B-239565.2, B-239566.2, Mar 19, 1991 91-1 CPD 298

B-239565.2, B-239566.2, Mar 19, 1991 91-1 CPD 298

PROCUREMENT - Bid Protests - GAO procedures - GAO decisions - Reconsideration

DIGEST

Attorneys

Defense Logistics Agency -- Reconsideration:

The Defense Logistics Agency requests reconsideration of our decision East West Research Inc., B-239565; B-239566, Aug. 21, 1990, 90-2 CPD Sec. 147, in which we sustained two protests by East West: one against the award of a purchase order for single stage valves to UPD, Inc. under request for quotations (RFQ) No. DLA700-90-X-U073, and the other against the award of a purchase order for brass valves to Amerigas, Inc. under RFQ No. DLA700-90-X-V285. We affirm our prior decision.

In both procurements challenged by the protester, the agency lost -- and therefore failed to consider -- quotations submitted by East West. were concerned by the circumstance that two quotations from the same party had been lost by the same contracting activity within less than 1 week, a coincidence which we viewed as involving more than mere occasional negligence on the agency's part. We sustained the protests on the grounds that such repeated losses by the agency constituted a breach of its duty under the Competition in Contracting Act of 1984 (CICA) to promote competition for small purchases to the maximum extent practicable.

In its request for reconsideration, the agency argues that there is no evidence in the record to support our finding that its loss of East West's quotations constituted more than mere negligence. The agency contends that the loss of a quotation by an agency should be viewed as more than negligence only where there is evidence that agency officials acted in bad faith or deliberately attempted to exclude a firm from the competition.

In this case, it was not simply the fact that the agency had lost two quotations that raised our concern -- it was the fact that two quotations from the same firm had been lost in a period of less than one week and that the agency had offered no explanation as to the procedures that it had in place to protect against such occurrences. We were -- and continue to be -- of the view that this combination of circumstances constituted more than mere negligence on the part of the agency officials.

The agency also argues that it did not breach its duty to promote competition to the maximum practicable extent since that duty did not apply to these acquisitions. The agency explains that prior to issuance of these RFQs, the Assistant Secretary of Defense (Production and Logistics) had authorized a class deviation from the small purchase procedures set forth in Federal Acquisition Regulation (FAR) Sec. 13.106, which increased the dollar limitation on purchases which could be made without solicitation of competitive quotations from $1,000 to $2,500. /1/ DLA contends that since the value of neither purchase exceeded $2,500, it had no obligation to promote competition to the maximum extent practicable.

CICA requires that the agency promote competition "to the maximum extent practicable" for all small purchases, 10 U.S.C. Sec. 2304(g)(4), and not merely for those exceeding a threshold of $1,000 (or $2,500). The FAR defines the minimum number of sources that must be solicited to obtain maximum practicable competition. At the time these RFQs were issued, the solicitation of only one quotation was required for purchases of less than $1,000 ($2,500 for Department of Defense acquisitions, pursuant to the class deviation noted by the agency). As we observed in our previous decision, however, merely soliciting the minimum number of sources required by the FAR is not all that is required to meet the maximum practicable competition standard -- the standard further requires that all eligible responsible vendors expressing an interest in competing be afforded a reasonable opportunity to do so. Thus, although DLA could have satisfied the requirement for maximum practicable competition for these purchases by soliciting only one source, once it in fact issued RFQs and made them publicly available, it was required to permit all vendors expressing an interest a fair opportunity to compete. This meant that, among other things, it was required to have procedures in place to safeguard any quotations received.

In its report on the protest, the agency did not explain what procedures, if any, were in place to safeguard quotations. Absent such an explanation, and in light of the fact that the agency's logs strongly suggested that the two quotations from East West were received and that the agency lost two quotations from the protester in less than 1 week, we concluded that it did not have adequate procedures in place for safeguarding quotations. Given these circumstances, we remain of the view that by losing East West's quotations, the agency breached its duty to promote competition to the maximum extent practicable. Moreover, even if CICA did not explicitly mandate that agencies promote competition to the maximum extent possible in using small purchase procedures, we believe that the federal government has a fundamental obligation to fully and fairly consider responses to its requests for bids or quotations. CMI Corp., B-211426, Oct. 12, 1983, 83-2 CPD Para. 453.

Finally, the agency argues in its request for reconsideration that East West offered alternate items in response to the RFQs, but did not submit technical data with its quotations; thus, according to the agency, it would have been required to request that East West submit technical data in order to evaluate its alternate parts. To the extent that the agency is arguing that East West's quotations were unacceptable because they were not accompanied by the requisite technical literature, this is an argument that the agency could have -- but did not -- raise in its report on the original protest. We therefore will not consider it.

Our prior decision is affirmed.

/1/ Prior to its revision on July 23, 1990 (FAC 84-58), FAR Sec. 13.106(a) provided that purchases not over $1,000 could be made without securing competitive quotations if the contracting officer considered the prices to be reasonable. The section now provides that purchases not exceeding 10 percent of the small purchase limitation, or $2,500, may be made without securing competitive quotations if prices are reasonable.