B-170706(2), MAR 29, 1971

B-170706(2): 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. SECRETARY: REFERENCE IS MADE TO A LETTER DATED AUGUST 27. ENCLOSED IS A COPY OF OUR DECISION OF TODAY TO THE COMPANY DENYING ITS PROTEST.

B-170706(2), 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. LETTER TO SECRETARY OF THE NAVY OUTLINING CORRECTIVE ACTION TO BE TAKEN.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED AUGUST 27, 1970, FROM THE DEPUTY COMMANDER, PURCHASING, NAVAL SUPPLY SYSTEMS COMMAND, FURNISHING OUR OFFICE A REPORT RELATIVE TO THE PROTEST OF DYNAMIC ENTERPRISES, INC., UNDER RFP NO. N00204-70-R-0025.

ENCLOSED IS A COPY OF OUR DECISION OF TODAY TO THE COMPANY DENYING ITS PROTEST. WHILE, FOR THE REASONS STATED THEREIN, WE DID NOT FEEL THAT WE SHOULD REQUIRE CANCELLATION OF THE CONTRACT AWARDED TO MBM, YOUR ATTENTION IS DIRECTED TO VARIOUS QUESTIONABLE NEGOTIATING PROCEDURES USED, AS DESCRIBED IN OUR DECISION AND AS SET OUT BELOW.

WITH REFERENCE TO THAT PORTION OF OUR DECISION WHICH HOLDS THAT AN AWARD MAY NOT BE DENIED ON THE SOLE BASIS THAT AN OFFEROR SUBMITTED AN UNPROFITABLE PRICE, YOUR ATTENTION IS INVITED TO A SIMILAR HOLDING IN OUR DECISION B-170228, SEPTEMBER 22, 1970, TO YOUR DEPARTMENT.

IN THE INSTANT PROCUREMENT IT ALSO APPEARS THAT THE MANNING CHARTS WERE CONSIDERED IN DETERMINING THE MANAGEMENT JUDGMENT AND ADEQUACY OF THE OFFEROR'S KNOWLEDGE OF THE REQUIREMENTS. ADDITIONALLY THE CHARTS WERE CONSIDERED AS AN "OTHER FACTOR," SINCE THE CONTRACTING OFFICER BASED HIS EVALUATION ON THE FACT THAT MBM "OFFERED MORE HOURS AT LESS COST AS COMPARED TO THE OTHER ACCEPTABLE OFFERS." HOWEVER, THERE WAS NOTHING IN THE SOLICITATION TO SUGGEST THAT EITHER OF THESE METHODS WAS TO BE EMPLOYED IN THE EVALUATION OF OFFERS. WE THINK THAT ONCE IT HAS BEEN DETERMINED THAT AN OFFEROR'S MANNING CHART INDICATES HIS UNDERSTANDING OF, AND HIS ABILITY TO FULFILL, THE CONTRACT REQUIREMENTS, INCLUDING WAGE RATES AND OTHER FACTORS DISCUSSED IN THE DECISION, HE SHOULD BE CONSIDERED TO BE IN THE COMPETITIVE RANGE FOR NEGOTIATION PURPOSES, AND THEREAFTER THE LOWEST OVERALL PRICE SHOULD BE THE REMAINING FACTOR IN DETERMINING THE LOWEST RESPONSIBLE OFFEROR. CF. 43 COMP. GEN. 353, 370 (1963); B-160486, JANUARY 8, 1968. CONVERSELY, IF THE REASON AN OFFEROR IS CONSIDERED TO BE OUTSIDE THE COMPETITIVE RANGE IS ONE OF NONRESPONSIBILITY, THEN A DETERMINATION OF NONRESPONSIBILITY UNDER ASPR 1-904.1 SHOULD BE MADE. OTHER WORDS, ONCE THE MANNING CHARTS HAVE BEEN CONSIDERED IN EVALUATING THE "OTHER FACTORS," THEY SHOULD NOT BE USED AGAIN FOR COMPARISON WITH THE BID PRICE SO AS TO DETERMINE WHO OFFERED THE LOWEST RATE PER MANHOUR.

TO ILLUSTRATE THE CONFUSION THAT EXISTS IN THIS AREA, BY LETTER OF MAY 19, 1970, THE CONTRACTING OFFICER ADVISED DYNAMICS, AND APPARENTLY ALL OTHER OFFERORS STILL CONSIDERED TO BE WITHIN THE COMPETITIVE RANGE, THAT:

"THE GOVERNMENT IS CONCERNED THAT PROPOSED STAFFING BE ADEQUATE TO PERFORM ANY RESULTING CONTRACT. NOTWITHSTANDING THIS CONCERN, UNDUE EMPHASIS ON CONTRACT MANNING AS BEING THE PRINCIPAL EVALUATION CRITERIA SHOULD BE AVOIDED. *** PROPOSED CONTRACT MANNING IS INCLUDED IN THE 'OTHER FACTORS'. DUE CONSIDERATION WILL BE GIVEN TO ALL OFFERORS WHO PROPOSED MANNING SCHEDULES WHICH REFLECT SOUND MANAGEMENT, JUDGMENT, AND ADEQUATE KNOWLEDGE OF THE REQUIREMENTS FOR SATISFACTORY MESS ATTENDANT OPERATIONS."

IF, FOLLOWING SUCH A LETTER, NEGOTIATIONS ARE CONTINUED WITH A GIVEN OFFEROR WITHOUT ADVICE THAT HIS MANNING SCHEDULE IS DEFICIENT, WE THINK HE SHOULD PROPERLY BE ABLE TO CONSIDER HIMSELF WITHIN THE COMPETITIVE RANGE INSOFAR AS "OTHER FACTORS" (MANNING SCHEDULES) ARE CONCERNED, AND HIS SOLE REMAINING CONCERN SHOULD BE WHETHER HIS TOTAL PRICE QUOTATION IS LOW.

FURTHER, WE BELIEVE THAT IN KEEPING WITH THE RULE STATED IN B-167685, OCTOBER 21, 1969, A MORE DEFINITIVE STATEMENT SHOULD HAVE BEEN CONTAINED IN THE SOLICITATION ADVISING OFFERORS THE EXACT ROLE THE MANNING CHARTS WERE TO PLAY IN THE EVALUATION OF OFFERS, ESPECIALLY IN VIEW OF THE FACT THAT PRESENTLY OFFERORS ARE ADVISED THAT, NOTWITHSTANDING THE NUMBER OF MANNING HOURS OFFERED, THE CONTRACTOR IS RESPONSIBLE IN ANY EVENT FOR SUPPLYING SUFFICIENT PERSONNEL TO PERFORM THE CONTRACT SATISFACTORILY. CF. B-160537, OCTOBER 17, 1967. IT IS CLEAR TO US THAT AT THE PRESENT TIME ALL KNOWLEDGEABLE COMPANIES REGULARLY ENGAGED IN THE TYPE OF BUSINESS HERE INVOLVED VIEW THE MANNING CHARTS AS A TOOL FOR CONTRACT ENFORCEMENT RATHER THAN ONE OF THE CRITICAL "OTHER FACTORS" TO BE CONSIDERED IN THE AWARD PROCESS. ADDITIONALLY, IF THE GOVERNMENT'S ESTIMATE OF THE GROSS NUMBER OF MANNING HOURS BELIEVED TO BE REQUIRED IS TO BE USED IN ANY WAY IN THE EVALUATION OF OFFERS, WE SEE NOTHING IMPROPER, AND INDEED WE THINK IT MAY PROVE BENEFICIAL, TO ADVISE OFFERORS OF SUCH ESTIMATE, LEAVING TO THE OFFERORS THE RESPONSIBILITY FOR DETERMINING THE NUMBER OF HOURS REQUIRED FOR EACH SPECIFIC AREA OF OPERATION. IN THIS REGARD, WE BELIEVE IT IS ESSENTIAL TO THE RECEIPT OF REASONABLE AND TRULY COMPETITIVE PRICES THAT THE GOVERNMENT'S ESTIMATE OF THE MANNING HOURS REQUIRED BE AS CURRENTLY ACCURATE AS POSSIBLE, BASED UPON PAST EXPERIENCE AS WELL AS FUTURE ANTICIPATED NEEDS, AND WE CAN PERCEIVE OF NO SUBSTANTIAL BASIS TO CONCLUDE THAT A GREATER NUMBER OF HOURS PROPOSED BY AN OFFEROR EVIDENCES, IN ITSELF, A HIGHER QUALITY PROPOSAL.

AS INDICATED IN OUR DECISION OF TODAY, WE DO NOT BELIEVE IT WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT TO EXERCISE THE OPTION ON MBM'S CONTRACT, AND WE STRONGLY RECOMMEND THAT FUTURE MESS ATTENDANT SERVICES AT PENSACOLA AND OTHER NAVAL STATIONS SHOULD BE SOLICITED UNDER PROCEDURES ENCOMPASSING THE SUGGESTIONS MADE HEREIN.

THE DOCUMENTS FURNISHED WITH THE REPORT FROM YOUR DEPARTMENT ARE RETURNED.