B-169509, OCT. 22, 1970

B-169509, OCT. 22, 1970

BID PROTEST - EVALUATION PROCEDURES DENIAL OF PROTEST AGAINST AGENCY EVALUATION CRITERIA IN DETERMINING LOWEST BID FOR OVERHAUL, REPAIR, MODIFICATION AND TESTING OF GOVERNMENT OWNED EQUIPMENT INCIDENT TO NEGOTIATED AWARD TO AVCO, INC. WHERE OFFERORS SUBMITTED COST BREAKDOWNS AND FINAL ANALYSIS OF TOTAL COST ESTIMATED BY FAA PRICE ANALYST UNSUCCESSFUL OFFEROR CAN NOT HAVE PROTEST TO LOWEST PROPOSER SUSTAINED ON BASIS THAT ALL APPLICABLE FACTORS WERE NOT INCLUDED IN THE EVALUATION OF SUCCESSFUL PARTY'S PROPOSAL WHEN BOTH PARTIES PROPOSALS CONTAINED SIMILAR PROVISIONS I.E., ALL PICK-UP AND DELIVERY FOB FAA DOCK. FURTHER, AGENCY FIGURES CONCERNING SHIPPING COST, INSPECTION COST, PACKING COSTS WHEN ADDED TO SUCCESSFUL PARTIES PROPOSAL IS STILL LOWER THAN PROTESTANT'S, AND WHERE LOCATION OF REPAIR FACILITY DOES NOT CHANGE NECESSITY FOR PRECAUTIONARY PACKAGING PROCEDURES DUE TO DELICATE EQUIPMENT, THERE IS NO BASIS FOR PROTEST.

TO BENDIX FIELD ENGINEERING CORPORATION:

REFERENCE IS MADE TO YOUR TELEGRAM OF APRIL 7, 1970, AND LETTERS OF APRIL 13, 1970, AND AUGUST 25, 1970, WITH ATTACHMENTS, PROTESTING AGAINST THE AWARD OF A CONTRACT UNDER REQUEST FOR PROPOSALS (RFP) NO. AC-73-0-1562, ISSUED ON DECEMBER 12, 1969, BY THE CONTRACT DEVELOPMENT AND PLACEMENT BRANCH, FEDERAL AVIATION ADMINISTRATION (FAA), OKLAHOMA CITY, OKLAHOMA. THE NEGOTIATION AUTHORITY WAS 41 U.S.C. 252(C)(10).

THE RFP WAS FOR THE ESTIMATED ANNUAL REQUIREMENTS FOR OVERHAUL, REPAIR, MODIFICATION AND FUNCTIONAL TESTING OF GOVERNMENT-OWNED EQUIPMENT. ATTACHMENT "B" TO THE RFP WAS A GENERAL LISTING OF THE ITEMS TO BE REPAIRED AND THE ESTIMATED ANNUAL QUANTITIES. FOURTEEN ITEMS WERE ON THE LIST AND SOME EXAMPLES OF ITEMS ON THE LIST ARE PRECISION, FRACTIONAL HORSEPOWER MOTORS; GENERATORS, TEST (VOR); AND COMMUNICATION RECEIVERS.

OFFERS WERE RECEIVED FROM 24 CONCERNS AND EACH OF THE OFFERORS ALSO SUBMITTED COST BREAKDOWNS. NEGOTIATIONS WERE HELD WITH ALL OFFERORS BETWEEN FEBRUARY 17, 1970 AND MARCH 5, 1970. BY TELEGRAM DATED MARCH 5, 1970, THE PROCURING ACTIVITY ADVISED OFFERORS THAT THE NEGOTIATIONS WERE CLOSED.

A REPORT WAS PREPARED BY FAA'S PRICE ANALYST COMPARING THE FIVE LOWEST OFFERORS AND PURSUANT TO THIS ANALYSIS THE ESTIMATED CONTRACT PRICE FOR SERVICES AND MATERIAL HANDLING PROPOSED BY AVCO'S PROPOSAL WAS $119,468.25. YOUR PROPOSAL WAS ESTIMATED TO BE HIGHER THAN AVCO'S PROPOSAL. IT WAS DETERMINED THAT AVCO'S OFFER WAS THE MOST ADVANTAGEOUS TO THE GOVERNMENT AND AN AWARD WAS MADE TO THAT CONCERN ON APRIL 3, 1970.

IN YOUR LETTER OF APRIL 13, YOU HAVE QUESTIONED FAA'S EVALUATION OF OFFERS AND IT IS URGED THAT FAA DID NOT INCLUDE ALL APPLICABLE FACTORS IN THE EVALUATION OF AVCO'S PROPOSAL. IN THIS REGARD IT IS URGED THAT PACKING COSTS OF $20,422.50; SHIPPING COSTS OF $27,738.80; AND INSPECTION COSTS OF $4,755.50 SHOULD HAVE BEEN ADDED TO AVCO'S PROPOSAL WHICH WOULD HAVE MADE YOUR PROPOSAL THE MOST ADVANTAGEOUS OFFER.

WITH RESPECT TO PACKING AND SHIPPING COSTS, YOUR LETTER OF APRIL 13, 1970, STATES AS FOLLOWS REGARDING THE REASONS WHY THERE WOULD BE NO GOVERNMENT-INCURRED PACKING COSTS UNDER YOUR PROPOSAL:

"EQUIPMENT PACKING AND SHIPPING COSTS TO GOVERNMENT:

"BFEC - NO COSTS TO GOVERNMENT. PICKUP AND DELIVERY WILL BE FOB FAA DOCK. NO PACKING WILL BE REQUIRED SINCE BFEC WILL USE PROTECTIVE PADS FOR THE EQUIPMENT WHICH WILL BE TAKEN TO BFEC OVERHAUL FACILITY APPROXIMATELY 10 MILES FROM FAA DOCK.

"AVCO - APPROXIMATELY 5,835 PIECES OF DELICATE ELECTRONIC AND MECHANICAL EQUIPMENTS WEIGHING 489,000 POUNDS WILL BE MADE IN 155 SHIPMENTS. SHOULD BE NOTED THAT BFEC PERSONNEL HAVE HAD AN OPPORTUNITY TO OBSERVE THE ACTUAL FAA WAREHOUSE SITUATION AND HAVE DETERMINED AS A RESULT OF SUCH OBSERVATION THAT A SUBSTANTIAL PORTION OF THE EQUIPMENTS TO BE SERVICED UNDER THE PROPOSED CONTRACT IS IN AN EXPOSED CONDITION AND WOULD REQUIRE PROTECTIVE PACKAGING PRIOR TO SHIPMENT TO A REMOTE AVCO'S FACILITY. *** "

THE INSPECTION COSTS CITED IN YOUR LETTER OF APRIL 13, 1970, ARE BASED ON YOUR ASSUMPTION THAT THE CONTRACTING OFFICER'S REPRESENTATIVE WOULD HAVE TO MAKE AN ESTIMATED NUMBER OF 12 TRIPS TO AVCO'S FACILITY IN CINCINNATI, OHIO, DURING THE TERM OF THE CONTRACT. IT IS FURTHER ASSUMED THAT EACH TRIP WOULD TAKE APPROXIMATELY FIVE DAYS AND THAT TWO DAYS WOULD BE LOST ON EACH TRIP AS TRAVEL TIME.

THE CONTRACTING OFFICER'S REPORT STATES AS FOLLOWS WITH REGARD TO YOUR CONTENTIONS ON THE ADDITIONAL COSTS THAT SHOULD HAVE BEEN CONSIDERED IN EVALUATING AVCO'S PROPOSAL:

"COMMENT ON PACKING COSTS OF $20,422.50

"BENDIX ALLEGES THAT THE FAA WOULD INCUR THIS ADDITIONAL COST BY VIRTUE OF THE AWARD TO AVCO BECAUSE FAA PERSONNEL WOULD HAVE TO PACK AND PREPARE ITEMS FOR SHIPMENT TO CINCINNATI AND NOT DO SO IF THE PLANT WERE LOCATED IN OKLAHOMA CITY. WE CONCLUDE THAT THIS COST WOULD BE ESSENTIALLY THE SAME REGARDLESS OF WHO THE CONTRACTOR IS OR WHERE HE BE LOCATED.

"COMMENT ON SHIPPING COST OF $27,738.80

"THE CONTRACT AWARDED TO AVCO PLAINLY STATES THAT ALL FREIGHT COSTS ARE ABSORBED BY AVCO SINCE ALL SHIPMENTS SHALL BE F.O.B. FAA DOCK. THIS ALLEGATION IS ENTIRELY UNWARRANTED.

"COMMENT ON INSPECTION COSTS OF $4,755.60

"THIS IS A MILD ARGUMENT IN FAVOR OF BFEC. HOWEVER DURING THE PAST YEAR INSPECTION PERSONNEL HAVE MADE ONLY SIX TRIPS TO AVCO AT A TOTAL COST OF $1,389.54 IN LIEU OF 12 TRIPS AT A COST OF $4,755.60 AS ALLEGED BY BFEC. THIS IS CERTAINLY AN INTANGIBLE COST.

"IT SHOULD ALSO BE NOTED THAT NOWHERE IN THE OFFER OR THE MINUTES OF NEGOTIATION WAS MENTION MADE THAT NO PACKAGING WOULD BE REQUIRED BECAUSE BFEC WOULD USE PROTECTIVE PADS FOR THE EQUIPMENT."

THE REPORT FROM FAA, DATED JULY 6, 1970, A COPY OF WHICH WAS FURNISHED TO YOU, STATES AS FOLLOWS WITH RESPECT TO THE CONTENTIONS RAISED BY YOU:

"PACKAGING AND SHIPPING COSTS

"IN ITS PROTEST, BFEC POINTS OUT THAT DURING NEGOTIATIONS WITH AGENCY PERSONNEL, IT PROPOSED TO ESTABLISH A FACILITY IN OKLAHOMA CITY APPROXIMATELY TEN DRIVING MILES FROM THE AERONAUTICAL CENTER TO PERFORM THE REQUIREMENTS SET FORTH IN THE AGENCY'S SOLICITATION. BFEC CONTENDS THAT SUCH AN ARRANGEMENT WOULD SAVE THE GOVERNMENT THE COST OF PACKAGING AND SHIPPING ITEMS UNDER THE CONTRACT TO AND FROM AVCO'S PLANT LOCATED IN CINCINNATI, OHIO. FURTHER DISCUSSION OF BFEC'S CONTENTION FOLLOWS:

"1. BFEC ASSUMES THAT AVCO WOULD NOT PAY THE COSTS OF SHIPPING TO AND FROM ITS PLANT. THIS ASSUMPTION HAS NO BASIS IN FACT. THE CONTRACT WITH AVCO SPECIFIES THAT PICKUP AND DELIVERY WILL BE F.O.B. FAA DOCK, THEREFORE, NO ADDITIONAL SHIPPING CHARGES WILL BE BORNE BY THE GOVERNMENT.

"2. BFEC FURTHER ASSUMES THAT BECAUSE ITS FACILITY WILL BE ONLY TEN MILES DISTANT FROM THE AERONAUTICAL CENTER, THIS WOULD ELIMINATE ANY NECESSITY FOR GOVERNMENT-INCURRED PACKAGING COSTS FOR OUT-BOUND SHIPMENTS. INSTEAD, BFEC STATES IT WOULD USE PROTECTIVE PADS FOR THE SHORT TRIP TO THEIR OVERHAUL FACILITY. AS ACKNOWLEDGED BY BFEC IN ITS PROTEST, THE ITEMS TO BE SHIPPED ARE 'DELICATE ELECTRONIC AND MECHANICAL EQUIPMENTS.' BECAUSE OF THE NATURE OF THESE ITEMS, IT HAS BEEN AGENCY DEPOT GENERAL POLICY TO PACK THEM INDIVIDUALLY PRIOR TO RELEASE TO VENDORS OR TRANSPORTATION COMPANIES TO PREVENT FURTHER PHYSICAL/MECHANICAL DAMAGE. THE CHIEF OF THE AGENCY'S DEPOT STORAGE AND TRANSPORTATION BRANCH HAS STATED THAT, BASED UPON THEIR REVIEW, THE MATERIALS/EQUIPMENT TO BE REPAIRED UNDER THE CONTRACT IN QUESTION SHOULD NOT BE PICKED UP AND TRANSPORTED WITH ANY LESSER DEGREE OF PACKAGING REGARDLESS OF THE DISTANCES INVOLVED. CONSEQUENTLY, THE CLOSE PROXIMITY OF THE BFEC FACILITY WOULD NOT RESULT IN LOWER PACKAGING COSTS TO THE GOVERNMENT.

"INSPECTION COSTS

"IN VIEW OF THE FACT THAT THE RFP DID NOT SPECIFY INSPECTION COSTS AS A FACTOR TO BE CONSIDERED WHEN MAKING AWARD, WE WERE PRECLUDED FROM EVALUATING THIS FACTOR AS A BASIS FOR MAKING AWARD. HOWEVER, SINCE BFEC RAISES THIS POINT WE OFFER THE FOLLOWING COMMENTS.

"IN ITS PROTEST, BFEC ESTIMATES THAT THE GOVERNMENT WILL INCUR $4,755.60 IN INSPECTION COSTS UNDER AVCO'S PROPOSAL WHICH WOULD NOT BE INCURRED UNDER THEIR PROPOSAL. WE AGREE WITH BFEC THAT, UNDER THE CONDITIONS CITED IN THEIR PROTEST, ADDITIONAL INSPECTION COSTS WILL BE INCURRED BY THE GOVERNMENT UNDER THE CONTRACT WITH AVCO. HOWEVER, WE ESTIMATE SUCH ADDITIONAL COSTS TO BE $2,142.06, WHICH IS CONSIDERABLY LESS THAN BFEC'S ESTIMATE. BFEC'S ESTIMATE OF AIR FARE, CAR RENTALS, AND PER DIEM COSTS AMOUNTING TO $3,747.60 IS BASED ON THE PREMISE THAT THE CONTRACTING OFFICER'S REPRESENTATIVE WILL MAKE 12 TRIPS ANNUALLY TO THE AVCO PLANT, EACH TRIP TAKING APPROXIMATELY FIVE DAYS. THE GOVERNMENT'S ESTIMATE FOR THESE SAME ELEMENTS OF COST IS $1,389.54, AND IS BASED UPON DOCUMENTED EXPENSES ACTUALLY INCURRED BY AGENCY EMPLOYEES DURING THE SIX VISITS MADE TO THE AVCO PLANT UNDER THE PRIOR YEAR CONTRACT. OUR ESTIMATE OF LOST TIME ($752.52) IS COMPUTED AT A DAILY RATE HIGHER THAN THAT USED BY BFEC IN ITS PROTEST; $62.71, AS COMPARED WITH $42.00.

"IN CONCLUSION, OUR ESTIMATE OF ADDITIONAL COSTS TO BE INCURRED UNDER A CONTRACT WITH AVCO OF $2,142.06 WHEN ADDED TO AVCO'S PROPOSED PRICE OF $119,468.25 TOTALS $121,610.31. *** " EVEN IF FAA'S ESTIMATE OF TRAVEL EXPENSES WERE INCLUDED IN THE EVALUATION OF AVCO'S PROPOSAL, THIS PROPOSAL WOULD STILL BE LOWER THAN YOUR EVALUATED PROPOSAL.

YOUR LETTER OF AUGUST 25, 1970, CITES TWO PRIOR INSTANCES WHERE YOU HAVE FURNISHED "VAN PACK" TYPE OF SHIPMENTS TO FAA AND YOU STATE THAT YOU ARE AT A LOSS TO UNDERSTAND WHY "VAN PACK" WHICH WAS ACCEPTABLE TO FAA IN THE PAST WOULD NOT BE ACCEPTABLE IN A 10-MILE RADIUS FROM THE ORIGIN POINT.

OUR OFFICE REQUESTED A SUPPLEMENTAL REPORT FROM FAA ON YOUR CONTENTION IN THE PRECEDING PARAGRAPH AND BY LETTER DATED OCTOBER 6, 1970, FAA HAS ADVISED THAT WHILE COMPLETE INFORMATION ON THE CONTRACTS CITED IN YOUR LETTER OF AUGUST 25, 1970, IS NOT AVAILABLE, FAA'S RECORDS DO SHOW THAT THOSE TWO CONTRACTS WERE AWARDED TO BENDIX CORPORATION ABOUT 20 YEARS AGO BY THE WASHINGTON PROCUREMENT OFFICE OF FAA'S PREDECESSOR AGENCY. FAA'S LETTER OF OCTOBER 6 ALSO POINTS OUT THAT YOUR LETTER OF AUGUST 25 INDICATES THAT THE CONTRACTS FOR THE EQUIPMENT MENTIONED THEREIN WERE FOR NEW EQUIPMENT, INCLUDING INSTALLATION AND TESTING AT VARIOUS AIRPORT SITES. FAA'S REPORT COMPARES THE SITUATION UNDER THE PRIOR CONTRACTS MENTIONED IN YOUR LETTER OF AUGUST 25, AND THE PRESENT CONTRACT AND STATES AS FOLLOWS:

"A COMPLETELY DIFFERENT SITUATION EXISTED REGARDING THE CONTRACT UNDER PROTEST. THIS CONTRACT WAS AWARDED BY THE FAA AERONAUTICAL CENTER IN OKLAHOMA CITY FOR REPAIR OF INDIVIDUAL ITEMS OF TEST AND OPERATING EQUIPMENT OF VARYING SIZES AND CONFIGURATIONS. MANY OF THESE ITEMS CONSIST OF INTRICATE ELECTRICAL AND ELECTRONIC PARTS AND APPURETENANCES HIGHLY SUSCEPTIBLE TO DAMAGE FROM SHOCK OR JOSTLING. SINCE THE DEPOT IS BASICALLY THE FAA SUPPLY FACILITY, ITEMS CONTRACTED OUT FOR REPAIR ARE GENERALLY OF THIS NATURE. FOR THIS REASON, THE DEPOT MANAGEMENT MAINTAINS THAT SHIPMENT BY VAN WOULD RESULT IN POTENTIAL INCREASED DAMAGE TO INDIVIDUAL ITEMS SENT OUT FOR REPAIR AND WOULD NOT PROVIDE ADEQUATE PROTECTION FOR REPAIRED ITEMS RETURNED BY THE CONTRACTOR."

THIS IS A CASE WHERE FAA CONSIDERED THE USE OF THE "VAN-PACK" METHOD AND DETERMINED THAT WITH RESPECT TO THE TYPE OF EQUIPMENT WHICH IS THE SUBJECT OF THIS PROCUREMENT, IT IS SAFER TO USE THE "COMMERCIAL" METHOD OF PACKING. WE HAVE NO BASIS TO QUESTION THIS DETERMINATION. ALSO, WE HAVE NO BASIS TO QUESTION FAA'S EVALUATION OF YOUR PROPOSAL AND AVCO'S PROPOSAL, AND AVCO'S PROPOSAL AS EVALUATED APPARENTLY WAS LOW.

IN THE CIRCUMSTANCES WE FIND NO VIOLATION OF LAW OR REGULATIONS IN THE MAKING OF THE AWARD TO AVCO AND YOUR PROTEST IS THEREFORE DENIED.