B-180872, MAY 21, 1974

B-180872: May 21, 1974

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USE OF ROTATING BIDDERS LIST WAS NOT UNDULY RESTRICTIVE OF COMPETITION SINCE PRACTICE COMPLIED WITH ASPR 2-205.4. PROCUREMENT WAS SYNOPSIZED IN COMMERCE BUSINESS DAILY. COPIES OF INVITATION WERE AVAILABLE TO ANY BIDDER UPON REQUEST. RECORD IS DEVOID OF ANY EVIDENCE OF INTENT TO DELIBERATELY EXCLUDE ANY FIRM FROM COMPETITION. INC.: THE PROTESTING CONCERNS HAVE OBJECTED TO THE UTILIZATION BY THE DEFENSE SUPPLY AGENCY (DSA). THE SUBJECT INVITATION WAS ISSUED MARCH 1. ELEVEN BIDS WERE OPENED ON MARCH 18. THE INSTANT PROTESTS WERE FILED WITH OUR OFFICE SHORTLY THEREAFTER. THAT THE LUMBER WAS URGENTLY NEEDED FOR THE VARIOUS MILITARY REQUIREMENTS. SINCE TWO OF THE THREE BIDS IN LINE FOR AWARD WERE TO EXPIRE THAT DAY.

B-180872, MAY 21, 1974

USE OF ROTATING BIDDERS LIST WAS NOT UNDULY RESTRICTIVE OF COMPETITION SINCE PRACTICE COMPLIED WITH ASPR 2-205.4; PROCUREMENT WAS SYNOPSIZED IN COMMERCE BUSINESS DAILY; AND COPIES OF INVITATION WERE AVAILABLE TO ANY BIDDER UPON REQUEST. MOREOVER, RECORD IS DEVOID OF ANY EVIDENCE OF INTENT TO DELIBERATELY EXCLUDE ANY FIRM FROM COMPETITION.

TO WEST COAST TIMBER PRODUCTS; WYATT LUMBER COMPANY; KENNEDY-JOHNSEN LUMBER, INC.:

THE PROTESTING CONCERNS HAVE OBJECTED TO THE UTILIZATION BY THE DEFENSE SUPPLY AGENCY (DSA), DEFENSE CONSTRUCTION SUPPLY CENTER (DCSC), COLUMBUS, OHIO, OF A ROTATIONAL SYSTEM FOR BIDDERS MAILING LISTS, UNDER INVITATION FOR BIDS DSA720-74-B-1813 IN PARTICULAR, AND WITH REGARD TO WOOD PRODUCT PROCUREMENTS IN GENERAL.

THE SUBJECT INVITATION WAS ISSUED MARCH 1, 1974 FOR A QUANTITY OF 2,030,091 BOARD FEET OF VARIOUS GRADES OF SOFTWOOD LUMBER FOR SHIPMENT TO FULFILL VARIOUS MILITARY REQUIREMENTS IN OKINAWA, JAPAN AND THAILAND. ELEVEN BIDS WERE OPENED ON MARCH 18, 1974, AND THE INSTANT PROTESTS WERE FILED WITH OUR OFFICE SHORTLY THEREAFTER. ON MARCH 28, 1974, THE CONTRACTING OFFICER DETERMINED, PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-407.8(B)(3), THAT THE LUMBER WAS URGENTLY NEEDED FOR THE VARIOUS MILITARY REQUIREMENTS; THAT A DELAY OF THE PROCUREMENT BY ONLY 30 DAYS WOULD RESULT IN SERIOUS CURTAILMENTS OF ALLOTMENTS TO USERS; AND SINCE TWO OF THE THREE BIDS IN LINE FOR AWARD WERE TO EXPIRE THAT DAY, AND THE BIDDERS HAD REFUSED TO EXTEND, AND THE THIRD HAD BEEN EXTENDED ONLY TO APRIL 4, 1974, AN AWARD WAS REQUIRED PRIOR TO RESOLUTION OF THE PROTEST BY THIS OFFICE.

THE PROTESTING CONCERNS OBJECT TO THE PRACTICE OF ROTATING BIDDERS LISTS WHICH WAS INSTITUTED BY THE PROCURING ACTIVITY TO REDUCE THE COST AND ADMINISTRATIVE BURDEN OF ISSUING SOLICITATIONS TO AS MANY AS 267 FIRMS ON COMBINED BIDDING LISTS WHERE THE NUMBER OF BIDS BEING RECEIVED CONSTITUTED ONLY A SMALL PERCENTAGE OF THE SOLICITATIONS ISSUED. THE PROTESTERS CONTEND THAT THE PRACTICE ARBITRARILY "ROTATES OUT" FIRMS WHICH CONSISTENTLY BID ON CERTAIN CATEGORIES OF MATERIAL, THAT EACH BIDDER IS NOT RECEIVING ALL INVITATIONS FOR THOSE ITEMS ON WHICH HE CONSISTENTLY BIDS AND, CONSEQUENTLY, THE PRACTICE CONSTITUTES AN UNREASONABLE RESTRICTION OF COMPETITION THAT DENIES THE GOVERNMENT THE BEST POSSIBLE PRICES WHILE INFLICTING HARDSHIPS UPON THE FIRMS AFFECTED.

IN SETTING FORTH THE FACTORS WHICH PRECIPITATED THE USE OF A ROTATIONAL SYSTEM, THE DSA NOTES THAT THE DCSC IN COLUMBUS MAINTAINS 13 DIFFERENT BIDDERS LISTS OF PROSPECTIVE SUPPLIERS OF WOOD PRODUCTS. TWO OF THESE LISTS, FOR SPECIALIZED ITEMS, ARE NOT ROTATED BECAUSE THE LISTS ARE RELATIVELY SMALL. THE OTHER 11 LISTS CONTAIN FROM 47 TO 267 BIDDERS, AND PREVIOUS PRACTICE HAS BEEN TO SOLICIT BIDS FROM ALL 267 (WHEN THE LARGEST LIST WAS USED). WHILE SUCH PRACTICE RESULTED IN ADEQUATE COMPETITION, THE NUMBER OF BIDS RECEIVED WAS MINIMAL IN COMPARISON TO THE SOLICITATIONS ISSUED.

ACCORDINGLY, AND IN KEEPING WITH ASPR 2-205.4, THE CENTER INSTITUTED A PROCEDURE BY WHICH THE BIDDERS LIST IS DIVIDED IN HALF ALPHABETICALLY. BIDDERS ON ONE HALF OF THE LIST ARE SOLICITED ON ONE PROCUREMENT, AND BIDDERS ON THE SECOND HALF ARE SOLICITED ON THE NEXT. IN ADDITION, FIRMS THAT RESPONDED ON THE PREVIOUS SOLICITATION AND FIRMS KNOWN TO SUPPLY THE PRODUCT BEING PURCHASED ARE TO BE SOLICITED. FURTHERMORE, ALL PROCUREMENTS OF WOOD PRODUCTS IN EXCESS OF $2,500 ARE TO BE SYNOPSIZED IN THE COMMERCE BUSINESS DAILY.

WITH REGARD TO THE SUBJECT INVITATION, THE RECORD STATES THAT BIDDERS ON THE FIRST HALF OF THE BIDDERS LIST WERE SOLICITED, AND THE NAMES OF FIVE OTHER SUPPLIERS KNOWN TO THE CONTRACTING OFFICER WERE ALSO SOLICITED, MAKING A TOTAL OF 50 FIRMS THAT WERE GIVEN COPIES OF THE SOLICITATION. WEST COAST TIMBER PRODUCTS AND, APPARENTLY WYATT, WERE NOT SOLICITED BECAUSE THEIR NAMES APPEARED ON THE SECOND HALF OF THE BIDDERS LIST AND THEY HAD FAILED TO SUBMIT A BID ON THE PREVIOUS PROCUREMENT, INVITATION FOR BIDS DSA720-74-B-1788. FURTHERMORE, WE ARE ADVISED THAT THE INSTANT SOLICITATION WAS SYNOPSIZED IN THE COMMERCE BUSINESS DAILY. IT IS REPORTED THAT OF THE 50 FIRMS RECEIVING COPIES OF THE SOLICITATION, 11 SUBMITTED BIDS AT PRICES WHICH THE PROCURING ACTIVITY CONSIDERED INDICATIVE OF GOOD COMPETITION.

THE CONTRACTING OFFICER ADVISED THAT AFTER APRIL 15, 1974, FIRMS ON THE BIDDERS LIST FOR WOOD PRODUCTS ARE BEING REQUESTED TO COMPLETE THE REVERSE SIDE OF DD FORM 1707, INFORMATION TO OFFERORS, IF THEY DO NOT INTEND TO SUBMIT A BID. IF ON TWO CONSECUTIVE SOLICITATIONS, A BIDDER FAILS TO EITHER SUBMIT A BID OR RETURN DD FORM 1707 INDICATING A DESIRE TO BE RETAINED ON THE BIDDERS LIST, THE BIDDER'S NAME IS TO BE REMOVED FROM THE MAILING LIST FOR FUTURE SOLICITATIONS FOR THE TYPE OF SUPPLIES ON WHICH A BIDDER DID NOT RESPOND. PROCUREMENTS OF WOOD PRODUCTS OVER $2,500 WILL CONTINUE TO BE SYNOPSIZED IN THE COMMERCE BUSINESS DAILY AND COPIES OF SOLICITATIONS WILL BE SUPPLIED IN RESPONSE TO INDIVIDUAL REQUESTS. IN THE EVENT THE PROCEDURE REDUCES THE BIDDERS LISTS FOR WOOD PRODUCTS TO A REASONABLE SIZE, THE ROTATION WILL BE DISCONTINUED. THE CONTRACTING OFFICER FURTHER STATES THAT WHILE DCSC CONSIDERS THE FOREGOING PROCEDURE TO BE THE MOST APPROPRIATE AT THE PRESENT TIME, IT IS CONTINUING TO STUDY WAYS IN WHICH THE PROCEDURE FOR SOLICITING PROCUREMENTS OF WOOD PRODUCTS MIGHT BE IMPROVED.

ASPR 2-205.2(A) PERMITS THE REMOVAL OF NAMES FROM BIDDERS MAILING LISTS FOR FAILURE TO RESPOND TO TWO CONSECUTIVE INVITATIONS OR PRE INVITATION NOTICES IN THE ABSENCE OF WRITTEN REQUEST FOR RETENTION ON THE LIST. ACCORDINGLY, WE CANNOT INTERPOSE LEGAL OBJECTION TO THE PROPOSED UTILIZATION OF THE DD FORM 1707, OR THE REMOVAL FROM MAILING LISTS FOR FAILURE TO SUBMIT SUCH FORM OR SUBMIT A BID ON TWO CONSECUTIVE SOLICITATIONS.

WITH REGARD TO THE ROTATION OF LISTS IN INSTANCES OF EXCESSIVELY LONG BIDDERS MAILING LISTS, ASPR 2-205.4 STATES:

"2-205.4 EXCESSIVELY LONG BIDDERS MAILING LISTS

(A) GENERAL. TO PREVENT EXCESSIVE ADMINISTRATIVE COSTS OF A PROCUREMENT, MAILING LISTS SHOULD BE USED IN A WAY WHICH WILL PROMOTE COMPETITION COMMENSURATE WITH THE DOLLAR VALUE OF THE PURCHASE TO BE MADE. AS MUCH OF THE MAILING LIST WILL BE USED AS IS COMPATIBLE WITH EFFICIENCY AND ECONOMY IN SECURING ADEQUATE COMPETITION AS REQUIRED BY LAW. WHERE THE NUMBER OF BIDDERS ON A MAILING LIST IS CONSIDERED EXCESSIVE IN RELATION TO A SPECIFIC PROCUREMENT, THE NUMBER OF FIRMS TO BE SOLICITED MAY BE REDUCED BY ANY METHOD CONSISTENT WITH THE FOREGOING, INCLUDING THOSE DESCRIBED IN (B) BELOW AND 2-205.6. THE FACT THAT LESS THAN AN ENTIRE MAILING LIST IS USED SHALL NOT IN ITSELF PRECLUDE FURNISHING OF BID SETS UPON REQUEST MADE BY CONCERNS NOT INVITED TO BID.

(B) ROTATION OF LISTS. MAILING LISTS MAY BE ROTATED, BUT TO DO SO WILL REQUIRE CONSIDERABLE JUDGMENT AS TO WHETHER THE SIZE OF THE TRANSACTION JUSTIFIES ROTATION. CONSIDERATION ALSO SHOULD BE GIVEN AS TO WHETHER TIME PERMITS UTILIZATION OF THE PRE-INVITATION NOTICE (SEE 2 205.6). ROTATING A LIST, THE INTEREST OF SMALL BUSINESS (SEE 1 702(B)(V)) AND THE EXISTENCE OF LABOR SURPLUS AREAS (SEE 1-803(A)(V)) SHALL BE CONSIDERED. WHENEVER THE ROTATION METHOD IS EMPLOYED, THE SUCCESSFUL BIDDER ON THE PREVIOUS PROCUREMENT FOR THE SAME OR SIMILAR ITEMS AND THOSE PROSPECTIVE SUPPLIERS WHO HAVE BEEN ADDED TO THE BIDDERS MAILING LIST SINCE THE LAST PROCUREMENT SHALL BE SOLICITED, IN ADDITION TO THOSE BIDDERS COMPRISING THAT SEGMENT OF THE LIST SELECTED FOR USE IN A PARTICULAR PROCUREMENT, EXCEPT WHERE SUCH ACTION WOULD PRECLUDED BY USE OF THE SMALL BUSINESS TOTAL SET-ASIDE PROCEDURES."

IN CONSIDERING PREVIOUS PROTESTS FROM FIRMS WHICH WERE NOT SOLICITED FOR A PARTICULAR PROCUREMENT DUE TO THE USE OF A ROTATIONAL PROCEDURE PURSUANT TO ASPR 2-205.4, THIS OFFICE HAS STATED THAT WHERE THE METHOD OF SOLICITATION PROVIDED ADEQUATE COMPETITION AND REASONABLE PRICES, THE FAILURE TO SOLICIT A PARTICULAR BIDDER DOES NOT, ABSENT A SHOWING OF DELIBERATE INTENT TO EXCLUDE THAT BIDDER, AFFORD A SUFFICIENT BASIS TO QUESTION AN AWARD. SEE B-178967(1), NOVEMBER 5, 1973; 49 COMP. GEN. 707 (1970).

THE CONTRACTING OFFICER HAS STATED THAT ADEQUATE COMPETITION WAS RECEIVED UNDER THE INSTANT SOLICITATION. MOREOVER, SINCE IT IS REPORTED THAT THE PROCUREMENT WAS SYNOPSIZED IN THE COMMERCE BUSINESS DAILY, AND THAT COPIES OF THE SOLICITATION WERE AVAILABLE UPON REQUEST AT THE PROCUREMENT OFFICE, WE ARE UNABLE TO DISCERN ANY DELIBERATE INTENT TO EXCLUDE WEST COAST, WYATT OR ANY OTHER FIRM FROM THE COMPETITION FOR AWARD. IN VIEW THEREOF, THE VALIDITY OF THE AWARD MUST BE AFFIRMED.