B-178707, JUN 19, 1974

B-178707, JUN 19, 1974

DESPITE GROSSNESS OF NAVY'S CONVERSION OF VALID DAILY ESTIMATES OF MANNING REQUIRED FOR MESS ATTENDANT SERVICES INTO SINGLE ANNUAL ESTIMATE, SINCE LOW OFFEROR SUBSTANTIATED THAT IT COULD PERFORM SATISFACTORILY AT ITS OFFERED MANNING LEVEL AND NO OFFEROR WAS PREJUDICED BY NAVY'S USE OF SINGLE ANNUAL ESTIMATE BECAUSE LOW OFFEROR'S PROPOSAL WAS LOWEST PRICED ACCEPTABLE PROPOSAL UNDER ANNUAL OR DAILY ANALYSIS, GAO'S EARLIER DECISIONS ARE AFFIRMED.

TO CHEMICAL TECHNOLOGY, INC.:

THE FACTS OF THIS CASE AS SUMMARIZED FROM OUR PRIOR DECISIONS (OCTOBER 2, 1973; RECONSIDERED MAY 15, 1974) ARE AS FOLLOWS:

"*** (REQUEST FOR PROPOSALS N00604-73-R-0230) REQUESTED OFFERS TO PROVIDE LABOR AND MATERIAL TO PERFORM MESS ATTENDANT SERVICES AT VARIOUS NAVY AND MARINE CORPS STATIONS ON THE ISLAND OF OAHU, HAWAII. THE RFP CONTAINED A GOVERNMENT ESTIMATE OF THE NUMBER OF MAN-HOURS REQUIRED AND OTHER DATA TO AID OFFERORS IN PREPARING THEIR PROPOSALS. THE GOVERNMENT (TOTAL) ESTIMATE FOR THE OPERATION WAS 265,172 MAN-HOURS (FOR REPRESENTATIVE WEEKDAYS AND WEEKEND HOLIDAYS).

"SECTION D OF THE RFP STATED THAT:

"'*** SUBMISSION OF MANNING CHARTS WHOSE TOTAL HOURS FALL MORE THAN 5% BELOW THESE ESTIMATES MAY RESULT IN REJECTION OF THE OFFER WITHOUT FURTHER NEGOTIATIONS UNLESS THE OFFEROR CLEARLY SUBSTANTIATES THE MANNING DIFFERENCE WITH SPECIFIC DOCUMENTATION DEMONSTRATING THAT THE OFFEROR CAN PERFORM THE REQUIRED SERVICES SATISFACTORILY WITH SUCH FEWER HOURS.'

THE EIGHT OFFERS RECEIVED WERE:

DIFFERENCE

FROM GOVERNMENT'S

"MAN-HOURS ESTIMATED MAN-HOURS

OFFERED (265,172) PRICE

QUALITY MAINTENANCE

COMPANY, INC. 213,704 -19% $ 740,943.00

INTEGRITY MANAGEMT.

INTERNATIONAL, INC.

(INTEGRITY) 224,927 -15% 660,216.97

JET SERVICES 251,337 - 5 % 748,980.00

DYNETERIA, INC. 251,772 - 5 % 722,803.51

SPACE SERVICES OF

GEORGIA 251,898 - 5 % 818,589.72

CONTRACT MANAGEMENT,

INC. 253,445 - 4 % 869,174.00

M C & E SERVICES AND

SUPPORT COMPANY, INC. 264,751 0 % 777,792.65

BROKEN LANCE

ENTERPRISES, INC. 265,468 0 % 1,136,365.98

"INTEGRITY, THE LOW OFFEROR, JUSTIFIED ITS OFFERED MAN-HOURS (A 15 PERCENT DEVIATION FROM THE GOVERNMENT ESTIMATE) ON THE BASIS THAT (1) IT HAD SPENT CONSIDERABLE TIME STUDYING THE MESS OPERATION AND THAT IT HAD SUBMITTED A TIME AND MOTION STUDY; (2) IT WAS OFFERING MORE HOURS THAN THE CURRENT CONTRACTOR USED IN ADEQUATELY PERFORMING THE PAST YEAR'S CONTRACT; AND (3) NO SUBSTANTIVE INFORMATION WAS PRESENTED TO REFUTE THAT PERFORMANCE OF THESE SERVICES COULD BE ACCOMPLISHED WITH MANNING BELOW THE GOVERNMENT'S ESTIMATE.

"INTEGRITY'S APPROACH IN JUSTIFYING ITS MANNING CHART WAS TO BREAK DOWN THE GOVERNMENT ESTIMATE INTO DAYS OF THE WEEK AND OFFER LESS MANNING THAN ESTIMATED ON THOSE PARTICULAR DAYS WHEN FEWER TROOPS WOULD UTILIZE THE MESS FACILITIES, I.E., FRIDAYS AND PAYDAYS."

CHEMICAL TECHNOLOGY TAKES ISSUE WITH WHETHER THERE WAS ANY GOVERNMENT ESTIMATE OF 265,172 MAN-HOURS. IT CONTENDS THAT THE ONLY REFERENCE TO A GOVERNMENT ESTIMATE IN THE RFP IS STATED IN TERMS OF MAN-HOURS PER REPRESENTATIVE WEEKDAY AND MAN-HOURS PER REPRESENTATIVE WEEKEND/HOLIDAY.

WE AGREE WITH THIS CONTENTION. HOWEVER, IT WAS THE NAVY'S PRACTICE IN ITS MESS ATTENDANT RFP'S TO EXTRAPOLATE AN ANNUAL ESTIMATE OF MAN HOURS FROM THE REPRESENTATIVE DAY ESTIMATES. PRECISELY, THE AGENCY FELT THAT BY MULTIPLYING THE DAILY ESTIMATES BY THE STATED NUMBER OF DAYS IN THE CONTRACT PERIOD, A VALID TOTAL ESTIMATE COULD BE OBTAINED. THUS, THE FIGURE OF 265,172 MAN-HOURS PER YEAR WAS ARRIVED AT IN THE FOLLOWING MANNER:

MAN-HOUR

MAN-HOUR REPRESENTATIVE

BUILDING REPRESENTATIVE WEEKEND & HOLIDAY

NO. WEEKDAY ESTIMATE ESTIMATE

188 136.5 114.0

55 149.0 129.0

654, 655, 655A

AND 658 166.5 117.0

3 57.0 40.0

33 59.0 40.0

126 58.0 40.0

430 53.0 46.5

4 104.0 74.0

783.0 600.5

783.0 X 252 (NO. OF WEEKDAYS STATED IN RFP) 197,316

X 113 (NO. OF WEEKEND/HOLIDAYS STATED IN RFP) 67,856.5

265,172.5

OUR OFFICE HAS EXPRESSED ITS VIEWS ON THE USE OF THIS PROCEDURE IN A NUMBER OF PREVIOUS DECISIONS. SPECIFICALLY, IN MATTER OF CHEMICAL TECHNOLOGY, B-179174, JANUARY 15, 1974, WE SPOKE DIRECTLY TO THE INCONGRUITY OF THIS APPROACH WITH PORTIONS OF THE LANGUAGE OF SECTION "D" OF ALL PRESENT NAVY MESS ATTENDANT RFP'S. IN THAT SITUATION, WE STATED THAT:

"SECTION D.4(A) OF THE RFP SPECIFICALLY STATES THAT:

"'*** SUBMISSION OF MANNING CHARTS WHOSE TOTAL HOURS FALL MORE THAN 5% BELOW *** (THE GOVERNMENT'S) ESTIMATES MAY RESULT IN REJECTION OF THE OFFER WITHOUT FURTHER NEGOTIATIONS ***'".

"WHILE THERE IS UNCERTAINTY IN THE INTERPRETATION TO BE GIVEN THIS LANGUAGE, WE BELIEVE THAT THE MOST LOGICAL AND REASONABLE CONSTRUCTION TO BE MADE OF IT CONTEMPLATES MAKING A COMPARISON OF EACH OFFEROR'S PROPOSED MANNING LEVEL FOR EACH REPRESENTATIVE DAY WITH THE GOVERNMENT'S ESTIMATE FOR THAT RESPECTIVE REPRESENTATIVE DAY. THE TENOR OF THE SECTION SOUGHT TO REQUIRE THE SUBMISSION OF OFFERS WHICH DEMONSTRATED ADEQUATE STAFFING (MANNING LEVELS CLOSE TO THE GOVERNMENT'S ESTIMATES) ON A REPRESENTATIVE WEEKDAY AND A REPRESENTATIVE WEEKEND/HOLIDAY.

"HOWEVER, WE NOTE THAT THE NAVY GENERALLY HAS MADE A COMPARISON OF THE OFFEROR'S TOTAL OFFERED MAN-HOURS FOR THE YEAR VIS-A-VIS THE GOVERNMENT TOTAL ESTIMATED MAN-HOUR NEEDS FOR THE YEAR. SEE 53 COMP. GEN. 198 (B- 178707, OCTOBER 2, 1973). THIS METHOD IS NOT A PROPER ONE TO ACHIEVE WHAT WE FIND TO BE THE DESIRED END OF SECTION D.4(A) - ASSURING SUFFICIENT MANNING AT ALL TIMES - SINCE IT CAN LEAD TO DISTORTED OFFERS WHICH TECHNICALLY COMPLY WITH THE TOTAL 95-PERCENT LEVEL. INDEED, IT IS POSSIBLE THAT AN EXTREMELY LOW MAN-HOUR FIGURE FOR REPRESENTATIVE WEEKEND/HOLIDAY MAY IN ESSENCE BE COUNTERBALANCED BY A RELATIVELY HIGH WEEKDAY FIGURE; THUS SEEMINGLY ASSURING ADEQUATE WEEKDAY PERFORMANCE BUT CASTING DOUBT ON THE OFFEROR'S WEEKEND CAPABILITIES."

MOREOVER, IN MATTER OF ABC MANAGEMENT SERVICES, TIDEWATER MANAGEMENT SERVICES INC. AND CHEMICAL TECHNOLOGY INC., 53 COMP. GEN. (B 178955, MARCH 11, 1974), WE HELD THAT THE INTEGRITY APPROACH OF DEMONSTRATING FEWER HOURS GENERALLY DEMONSTRATED THE REASONABLENESS OF THE AGENCY'S REPRESENTATIVE DAILY ESTIMATE BUT REVEALED THE GROSSNESS OF CONVERTING THESE DAILY ESTIMATES INTO AN ANNUAL ESTIMATE THROUGH THE USE OF THE RIGID DEFINITION OF THE CONTRACT YEAR (252 REPRESENTATIVE WEEKDAYS AND 113 REPRESENTATIVE WEEKEND/HOLIDAYS).

PERHAPS, WE COULD HAVE MORE CLEARLY STATED IN OUR EARLIER DECISIONS INVOLVING THE INSTANT PROCUREMENT THAT THERE IS DOUBT CAST ON THE SINGLE ANNUAL ESTIMATE DERIVED BY THE NAVY, BUT THERE APPEARS TO BE NO EVIDENCE THAT THE REPRESENTATIVE DAILY ESTIMATES WERE GROSSLY INACCURATE AND/OR MISLEADING.

CHEMICAL TECHNOLOGY RECITES THE FOLLOWING PORTION OF OUR 53 COMP. GEN. 198 (1973) DECISION TO EMPHASIZE THE FACT THAT THE NAVY OVERESTIMATED ITS ANNUAL MAN-HOUR REQUIREMENT:

"'WE NOTE THAT INTEGRITY'S OFFER WAS 40,245 HOURS LESS THAN THE GOVERNMENT'S ESTIMATE, BUT STILL EXCEEDED THE MANNING OF THE INCUMBENT CONTRACTOR. THIS FACT WHILE SEEMINGLY QUESTIONING THE GOVERNMENT'S ESTIMATE, IS SUPPORTIVE OF AN OFFER OF SUBSTANTIALLY LESSER MANHOURS, AND THEREFORE COULD PROPERLY HAVE BEEN TAKEN AS JUSTIFICATION FOR INTEGRITY'S OFFERED MANNING LEVELS.'"

WE NOW AMPLIFY THIS BY STATING THAT INTEGRITY'S OFFER - 40,225 MAN HOURS LESS THAN THE SINGLE ANNUAL ESTIMATE - IS A FURTHER INDICATION OF THE GROSSNESS OF CONVERTING REASONABLE DAILY ESTIMATES INTO AN UNREALISTIC ANNUAL ESTIMATE. HOWEVER, WE REMAIN OF THE VIEW THAT (1) INTEGRITY SUBSTANTIATED THAT IT COULD PERFORM SATISFACTORILY AT ITS OFFERED MANNING LEVEL; (2) INTEGRITY PROPOSED THE LOWEST PRICE; AND (3) NO OFFEROR WAS PREJUDICED BY THE NAVY'S USE OF THE SINGLE ANNUAL ESTIMATE SINCE INTEGRITY'S PROPOSAL WAS THE LOWEST PRICED ACCEPTABLE PROPOSAL UNDER EITHER ANALYSIS.

FOR THE REASONS NOTED ABOVE, OUR EARLIER DECISIONS ARE AFFIRMED.