B-154642, AUG. 20, 1964

B-154642: Aug 20, 1964

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INC.: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF JULY 3. THE REQUEST IN QUESTION WAS FOR PROPOSALS TO PRODUCE A THIRTY MINUTE 16 MM. PROPOSALS WERE REQUESTED FOR SCRIPTING AND PRODUCING OF THIS FILM TOGETHER WITH A COST BREAKDOWN. THE CLOSING TIME FOR RECEIPT OF PROPOSALS WAS JUNE 3. SINCE THIS IS HIGHER THAN YOUR PROPOSAL YOU BELIEVE IT REPRESENTS UNNECESSARY COST TO THE UNITED STATES. WE ARE ADVISED THAT THE AGENCY FOR INTERNATIONAL DEVELOPMENT BELIEVES YOUR PROPOSAL DID NOT APPEAR TO REFLECT ADEQUATELY FOR FOLLOWING COST ITEMS: (A) LENGTH OF TIME TO PREPARE THE SCRIPT. THE AGENCY FOR INTERNATIONAL DEVELOPMENT RECEIVED THE IMPRESSION THAT YOUR PROPOSAL WAS BASED ON MINIMAL SUPPLIES AND SERVICES AND THAT A COST-PLUS-A-FIXED-FEE CONTRACT WITH YOUR FIRM WOULD COST CONSIDERABLY MORE THAN YOUR ESTIMATE.

B-154642, AUG. 20, 1964

TO NORWOOD STUDIOS, INC.:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF JULY 3, AND LETTER OF JULY 31, 1964, PROTESTING THE AWARD OF A CONTRACT UNDER REQUEST FOR PROPOSALS PIO/T 598-15-990-081-9-6520051 ISSUED BY THE AGENCY FOR INTERNATIONAL DEVELOPMENT.

THE REQUEST IN QUESTION WAS FOR PROPOSALS TO PRODUCE A THIRTY MINUTE 16 MM. COLOR MOTION PICTURE SOUND FILM ON THE SUBJECT OF RURAL ELECTRIC COOPERATIVES. PROPOSALS WERE REQUESTED FOR SCRIPTING AND PRODUCING OF THIS FILM TOGETHER WITH A COST BREAKDOWN. THE CLOSING TIME FOR RECEIPT OF PROPOSALS WAS JUNE 3, 1964. THE REQUEST STATED THAT PROPOSALS SHALL BE SUBMITTED ON A COST-PLUS-A-FIXED-FEE BASIS AND SHALL BE BASED UPON CONSIDERATION OF ALL INFORMATION INDICATED IN THE REQUEST INCLUDING THE REQUIREMENT THAT "THE CONTRACTOR SHALL PREPARE A COST BREAKDOWN IN DUPLICATE * * *.' IT ALSO PROVIDED THAT "THE DIRECTOR SHOULD BE ABLE TO SPEAK SPANISH * * *.' YOU SUBMITTED A PROPOSAL IN THE AMOUNT OF $19,222.04 BASED ON A SCRIPT COST OF $2,112, AND A PRODUCTION COST OF $17,110.04. ALSO, YOU SHOWED YOUR OVERHEAD COST TO BE 60 PERCENT OF DIRECT COSTS. ON JUNE 11, 1964, YOU INCREASED YOUR PRODUCTION COST TO $18,808.44 TO COVER ADDITIONAL LOCAL TRAVEL AND ASSOCIATED EXPENSES IN NICARAGUA, MAKING A TOTAL COST OF $20,920.44. YOU SAY THAT BY LETTER DATED JUNE 29, 1964, THE AGENCY FOR INTERNATIONAL DEVELOPMENT ADVISED YOU THAT AWARD HAD BEEN MADE TO AUDIO PRODUCTIONS, INC., IN THE AMOUNT OF $30,220. SINCE THIS IS HIGHER THAN YOUR PROPOSAL YOU BELIEVE IT REPRESENTS UNNECESSARY COST TO THE UNITED STATES.

WE ARE ADVISED THAT THE AGENCY FOR INTERNATIONAL DEVELOPMENT BELIEVES YOUR PROPOSAL DID NOT APPEAR TO REFLECT ADEQUATELY FOR FOLLOWING COST ITEMS:

(A) LENGTH OF TIME TO PREPARE THE SCRIPT.

(B) LABOR COSTS FOR CREWS WORKING IN NICARAGUA.

(C) AMOUNT OF RAW STOCK FILM REQUIRED AND PROCESSING RELATED THERETO.

(D) TRANSPORTATION COSTS IN NICARAGUA.

(E) COST OF A PRODUCTION DIRECTOR.

THUS, THE AGENCY FOR INTERNATIONAL DEVELOPMENT RECEIVED THE IMPRESSION THAT YOUR PROPOSAL WAS BASED ON MINIMAL SUPPLIES AND SERVICES AND THAT A COST-PLUS-A-FIXED-FEE CONTRACT WITH YOUR FIRM WOULD COST CONSIDERABLY MORE THAN YOUR ESTIMATE, PARTICULARLY SINCE YOU ESTIMATED OVERHEAD AT 60 PERCENT OF DIRECT COSTS.

SINCE IT WAS BELIEVED THAT YOUR PROPOSAL WOULD RESULT IN COSTS CONSIDERABLY IN EXCESS OF THOSE ESTIMATED, THE AGENCY CONTACTED BOTH YOU AND AUDIO TO INQUIRE WHETHER EITHER WOULD BE WILLING TO ENTER INTO A COST- PLUS-A-FIXED-FEE CONTRACT EMBODYING THE ESTIMATED COST AS THE MAXIMUM COST FIGURE. IT IS REPORTED THAT YOU WERE UNWILLING TO CONTRACT ON THAT BASIS, WHILE AUDIO ADVISED THE AGENCY IT WOULD DO SO. AS A RESULT, UNDER ARTICLE 11/4) OF THE CONTRACT WITH AUDIO THE WORK CAN COST THE GOVERNMENT LESS THAN THE ESTIMATED PRICE BUT NOT MORE. THIS OBVIOUSLY IS TO THE GOVERNMENT'S INTEREST.

FURTHERMORE, IT IS REPORTED THAT AUDIO WAS MORE RESPONSIVE TO THE REQUEST FOR PROPOSALS IN THAT IT STATED THE DIRECTOR WOULD SPEAK SPANISH WHEREAS, ALTHOUGH YOU WERE CONTACTED SEVERAL TIMES ON THIS POINT, YOU NEVER MADE IT CLEAR WHETHER OR NOT YOUR DIRECTOR WOULD HAVE THE NECESSARY LANGUAGE COMPETENCE. THEREFORE, AFTER CONSIDERING THE PROBABLE ULTIMATE COST AND ON THE BASIS OF RESPONSIVENESS OF THE PROPOSALS THE AGENCY WAS OF THE OPINION THAT AUDIO OFFERED THE MORE ADEQUATE ASSURANCE OF SATISFACTORY ACCOMPLISHMENT OF THE DESIRED OBJECTIVE AND THAT AN AWARD TO AUDIO WAS IN THE BEST INTEREST TO THE UNITED STATES.

SINCE A COST TYPE CONTRACT NEED NOT NECESSARILY BE AWARDED TO THE BIDDER SUBMITTING THE LOW ESTIMATE, AND SINCE THE CONTRACTING AGENCY APPEARS TO HAVE HAD A SUBSTANTIAL BASIS FOR THE DETERMINATIONS ON WHICH ITS ACTION WAS BASED, WE FIND NO LEGAL BASIS FOR OBJECTION AND YOUR PROTEST IS DENIED.