B-170427(1), DEC. 2, 1970

B-170427(1): Dec 2, 1970

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PROTESTANT WAS AWARDED CONTRACT FOR 1967. THEN THE AWARD OF THE 1971 CONTRACT UNDER A METHOD THAT CAN BE CALLED NEGOTIATION ONLY IN THE SENSE THAT IT WAS LIMITED TO TWO OFFERORS. WILL NOT BE UPSET BECAUSE NEITHER PARTY WAS PREJUDICED NOR RECEIVED AN UNFAIR ADVANTAGE BY THE IRREGULAR PROCEDURE. I. BARSTOW: REFERENCE IS MADE TO YOUR TELEGRAM OF JULY 22. THE DEPARTMENT OF THE INTERIOR REPORTS THAT PRIOR TO 1967 REFUSE REMOVAL AT THESE SITES WAS COMPLETELY HANDLED BY THE BRANCH OF PLANT MANAGEMENT. SINCE YOUR CONCERN WAS APPARENTLY CONSIDERED THE ONLY FIRM QUALIFYING AS "INDIAN INDUSTRY" FOR THESE SERVICES. CONTRACTS FOR THE REQUIREMENTS WERE AWARDED TO YOU IN 1967. THE COMMISSIONER OF INDIAN AFFAIRS HAS DIRECTED THAT IF THE PRODUCT OR SERVICE IS AVAILABLE FROM MORE THAN ONE FIRM OR INDIVIDUAL QUALIFYING AS "INDIAN INDUSTRY" THEN COMPETITIVE CONTRACTING PROCEDURES ARE REQUIRED TO BE FOLLOWED TO OBTAIN SUCH PRODUCT OR SERVICE.

B-170427(1), DEC. 2, 1970

BID PROTEST - NEGOTIATIONS - BUY INDIAN ACT DENIAL OF PROTEST OF WINDOW ROCK SANITATION COMPANY AGAINST THE AWARD OF A CONTRACT FOR REFUSE DISPOSAL AT THE BUREAU OF INDIAN AFFAIRS FACILITIES AT WINDOW ROCK AND FORT DEFIANCE, ARIZONA TO BENJAMIN F. W. DAMON. WHEN UNDER THE "BUY INDIAN ACT," 25 U.S.C. 47, PROTESTANT WAS AWARDED CONTRACT FOR 1967, 1968, 1969, & 1970, THEN THE AWARD OF THE 1971 CONTRACT UNDER A METHOD THAT CAN BE CALLED NEGOTIATION ONLY IN THE SENSE THAT IT WAS LIMITED TO TWO OFFERORS, WILL NOT BE UPSET BECAUSE NEITHER PARTY WAS PREJUDICED NOR RECEIVED AN UNFAIR ADVANTAGE BY THE IRREGULAR PROCEDURE. HOWEVER, THE GAO RECOMMENDS THAT THE SECRETARY OF THE INTERIOR INSURE THAT UNIFORM PROCEDURES BE FOLLOWED IN FUTURE PROCUREMENTS SUBJECT TO THE "BUY INDIAN ACT."

TO R. & V. I. BARSTOW:

REFERENCE IS MADE TO YOUR TELEGRAM OF JULY 22, 1970, CONCERNING YOUR PROTEST AGAINST THE PROPOSED AWARD OF A CONTRACT TO ANOTHER BIDDER FOR THE COLLECTION AND DISPOSAL OF REFUSE AT THE BUREAU OF INDIAN AFFAIRS FACILITIES AT WINDOW ROCK AND FORT DEFIANCE, ARIZONA.

THE DEPARTMENT OF THE INTERIOR REPORTS THAT PRIOR TO 1967 REFUSE REMOVAL AT THESE SITES WAS COMPLETELY HANDLED BY THE BRANCH OF PLANT MANAGEMENT, BUREAU OF INDIAN AFFAIRS. IN 1967 THE DEPARTMENT DETERMINED THAT IT WOULD OBTAIN THE REQUIRED SERVICES IN ACCORDANCE WITH SECTION 23 OF THE "BUY INDIAN ACT," 25 U.S.C. 47, WHICH PROVIDES:

"SO FAR AS MAY BE PRACTICABLE INDIAN LABOR SHALL BE EMPLOYED, AND PURCHASES OF THE PRODUCTS OF INDIAN INDUSTRY MAY BE MADE IN THE OPEN MARKET IN THE DISCRETION OF THE SECRETARY OF THE INTERIOR." SINCE YOUR CONCERN WAS APPARENTLY CONSIDERED THE ONLY FIRM QUALIFYING AS "INDIAN INDUSTRY" FOR THESE SERVICES, CONTRACTS FOR THE REQUIREMENTS WERE AWARDED TO YOU IN 1967, 1968, 1969 AND 1970.

THE DEPARTMENT HAS FURTHER ADVISED THAT, UNDER THE AUTHORITY DELEGATED TO HIM BY THE SECRETARY OF THE INTERIOR, THE COMMISSIONER OF INDIAN AFFAIRS HAS DIRECTED THAT IF THE PRODUCT OR SERVICE IS AVAILABLE FROM MORE THAN ONE FIRM OR INDIVIDUAL QUALIFYING AS "INDIAN INDUSTRY" THEN COMPETITIVE CONTRACTING PROCEDURES ARE REQUIRED TO BE FOLLOWED TO OBTAIN SUCH PRODUCT OR SERVICE, AND AWARD IS TO BE BASED ON THE BEST BID OR OFFER. IN THIS CONNECTION THE DEPARTMENT STATES THAT THIS YEAR OTHER INDIAN RESIDENTS INDICATED AN INTEREST IN COMPETING FOR THE 1971 FISCAL YEAR CONTRACT FOR THE SERVICES AT THESE FACILITIES. IN VIEW THEREOF, AND SINCE THE DEPARTMENT CONSIDERED THAT YOUR COMPANY HAD BEEN ALLOWED TO BECOME SUFFICIENTLY EXPERIENCED TO CONFRONT THE COMPETITIVE MARKET, IT WAS DETERMINED THAT COMPETITION SHOULD BE HAD ON THE SUBJECT REQUIREMENT BY CONSIDERING AN OFFER FOR THESE SERVICES FROM BENJAMIN F. W. DAMON, AS WELL AS AN OFFER FROM YOUR COMPANY.

THE RECORD SHOWS THAT YOU AND MR. DAMON WERE JOINTLY BRIEFED CONCERNING THE SCOPE OF THE SERVICES AND ON JUNE 19, 1970, WERE SIMULTANEOUSLY FURNISHED COPIES OF FORM 5-1251 (NEGOTIATED CONTRACT), ATTACHED TO WHICH WERE THE DETAILS OF THE PROPOSED CONTRACT, INCLUDING A COMPLETE LISTING OF ALL PICKUP POINTS AND THE FREQUENCY OF PICKUPS REQUIRED UNDER THE CONTRACT.

THE DEPARTMENT STATES THAT IT WAS EXPLAINED TO YOU AND MR. DAMON THAT THIS WAS A NEGOTIATION ONLY IN THE SENSE THAT IT WAS LIMITED TO THE TWO OFFERORS; THAT THE INITIAL PROPOSALS TO BE FURNISHED SHOULD BE THE "BEST" YOU AND MR. DAMON COULD OFFER; AND THAT THERE WOULD BE NO ATTEMPT TO APPLY NEGOTIATING PROCEDURES NORMALLY USED IN DEALING WITH ESTABLISHED BUSINESS CONCERNS.

ON JUNE 24, 1970, THE DATE SET FOR RECEIPT OF OFFERS, THE CONTRACTING OFFICER PUBLICLY ANNOUNCED THE PRICES SUBMITTED BY YOU AND MR DAMON AS FOLLOWS:

WINDOW ROCK SANITATION COMPANY - $34,743.55

BENJAMIN F. W. DAMON - $26,746.36 THE RECORD CONTAINS NO EVIDENCE THAT ANY DISCUSSIONS WERE SUBSEQUENTLY CONDUCTED WITH YOUR FIRM OR MR. DAMON.

YOU MAINTAIN THAT THE PROCUREMENT WAS NOT STRICTLY CONDUCTED IN ACCORDANCE WITH PROCEDURES APPLICABLE TO EITHER FORMALLY ADVERTISED BIDDING OR TO NEGOTIATED PROCUREMENTS, AND THAT THE LOW OFFEROR SHOULD NOT BE CONSIDERED A RESPONSIBLE CONTRACTOR FOR THESE SERVICES. YOU ALSO QUESTION WHETHER THE PRICE SUBMITTED BY MR. DAMON IS REASONABLE. IN VIEW OF THESE ALLEGATIONS, YOU ASSERT THAT THE AWARD SHOULD BE MADE TO YOUR COMPANY AND NOT TO MR. DAMON.

THE DEPARTMENT ACKNOWLEDGES THAT THE PROCEDURE FOLLOWED WAS IRREGULAR, HOWEVER, IT MAINTAINS THAT SUCH IRREGULARITIES DID NOT IN ANY WAY PREJUDICE THE CONSIDERATION OF YOUR OFFER, OR GRANT MR. DAMON ANY COMPETITIVE ADVANTAGE SINCE BOTH OFFERORS WERE TREATED IN THE SAME MANNER. THE DEPARTMENT THEREFORE CONTENDS THAT THE PROCUREMENT SHOULD NOT BE CANCELLED BECAUSE OF PROCEDURAL DEFECTS.

WE CONCUR WITH THIS POSITION. WHILE THE PROCEDURES FOLLOWED WERE VERY INFORMAL AND THE PRICES WERE ANNOUNCED UPON OPENING OF THE OFFERS WITHOUT NEGOTIATIONS, THE RECORD INDICATES THAT BOTH OFFERORS WERE ADEQUATELY INFORMED (AND UNDERSTOOD) THAT THEIR OFFERS WOULD BE TREATED AS BIDS AND THAT THEY SHOULD STATE THEIR BEST PRICES. IN THIS CONNECTION WE NOTE THAT IF FORMAL PROCUREMENT PROCEDURES HAD BEEN EMPLOYED AND STRICTLY FOLLOWED, YOUR BID COULD NOT HAVE BEEN CONSIDERED INASMUCH AS IT WAS NOT SUBMITTED BY THE TIME SPECIFIED FOR BID OPENING. HOWEVER, WE ARE RECOMMENDING THAT THE SECRETARY OF THE INTERIOR TAKE SUCH ACTION AS MAY BE NECESSARY TO INSURE THAT UNIFORM PROCEDURES ARE FOLLOWED IN FUTURE PROCUREMENTS SUBJECT TO THE BUY INDIAN ACT.

CONCERNING YOUR ALLEGATION THAT MR. DAMON SHOULD NOT BE CONSIDERED A RESPONSIBLE OFFEROR FOR THIS PROCUREMENT, THE DEPARTMENT HAS ADVISED AS FOLLOWS:

"MR. DAMON HAS A RECORD OF HAVING OPERATED A BUSINESS OF LUMBER AND LOG HAULING FOR THE NAVAJO FOREST PRODUCTS INDUSTRIES OVER THE PAST SEVERAL YEARS. HE HAS MANAGED HIS LOGGING BUSINESS FOR A NUMBER OF YEARS; MET PAYROLLS, MAINTAINED AND AMORTIZED EQUIPMENT, DIRECTED HIS PERSONNEL, ETC. MR. DAMON LISTED, AS A REQUIRED ATTACHMENT TO HIS PROPOSAL, EQUIPMENT SUFFICIENT TO HANDLE THE TASK. HE HAS FURTHER INFORMED THE BUREAU THAT HE HAS ADEQUATE RESOURCES TO EXPAND HIS EQUIPMENT LIST IF AND WHEN SUCH BECOMES NECESSARY."

WE HAVE CONSISTENTLY MAINTAINED THAT THE DETERMINATION OF A BIDDER'S RESPONSIBILITY IS PRIMARILY THE FUNCTION OF THE PROCURING AGGENCY, AND IN THE ABSENCE OF BAD FAITH OR A REASONABLE BASIS FOR SUCH DETERMINATION WE WILL NOT SUBSTITUTE OUR JUDGMENT FOR THAT OF THE AGENCY. 37 COMP. GEN. 798 (1958). BASED ON OUR REVIEW OF THE RECORD CONCERNING MR. DAMON'S BUSINESS OPERATIONS, WE CANNOT CONCLUDE THAT THE DEPARTMENT WAS NOT JUSTIFIED IN FINDING MR. DAMON TO BE A RESPONSIBLE CONTRACTOR FOR THE PROCUREMENT.

CONCERNING YOUR ALLEGATION THAT THE PRICE OF MR. DAMON'S OFFER IS UNREASONABLY LOW, THE DEPARTMENT STATES THAT IN THE LAST FULL YEAR IN WHICH THE BUREAU OF INDIAN AFFAIRS PROVIDED THIS SERVICE THE COST TO THE GOVERNMENT WAS $16,602. WHILE THE DEPARTMENT STATES THAT THIS FIGURE CANNOT BE DIRECTLY COMPARED TO THE COST OF A COMMERCIAL CONTRACT, IT MAINTAINS THAT THE COST PROVIDES A BASE FROM WHICH TO ASSESS THE VALIDITY OF COMMERCIAL PROPOSALS. COMPARING MR. DAMON'S PRICE WITH SUCH BASE AND THE PRICES PAID TO YOUR CONCERN FOR THE SERVICES DURING THE PAST YEARS, THE DEPARTMENT MAINTAINS THAT HIS OFFER IS REASONABLE. ADDITIONALLY, THE DEPARTMENT MADE AN ANALYSIS OF MR. DAMON'S OFFER AND CONCLUDED THAT THE VARIOUS COSTS PROPOSED THEREIN SHOWED AN ADEQUATE UNDERSTANDING OF THE REQUIREMENTS.

FOR THE REASONS SET FORTH ABOVE YOUR PROTEST MUST BE DENIED.