals also
based on helicopters capable of carrying more than two persons, although
one was found to be unacceptable for other reasons. The agency insists
that no proposal, including Aerodyne's, was rejected for offering a TERT
based on a helicopter capable of carrying more than two persons.
Aerodyne acknowledges that one helicopter model can have several seat
configurations and that a helicopter with a high gross weight capability
could be reconfigured to carry less passengers for more passenger
comfort. Aerodyne contends, however, that it is well understood in the
aviation industry that reference to the number of seats in any aircraft
is the maximum configuration, and that reference to a two-person or
five-person helicopter means the maximum seating certified by FAA.
Aerodyne, thus, argues that the requirement for a two-person helicopter
restricted the offerors to a helicopter capable of carrying no more than
two passengers.
Contracting officials enjoy a reasonable degree of discretion in the
evaluation of proposals for acceptability, and we will not substitute
our judgment for that of the procuring agency unless the agency's action
was arbitrary or in violation of procurement statutes and regulations.
Rack Engineering Co., B-214988, Sept. 10, 1984, 84-2 CPD Paragraph 272.
In addition, it is well established that the protester has the burden of
affirmatively proving its case. H.E. Cramer Co., Inc., B-212015.2, Jan.
24, 1984, 84-1 CPD Paragraph 111. Although Aerodyne insists that, in
the aviation industry, reference to a two-person helicopter means a
helicopter that can carry a maximum of two persons, Aerodyne has
submitted no evidence in support of this allegation. We therefore find
that Aerodyne has not met its burden of proof, and we will not question
the agency's conclusion that a helicopter configured to carry two
persons met the RFP requirement for a two-person helicopter, even though
the same helicopter also could be configured to carry five persons.
In this connection, we also note that the agency states that
Aerodyne's proposal was not rejected for noncompliance with the
two-person requirement, but instead for not meeting the requirement that
the base helicopter be commercially available. Aerodyne contends that
its base helicopter is commercially available, but again offers no proof
of its contention. Where conflicting statements of the protester and
the agency are the only evidence available on an issue, we will accept
the agency's version of the facts. See FMI-Hammer Joint Venture,
B-206665, Aug. 20, 1982, 82-2 CPD Paragraph 160. Accordingly, even if
we view the agency's position concerning the two-person requirement as a
relaxation of the requirement, Aerodyne was not prejudiced since its
base helicopter was not acceptable in any event.
With regard to Aerodyne's contention that the helicopter on which
Hynes based its proposed TERT does not meet the RFP specifications for
diameter of the main rotor, fuselage length, rate of climb and hovering
ceilings, we point out that there are no specifications in the RFP for
the base helicopter, other than that it be a small, commercially
available, two-person civilian helicopter. The other specifications in
the RFP pertain to the TERT, not the helicopter on which it will be
based. Furthermore, because the TERT will be used for military
purposes, there is no requirement, as Aerodyne alleges, that the TERT
obtain FAA certification as to airworthiness.
Under all the circumstances, we find no impropriety in either the
agency's acceptance of Hynes' proposal or its rejection of Aerodyne's
proposal.
The protest is denied.
Harry R. Van Cleve
General Counsel
(1) Attachment 2 specified the engineering documentation required
from the contractor after award.
81.4-6.
. . . . .