B-157052, AUG. 16, 1965

B-157052, AUG. 16, 1965

TO ALEXANDER BOSKOFF:

WE REFER TO YOUR LETTER OF JULY 22, 1965, IN BEHALF OF SQUARE DEAL TRUCKING COMPANY, INCORPORATED, PROTESTING THE AWARD MADE BY THE NATIONAL BUREAU OF STANDARDS ON JULY 1, 1965, TO POTOMAC DISPOSAL COMPANY FOR TRASH REMOVAL SERVICES AT THE NATIONAL BUREAU OF STANDARDS, GAITHERSBURG, MARYLAND, FOR THE PERIOD JULY 1, 1965, THROUGH SEPTEMBER 30, 1965.

THE PROCUREMENT ARISES FROM THE FACT THAT THE NATIONAL BUREAU OF STANDARDS IS GRADUALLY RELOCATING ITS FACILITIES TO ITS NEW SITE AT GAITHERSBURG, MARYLAND. ON MAY 4, 1965, THE BUREAU ISSUED AN INVITATION (IFB NO. G-4408-65) CALLING FOR BIDS FOR THE TRASH REMOVAL SERVICES FOR THE FISCAL YEAR 1965. MR. BORTNICK OF SQUARE DEAL PROTESTED AGAINST THIS INVITATION ON THE BASIS THAT THE NATURE AND EXTENT OF THE REQUIREMENT WAS NOT STATED WITH SUFFICIENT CLARITY. THE BUREAU AGREED, AND CANCELLED THE INVITATION. ON MAY 27, 1965, IT ISSUED ANOTHER INVITATION FOR THE FISCAL YEAR REQUIREMENT (IFB NO. B 4434-65), SETTING FORTH THE ANTICIPATED FREQUENCY OF PICK-UPS AT THE VARIOUS BUILDING LOCATIONS. BIDDERS WERE ASKED TO QUOTE A PRICE PER PICK-UP ON 6 AND 8-CUBIC YARD CONTAINERS (CONTRACTOR-FURNISHED CONTAINERS) BASED ON STATED FREQUENCIES OF PICK-UPS PER WEEK AT EACH TRASH POINT. BIDS WERE RECEIVED ON JUNE 15, 1965, FROM THREE FIRMS, NAMELY, SQUARE DEAL, POTOMAC DISPOSAL COMPANY AND UNITED DISPOSAL CORPORATION. IT APPEARS THAT SQUARE DEAL QUOTED WEEKLY RATES WHILE THE OTHER TWO BIDDERS QUOTED MONTHLY RATES. (ACTUALLY, IN THE CASE OF POTOMAC DISPOSAL COMPANY, IT CAN ONLY BE ASSUMED THAT THE BIDDER QUOTED MONTHLY RATES.) THE BUREAU COMPUTED THE AVERAGE PRICE PER PICK UP OFFERED BY EACH BIDDER TO BE AS FOLLOWS:

CHART

6-CUBIC YARD CONTAINER 8-CUBIC YARD CONTAINER

POTOMAC DISPOSAL $5.03 $5.97

UNITED DISPOSAL $5.35 $6.06

SQUARE DEAL $6.00 $7.00

MR. BORTNICK PROTESTED THAT SQUARE DEAL HAD SUBMITTED THE ONLY RESPONSIVE BID. HOWEVER, BY LETTER OF JUNE 24, 1965, THE BUREAU ADVISED THE BIDDERS THAT ALL BIDS WERE REJECTED DUE TO THE UNCERTAINTY OF THE BUREAU'S FUTURE NEEDS FOR THIS REQUIREMENT, AND THAT NEW PRICE PROPOSALS WOULD BE OBTAINED FOR A SHORTER PERFORMANCE PERIOD. THE LETTER CONCLUDED AS FOLLOWS:

"ATTACHED ARE SPECIFICATIONS FOR THE JOB TO BE PERFORMED FROM JULY 1, 1965 THROUGH SEPTEMBER 30, 1965. INASMUCH AS THE COST OF THIS PROCUREMENT WILL PLACE IT WITHIN THE ESTABLISHED LIMITS FOR SMALL PURCHASE PROCEDURES, WE WILL CALL YOU IN THE VERY NEAR FUTURE TO REQUEST YOUR NEW PRICE QUOTATIONS. THE ORDER WILL BE AWARDED IN THE AGGREGATE BASED ON LOWEST AVERAGE COST TO THE GOVERNMENT.'

THE SPECIFICATION PROVIDED THAT ONLY 8-CUBIC YARD CONTAINERS WOULD BE UTILIZED. IT WAS ALSO PROVIDED THAT THE ORDER COULD BE EXTENDED, AT THE BUREAU'S OPTION, BEYOND SEPTEMBER 30, 1965, UP TO JUNE 30, 1966.

SQUARE DEAL WROTE TO THE CONTRACTING OFFICE ON JUNE 29, 1965, CONTENDING THAT THE CHANGE IN SPECIFICATIONS PERMITTING ONLY 8-CUBIC YARD CONTAINERS WAS UNDULY RESTRICTIVE. THE COMPANY STATED THAT A CONTAINER OF THAT SIZE IS NOT NORMALLY USED FOR THE TYPE OF TRASH REMOVAL REQUIRED ON THIS JOB, AND THAT ONLY POTOMAC HAD SUCH CONTAINERS IN STOCK. SQUARE DEAL INDICATED THAT WHILE IT WAS WILLING TO PURCHASE THE 8-CUBIC YARD CONTAINER FOR USE UNDER A ONE-YEAR CONTRACT, IT WAS NOT IN A POSITION TO PURCHASE THIS CONTAINER FOR A THREE-MONTH CONTRACT. ACCORDINGLY, SQUARE DEAL ADVISED THAT IT WOULD NOT OFFER A BID UNDER THE REVISED SPECIFICATION. WHEN SQUARE DEAL WAS CALLED BY TELEPHONE IT REFUSED TO QUOTE A PRICE. THE OTHER TWO BIDDERS DID QUOTE, HOWEVER, AND AN AWARD WAS MADE ON JULY 1, 1965, TO POTOMAC DISPOSAL COMPANY AT $4.50 PER PICK-UP.

THE BUREAU EXPLAINS THAT ITS DECISION TO REQUIRE THE 8-CUBIC YARD CONTAINER WAS BASED ON THE CONSIDERATIONS THAT (1) THE PRICE PER CUBIC YARD WOULD BE LOWER (AS INDICATED BY THE PRIOR BIDDING) AND (2) FEWER PICK -UPS WOULD BE REQUIRED. ALSO, THE BUREAU POINTS OUT THAT THE OTHER BIDDER (UNITED DISPOSAL CORPORATION) DID OFFER AN ORAL QUOTE FOR THE 8 CUBIC YARD CONTAINER, SHOWING THAT COMPETITION WAS AVAILABLE.

THE RECORD SHOWS THAT THE DECISION TO CONTRACT FOR THREE MONTHS RATHER THAN ONE YEAR WAS MADE BECAUSE OF THE UNCERTAINTY OF THE FUTURE REQUIREMENTS, UNCERTAINTY OF OCCUPANCY DATES OF THE NEW BUILDINGS AT GAITHERSBURG, VOLUME OF TRASH THAT MAY BE GENERATED AND EXACT LOCATIONS OF PICK-UP POINTS. AGAINST THESE CONSIDERATIONS YOU CONTEND THAT SINCE THE BUREAU WAS CONTRACTING FOR A FLAT RATE PER PICK-UP, THE BUREAU WAS IN A POSITION TO MAKE A ONE-YEAR CONTRACT, AS INDICATED BY THE PRIOR INVITATIONS.

OBVIOUSLY THE LOCATION AND FREQUENCY OF PICK-UPS AFFECT THE RATES WHICH A BIDDER WILL CHARGE FOR EACH PICK-UP. THE ORIGINAL INVITATION WAS CANCELLED AFTER SQUARE DEAL PROTESTED THAT THE SPECIFICATIONS WERE NOT SUFFICIENTLY CLEAR TO ALLOW BIDDING ON THE REQUIREMENTS. THE SECOND INVITATION WAS MORE EXPLICIT; HOWEVER, THE BUREAU FINALLY DECIDED TO CONTRACT FOR A SHORTER PERIOD OR AT LEAST UNTIL THE NEEDS COULD BE CRYSTALLIZED IN MORE DEFINITIVE TERMS. UNDER THE CIRCUMSTANCES, IT WAS PROPER FOR THE BUREAU TO RECONSIDER ITS REQUIREMENTS AND CONTRACT FOR THE SHORTER PERIOD USING THE REVISED SPECIFICATIONS.

SINCE THE COST OF THE PROCUREMENT WAS ESTIMATED AT LESS THAN $2,500 FOR THE THREE-MONTH PERIOD, PURCHASE ACTION UNDER THE SMALL PURCHASES PROCEDURE (INCLUDING ORAL SOLICITATIONS) WAS PROPER. 41 U.S.C. 252 (C) (3); FPR 1-3.6. ACCORDINGLY, SQUARE DEAL'S PROTEST AGAINST THE AWARD TO POTOMAC DISPOSAL COMPANY IS DENIED.

HOWEVER, YOU QUESTION THE PROPRIETY OF THE OPTION PROVISION IN THE SPECIFICATIONS PERMITTING THE BUREAU TO EXTEND THE CONTRACT COMPLETION DATE BEYOND SEPTEMBER 30, 1965, UP TO JUNE 30, 1966. IN THIS CONNECTION, ENCLOSED IS A COPY OF OUR LETTER OF TODAY TO THE NATIONAL BUREAU OF STANDARDS.