B-167685, OCT. 21, 1969

B-167685: Oct 21, 1969

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CLAIMING CONTEMPLATED MANHOURS WERE ADEQUATE FOR PERFORMANCE AND OPPORTUNITY FOR FURTHER DISCUSSION WAS REFUSED. IS DENIED. NUMBER OF WORKERS AND TOTAL ESTIMATED LABOR HOURS ARE NECESSARY FOR CONSIDERATION. TO ALLOW FURTHER DISCUSSIONS ON JUNE 23 (CUT-OFF DATE JUNE 25) IN FAIRNESS TO OTHER OFFERORS WOULD HAVE MEANT FURTHER CONTEMPORANEOUS DISCUSSIONS WITH ALL OFFERORS OR OFFERORS' NEGOTIATION POSTURE WOULD HAVE BEEN PREJUDICED AND CONTRACTING OFFICER'S ACTION IN REFUSING FURTHER NEGOTIATION WAS PROPER. INC.: REFERENCE IS MADE TO YOUR LETTER OF JULY 31. THE PROCUREMENT WAS A 100-PERCENT SET-ASIDE FOR SMALL BUSINESS CONCERNS. A TOTAL OF 19 FIRMS WAS SOLICITED. EACH OFFEROR WAS REQUIRED BY SECTION 5.0 (A) THEREOF TO SUBMIT A MANNING CHART SHOWING THE STAFFING LEVEL FOR EACH BUILDING ESTIMATED BY THE OFFEROR AS BEING REQUIRED "TO SATISFACTORILY PERFORM THE CONTRACT SERVICES.'.

B-167685, OCT. 21, 1969

NEGOTIATION--EVALUATION FACTORS--MANNING REQUIREMENTS UNDER REQUEST FOR PROPOSALS FOR MESS ATTENDANT SERVICES WHICH REQUIRED MANNING CHART SUBMISSION WITH PROPOSAL, OFFEROR'S PROTEST TO AWARD AT HIGHER PRICE, CLAIMING CONTEMPLATED MANHOURS WERE ADEQUATE FOR PERFORMANCE AND OPPORTUNITY FOR FURTHER DISCUSSION WAS REFUSED, IS DENIED, SINCE MANNING CHART REPRESENTED OFFEROR'S BASIC APPROACH TO PERFORMING SERVICES REQUIRED AND ALL RELEVANT FACTORS, INCLUDING LABOR RESOURCES, WAGE RATES, NUMBER OF WORKERS AND TOTAL ESTIMATED LABOR HOURS ARE NECESSARY FOR CONSIDERATION. TO ALLOW FURTHER DISCUSSIONS ON JUNE 23 (CUT-OFF DATE JUNE 25) IN FAIRNESS TO OTHER OFFERORS WOULD HAVE MEANT FURTHER CONTEMPORANEOUS DISCUSSIONS WITH ALL OFFERORS OR OFFERORS' NEGOTIATION POSTURE WOULD HAVE BEEN PREJUDICED AND CONTRACTING OFFICER'S ACTION IN REFUSING FURTHER NEGOTIATION WAS PROPER.

TO ORBITING ENTERPRISES, INC.:

REFERENCE IS MADE TO YOUR LETTER OF JULY 31, 1969, PROTESTING AGAINST THE AWARD OF A CONTRACT TO DYNAMIC ENTERPRISES, INC. (DYNAMIC), UNDER REQUEST FOR PROPOSALS (RFP) NO. N00600-69-R-5236, ISSUED BY THE UNITED STATES NAVY PURCHASING OFFICE, WASHINGTON NAVY YARD, WASHINGTON, D.C.

THE SUBJECT RFP, ISSUED ON MAY 23, 1969, SOLICITED OFFERS FOR FURNISHING LABOR AND MATERIALS TO PERFORM MESS ATTENDANT SERVICES IN BUILDING NO. 72 AT THE NAVAL STATION AND BUILDING NO. 166 AT THE WASHINGTON NAVY YARD DURING THE PERIOD JULY 1, 1969, THROUGH JUNE 30, 1970. THE PROCUREMENT WAS A 100-PERCENT SET-ASIDE FOR SMALL BUSINESS CONCERNS. A TOTAL OF 19 FIRMS WAS SOLICITED.

AS A PART OF THE RFP, EACH OFFEROR WAS REQUIRED BY SECTION 5.0 (A) THEREOF TO SUBMIT A MANNING CHART SHOWING THE STAFFING LEVEL FOR EACH BUILDING ESTIMATED BY THE OFFEROR AS BEING REQUIRED "TO SATISFACTORILY PERFORM THE CONTRACT SERVICES.' SECTION 5.0 (A) PROVIDED THAT:

"SECTION 5.0 - NOTICES TO OFFERORS

"/A) ALL OFFERORS SHALL SUBMIT WITH THEIR PROPOSAL, A MANNING CHART IN THE FORMAT OF FIGURE 1, ATTACHED, SHOWING THE ESTIMATED NUMBER OF PERSONNEL REQUIRED IN EACH SPACE EACH HALF HOUR OF A REPRESENTATIVE WEEKDAY TO SATISFACTORILY PERFORM THE CONTRACT SERVICES. NOTHING IN THIS SECTION, OR ELSEWHERE IN THIS CONTRACT SHALL BE CONSTRUED AS LIMITING THE CONTRACTOR'S RESPONSIBILITY FOR PROVIDING SUFFICIENT PERSONNEL TO ACCOMPLISH ALL OF THE REQUIREMENTS SET FORTH HEREIN.'

WITH RESPECT TO THE MANNING CHART, SECTION 9.33 OF THE RFP PROVIDED THAT:

"9.33 - STAFFING LEVELS (NUMBER OF EMPLOYEES)

"THE STAFFING LEVELS ENTERED BY THE CONTRACTOR ON THE MANNING CHART (FIGURE 1) SHALL BECOME AN INTEGRAL PART OF THE CONTRACT, AND THE CONTRACTING OFFICER MAY REQUIRE THAT THIS STAFFING LEVEL BE FULFILLED SHOULD PERFORMANCE OF THIS CONTRACT FALL BELOW ACCEPTABLE STANDARDS. THE CONTRACTOR MAY BE REQUIRED TO MAKE MONETARY ADJUSTMENTS FOR ANY MANHOURS LESS THAN THOSE SPECIFIED, SHOULD THE CONTRACTING OFFICER DETERMINE THAT A LESS THAN SATISFACTORY LEVEL OF PERFORMANCE IS CAUSED BY PERSONNEL STAFFING BELOW THAT SET FORTH IN FIGURE 1, MANNING CHART.'

ON JUNE 13, 1969, THE CLOSING DATE SET FOR RESPONSES TO THE RFP, PROPOSALS WERE RECEIVED FROM 10 FIRMS. THE 10 INITIAL PROPOSALS, IN TERMS OF PRICE AND MANHOUR STAFFING LEVELS, ARE REPORTED AS FOLLOWS:

MANHOURS

BUILDINGS

OFFEROR PRICE 72 166

INSTANT FOOD SERVICES $135,660.00 80 80

ORBITING ENTERPRISES 159,840.00 67-1/2 67-1/2

IRA GELBER 184,848.72 108 113-1/2

P.J.K. COMPANY 189,324.00 107-1/2 107-1/2

QUALITY MAINTENANCE CORP. 192,288.00 (NOT DETERMINABLE)

DYNAMIC ENTERPRISES, INC. 199,670.40 121 119

MILITARY BASE

MANAGEMENT, INC.213,840.00 125 125

NATIONWIDE BUILDING

MAINTENANCE INC. 230,000.00 184 184

HUNTSVILLE FOOD SERVICE 238,802.02 95 95

MURCOLE 338,472.00 172-1/2 172-1/2

IT IS REPORTED THAT NEGOTIATIONS WERE THEN CONDUCTED WITH ALL 10 OFFERORS. IN THIS RESPECT, INSTANT FOOD SERVICES, ORBITING ENTERPRISES, IRA GELBER, P.J.K. COMPANY AND HUNTSVILLE FOOD SERVICE WERE NOTIFIED THAT THEIR STAFFING LEVELS WERE CONSIDERED LOW FOR THE WORK TO BE DONE. MILITARY BASE MANAGEMENT, NATIONWIDE BUILDING MAINTENANCE AND MURCOLE WERE NOTIFIED THAT THEIR STAFFING ESTIMATES WERE CONSIDERED HIGH. QUALITY MAINTENANCE CORPORATION WAS NOTIFIED THAT ITS MANNING CHART WAS INCONSISTENT AND REQUIRED CLARIFICATION. THE STAFFING LEVEL OF THE MANNING CHART SUBMITTED BY DYNAMIC ENTERPRISES WAS CONSIDERED APPROPRIATE AND DISCUSSION WAS HELD WITH DYNAMIC ONLY TO VERIFY ITS OFFERED DISCOUNT OF 17 PERCENT. ALL OFFERORS WERE ADVISED THAT THEY HAD THE OPPORTUNITY TO REVISE THEIR STAFFING LEVELS AND/OR PRICES ON THE BASIS OF THE INFORMATION PROVIDED DURING THE NEGOTIATION DISCUSSIONS.

IN ORDER TO EFFECT AWARD OF A CONTRACT BY JUNE 30, 1969, THE ADVICE AS TO PROPOSAL REVISIONS WAS TELEPHONICALLY COMMUNICATED TO ALL OFFERORS ON JUNE 19, 1969. THEREAFTER, BY LETTER DATED JUNE 20, 1969, THE CONTRACTING OFFICE ADVISED EACH OFFEROR THAT:

"IN ORDER TO PROVIDE FOR A COMMON CUT-OFF POINT FOR SUBMISSION OF REVISIONS TO THE PROPOSALS, YOU ARE ADVISED THAT ANY REVISIONS YOU DESIRE TO MAKE MUST BE RECEIVED IN THIS OFFICE, ATTENTION CODE P2.3, BY 4:00 P.M., EDT, 1969 JUNE 25.' THE LETTER ALSO INFORMED OFFERORS THAT AFTER JUNE 25, 1969, NO INFORMATION OTHER THAN NOTICE OF UNACCEPTABILITY OF PROPOSAL WOULD BE FURNISHED TO ANY OFFEROR UNTIL AWARD HAD BEEN MADE.

IT IS REPORTED THAT ON JUNE 23, 1969, MESSRS. FORD AND DUNN OF ORBITING VISITED THE CONTRACTING OFFICE AND REQUESTED THE OPPORTUNITY TO DISCUSS THEIR REVISED MANNING CHART AT THAT TIME. THEY WERE INFORMED THAT THE CONTRACTING OFFICE WOULD PROVIDE NO MORE DEFINITE ADVICE THAN THAT THEIR ORIGINAL ESTIMATE OF MANNING WAS CONSIDERED LOW. IN THIS RESPECT, THE RFP HAD ENCOURAGED OFFERORS TO EXAMINE THE FACILITIES TO BE SERVICED AND TO PROVIDE THEIR OWN ESTIMATE OF THE STAFFING LEVEL REQUIRED TO PERFORM THE REQUIRED SERVICES. THE OFFEROR'S ESTIMATE WAS TO BE USED AS AN INDICATION OF HIS UNDERSTANDING OF AND ABILITY TO FULFILL THE REQUIREMENT.

ALL OFFERORS (EXCEPT P.J.K.) RESPONDED TO THE "CUT-OFF" LETTER OF JUNE 20 AND SUBMITTED THEIR REVISED PROPOSALS PRIOR TO THE JUNE 25, 1969, DATE SET FOR CLOSING OF NEGOTIATIONS. AS A RESULT OF THE NEGOTIATIONS CONDUCTED UNTIL JUNE 20, INSTANT FOOD SERVICES, ORBITING ENTERPRISES AND HUNTSVILLE FOOD SERVICE INCREASED THEIR PROPOSED STAFFING LEVELS. NATIONWIDE BUILDING MAINTENANCE, MILITARY BASE MANAGEMENT AND MURCOLE REDUCED THEIR PROPOSED STAFFING LEVELS. QUALITY MAINTENANCE CLARIFIED ITS PROPOSED MANNING SCHEDULE, DYNAMIC ENTERPRISES CONFIRMED ITS OFFERED DISCOUNT AND IRA GELBER MADE NO CHANGE TO ITS PROPOSAL AS ORIGINALLY SUBMITTED.

AFTER EVALUATION OF THE REVISED PROPOSALS, IT WAS ADMINISTRATIVELY DETERMINED THAT THE PROPOSALS OF DYNAMIC ENTERPRISES, QUALITY MAINTENANCE AND MILITARY BASE MANAGEMENT WERE CONSIDERED TECHNICALLY ACCEPTABLE. IS REPORTED THAT THE ESTIMATED STAFFING LEVELS OF THE TWO LOW OFFERORS, INSTANT FOOD SERVICES AND ORBITING ENTERPRISES, AS MODIFIED BY RESUBMISSION, WERE CONSIDERED TO BE TOO LOW FOR ADEQUATE PERFORMANCE OF THE SERVICES, THUS INDICATING A LACK OF UNDERSTANDING OF THE REQUIREMENT. IN THIS RESPECT THE RECORD SHOWS THE FOLLOWING WITH RESPECT TO THE THREE LOW OFFERORS:

BUILDING 72 BUILDING 166

MANHOURS PRICE MANHOURS PRICE TOTAL EVALUATED

----------------- ----------------- ----- ------ -- INSTANT FOOD SERVICES

96 $80,400 96 $77,760 $158,160 $153,098.88 ORBITING ENTERPRISES 89 88,800 89 88,800 177,600 159,840.00 DYNAMIC ENTERPRISES 121 117,360 119

104,160 221,520 183,861.60 THE RECORD SHOWS THAT THE STAFFING LEVELS OF QUALITY MAINTENANCE AT AN EVALUATED PRICE OF $188,442 AND MILITARY BASE MANAGEMENT AT AN EVALUATED PRICE OF $203,040, AS FINALLY PROPOSED, WERE 136 MANHOURS FOR BUILDING 72 AND 117 MANHOURS FOR BUILDING 166 AND 115 MANHOURS FOR EACH BUILDING, RESPECTIVELY. FROM THE FOREGOING, IT IS APPARENT THAT YOUR FINAL OFFER WAS NOT IN FACT THE LOWEST SINCE INSTANT FOOD SERVICES OFFERED A LOWER PRICE WITH MORE MANHOURS THAN DID ORBITING. IN ANY EVENT, IT IS REPORTED THAT AN ANALYSIS OF THE MANNING CHART SUBMITTED BY ORBITING INDICATED THE FOLLOWING REPORTED DEFICIENCIES:

"1. THE CONTRACTOR OFFERED ONLY ONE (1) PERSON TO POLICE THE DINING AREA DURING MEAL HOURS. REQUIRING ACTIVITY HAS INDICATED THAT AT LEAST TWO (2) WOULD BE REQUIRED.

"2. NO PERSONNEL PROVIDED FOR PAN WASHING AFTER THE BREAKFAST MEAL.

"3. SUPERVISORS DOUBLE AS CASHIERS, LEAVING NO SUPERVISOR AVAILABLE DURING MEAL HOURS.' ACCORDINGLY, AWARD OF CONTRACT WAS MADE ON JUNE 30, 1969, TO DYNAMIC ENTERPRISES AS THE LOWEST RESPONSIVE OFFEROR PROPOSING A STAFFING LEVEL ADEQUATE FOR PERFORMANCE OF THE REQUIRED SERVICES.

IN YOUR PROTEST, YOU CONTEND THAT AWARD SHOULD NOT HAVE BEEN MADE TO DYNAMIC AT A HIGHER PRICE THAN YOUR OFFER SINCE THE 89 MANHOURS PER DAY WHICH YOU PLANNED TO UTILIZE IN EACH MESSING FACILITY IS ADEQUATE TO PERFORM THE SERVICES REQUIRED. IN THIS CONNECTION, YOU MAINTAIN THAT THE MANNING CHART IS ALMOST NEVER FOLLOWED ON CONTRACTS OF THIS TYPE AND ONLY RARELY REQUIRED TO BE FOLLOWED WHEN PERFORMANCE BY AN ORGANIZATION FALLS BELOW ACTUAL REQUIREMENTS. SECONDLY, YOU IMPLY THAT YOU WERE DENIED THE OPPORTUNITY TO NEGOTIATE IN THAT YOU WERE NEVER ALLOWED TO DISCUSS EITHER MONEY OR MANHOURS WITH NAVY PERSONNEL.

IN A NEGOTIATED PROCUREMENT, THE RULES OF FORMALLY ADVERTISED, CMPETITIVE BIDDING, SUCH AS THE REQUIREMENT FOR AWARD TO THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER, ARE NOT CONTROLLING AND A CONTRACTING OFFICER MAY TAKE INTO CONSIDERATION ALL FACTORS DEEMED ESSENTIAL TO THE PROCUREMENT GOAL. WE VIEW THE INFORMATION TO BE SECURED FROM AN OFFEROR'S MANNING CHART AS AN AID TO THE CONTRACTING OFFICER IN DETERMINING WHETHER THE OFFEROR IS WITHIN A COMPETITIVE RANGE FOR NEGOTIATION PURPOSES. IN THIS PROCUREMENT, MOREOVER, THE MANNING CHART REPRESENTED THE OFFEROR'S BASIC APPROACH TO PERFORMING THE REQUIRED SERVICES. THE GOAL OF THIS NEGOTIATED PROCUREMENT WAS TO PROCURE SERVICES FROM A RESPONSIBLE SOURCE AT FAIR AND REASONABLE PRICES WHICH ARE CALCULATED TO RESULT IN THE LOWEST ULTIMATE OVERALL COST TO THE GOVERNMENT. SEE PARAGRAPH 3-801.1 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). IN ADDITION, ASPR 3-806 (A) STATES THAT "THE OBJECTIVE OF THE CONTRACTING OFFICER SHALL BE TO NEGOTIATE FAIR AND REASONABLE PRICES IN WHICH DUE WEIGHT IS GIVEN TO ALL RELEVANT FACTORS, INCLUDING THOSE IN 3-101.' ASPR 3-101 STATES THAT WHEN NEGOTIATIONS ARE ENTERED INTO DUE ATTENTION SHALL BE GIVEN TO A NUMBER OF FACTORS, INCLUDING "CONSIDERATION OF THE SOUNDNESS OF PROSPECTIVE CONTRACTORS' MANAGEMENT OF LABOR RESOURCES, INCLUDING WAGE RATES, NUMBER OF WORKERS AND TOTAL ESTIMATED LABOR HOURS.' ASPR 3-101 (XV). THUS, IT IS EVIDENT THAT THE DETERMINATION OF AN APPROPRIATE LEVEL OF MANNING NECESSARY TO PERFORM THE WORK UNDER A PROPOSED PROCUREMENT IS A LEGITIMATE AND PROPER SUBJECT FOR NEGOTIATION. SEE B-166705, JULY 30, 1969.

CONTRARY TO YOUR VIEW, THE STAFFING LEVELS SUBMITTED BY A SUCCESSFUL OFFEROR COULD BE STRICTLY ENFORCED BY THE CONTRACTING OFFICER UNDER SECTION 9.33 OF THE RESULTING CONTRACT IF PERFORMANCE OF THE CONTRACT FELL BELOW ACCEPTABLE STANDARDS. THUS, THE MANNING CHART IS AN IMPORTANT MEASURE OF CONTRACT PERFORMANCE.

REGARDING YOUR CONTENTION THAT YOU WERE DENIED THE OPPORTUNITY TO NEGOTIATE, ASPR 3-805.1 (A) REQUIRES THAT, AFTER RECEIPT OF INITIAL PROPOSALS, DISCUSSIONS BE CONDUCTED WITH ALL OFFERORS WITHIN A COMPETITIVE RANGE WITH CERTAIN EXCEPTIONS NOT HERE PERTINENT. THAT REGULATION IMPOSES AN AFFIRMATIVE DUTY TO NEGOTIATE AND, IN THIS CASE, THE NAVY PURCHASING OFFICE DID IN FACT NEGOTIATE WITH ALL OFFERORS UNTIL JUNE 20, 1969. HOWEVER, IT IS OBVIOUS THAT WHEN NEGOTIATIONS ARE CONDUCTED THEY MUST BE BROUGHT TO A CLOSE AT SOME POINT PRIOR TO AWARD OF A CONTRACT. THE MANNER OF TERMINATING NEGOTIATIONS IS ESTABLISHED IN ASPR 3-805.1 (B), WHICH STATES IN MATERIAL PART:

"* * * WHENEVER NEGOTIATIONS ARE CONDUCTED WITH SEVERAL OFFERORS, WHILE SUCH NEGOTIATIONS MAY BE CONDUCTED SUCCESSIVELY, ALL OFFERORS SELECTED TO PARTICIPATE IN SUCH NEGOTIATIONS (SEE (A) ABOVE) SHALL BE OFFERED AN EQUITABLE OPPORTUNITY TO SUBMIT SUCH PRICE, TECHNICAL, OR OTHER REVISIONS IN THEIR PROPOSALS AS MAY RESULT FROM THE NEGOTIATIONS. ALL SUCH OFFERORS SHALL BE INFORMED OF THE SPECIFIED DATE (AND TIME IF DESIRED) OF THE CLOSING OF NEGOTIATIONS AND THAT ANY REVISIONS TO THEIR PROPOSALS MUST BE SUBMITTED BY THAT DATE. ALL SUCH OFFERORS SHALL BE INFORMED THAT ANY REVISION RECEIVED AFTER SUCH DATE SHALL BE TREATED AS A LATE PROPOSAL IN ACCORDANCE WITH THE -LATE PROPOSALS' PROVISIONS OF THE REQUEST FOR PROPOSALS. (IN THE EXCEPTIONAL CIRCUMSTANCES WHERE THE SECRETARY CONCERNED AUTHORIZES CONSIDERATION OF SUCH A LATE PROPOSAL, RESOLICITATION SHALL BE LIMITED TO THE SELECTED OFFERORS WITH WHOM NEGOTIATIONS HAVE BEEN CONDUCTED.) IN ADDITION, ALL SUCH OFFERORS SHALL ALSO BE INFORMED THAT AFTER THE SPECIFIED DATE FOR THE CLOSING OF NEGOTIATION NO INFORMATION OTHER THAN NOTICE OF UNACCEPTABILITY OF PROPOSAL, IF APPLICABLE (SEE 3- 508), WILL BE FURNISHED TO ANY OFFEROR UNTIL AWARD HAS BEEN MADE.' THIS CONNECTION, SINCE THE "CUT-OFF" DATE FOR SUBMISSION OF REVISED PROPOSALS WAS JUNE 25, FURTHER NEGOTIATIONS POSSIBLY COULD HAVE BEEN CONDUCTED WITH YOUR REPRESENTATIVES ON THEIR VISIT TO THE CONTRACTING OFFICE ON JUNE 23, 1969. HOWEVER, IF FURTHER DISCUSSIONS WERE HELD WITH YOUR REPRESENTATIVES AT THEIR INSISTENCE ON JUNE 23, IN FAIRNESS TO THE OTHER OFFERORS, FURTHER CONTEMPORANEOUS DISCUSSIONS WOULD HAVE HAD TO BE CONDUCTED WITH THEM. TO DO OTHERWISE WOULD HAVE PREJUDICED THE NEGOTIATION POSTURE OF ALL OTHER OFFERORS. WITH AN AWARD TO BE MADE BY JUNE 30 AND PERFORMANCE TO COMMENCE JULY 1, 1969, WE FEEL THAT THE CONTRACTING OFFICER WAS ACTING WITHIN HER DISCRETION IN NOT COMMENCING FURTHER NEGOTIATIONS WITH YOUR REPRESENTATIVES ON JUNE 23, 1969.