B-165696, MAR. 25, 1969

B-165696: Mar 25, 1969

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

INCORPORATED: FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE AWARD OF A CONTRACT TO THE AMERICAN MAILING CORPORATION (AMC) BY THE PEACE CORPS PURSUANT TO INVITATION FOR BIDS NO. 69-3. THE SOLICITATION WAS ISSUED ON NOVEMBER 7. WITH ITEM 2 MARKED TO INDICATE IT WAS AN ADVERTISED PROCUREMENT. THE INVITATION ALSO INCLUDED NOTICE THAT ALL OFFERS WERE SUBJECT TO THE ATTACHED SOLICITATION INSTRUCTIONS AND CONDITIONS. STATES THAT THE SERVICES CALLED FOR WILL BE AS REQUIRED DURING THE TERM OF THE CONTRACT. THAT IT IS NOT POSSIBLE TO ESTIMATE THE AMOUNT OF WORK THAT MAY BE REQUESTED OR THE PERCENTAGE OF WORK TO BE PERFORMED IN EACH CATEGORY. NO ESTIMATE OF THE NUMBER OF SPECIAL PICKUP OR DELIVERY SERVICES IS GIVEN.

B-165696, MAR. 25, 1969

TO DATA-MAIL, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE AWARD OF A CONTRACT TO THE AMERICAN MAILING CORPORATION (AMC) BY THE PEACE CORPS PURSUANT TO INVITATION FOR BIDS NO. 69-3, FOR PROVIDING WAREHOUSE, MAILING, DISTRIBUTION AND RELATED SERVICES FOR THE PERIOD BEGINNING DECEMBER 7, 1968, AND ENDING JUNE 30, 1970.

THE SOLICITATION WAS ISSUED ON NOVEMBER 7, 1968, ON STANDARD FORM 33, SOLICITATION, OFFER, AND AWARD, WITH ITEM 2 MARKED TO INDICATE IT WAS AN ADVERTISED PROCUREMENT. THE INVITATION CALLED FOR THE PUBLIC OPENING OF BIDS ON NOVEMBER 18, 1968. THE INVITATION ALSO INCLUDED NOTICE THAT ALL OFFERS WERE SUBJECT TO THE ATTACHED SOLICITATION INSTRUCTIONS AND CONDITIONS, SF33-A, AND THE GENERAL PROVISIONS, SF32, 1964 EDITION, ATTACHED OR INCORPORATED THEREIN BY REFERENCE.

PARAGRAPH I, SCOPE, STATES THAT THE SERVICES CALLED FOR WILL BE AS REQUIRED DURING THE TERM OF THE CONTRACT, BUT THAT IT IS NOT POSSIBLE TO ESTIMATE THE AMOUNT OF WORK THAT MAY BE REQUESTED OR THE PERCENTAGE OF WORK TO BE PERFORMED IN EACH CATEGORY. PARAGRAPH II, WAREHOUSE SERVICES, CALLS FOR THE CONTRACTOR TO PROVIDE APPROXIMATELY 10,000 SQUARE FEET OF STORAGE SPACE, EQUIPMENT NECESSARY TO HANDLE APPROXIMATELY 700 SKIDS OF MATERIAL, THE TAKING OF INVENTORY, AND SCHEDULED AND SPECIAL PICKUP SERVICES. NO ESTIMATE OF THE NUMBER OF SPECIAL PICKUP OR DELIVERY SERVICES IS GIVEN. UNDER PARAGRAPH III, MAILING AND RELATED SERVICES COST SCHEDULE, THE BIDDER IS REQUIRED TO STATE PRICES FOR MACHINE AND HAND INSERTING, TUCKING ENVELOPE FLAPS, SEALING ENVELOPES, HAND FOLDING, AFFIXING LABELS TO ENVELOPES, ADDRESSING AND TYPING, HAND BINDERY SERVICES, AND PACKING SERVICES. NO GOVERNMENT ESTIMATE IS GIVEN FOR THE AMOUNT OF WORK ANTICIPATED UNDER ANY OF THESE ITEMS. IN ADDITION, PARAGRAPH IV, SUBSIDIARY SERVICES, REQUIRES THE CONTRACTOR TO PERFORM UNSPECIFIED RELATED SERVICES FOR A PRICE TO BE AGREED UPON WHEN AND IF THE SERVICES ARE DESIRED. THIS PROVISION ALSO INVITES BIDDERS TO SUBMIT AS AN ATTACHMENT ANY SERVICES AVAILABLE AND THE COST THEREFOR.

ALTHOUGH BIDS WERE SOLICITED FROM NINE FIRMS, ONLY THREE BIDS WERE RECEIVED AND OPENED ON NOVEMBER 18, 1968. THE ADW BID WAS NONRESPONSIVE. YOUR FACILITIES AND AMC'S WERE IMMEDIATELY INSPECTED. ON NOVEMBER 21, 1968, THE CONTRACTING OFFICER REVIEWED THE BIDS AND FACILITIES INSPECTION REPORTS. THE REPORT ON YOUR FACILITIES WAS NEGATIVE, WHEREAS AMC RECEIVED A FAVORABLE RECOMMENDATION. THE CONTRACTING OFFICER EVALUATED THE BID PRICES BY SELECTING AT RANDOM TWO MONTHS UNDER THE PRIOR CONTRACT AND APPLYING THE QUANTITIES ORDERED THEREUNDER TO THE BID PRICES FOR THE SAME ITEMS UNDER THE SUBJECT INVITATION. UNDER SUCH METHOD OF EVALUATION, AMC WAS DETERMINED TO BE THE LOW BIDDER BY $3,819.53. THE CONTRACTING OFFICER, CONCLUDING THAT AMC'S BID WAS THE MOST ADVANTAGEOUS TO THE GOVERNMENT BOTH AS TO PRICE AND FACILITIES, AWARDED THE CONTRACT TO AMC ON NOVEMBER 21, 1968.

YOU CONTEND THAT THE INVITATION WAS DEFECTIVE AND, THEREFORE, THE AWARD WAS NOT VALID BECAUSE ,ALL BIDDERS WERE NOT ACCORDED EQUAL OPPORTUNITY TO COMPUTE BIDS IN CONFORMITY WITH THE OBJECTIVE FACTORS COMPRISING THE BASIS UPON WHICH BIDS" WERE EVALUATED. IN THIS CONNECTION, YOU STATE THAT ALTHOUGH YOU REQUESTED INFORMATION AS TO QUANTITIES ORDERED UNDER THE PRIOR CONTRACT, YOU WERE DENIED SUCH INFORMATION ON THE BASIS THAT QUANTITATIVE FACTORS COULD NOT BE ASSIGNED BECAUSE IT WAS IMPOSSIBLE TO FORECAST THE QUANTITIES THAT WOULD BE NEEDED IN THE FUTURE. YOU CONTEND THAT SUCH QUANTITIES WERE KNOWN TO AMC AS THE PRIOR CONTRACTOR AND IF THEY WERE TO BE USED IN THE EVALUATION OF BIDS THEY SHOULD HAVE BEEN AVAILABLE TO ALL BIDDERS. YOU ALSO REFER TO THE FACT THAT UNDER THE TERMS OF THE INVITATION THE GOVERNMENT RESERVED THE RIGHT TO MAKE THE AWARD IN THE AGGREGATE AND IMPLY THAT SINCE YOUR AGGREGATE BID PRICE WAS 14.9 PERCENT BELOW AMC-S, YOU SHOULD HAVE BEEN DETERMINED THE LOW BIDDER.

YOU ALSO DISPUTE THE PEACE CORPS' DETERMINATION THAT YOUR FIRM WAS NONRESPONSIBLE AND CONTEND THAT UNDER THE FEDERAL PROCUREMENT REGULATIONS CONCERNING SMALL BUSINESS FIRMS SUCH DETERMINATION SHOULD HAVE BEEN REFERRED TO THE SMALL BUSINESS ADMINISTRATION FOR REVIEW.

YOU ALSO QUESTION THE PEACE CORPS' AUTHORITY FOR AWARDING A CONTRACT IN EXCESS OF ONE YEAR. FINALLY, YOU CONTEND THAT THE PEACE CORPS IMPROPERLY CONSIDERED THE PROMPT PAYMENT DISCOUNTS OFFERED BY THE BIDDERS IN ITS EVALUATION OF THE BIDS.

THE PEACE CORPS' REPORTS THAT NO QUANTITY ESTIMATES OF THE VARIOUS ITEMS WERE STATED IN THE INVITATION BECAUSE PRIOR CONTRACT QUANTITIES HAD VARIED CONSIDERABLY AND, THEREFORE, ANY ESTIMATE OF FUTURE NEEDS COULD HAVE BEEN MISLEADING TO BIDDERS. IT IS THE PEACE CORPS POSITION THAT ALL BIDDERS WERE AFFORDED THE SAME OPPORTUNITY TO COMPUTE AND SUBMIT COMPETITIVE PRICES AND THE METHOD OF EVALUATION WAS APPLIED IN THE SAME MANNER TO BOTH BIDDERS. THE PEACE CORPS HAS ALSO ADVISED OUR OFFICE THAT ALTHOUGH THE EVALUATION WAS BASED UPON TWO MONTHS CHOSEN AT RANDOM, AMC IS STILL THE LOW BIDDER BASED UPON THE SAME METHOD OF EVALUATION USING THE REQUIREMENTS OF THE PRECEDING 12 MONTHS. THEREFORE, THE PEACE CORPS CONTENDS THAT AMC WAS PROPERLY AWARDED THE CONTRACT AS THE LOW RESPONSIVE AND RESPONSIBLE BIDDER.

IT IS THE PEACE CORPS' POSITION THAT ALL INQUIRIES BY BIDDERS REGARDING PAST REQUIREMENTS WERE ANSWERED AND NONE COMPLAINED THAT THE INFORMATION GIVEN IN RESPONSE WAS INADEQUATE OR THAT BID PRICES COULD NOT BE COMPUTED FOR WANT OF FURTHER INFORMATION. THE PEACE CORPS STATES THAT FEDERAL PROCUREMENT REGULATIONS (FPR) 1-2.201 "DOES NOT REQUIRE THAT INVITATIONS SET FORTH THE QUANTITATIVE FACTORS TO BE EMPLOYED IN MAKING PRICE COMPARISONS. RATHER SEC. 1-2.201 (A) (20) REQUIRES ONLY THAT, IF - GOVERNMENT COSTS OR EXPENDITURES OTHER THAN BID PRICES ARE TO BE CONSIDERED IN THE EVALUATION OF BIDS-, SUCH FACTORS BE SET OUT IN THE INVITATION.'

THE MEMORANDA OF CONVERSATIONS ON NOVEMBER 14, 1968, WITH DATA-MAIL INDICATE THAT A REQUEST FOR SPECIFIC INFORMATION AS TO THE VOLUME OF THE SERVICES CALLED FOR WAS REQUESTED, BUT ONLY GENERAL INFORMATION WAS GIVEN. FURTHERMORE, SUBPARAGRAPH (20) OF FPR 1-2.201 (A), CITED ABOVE, IS NOT CONCERNED WITH THE TYPE OF INFORMATION SOUGHT BY DATA MAIL. HOWEVER, SUBPARAGRAPH (7) OF THE CITED REGULATION DOES REQUIRE THE INVITATION TO CONTAIN A DESCRIPTION OF SUPPLIES OR SERVICES TO BE FURNISHED UNDER EACH ITEM IN SUFFICIENT DETAIL TO PERMIT FULL AND FREE COMPETITION.

WE ARE AWARE THAT PURSUANT TO SECTION 302 OF EXECUTIVE ORDER NO. 11041, THE PEACE CORPS IS NOT REQUIRED TO COMPLY WITH THE RULES GOVERNING FORMAL ADVERTISING. NEVERTHELESS, IT IS CLEAR THAT THE SOLICITATION OF BIDS AND AWARD OF THE CONTRACT IN THE INSTANT CASE WERE EFFECTED THROUGH FORMAL ADVERTISING PROCEDURES. THE PEACE CORPS MAKES NO CONTENTION THAT THEIR INTENTION WAS OTHERWISE OR THAT SUCH PROCEDURES ARE NOT APPLICABLE. THEREFORE, WE THINK THAT THE VALIDITY OF DATA-MAIL'S PROTEST MAY PROPERLY BE DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF THE INVITATION AND THE FPR AS INTERPRETED AND APPLIED BY THE COURTS AND DECISIONS OF OUR OFFICE. SEE B-158324, FEBRUARY 10, 1966.

IN ANY CASE IT IS A BASIC PROCUREMENT POLICY THAT ALL CONTRACTS, WHETHER BY FORMAL ADVERTISING OR BY NEGOTIATION, SHALL BE MADE ON A COMPETITIVE BASIS TO THE MAXIMUM PRACTICABLE EXTENT. SEE FPR 1-1.301 1. THIS POSITION IS CONSISTENT WITH THE PRINCIPLE OFTEN STATED IN OUR DECISIONS TO THE EFFECT THAT ADEQUATE COMPETITION -- IN THE SENSE OF THE SOLICITATION OF OFFERS FROM ALL QUALIFIED SOURCES AND THEIR EVALUATION ON A COMMON BASIS -- MUST BE OBTAINED. WITH RESPECT TO REQUIREMENTS TYPE CONTRACTS, WE HAVE HELD THAT WHERE THE QUANTITIES FOR THE VARIOUS ITEMS ARE NOT KNOWN, THE INVITATION FOR BID OR REQUEST FOR PROPOSALS MUST PROVIDE SOME BASIS FOR EVALUATION, SUCH AS PROVIDING ESTIMATED QUANTITIES FOR THE VARIOUS ITEMS. B-161875, OCTOBER 13, 1967; B-162182, NOVEMBER 13, 1967. IN THIS CONNECTION, SEE FPR 1 3.409 (B) (1), WHICH PROVIDES, IN PART, AS FOLLOWS:

"AN ESTIMATED TOTAL QUANTITY IS STATED FOR THE INFORMATION OF PROSPECTIVE CONTRACTORS, WHICH ESTIMATE SHOULD BE AS REALISTIC AS POSSIBLE. THE ESTIMATE MAY BE OBTAINED FROM THE RECORDS OF PREVIOUS REQUIREMENTS AND CONSUMPTION, OR BY OTHER MEANS.'

IT IS CLEAR, THEREFORE, WHETHER THE RULES GOVERNING ADVERTISING OR NEGOTIATING ARE APPLIED, THE SUBJECT INVITATION WAS DEFECTIVE AND DID NOT COMPLY WITH OUR DECISIONS AND THE FPR PROVISIONS. NONETHELESS, SINCE THE CONTRACT HAS BEEN IN EXISTENCE FOR SOME TIME AND THE SUCCESSFUL BIDDER WAS LOW WHETHER ON THE TOTAL OR THE TWO MONTH ESTIMATE OF QUANTITIES, WE WOULD NOT BE JUSTIFIED IN DIRECTING CANCELLATION OF THE CONTRACT. HOWEVER, WE ARE BRINGING THIS MATTER TO ATTENTION OF THE DIRECTOR OF THE PEACE CORPS IN ORDER TO PRECLUDE ITS RECURRENCE IN FUTURE PROCUREMENTS.

SINCE AMC WAS DETERMINED THE LOW RESPONSIVE AND RESPONSIBLE BIDDER, REFERRAL OF THE QUESTION OF YOUR RESPONSIBILITY TO SBA WAS NOT REQUIRED. WITH RESPECT TO YOUR QUESTION CONCERNING THE TERM OF THE CONTRACT, THE PEACE CORPS IS AUTHORIZED UNDER THE PROVISIONS OF 22 U.S.C. 2509 (C) TO ENTER INTO A CONTRACT WHICH ENTAILS THE EXPENDITURE OF FUNDS FOR NOT MORE THAN 36 MONTHS. ALTHOUGH CONSIDERATION OF THE PROMPT PAYMENT DISCOUNTS IN THE EVALUATION WAS IMPROPER IN VIEW OF THE PROVISION OF THE INVITATION THAT SUCH DISCOUNTS FOR PAYMENT WITHIN LESS THAN 20 DAYS WILL NOT BE CONSIDERED IN THE EVALUATION, IT DID NOT AFFECT THE RELATIVE STANDING OF THE BIDDERS.