B-170706(1), MAR 29, 1971

B-170706(1): Mar 29, 1971

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BID PROTEST - QUESTIONABLE NEGOTIATION PROCEDURES OPTION CANCELLATION DECISION CONCLUDING THAT AWARD TO MILITARY BASE MANAGEMENT FOR MESS SERVICES AT NAVAL AIR STATION WAS BASED ON QUESTIONABLE NEGOTIATING PROCEDURES AND THAT WHILE CANCELLATION IS NOT RECOMMENDED. FAILURE OF SOLICITATION TO INDICATE THAT OFFEROR MUST QUOTE CERTAIN MINIMUM PRICES FOR MANNING SCHEDULE AND AWARD ON BASIS OF OFFER OF MORE HOURS AT LESS COST IS QUESTIONED. ONCE MANNING SCHEDULES ARE CONSIDERED AS "OTHER FACTORS" IN DETERMINING THE ADEQUACY OF THE OFFEROR'S KNOWLEDGE THEY MAY NOT BE CONSIDERED FOR BID PRICE COMPARISON. INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 7. SHOULD THE CONTRACTING OFFICER DETERMINE THAT A LESS THAN SATISFACTORY LEVEL OF PERFORMANCE IS CAUSED BY PERSONNEL STAFFING BELOW THAT SET FORTH IN ATTACHMENT A.

B-170706(1), MAR 29, 1971

BID PROTEST - QUESTIONABLE NEGOTIATION PROCEDURES OPTION CANCELLATION DECISION CONCLUDING THAT AWARD TO MILITARY BASE MANAGEMENT FOR MESS SERVICES AT NAVAL AIR STATION WAS BASED ON QUESTIONABLE NEGOTIATING PROCEDURES AND THAT WHILE CANCELLATION IS NOT RECOMMENDED, NAVY SHOULD NOT EXERCISE THE OPTION FOR THE NEXT YEAR. FAILURE OF SOLICITATION TO INDICATE THAT OFFEROR MUST QUOTE CERTAIN MINIMUM PRICES FOR MANNING SCHEDULE AND AWARD ON BASIS OF OFFER OF MORE HOURS AT LESS COST IS QUESTIONED. ONCE MANNING SCHEDULES ARE CONSIDERED AS "OTHER FACTORS" IN DETERMINING THE ADEQUACY OF THE OFFEROR'S KNOWLEDGE THEY MAY NOT BE CONSIDERED FOR BID PRICE COMPARISON. A GREATER NUMBER OF HOURS PROPOSED BY ONE OFFEROR DOES NOT, IN ITSELF, EVIDENCE A HIGHER QUALITY PROPOSAL. WHILE IT WOULD NOT BE IN INTEREST OF GOVERNMENT TO CANCEL, THE OPTION FOR THE NEXT YEAR SHOULD BE READVERTISED OR RESOLICITED ON BASIS OF CORRECTIVE RECOMMENDATIONS.

TO DYNAMIC ENTERPRISES, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 7, 1970, AND SUBSEQUENT CORRESPONDENCE TO OUR OFFICE PROTESTING THE AWARD OF A CONTRACT TO MILITARY BASE MANAGEMENT, INC. (MBM), UNDER SOLICITATION NO. N00204-70-R- 0025, ISSUED BY NAVAL AIR STATION, PENSACOLA, FLORIDA.

THE SUBJECT RFP, ISSUED ON FEBRUARY 4, 1970, SOLICITED OFFERS FOR FURNISHING LABOR AND MATERIALS TO PERFORM MESS ATTENDANT SERVICES IN SUBSISTENCE BUILDINGS 601, 602, 1593 AND 1907; BAKE SHOP BUILDING 637; AND BUTCHER SHOP BUILDING 680, AT THE NAVAL AIR STATION, PENSACOLA, FLORIDA, DURING THE PERIOD JULY 1, 1970, THROUGH JUNE 30, 1971.

SECTION 5.0(A) OF THE RFP PROVIDED THAT:

"SECTION 5.0 - NOTICES TO OFFERORS

"(A) ALL OFFERORS SHALL SUBMIT WITH THEIR PROPOSAL, MANNING CHARTS IN THE FORMAT OF ATTACHMENT A, 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 9.36 OF THE RFP PROVIDED THAT:

"9.36 - STAFFING LEVELS (NUMBER OF EMPLOYEES)

"THE STAFFING LEVELS ENTERED BY THE CONTRACTOR ON THE MANNING CHART (ATTACHMENT A) 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 ATTACHMENT A, MANNING CHART. NOTWITHSTANDING THE FOREGOING, THE CONTRACTOR IS RESPONSIBLE IN ANY EVENT FOR SUPPLYING SUFFICIENT PERSONNEL TO PERFORM THE CONTRACT SATISFACTORILY."

FIFTEEN FIRMS SUBMITTED OFFERS IN RESPONSE TO THE SOLICITATION. REVIEW BY THE CONTRACTING OFFICER AND THE FOOD SERVICE OFFICER INDICATED THAT FURTHER NEGOTIATIONS WERE REQUIRED WITH THE OFFERORS IN ORDER TO RESOLVE UNCERTAINTIES IN THE OFFERS SUBMITTED. ALSO, AT THIS TIME IT WAS LEARNED THAT THE ESTIMATED NUMBER OF MEALS ORIGINALLY REQUIRED IN THE SOLICITATION HAD BEEN DECREASED. IN VIEW THEREOF ALL OFFERORS WERE ALLOWED TO SUBMIT REVISED PROPOSALS, WHICH WERE AS FOLLOWS:

TOTAL HOURS MANNING

OFFERORS YEARLY AMOUNT NET) OFFERED YEARLY

JCM $350,798.85 182,919

FEDERAL FOODS 352,351.88 162,204.5

PJK 359,622.50 175,854.5

SPACE SERVICES 365,608.03 155,897.5

INDUSTRIAL MAINT. SERVICE 388,163.30 148,843.5

WEBSTER CONTRACTORS 395,778.26 204,817

MANPOWER 399,995.82 175,500.5

HUNTSVILLE FOOD 408,832.38 199,132.5

WORLDWIDE 421,244.08 201,324.5

MILITARY BASE MANAGEMENT 433,332.89 208,307.5

DYNAMIC ENTERPRISES INC. 449,460.00 215,938

KLEEN-RITE JANITORIAL 451,939.84 214,041.5

WESTGATE 459,999.96 210,783

INDUSTRIAL SUPPORT 484,785.00 215,051

ORBITING ENTERPRISES 584,976.70 243,415.5

BEFORE THE SPECIFIED DATE FOR THE CLOSING OF NEGOTIATIONS THE FOLLOWING REVISED FINAL OFFERS WERE RECEIVED:

TOTAL HOURS MANNING

OFFERORS YEARLY AMOUNT NET) OFFERED YEARLY

JCM CORPORATION 350,798.85 182,919

FEDERAL FOODS 352,351.88 162,204.5

PJK COMPANY 359,622.50 175,854.5

SPACE SERVICES OF GEORGIA 365,608.03 155,897.5

MANPOWER 387,751.05 175,500.5

INDUSTRIAL MAINTENANCE 388,163.30 148,843.5

WEBSTER CONTRACTORS 395,788.26 204,817

DYNAMIC ENTERPRISES, INC. 404,514.00 215,938

HUNTSVILLE FOOD SERVICE 408,832.38 199,132.5

WORLDWIDE 421,244.08 201,324.5

MILITARY BASE MANAGEMENT 438,888.45 208,307.5

KLEEN-RITE JANITORIAL 451,939.84 214,041.5

WESTGATE 459,999.96 210,783

INDUSTRIAL SUPPORT 471,420.00 215,051

ORBITING ENTERPRISES 584,976.70 243,415.5

THE CONTRACTING OFFICER CONCLUDED AFTER REVIEW OF THE FINAL REVISED OFFERS THAT MBM HAD PROPOSED THE MOST ADVANTAGEOUS OFFER TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED, SINCE "OF ALL THE ACCEPTABLE OFFERS, MBM'S PROPOSAL OFFERED MORE HOURS AT LESS COST AS COMPARED TO THE OTHER ACCEPTABLE OFFERS." CONSEQUENTLY, AWARD WAS MADE TO MBM ON JUNE 25, 1970.

IN A LETTER OF JUNE 30, 1970, THE CONTRACTING OFFICER ADVISED YOUR FIRM OF THE AWARD TO MBM AND STATED "THE MANHOURS OFFERED AND THE PRICE OFFERED WERE NOT COMPATIBLE WITH THE WAGE DETERMINATION REQUIREMENTS. IT WAS CONSIDERED UNFAIR TO AWARD TO YOUR COMPANY UNDER SUCH CIRCUMSTANCES AS THE PRICE WAS NOT CONSIDERED TO BE FAIR AND REASONABLE." IN HIS REPORT TO OUR OFFICE THE CONTRACTING OFFICER ADVISES:

"DYNAMIC'S PROPOSAL WAS CONSIDERED UNACCEPTABLE BECAUSE THE 215,938 MANHOURS AND THE $404,514.00 AMOUNT WERE NOT COMPATIBLE WITH THE $1.90 MINIMUM HOURLY WAGE REQUIREMENT (215,938 DIVIDED BY $404,514.00 $1.87).

IN YOUR PROTEST, YOU CONTEND THAT AWARD SHOULD NOT HAVE BEEN MADE TO MBM AT A HIGHER PRICE THAN YOUR OFFER SINCE THE MANHOURS WHICH YOU PLANNED TO UTILIZE IN EACH MESSING FACILITY IS ADEQUATE TO PERFORM THE SERVICES REQUIRED, "IN THAT IT MATCHED THE STAFFING WHICH THE GOVERNMENT ADVISED WAS NECESSARY TO PERFORM THE CONTRACT." IN THIS CONNECTION, YOU MAINTAIN THAT THE CONTRACTOR'S MANNING CHART IS ALMOST NEVER FOLLOWED ON CONTRACTS OF THIS TYPE AND, AT BEST, MANNING CHARTS ARE A TOOL FOR CONTRACT ENFORCEMENT. YOU ALSO POINT OUT THAT THE ACTUAL MINIMUM STATUTORY COST PER MANHOUR IS $2.1604, INCLUDING UNEMPLOYMENT TAX, WORKMEN'S COMPENSATION AND HEALTH AND WELFARE BENEFITS, AND BY COMPUTING MBM'S COST PER MANHOUR IN THE METHOD EMPLOYED BY THE CONTRACTING OFFICER WOULD GIVE A RESULT OF $2.1069 PER MANHOUR. THEREFORE EVEN MBM COULD NOT HAVE PAID THE LEGAL MINIMUM WAGE, AT ITS BID PRICE, IF IT ADHERED TO ITS MANNING CHART.

IN B-167685, OCTOBER 21, 1969, IN WHICH WE DENIED A PROTEST OF AN AWARD TO YOUR FIRM, WE STATED:

"IN A NEGOTIATED PROCUREMENT, THE RULES OF FORMALLY ADVERTISED, COMPETITIVE 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. 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."

WE BELIEVE THE ABOVE STATEMENT IS EQUALLY APPLICABLE TO THE PRESENT SITUATION.

WHILE THE SOLICITATION REQUIRED THAT THE SUCCESSFUL OFFEROR MUST MEET THE MINIMUM WAGE REQUIREMENTS, THERE WAS NOTHING IN THE RFP WHICH SPECIFICALLY ADVISED EACH OFFEROR THAT ITS PROPOSAL ON ITS FACE MUST QUOTE A CERTAIN MINIMUM PRICE PER MANHOUR SO AS TO MEET THE MINIMUM WAGE REQUIREMENTS. THIS REGARD, WE HAVE HELD THAT SOUND PROCUREMENT POLICY REQUIRES OFFERORS TO BE INFORMED OF ALL EVALUATION FACTORS AND OF THE RELATIVE WEIGHTS TO BE ATTACHED TO EACH FACTOR, B-167983, MARCH 11, 1970, AND WE FEEL THAT THE FAILURE TO SO ADVISE OFFERORS IN THE INSTANT PROCUREMENT WAS NOT CONDUCIVE TO OBTAINING PROPOSALS OFFERING THE MAXIMUM COMPETITION AND MOST REASONABLE PRICES.

WE HAVE ALSO HELD THAT AN AWARD MAY NOT BE DENIED ON THE SOLE BASIS THAT AN OFFEROR SUBMITTED AN UNPROFITABLE PRICE. B-170228, SEPTEMBER 22, 1970; B-169465, JUNE 19, 1970. HOWEVER, WE HAVE RECOGNIZED IN SIMILAR CASES THAT THE FINAL SELECTION OF A CONTRACTOR UNDER NEGOTIATING PROCEDURES IS LARGELY A MATTER OF JUDGMENT, AND IN THE ABSENCE OF A CLEAR SHOWING THAT A DETERMINATION REGARDING THE ACCEPTABILITY OF A PROPOSAL WAS AN ARBITRARY ABUSE OF DISCRETION OR MADE IN BAD FAITH, THIS OFFICE DOES NOT QUESTION A DEPARTMENT'S DECISION TO REJECT A PROPOSAL CONSIDERED UNACCEPTABLE. 167983, MARCH 11, 1970.

IT IS OUR VIEW THAT THE CIRCUMSTANCES SURROUNDING THE AWARD TO MBM DO NOT DISCLOSE SUCH A CLEAR ABUSE OF DISCRETION BY THE CONTRACTING OFFICER, OR THAT THERE IS ANY BASIS FOR IMPUTATION OF BAD FAITH ON HIS PART, SO AS TO AFFECT THE LEGALITY OF THE CONTRACT AWARDED TO MBM. IN VIEW THEREOF WE SEE NO ADEQUATE BASIS FOR DIRECTING CANCELLATION OF MBM'S CONTRACT AND, TO THE EXTENT YOUR PROTEST REQUESTED SUCH ACTION IT IS DENIED.

WE ARE, HOWEVER, ADVISING THE SECRETARY OF THE NAVY THAT, IN THE LIGHT OF THE QUESTIONABLE NEGOTIATING PROCEDURES USED, EXERCISE OF THE OPTION IN THE CONTRACT AWARDED WOULD BE CONSIDERED IMPROPER BY OUR OFFICE, AND OFFERS FOR THE SERVICES FOR NEXT YEAR SHOULD THEREFORE BE RESOLICITED UNDER REVISED PROCEDURES WHICH WILL MORE FULLY ADVISE OFFERORS OF THE NEGOTIATION PROCEDURES TO BE FOLLOWED AND THE FACTORS ON WHICH AN AWARD WILL BE BASED.

ACCORDINGLY, YOUR PROTEST IS DENIED.