B-181562, MAR 24, 1975

B-181562: Mar 24, 1975

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GEOGRAPHICAL RESTRICTION OF CONTRACTOR LOCATION WITHIN 20 MILES OF NAVY SHIPYARD FOR CONTRACT REQUIRING DESIGN SERVICES FOR THE REPAIR AND IMPROVEMENT OF VESSELS IS NOT OBJECTIONABLE WHERE RECORD INDICATES RESTRICTION IS BASED UPON BONA FIDE REQUIREMENTS OF CONTRACT ADMINISTRATION. INC.: REQUEST FOR PROPOSALS (RFP) N00191-75-R-0058 WAS ISSUED JANUARY 17. THE SUBJECT RFP IS A RESOLICITATION OF A REQUIREMENT FOLLOWING THE CANCELLATION OF CONTRACT N00191-74-D-0389. THE CONTRACT WAS CANCELED WHEN THE NAVY. ONLY THOSE ORDERS CONSIDERED ABSOLUTELY ESSENTIAL WERE TO BE PLACED WITH SHARP PENDING THE AWARD OF A NEW CONTRACT UNDER THE INSTANT RFP. THE PROTESTER BELIEVES THAT SHARP HAS A MATERIAL BIDDING ADVANTAGE SINCE IT HAS AN OFFICE IN CHARLESTON AND IT IS THE INCUMBENT CONTRACTOR.

B-181562, MAR 24, 1975

GEOGRAPHICAL RESTRICTION OF CONTRACTOR LOCATION WITHIN 20 MILES OF NAVY SHIPYARD FOR CONTRACT REQUIRING DESIGN SERVICES FOR THE REPAIR AND IMPROVEMENT OF VESSELS IS NOT OBJECTIONABLE WHERE RECORD INDICATES RESTRICTION IS BASED UPON BONA FIDE REQUIREMENTS OF CONTRACT ADMINISTRATION.

PERSONNEL PLUS ENGINEERING SERVICES, INC.:

REQUEST FOR PROPOSALS (RFP) N00191-75-R-0058 WAS ISSUED JANUARY 17, 1975, BY THE DEPARTMENT OF THE NAVY, CHARLESTON NAVAL SHIPYARD, FOR MARINE ENGINEERING AND DRAFTING AND NAVAL ARCHITECTURAL SERVICES.

THE SUBJECT RFP IS A RESOLICITATION OF A REQUIREMENT FOLLOWING THE CANCELLATION OF CONTRACT N00191-74-D-0389, AWARDED TO GEORGE G. SHARP, INC. UNDER RFP N00191-74-R-0019. THE CONTRACT WAS CANCELED WHEN THE NAVY, AFTER REVIEWING THE PROCUREMENT, DETERMINED THAT THE ORIGINAL RFP EMBODIED CERTAIN MATERIAL DEFECTS. SUBSEQUENT TO CANCELLATION, ONLY THOSE ORDERS CONSIDERED ABSOLUTELY ESSENTIAL WERE TO BE PLACED WITH SHARP PENDING THE AWARD OF A NEW CONTRACT UNDER THE INSTANT RFP.

PERSONNEL PLUS, WHOSE PROPOSAL HAD BEEN DETERMINED TECHNICALLY UNACCEPTABLE UNDER THE ORIGINAL RFP, DID NOT SUBMIT A PROPOSAL UNDER THE INSTANT RFP. HOWEVER, IT HAS PROTESTED THE GEOGRAPHICAL RESTRICTION IN THE INSTANT RFP THAT THE PROSPECTIVE CONTRACTOR POSSESS A FACILITY WITHIN 30 MILES (SUBSEQUENTLY REDUCED TO 20 MILES) OF THE CHARLESTON NAVAL SHIPYARD. THE PROTESTER BELIEVES THAT SHARP HAS A MATERIAL BIDDING ADVANTAGE SINCE IT HAS AN OFFICE IN CHARLESTON AND IT IS THE INCUMBENT CONTRACTOR. THE PROTESTER ALSO RENEWED ITS PROTEST FILED UNDER THE ORIGINAL SOLICITATION AGAINST THE DETERMINATION THAT ITS PROPOSAL WAS UNACCEPTABLE, CITING THE FACT THAT IT UNDERBID SHARP BY $249,000.

INASMUCH AS THE NAVY CANCELED THE CONTRACT BECAUSE THE ORIGINAL RFP WAS CONSIDERED DEFECTIVE, WE DO NOT SEE ANY USEFUL PURPOSE IN DEVELOPING AND CONSIDERING THE PROTEST REGARDING THE REJECTION OF THE PROTESTER'S PROPOSAL. ACCORDINGLY, WE BELIEVE THIS ALLEGATION IS MOOT.

WITH REGARD TO THE GEOGRAPHICAL RESTRICTION IMPOSED UNDER THE INSTANT RFP, THE NAVY RELATES ITS EXPERIENCE CONCERNING THE CHARLESTON AND OTHER SHIPYARDS THAT THE PRESENCE OF A DESIGN SERVICE CONTRACTOR CLOSE TO THE SHIPYARD IS ESSENTIAL TO THE ADMINISTRATION OF THE CONTRACT. SPECIFICALLY, IT IS STATED THAT THERE ARE NUMEROUS TASKS REQUIRING IMMEDIATE ACTION AND FACE-TO-FACE NEGOTIATIONS WITH LITTLE OR NO PRIOR NOTICE. FURTHER, THE DESIGN DIVISION MUST MONITOR THE PERFORMANCE OF THE CONTRACTOR TO OBTAIN REASONABLE ASSURANCE THAT INEFFICIENT OR WASTEFUL METHODS ARE NOT BEING USED. MOREOVER, SHIPYARD PERSONNEL MUST BE ABLE TO PROVIDE TECHNICAL DIRECTION TO THE CONTRACTOR WITH REGARD TO THE FILLING IN OF TECHNICAL DETAILS, SUGGESTION OF POSSIBLE LINES OF INQUIRY, THE PROVISION OF MORE COMPLETE DATA ON INSTALLED SYSTEMS, AND THE PERFORMANCE OF OPERATIONAL TESTS THEREON. FINALLY, IT IS STATED THAT BEFORE A DRAWING IS ACCEPTED FROM A CONTRACTOR, SEVERAL REVISIONS ARE FREQUENTLY REQUIRED IN ORDER TO OBTAIN THE DESIGN DIVISION'S FINAL APPROVAL. ACCORDINGLY, THE PROXIMITY REQUIREMENT ELIMINATES THE LOSS OF TIME INCURRED IN MAILING WHICH, CONSIDERING THE NUMEROUS DRAWINGS INVOLVED, IS CONSIDERED TO HAVE A SIGNIFICANT IMPACT UPON SCHEDULE ADHERENCE AND COSTS RESULTING FROM DELAYS.

THE CONTRACTING OFFICER DOES NOT CONSIDER THE GEOGRAPHICAL LIMITATION TO BE A SIGNIFICANT DETERRENT TO EFFECTIVE COMPETITION, CONTENDING THAT SHARP AND ANOTHER OFFEROR WITH OFFICES IN CHARLESTON ENJOY ONLY A SLIGHT COMPETITIVE PRICE ADVANTAGE OVER FIRMS WHICH WOULD BE REQUIRED TO SET ONE UP AFTER CONTRACT AWARD. WE ARE ALSO ADVISED BY THE NAVY THAT NINE PROPOSALS WERE RECEIVED UNDER THE RESOLICITATION NOTWITHSTANDING THE REQUIREMENT FOR A FACILITY NEAR CHARLESTON. AT LEAST SEVEN OFFERORS WERE APPARENTLY WILLING TO SET UP A CHARLESTON OFFICE UPON AWARD OF A CONTRACT.

OUR OFFICE HAS RECOGNIZED THAT A GEOGRAPHICAL RESTRICTION, WHILE OBVIOUSLY RESTRICTIVE OF COMPETITION IN THE BROADEST SENSE, NEED NOT BE REGARDED AS UNDULY RESTRICTIVE WHEN PREDICATED UPON THE ACTUAL NEEDS OF THE PROCURING AGENCY. SEE 53 COMP. GEN. 102, 103 (1973); DESCOMP, INC., 53 COMP. GEN. 522, 528 (1974). THE PROPER SCOPE OF A RESTRICTION IS A MATTER OF JUDGMENT AND DISCRETION, INVOLVING CONSIDERATION OF THE SERVICES BEING PROCURED, PAST EXPERIENCE AND OTHER FACTORS. WE WILL NOT INTERPOSE AN OBJECTION IN CASES WHERE THE RESTRICTION IS BASED UPON CAREFUL CONSIDERATION BY THE AGENCY OF ALL RELEVANT FACTORS AND WHERE THE RECORD HAS SUFFICIENTLY SET THEM OUT. PLATTSBURG LAUNDRY AND DRY CLEANING CORPORATION, 54 COMP. GEN. 29 (1974).

WE CONSIDER THE AGENCY'S REASONS FOR THE GEOGRAPHICAL RESTRICTION TO BEAR A REASONABLE RELATIONSHIP TO LEGITIMATE AND BONA FIDE AGENCY REQUIREMENTS FOR CONTRACT ADMINISTRATION. WE THEREFORE DO NOT FIND ANY BASIS UPON WHICH TO OBJECT TO THE REQUIREMENT.

ACCORDINGLY, THE PROTEST IS DENIED.