B-171586(2), APR 29, 1971

B-171586(2): Apr 29, 1971

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THE REQUIREMENT THAT A CONTRACTOR BE LOCATED IN A GIVEN AREA IS MATTER OF RESPONSIBILITY AND WHERE BIDDERS LOCATED OUTSIDE THE PRESCRIBED GEOGRAPHICAL AREA PROPOSE EITHER TO SET UP FACILITIES IN. TO COLUMBIA RESEARCH CORPORATION: REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 22. THE PROTEST IS DENIED FOR THE REASONS HEREINAFTER STATED. THE PROTEST IS "BASED UPON THE FACT THAT JAKUS ASSOCIATES IS A NONRESPONSIVE OFFEROR. EVALUATION WILL BE BASED ON THE FOLLOWING CRITERIA: "(3) LOCATION WITHIN 50 MILES OF WASHINGTON. WILL NOT BE CONSIDERED.". YOU STATE THAT IT IS OBVIOUS THAT JAKUS HAS MADE NO SUBSTANTIAL EFFORT TO ESTABLISH AN OPERATING FACILITY WITHIN THE GEOGRAPHICAL PARAMETERS PRESCRIBED BY THE RFP.

B-171586(2), APR 29, 1971

BID PROTEST - RESPONSIBILITY - GEORGRAPHIC AREA DENYING PROTEST OF COLUMBIA RESEARCH CORPORATION AGAINST THE PROPOSED AWARD OF A CONTRACT TO JAKUS ASSOCIATED UNDER AN RFP ISSUED BY THE NAVY SUPPLY SYSTEMS COMMAND, WASHINGTON NAVY YARD FOR AN INDEFINITE NUMBER OF MAN-HOURS FOR TECHNICAL SERVICES IN SUPPORT OF PROJECT SURPASS. THE REQUIREMENT THAT A CONTRACTOR BE LOCATED IN A GIVEN AREA IS MATTER OF RESPONSIBILITY AND WHERE BIDDERS LOCATED OUTSIDE THE PRESCRIBED GEOGRAPHICAL AREA PROPOSE EITHER TO SET UP FACILITIES IN, OR TO UTILIZE THE PLANT OF ANOTHER COMPANY LOCATED WITHIN THE PRESCRIBED AREA, BIDS SHOULD NOT BE REJECTED IF OTHERWISE ACCEPTABLE.

TO COLUMBIA RESEARCH CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 22, 1971, AND PRIOR CORRESPONDENCE, PROTESTING AGAINST THE PROPOSED AWARD OF A CONTRACT TO JAKUS ASSOCIATES, SAN DIEGO, CALIFORNIA, UNDER REQUEST FOR PROPOSALS (RFP) NO. N00600-70-R-5344, ISSUED BY THE NAVAL SUPPLY SYSTEMS COMMAND, U.S. NAVY PURCHASING OFFICE, WASHINGTON NAVY YARD, FOR AN INDEFINITE NUMBER OF MAN-HOURS FOR TECHNICAL SERVICES IN SUPPORT OF PROJECT SURPASS. THE PROTEST IS DENIED FOR THE REASONS HEREINAFTER STATED.

THE PROTEST IS "BASED UPON THE FACT THAT JAKUS ASSOCIATES IS A NONRESPONSIVE OFFEROR, HAVING FAILED TO MEET THE GEOGRAPHICAL AREA LIMITATION SPECIFIED IN THE SOLICITATION." IN THIS REGARD, THE RFP CONTAINED A CAVEAT AS FOLLOWS:

"WARNING - LIMITATION OF GEOGRAPHICAL AREA

"ANY CONTRACT AWARDED AS A RESULT OF THIS SOLICITATION SHALL BE WITH A FIRM THAT HAS OPERATING FACILITIES LOCATED WITHIN A FIFTY (50) MILE RADIUS OF WASHINGTON, D.C." IN ADDITION, INSOFAR AS PERTINENT, THE RFP STATED:

"A. EVALUATION WILL BE BASED ON THE FOLLOWING CRITERIA:

"(3) LOCATION WITHIN 50 MILES OF WASHINGTON, D.C.

"B. *** OFFERS THAT DO NOT SHOW AN OPERATING FACILITY WITHIN 50 MILES OF WASHINGTON, D.C. WILL NOT BE CONSIDERED."

YOU STATE THAT IT IS OBVIOUS THAT JAKUS HAS MADE NO SUBSTANTIAL EFFORT TO ESTABLISH AN OPERATING FACILITY WITHIN THE GEOGRAPHICAL PARAMETERS PRESCRIBED BY THE RFP, BUT HAD MERELY ARRANGED TO USE THE WORKING SPACE OF ANOTHER FIRM." FURTHER, YOU STATE THAT IF SUCH AN ARRANGEMENT WAS ACCEPTABLE, THE INTENDED RESTRICTIVE CHARACTER OF THE GEOGRAPHICAL LIMITATION CLAUSE WOULD BE OF NO USEFUL EFFECT, IN THAT ANY BIDDER COULD QUALIFY FOR THE PROCUREMENT BY STATING AN INTENTION TO ESTABLISH AN OPERATING FACILITY WITHIN THE REQUIRED AREA. HOWEVER, YOU RECOGNIZE THAT THE GEOGRAPHICAL LIMITATION CLAUSE IS A SPECIAL STANDARD OF RESPONSIBILITY IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH 1 903.3 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). IN CONCLUSION, YOU INQUIRE AS TO THE ARRANGEMENTS JAKUS HAD MADE WITH THE QUEST RESEARCH CORPORATION.

OUR OFFICE HAS HELD, WITH REFERENCE TO FORMALLY ADVERTISED PROCUREMENTS, THAT THE REQUIREMENT THAT A CONTRACTOR BE LOCATED IN A GIVEN AREA IS A MATTER OF RESPONSIBILITY AND THAT WHERE BIDDERS LOCATED OUTSIDE THE PRESCRIBED GEOGRAPHICAL AREA PROPOSE EITHER TO SET UP FACILITIES IN OR TO UTILIZE THE PLANT OF ANOTHER COMPANY LOCATED WITHIN THE PRESCRIBED AREA, THE BIDS SHOULD NOT BE REJECTED IF THE BIDDERS ARE OTHERWISE ACCEPTABLE. B-163039, JANUARY 25, 1968, AND CASES CITED THEREIN. THERE IS NO REASON WHY SUCH HOLDING SHOULD NOT APPLY TO NEGOTIATED PROCUREMENTS AS WELL. THAT CONNECTION, ASPR 1-903.2 REQUIRES THAT A PROSPECTIVE CONTRACTOR:

"(I) HAVE THE NECESSARY ORGANIZATION, EXPERIENCE, OPERATIONAL CONTROLS AND TECHNICAL SKILLS, OR THE ABILITY TO OBTAIN THEM (INCLUDING WHERE APPROPRIATE, SUCH ELEMENTS AS PRODUCTION CONTROL PROCEDURES, PROPERTY CONTROL SYSTEM AND QUALITY ASSURANCE MEASURES APPLICABLE TO MATERIALS PRODUCED OR SERVICES PERFORMED BY THE PROSPECTIVE CONTRACTOR AND SUBCONTRACTORS (SEE 1-903.4); AND

"(II) HAVE THE NECESSARY PRODUCTION, CONSTRUCTION, AND TECHNICAL EQUIPMENT AND FACILITIES, OR THE ABILITY TO OBTAIN THEM. WHERE A PROSPECTIVE CONTRACTOR PROPOSES TO USE THE FACILITIES OR EQUIPMENT OF ANOTHER CONCERN, NOT A SUBCONTRACTOR, OR OF HIS AFFILIATE (SEE 2 201(ABII) AND (B)(XVII)), ALL EXISTING BUSINESS ARRANGEMENTS, FIRM OR CONTINGENT, FOR THE USE OF SUCH FACILITIES OR EQUIPMENT SHALL BE CONSIDERED IN DETERMINING THE ABILITY OF THE PROSPECTIVE CONTRACTOR TO PERFORM THE CONTRACT; SEE ALSO 1-904.2."

ASPR 1-903.4 CONSIDERS THAT ACCEPTABLE EVIDENCE OF A PROSPECTIVE CONTRACTOR'S "ABILITY TO OBTAIN" THE NECESSARY FACILITIES AND PERSONNEL REQUIRED BY ASPR 1-903.2 "SHALL NORMALLY BE A COMMITMENT OR EXPLICIT ARRANGEMENT, WHICH WILL BE IN EXISTENCE AT THE TIME THE CONTRACT IS TO BE AWARDED, FOR THE RENTAL, PURCHASE OR OTHER ACQUISITION OF SUCH RESOURCES, EQUIPMENT, FACILITIES, OR PERSONNEL."

MOREOVER, THE MATTER OF RESPONSIBILITY IS RESOLVED AS OF THE TIME THAT PERFORMANCE IS SCHEDULED TO BEGIN, NOT THE DATE SET FOR RECEIPT OF PROPOSALS. SEE 47 COMP. GEN. 373, 376 (1968) AND B-162888, JANUARY 4, 1968.

IT IS TRUE THAT JAKUS INTENDS TO UTILIZE THE FACILITIES OF QUEST RESEARCH CORPORATION, MCLEAN, VIRGINIA, A FIRM WITHIN THE PRESCRIBED GEOGRAPHICAL BOUNDARY. FURTHER, JAKUS HAS INDICATED THAT THE FIRM WILL PERFORM THE CONTRACT WITH JAKUS TECHNICAL PERSONNEL AT NO COST TO THE GOVERNMENT FOR TRAVEL BETWEEN THE WEST COAST AND WASHINGTON, D.C. ALSO, THERE IS ON FILE AN AGREEMENT DATED SEPTEMBER 30, 1970, UNDER WHICH QUEST AGREES TO PROVIDE JAKUS WITH OFFICE SPACE, TELEPHONE SERVICE, TECHNICAL ASSISTANCE, CLERICAL SUPPORT, AND CLASSIFIED DOCUMENT STORAGE, AS REQUIRED, FOR A PERIOD OF 18 MONTHS FROM THE DATE OF THE AGREEMENT OR UNTIL CANCELED BY EITHER PARTY.

THE DEFENSE CONTRACT ADMINISTRATION SERVICES DISTRICT (DCASD) HAS CONDUCTED A PREAWARD SURVEY THAT ANSWERS YOUR QUESTIONS AS TO JAKUS' ARRANGEMENTS. DCASD HAS RECOMMENDED COMPLETE AWARD AND STATED:

"A. THE PERSONNEL LIST IS NOT THE MOST RECENT LIST FURNISHED BY JAKUS UNDER THE PROPOSAL. MOST OF THE PERSONNEL IN THE LATEST LIST ARE OR HAVE BEEN EMPLOYED BY JAKUS. THOSE NOT EMPLOYED HAVE GIVEN CONSENT FOR USE OF THEIR RESUMES; HOWEVER THIS CONSENT IS NOT IN THE FORM OF AN AFFIDAVIT. OUR EXAMINATION OF THE RFP AND THE ASPR DOES NOT REVEAL ANY REQUIREMENT FOR AN AFFIDAVIT.

"B. JAKUS WOULD BEAR THE COST OF TRANSFERRING PERSONNEL AS NECESSARY TO THE WASHINGTON AREA. CHARGES TO THE GOVERNMENT FOR SUCH EXPENSE WOULD BE PRECLUDED BY THE TERMS OF THE CONTRACT, WHICH ESTABLISHES FIXED PRICE HOURLY RATES FOR SPECIFIC TASKS AS IDENTIFIED IN WORK ORDERS. IT IS UNDERSTOOD THAT THERE IS NO PROVISION IN PROPOSED CONTRACT FOR RENEGOTIATION OF THE HOURLY RATES.

"C. CONTRACTOR'S LETTER 23 NOV 70 EXPLAINS HIS PLAN FOR COMMENCING WORK UPON RECEIPT OF AWARD. THE PLAN IS RESPONSIVE TO RFP REQUIREMENTS AND APPEARS FEASIBLE. DCASD RECORDS ON JAKUS INDICATE THAT CONTRACTS ADMINISTERED HAVE BEEN PERFORMED TO SCHEDULE.

"D. ALTHOUGH JAKUS EMPLOYEES HAVE PERFORMED DUTIES IN WASHINGTON FROM TIME TO TIME, THEY WERE USUALLY ATTACHED TO JAKUS' SAN DIEGO OFFICE WITH NO PERMANENT WASHINGTON ASSIGNMENT.

"E. UNDER JAKUS' AGREEMENT WITH QUEST RESEARCH CORPORATION, QUEST WOULD IN EFFECT BE THE LANDLORD, AND IN ADDITION WOULD FURNISH THE OFFICE EQUIPMENT AND SERVICES AS INDICATED. THE ATTACHED AGREEMENT HAS BEEN REAFFIRMED PER ATTACHED QUEST LETTER 15 MAR 71 AND JAKUS ENDORSEMENT 17 MAR 71. IN OUR OPINION QUEST IS NOT AN AFFILIATE OF JAKUS UNDER THE DEFINITION OF ASPR 1-701.1(C).

"F. JAKUS WOULD BE THE PRIME CONTRACTOR FOR PROPOSED PROCUREMENT. ALTHOUGH THEY MAY ELECT TO SUBCONTRACT FOR VARIOUS SPECIFIC SERVICES, THEY WOULD NOT SUBCONTRACT THE TASKS DESCRIBED IN THE WORK ORDERS TO ANY OTHER COMPANY FOR TOTAL PERFORMANCE. IT IS BELIEVED THAT THIS PLAN IS ACCEPTABLE WITHIN THE PROVISIONS OF THE CONTRACT, THE ONLY RESTRICTION BEING THE GP REQUIREMENT TO OBTAIN THE PCO'S CONSENT ON PURCHASE ORDERS OVER $25,000.00."

IN VIEW OF THE FOREGOING, AN AWARD TO JAKUS WOULD NOT APPEAR TO BE IMPROPER.