B-179165, FEB 11, 1974

B-179165: Feb 11, 1974

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TECHNICAL PROPOSAL OF OFFEROR WHICH DID NOT INDICATE FIRM UNDERSTOOD SCOPE OF WORK AND WHICH WAS DETERMINED TO BE TECHNICALLY UNACCEPTABLE. WAS PROPERLY REJECTED. ADMINISTRATIVE DETERMINATION THAT A PROPOSAL IS UNACCEPTABLE AND NOT WITHIN COMPETITIVE RANGE WILL NOT BE DISTURBED ABSENT A SHOWING OF ARBITRARY ABUSE OF ADMINISTRATIVE DISCRETION. PROTEST OF OFFEROR BASED ON CONTENTION THAT PROCUREMENT OF LABORATORY ANALYSIS OF FOOD PRODUCTS FOR FILTH SHOULD HAVE BEEN FORMALLY ADVERTISED RATHER THAN NEGOTIATED IS FOUND TO BE UNTIMELY SINCE GAO INTERIM BID PROTEST PROCEDURES AND STANDARDS PROVIDE THAT PROTESTS BASED ON ALLEGED IMPROPRIETIES IN SOLICITATIONS WHICH ARE APPARENT PRIOR TO CLOSING DATE FOR RECEIPT OF PROPOSALS SHALL BE FILED PRIOR TO CLOSING DATE FOR RECEIPT OF PROPOSALS.

B-179165, FEB 11, 1974

UNDER REQUEST FOR PROPOSALS FOR LABORATORY ANALYSIS OF CHOCOLATE, MACARONI, AND NOODLE FOOD PRODUCTS FOR FILTH, TECHNICAL PROPOSAL OF OFFEROR WHICH DID NOT INDICATE FIRM UNDERSTOOD SCOPE OF WORK AND WHICH WAS DETERMINED TO BE TECHNICALLY UNACCEPTABLE, WAS PROPERLY REJECTED, SINCE FAILURE OF OFFEROR TO INDICATE IT UNDERSTOOD SCOPE OF WORK DOES NOT RELATE TO RESPONSIBILITY OF OFFEROR BUT TO ACCEPTABILITY OF PROPOSAL. SEE CASES CITED. ADMINISTRATIVE DETERMINATION THAT A PROPOSAL IS UNACCEPTABLE AND NOT WITHIN COMPETITIVE RANGE WILL NOT BE DISTURBED ABSENT A SHOWING OF ARBITRARY ABUSE OF ADMINISTRATIVE DISCRETION. PROTEST OF OFFEROR BASED ON CONTENTION THAT PROCUREMENT OF LABORATORY ANALYSIS OF FOOD PRODUCTS FOR FILTH SHOULD HAVE BEEN FORMALLY ADVERTISED RATHER THAN NEGOTIATED IS FOUND TO BE UNTIMELY SINCE GAO INTERIM BID PROTEST PROCEDURES AND STANDARDS PROVIDE THAT PROTESTS BASED ON ALLEGED IMPROPRIETIES IN SOLICITATIONS WHICH ARE APPARENT PRIOR TO CLOSING DATE FOR RECEIPT OF PROPOSALS SHALL BE FILED PRIOR TO CLOSING DATE FOR RECEIPT OF PROPOSALS.

TO MEI-CHARLTON, INC.:

REQUEST FOR PROPOSALS (RFP) NO. 641-3-284 WAS ISSUED BY THE FOOD AND DRUG ADMINISTRATION, PUBLIC HEALTH SERVICE, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE (HEW), WITH A CLOSING DATE OF MAY 21, 1973, FOR RECEIPT OF PROPOSALS. THE RFP REQUESTED PROPOSALS FOR LABORATORY ANALYSIS OF 500 SAMPLES OF CHOCOLATE AND 1,500 SAMPLES OF MACARONI AND NOODLE PRODUCTS FOR FILTH. OFFERORS WERE REQUESTED TO SUBMIT A TECHNICAL PROPOSAL AND A BUSINESS MANAGEMENT AND COST PROPOSAL. THE RFP SET FORTH THE FOLLOWING EVALUATION CRITERIA FOR THE TECHNICAL PROPOSALS:

"EVALUATION CRITERIA

"1. GENERAL

PROPOSALS RECEIVED SHALL FIRST BE EVALUATED FROM A TECHNICAL STANDPOINT WITHOUT REGARD TO PROPOSED COST. THOSE PROPOSALS WHICH ARE CONSIDERED TO BE TECHNICALLY ACCEPTABLE OR SUSCEPTIBLE OF BEING CLARIFIED BY FURTHER NEGOTIATION SHALL THEN BE EVALUATED FROM A FINANCIAL AND MANAGEMENT STANDPOINT. COMPLEMENTARY TO THE COMPUTED SCORE PROCEDURE, SIGNIFICANT DEFICIENCIES WHICH CAUSE EXCEPTIONALLY LOW SCORES ON SPECIFIC FACTORS OR SUB-FACTORS MAY BE USED AS A BASIS FOR REJECTION AS TO TECHNICAL CAPABILITY.

"2. TECHNICAL EVALUATION

THIS EVALUATION SHALL BE BASED UPON THE COMPLETENESS AND THOROUGHNESS OF THE PROPOSAL SUBMITTED AS EVIDENCED BY ITS CLARITY. THE OFFEROR SHOULD SHOW THAT THE OBJECTIVES STATED IN THE PROPOSAL ARE UNDERSTOOD AND OFFER A LOGICAL PROGRAM FOR THEIR ACHIEVEMENT. THE FOLLOWING FACTORS WILL BE WEIGHED IN DESCENDING ORDER OF MERIT IN ESTABLISHING A NUMBERICAL RATING FOR ALL TECHNICAL PROPOSALS SUBMITTED:

"A. QUALIFICATIONS OF THE INVESTIGATOR AND LABORATORY PERSONNEL TO BE UTILIZED. INDICATE PAST EXPERIENCE IN PERFORMING INSECT FRAGMENTS AND HAIR COUNTS MADE ON THESE OR SIMILAR FOOD PRODUCTS.

"B. AVAILABLE FACILITIES AND EQUIPMENT FOR CONDUCTING THE PROPOSED ANALYSES AS EVIDENCED BY A LIST OF APPROPRIATE LABORATORY EQUIPMENT POSSESSED BY THE OFFEROR.

"C. UNDERSTANDING OF THE SCOPE OF WORK."

EIGHTEEN OFFERS WERE RECEIVED AND EACH TECHNICAL PROPOSAL WAS EVALUATED AGAINST THE CRITERIA ESTABLISHED IN THE RFP BY A TECHNICAL EVALUATION COMMITTEE. THE EVALUATION COMMITTEE CONCLUDED THAT THE TECHNICAL PROPOSALS SUBMITTED BY METALLURGICAL ENGINEERS, INC. (NOW KNOWN AS MEI- CHARLTON, INC.) AND CERTAIN OTHER FIRMS WERE UNACCEPTABLE FROM A TECHNICAL VIEWPOINT. THE REPORT OF THE EVALUATION COMMITTEE INDICATES THAT THE TECHNICAL PROPOSAL OF MEI-CHARLTON WAS CONSIDERED UNACCEPTABLE FOR THE FOLLOWING REASONS:

"SUBJECT: TECHNICAL EVALUATION OF METALLURGICAL ENGINEERS, INC. RESPONSE TO RFP 641-3-284.

"THIS PROPOSAL WAS REVIEWED BY A PANEL OF THREE MEMBERS OF THE MICROANALYTICAL BRANCH ON JUNE 1, 1973. THE REQUEST FOR PROPOSAL LISTED THREE SUBJECTS AS CRITERIA FOR EVALUATION; (A) QUALIFICATIONS, (B) FACILITIES AND EQUIPMENT, AND (C) UNDERSTANDING THE SCOPE OF THE WORK.

"THE FIRST FACTOR WAS WORTH 50% OF THE EVALUATION; OF THIS, MEI AVERAGED 14.3%. THE QUALIFICATIONS OF THE INVESTIGATORS AND LABORATORY PERSONNEL APPEAR INADEQUATE ON THE BASIS OF THEIR WRITTEN PROPOSAL. NO TRAINING OR EXPERIENCE IN FILTH ANALYSIS ARE CLAIMED BY EITHER THE PROJECT ADMINISTRATOR OR DIRECTOR. ONE OF THE TWO SCIENTISTS DOES LIST PHYSICAL ANALYSIS OF FOODS AND HAS ATTENDED A FDA WORKSHOP ON FILTH ANALYSIS. THERE WAS, HOWEVER, NO MENTION OF PAST EXPERIENCE OF ANY OF THE PERSONNEL IN PERFORMING INSECT FRAGMENT OR STRIATED HAIR COUNTS ON ALIMENTARY PASTE, CHOCOLATE OR SIMILAR FOOD PRODUCTS.

"THE SECOND FACTOR WAS WORTH 35% OF THE TOTAL SCORE. FACILITIES AND EQUIPMENT WERE NOT ADEQUATELY LISTED AS REQUESTED WITH THE EXCEPTION OF WIDE FIELD MICROSCOPES. MEI RECEIVED 16% IN THIS CATEGORY.

"THE THIRD FACTOR WAS WORTH 15%. MEI FAILED TO DEMONSTRATE A THOROUGH UNDERSTANDING OF THE SCOPE OF WORK IN THEIR WRITTEN PROPOSAL AND RECEIVED AN AVERAGE SCORE OF 3%.

"MEI WAS ELIMINATED FROM CONSIDERATION BY A SCORE OF 33.3% OF A POSSIBLE 100%. WHEN THEIR BUSINESS AND COST PROPOSAL WAS RECEIVED, IT WAS DECIDED THAT THEY WOULD NOT BE RECONSIDERED AT THAT POINT BECAUSE OF THEIR LOW SCORE ON THEIR TECHNICAL PROPOSAL."

MEI-CHARLTON'S NUMERICAL RATING OF 33.3 OF A POSSIBLE 100 RANKED ITS TECHNICAL PROPOSAL TWELFTH OF THE 18 PROPOSALS RECEIVED. AFTER THE EVALUATION OF THE PROPOSALS RECEIVED, NEGOTIATIONS WERE CONDUCTED WITH THE FOUR OFFERORS DEEMED BY THE TECHNICAL EVALUATION COMMITTEE TO CONSTITUTE THE COMPETITIVE RANGE. ON JUNE 26, 1973, A CONTRACT WAS AWARDED TO O'DEAN KURTZ ASSOCIATES, INC., IN THE AMOUNT OF $14,800.

MEI-CHARLTON PROTESTED THE REJECTION OF ITS TECHNICAL PROPOSAL AND HAS TAKEN EXCEPTION TO FACTORS 1, 2, AND 3 OF THE EVALUATION CRITERIA. REGARD TO FACTOR 1, QUALIFICATIONS OF THE INVESTIGATOR AND LABORATORY PERSONNEL TO BE UTILIZED, MEI-CHARLTON ALLEGES THAT ITS PERSONNEL ARE FULLY QUALIFIED TO CARRY OUT THE ANALYSES. IN THIS CONNECTION, THE CONTRACTING OFFICER REPORTS THAT THE RESUMES OF THE PERSONNEL PROPOSED BY MEI-CHARLTON INDICATED A LACK OF HAVING MICRONALYST QUALIFICATIONS IN ENTOMOLOGY; THAT ONE OFFICIAL OF THE CORPORATION WHO HAD ATTENDED THE FDA TRAINING SESSION OF METHODOLOGY FOR DETERMINING FILTH IN FOODS WAS THE ONLY APPARENT QUALIFIED PERSON PROPOSED; AND THAT THE BALANCE OF PERSONNEL REFLECTED BACKGROUNDS OTHER THAN THAT REQUIRED AND NO INDICATION OF SPECIFIC EXPERIENCE RELATING TO "INSECT FRAGMENTS AND HAIR COUNTS MADE ON THESE OR SIMILAR FOOD PRODUCTS" AS REQUESTED IN THE RFP.

AS TO FACTOR 2, AVAILABLE FACILITIES AND EQUIPMENT, MEI-CHARLTON STATES THAT THE CONTRACTING OFFICER'S CONTENTION THAT THE FIRM DOES NOT SHOW THE AVAILABILITY OF ADEQUATE EQUIPMENT IN ITS TECHNICAL PROPOSAL IS WITHOUT FOUNDATION. IN THIS REGARD, HEW STATES THAT THE LISTING BY OFFERORS OF THE EQUIPMENT IN THEIR POSSESSION IS NOT A PROPER EVALUATION CRITERION SINCE THIS IS A MATTER PERTAINING TO OFFEROR RESPONSIBILITY RATHER THAN TECHNICAL ACCEPTABILITY OR RESPONSIVENESS. OUR OFFICE AGREES WITH THE FOREGOING STATEMENT OF HEW. IN THIS CONNECTION, IT IS REPORTED THAT EVEN IF FACTOR 2 IS EXCLUDED FROM THE EVALUATION CRITERIA, MEI-CHARLTON'S TECHNICAL PROPOSAL WOULD STILL BE OUTSIDE THE COMPETITIVE RANGE.

WITH RESPECT TO FACTOR 3, UNDERSTANDING OF THE SCOPE OF THE WORK, MEI CHARLTON STATES THAT THE GOVERNMENT HAS ADOPTED A FORMAL PROCEDURE FOR THE EXAMINATION OF MATERIAL SUCH AS MACARONI AND NOODLE PRODUCTS FOR FILTH; THAT THIS SPECIFICATION IS VERY DETAILED; AND THAT THE PROCURING ACTIVITY'S DEMAND THAT A LABORATORY WHICH PROPOSES TO USE SUCH SPECIFICATION AND CITES THE SPECIFICATION IN ITS PROPOSAL, BE REQUIRED TO DETAIL IT, IS NOTHING MORE THAN A "MAKE WORK" DEMAND. THE CORPORATION POINTS OUT THAT IT AGREED TO USE THE GOVERNMENT PROCEDURE AND THAT IT ENCLOSED A COPY THEREOF WITH ITS PROPOSAL.

IT IS REPORTED THAT MEI-CHARLTON RECEIVED A LOW SCORE UNDER FACTOR 3 BECAUSE IT DID NOT CLEARLY DEMONSTRATE A THOROUGH UNDERSTANDING OF THE SCOPE OF THE WORK IN ITS TECHNICAL PROPOSAL. IT APPEARS THAT THE CORPORATION HAS ERRONEOUSLY ASSUMED THAT THE INSTRUCTIONS PERTAINING TO THE ACHIEVEMENT OF THE STATEMENT OF WORK ARE TO BE REGARDED, IN AND OF THEMSELVES, A DEFINITE SPECIFICATION OF THE TYPE USED IN INVITATIONS FOR BIDS COVERING FORMAL ADVERTISED PROCUREMENTS. ALTHOUGH IT MAY APPEAR THAT REJECTION OF MEI-CHARLTON'S TECHNICAL PROPOSAL FOR FAILURE TO UNDERSTAND THE SCOPE OF THE WORK IMPLIES THAT ITS RESPONSIBILITY AS A PROSPECTIVE CONTRACTOR WAS A FACTOR, OUR OFFICE HAS HELD IN B-170890, NOVEMBER 18, 1970, THAT A DETERMINATION OF THIS NATURE RELATES TO THE QUESTION OF WHETHER THE PROPOSAL IS TECHNICALLY ACCEPTABLE AND WITHIN A COMPETITIVE TECHNICAL RANGE FOR NEGOTIATION PURPOSES AND DOES NOT INVOLVE MATTERS OF CAPACITY AND CREDIT WHICH, IN A CASE INVOLVING A SMALL BUSINESS FIRM, MUST BE JUDGED BY THE SMALL BUSINESS ADMINISTRATION. SEE 15 U.S.C. 637(B)(7), AND 46 COMP. GEN. 893 (1967).

WE HAVE RECOGNIZED THAT A REASONABLE DEGREE OF ADMINISTRATIVE DISCRETION IS PERMISSIBLE WITH RESPECT TO TECHNICAL CONSIDERATIONS. THEREFORE, WE WILL NOT DISTURB AN ADMINISTRATIVE DETERMINATION THAT A PROPOSAL IS TECHNICALLY UNACCEPTABLE AND NOT WITHIN A COMPETITIVE RANGE IN THE ABSENCE OF A CLEAR SHOWING THAT SUCH A DETERMINATION WAS AN ARBITRARY ABUSE OF DISCRETION. 48 COMP. GEN. 314 (1968). WE HAVE REVIEWED THE REASONS NOTED ABOVE FOR THE REJECTION OF THE TECHNICAL PROPOSAL AND CANNOT CONCLUDE THAT THE AGENCY PERSONNEL ACTED ARBITRARILY IN THEIR DETERMINATION THAT MEI- CHARLTON'S PROPOSAL WAS NOT WITHIN A COMPETITIVE RANGE. B-176504, DECEMBER 21, 1972; B-176294, OCTOBER 27, 1972; B-177822, JULY 16, 1973. ACCORDINGLY, THE PROTEST IS DENIED.

FINALLY, MEI-CHARLTON CONTENDS THAT THE PROCUREMENT SHOULD HAVE BEEN FORMALLY ADVERTISED RATHER THAN NEGOTIATED. THE CORPORATION STATES THAT GOVERNMENT PROCUREMENT REGULATIONS CLEARLY DELINEATE THAT AWARDS SHOULD BE MADE ON A FIXED-PRICE BASIS WHEN THERE IS AN ADEQUATE SPECIFICATION FOR THE WORK TO BE CARRIED OUT ON A COMMERCIAL BASIS. IN THIS CONNECTION, THE FIRM POINTS OUT THAT THE JOURNAL OF THE ASSOCIATION OF OFFICIAL ANALYTICAL CHEMISTS, 11TH EDITION, 1970, GIVES VERY DETAILED METHODS FOR THIS TYPE OF ANALYSIS. ALSO, THE CORPORATION MAINTAINS THAT THE TYPE OF WORK IS NOT OF A HIGHLY SOPHISTICATED NATURE; THAT PROCEDURES ARE ADEQUATELY OUTLINED BY AVAILABLE SPECIFICATIONS; AND THAT THE PERSONNEL OF MEI-CHARLTON AND OF ALL THE LABORATORIES RECEIVING A COPY OF THE RFP ARE QUALIFIED TO CARRY OUT THE ANALYSES. THIS LATTER ARGUMENT BY MEI-CHARLTON APPEARS TO BE THAT THE REQUIREMENTS OF THE GOVERNMENT UNDER THE SUBJECT RFP ARE TOO STRINGENT AND EXCESSIVE FOR THE TYPE OF WORK INVOLVED.

THE SUBJECT CONTRACT WAS NEGOTIATED PURSUANT TO 41 U.S.C. 252(C)(10), WHICH PROVIDES THAT CONTRACTS MAY BE NEGOTIATED FOR PROPERTY OR SERVICES FOR WHICH IT IS IMPRACTICABLE TO SECURE COMPETITION. SECTION 1- 3.210(A)(13) OF THE FEDERAL PROCUREMENT REGULATIONS LISTS THE IMPOSSIBILITY OF DRAFTING ADEQUATE SPECIFICATIONS, THE BASIS RELIED UPON IN THE ADMINISTRATION'S DETERMINATION AND FINDINGS, DATED APRIL 23, 1973, AS ONE OF THE INSTANCES WHERE THE CITED STATUTORY AUTHORITY MAY BE USED.

OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS (4 CFR 20.1, ET SEQ.) PROVIDE THAT PROTESTS BASED UPON ALLEGED IMPROPRIETIES IN SOLICITATIONS WHICH ARE APPARENT PRIOR TO THE CLOSING DATE FOR RECEIPT OF PROPOSALS SHALL BE FILED PRIOR TO THE CLOSING DATE FOR RECEIPT OF PROPOSALS. MEI- CHARLTON DID NOT QUESTION THE USE OF NEGOTIATION PROCEDURES OR THE STRINGENCY OR EXCESSIVENESS OF THE SPECIFICATIONS UNTIL AFTER THE AWARD OF THE CONTRACT. SINCE THE CORPORATION STATES THAT ITS STAFF HAS CARRIED OUT ANALYSIS FOR FILTH FOR NEARLY 40 YEARS, IT WOULD APPEAR THAT THE FIRM HAD SUFFICIENT EXPERIENCE TO CALL TO THE PROCURING ACTIVITY'S ATTENTION THE REASONS WHY IT BELIEVED IT WAS NOT IMPOSSIBLE TO DRAFT ADEQUATE SPECIFICATIONS FOR THE LABORATORY ANALYSIS OF THE MACARONI AND NOODLE PRODUCTS FOR FILTH. IN ANY EVENT, WHEN THE PROCURING ACTIVITY DECIDED TO PROCURE THE LABORATORY ANALYSIS OF THE FOOD PRODUCTS BY NEGOTIATION, THE APPROPRIATE TIME TO PROTEST THIS METHOD WOULD HAVE BEEN AT THE TIME OF THE ISSUANCE OF THE RFP AND, IN ANY EVENT, NO LATER THAN THE CLOSING DATE FOR RECEIPT OF PROPOSALS WHEN REMEDIAL ACTION MIGHT HAVE BEEN POSSIBLE. ALSO, ANY PROTEST AS TO THE STRINGENCY OR EXCESSIVENESS OF THE REQUIREMENTS OF THE SPECIFICATIONS SHOULD HAVE BEEN MADE AT THE SAME TIME AS THE PROTEST AGAINST THE USE OF NEGOTIATION PROCEDURES BY THE PROCURING ACTIVITY. THE CIRCUMSTANCES, THIS PORTION OF MEI-CHARLTON'S PROTEST MUST BE REGARDED AS UNTIMELY AND WILL NOT BE CONSIDERED.