B-174675, FEB 23, 1972

B-174675: Feb 23, 1972

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

PROTESTANT IS AN EMPLOYEE OF THE PRESENT CONTRACTOR. CONTENDS THAT THE AWARD TO LOW BID WILL CAUSE THOUSANDS OF MINORITY WORKERS TO LOSE THEIR JOBS SINCE ITS BID IS FAR BELOW THE PRESENT MONTHLY PAYROLL COST. AWARD OF A FORMALLY ADVERTISED PROCUREMENT IS MADE TO THE LOW RESPONSIVE. RETENTION OF A REPLACED CONTRACTOR'S EMPLOYEES IS NOT A DECISIVE FACTOR IN DETERMINING A BIDDER'S ENTITLEMENT TO AN AWARD. THE CONTRACTING OFFICER'S DETERMINATION WAS PROPER AND THERE IS NO LEGAL BASIS FOR OBJECTION TO THE AWARD. THE PROCUREMENT WAS ADVERTISED UNDER INVITATION FOR BIDS (IFB) DABF03 72-B- 0008. LOW BID JANITORIAL SERVICE (LOW BID) WAS THE LOWEST BIDDER FOR THE SERVICES AT THE PRESIDIO AND AT THREE OTHER LOCATIONS.

B-174675, FEB 23, 1972

BID PROTEST - RETENTION OF EMPLOYEES OF REPLACED CONTRACTOR DECISION DENYING PROTEST OF BILL SIMMONS AGAINST AWARD OF A CONTRACT TO LOW BID JANITORIAL SERVICE UNDER AN IFB ISSUED BY THE ARMY FOR THE PERFORMANCE OF JANITORIAL SERVICES AT THE PRESIDIO OF SAN FRANCISCO. PROTESTANT IS AN EMPLOYEE OF THE PRESENT CONTRACTOR, U.S. EAGLE, INC., AND CONTENDS THAT THE AWARD TO LOW BID WILL CAUSE THOUSANDS OF MINORITY WORKERS TO LOSE THEIR JOBS SINCE ITS BID IS FAR BELOW THE PRESENT MONTHLY PAYROLL COST. UNDER THE PROVISIONS OF 10 U.S.C. 2305(C), AWARD OF A FORMALLY ADVERTISED PROCUREMENT IS MADE TO THE LOW RESPONSIVE, RESPONSIBLE BIDDER. RETENTION OF A REPLACED CONTRACTOR'S EMPLOYEES IS NOT A DECISIVE FACTOR IN DETERMINING A BIDDER'S ENTITLEMENT TO AN AWARD. IN THE INSTANT CASE, THE CONTRACTING OFFICER'S DETERMINATION WAS PROPER AND THERE IS NO LEGAL BASIS FOR OBJECTION TO THE AWARD. ACCORDINGLY, THE PROTEST MUST BE DENIED.

TO MR. BILL SIMMONS:

WE REFER TO YOUR PROTEST BY TELEGRAM OF NOVEMBER 24, 1971, ADDRESSED TO A MEMBER OF CONGRESS, AGAINST AWARD BY THE DEPARTMENT OF THE ARMY OF A CONTRACT TO LOW BID JANITORIAL SERVICE, OAKLAND, CALIFORNIA, FOR PERFORMANCE OF JANITORIAL SERVICES AT THE PRESIDIO OF SAN FRANCISCO. THE PROCUREMENT WAS ADVERTISED UNDER INVITATION FOR BIDS (IFB) DABF03 72-B- 0008, DATED AUGUST 3, 1971, AND LOW BID JANITORIAL SERVICE (LOW BID) WAS THE LOWEST BIDDER FOR THE SERVICES AT THE PRESIDIO AND AT THREE OTHER LOCATIONS.

AS AN EMPLOYEE OF U.S. EAGLE, INC. (EAGLE), THE CONTRACTOR WHICH IS CURRENTLY PERFORMING THE SERVICES IN QUESTION AT THE PRESIDIO, YOU EXPRESS FEAR THAT EAGLE'S EMPLOYEES, OF WHOM YOU STATE 95 PERCENT ARE MEMBERS OF MINORITY GROUPS, WILL LOSE THEIR JOBS IF LOW BID ASSUMES THE CONTRACT SINCE ITS BID IS THOUSANDS OF DOLLARS UNDER THE PRESENT MONTHLY PAYROLL COST. IN THIS CONNECTION, YOU ARE ADVISED THAT THE STATUTE INVOLVED, 10 U.S.C. 2305(C), REQUIRES THAT THE AWARD IN A FORMALLY ADVERTISED PROCUREMENT BE MADE TO THE LOW RESPONSIVE, RESPONSIBLE BIDDER, AND WHETHER A NEW CONTRACTOR WILL RETAIN THE EMPLOYEES OF THE REPLACED CONTRACTOR IS NOT GENERALLY A DECISIVE FACTOR IN DETERMINING THE LEGAL ENTITLEMENT OF A BIDDER TO RECEIVE THE AWARD.

SHORTLY AFTER THE OPENING OF BIDS ON NOVEMBER 17, 1971, AS SCHEDULED, THE CONTRACTING OFFICER RECEIVED A PROTEST FROM EAGLE AGAINST AN AWARD TO LOW BID ON THE BASIS THAT ITS BID WAS UNREALISTICALLY LOW. BY LETTER OF NOVEMBER 29, THE CONTRACTING OFFICER REQUESTED LOW BID TO VERIFY ITS BID PRICE, GIVING CONSIDERATION TO VARIOUS FACTORS INVOLVED IN PERFORMANCE OF THE CONTRACT, AND TO SUBMIT THE PROPOSED "METHOD OF OPERATION", WHICH THE SPECIFICATIONS REQUIRED TO BE FURNISHED BEFORE AWARD, SHOWING THE ORGANIZATION OF THE BIDDER'S WORK FORCE AND OTHER PERTINENT INFORMATION RELATING TO PERFORMANCE.

IN LETTERS DATED DECEMBER 8, 9 AND 10, 1971, LOW BID VERIFIED ITS BID PRICE AND PROVIDED THE CONTRACTING OFFICER WITH THE REQUESTED INFORMATION REGARDING ITS PROPOSED PLAN OF OPERATION AND ITS WORK FORCE. THE CONTRACTING OFFICER ACCORDINGLY SUBMITTED TO THE DEFENSE CONTRACT ADMINISTRATION SERVICES REGION (DCASR), SAN FRANCISCO, A REQUEST FOR A COMPLETE PREAWARD SURVEY OF LOW BID.

IN A REPORT DATED DECEMBER 16, DCASR RECOMMENDED THAT A COMPLETE AWARD UNDER THE IFB BE MADE TO LOW BID. ON THE FACTOR OF ABILITY TO MEET THE REQUIRED SCHEDULE, THE REPORT NOTED THAT LOW BID HAS A SATISFACTORY PERFORMANCE RATING FROM THE NATIONAL TRANSPORTATION SAFETY BOARD, THE UNITED STATES BORDER PATROL AND COMMERCIAL SOURCES, AND STATED WITH RESPECT TO PERSONNEL, "HE INTENDS TO PUT HIS OWN SUPERVISORY PERSONNEL ON THE JOB AND KEEP THE PEOPLE WHO ARE NOW ON BOARD. IF ADDITIONAL PERSONNEL ARE REQUIRED, THEY ARE AVAILABLE AT LOCAL SOURCES."

IN ADDITION, THE CONTRACTING OFFICER SUBMITTED TO THE DIRECTORATE OF FACILITIES ENGINEER AT THE PRESIDIO LOW BID'S STATEMENTS CONCERNING ITS METHOD OF OPERATION. IN A MEMORANDUM DATED DECEMBER 27, THE MAINTENANCE GENERAL FOREMAN AT THE DIRECTORATE RECOMMENDED TO THE CONTRACTING OFFICER THAT LOW BID'S METHOD OF OPERATION BE ACCEPTED.

ON DECEMBER 29, 1971, THE CONTRACTING OFFICER, ACTING IN ACCORDANCE WITH THE PROVISIONS OF ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2 407.8, ISSUED A DETERMINATION AND FINDINGS (D&F) RESPECTING THE MERITS OF THE EAGLE PROTEST. THE D&F READS, IN PART, AS FOLLOWS:

"IN ITS LETTER OF PROTEST, U.S. EAGLE, INC. PROJECTED A LOSS BY LOW BID JANITORIAL SERVICE OF $51,600 FOR THE CONTRACT PERIOD OF ONE YEAR. AT THE SAME TIME, THE BID OF U.S. EAGLE, INC. WAS $39,385.54 HIGHER FOR A ONE YEAR PERIOD THAN LOW BID JANITORIAL SERVICE, FOR THAT PORTION OF SOLICITATION IN WHICH BOTH U.S. EAGLE, INC. AND LOW BID JANITORIAL SERVICE BID. THIS WOULD INDICATE EITHER THAT THE BID OF U.S. EAGLE, INC., WOULD RESULT IN A LOSS FOR THAT COMPANY OF $12,214.46, OR THAT THEIR ESTIMATE OF LOSS FOR LOW BID JANITORIAL SERVICE IS UNREALISTIC AND INFLATED.

"THE BID OF THE SECOND LOW BIDDER, DEPENDABLE JANITORIAL SERVICE, WHO IS CURRENTLY PERFORMING SATISFACTORILY AS THE CONTRACTOR FOR THE SUB POSTS OF FT. BARRY, BAKER AND CRONKHITE (SCHEDULES D, E & F) FURTHER TENDS TO REFUTE THE PROBABLE LOSS CLAIMED BY U.S. EAGLE, AS ITS CONFIRMED BID PRICE IS ONLY $16,323.69 HIGHER THAN THE BID OF LOW BID JANITORIAL SERVICE. WHILE U.S. EAGLE, INC. ALSO PROTESTED THIS BID AS UNREALISTIC, IT REFLECTS IN COMBINATION WITH THE LOWER PRICE OF LOW BID JANITORIAL SERVICE, THE LIKELIHOOD THAT A PRICE WELL BELOW THE COST ESTIMATED BY U.S. EAGLE, IN ITS PROTEST, IS REASONABLE AND ACHIEVABLE.

"IN THAT LOW BID JANITORIAL SERVICE HAS REVIEWED AND VERIFIED ITS BID PRICE AFTER HAVING BEEN ADVISED BY THE CONTRACTING OFFICER AS TO THE POSSIBILITY THAT A MISTAKE MAY HAVE BEEN MADE, CALLING HIS ATTENTION TO THE SUSPECTED MISTAKE, AND IN THE ABSENCE OF POSITIVE EVIDENCE THAT A MISTAKE DOES IN FACT EXIST, THE CONTRACTING OFFICER MUST ASSUME THAT THE BID OF LOW BID JANITORIAL SERVICE IS ITS INTENDED AND CORRECT BID PRICE, AND FURTHER CONSIDERATION OF ITS BID IS NOT PREJUDICIAL TO THE RIGHTS OF OTHER BIDDERS. A SIMILAR JUDGMENT MUST ALSO APPLY TO THE PROTESTED BID OF DEPENDABLE JANITORIAL SERVICE.

"UPON THE BASIS OF THE FINDINGS SET FORTH ABOVE, I HEREBY DETERMINE THAT THE PROTEST OF BIDDER NO. 8, U.S. EAGLE, INC., IS WITHOUT REASONABLE FOUNDATION AND WARRANTS NO FURTHER ACTION."

AS TO YOUR ASSERTION THAT LOW BID'S PRICE IS UNDER CURRENT PAYROLL COSTS, THE CONTRACTING OFFICER ADHERES TO HIS EARLIER POSITION IN DENYING THE EAGLE PROTEST; I.E., THAT THE BID IS REALISTIC.

THE OWNER OF LOW BID, IN A LETTER OF JANUARY 3, 1972, MAKES THE FOLLOWING PERTINENT COMMENTS REGARDING YOUR PROTEST:

"AS FAR AS MINORITIES ARE CONCERNED, I AM A MINORITY MEMBER, AND PRESENTLY EMPLOY CAUCASIANS AND MINORITIES IN MY BUSINESS. THE CHANGE OF CONTRACTORS WILL NOT RESULT IN WHOLESALE FIRING OR UNEMPLOYMENT UNLESS EMPLOYEES LEAVE ON THEIR OWN VOLITION.

"THE FIRM AGREEMENT OF SERVICES TO BE PERFORMED, WAGE DETERMINATIONS, AND PLEDGE OF NON-DISCRIMINATORY PRACTICES AS REQUIRED BY LAW SHOULD ERASE ANY DOUBT THAT U.S. EAGLE'S EMPLOYEES HAVE ABOUT SALARY DROPS, DISMISSALS, OR ANY OTHER UNFAIR PRACTICES."

THE RECORD SHOWS THAT LOW BID HAS VERIFIED ITS BID AND THAT A COMPARISON OF ITS PRICE WITH THE PRICES QUOTED BY THE SECOND LOW BIDDER AND THE INCUMBENT CONTRACTOR, WHO IS THE THIRD LOW BIDDER, INDICATES THAT THE LOWEST PRICE IS NOT UNREALISTIC. IN ADDITION, THE FEASIBILITY OF LOW BID'S PROPOSED METHOD OF OPERATION APPEARS TO BE SUPPORTED BY THE RECORD AND THE RECOMMENDATION OF THE DIRECTORATE OF FACILITIES ENGINEER THAT LOW BID'S METHOD OF OPERATION BE ACCEPTED. IN THE CIRCUMSTANCES, WE ARE UNABLE TO CONCLUDE THAT THE CONTRACTING OFFICER'S DETERMINATION THAT THE LOW BIDDER IS RESPONSIVE AND RESPONSIBLE IS WITHOUT A PROPER BASIS.

ON THE RECORD BEFORE US, WE SEE NO LEGAL BASIS FOR OBJECTION TO AN OTHERWISE PROPER AWARD TO LOW BID JANITORIAL SERVICE. YOUR PROTEST IS THEREFORE DENIED.