B-171234, APR 14, 1971

B-171234: Apr 14, 1971

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MSP WAS DETERMINED TO BE LOW BIDDER ON THE NON-SET ASIDE PORTION. WHILE BOTH MSP AND PROTESTANT WERE IN THE TOP CATEGORY FOR CONSIDERATION AS CERTIFIED ELIGIBLE CONCERNS WITH A FIRST PREFERENCE AND SMALL BUSINESSES. MSP WAS OFFERED AND ACCEPTED THE SET ASIDE AWARD PURSUANT TO ASPR 1-804.2. MSP'S PROMPT PAYMENT DISCOUNT WAS PROPERLY EVALUATED AS WAS THE USE OF GOVERNMENT-FURNISHED PROPERTY. DAVID FROMSON: REFERENCE IS MADE TO YOUR LETTERS OF DECEMBER 1. BIDS WERE OPENED ON SEPTEMBER 25. THE ARMY EVALUATED THE BIDS OF ATI AND MSP AS FOLLOWS: MSP ATI BID OFFER PER UNIT PRICE .297 .2989 SUBTRACT DISCOUNT (PAYABLE 1/4 OF 1% IF PAID IN 10 CALENDAR DAYS) - .0007425 -0- .296575.2989 ADD TRANSPORTATION PER UNIT .006592 .011248 .3028495 .310148 ADD GOVERNMENT-FURNISHED PROPERTY EVALUATION .0026 -0- NET EVALUATED PRICE PER UNIT .3054495 .310148 BASED ON THE EVALUATION MSP WAS DETERMINED TO BE LOW BIDDER ON THE NON-SET-ASIDE PORTION AND WAS AWARDED A CONTRACT ON OCTOBER 30.

B-171234, APR 14, 1971

BID PROTEST - SET ASIDE DECISION DENYING PROTEST AGAINST AWARD OF CONTRACT TO MODEL SCREW PRODUCTS, INC., (MSP), UNDER IFB ISSUED BY THE ARMY AMMUNITION PROCUREMENT AND SUPPLY AGENCY FOR 540,000 BOMB COMPONENTS WITH AN IDENTICAL AMOUNT SET ASIDE FOR AWARD TO A QUALIFYING LABOR SURPLUS AREA CONCERN. MSP WAS DETERMINED TO BE LOW BIDDER ON THE NON-SET ASIDE PORTION, AND WHILE BOTH MSP AND PROTESTANT WERE IN THE TOP CATEGORY FOR CONSIDERATION AS CERTIFIED ELIGIBLE CONCERNS WITH A FIRST PREFERENCE AND SMALL BUSINESSES, MSP WAS OFFERED AND ACCEPTED THE SET ASIDE AWARD PURSUANT TO ASPR 1-804.2. FURTHER, MSP'S PROMPT PAYMENT DISCOUNT WAS PROPERLY EVALUATED AS WAS THE USE OF GOVERNMENT-FURNISHED PROPERTY. THEREFORE, THE PROTEST MUST BE DENIED.

TO MR. DAVID FROMSON:

REFERENCE IS MADE TO YOUR LETTERS OF DECEMBER 1, 1970, WITH ENCLOSURES, AND FEBRUARY 18, 1971, ON BEHALF OF AMERICAN TECHNICAL INDUSTRIES, INCORPORATED (ATI), PROTESTING AGAINST THE AWARD OF A CONTRACT TO MODEL SCREW PRODUCTS, INCORPORATED (MSP), UNDER INVITATION FOR BIDS (IFB) NO. DAAA09-71-B-0029, ISSUED ON AUGUST 26, 1970, BY THE ARMY AMMUNITION PROCUREMENT AND SUPPLY AGENCY, JOLIET, ILLINOIS (ARMY) FOR 540,000 BOMB COMPONENTS WITH AN IDENTICAL QUANTITY OF THE ITEM SET ASIDE FOR AWARD TO A QUALIFYING LABOR SURPLUS AREA CONCERN.

BIDS WERE OPENED ON SEPTEMBER 25, 1970, AND AS YOU REPORT, THE ARMY EVALUATED THE BIDS OF ATI AND MSP AS FOLLOWS:

MSP ATI

BID OFFER PER UNIT PRICE .297 .2989

SUBTRACT DISCOUNT (PAYABLE 1/4 OF 1% IF PAID

IN 10 CALENDAR DAYS) - .0007425 -0-

.296575.2989

ADD TRANSPORTATION PER UNIT .006592 .011248

.3028495 .310148

ADD GOVERNMENT-FURNISHED PROPERTY EVALUATION .0026 -0-

NET EVALUATED PRICE PER UNIT .3054495 .310148 BASED ON THE EVALUATION MSP WAS DETERMINED TO BE LOW BIDDER ON THE NON-SET-ASIDE PORTION AND WAS AWARDED A CONTRACT ON OCTOBER 30, 1970. WITH RESPECT TO THE SET-ASIDE, BOTH MSP AND ATI WERE IN THE TOP CATEGORY FOR CONSIDERATION AS CERTIFIED ELIGIBLE CONCERNS WITH A FIRST PREFERENCE AND SMALL BUSINESSES. AWARD OF THE SET-ASIDE PORTION OF THE PROCUREMENT WAS MADE TO MSP ON NOVEMBER 3, 1970.

YOU PROTEST THE AWARD ON THE GROUNDS THAT ATI WAS IMPROPERLY DENIED THE OPPORTUNITY TO NEGOTIATE THE SET-ASIDE PORTION OF THE PROCUREMENT AND ALSO THAT IN EVALUATING MSP'S BID THE GOVERNMENT INCORRECTLY APPLIED THE DISCOUNT OFFERED BY MSP AND INCORRECTLY EVALUATED THE USE OF RENT-FREE GOVERNMENT PROPERTY WHICH MSP PROPOSED IN ITS BID TO USE.

IT IS YOUR CONTENTION THAT UNDER THE PROCEDURE SET OUT IN ASPR 1 804.2 ATI WAS ENTITLED TO AN OPPORTUNITY TO NEGOTIATE WITH THE ARMY ON THE NON- SET-ASIDE PORTION EVEN IF ITS PRICE WAS NOT AS LOW AS MSP'S PRICE. THIS REGARD IT MUST BE POINTED OUT THAT BOTH MSP AND ATI WERE DETERMINED TO BE RESPONSIVE BIDDERS AS WELL AS WITHIN THE FIRST PRIORITY CATEGORY.

THE "NOTICE OF LABOR AREA SET-ASIDE (1970 JUNE) ASPR 1 804.2(B)(1)(DPC #78)" CLAUSE BEGINNING ON PAGE 12 OF THE SUBJECT IFB SETS FORTH THE PRIORITY FOR CONDUCTING NEGOTIATIONS ON THE SET-ASIDE PORTION AND FURTHER PROVIDES THAT WITHIN EACH OF THE GROUPS, "NEGOTIATIONS WITH SUCH CONCERNS WILL BE IN THE ORDER OF THEIR OFFERS ON THE NON-SET-ASIDE PORTION, BEGINNING WITH THE LOWEST RESPONSIVE OFFER." THUS, "NEGOTIATIONS" WERE CONDUCTED SOLELY WITH MSP BASED ON THE DETERMINATION THAT IT HAD SUBMITTED THE LOWEST OFFER ON THE NON-SET ASIDE PORTION. ALTHOUGH THE CLAUSE UTILIZES THE TERM "NEGOTIATION", SET-ASIDE PROCUREMENTS ARE SPECIFICALLY EXEMPTED FROM THE REQUIREMENTS AT 10 U.S.C. 2304(G) FOR HOLDING WRITTEN OR ORAL DISCUSSIONS. SET ASIDE "NEGOTIATIONS" DO NOT RELATE TO PRICE IN THE SENSE CONTEMPLATED BY NON-SET-ASIDE NEGOTIATION. THE LOWEST RESPONSIVE AND RESPONSIBLE QUALIFYING BIDDER IS FIRST OFFERED THE SET-ASIDE PORTION AT THE PRICE FIXED FOR FORMAL AWARD; ONLY IF IT DOES NOT ACCEPT WILL THE OTHER BIDDERS WITHIN THE SAME PRIORITY GROUPING BE APPROACHED IN SUCCESSION ACCORDING TO THE ESTABLISHED PRIORITY. IN THE INSTANT CASE, SINCE MSP WAS IN THE HIGHEST PRIORITY FOR THE LABOR SURPLUS AREA SET- ASIDE, AS WELL AS LOW ON THE NON-SET-ASIDE PORTION, ITS ACCEPTANCE OF THE SET ASIDE OFFER PRECLUDED THE ACTIVITY FROM CARRYING ON NEGOTIATIONS WITH ATI.

IN REGARD TO YOUR CONTENTION THAT THE DISCOUNT OFFERED BY MSP FOR PROMPT PAYMENT WITHIN TEN DAYS WAS IN CONTRAVENTION OF ASPR 2-407.3(A), PLEASE NOTE THAT THE IFB AT PAGE 22 CONTAINED THE PROPER NOTICE CONTEMPLATED BY ASPR 2-407.3(A) TO PROVIDE FOR THE EVALUATION OF PROMPT PAYMENT DISCOUNT PERIODS OF LESS THAN 20 DAYS. IN VIEW OF THE CIRCUMSTANCES, WE CONCLUDE THAT THE DISCOUNT OFFERED BY MSP WAS PROPERLY EVALUATED. SIMILARLY, WE FIND NO IRREGULARITY IN THE EVALUATION FORMULA UTILIZED BY THE ACTIVITY IN REGARD TO MSP'S USE OF GOVERNMENT-FURNISHED PROPERTY. IT APPEARS THAT THE EVALUATION FACTOR WAS COMPUTED IN ACCORDANCE WITH THE EVALUATION PROCEDURE SPECIFIED IN THE IFB CLAUSE ENTITLED "EVALUATION PROCEDURE TO ELIMINATE COMPETITIVE ADVANTAGE FROM RENT-FREE USE OF GOVERNMENT PRODUCTION AND RESEARCH PROPERTY." THE REPORTED ACQUISITION VALUE OF THE ITEM OF EQUIPMENT TO BE USED IS $16,868 AND THE MONTHLY RENTAL RATE IS GIVEN AS .75 FOR 11 MONTHS. THE EVALUATION FACTOR OF .0026 FOR 540,000 UNITS WAS COMPUTED BASED ON THESE FIGURES.

ACCORDINGLY, YOUR PROTEST MUST BE DENIED.