B-177412, MAR 20, 1973, 52 COMP GEN 593

B-177412: Mar 20, 1973

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WHOSE PROPOSAL WAS ADMINISTRATIVELY LOST. HAD NOT SUBMITTED A PROPOSAL WAS NOT SOUND PROCUREMENT PRACTICE. THE CONTRACT NEGOTIATED PURSUANT TO SECTION 1 3.210 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR) ON THE BASIS OF A DETERMINATION AND FINDINGS (D&F) THAT IT WAS IMPRACTICABLE TO SECURE COMPETITION BECAUSE ONLY THREE SOURCES HAD TOP SECURITY CLEARANCE NEED NOT BE TERMINATED FOR THAT REASON AS THE LOST PROPOSAL COULD ONLY BE ESTABLISHED BY SELF-SERVING STATEMENTS. TERMINATION OF THE AWARD NEVERTHELESS IS RECOMMENDED IN VIEW OF THE FACT NEGOTIATION PROCEDURES WERE USED TO CONVERT THE SUCCESSFUL CONTRACTOR'S SECRET CLEARANCE TO TOP SECRET. COPIES OF THE DECISION ARE TRANSMITTED TO THE CONGRESSIONAL COMMITTEES NAMED IN SECTION 232 OF THE LEGISLATIVE REORGANIZATION ACT OF 1970.

B-177412, MAR 20, 1973, 52 COMP GEN 593

CONTRACTS - NEGOTIATION - REQUESTS FOR PROPOSALS - LOST ALTHOUGH THE FAILURE TO INQUIRE WHY THE INCUMBENT CONTRACTOR FURNISHING SECURITY WATCHMAN SERVICES, WHOSE PROPOSAL WAS ADMINISTRATIVELY LOST, HAD NOT SUBMITTED A PROPOSAL WAS NOT SOUND PROCUREMENT PRACTICE, THE CONTRACT NEGOTIATED PURSUANT TO SECTION 1 3.210 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR) ON THE BASIS OF A DETERMINATION AND FINDINGS (D&F) THAT IT WAS IMPRACTICABLE TO SECURE COMPETITION BECAUSE ONLY THREE SOURCES HAD TOP SECURITY CLEARANCE NEED NOT BE TERMINATED FOR THAT REASON AS THE LOST PROPOSAL COULD ONLY BE ESTABLISHED BY SELF-SERVING STATEMENTS. HOWEVER, TERMINATION OF THE AWARD NEVERTHELESS IS RECOMMENDED IN VIEW OF THE FACT NEGOTIATION PROCEDURES WERE USED TO CONVERT THE SUCCESSFUL CONTRACTOR'S SECRET CLEARANCE TO TOP SECRET, AND THE D&F DID NOT SATISFY THE CRITERIA IN FPR SECTION 1-3.305(B), BUT RATHER PREQUALIFIED THE THREE FIRMS THUS RESTRICTING COMPETITION. ANY RESOLICITATION SHOULD CONSIDER USING FORMAL ADVERTISING AND SHOULD TREAT TOP SECURITY CLEARANCE AS A MATTER OF BIDDER RESPONSIBILITY. GENERAL ACCOUNTING OFFICE - RECOMMENDATIONS IMPLEMENTATION WHEN A UNITED STATES GENERAL ACCOUNTING OFFICE DECISION CONTAINS A RECOMMENDATION FOR CORRECTIVE ACTION, COPIES OF THE DECISION ARE TRANSMITTED TO THE CONGRESSIONAL COMMITTEES NAMED IN SECTION 232 OF THE LEGISLATIVE REORGANIZATION ACT OF 1970, AND THE CONTRACTING AGENCY'S ATTENTION IS DIRECTED TO SECTION 236 OF THE ACT WHICH REQUIRES THE AGENCY TO SUBMIT WRITTEN STATEMENTS OF THE ACTION TO BE TAKEN ON THE RECOMMENDATION TO THE HOUSE AND SENATE COMMITTEES ON GOVERNMENT OPERATIONS NOT LATER THAN 60 DAYS AFTER THE DATE OF THE DECISION, AND TO THE COMMITTEES ON APPROPRIATIONS IN CONNECTION WITH THE FIRST REQUEST FOR APPROPRIATIONS MADE BY THE AGENCY MORE THAN 60 DAYS AFTER THE DATE OF THE DECISION.

TO THE ACTING ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, MARCH 20, 1973:

THE VIEWS OF THE GENERAL SERVICES ADMINISTRATION (GSA) ON THE PROTEST OF SULLIVAN SECURITY SERVICE, INC. (SULLIVAN), AGAINST THE AWARD OF A CONTRACT TO THE ENSEC CORPORATION (ENSEC) UNDER REQUEST FOR PROPOSALS (RFP) GS-03B-17977(NEG), ISSUED BY REGION 3 OF THE PUBLIC BUILDINGS SERVICE, WERE TRANSMITTED TO OUR OFFICE BY REPORTS DATED DECEMBER 15, 1972, AND FEBRUARY 12, 1973, FROM THE GENERAL COUNSEL AND ACTING CHIEF COUNSEL, RESPECTIVELY.

THIS RFP FOR SECURITY WATCHMAN SERVICES WAS NEGOTIATED PURSUANT TO THE AUTHORITY OF SECTION 302(C)(10) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, 41 U.S.C. 252(C)(10), IMPLEMENTED BY SECTION 1-3.210 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR), BECAUSE IT WAS IMPRACTICABLE TO SECURE COMPETITION. THE DETERMINATION AND FINDINGS (D&F) PROVIDED:

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 FEDERAL AVIATION ADMINISTRATION, THROUGH OUR WEST MARYLAND FIELD OFFICE, HAS REQUESTED THAT SECURITY GUARD SERVICES AT THE FAA RECORDS CENTER, MARTINSBURG, WEST VIRGINIA, BE CONTINUED FOR ANOTHER YEAR.

2. IT IS A REQUIREMENT OF THE SPECIFICATIONS AND FAA THAT THE CONTRACTOR'S PERSONNEL HAVE TOP SECRET CLEARANCES.

3.ONLY 3 FIRMS ARE KNOWN TO HAVE TOP SECRET CLEARANCES. THEY ARE AS FOLLOWS:

SULLIVAN SECURITY AGENCY, INC., MARTINSBURG, WV

FEDERAL SERVICES, INC., WASHINGTON, DC

ENSEC SERVICES CORPORATION, TIMONIUM, MD

DETERMINATION

BASED ON 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:"IT IS IMPRACTICABLE TO SECURE COMPETITION FOR THE REQUIRED SERVICES," AND I DO HEREBY AUTHORIZE NEGOTIATION WITH THE FIRMS MENTIONED ABOVE.

THE INITIAL SOLICITATION FOR THESE SERVICES WAS ISSUED JULY 7, 1972, AND OFFERS RECEIVED BY JULY 17, 1972. BEFORE AWARD COULD BE MADE, NEW WAGE RATE DETERMINATIONS WERE ISSUED BY THE DEPARTMENT OF LABOR. CONSEQUENTLY, THAT RFP WAS CANCELED AND THIS SOLICITATION WAS ISSUED ON OCTOBER 2, 1972, INCORPORATING THE NEW WAGE RATES. OFFERS WERE REQUIRED TO BE SUBMITTED TO THE BID RECEIVING OFFICE, REGION 3, ROOM 7065B, BY CLOSE OF BUSINESS OCTOBER 13, 1972.

THE RECORD SHOWS THAT ENSEC'S PROPOSAL WAS THE ONLY ONE RECEIVED BY THE REQUIRED TIME. ON OCTOBER 27, 1972, A NOTICE OF AWARD WAS MAILED TO ENSEC. SINCE SULLIVAN HAD NOT RECEIVED ANY NOTICE CONCERNING AWARD, IT TELEPHONED THE CONTRACTING OFFICER ON NOVEMBER 2, 1972, FOR INFORMATION CONCERNING ITS PROPOSAL. IT IS REPORTED BY THE CONTRACTING OFFICER THAT THIS WAS HIS FIRST INDICATION THAT SULLIVAN HAD SUBMITTED A PROPOSAL. INVESTIGATION ESTABLISHED THAT SULLIVAN SENT A CERTIFIED LETTER (NO. 730719), APPARENTLY ADDRESSED AS INDICATED IN THE RFP, WHICH WAS RECEIVED AND SIGNED FOR IN THE GSA MAILROOM AT APPROXIMATELY 3:20 P.M. ON OCTOBER 11, 1972. THE COURSE OF THE LETTER WAS TRACED BY THE MAILROOM EMPLOYEE WHO SIGNED FOR IT AS FOLLOWS:

WHEN A LETTER IS RECEIVED IN THE MAIL ROOM MARKED "CERTIFIED" I SIGN FOR IT. IF THE LETTER REFLECTS A BID, IT IS SENT TO THE BID ROOM ON THE FIRST FLOOR OF THE ROB. THE LETTER IS NOT LOGGED INTO THE MAIL ROOM LOG BUT IS LOGGED IN AT THE BID ROOM UPON RECEIPT THERE. IF THE LETTER IS NOT ACCEPTED IN THE BID ROOM, IT IS DELIVERED TO ROOM 7065. IN THIS CASE, THE CERTIFIED BID NO. 730719 WAS SENT TO THE BID ROOM, BUT SINCE IT WAS NOT LOGGED INTO THE LOG BOOK THERE IT WAS DELIVERED TO ROOM 7065, AS REFLECTED IN OUR LOG, A COPY OF WHICH IS ATTACHED HERETO. THE PERSON DELIVERING A CERTIFIED BID TO ROOM 7065 IS NOT REQUIRED TO HAVE THE ADDRESSEE SIGN UPON RECEIPT THEREOF.

CERTIFIED BID NO. 730719 WAS HANDLED IN THE REGULAR MANNER AS SET FORTH ABOVE. I HAVE NO KNOWLEDGE OF WHAT HAPPENED AFTER DELIVERY TO ROOM 7065.

TO DATE, THE LOST LETTER HAS NOT BEEN LOCATED.

IT IS SULLIVAN'S CONTENTION THAT SINCE ITS PROPOSAL WAS RECEIVED TIMELY BY GSA, SULLIVAN SHOULD NOT BE DENIED THE OPPORTUNITY TO COMPETE FOR THE AWARD BECAUSE GSA WAS NEGLIGENT IN HANDLING THE PROPOSAL. THE GENERAL COUNSEL CONCLUDES, IN THIS REGARD, THAT SINCE THE PROPOSAL IS LOST AND THE ONLY MEANS OF ESTABLISHING ITS CONTENTS WOULD BE ON THE BASIS OF SULLIVAN'S SELF-SERVING STATEMENTS AFTER ENSEC'S PRICES HAVE BEEN EXPOSED, NO BASIS EXISTS TO CANCEL THE AWARD.

WE CONCUR WITH THE GENERAL COUNSEL'S CONCLUSION SO FAR AS IT RELATES TO THE LOST PROPOSAL.

SULLIVAN HAS BEEN THE INCUMBENT CONTRACTOR FOR THE PAST 5 CONSECUTIVE YEARS. MOREOVER, SULLIVAN EXTENDED ITS CONTRACT AT THE REQUEST OF THE PROCUREMENT OFFICER ON A MONTHLY BASIS FROM JUNE 1972 THROUGH FEBRUARY 1973. COMMENCING IN SEPTEMBER 1972, SULLIVAN REQUESTED AND RECEIVED INCREASED HOURLY WAGE RATES FROM $2.65 TO $3. MOREOVER, ON OCTOBER 10, 1972, ONE OF SULLIVAN'S OFFICERS TELEPHONED THE CONTRACTING OFFICER TO QUERY HIM CONCERNING THE MINIMUM MAN-HOUR REQUIREMENTS AND ALSO INFORMED HIM THAT SULLIVAN'S PROPOSAL UNDER THE INSTANT RFP WAS BEING MAILED THAT SAME DAY.

OUR CONSIDERATION OF THE CIRCUMSTANCES SURROUNDING SULLIVAN'S ABORTED ATTEMPT TO COMPETE FOR THIS AWARD LEADS US TO CONCLUDE THAT SINCE THE CONTRACTING OFFICER KNEW FROM THE BEGINNING OF SULLIVAN'S ON-GOING INTEREST AND THAT THE FIELD OF POTENTIAL COMPETITORS WAS LIMITED TO THREE SOURCES, INCLUDING SULLIVAN, SOUND PROCUREMENT PRACTICE SHOULD HAVE PROMPTED AN INQUIRY TO DETERMINE WHETHER SULLIVAN HAD SUBMITTED A PROPOSAL. WHILE WE DO NOT BELIEVE THAT THESE CIRCUMSTANCES THEMSELVES WARRANT OUR OFFICE TO RECOMMEND TERMINATION OF THE CONTRACT AWARDED ENSEC, FOR THE FOLLOWING REASONS, WE DO MAKE SUCH A RECOMMENDATION.

THE FINDINGS SUPPORTING THE DETERMINATION TO NEGOTIATE THIS PROCUREMENT STATE THAT IT IS A REQUIREMENT THAT THE CONTRACTOR HAVE A TOP SECRET CLEARANCE AND THAT ONLY THE THREE LISTED FIRMS ARE KNOWN TO POSSESS THE REQUISITE CLEARANCE. ON THIS BASIS, THE CONTRACTING OFFICER DETERMINED THAT NEGOTIATION WAS NECESSARY BECAUSE IT WAS IMPRACTICABLE TO OBTAIN COMPETITION. IN THIS REGARD, FPR 1-3.305(B) PROVIDES:

EACH DETERMINATION AND FINDINGS REQUIRED*** SHALL BE SIGNED BY THE OFFICIAL MAKING THE DETERMINATION AND FINDINGS AND SHALL SET OUT ENOUGH FACTS AND CIRCUMSTANCES TO CLEARLY JUSTIFY THE SPECIFIC DETERMINATION MADE. EACH DETERMINATION AND FINDINGS REQUIRED TO NEGOTIATE EITHER AN INDIVIDUAL CONTRACT OR A CLASS OF CONTRACTS UNDER SECS.*** 1-3,210 ***SHALL SET FORTH ENOUGH FACTS AND CIRCUMSTANCES TO CLEARLY AND CONVINCINGLY ESTABLISH THAT THE USE OF FORMAL ADVERTISING WOULD NOT HAVE BEEN FEASIBLE OR PRACTICABLE.

WE NOTE THAT, CONTRARY TO THE D&F, ENSEC DID NOT HAVE THE REQUISITE TOP SECRET CLEARANCE, BUT HELD ONLY A SECRET CLEARANCE. IN A SUPPLEMENTARY REPORT OF FEBRUARY 9, 1973, THE CONTRACTING OFFICER PROFERRED THE FOLLOWING:

BASIS FOR C(10) NEGOTIATION WAS DUE TO THE SECURITY REQUIREMENTS FOR THE CONTRACT. IT WAS FELT THAT IT WAS NECESSARY TO SOLICIT OFFERS ONLY FROM FIRMS WHO HELD A SECRET CLEARANCE, WHICH COULD READILY BE CONVERTED TO A TOP SECRET. WE DID NOT RESTRICT THE OFFERS TO COMPANIES WHO ALREADY POSSESSED A TOP SECRET CLEARANCE, BECAUSE IT WAS FELT THIS WOULD TOO STRINGENTLY RESTRICT THE POSSIBLE OFFERORS.

THE INCONSISTENCY BETWEEN THE D&F AND THE ABOVE STATEMENT CONCERNING THE NEED TO UTILIZE NEGOTIATION PROCEDURES BECAUSE OF SECURITY REQUIREMENTS IS APPARENT. IN EITHER EVENT (SECRET OR TOP SECRET CLEARANCE), WE DO NOT BELIEVE THAT THE FINDINGS SATISFY THE CRITERIA ESTABLISHED IN FPR 1- 3.305(B). MOREOVER, WE DO NOT THINK THAT THE USE OF NEGOTIATION IS JUSTIFIED TO FACILITATE THE CONVERSION OF A SECRET CLEARANCE TO TOP SECRET WHEN PROCEDURES ARE AVAILABLE TO GSA UNDER DOD INDUSTRIAL SECURITY REGULATION, DOD DIRECTIVE NO. 5220.22-R, FOR THE ISSUANCE OF AN INTERIM TOP SECRET CLEARANCE. SEE SECTION 2-102B. WE ARE INFORMED THAT ENSEC'S CONVERSION TO TOP SECRET TOOK 80 DAYS, WHICH NECESSITATED THE CONTINUED EXTENSION OF SULLIVAN'S CONTRACT FROM NOVEMBER 1972 THROUGH FEBRUARY 1973.

IN OUR VIEW, THE D&F IS, IN EFFECT, A PREQUALIFICATION OF ONLY THREE FIRMS AND, AS SUCH, IS INCONSISTENT WITH FPR 1-3.101(C) WHICH REQUIRES THE SOLICITATION OF PROPOSALS FROM THE MAXIMUM NUMBER OF QUALIFIED SOURCES CONSISTENT WITH THE NATURE AND REQUIREMENTS OF THE SERVICES TO BE RENDERED. 52 COMP. GEN. 593(1973). WHILE ONLY THREE FIRMS WERE "KNOWN" TO THE CONTRACTING OFFICER TO POSSESS TOP SECRET CLEARANCE, THERE IS NO INDICATION THAT ANY ATTEMPT WAS MADE TO ESTABLISH THE EXISTENCE OF ANY OTHERS. APPARENTLY DUE TO THIS SUPPOSED LACK OF QUALIFIED SOURCES, THE SOLICITATION WAS NOT SYNOPSIZED IN THE COMMERCE BUSINESS DAILY IN ACCORDANCE WITH FPR 1-3.103. MOREOVER, WE HAVE HELD THAT CONCLUSIONS OR THE OPINIONS OF CONTRACTING OFFICERS ON THE AVAILABILITY OF QUALIFIED OFFERORS MAY NOT BE ACCEPTED AS CONTROLLING PRIOR TO SOLICITATION OF OFFERORS. 41 COMP. GEN. 484, 490(1962). FURTHER, WE NOTE THAT THE RFP IS DEVOID OF ANY INDICATION OF THE LEVEL OF SECURITY CLEARANCE REQUIRED OF A PROPOSED CONTRACTOR'S EMPLOYEES TO PERFORM THE WORK.

IN VIEW OF THE ABOVE, WE ARE NOT PERSUADED THAT THE USE OF FORMAL ADVERTISING WAS EITHER IMPRACTICABLE OR UNFEASIBLE. IN REACHING THIS CONCLUSION WE ARE NOT UNMINDFUL OF THE NEED FOR A TOP SECRET CLEARANCE AND WE HAVE HELD IN THIS REGARD THAT SUCH A REQUIREMENT IS A MATTER TO BE CONSIDERED IN DETERMINING THE RESPONSIBILITY OF A BIDDER. B-173627, FEBRUARY 10, 1972; 51 COMP. GEN. 168(1971) AND CASES CITED THEREIN. THE CRITICAL TIME FOR MEETING THE SECURITY (RESPONSIBILITY) REQUIREMENT IS THE TIME SET FOR COMMENCEMENT OF PERFORMANCE, PLUS ANY NECESSARY LEAD TIME.

UNDER THE CIRCUMSTANCES, WE BELIEVE THE PREQUALIFICATION OF SOURCES ON THE LIMITED BASIS OF THE CONTRACTING OFFICER'S KNOWLEDGE CONSTITUTES AN UNDUE RESTRICTION ON THE COMPETITION CONTEMPLATED BY FPR 1 3.101(C). THEREFORE, WE RECOMMEND THE AWARD TO ENSEC BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT. IN THIS CONNECTION, SINCE THE PROCUREMENT WAS HANDLED SUBSTANTIALLY AS IF IT HAD BEEN FORMALLY ADVERTISED, WE RECOMMEND THAT CONSIDERATION BE GIVEN TO USING FORMAL ADVERTISING FOR ANY RESOLICITATION.

AS THIS DECISION CONTAINS A RECOMMENDATION FOR CORRECTIVE ACTION TO BE TAKEN, IT IS BEING TRANSMITTED BY LETTERS OF TODAY TO THE CONGRESSIONAL COMMITTEES NAMED IN SECTION 232 OF THE LEGISLATIVE REORGANIZATION ACT OF 1970, PUBLIC LAW 91-510, 31 U.S.C. 1172. IN VIEW THEREOF, YOUR ATTENTION IS DIRECTED TO SECTION 236 OF THE ACT, 31 U.S.C. 1176, WHICH REQUIRES THAT YOU SUBMIT WRITTEN STATEMENTS OF THE ACTION TO BE TAKEN WITH RESPECT TO THE RECOMMENDATION. THE STATEMENTS ARE TO BE SENT TO THE HOUSE AND SENATE COMMITTEES ON GOVERNMENT OPERATIONS NOT LATER THAN 60 DAYS AFTER THE DATE OF THIS LETTER AND TO THE COMMITTEES ON APPROPRIATIONS IN CONNECTION WITH THE FIRST REQUEST FOR APPROPRIATIONS MADE BY YOUR AGENCY MORE THAN 60 DAYS AFTER THE DATE OF THIS LETTER.

WE WOULD APPRECIATE ADVICE OF WHATEVER ACTION IS TAKEN ON OUR RECOMMENDATION.