B-179101, FEB 13, 1974, 53 COMP GEN 584

B-179101, FEB 13, 1974, 53 COMP GEN 584

CONTRACTS - NEGOTIATION - EVALUATION FACTORS - MANNING REQUIREMENTS - GOVERNMENT ESTIMATED BASIS UPON RECONSIDERATION OF THE HOLDING IN 53 COMP. GEN. 440 (B-179101, DEC. 28, 1973) THAT AN OFFER WHICH FAILED TO INCLUDE THE JUSTIFICATION REQUIRED BY THE REQUEST FOR PROPOSALS WHEN MANHOURS PROPOSED DEVIATED BY MORE THAN 5% FROM THE GOVERNMENT'S ESTIMATE WAS IMPROPERLY REJECTED AS NO DISCUSSION WAS HELD WITH THE OFFEROR THE HOLDING IS AFFIRMED, SINCE RELIANCE ON THE NUMERICAL DEVIATION FOR REJECTION OF THE PROPOSAL WAS INCONSISTENT WITH THE TECHNICALLY ACCEPTABLE PROPOSAL WHICH INDICATED THE OFFEROR COULD ADEQUATELY PERFORM NOTWITHSTANDING THE MANHOURS DEVIATION, AND WITH ASPR 3 -805.2, WHICH REQUIRES THE INCLUSION OF OFFERS IN THE COMPETITIVE RANGE THAT HAVE A REASONABLE CHANCE OF BEING SELECTED FOR AWARD OR IF THERE IS DOUBT AS TO WHETHER THE OFFERS ARE IN THE COMPETITIVE RANGE.

IN THE MATTER OF ABC MANAGEMENT SERVICES, INC., FEBRUARY 13, 1974:

TIDEWATER MANAGEMENT SERVICES, INC. (TIDEWATER) HAS REQUESTED RECONSIDERATION OF OUR DECISION 53 COMP. GEN. 440 (1973) IN WHICH WE ADVISED THE SECRETARY OF THE NAVY THAT THE RENEWAL OPTION IN TIDEWATER'S CONTRACT TO PERFORM MESS ATTENDANT SERVICES AT PORT HUENEME, CALIFORNIA, SHOULD NOT BE EXERCISED BECAUSE ANOTHER FIRM, ABC MANAGEMENT SERVICES, INC. (ABC), HAD BEEN IMPROPERLY EXCLUDED FROM THE COMPETITIVE RANGE DURING THE INITIAL EVALUATION OF PROPOSALS.

THE REQUEST FOR PROPOSALS (RFP) WARNED OFFERORS THAT PROPOSALS CONTAINING MANNING CHARTS SHOWING HOURS MORE THAN 5 PERCENT BELOW THE STATED GOVERNMENT ESTIMATES OF MINIMUM REQUIRED MANHOURS "MAY RESULT IN REJECTION OF THE OFFER WITHOUT FURTHER NEGOTIATION" UNLESS THE OFFEROR SUBSTANTIATED THE MANNING DIFFERENCE TO SHOW THAT IT COULD PERFORM SATISFACTORILY WITH THE PROPOSED FEWER HOURS. ABC'S OFFER WAS REJECTED BECAUSE IT FAILED TO JUSTIFY A DEVIATION OF MORE THAN 6 PERCENT FROM THE GOVERNMENT ESTIMATE. HOWEVER, WE VIEWED THE REJECTION AS INCONSISTENT WITH ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3-805.2 BECAUSE ABC'S OFFER HAD BEEN FOUND TO BE TECHNICALLY SATISFACTORY AND YET WAS REJECTED SOLELY BECAUSE ITS MANNING CHART DEVIATED FROM THE PREDETERMINED MANHOUR LEVEL SET FORTH IN THE RFP.

TIDEWATER ASSERTS THAT THE 5 PERCENT REQUIREMENT OF THE RFP SHOULD BE REGARDED AS CONTROLLING, AND SUGGESTS THAT A MORE APPROPRIATE BASIS FOR REJECTION OF ABC'S OFFER WOULD BE THAT IT WAS "NONRESPONSIVE" RATHER THAN "OUTSIDE THE COMPETITIVE RANGE."

THE CONCEPT OF "RESPONSIVENESS" IS FOR APPLICATION IN FORMALLY ADVERTISED PROCUREMENTS, AND REFERS TO WHETHER OR NOT A BID OFFERS TO PROVIDE THE GOVERNMENT'S STATED NEEDS. A BID WHICH DOES NOT MEET THOSE NEEDS MUST BE REJECTED AS NONRESPONSIVE, WITHOUT ANY DISCUSSION WITH THE BIDDER INVOLVED. HOWEVER, THE CONCEPT OF RESPONSIVENESS IS NOT APPLICABLE TO NEGOTIATED PROCUREMENTS IN WHICH THE GOVERNMENT NORMALLY HAS A STATUTORY DUTY TO HOLD DISCUSSIONS WITH ALL OFFERORS IN THE COMPETITIVE RANGE. U.S.C. 2304(G). CONTRACTING OFFICERS GENERALLY HAVE BEEN REQUIRED TO INCLUDE PROPOSALS IN THE COMPETITIVE RANGE IF THERE WAS A MEANINGFUL POSSIBILITY THAT THEY COULD BE IMPROVED BY WRITTEN OR ORAL DISCUSSIONS TO THE POINT OF BEING ACCEPTABLE FOR AWARD. 47 COMP. GEN. 29 (1967); 50 ID. 59 (1970). FURTHERMORE, ASPR 3 805.2 NOW STATES THAT OFFERS SHALL BE INCLUDED IN THE COMPETITIVE RANGE IF THEY "HAVE A REASONABLE CHANCE OF BEING SELECTED FOR AWARD" AND EVEN IF "THERE IS DOUBT" AS TO WHETHER THE OFFERS SHOULD BE IN THE COMPETITIVE RANGE.

WE AGREE WITH TIDEWATER THAT EFFECT SHOULD BE GIVEN TO THE RFP PROVISIONS, AND WE HAVE SPECIFICALLY RECOGNIZED THAT THE RFP PROVISIONS GIVE CONTRACTING OFFICERS "DISCRETION TO ELIMINATE UNSUBSTANTIATED SUB 95 PERCENT OFFERS FROM CONSIDERATION AT ANY TIME BEFORE AWARD" AND THAT THEY NEED NOT "ACCEPT AN UNSUBSTANTIATED LOW-HOUR OFFEROR'S PROPOSAL BECAUSE OF THE OFFEROR'S MERE ASSERTIONS THAT IT CAN PERFORM ADEQUATELY." 53 COMP. GEN. 388 (1973). HOWEVER, IN THAT CASE THE CONTRACTING OFFICER INCLUDED WITHIN THE COMPETITIVE RANGE OFFERS PROPOSING MANNING LEVELS OUTSIDE THE 5 PERCENT ACCEPTABLE DEVIATION BECAUSE IT WAS DETERMINED THAT MEANINGFUL NEGOTIATIONS COULD BE CONDUCTED WITH THOSE OFFERORS. IT WAS ONLY WHEN THE OFFERORS FAILED, AFTER DISCUSSION, TO UPGRADE THEIR PROPOSALS OR SUBSTANTIATE THEIR DEVIATIONS THAT THE PROPOSALS WERE REJECTED. SEE ALSO B-179174, JANUARY 15, 1974. ON THE OTHER HAND, NAVY CONTRACTING OFFICERS HAVE ALSO EXERCISED THEIR DISCRETION TO REJECT, WITHOUT DISCUSSION, OFFERS DEVIATING MORE THAN 5 PERCENT FROM THE GOVERNMENT ESTIMATE. SEE, E.G., 53 COMP. GEN. 440, SUPRA.

IN THIS CASE, WE MIGHT WELL HAVE NO DISAGREEMENT WITH THE CONTRACTING OFFICER'S DECISION TO REJECT ABC'S OFFER BUT FOR THE FACT THAT FOOD SERVICE PERSONNEL EVALUATED THE OFFER AND FOUND IT TO BE TECHNICALLY SATISFACTORY PRIOR TO THE TIME THE CONTRACTING OFFICER MADE HIS DECISION. UNDER THESE CIRCUMSTANCES, WE THINK THE CONTRACTING OFFICER'S RELIANCE ON ABC'S NUMERICAL DEVIATION TO REJECT ITS PROPOSAL WAS INCONSISTENT WITH THE TECHNICAL EVALUATION AND WITH THE REQUIREMENTS OF ASPR 3-805.2 AND WAS SIMILAR TO DETERMINING THE COMPETITIVE RANGE BY MEANS OF A PREDETERMINED SCORE. IN OUR VIEW, THE TECHNICAL EVALUATION INDICATED THAT ABC COULD ADEQUATELY PERFORM NOTWITHSTANDING ITS MAN-HOURS DEVIATION, AND THE CONTRACTING OFFICER THEREFORE HAD A DUTY TO CONDUCT DISCUSSIONS WITH ABC.

ACCORDINGLY, OUR PREVIOUS DECISION IS AFFIRMED.