B-171562(2), MAY 17, 1971

B-171562(2): May 17, 1971

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PROTESTANT'S CLAIM THAT SINCE ALL RANKING PROPOSERS WERE CONSIDERED TECHNICALLY QUALIFIED. THE DETERMINATIVE EVALUATION FACTOR SHOULD HAVE BEEN COST WILL NOT STAND. THE CONTRACTING OFFICER PROPERLY CONCLUDED THAT AWARD TO THE RESPONSIBLE FIRM QUOTING THE LOWEST ESTIMATED COST WAS NOT NECESSARILY THE MOST ADVANTAGEOUS. INDICATED THAT THESE OTHER FACTORS WERE OF GREATER IMPORTANCE IN SELECTION OF THE CONTRACTOR. INCORPORATED: FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE AWARD OF A CONTRACT TO DYNALECTRON CORPORATION BY THE UNITED STATES ARMY MOBILITY EQUIPMENT COMMAND (MECOM). THE RFQ WAS ISSUED TO 41 FIRMS AND 12 TIMELY RESPONSES WERE RECEIVED. AWARD WAS MADE TO DYNALECTRON ON DECEMBER 4.

B-171562(2), MAY 17, 1971

BID PROTEST - LOWEST OVERALL COST - EVALUATION CRITERIA DENYING PROTEST OF SPACE AGE ENGINEERING, INC., AGAINST THE AWARD TO DYNALECTRON CORP., OF A CONTRACT FOR MAINTENANCE AND REPAIR AS REQUIRED ON COMMERCIAL CONSTRUCTION EQUIPMENT LOCATED IN VIETNAM UNDER AN RFP ISSUED BY THE U.S. ARMY MOBILITY EQUIPMENT COMMAND. PROTESTANT'S CLAIM THAT SINCE ALL RANKING PROPOSERS WERE CONSIDERED TECHNICALLY QUALIFIED, THE DETERMINATIVE EVALUATION FACTOR SHOULD HAVE BEEN COST WILL NOT STAND. IN VIEW OF THE NATURE OF THE SERVICES BEING PROCURED AND THE TYPE OF CONTRACT CONTEMPLATED, THE CONTRACTING OFFICER PROPERLY CONCLUDED THAT AWARD TO THE RESPONSIBLE FIRM QUOTING THE LOWEST ESTIMATED COST WAS NOT NECESSARILY THE MOST ADVANTAGEOUS. MOREOVER, THE RFQ INCLUDED REQUIREMENTS FOR SUBMISSION OF RELEVANT FACTORS IN ADDITION TO COST, AND INDICATED THAT THESE OTHER FACTORS WERE OF GREATER IMPORTANCE IN SELECTION OF THE CONTRACTOR.

TO SPACE AGE ENGINEERING, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE AWARD OF A CONTRACT TO DYNALECTRON CORPORATION BY THE UNITED STATES ARMY MOBILITY EQUIPMENT COMMAND (MECOM), PURSUANT TO REQUEST FOR QUOTATIONS NO. DAAK01-Q-1191.

THE RFQ, ISSUED ON AUGUST 4, 1970, WITH A CLOSING DATE OF SEPTEMBER 15, 1970, SOLICITED QUOTATIONS FOR FURNISHING THE WORK AND SERVICES NECESSARY TO ACCOMPLISH TEARDOWN, ANALYSIS, ENGINEERING EVALUATIONS, MAINTENANCE, OVERHAUL, REPAIR, REWORK AND MODIFICATION AS REQUIRED ON COMMERCIAL CONSTRUCTION EQUIPMENT LOCATED IN THE REPUBLIC OF VIETNAM. THE RFQ WAS ISSUED TO 41 FIRMS AND 12 TIMELY RESPONSES WERE RECEIVED. AWARD WAS MADE TO DYNALECTRON ON DECEMBER 4, 1970, FOR THE PERIOD THROUGH JUNE 30, 1971, WITH AN OPTION TO EXTEND PERFORMANCE FOR TWO YEARS.

YOU CONTEND THAT SINCE ALL 12 QUOTERS WERE CONSIDERED TECHNICALLY COMPETENT THE DETERMINATIVE EVALUATION FACTOR SHOULD HAVE BEEN COST; THAT AWARD TO YOUR FIRM WOULD HAVE RESULTED IN A SAVING OF ABOUT $100,000 FOR THE BASIC CONTRACT, AND ABOUT $500,000 IF THE OPTION IS EXERCISED; THAT THE EVALUATION FACTORS WERE NOT SUFFICIENTLY DEFINED AND THE WEIGHTS WERE NOT DISCLOSED; THAT YOUR USE OF ALL UNITED STATES CITIZENS AS OPPOSED TO THE CONTRACTOR'S USE OF SOME LOCAL NATIONALS WOULD RESULT IN SUPERIOR PERFORMANCE; AND THAT CERTAIN OF THE CONCLUSIONS OF THE EVALUATORS WITH RESPECT TO YOUR PERSONNEL WERE ERRONEOUS.

IT IS REPORTED THAT THE SUBJECT CONTRACT IS A CONTINUATION OF THE SAME SERVICES PROVIDED UNDER A PREVIOUS CONTRACT WITH DYNALECTRON. SINCE THERE WAS NO WAY TO PROJECT THE EXTENT OF THE WORK THAT WOULD BE INVOLVED, IT WAS DETERMINED THAT A TIME AND MATERIALS CONTRACT WOULD BE THE MOST APPROPRIATE TYPE TO USE. FURTHER, IT WAS DECIDED THAT IN VIEW OF THE USE OF A TIME AND MATERIALS CONTRACT AND THE HIGHLY SENSITIVE WORK INVOLVED, GREATER EMPHASIS SHOULD BE PLACED ON THE CAPABILITY OF THE PROSPECTIVE CONTRACTOR TO PERFORM THAN ON THE LABOR RATES, PER DIEM RATES, AND ESTIMATED TRANSPORTATION COSTS QUOTED. THEREFORE, THE RFQ PROVIDED THAT IN THE EVALUATION "PRIME CONSIDERATION WILL BE GIVEN TO THE FOLLOWING FACTORS IN DESCENDING ORDER OF IMPORTANCE:"

"D 2

"A. AVAILABILITY OF SKILLED AND QUALIFIED PERSONNEL (QUANTITY AND CATEGORY ON HAND AND THOSE TO BE EMPLOYED).

"B. CONTRACTOR'S PROPOSED MANAGEMENT PLAN FOR THE CONTRACT TO INCLUDE:

(1) MAN-LOADING, INCLUDING SUPERVISORY, MANAGEMENT AND OPERATIONAL PERSONNEL.

(2) REPAIR PARTS SUPPLY SYSTEM.

(3) SYSTEM FOR CONTROL OF GOVERNMENT-FURNISHED PARTS, PROPERTY, EQUIPMENT, ETC.

(4) CONTRACTOR'S RECOGNITION OF THE PROBLEMS INHERENT IN THE NATURE AND LOCATION OF THE PROPOSED WORK AND SERVICES, TO INCLUDE IDENTIFICATION OF CRITICAL PROBLEM AREAS AND PROPOSED SOLUTIONS.

"C. CONTRACTOR'S PAST EXPERIENCE ON MAINTENANCE AND REPAIR OF SIMILAR CONSTRUCTION EQUIPMENT.

"D. OFFEROR'S LABOR RATES, PER DIEM RATES AND ESTIMATED TRANSPORTATION COSTS.

"D 4. THE GOVERNMENT, AFTER EVALUATION OF ALL FACTORS OUTLINED ABOVE, INTENDS TO AWARD A CONTRACT TO THE CONTRACTOR WHOSE OFFER IS THE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED."

IN ADDITION, SECTION D REQUIRED SUBMISSION OF, AMONG OTHER THINGS, A PRICING PROPOSAL IN TWO PARTS SHOWING (1) STRAIGHT TIME AND OVERTIME HOURLY RATES FOR EACH LABOR CLASSIFICATION SPECIFIED AND (2) A BREAKDOWN OF THE TOTAL ESTIMATED COST FOR THE ENTIRE PROJECT, TO INCLUDE LABOR, TRAVEL, PER DIEM AND OTHER DIRECT AND INDIRECT COSTS; A PROGRAM MANAGEMENT PLAN SHOWING THE APPROACH OR METHOD OF ACCOMPLISHING THE WORK; PROPOSED MAN-LOADING BY NUMBER AND LABOR CLASSIFICATION FOR EACH SERVICE LOCATION SPECIFIED BASED ON THE LIST OF EQUIPMENT AT EACH SITE; THE PROPOSED TOTAL MAN-LOADING BY NUMBER AND CLASSIFICATION FOR THE ENTIRE PROJECT; AND PERSONNEL RESUMES FOR EMPLOYEES IN EIGHT CLASSIFICATIONS. THE RFQ SPECIFIED 26 SITES WHERE PERFORMANCE WOULD BE REQUIRED, AND CONTAINED A LIST OF THE NUMBER, TYPE AND LOCATION OF THE EQUIPMENT. AMENDMENT 1 TO THE RFQ INCLUDED THE FOLLOWING PROVISION CONCERNING EVALUATION OF COST:

"THE COST CRITERIA TO BE USED IN EVALUATION WILL BE THE TOTAL ESTIMATED COST TO THE GOVERNMENT, WHICH WILL BE COMPUTED BY APPLYING THE CONTRACTOR'S PROPOSED PER DIEM RATES AND LABOR BILLING RATES TO CONTRACTOR'S PROPOSED STAFFING. CONTRACTOR'S PROPOSED OTHER FORESEEABLE COST WILL ALSO BE A CRITERIA WHICH WILL BE USED TO ARRIVE AT A TOTAL ESTIMATED COST FOR THE SERVICES."

AFTER RECEIPT OF THE QUOTATIONS, A CONTRACTING OFFICER'S TEAM PERFORMED A TECHNICAL EVALUATION DURING THE PERIOD SEPTEMBER 21 THROUGH OCTOBER 8, 1970, IN ACCORDANCE WITH THE EVALUATION PLAN DEVELOPED PRIOR THERETO. THE TECHNICAL EVALUATION WAS BASED ON THE FACTORS LISTED IN SECTION D 2 A, B AND C, AND APPLICATION THERETO OF WEIGHTS OF 40, 30 AND 20 PERCENT, RESPECTIVELY, AS ESTABLISHED IN THE EVALUATION PLAN. THE FOLLOWING RANKING RESULTED FROM THE INITIAL EVALUATION:

RANKING FIRM POINTS

1 DYNALECTRON 368.96

26 360.96

3 7 340.52

4 3 333.60

5 2 287.44

6 9 225.68

7 1 204.68

8 SPACE AGE 191.58

9 4 168.30

10 11 160.92

11 12 137.18

12 10 92.68

THE EVALUATION TEAM CONCLUDED THAT THE FIRST FOUR FIRMS WERE IN THE ZONE OF CONSIDERATION. HOWEVER, AS REQUIRED BY THE EVALUATION PLAN, THE REPORT INCLUDED INFORMATION AS TO THE WEAKNESSES IN EACH QUOTATION. DURING THE PERIOD OCTOBER 19 THROUGH NOVEMBER 9, 1970, THE CONTRACTING OFFICER CONDUCTED NEGOTIATIONS WITH ALL 12 FIRMS AND THEY WERE ADVISED OF THEIR RESPECTIVE AREAS OF WEAKNESS AND AFFORDED AN OPPORTUNITY TO MAKE REVISIONS. AFTER REVISIONS WERE MADE, THE QUOTATIONS WERE REEVALUATED. THE RANKING REMAINED THE SAME THROUGH FIRM NUMBER NINE. YOUR POINT TOTAL INCREASED TO 193.38 AND DYNALECTRON'S POINT TOTAL INCREASED TO 375.46. THE EVALUATED ESTIMATED COST OF YOUR QUOTATION WAS $1,458,625.40, AND DYNALECTRON'S WAS $1,531,703.20, A DIFFERENCE OF $73,077.80. THESE FIGURES DO NOT INCLUDE YOUR PHASE-IN COST ESTIMATE OF $24,820. DYNALECTRON'S ESTIMATED COST WAS THE LOWEST OF THE SIX HIGHEST TECHNICALLY RANKED QUOTATIONS. SUBSEQUENT TO THE FINAL TECHNICAL EVALUATION, A 10 PERCENT WEIGHT FACTOR WAS APPLIED TO COST. THE LOW QUOTATION WAS ASSIGNED THE MAXIMUM OF 10 PERCENT AND A PERCENTAGE RATIO BETWEEN THAT QUOTATION AND THE OTHERS WAS ESTABLISHED. THE RESPECTIVE SCORES FOR COST WERE ADDED TO THE TECHNICAL POINT SCORES WITH NO RESULTING CHANGE IN THE RANKINGS.

THE SUBJECT PROCUREMENT WAS NEGOTIATED PURSUANT TO 10 U.S.C. 2304(A)(10), AS IMPLEMENTED BY PARAGRAPH 3-210.2(VIII) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). SECTION 2302, TITLE 10 U.S.C., DEFINES THE TERM "NEGOTIATE" AS MEANING TO "MAKE WITHOUT FORMAL ADVERTISING." IN A NEGOTIATED PROCUREMENT, THE RULES OF FORMALLY ADVERTISED, COMPETITIVE BIDDING, SUCH AS THE REQUIREMENT FOR AWARD TO THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER, ARE NOT CONTROLLING AND A CONTRACTING OFFICER MAY PROPERLY TAKE INTO CONSIDERATION ALL FACTORS DEEMED ESSENTIAL TO THE PROCUREMENT GOAL. TH GOAL OF THIS PROCUREMENT WAS TO PROCURE AN INDEFINITE AND INDETERMINABLE AMOUNT OF SPECIFIED SERVICES FROM A RESPONSIBLE SOURCE AT FAIR AND REASONABLE PRICES CALCULATED TO RESULT IN THE LOWEST ULTIMATE OVERALL COST TO THE GOVERNMENT. SEE ASPR 3-801.1. THIS CONNECTION, ASPR 3-806(A) STATES THAT "THE OBJECTIVE OF THE CONTRACTING OFFICER SHALL 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 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."

IT IS OUR OPINION THAT UNDER THE FOREGOING PRINCIPLES, AND IN VIEW OF THE NATURE OF THE SERVICES BEING PROCURED AND THE TYPE OF CONTRACT CONTEMPLATED, THE CONTRACTING OFFICER PROPERLY CONCLUDED THAT AWARD TO THE RESPONSIBLE FIRM QUOTING THE LOWEST ESTIMATED COST WAS NOT NECESSARILY THE MOST ADVANTAGEOUS. MOREOVER, THE RFQ INCLUDED REQUIREMENTS FOR SUBMISSION OF RELEVANT FACTORS IN ADDITION TO COST, AND INDICATED THAT THESE OTHER FACTORS WERE OF GREATER IMPORTANCE IN SELECTION OF THE CONTRACTOR. FURTHER, IT IS OUR VIEW THAT THE EVALUATION PLAN AND EVALUATION THEREUNDER GAVE DUE WEIGHT TO THE RELEVANT FACTORS ESSENTIAL TO SELECTING A FIRM WHOSE PERFORMANCE WAS CALCULATED TO RESULT IN THE LOWEST OVERALL COST TO THE GOVERNMENT.

CONCERNING YOUR CONTENTION THAT THE WEIGHTS OF THE VARIOUS FACTORS WERE NOT DISCLOSED, WE HAVE HELD THAT OFFERORS SHOULD BE INFORMED OF THE RELATIVE WEIGHT OR IMPORTANCE ATTACHED TO EACH FACTOR. 49 COMP. GEN. 229 (1969). THE RFQ WAS DEFICIENT IN THIS RESPECT. HOWEVER, IN VIEW OF THE RELATIVELY LOW TECHNICAL SCORE RECEIVED BY YOUR FIRM AND THE RELATIVELY SMALL DIFFERENCE BETWEEN YOUR'S AND DYNALECTRON'S ESTIMATED COSTS, WE DO NOT BELIEVE YOU WERE PREJUDICED BY THIS DEFICIENCY. SEE B-169764, DECEMBER 23, 1970; B-170449, NOVEMBER 17, 1970.

ALTHOUGH YOU DISAGREE WITH CERTAIN CONCLUSIONS OF THE EVALUATION TEAM WITH RESPECT TO YOUR PERSONNEL, THERE IS NO BASIS FOR OUR OFFICE TO SUBSTITUTE OUR JUDGMENT FOR THAT OF QUALIFIED EVALUATORS IN THE ABSENCE OF BASIS. ON THE BASIS OF THE RECORD BEFORE US, WE ARE UNABLE TO MAKE SUCH FINDINGS. FURTHERMORE, THE FACT THAT DYNALECTRON PROPOSES TO EMPLOY SOME LOCAL NATIONALS DOES NOT AFFORD OUR OFFICE A BASIS FOR QUESTIONING THE EVALUATION TEAM'S CONCLUSIONS WITH RESPECT TO ITS OVERALL CAPABILITY.