B-176940, MAR 2, 1973, 52 COMP GEN 569

B-176940: Mar 2, 1973

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CONTRACTS - NEGOTIATION - COMPETITION - IMPRACTICABLE TO OBTAIN - PROPRIETY OF AWARD NEGOTIATION PROCEDURES PURSUANT TO A DETERMINATION AND FINDINGS FOR THE RESTORATION OF A NATIONAL MONUMENT HISTORICAL STRUCTURE ON THE BASIS IT WAS IMPRACTICABLE TO SECURE COMPETITION BY FORMAL ADVERTISING WITHIN THE MEANING OF 41 U.S.C. 252(C)(10). HAVING BEEN USED TO PREQUALIFY FIRMS SINCE THE PROCUREMENT OTHERWISE WAS TREATED AS FORMALLY ADVERTISED. THE PRESELECTION METHOD OF QUALIFYING FIRMS AND THE FAILURE TO SYNOPSIZE THE PROCUREMENT IN THE COMMERCE BUSINESS DAILY WAS RESTRICTIVE OF THE FULL AND FREE COMPETITION CONTEMPLATED BY THE ADVERTISING STATUTES. THIS REQUEST WAS PROMPTED BY YOUR DEPARTMENT'S ULTIMATE REJECTION OF THE INFORMAL PROPOSAL OF REPRESENTATIVES OF THE DEPARTMENT TO CONDUCT FURTHER NEGOTIATIONS WITH THE INTERESTED PARTIES.

B-176940, MAR 2, 1973, 52 COMP GEN 569

CONTRACTS - NEGOTIATION - COMPETITION - IMPRACTICABLE TO OBTAIN - PROPRIETY OF AWARD NEGOTIATION PROCEDURES PURSUANT TO A DETERMINATION AND FINDINGS FOR THE RESTORATION OF A NATIONAL MONUMENT HISTORICAL STRUCTURE ON THE BASIS IT WAS IMPRACTICABLE TO SECURE COMPETITION BY FORMAL ADVERTISING WITHIN THE MEANING OF 41 U.S.C. 252(C)(10), AS IMPLEMENTED BY SECTION 1 3.210 OF THE FEDERAL PROCUREMENT REGULATIONS, HAVING BEEN USED TO PREQUALIFY FIRMS SINCE THE PROCUREMENT OTHERWISE WAS TREATED AS FORMALLY ADVERTISED, ANY AWARD UNDER THE SOLICITATION WOULD BE IMPROPER, AND IF RESOLICITED THE PROCUREMENT SHOULD BE FORMALLY ADVERTISED. THE PRESELECTION METHOD OF QUALIFYING FIRMS AND THE FAILURE TO SYNOPSIZE THE PROCUREMENT IN THE COMMERCE BUSINESS DAILY WAS RESTRICTIVE OF THE FULL AND FREE COMPETITION CONTEMPLATED BY THE ADVERTISING STATUTES. FURTHERMORE, EVEN UNDER NEGOTIATION PROCEDURES, THE PREQUALIFICATION OF OFFERORS WOULD BE INCONSISTENT WITH THE REQUIREMENT THAT NEGOTIATED PROCUREMENTS BE ON A COMPETITIVE BASIS TO THE MAXIMUM PRACTICAL EXTENT.

TO THE SECRETARY OF THE INTERIOR, MARCH 2, 1973:

BY LETTER DATED FEBRUARY 1, 1973, THE DEPUTY ASSISTANT SECRETARY REQUESTED A DECISION ON THE PROTEST OF THE AMERICAN CONSTRUCTION COMPANY, INC., AGAINST THE NATIONAL PARK SERVICE'S (NPS) PROPOSED AWARD OF A CONTRACT TO S. PUMA CO., INC., FOR THE SECOND PHASE OF RESTORATION OF CASTLE CLINTON NATIONAL MONUMENT, BATTERY PARK, NEW YORK. THIS REQUEST WAS PROMPTED BY YOUR DEPARTMENT'S ULTIMATE REJECTION OF THE INFORMAL PROPOSAL OF REPRESENTATIVES OF THE DEPARTMENT TO CONDUCT FURTHER NEGOTIATIONS WITH THE INTERESTED PARTIES. THIS PROPOSAL LED TO THE WITHDRAWAL OF AMERICAN'S PROTEST ON JANUARY 23, 1973. SIMILARLY, PUMA EXPRESSED NO OBJECTION TO THE PROPOSAL. WE THEREFORE CLOSED OUR FILE ON THE PROTEST ON JANUARY 29, 1973.

IN RESPONSE TO THE DEPUTY ASSISTANT SECRETARY'S REQUEST, WE HAVE CONSIDERED THE PROTEST ON THE RECORD WHICH HAD BEEN DEVELOPED BY OUR OFFICE PRIOR TO AMERICAN'S WITHDRAWAL. COUNSEL FOR AMERICAN HAS SET FORTH NUMEROUS GROUNDS FOR PROTESTING AGAINST ANY AWARD TO PUMA. HOWEVER, UPON CLOSE EXAMINATION OF THE RECORD, THE OVERRIDING QUESTION, IN OUR VIEW, IS WHETHER AN AWARD PROPERLY CAN BE MADE UNDER THE SOLICITATION IN VIEW OF THE PROCUREMENT PRACTICES AND PROCEDURES UTILIZED.

THE RECORD SHOWS THAT ON JUNE 9, 1972, THE CONTRACTING OFFICER ISSUED DETERMINATIONS AND FINDINGS (D&F), WHEREIN HE DETERMINED TO NEGOTIATE THIS PROCUREMENT ON THE GROUND THAT IT WAS IMPRACTICABLE TO SECURE COMPETITION BY FORMAL ADVERTISING WITHIN THE MEANING OF 41 U.S.C. 252(C)(10), AS IMPLEMENTED BY SECTION 1-3.210 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR).

THE FINDINGS AND DETERMINATIONS OF THE CONTRACTING OFFICER PROVIDE, IN PERTINENT PART, AS FOLLOWS:

FINDINGS

IN ACCORDANCE WITH THE REQUIREMENTS OF SECTION 302(C)(10) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, I MAKE THE FOLLOWING FINDINGS:

1. THE RESTORATION OF PROJECTS OF HISTORIC BUILDINGS AND STRUCTURES PRESENT UNIQUE PROBLEMS NOT GENERALLY ASSOCIATED WITH PROCUREMENT AND CONTRACTING PROCEDURES. THE MEASURES APPLICABLE TO NORMAL ALTERATIONS, REPAIR, OR RECONSTRUCTION WORK WILL NOT OFFER THE NEEDED PROTECTION TO THE GOVERNMENT INTEREST. A HIGH DEGREE OF SKILL AND EXPERTISE BASED ALMOST ENTIRELY UPON EXPERIENCE WITH SIMILAR WORK AND ATTENDANT CONDITIONS AND UPON COMPETENT PERSONNEL ARE REQUIRED.

THE PROCEDURE OF PUBLIC ADVERTISING FOR BIDS TO BE FOLLOWED BY AN EVALUATION OF BIDDERS BASED TO A LARGE EXTENT ON FACTORS OTHER THAN PRICE, SUCH AS EXPERIENCE AND FAMILIARITY WITH SIMILAR CONDITIONS, IS LIKELY TO RESULT IN BIDS FROM UNQUALIFIED SOURCES AND TO STIMULATE ACTION BY UNSUCCESSFUL BIDDERS IN OBJECTING TO THE EVALUATION RESULT AND IN SEEKING A REVIEW OF SUCH RESULT.

AS A RESULT OF THIS PROBLEM, THE DIRECTOR OF SURVEY AND REVIEW, BY MEMORANDUM DATED AUGUST 30, 1967, CONCURRED IN THE RECOMMENDATION OF OUR MEMORANDUM OF AUGUST 21, 1967, THAT NEGOTIATION FOR PROJECTS INVOLVING THE RESTORATION OF HISTORIC STRUCTURES AND BUILDINGS WAS ALLOWABLE UNDER THE PROVISIONS OF SECTION 302(C)(10) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, AND WAS JUSTIFIABLE.

THE PART II RESTORATION OF CASTLE CLINTON, BATTERY PARK, NEW YORK CITY, N.Y., IS A HISTORIC STRUCTURE AND ITS RESTORATION REQUIRES SPECIAL EXPERTISE BASED UPON EXPERIENCE WITH SIMILAR WORK, ATTENDANT CONDITIONS, AND UPON COMPETENT PERSONNEL. REPRESENTATIVES OF THE NEW YORK DISTRICT AND HISTORIC PRESERVATION WILL MEET TO DISCUSS THE RESTORATION PROBLEM AT CASTLE CLINTON AND TO SELECT RESPONSIBLE FIRMS WITH THESE REQUIRED QUALIFICATIONS FROM WHOM PROPOSALS MIGHT BE SOLICITED FOR THE RESTORATION WORK.

DETERMINATIONS

1. BASED UPON THE FOREGOING FINDINGS, I HEREBY DETERMINE WITHIN THE MEANING OF SECTION 302(C)(10) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, THAT:

A. THE RESTORATION OF CASTLE CLINTON NATIONAL MONUMENT, BATTERY PARK, NEW YORK CITY, IS NECESSARY.

B. NEGOTIATION IS NECESSARY IN THIS SITUATION SINCE THE GOVERNMENT MUST BE ASSURED THAT IT WILL HAVE THE HIGH DEGREE OF SKILL AND EXPERTISE BASED ALMOST ENTIRELY UPON EXPERIENCE WITH SIMILAR WORK AND ATTENDANT CONDITIONS AND UPON COMPETENT PERSONNEL.

THE FACTS AND CIRCUMSTANCES SET FORTH IN THE D&F APPEAR TO INDICATE THAT THE ONLY REASON FOR INVOKING THE NEGOTIATION AUTHORITY WAS TO "PREQUALIFY" FIRMS WHICH HAD EXPERIENCE WITH SIMILAR WORK AND ATTENDANT CONDITIONS. NOTE, HOWEVER, THAT AN EXAMINATION OF THE MEMORANDUMS REFERRED TO IN THE D&F SUGGESTS THAT SUBSECTION (A)(9) OR (A)(13) OF FPR 1-3.210 MIGHT PROVIDE A BASIS FOR NEGOTIATION UNDER 41 U.S.C. 252(C)(10). SUBSECTION (A)(9) PROVIDES FOR NEGOTIATION "WHEN THE CONTEMPLATED PROCUREMENT INVOLVES MAINTENANCE, REPAIR, ALTERATION, OR INSPECTION AND THE EXACT NATURE OR AMOUNT OF THE WORK TO BE DONE IS NOT KNOWN." SUBSECTION (A)(13) PROVIDES FOR NEGOTIATION "WHEN IT IS IMPOSSIBLE TO DRAFT FOR AN INVITATION FOR BIDS ADEQUATE SPECIFICATIONS OR ANY OTHER ADEQUATELY DETAILED DESCRIPTION OF THE REQUIRED PROPERTY OR SERVICES." NEVERTHELESS, FROM OUR REVIEW OF THE D&F AND THE RECORD BEFORE US, WE CANNOT CONCLUDE THAT EITHER SUBSECTION WAS RELIED UPON TO SUPPORT THE "NEGOTIATION" OF THIS PROCUREMENT. APART FROM THE SILENCE OF THE D&F, THE MOST COMPELLING REASON FOR REACHING THIS CONCLUSION IS THE FACT THAT IN ALL OTHER RESPECTS THIS PROCUREMENT WAS TREATED AS A FORMALLY ADVERTISED PROCUREMENT - AN APPROACH WHICH IS WHOLLY INCONSISTENT WITH THE USE OF EITHER EXCEPTION. INDEED, IN RESPONSE TO AMERICAN'S CONTENTION CONCERNING THE ADEQUACY OF THE SPECIFICATIONS, NPS HAS DEFENDED THE ADEQUACY OF THE SPECIFICATIONS.

WITH RESPECT TO THE FORMALLY ADVERTISED ASPECTS OF THIS PROCUREMENT, THE ACTING DIRECTOR OF SURVEY AND REVIEW'S LETTER OF NOVEMBER 17, 1972, CONTAINS THE FOLLOWING PERTINENT DESCRIPTION OF THE CIRCUMSTANCES SURROUNDING THIS CONTEMPLATED PROCUREMENT:

NPS, BY SOLICITATION OF JULY 25, 1972, INVITED SIX FIRMS, ALL OF WHOM HAD BEEN ADMINISTRATIVELY DETERMINED TO BE QUALIFIED RESTORATION FIRMS, TO SUBMIT OFFERS ON OR BEFORE AUGUST 8, 1972, TO PERFORM THE PROPOSED WORK.

THE SOLICITATION, STANDARD FORM 20, STATES QUITE CLEARLY THAT OFFERS WILL BE PUBLICLY OPENED. THIS IS REITERATED IN PARAGRAPH 9, OF STANDARD FORM 22. PARAGRAPH 10 OF STANDARD FORM 22, REFERENCED IN THE BASIS OF AWARD STATEMENT AT THE END OF STANDARD FORM 21, PROVIDES FOR AWARD ON THE BASIS OF PRICE AND OTHER FACTORS.

ON AUGUST 1, 1972, A DETAILED INSPECTION OF THE WORKSITE WAS MADE BY REPRESENTATIVES OF SEVERAL OF THE PROSPECTIVE CONTRACTORS, INCLUDING BOTH AMERICAN AND PUMA. NPS OFFICIALS REMINDED ALL CONTRACTORS, IN THE COURSE OF THE SITE VISIT AND DISCUSSIONS AT THE NPS OFFICE IN CONNECTION WITH THE SITE VISIT, THAT THERE WOULD INDEED BE A PUBLIC OPENING OF PROPOSALS. NPS OFFICIALS ALSO DREW THE PROSPECTIVE CONTRACTORS' ATTENTION TO THE NOTATIONS IN THE SOLICITATION DOCUMENTS TO THE EFFECT THAT AWARD WOULD BE MADE TO THAT RESPONSIBLE OFFEROR WHOSE OFFER, CONFORMING TO THE OFFER, IS MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. THIS IS, OF COURSE, THE PREVIOUSLY NOTED MATERIAL IN STANDARD FORM 21 AND STANDARD FORM 22, REGULARLY USED IN FORMALLY ADVERTISED CONSTRUCTION CONTRACTS.

FOLLOWING THE SITE INSPECTION, THE NPS ISSUED THE MEMORANDUM OF UNDERSTANDING AND ADDENDUM 1. THESE DOCUMENTS WERE ISSUED IN THE INTEREST OF CLARIFYING TECHNICAL POINTS IN THE PLANS AND SPECIFICATIONS RAISED AT THE SITE INSPECTION. ADDENDUM 1 CLEARLY STATES THAT THERE WILL BE "NO CHANGE IN TIME OR PLACE OF PROPOSAL OPENING."

SUBSEQUENTLY, ON AUGUST 8, 1972, THE TWO PROPOSALS SUBMITTED WERE OPENED AS REQUIRED BY THE SOLICITATION AND IT WAS REVEALED THAT PUMA OFFERED $588,200 AND AMERICAN $1,221,000. THE GOVERNMENT HAVING AN ESTIMATE, REVISED AFTER THE SITE INSPECTION, OF $584,500, CONTEMPLATES AWARD TO PUMA. THIS PROTEST FOLLOWED.

SIGNIFICANTLY HERE, THE SOLICITATION, THE VERY DOCUMENTS PROSPECTIVE CONTRACTORS REVIEWED WHILE PREPARING THEIR OFFERS, EFFECTIVELY COMPLETELY LIMITED THE COMPETITION TO PRICE BY ITS UNEQUIVOCAL, LUCID, AND LONG ESTABLISHED LANGUAGE INDICATING THE BASIS OF AWARD AND IN PROVIDING FOR A PUBLIC OPENING. THESE DOCUMENTS ADVISED ALL PROSPECTIVE CONTRACTORS THAT AWARD WAS CONTEMPLATED BASED UPON THE INITIAL PRICE SUBMISSION. THIS WAS REINFORCED AT THE SITE INSPECTION AND CONFERENCE. THE PROPOSERS, HAVING BEEN MADE AWARE BY NPS, MADE THEIR SUBMISSIONS AND NO COMPLAINT SHOULD NOW BE HEARD IF AWARD IS MADE AS ALL KNEW WAS ORIGINALLY CONTEMPLATED.

MOREOVER, CONSISTENT WITH THE USE OF THE NEGOTIATION AUTHORITY OF 41 U.S.C. 252(C)(10) ONLY FOR THE PURPOSE OF "PREQUALIFYING" WE UNDERSTAND THAT THIS PROCUREMENT WAS NOT SYNOPSIZED IN THE COMMERCE BUSINESS DAILY AS IS CONTEMPLATED BY FPR 1-1.1003-2.

IN OUR OPINION, A DESIRE TO PREQUALIFY FIRMS IS NOT A SUFFICIENT BASIS FOR INVOKING THE NEGOTIATION AUTHORITY OF 41 U.S.C. 252(C)(10). SEE 41 COMP. GEN. 484(1962). IN REALITY, THE PROCUREMENT WAS TREATED AS FORMALLY ADVERTISED AND WOULD HAVE BEEN SO DENOMINATED BUT FOR THE DESIRE TO PREQUALIFY FIRMS. SUCH BEING THE CASE, WE SEE NO REASON WHY THE PROCUREMENT SHOULD NOT BE TREATED AS FORMALLY ADVERTISED. IN THIS POSTURE, THE RESOLUTION OF A RESPONSIBILITY QUESTION - A FIRM'S QUALIFICATIONS TO PERFORM THE WORK - THROUGH AN UNAUTHORIZED PRESELECTION METHOD IS INCONSISTENT AND AT ODDS WITH THE FULL AND FREE COMPETITIVE ADVERTISING PROCEDURES. GENERALLY, RESPONSIBILITY DETERMINATIONS REQUIRED BY 41 U.S.C. 253(B) ARE TO BE RESOLVED AFTER BID OPENING BUT, IN ANY EVENT, BEFORE AWARD. THIS PREQUALIFICATION PROCEDURE, COUPLED WITH THE DELIBERATE DECISION NOT TO CIRCULARIZE THE PROCUREMENT IN THE COMMERCE BUSINESS DAILY IN FURTHERANCE OF PREQUALIFICATION, RESULTS IN AN UNWARRANTED RESTRICTION ON THE FULL AND FREE COMPETITION CONTEMPLATED BY THE FORMAL ADVERTISING STATUTES. EVEN UNDER NEGOTIATION PROCEDURES, THE PREQUALIFICATION PROCEDURE EMPLOYED HERE WOULD BE INCONSISTENT WITH THE REQUIREMENT THAT NEGOTIATED PROCUREMENTS BE ON A COMPETITIVE BASIS TO THE MAXIMUM PRACTICAL EXTENT. FPR 1-1.301-1; CF. 50 COMP. GEN. 215(1970).

FOR THE FOREGOING REASONS, WE MUST CONCLUDE THAT ANY AWARD UNDER THE EXISTING SOLICITATION WOULD BE IMPROPER. ANY RESOLICITATION OF THE REQUIREMENT SHOULD BE ADMINISTERED IN ACCORDANCE WITH THE REQUIREMENTS OF SUBPART 1-2.2 OF THE FPR WHICH GOVERNS THE SOLICITATION OF BIDS BY FORMAL ADVERTISING.

PLEASE ADVISE US OF THE ACTION TAKEN IN THIS MATTER.