B-182337, JAN 20, 1975, 54 COMP GEN 606

B-182337, JAN 20, 1975, 54 COMP GEN 606

CONTRACTS - NEGOTIATION - REQUESTS FOR PROPOSALS - MASTER AGREEMENT - USE OF LIST DEPARTMENT OF AGRICULTURE'S PROPOSED USE OF AN ANNUAL MASTER AGREEMENT PREQUALIFYING 10 CONSULTING FIRMS IN EACH OF 8 SUBJECT AREAS IS UNDULY RESTRICTIVE OF COMPETITION. UNLIKE QUALIFIED PRODUCTS LIST/QUALIFIED MANUFACTURERS LIST-TYPE PROCEDURES, WHICH LIMIT COMPETITION BASED ON AN OFFEROR'S ABILITY TO PROVIDE A PRODUCT OF THE REQUIRED TYPE OR QUALITY, THE PROPOSED PROCEDURE WOULD PRECLUDE COMPETITION OF RESPONSIBLE FIRMS WHICH COULD PROVIDE SATISFACTORY CONSULTING SERVICES BASED ONLY UPON A DETERMINATION AS TO THEIR QUALIFICATIONS COMPARED TO THOSE OF OTHER INTERESTED FIRMS.

IN THE MATTER OF DEPARTMENT OF AGRICULTURE'S USE OF MASTER AGREEMENT, JANUARY 20, 1975:

BY LETTER OF OCTOBER 1, 1974, THE ASSISTANT SECRETARY FOR ADMINISTRATION, DEPARTMENT OF AGRICULTURE, HAS REQUESTED AN ADVANCE DECISION CONCERNING THE PROPRIETY OF A PROPOSED PROCEDURE BY WHICH OFFERS FOR EACH OF 8 SPECIFIC CATEGORIES OF CONSULTING SERVICES WOULD BE SOLICITED FROM PREDETERMINED CLASSES OF 10 OFFERORS.

THE DEPARTMENT EXPLAINS THAT IT IS BURDENSOME AND IMPRACTICAL FROM AN ADMINISTRATIVE VIEWPOINT TO EVALUATE THE LARGE NUMBERS OF PROPOSALS WHICH ARE REGULARLY RECEIVED IN RESPONSE TO ITS SOLICITATIONS FOR CONSULTING SERVICES. REPORTEDLY IT IS NOT UNUSUAL FOR THE DEPARTMENT TO RECEIVE IN EXCESS OF 20 PROPOSALS FOR A SINGLE JOB REQUIREMENT. THE EVALUATION OF SUCH LARGE NUMBERS OF PROPOSALS IS COSTLY IN TERMS OF MANPOWER EXPENDED FOR THE ACTUAL EVALUATION AND IN TERMS OF THE MANPOWER THAT MUST BE REDIRECTED TO THIS TASK FROM OTHER DUTIES. IN ADDITION, IT IS REPORTED THAT THE TIME INVOLVED IN EVALUATING LARGE NUMBERS OF PROPOSALS DECREASES THE DEPARTMENT'S ABILITY TO RESPOND QUICKLY TO NEEDS FOR CONSULTING SERVICES AND MAY DELAY THE INITIATION OR COMPLETION OF A PROJECT.

TO SIMPLIFY THE SOLICITATION PROCEDURE AND MINIMIZE THE ADMINISTRATIVE BURDEN AND EXPENSE OF EVALUATION, THE DEPARTMENT OF AGRICULTURE PROPOSES TO AWARD A 1-YEAR MASTER AGREEMENT FOR ITS CONSULTING REQUIREMENTS ON PROJECTS ESTIMATED UNDER $100,000 IN THE WASHINGTON, D.C. AREA. THE DEPARTMENT HAS ISSUED A REQUEST FOR PROPOSALS (RFP) QUALIFYING FIRMS UNDER THE MASTER AGREEMENT. COPIES OF THE RFP HAVE BEEN SENT TO 280 FIRMS AND IT HAS ALSO BEEN ADVERTISED IN THE COMMERCE BUSINESS DAILY. UNDER THE RFP, THE DEPARTMENT'S CONSULTING NEEDS HAVE BEEN DIVIDED INTO 8 SUBJECT MATTER AREAS AS FOLLOWS:

1. ACCOUNTING, AUDIT AND BUDGET SYSTEMS ANALYSIS AND DEVELOPMENTAL SERVICES.

2. DATA PROCESSING AND INFORMATION SYSTEMS ANALYSIS AND DEVELOPMENTAL SERVICES AND RELATED SOFTWARE STUDIES.

3. ORGANIZATIONAL REVIEW.

4. PERSONNEL ANALYSIS.

5. PLANNING - PROJECT MANAGEMENT ASSISTANCE.

6. PROGRAM EVALUATION - COST BENEFIT ANALYSIS.

7. WORK MEASUREMENT PROGRAMS.

8. TELECOMMUNICATIONS AND TELECOMMUNICATIONS SOFTWARE STUDIES.

FROM AMONG THE 127 FIRMS WHICH HAVE RESPONDED BY SUBMITTING PROPOSALS FOR QUALIFICATION UNDER THE MASTER AGREEMENT, THE DEPARTMENT OF AGRICULTURE PROPOSES TO SELECT THE 10 MOST QUALIFIED FIRMS IN EACH SUBJECT MATTER AREA. BY THE TERMS OF THE MASTER AGREEMENT, FIRMS SO QUALIFIED WILL NOT BE OBLIGATED TO PROVIDE ANY PARTICULAR SERVICES. FOR THE 1-YEAR PERIOD FOR WHICH THE MASTER AGREEMENT IS OPERATIVE, HOWEVER, ONLY THOSE FIRMS WILL BE ELIGIBLE TO SUBMIT PROPOSALS TO FULFILL THE DEPARTMENT'S CONSULTING NEEDS IN THE PARTICULAR SUBJECT MATTER AREA. IN THIS MANNER THE DEPARTMENT BELIEVES IT WILL BE ASSURED OF RECEIVING NO MORE THAN 10 PROPOSALS FOR ANY PARTICULAR TASK AND WILL BE ASSURED IN ADVANCE THAT ALL OFFERORS POSSESS THE CAPABILITY TO SATISFACTORILY PERFORM.

THE RFP SOLICITS PROPOSALS CONTAINING SUBSTANTIALLY THE FOLLOWING INFORMATION:

IX. SUBMISSION OF PROPOSALS FOR (MASTER) AGREEMENT

EACH CONTRACTOR SUBMITTING A PROPOSAL SHALL PROVIDE THE FOLLOWING INFORMATION:

A. INDICATE THE SERVICE AREAS LISTED ON THE SCOPE OF WORK, PARAGRAPH IV TO WHICH YOUR PROPOSAL IS IN RESPONSE. IT IS NOT NECESSARY TO INCLUDE ALL SERVICE AREAS.

B. PROVIDE QUALIFICATIONS FOR PERFORMING WORK AGAINST THE SERVICES AREAS INDICATED. INCLUDE EXPERIENCE AND CAPACITY IN DOING SIMILAR WORK FOR THE GOVERNMENT OR PROVATE INDUSTRY. NAME AND TELEPHONE NUMBER OF CUSTOMER'S CONTRACT REPRESENTATIVE SHOULD BE PROVIDED.

C. THE CONTRACTOR SHALL PROVIDE THE CRITERIA TO BE USED IN HIS PROCESS OF SELECTION OF PROJECT MANAGERS AND SENIOR STAFF ON INDIVIDUAL TASK ORDERS. THESE INTERNAL CRITERIA SHOULD INCLUDE THE CONTRACTOR'S TRAINING PROGRAM AS WELL AS OTHER PERSONNEL DEVELOPMENT PROGRAMS TO ENSURE THAT THE CONTRACTOR'S SYSTEM PROVIDES THE MOST HIGHLY QUALIFIED INDIVIDUALS.

D. PROVIDES RESUMES OF TYPICAL PROFESSIONALS WHO WOULD BE AVAILABLE TO WORK ON INDIVIDUAL TASK ORDER. RESUMES SHOULD IDENTIFY - PREVIOUS EXPERIENCE, EDUCATION - SPECIFIC QUALIFICATIONS, AND PREVIOUS ASSIGNMENT RESPONSIBILITIES WHICH ARE RELEVANT TO THE SERVICE AREAS.

E. DESIGNATE A CONTRACTOR'S REPRESENTATIVE WHO CAN BE CONTACTED REGARDING (INCLUDE A RESUME).

- PROPOSED TASK ORDERS AND STAFF AVAILABILITY

- CONTRACT PERFORMANCE

- CONTRACT ADMINISTRATION QUESTIONS

- CONTRACT NEGOTIATIONS

IT IS CLEAR THAT THE MASTER AGREEMENT AS CONCEIVED BY THE DEPARTMENT OF AGRICULTURE IS IN FACT A MECHANISM FOR PREQUALIFICATION OF OFFERORS. ANY SYSTEM FOR PREQUALIFICATION OF OFFERORS, OR OTHERWISE LIMITING THE NUMBER OF OFFERS, IS TO SOME DEGREE IN DEROGATION OF THE PRINCIPAL TENET OF THE COMPETITIVE SYSTEM THAT BIDS OR PROPOSALS BE SOLICITED IN SUCH A MANNER AS TO PERMIT THE MAXIMUM AMOUNT OF COMPETITION CONSISTENT WITH THE NATURE AND EXTENT OF THE SERVICES OR ITEMS BEING PROCURED. SEE 41 U.S.C. 253(A); FEDERAL PROCUREMENT REGULATIONS 1-1.301-1, 1-1.302-1(B). THE INQUIRY PERTINENT TO DETERMINING THE VALIDITY OF ANY PROCEDURE LIMITING THE EXTENT OF COMPETITION IS NOT WHETHER IT RESTRICTS COMPETITION PER SE, BUT WHETHER IT UNDULY RESTRICTS COMPETITION.

IN CONSIDERING LEGITIMATE RESTRICTIONS ON COMPETITION IN GOVERNMENT PROCUREMENT, WE HAVE UPHELD THE USE OF QUALIFIED PRODUCTS LISTS (QPL). 36 COMP. GEN. 809 (1957) WE INDICATED THAT THE GOVERNMENT'S INTEREST IN OBTAINING MAXIMUM COMPETITION IS TO BE WEIGHED AGAINST A BONA FIDE ADMINISTRATIVE DETERMINATION THAT THE EXIGENCIES OF A PARTICULAR PROCUREMENT PROGRAM ARE SUCH THAT THE DELAY INVOLVED IN OBTAINING MAXIMUM COMPETITION WOULD ADVERSELY AFFECT THE GOVERNMENT'S INTEREST. SIMILARLY, IN B-135504, MAY 2, 1958, WE UPHELD THE USE OF A QUALIFIED MANUFACTURERS LIST (QML) IN THE "MAKE, TRIM AND CUT" CLOTHING INDUSTRY. IN UPHOLDING THE USE OF A PROCEDURE FOR PREQUALIFICATION OF MANUFACTURERS SIMILAR TO THAT FOR QUALIFYING PRODUCTS FOR THE QPL WE RELIED HEAVILY UPON THE CLEAR SHOWING THAT HAD BEEN MADE IN THE COURSE OF CONGRESSIONAL HEARINGS THAT A POLICY OF OBTAINING MAXIMUM COMPETITION WAS IN FACT DISCOURAGING REPUTABLE COMPANIES FROM BIDDING ON GOVERNMENT CONTRACTS WITH THE RESULT THAT THE CLOTHING ITEMS PROCURED WERE OFTEN OF INFERIOR QUALITY. WE THERE RECOGNIZED THAT WHILE THE QML PROCEDURE WAS SOMEWHAT RESTRICTIVE OF COMPETITION, IT WAS NOT UNDULY RESTRICTIVE UNDER THE CIRCUMSTANCES AND MIGHT IN FACT ENCOURAGE COMPETITION BETWEEN RESPONSIBLE CLOTHING MANUFACTURERS. BASED ON SIMILAR CONSIDERATIONS OF NECESSITY, IN 50 COMP. GEN. 542 (1971), WE CONSIDERED AND INTERPOSED NO OBJECTION TO THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION'S PREQUALIFICATION OF MICROCIRCUITRY MANUFACTURERS BY MEANS OF A PRODUCTION LINE CERTIFICATION PROCEDURE.

WHILE THE QPL/QML-TYPE PROCEDURES REFERRED TO ABOVE ARE SIMILAR TO THOSE PROPOSED UNDER THE DEPARTMENT OF AGRICULTURE'S MASTER AGREEMENT IN THAT ALL INVOLVE A FORM OF PREQUALIFICATION, THEY DIFFER IN SEVERAL CRITICAL RESPECTS. UNDER QPL/QML-TYPE PROCEDURES, NO MANUFACTURER OR PRODUCER IS NECESSARILY PRECLUDED FROM COMPETING FOR A PROCUREMENT FOR WHICH HE IS ABLE TO PROVIDE A SATISFACTORY PRODUCT AND SUCH MANUFACTURER OR PRODUCER MAY BECOME ELIGIBLE TO COMPETE AT ANY TIME THAT IT DEMONSTRATES UNDER APPLICABLE PROCEDURES THAT IT IS ABLE TO FURNISH AN ACCEPTABLE ITEM MEETING THE GOVERNMENT'S NEEDS. UNDER THE PROCEDURES PROPOSED BY THE DEPARTMENT OF AGRICULTURE, DISQUALIFICATION OF AN OFFEROR WOULD NOT BE PREDICATED UPON A FINDING THAT IT COULD NOT PROVIDE A SATISFACTORY STUDY, BUT THAT OTHER FIRMS COULD IN ALL LIKELIHOOD FURNISH A STUDY OF SUPERIOR QUALITY. WHEREAS DISQUALIFICATION UNDER THE QPL/QML-TYPE PROCEDURES IS BASED ON A DETERMINATION AS TO A POTENTIAL OFFEROR'S ABILITY TO FURNISH THE PARTICULAR ITEM NEEDED BY THE GOVERNMENT, THE MASTER AGREEMENT WOULD EXCLUDE A POTENTIAL OFFEROR UPON A GENERAL FINDING AS TO THE RELATIVE QUALIFICATION OF THAT FIRM TO PERFORM CONSULTING SERVICES IN THE GENERAL AREA IN WHICH THE GOVERNMENT MIGHT REQUIRE A STUDY. MOREOVER, WE POINT OUT THAT THE QPL/QML-TYPE PROCEDURES HAVE BEEN SANCTIONED BASED NOT MERELY ON A SHOWING OF ADMINISTRATIVE EXPEDIENCY, BUT ON A SHOWING THAT THE RESTRICTIVE PROCEDURES WERE ESSENTIAL TO ASSURE THE PROCUREMENT OF A SATISFACTORY END PRODUCT. THE DEPARTMENT OF AGRICULTURE HAS OFFERED NO SUCH EVIDENCE AS TO ESSENTIALITY FOR RESTRICTING COMPETITION, BUT HAS INDICATED ONLY THAT OBTAINING MAXIMUM COMPETITION IS ADMINISTRATIVELY BURDENSOME.

IN FACT THE PROCEDURES PROPOSED BY THE DEPARTMENT ARE SOMEWHAT ANALOGOUS TO THOSE CONSIDERED IN 53 COMP. GEN. 209 (1973). IN THAT CASE WE CONSIDERED A SOLICITATION PROCEDURE EMPLOYED BY THE NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION (NHTSA) FOR THE ESTABLISHMENT AND OPERATION OF A QUALIFIED OFFERORS LIST (QOL). THE QOL AS ESTABLISHED BY THE NHTSA INCLUDED CONTRACTORS WHICH HAD RECEIVED AWARDS DURING THE PRIOR 2 FISCAL YEARS, CONTRACTORS WHOSE PROPOSALS SUBMITTED DURING THE PREVIOUS 2 FISCAL YEARS HAD BEEN EVALUATED AS TECHNICALLY ACCEPTABLE, AND OTHER FIRMS WHICH HAD BEEN DETERMINED TO BE QUALIFIED BASED ON "CAPABILITY DESCRIPTIONS" SUBMITTED BY THEM AND EVALUATED IN ADVANCE OF ANY PROCUREMENT. THE NHTSA PROCEDURE WAS AN ATTEMPT TO PREDETERMINE THE RESPONSIBILITY OF POTENTIAL OFFERORS. THERE WE FOUND THE USE OF A QOL TO BE AN UNDUE RESTRICTION UPON COMPETITION BECAUSE NHTSA HAD STATED NO REASON TO JUSTIFY THE NEED FOR PREDETERMINATION OF BIDDER/OFFEROR RESPONSIBILITY BEYOND THE NEED TO RESTRICT THE AVAILABLE NUMBER OF SOLICITATIONS.

SINCE THE SOLE JUSTIFICATION FOR USE OF THE MASTER AGREEMENT IS ADMINISTRATIVE EXPEDIENCY, WE CONSIDER THE PROCEDURE PROPOSED BY THE DEPARTMENT OF AGRICULTURE TO BE UNDULY RESTRICTIVE OF COMPETITION UNDER THE FOREGOING RATIONALE AND, THEREFORE, IMPROPER.