B-171367(1), SEP 22, 1971

B-171367(1): Sep 22, 1971

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RECORD REVEALS THAT A DETERMINATION WAS MADE BY THE CONTRACTING OFFICER THAT FEMCO WAS NOT WITHIN THE COMPETITIVE RANGE. PRIMARILY ON THE BASIS THAT ITS MANNING ESTIMATE WAS LOW. THIS DETERMINATION IS A MATTER OF ADMINISTRATIVE DISCRETION AND WILL NOT BE UPSET. ALLEGATION OF "CLANDESTINE ACTIVITIES" OF CONTRACTING OFFICER WITH JOINT VENTURE WHICH WAS AWARDED THE CONTRACT IS INSUFFICIENT TO UPSET THIS AWARD. RECORD INDICATES AWARD WAS NOT MADE IN CONFORMITY WITH ASPR 2 407.8(B)(3) CONCERNING NOTICE TO PROTESTANT OF THE DETERMINATION TO MAKE AWARD. AS THIS REQUIREMENT IS PROCEDURAL RATHER THAN SUBSTANTIVE. VALIDITY OF THE AWARD IS NOT AFFECTED. TO FEMCO-ICC/TECCOS: REFERENCE IS MADE TO YOUR LETTER OF AUGUST 14.

B-171367(1), SEP 22, 1971

BID PROTEST - COMPETITIVE RANGE DETERMINATION DENYING PROTEST OF FEMCO-ICC/TECCOS AGAINST AWARD OF CONTRACT TO ANOTHER FIRM UNDER RFP ISSUED BY U.S. ARMY KOREA PROCUREMENT AGENCY FOR OPERATION AND MAINTENANCE OF CERTAIN ARMY REAL PROPERTY IN KOREA. RECORD REVEALS THAT A DETERMINATION WAS MADE BY THE CONTRACTING OFFICER THAT FEMCO WAS NOT WITHIN THE COMPETITIVE RANGE, PRIMARILY ON THE BASIS THAT ITS MANNING ESTIMATE WAS LOW. THIS DETERMINATION IS A MATTER OF ADMINISTRATIVE DISCRETION AND WILL NOT BE UPSET, EXCEPT ON A CLEAR SHOWING OF ABUSE. ALLEGATION OF "CLANDESTINE ACTIVITIES" OF CONTRACTING OFFICER WITH JOINT VENTURE WHICH WAS AWARDED THE CONTRACT IS INSUFFICIENT TO UPSET THIS AWARD, CONSIDERING THE FACT THAT THE MATTER HAS BEEN INVESTIGATED BY THE PROVOST MARSHALL'S OFFICE, EIGHTH ARMY, WITH NO INFORMATION OF MISCONDUCT HAVING BEEN RECEIVED BY THIS OFFICE. RECORD INDICATES AWARD WAS NOT MADE IN CONFORMITY WITH ASPR 2 407.8(B)(3) CONCERNING NOTICE TO PROTESTANT OF THE DETERMINATION TO MAKE AWARD, NOTWITHSTANDING THE PROTEST. HOWEVER, AS THIS REQUIREMENT IS PROCEDURAL RATHER THAN SUBSTANTIVE, VALIDITY OF THE AWARD IS NOT AFFECTED. ON THIS POINT, CORRECTIVE ACTION HAS BEEN RECOMMENDED TO THE SECRETARY OF THE ARMY.

TO FEMCO-ICC/TECCOS:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 14, 1971, AND PRIOR CORRESPONDENCE, REGARDING THE PROTEST AGAINST THE AWARD OF A CONTRACT TO ANOTHER OFFEROR UNDER REQUEST FOR PROPOSALS (RFP) DAJB03-70-R-6085, ISSUED BY THE UNITED STATES ARMY KOREA PROCUREMENT AGENCY.

THE RFP WAS ISSUED ON SEPTEMBER 1, 1970, TO PROCURE SERVICES FOR THE MANAGEMENT, OPERATION, MAINTENANCE AND REPAIR OF CERTAIN ARMY REAL PROPERTY FACILITIES FOR THE PERIOD DECEMBER 1, 1970, THROUGH JUNE 30, 1971. SIX OFFERORS SUBMITTED TIMELY PROPOSALS WHICH WERE EVALUATED BY A TECHNICAL EVALUATION COMMITTEE. AS A RESULT OF THE TECHNICAL EVALUATION, THREE OFFERORS, FEMCO-ICC/TECCOS (FEMCO) INCLUDED, WERE ELIMINATED FROM FURTHER CONSIDERATION. THE PROPOSALS OF THE THREE REMAINING FIRMS WERE FURTHER EVALUATED BY A NONTECHNICAL EVALUATING COMMITTEE WITH RESPECT TO OVERALL COST, OVERHEAD RATES AND PROPOSED FEE. NEGOTIATIONS, ANTICIPATING THE AWARD OF A COST-PLUS-FIXED-FEE CONTRACT, WERE THEN HELD WITH THESE OFFERORS.

THE GIST OF YOUR PROTEST IS THAT FEMCO WAS IMPROPERLY EXCLUDED FROM FURTHER NEGOTIATION. YOU ASSERT THAT YOUR PROPOSAL WAS NOT SO TECHNICALLY INFERIOR SO AS TO PRECLUDE THE POSSIBILITY OF MEANINGFUL NEGOTIATIONS AND THAT AWARD TO FEMCO WOULD HAVE EFFECTED CONSIDERABLE COST SAVINGS TO THE GOVERNMENT. YOU ALSO ASSERT THAT CERTAIN PAST "CLANDESTINE ACTIVITIES" BETWEEN THE CONTRACTING OFFICER AND ONE OF THE MEMBER FIRMS OF THE JOINT VENTURE AWARDED THE CONTRACT MAY HAVE "UNDULY INFLUENCED" THE CONTRACTING OFFICER TO MAKE AWARD TO THAT JOINT VENTURE.

AS TO THIS LATTER MATTER, AN INVESTIGATION WAS INITIATED BY THE PROVOST MARSHAL'S OFFICE, EIGHTH ARMY, INTO THE ALLEGED MISCONDUCT OF THE CONTRACTING OFFICER. TO DATE, WE ARE IN RECEIPT OF NO INFORMATION OR EVIDENCE WHICH WOULD INDICATE AN ABUSE OF DISCRETION OR MISCONDUCT WITH RESPECT TO THIS PROCUREMENT. CONSEQUENTLY, WE DO NOT BELIEVE THAT FEMCO'S ASSERTION ON THIS POINT HAS SUFFICIENT VIABILITY TO WARRANT FURTHER DISCUSSION.

CONCERNING YOUR FIRST ASSERTION THAT FEMCO WAS NOT SO TECHNICALLY INFERIOR THAT MEANINGFUL NEGOTIATIONS WERE PRECLUDED, THE RECORD REVEALS THAT A DETERMINATION WAS MADE BY THE CONTRACTING OFFICER THAT FEMCO WAS NOT WITHIN A COMPETITIVE RANGE PRIMARILY ON THE BASIS THAT ITS MANNING ESTIMATE WAS LOW. THE DETERMINATION OF COMPETITIVE RANGE IS A MATTER OF ADMINISTRATIVE DISCRETION WHICH WILL NOT BE DISTURBED ABSENT A CLEAR SHOWING OF ABUSE OF DISCRETION. SEE 48 COMP. GEN. 314, 318 (1968). FIND NO SUCH ABUSE OF DISCRETION IN THIS CASE.

MOREOVER, OUR OFFICE HAS RECOGNIZED THAT WHERE, AS IN THIS CASE, A COST- TYPE PROCUREMENT IS ANTICIPATED, COST IS NOT THE CONTROLLING FACTOR IN DETERMINING WHICH PROPOSAL IS MOST ADVANTAGEOUS TO THE GOVERNMENT. COMP. GEN. (B-171663, APRIL 19, 1971). SEE, ALSO, B-171857(2), MAY 24, 1971. A LOWER COST PROPOSAL WOULD NOT PER SE GUARANTEE AWARD TO FEMCO IN THE CIRCUMSTANCES.

CONCERNING YOUR COMPLAINT THAT AWARD WAS MADE NOTWITHSTANDING YOUR PROTEST, IT APPEARS THAT THE PROCEDURE OUTLINED IN PARAGRAPH 2 407.8(B)(3) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) CONCERNING NOTICE TO THE PROTESTANT OF THE DETERMINATION TO MAKE AWARD AFTER A WRITTEN PROTEST HAS BEEN FILED WAS NOT FOLLOWED. HOWEVER, INASMUCH AS THIS REGULATORY PROVISION IS PROCEDURAL RATHER THAN SUBSTANTIVE, THE FAILURE OF THE CONTRACTING OFFICIALS TO FOLLOW IT DID NOT AFFECT THE VALIDITY OF THE AWARD MADE TO YOUR COMPETITOR.

IN ADDITION TO THE PROCEDURAL DEFECT DISCUSSED ABOVE, OUR REVIEW OF THE RECORD REVEALED THAT OFFERORS WERE NOT ADEQUATELY ADVISED OF THE EVALUATION FACTORS TO BE APPLIED TO PROPOSALS. SEE ASPR 3-501(A) AND 49 COMP. GEN. 229 (1969).

WHILE WE ARE BRINGING THE ABOVE-NOTED DEFICIENCIES TO THE ATTENTION OF THE SECRETARY OF THE ARMY BY LETTER OF TODAY, FURTHER ACTION BY OUR OFFICE IS NOT DEEMED WARRANTED IN VIEW OF THE FOREGOING.