B-179196, APR 24, 1974

B-179196: Apr 24, 1974

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PROCURING AGENCY'S DETERMINATION THAT SUCCESSFUL OFFEROR'S PROPOSAL FOR DESIGN AND CONSTRUCTION OF TURNKEY FAMILY HOUSING PROJECT CONFORMED TO SPECIFICATIONS WAS NOT THE PRODUCT OF AN ABUSE OF DISCRETION OR ARBITRARY ACTION. 2. WAS UNTIMELY AND THEREFORE NOT CONSIDERED ON THE MERITS. WAS ISSUED BY THE NAVAL FACILITIES ENGINEERING COMMAND. 12 PROPOSALS WERE SUBMITTED. EACH OFFEROR WAS ADVISED OF THE AREAS OF ITS PROPOSAL IN WHICH REQUIREMENTS OF THE RFP WERE NOT SATISFIED AND OFFERED AN OPPORTUNITY TO REVISE AND TO SUBMIT A BEST AND FINAL OFFER. EACH PROPOSAL WAS THEN EVALUATED BY THE COMMAND TURNKEY SELECTION BOARD (BOARD) AND ASSIGNED QUALITY POINTS IN ACCORDANCE WITH THE PROVISIONS OF THE STANDARD EVALUATION MANUAL FOR TURNKEY NAVAL FAMILY HOUSING PROJECTS (MANUAL).

B-179196, APR 24, 1974

1. PROCURING AGENCY'S DETERMINATION THAT SUCCESSFUL OFFEROR'S PROPOSAL FOR DESIGN AND CONSTRUCTION OF TURNKEY FAMILY HOUSING PROJECT CONFORMED TO SPECIFICATIONS WAS NOT THE PRODUCT OF AN ABUSE OF DISCRETION OR ARBITRARY ACTION. 2. ALLEGATION THAT RFP CONTAINED INADEQUATE STATEMENTS OF EVALUATION CRITERIA AND THEIR RELATIVE IMPORTANCE, FIRST MADE 7 MONTHS AFTER DUE DATE FOR INITIAL PROPOSALS, WAS UNTIMELY AND THEREFORE NOT CONSIDERED ON THE MERITS.

TO NHA HOUSING, INCORPORATED:

ON DECEMBER 4, 1972, REQUEST FOR PROPOSALS (RFP) N62474-73-R-5015, WAS ISSUED BY THE NAVAL FACILITIES ENGINEERING COMMAND, WESTERN DIVISION. THE RFP SOLICITED PROPOSALS FOR THE DESIGN AND CONSTRUCTION OF A FAMILY HOUSING PROJECT CONSISTING OF 400 UNITS AT THE MARINE CORPS BASE, CAMP PENDLETON, CALIFORNIA AND 100 UNITS AT THE MARINE CORPS BASE, TWENTY-NINE PALMS, CALIFORNIA, ON A TURNKEY BASIS.

IN RESPONSE TO THE RFP, 12 PROPOSALS WERE SUBMITTED. DURING THE TECHNICAL EVALUATION PERIOD, EACH OFFEROR WAS ADVISED OF THE AREAS OF ITS PROPOSAL IN WHICH REQUIREMENTS OF THE RFP WERE NOT SATISFIED AND OFFERED AN OPPORTUNITY TO REVISE AND TO SUBMIT A BEST AND FINAL OFFER. EACH PROPOSAL WAS THEN EVALUATED BY THE COMMAND TURNKEY SELECTION BOARD (BOARD) AND ASSIGNED QUALITY POINTS IN ACCORDANCE WITH THE PROVISIONS OF THE STANDARD EVALUATION MANUAL FOR TURNKEY NAVAL FAMILY HOUSING PROJECTS (MANUAL). THE BOARD ESTABLISHED THE COST/QUALITY RATIO OF EACH PROPOSAL BY DIVIDING THE ASSIGNED QUALITY POINTS INTO THE COST PROPOSED. ON THIS BASIS, THE PROPOSAL OF C-R-K AND ASSOCIATES, A JOINT VENTURE, WAS EVALUATED AS HAVING THE MOST FAVORABLE RATIO OF DOLLARS PER QUALITY POINT. HOWEVER, C-R-K'S PROPOSAL EXCEEDED THE STATUTORY COST LIMITATION OF $24,000 PER UNIT WHICH RESULTED IN THE BOARD'S HAVING TO RE-EVALUATE ITS PROPOSAL BY SUBTRACTING DEDUCTIVE ITEMS. THE STANDING OF THE TOP THREE OFFERORS, IN TERMS OF COST/QUALITY RATIO, WAS THEN AS FOLLOWS:

1. MORRISON-KNUDSEN/ECOSCIENCE, A JOINT VENTURE (MK/E)

2. C-R-K & ASSOCIATES

3. NHA HOUSING, INC. (NHA)

THE DOLLAR AMOUNTS OF THE THREE OFFERS WERE:

NHA $10,471,000

MK/E 10,693,776

C-R-K 11,140,507

THE BOARD CONSIDERED THE DOLLAR DIFFERENTIAL OF $222,776 BETWEEN THE MK/E PROPOSAL AND THAT OF NHA, BUT CONCLUDED THAT THE LOWER COST/QUALITY RATIO OF THE MK/E PROPOSAL OUTWEIGHED THE COST DIFFERENTIAL. ACCORDINGLY, THE BOARD RECOMMENDED THAT AWARD BE MADE TO MK/E ON THE BASIS THAT ITS PROPOSAL REPRESENTED THE COMBINATION OF QUALITY AND COST MOST ADVANTAGEOUS TO THE GOVERNMENT AND, IN ACCORDANCE WITH THAT RECOMMENDATION, THE CONTRACT WAS AWARDED TO MK/E.

THEREAFTER, NHA PROTESTED THE AWARD OF THE CONTRACT TO MK/E. BASICALLY, NHA CONTENDED THAT MK/E'S PROPOSAL DID NOT CONFORM IN SEVERAL RESPECTS WITH THE TECHNICAL REQUIREMENTS OF THE RFP AND THEREFORE, SHOULD HAVE BEEN INELIGIBLE FOR CONSIDERATION.

FIRST, NHA ARGUED THAT ONE OF MK/E'S UNIT PLANS FOR THE ENLISTED MEN'S TWO-BEDROOM DUPLEX WAS UNACCEPTABLE IN THAT IT EXCEEDED THE STATUTORY MAXIMUM SQUARE FOOTAGE SPECIFIED IN PARAGRAPH 2A.2B OF THE RFP. HOWEVER, IT IS THE NAVY'S POSITION, WHICH APPEARS TO BE SUPPORTED BY THE RECORD, THAT THE FLOOR AREA OF EACH UNIT IS WITHIN THE STATUTORY MAXIMUM SQUARE FOOTAGE.

NHA ALSO ALLEGED THAT THE CERTIFICATE FURNISHED BY MK/E WITH ITS PROPOSAL DID NOT CONFORM TO THE REQUIREMENTS OF PARAGRAPH 2A.2D OF THE RFP, AS AMENDED, WHICH REQUIRED PROPOSERS WHO SUBMITTED PLANS WHICH EXCEEDED THE "BASIC NET" FLOOR AREAS SPECIFIED IN PARAGRAPH 2A.2B, TO INCLUDE A WRITTEN CERTIFICATION THAT SUCH UNIT DESIGNS "HAVE BEEN CONSTRUCTED OR ARE CURRENTLY BEING OFFERED IN THE COMMERCIAL MARKET PLACE." THIS ALLEGATION WAS PROPOUNDED ON THE BASIS THAT MK/E'S CERTIFICATE STATED THAT THE UNIT DESIGNS PROPOSED FOR THE INSTANT PROCUREMENT WERE "MODIFIED OFF-THE-SHELF DESIGNS WHICH ARE OFFERED COMMERCIALLY AND/OR HAVE BEEN CONSTRUCTED OR CURRENTLY UNDER CONSTRUCTION." ALTHOUGH THE REQUIRED CERTIFICATE MADE NO ALLOWANCE FOR MODIFICATION OF COMMERCIAL DESIGNS, IT IS OUR OPINION THAT UNIT DESIGNS WHICH HAVE BEEN PREVIOUSLY CONSTRUCTED OR ARE PRESENTLY UNDER CONSTRUCTION FOR THE NAVY AND WHICH HAVE BEEN MODIFIED TO CONFORM TO THE SPECIFICATIONS OF THE PRESENT RFP, MAY BE CONSIDERED ELIGIBLE FOR CITATION IN THE REQUIRED CERTIFICATE. THE ELIGIBILITY OF SUCH MODIFIED DESIGNS WOULD NOT ELIMINATE THE REQUIREMENT FOR PROPOSERS TO ABIDE BY THE STATUTORY DESIGN LIMITS OF THE UNITS AND SUCH MODIFICATIONS WOULD NOT APPRECIABLY ALTER THE DESIGN AS TO HAVE IT ACTUALLY BECOME A NEW, ORIGINAL UNIT.

NHA FURTHER CONTENDED THAT ONE UNIT PLAN PROPOSED BY MK/E DID NOT CONFORM TO THE MINIMUM WIDTH REQUIREMENTS FOR DINING ROOM AND LIVING ROOM AREAS SET FORTH IN PARAGRAPHS 2A.5A(5) AND (7) OF THE RFP. THE NAVY CONCEDES THAT, AFTER SELECTION BUT BEFORE AWARD, IT DISCOVERED THAT THE DINING AREA IN ONE FOUR-BEDROOM ENLISTED MEN'S UNIT WAS SIX INCHES TOO SHORT IN ONE DIMENSION (BEING 9' 6" RATHER THAN 10'), BUT THAT MK/E WAS ADJUSTING ITS PLANS TO ELIMINATE THE DISCREPANCY. ALTHOUGH WE AGREE WITH NHA THAT THIS WAS A DEFICIENCY IN MK/E'S PROPOSAL, IT HAS NOT BEEN SHOWN TO HAVE BEEN OF SUCH MAGNITUDE THAT IT SHOULD HAVE CHANGED THE SELECTION OF MK/E.

NHA ALSO ALLEGED THAT INTERIOR BULK STORAGE SPACES IN ONE OF MK/E'S 2 BEDROOM ENLISTED MEN'S DUPLEXES HAS A DEPTH OF 2' 2", INSTEAD OF THE REQUIRED MINIMUM OF 2' 6". NHA FURTHER GENERALLY CONTENDS THAT ANY ALTERATION OF THE STORAGE SPACES TO A DEPTH OF 2' 6" "WOULD REQUIRE AN ENLARGEMENT OF THE TOTAL BUILDING, WHICH WOULD MOST CERTAINLY BE REFLECTED IN THE INCREASE OF THE OVER ALL AREA." WE UNDERSTAND THE THRUST OF NHA'S ARGUMENT TO BE THAT THE STORAGE SPACE COULD BE MADE TO CONFORM TO THE MINIMUM REQUIREMENTS ONLY IF THE DWELLING UNIT WERE ENLARGED BEYOND THE STATUTORY MAXIMUM SQUARE FOOTAGE.

OUR EXAMINATION OF MK/E'S BLUEPRINTS SHOWS INTERIOR BULK STORAGE AREAS DEPICTED AS 2' 6" IN DEPTH. IT IS THE NAVY'S POSITION THAT THIS REPRESENTS A CLEAR DEPTH OF 2' 6" WHICH CAN BE ACHIEVED WITHIN THE EXISTING DIMENSIONS OF THE HOUSING UNITS. IN THE ABSENCE OF A MORE SPECIFIC STATEMENT OF NHA'S PROTEST, AND THE LACK OF EVIDENCE OF BAD FAITH ON THE PART OF THE NAVY, WE DO NOT BELIEVE IT HAS BEEN SHOWN THAT THE NAVY'S DETERMINATION IS INCORRECT.

NHA ALLEGED THAT THE AWARD OF THE CONTRACT TO MK/E WAS PARTIALLY ATTRIBUTABLE TO THE LATTER'S SUBMISSION OF AN UNNECESSARILY ELABORATE PROPOSAL, AND THAT ALTHOUGH MK/E'S NAME DID NOT APPEAR ON ITS PROPOSAL, THAT OFFEROR'S IDENTITY WAS APPARENT FROM THE PROPOSAL'S SIMILARITY TO MK/E'S PRIOR RESPONSE TO NAVY TURNKEY PROJECTS IN CALIFORNIA. LOSS OF ANONYMITY WOULD CONTRAVENE THE RFP REQUIREMENT THAT PROPOSAL EVALUATION WAS TO BE PERFORMED WITHOUT KNOWLEDGE OF THE OFFERORS' IDENTITIES. THE RFP ALSO INCLUDED THE CLAUSE PRESCRIBED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3-501(B)(C)(XXIV), WHICH DISCOURAGES THE SUBMISSION OF UNNECESSARILY ELABORATE PROPOSALS.

MK/E'S PROPOSAL MADE EXTENSIVE USE OF FULL-COLOR CATALOG CUTS AND FLIERS DISTRIBUTED BY MATERIAL SUPPLIERS. WE ARE UNABLE TO CONCLUDE, HOWEVER, THAT THE USE OF THESE PUBLICATIONS RESULTED IN AN "UNNECESSARILY ELABORATE" PROPOSAL. MOREOVER, UNDER THE TERMS OF THE SOLICITATION, THE SUBMISSION OF AN UNNECESSARILY ELABORATE PROPOSAL DOES NOT, IN AND OF ITSELF, REQUIRE REJECTION OF THE PROPOSAL.

IT IS THE NAVY'S POSITION THAT THE EVALUATION WAS BASED ON THE FACTORS LISTED IN THE MANUAL AND WAS CONDUCTED IN STRICT CONFIDENCE WITHOUT PRIOR KNOWLEDGE OF THE OFFERORS' IDENTITIES. IN THE ABSENCE OF EVIDENCE TO THE CONTRARY, WE CANNOT ACCEPT NHA'S ALLEGATION THAT MK/E'S IDENTITY WAS KNOWN TO THE EVALUATORS.

NHA CONTENDED THAT MK/E'S PROPOSAL WAS INELIGIBLE FOR CONSIDERATION BECAUSE THAT FIRM INITIALLY SITED FOUR UNITS OUTSIDE THE PROJECT BOUNDARIES, IN VIOLATION OF THE RFP REQUIREMENT THAT THE "TOTAL NUMBER OF UNITS MUST BE ACCOMMODATED ON THE LAND AVAILABLE." IN THIS CONNECTION, NHA FURTHER ALLEGED THAT THE NAVY RELAXED ITS REQUIREMENT OF ADHERENCE TO THE SPECIFICATIONS BY ALLOWING MK/E TO RELOCATE THE FOUR UNITS WITHIN THE LAND AVAILABLE AFTER BEING SELECTED FOR AWARD, INDICATING THAT DIFFERENT STANDARDS OF EVALUATION WERE APPLIED TO THE VARIOUS PROPOSALS AND THAT ALL THE SUBMISSIONS WERE NOT SCRUTINIZED TO THE SAME DEGREE.

THE NAVY CONCEDED THAT FOUR MK/E UNITS WERE INITIALLY PROPOSED TO BE SITED OUTSIDE THE PROJECT BOUNDARIES. UPON ITS DISCOVERY OF THIS DISCREPANCY AFTER AWARD, THE NAVY DIRECTED MK/E TO CORRECT THIS NONCONFORMITY AND RESITE THE FOUR UNITS WITHIN THE LAND AVAILABLE IN ITS FINAL PLANS FOR THE PROJECT. WE AGREE THAT MK/E'S PROPOSAL SHOULD HAVE BEEN MORE CAREFULLY EXAMINED AND SCRUTINIZED BY THE EVALUATORS AS TO THE LOCATION OF THE PROPOSED UNITS PRIOR TO AWARD. HOWEVER, SINCE THERE IS NO INDICATION OF RECORD THAT THE REVISION CHANGED THE RELATIVE STANDING OF THE OFFERORS, IT IS OUR OPINION THAT THE NAVY'S DIRECTION TO RELOCATE THE UNITS, AFTER AWARD, DID NOT AMOUNT TO AN UNWARRANTED RELAXATION OF THE SPECIFICATIONS. EVEN AFTER THE RELOCATION, MK/E'S PROPOSAL WAS CONSIDERED AS OFFERING THE MOST ADVANTAGEOUS COMBINATION OF QUALITY AND COST.

COUNSEL FOR NHA HAS ADVANCED THE ARGUMENT THAT THE SITE DESIGN AND CONSTRUCTION OBJECTIVES DELINEATED IN PARAGRAPHS 2A.4A(2) AND 2A.4C(5) OF THE RFP WOULD NOT BE SUCCESSFULLY ACCOMPLISHED BY THE MK/E PROPOSAL. PARAGRAPH 2A.4A(2) PROVIDES IN PERTINENT PART THAT:

"VARIETY IN *** SITING CONFIGURATIONS OF HOUSES IS ENCOURAGED TO FIT VARYING TERRAIN CONDITIONS AND TO PROVIDE ATTRACTIVE RESIDENTIAL PATTERNS AND STREETSCAPES. *** DESIGN SHOULD CAPITALIZE UPON ECONOMIES INHERENT IN THE NATURAL CHARACTERISTICS OF THE SITE, USING EXISTING TERRAIN TO MINIMIZE CUT AND FILL ***."

PARAGRAPH 2A.4C(5) PROVIDES THAT: "THE NATURAL GRADIENTS OF THE EXISTING TERRAIN SHALL BE RETAINED WITH A MINIMUM OF CUTTING REQUIRED FOR INSTALLATION OF HOUSE SLABS, PAVING, ETC."

NHA ALLEGED THAT RATHER THAN CONFORMING TO THE ABOVE SPECIFICATIONS, THE UNIT DESIGNS AND GRADING PROPOSED BY MK/E WOULD REQUIRE MAXIMUM CUTTING AND FILLING OF THE EXISTING NATURAL TERRAIN IN ORDER FOR THE PROJECT TO BE CONSTRUCTED. IN SUPPORT OF THIS ALLEGATION, NHA CONTENDED THAT CERTAIN DRIVEWAY GRADES PROPOSED BY MK/E EXCEED THE SLOPES SPECIFIED IN THE FEDERAL HOUSING ADMINISTRATION (FHA) STANDARDS INCORPORATED IN THE RFP. FURTHERMORE, NHA ARGUED THAT MK/E'S REPRESENTATION IN THE NARRATIVE SUBMITTED WITH ITS PROPOSAL THAT GRADING HAD BEEN KEPT TO A MINIMUM WAS IN SHARP CONTRAST TO THE ACTUAL PLANS SUBMITTED BY MK/E. THE NAVY CONTENDS THAT THE PROPOSAL AS ACCEPTED DID CONFORM TO THE REQUIREMENTS OF THE RFP IN THAT THE PROPOSED UNIT DESIGN PLANS CONTAINED A NOTE THAT THE GARAGE FLOOR FOR THESE UNITS WAS TO BE LOWERED ONE TO THREE FEET IN ORDER TO REDUCE THE DRIVEWAY GRADE. IN THE NAVY'S VIEW, THE GRADING PROPOSED BY MK/E IS NOT OBJECTIONABLE, ONLY INVOLVES THE ASSIGNMENT OF FEWER QUALITY POINTS, AND DOES NOT CONSTITUTE NONCONFORMITY WITH THE SPECIFICATIONS.

THIS "TURNKEY" HOUSING CONSTRUCTION PROJECT UTILIZED A PERFORMANCE TYPE SPECIFICATION, WHICH SET FORTH MINIMUM BROAD STANDARDS AND BASIC CONFIGURATIONS. AS WE OBSERVED IN 51 COMP. GEN. 129, 131 (1971), UNDER THE "TURNKEY" METHOD:

"*** A DEVELOPER BUILDS IN ACCORDANCE WITH PLANS AND SPECIFICATIONS PREPARED BY HIS OWN ARCHITECT AND TO A STANDARD OF GOOD DESIGN, QUALITY, AND WORKMANSHIP. NECESSARILY, THE GUIDANCE IN THE SOLICITATION IS LIMITED TO AN INDICATION OF THE FEATURES REQUIRED, SUCH AS STYLE OF HOUSE, NUMBER OF BEDROOMS, AND BATHS, ETC., AND AN INDICATION OF WHERE THE HOUSING IS TO BE LOCATED ON THE SITE - ESSENTIALLY, PERFORMANCE SPECIFICATIONS."

IN THESE CIRCUMSTANCES, THE SELECTION OF THE CONTRACTOR BEST QUALIFIED FOR AWARD IS TO BE MADE BY THE ADMINISTRATIVE OFFICE CONCERNED IN THE EXERCISE OF ITS SOUND JUDGMENT AS TO THE BEST INTERESTS AND ADVANTAGE TO THE GOVERNMENT. B-149344, DECEMBER 26, 1962.

IN VIEW OF THE FACT THAT THE NAVY DETERMINED THAT THE DRIVEWAYS AND GRADING OF THE UNITS PROPOSED BY MK/E CONFORMED TO THE OBJECTIVES AND REQUIREMENTS OF THE RFP, WE WILL NOT QUESTION THE PROPRIETY OF THE AWARD ON THESE GROUNDS.

IN ONE OF ITS LATER SUBMISSIONS TO OUR OFFICE, NHA ALLEGED THAT THE SOLICITATION CONTAINED INADEQUATE STATEMENTS OF THE CRITERIA FOR EVALUATION OF PROPOSALS AND THE RELATIVE IMPORTANCE OF THOSE CRITERIA. REGARD TO THIS CONTENTION, SECTION 20.2(A) OF OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS REQUIRES THAT PROTESTS "BASED UPON ALLEGED IMPROPRIETIES IN ANY TYPE OF SOLICITATION WHICH ARE APPARENT PRIOR TO *** THE CLOSING DATE FOR RECEIPT OF PROPOSALS SHALL BE FILED PRIOR TO *** THE CLOSING DATE FOR RECEIPT OF PROPOSALS." SINCE THIS ALLEGATION WAS MADE APPROXIMATELY 7 MONTHS AFTER INITIAL PROPOSALS WERE DUE UNDER THE INSTANT RFP, WE REGARD THIS PORTION OF NHA'S PROTEST AS UNTIMELY FILED AND THEREFORE DECLINE TO CONSIDER IT UPON THE MERITS.

WE HAVE CONSIDERED THE OTHER ALLEGATIONS PROPOUNDED BY NHA AND HAVE DETERMINED THEM NOT TO BE SUFFICIENTLY MATERIAL TO DISTURB THE AWARD OF THE CONTRACT TO MK/E. FROM OUR REVIEW OF THE RECORD IN THE INSTANT CASE, WE ARE UNABLE TO CONCLUDE THAT THE DEPARTMENT OF THE NAVY HAS ARBITRARILY EXERCISED THE DISCRETION COMMITTED TO IT IN EVALUATING THE PROPOSALS OR IN MAKING AN AWARD TO MK/E.

ACCORDINGLY, THE PROTEST OF NHA IS DENIED.