B-173536, OCT 22, 1971

B-173536: Oct 22, 1971

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PROTESTANT'S CONTENTION THAT THEIR BID PRICE WAS IMPROPERLY REVEALED TO SOUTHERN CANNOT BE SUPPORTED FROM THE FACTS IN THIS RECORD. WHILE THE PREAWARD SURVEY MAY HAVE BEEN UNTIMELY. ASPR 3-508.2(B) PROVIDES THAT AWARD OF A CONTRACT MAY BE MADE BEFORE ISSUANCE OF PREAWARD NOTICES IF THERE IS AN URGENT PROCUREMENT SITUATION. AS WAS DETERMINED TO BE THE CASE HERE. WAS ISSUED ON APRIL 20. A FIRM FIXED PRICE CONTRACT WAS CONTEMPLATED. YOUR FIRM'S QUOTATION WAS $142. SOUTHERN'S WAS $165. WAS REQUESTED TO PERFORM A PREAWARD SURVEY ON YOUR FIRM. BEST AND FINAL OFFERS WERE REQUESTED FROM ALL OFFERORS BY JUNE 15. A PREAWARD SURVEY WAS THEN MADE OF SOUTHERN'S FACILITY RESULTING IN A SATISFACTORY REPORT ON JUNE 30.

B-173536, OCT 22, 1971

BID PROTEST - PREAWARD SURVEY - DISCLOSURE OF BID POSITION - PREAWARD NOTICE DENIAL OF PROTEST AGAINST THE AWARD OF A CONTRACT TO SOUTHERN ASSOCIATED ENGINEERS, INC., UNDER AN RFQ ISSUED BY THE U.S. ARMY SAFEGUARD SYSTEM COMMAND ON A 100 PERCENT SMALL BUSINESS SET-ASIDE PROCUREMENT FOR "TECHNICAL ASSISTANCE AND SUPPORT (ILLUSTRATIONS)" FOR FY 1972. PROTESTANT'S CONTENTION THAT THEIR BID PRICE WAS IMPROPERLY REVEALED TO SOUTHERN CANNOT BE SUPPORTED FROM THE FACTS IN THIS RECORD. WHILE THE PREAWARD SURVEY MAY HAVE BEEN UNTIMELY, THAT DOES NOT PROVIDE A BASIS FOR OVERTURNING THE CONTRACT. FURTHER, ASPR 3-508.2(B) PROVIDES THAT AWARD OF A CONTRACT MAY BE MADE BEFORE ISSUANCE OF PREAWARD NOTICES IF THERE IS AN URGENT PROCUREMENT SITUATION, AS WAS DETERMINED TO BE THE CASE HERE.

TO REPRO SERVICES, INCORPORATED:

WE REFER TO YOUR LETTER DATED JULY 2, 1971, WITH ENCLOSURES, PROTESTING AGAINST THE AWARD OF A CONTRACT TO SOUTHERN ASSOCIATED ENGINEERS, INCORPORATED (SOUTHERN), UNDER REQUEST FOR QUOTATIONS (RFQ) NO. DAHC60-71- Q-0201, ISSUED BY THE UNITED STATES ARMY SAFEGUARD SYSTEM COMMAND, HUNTSVILLE, ALABAMA.

THE SUBJECT SOLICITATION, A 100 PERCENT SMALL BUSINESS SET-ASIDE, WAS ISSUED ON APRIL 20, 1971, FOR "TECHNICAL ASSISTANCE AND SUPPORT (ILLUSTRATIONS)" FOR FY 1972. A FIRM FIXED PRICE CONTRACT WAS CONTEMPLATED. SIX FIRMS SUBMITTED QUOTATIONS BY MAY 20, 1971. YOUR FIRM'S QUOTATION WAS $142,430; AND SOUTHERN'S WAS $165,055.

ON JUNE 1, 1971, THE DCASO, HUNTSVILLE, ALABAMA, WAS REQUESTED TO PERFORM A PREAWARD SURVEY ON YOUR FIRM. THIS RESULTED IN A SATISFACTORY REPORT ON JUNE 10, 1971. SHORTLY THEREAFTER, BEST AND FINAL OFFERS WERE REQUESTED FROM ALL OFFERORS BY JUNE 15, 1971. YOUR FIRM LOWERED ITS PRICE TO $136,730, WHILE SOUTHERN LOWERED ITS PRICE TO $124,660. A PREAWARD SURVEY WAS THEN MADE OF SOUTHERN'S FACILITY RESULTING IN A SATISFACTORY REPORT ON JUNE 30, 1971.

ON JUNE 30, 1971, THE CONTRACTING OFFICER DETERMINED THAT, DUE TO THE URGENCY OF THE PROCUREMENT, PREAWARD NOTICES COULD NOT BE ISSUED TO UNSUCCESSFUL OFFERORS AS PRESCRIBED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3-508.2. NOTICES WERE THEREFORE ISSUED TO UNSUCCESSFUL OFFERORS ON JULY 1, 1971, THE DATE OF THE AWARD TO SOUTHERN.

THE INITIAL PORTION OF YOUR PROTEST QUESTIONS THE PROPRIETY OF THE PREAWARD SURVEY CONDUCTED OF YOUR FACILITY IN THE FOLLOWING MANNER:

" *** A PRE-AWARD SURVEY WAS CONDUCTED BY DCAS ON JUNE 7, 1971. WE HAVE BEEN INFORMED THAT THE SUCCESSFUL PROPOSERS ARE USUALLY THE ONLY ONES THAT HAVE PRE-AWARD SURVEYS CONDUCTED AT THEIR FACILITIES. ONE DISCONCERTING FACTOR CONCERNING THE PRE-AWARD BY DCAS WAS THAT SOUTHERN ASSOCIATED ENGINEERS HAD KNOWLEDGE OF THE IMPENDING SURVEY. AT THAT TIME, SOUTHERN ASSOCIATED ENGINEERS WAS RENTING SPACE AND EQUIPMENT FROM REPRO SERVICES (IN ORDER TO FACILITATE THE FY '71 CONTRACT) AND THEY LOCKED THEIR LEASED SPACE TO PREVENT IT FROM BEING SURVEYED. ONE OF THEIR EMPLOYEES ADVISED THAT HE WAS AWARE OF THE IMPENDING SURVEY AND THIS WAS THE REASON FOR LOCKING THE LEASED AREA. WE ASKED THE DCAS REPRESENTATIVE IF THEY NORMALLY ADVISE COMPETITORS WHEN A PRE-AWARD SURVEY IS TO BE MADE. THE DCAS REPRESENTATIVE SAID THAT HE DID NOT KNOW HOW THE COMPETITION FOUND OUT HE WAS INTENDING TO SURVEY REPRO SERVICES BECAUSE HE DIDN'T TELL ANYONE EXCEPT US. AT THE TIME THE DCAS REPRESENTATIVE PHONED US FOR AN APPOINTMENT TO SURVEY, SOUTHERN ASSOCIATED ENGINEERS APPARENTLY KNEW OF THE SURVEY FROM OTHER SOURCES, PROBABLY WITHIN THE SAFEGUARD COMMAND, WHICH REQUESTED DCAS TO MAKE THE SURVEY. THERE WAS AN APPARENT LEAK OF INFORMATION TO A COMPETITOR ABOUT THE PRE-AWARD SURVEY.

"WHAT OTHER INFORMATION ABOUT OUR ORIGINAL BID THAT WAS LEAKED TO SOUTHERN ASSOCIATED ENGINEERS SHOULD BE AS EQUALLY DISTURBING TO THE GOVERNMENT AS IT IS TO US."

YOU APPARENTLY CONTEND THAT SINCE SOUTHERN LOCKED THEIR FACILITIES DURING THE PREAWARD SURVEY THE IMPLICATION ARISES THAT SOUTHERN WAS INFORMED OF THE IMPENDING SURVEY AND POSSIBLY RECEIVED INFORMATION REGARDING YOUR ORIGINAL PRICE. THE CONTRACTING OFFICER HAS BEEN ADVISED BY SOUTHERN THAT THEY RECEIVED NO ADVANCE NOTICE OF THE SURVEY AND THAT THEIR FACILITY WAS LOCKED BECAUSE THEY WERE WORKING ON CLASSIFIED MATERIALS AT THE TIME. SOUTHERN ALSO CONTENDS THAT THEY HAVE NOT BEEN ABLE TO DETERMINE THE IDENTITY OF THE EMPLOYEE WHO ALLEGEDLY MADE THE STATEMENT CONCERNING THE SURVEY. IN ADDITION, THE CONTRACTING OFFICER ADVISES US THAT HE HAS BEEN ABLE TO DISCOVER NO EVIDENCE WHICH COULD LEAD TO A CONCLUSION THAT SOUTHERN KNEW OF THE IMPENDING PREAWARD SURVEY OR THAT YOUR PRICE WAS DIVULGED BY PROCUREMENT PERSONNEL.

IN VIEW OF THE EXPLANATION OFFERED BY THE CONTRACTING OFFICER, THE EVIDENCE WHICH YOU HAVE PUT FORTH - CONSISTING OF THE FACT THAT SOUTHERN LOCKED THEIR FACILITY AND THE ALLEGED STATEMENT OF THE SOUTHERN EMPLOYEE - DOES NOT AFFORD US A PROPER BASIS FOR REJECTING THE ADMINISTRATIVE VERSION.

ALTHOUGH WE RECOGNIZE THE POSSIBILITY THAT THE MERE INSTITUTION OF A PREAWARD SURVEY DURING NEGOTIATIONS CAN IN A PARTICULAR CASE GIVE RISE TO THE INFERENCE THAT AN OFFEROR'S PRICE IS LOW IN RELATION TO THAT OF ANOTHER, WE DO NOT BELIEVE THAT SUCH ACTION PER SE CONSTITUTES THE USE OF AN AUCTION TECHNIQUE (I.E., INFORMING AN OFFEROR THAT HIS PRICE IS NOT LOW) WHICH IS PROHIBITED BY ASPR 3-805.1(B). SEE 48 COMP. GEN. 323 (1968). WE ARE INFORMED THAT THIS PARTICULAR SURVEY WAS PERFORMED WHEN IT WAS BECAUSE OF AN ERROR BY THE CONTRACT SPECIALIST. ALTHOUGH THE SURVEY WAS, PERHAPS, ILL TIMED, IT DOES NOT AFFORD A BASIS FOR OVERTURNING THE RESULTING CONTRACT SINCE SUCH SURVEYS MAY BE TAKEN OF ANY PROSPECTIVE AWARDEE, NOT JUST THE LOW OFFEROR. FURTHER, THERE IS NO DIRECT EVIDENCE TO SHOW THAT THE SURVEY CAUSED YOUR PRICE OR RELATIVE STANDING TO BE DISCLOSED.

YOU CONTEND, FURTHER, THAT THE AWARD WAS IMPROPER BECAUSE AT THE TIME OF AWARD SOUTHERN DID NOT HAVE THE FACILITIES TO PRODUCE THE REQUIRED SUPPLIES. YOU POSE THE POSSIBILITY THAT SOUTHERN INTENDED IMPROPERLY TO SUBCONTRACT WITH A LARGE BUSINESS FOR THE NECESSARY SUPPLIES. THE CONTRACTING OFFICER HAS INFORMED US AS FOLLOWS:

" *** ON THE DAY OF AWARD, SOUTHERN ASSOCIATED ENGINEERS, INC. INFORMED SAFSCOM THAT IT HAD ALL THE NECESSARY PHOTO LAB EQUIPMENT AVAILABLE TO PERFORM THE CONTRACT. THIS EQUIPMENT WAS TO BE SET UP BY 5 JULY, TAB K. THIS COMMAND DETERMINED IT WOULD NOT HAVE ANY REQUIREMENTS FROM 1-5 JULY REQUIRING THIS EQUIPMENT, *** . THE POTENTIAL SUBCONTRACTING WITH A LARGE BUSINESS REVEALED IN THE PRE AWARD SURVEY WAS NOT CONTEMPLATED AT THE TIME OF AWARD. SAFSCOM DETERMINED, WHEN THE AWARD WAS MADE, THAT A LARGE BUSINESS WOULD NOT BE NEEDED. SOUTHERN ASSOCIATED ENGINEERS HAS NOT SUBCONTRACTED WITH ANY LARGE BUSINESS UNDER THE CONTRACT PROTESTED, ***

IN ANY CASE, SUBCONTRACTING WITH A LARGE BUSINESS CONCERN UNDER A SMALL BUSINESS SET-ASIDE IS NOT IMPROPER SO LONG AS THE SMALL BUSINESS FIRM MAKES SOME SIGNIFICANT CONTRIBUTION TO THE MANUFACTURE OR PRODUCTION OF THE CONTRACT END ITEM. SEE 49 COMP. GEN. 41 (1969). WE NOTE ALSO THAT YOUR FIRM HAS SUBMITTED NO WRITTEN PROTEST TO THE CONTRACTING OFFICER CONTESTING SOUTHERN'S SELF-CERTIFICATION PURSUANT TO ASPR 1-703. IN LIGHT OF THE FOREGOING CIRCUMSTANCES, WE FIND IN THIS CASE NO VIOLATION OF THE RULES APPLICABLE TO SMALL BUSINESS SET-ASIDES.

FINALLY, YOU CONTEND THAT THE PREAWARD NOTICE REQUIRED BY ASPR 3 508.2 WAS NOT PROPERLY ISSUED. AS NOTED, THE CONTRACTING OFFICER CONTENDS THAT THE REQUIREMENT IN ASPR 3-508.2(B) COULD NOT BE MET BECAUSE OF AN URGENT NEED FOR CONTINUED ILLUSTRATIONS SUPPORT. THE PROVISION CONTAINS AN EXCEPTION TO THE NOTICE REQUIREMENT IN THE CASE OF AN URGENT PROCUREMENT. REGARDLESS OF THE VALIDITY OF THE CONTRACTING OFFICER'S CONTENTION, WE CANNOT FIND ANY BASIS FOR CONCLUDING THAT A FAILURE TO GIVE THE NOTICE CALLED FOR BY THE ASPR, WHICH WAS OBVIOUSLY INTENDED SIMPLY TO INDICATE TO THE OFFERORS GIVEN NOTICE THAT ANY ADDITIONAL EFFORT DIRECTED TOWARD IMPROVEMENT OF THE PROPOSAL WOULD NOT BE FRUITFUL SO FAR AS THE SPECIFIC PROCUREMENT IS CONCERNED, COULD AFFECT THE VALIDITY OF THE AWARD.

ACCORDINGLY, YOUR PROTEST MUST BE DENIED.