B-181663, MAR 28, 1975, 54 COMP GEN 809

B-181663: Mar 28, 1975

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CONTRACTS - PROTESTS - TIMELINESS PROTEST REGARDING NEGOTIATION RATHER THAN FORMAL ADVERTISING OF NAVY MESS ATTENDANT CONTRACTS FILED AFTER RECEIPT OF PROPOSALS IS UNTIMELY UNDER 4 CODE OF FEDERAL REGULATIONS (CFR) 20.1. MATTER WILL BE CONSIDERED SIGNIFICANT ISSUE UNDER 4 CFR 20.2 (1974). SHOULD HAVE BEEN CONDUCTED BY PROCESS KNOWN AS SMALL BUSINESS RESTRICTED ADVERTISING SINCE NAVY HAS NOT DEMONSTRATED THAT USE OF THIS METHOD WAS NOT POSSIBLE. 1975: REQUEST FOR PROPOSALS (RFP) N00612-74-R-0175 WAS ISSUED ON APRIL 24. 15 OFFERS WERE RECEIVED. WERE AN ACCURATE ASSESSMENT OF THE MANHOUR REQUIREMENTS FOR THE SERVICES DESIRED. THE FOOD SERVICE OFFICER'S MEMO TO THE CONTRACTING OFFICER STATED IN PERTINENT PART THAT: *** A REVIEW OF SUBJECT MAN-HOUR REQUIREMENTS WAS CONDUCTED.

B-181663, MAR 28, 1975, 54 COMP GEN 809

CONTRACTS - PROTESTS - TIMELINESS PROTEST REGARDING NEGOTIATION RATHER THAN FORMAL ADVERTISING OF NAVY MESS ATTENDANT CONTRACTS FILED AFTER RECEIPT OF PROPOSALS IS UNTIMELY UNDER 4 CODE OF FEDERAL REGULATIONS (CFR) 20.1, ET SEQ. (1974). HOWEVER, DUE TO WIDESPREAD INTEREST, MATTER WILL BE CONSIDERED SIGNIFICANT ISSUE UNDER 4 CFR 20.2 (1974). CONTRACTS - MESS ATTENDANT SERVICES - SMALL BUSINESS SET -ASIDE - PROCUREMENTS - SMALL BUSINESS RESTRICTED ADVERTISING TOTAL SMALL BUSINESS SET-ASIDE FOR MESS ATTENDANT SERVICES PURSUANT TO 10 U.S.C. 2304(A)(1) (1970) AND ARMED SERVICES PROCUREMENT REGULATION 1-706.5 (1973 ED.) SHOULD HAVE BEEN CONDUCTED BY PROCESS KNOWN AS SMALL BUSINESS RESTRICTED ADVERTISING SINCE NAVY HAS NOT DEMONSTRATED THAT USE OF THIS METHOD WAS NOT POSSIBLE.

IN THE MATTER OF IRA GELBER FOOD SERVICES, INC.; T AND S SERVICE ASSOCIATES, INC., MARCH 28, 1975:

REQUEST FOR PROPOSALS (RFP) N00612-74-R-0175 WAS ISSUED ON APRIL 24, 1974, BY THE NAVAL SUPPLY CENTER, CHARLESTON, SOUTH CAROLINA. THE RFP SOUGHT OFFERS ON THE PERFORMANCE OF MESS ATTENDANT SERVICES AT THE NAVAL AIR STATION, KEY WEST, FLORIDA, FROM JULY 1, 1974, TO JUNE 30, 1975. THE AWARD OF A CONTRACT TO MILITARY BASE MANAGEMENT OF NEW JERSEY, INC. (MBM), UNDER THE RFP RESULTED IN THIS PROTEST WHICH ESSENTIALLY QUESTIONS THE NEGOTIATION PROCEDURES AND PROCUREMENT METHOD UTILIZED BY THE NAVY.

BY THE CLOSING DATE SET FOR RECEIPT OF PROPOSALS, MAY 28, 1974, 15 OFFERS WERE RECEIVED, 11 OF WHICH PROPOSED FEWER HOURS THAN THE GOVERNMENT'S ESTIMATE OF 161,987 MAN-HOURS. THE REPORT OF THE CONTRACTING OFFICER STATES THAT:

*** THE CONTRACTING OFFICER, ON 30 MAY 74, REQUESTED VERIFICATION OF THE MANHOUR REQUIREMENTS FROM THE FOOD SERVICES OFFICER, NAS, KEY WEST *** (WHO SUBSEQUENTLY) VERIFIED THAT THE ESTIMATES, AS SUBMITTED AND STATED IN THE SOLICITATION, WERE AN ACCURATE ASSESSMENT OF THE MANHOUR REQUIREMENTS FOR THE SERVICES DESIRED.

THE FOOD SERVICE OFFICER'S MEMO TO THE CONTRACTING OFFICER STATED IN PERTINENT PART THAT:

*** A REVIEW OF SUBJECT MAN-HOUR REQUIREMENTS WAS CONDUCTED. THE MAN- HOUR REQUIREMENTS ORIGINALLY SUBMITTED HAVE BEEN VERIFIED, IN FACT MINIMAL ADDITIONAL MAN-HOUR REQUIREMENTS WERE DISCOVERED. THE FOOD SERVICE DIVISION, NAS KEY WEST DOES NOT DESIRE ANY FURTHER ADJUSTMENT OF THESE REQUIREMENTS TO REFLECT THE NEW REQUIREMENTS. IT IS THEREFORE REQUESTED THAT PRIOR MAN-HOUR REQUIREMENTS SUBMITTED BE CONSIDERED AS A BASE FOR FURTHER CONTRACT NEGOTIATIONS.

OUR REVIEW SHOWS THAT THE ESTIMATE WAS NOT AMENDED. WE ATTRIBUTE THIS TO THE FACT THAT THE CONTRACTING OFFICER FELT, ON THE BASIS OF ADVICE FROM THE FOOD SERVICE OFFICER, THAT THE ESTIMATE WAS REASONABLE, OR PERHAPS UNDERSTATED, NOTWITHSTANDING THAT MOST OFFERORS PROPOSED FEWER HOURS THAN ESTIMATED BY THE NAVY.

DISCUSSIONS WERE HELD WITH ALL OFFERORS. THOSE OFFERORS WHOSE PROPOSALS DID NOT MEET THE EVALUATION AND AWARD CRITERIA SET OUT IN SECTION "D" OF THE RFP WERE ADVISED AND GIVEN THE OPPORTUNITY TO ADJUST OR REVISE THEIR PROPOSALS. ADDITIONALLY, BY AMENDMENT NO. 0004 ALL OFFERORS WERE GIVEN THE OPPORTUNITY TO SUBMIT BEST AND FINAL OFFERS BY JUNE 20, 1974. SECTION "D" READS IN PERTINENT PART:

EVALUATION OF OFFEROR'S MANNING AND PRICES

(A) MANNING LEVELS OFFERED MUST BE SUFFICIENT TO PERFORM THE REQUIRED SERVICES. FOR THE PURPOSE OF EVALUATING PROPOSALS THE GOVERNMENT ESTIMATES THAT SATISFACTORY PERFORMANCE DURING THE CONTRACT PERIOD OF 365 DAYS WILL REQUIRE A TOTAL OF 161,987 MANNING HOURS (INCLUDING MANAGEMENT/SUPERVISION) FOR BOTH BLDG. #1287 ITEM 0001 & BLDG. #515 ITEM 0002. THIS ESTIMATE IS BASED UPON APPROXIMATELY 227 HOURS ON A REPRESENTATIVE WEEKDAY MULTIPLIED BY 252 WEEKDAYS, AND 173 HOURS ON A REPRESENTATIVE WEEKEND/HOLIDAY MULTIPLIED BY 113 WEEKEND/HOLIDAYS FOR BLDG. 1287, ITEM 0001, & APPROXIMATELY 262 HOURS ON A REPRESENTATIVE WEEKDAY MULTIPLIED BY 252 WEEKDAYS, & 170 HOURS ON A REPRESENTATIVE WEEKEND/HOLIDAY MULTIPLIED BY 113 WEEKEND/HOLIDAYS FOR ITEM 0002. SUBMISSION OF MANNING CHARTS WHOSE TOTAL HOURS FALL BELOW THE TOTAL OF 161,987 FOR THE TOTAL OF 365 DAYS DURING THE CONTRACT PERIOD AS STATED ABOVE MAY RESULT IN REJECTION OF THE OFFER UNLESS THE OFFEROR CLEARLY SUBSTANTIATES THE MANNING DIFFERENCE WITH SPECIFIC DOCUMENTATION DEMONSTRATING THAT THE OFFEROR CAN PERFORM THE REQUIRED SERVICES SATISFACTORILY WITH *** FEWER HOURS. SUCH DOCUMENTATION SHOULD ACCOMPANY THE OFFER.

(B) FURTHER EVALUATION OF THE OFFERORS' PROPOSALS WILL BE BASED ON THE FOLLOWING CRITERIA:

(1) THE MANNING DISTRIBUTION IN SPACE/JOB CATEGORIES PRIOR TO, DURING AND AFTER MEAL HOURS AND AT PEAK PERIODS MUST BE REPRESENT AN EFFECTIVE, WELL PLANNED MANAGEMENT APPROACH TO THE EFFICIENT UTILIZATION OF MANPOWER RESOURCES

(2) THE TOTAL MANHOURS OFFERED MUST BE SUPPORTED BY THE PRICE OFFERED WHEN COMPARED AS FOLLOWS. THE TOTAL OF ALL HOURS OFFERED FOR THE TOTAL DAYS ANY EVALUATED PROMPT PAYMENT DISCOUNT) TO ASSURE THAT THIS DOLLAR/HOUR RATIO IS AT LEAST SUFFICIENT TO COVER THE FOLLOWING BASIC LABOR EXPENSES:

THE BASIC WAGE RATE

FRINGE BENEFITS

HEALTH AND WELFARE

VACATION AND HOLIDAYS

FICA

UNEMPLOYMENT INSURANCE

WORKMEN'S COMPENSATION INSURANCE

FAILURE OF THE PRICE OFFERED TO THUS SUPPORT THE OFFEROR'S MANNING CHARTS MAY RESULT IN REJECTION OF THE PROPOSAL.

(C) AWARD WILL BE MADE TO THE RESPONSIBLE OFFEROR WHOSE PROPOSAL, MEETING THE CRITERIA SET FORTH IN (A) AND (B) ABOVE, OFFERS THE LOWEST EVALUATED TOTAL PRICE ***.

THE LOWEST OFFER RECEIVED WAS MADE BY MBM. MBM PROPOSED TO USE 129,924 MAN-HOURS OR 80.2 PERCENT OF THE GOVERNMENT'S ESTIMATED NUMBER OF MAN- HOURS AT A PRICE OF $337,639.50. MBM SUBMITTED DOCUMENTATION AS REQUIRED BY SECTION "D" TO DEMONSTRATE THAT SATISFACTORY PERFORMANCE COULD BE ACHIEVED WITH SUCH FEWER HOURS. THE DOCUMENTATION CONSISTED OF ACTUAL MBM PAYROLL RECORDS FOR THE PERIOD JANUARY 1, 1973, THROUGH JULY 6, 1973. THIS MATERIAL INDICATED THAT MBM HAD PREVIOUSLY PERFORMED MESS ATTENDANT SERVICES AT THE NAVAL AIR STATION IN KEY WEST AND HAD USED SUBSTANTIALLY FEWER HOURS THAN THE GOVERNMENT ESTIMATE STATED IN THIS RFP. ALTHOUGH THE NAVY RECOGNIZED THAT SINCE THE EARLIER MBM CONTRACT, A NUMBER OF CHANGES HAD BEEN MADE AT KEY WEST (I.E., THE MAIN FEEDING FUNCTION HAD BEEN TRANSFERRED FROM BUILDING 1287 TO BUILDING 515 AND THE TOTAL NUMBER OF MEALS SERVED HAD INCREASED 15 PERCENT), MBM EMPHASIZED IN NEGOTIATIONS THAT THE SPECIFICATIONS FOR THE PRESENT CONTRACT WERE UNCHANGED FROM THE PREVIOUS CONTRACT, AND THAT MBM'S OFFERED HOURS WERE 39 PERCENT HIGHER THAN WHAT IT HAD PROVIDED UNDER THE PREVIOUS CONTRACT. THE CONTRACTING OFFICER ACCEPTED THIS JUSTIFICATION.

MOREOVER, THE CONTRACTING OFFICER STATES THAT AN EVALUATION OF MBM'S OFFER WITH RESPECT TO THE DOLLAR/HOUR RATIO REQUIREMENT OF SECTION DB) OF THE RFP INDICATED THAT MBM'S OFFER COMPLIED IN THAT THE EVALUATED PRICE "WAS MORE THAN ADEQUATE TO SUPPORT THE MINIMUM PRICE FOR THE ACTUAL HOURS OFFERED ***."

THE PROTESTERS ARGUE THAT:

(1) MBM DID NOT CLEARLY SUBSTANTIATE ITS MANNING DEFICIENCY AS REQUIRED BY SECTION DA) OF THE RFP;

(2) "*** IF THE GOVERNMENT REALLY BELIEVED THAT A DRASTIC DROP OF 27,139 HOURS FROM ITS ESTIMATE WAS ACCEPTABLE, THIS IS AN ADMISSION BY THE PROCURING OFFICE THAT ITS ESTIMATE WAS BAD IN THE FIRST PLACE ***;"

(3) THAT MBM'S DOLLAR/HOUR RATIO DOES NOT COMPORT WITH THE REQUIREMENTS SET OUT IN SECTION DB) OF THE RFP; AND

(4) THE NAVY HAS NOT ACTED TO COMPLY WITH THE SUGGESTION STATED IN MATTER OF ABC MANAGEMENT SERVICES, INC.; TIDEWATER MANAGEMENT SERVICES, INC.; CHEMICAL TECHNOLOGY, INC., 53 COMP. GEN. 656, 664 (1974) THAT "*** THE NAVY SERIOUSLY CONSIDER FORMALLY ADVERTISING ALL FUTURE PROCUREMENTS FOR MESS ATTENDANT SERVICES (AS DO THE ARMY AND AIR FORCE)."

WITH REGARD TO THE LATTER POINT, THE PROTESTER IMPLIES THAT THE NAVY ACTED IMPROPERLY IN IGNORING OUR RECOMMENDATION MADE IN MATTER OF ABC MANAGEMENT SERVICES, INC., ET AL., SUPRA, THAT IT SERIOUSLY CONSIDER FORMALLY ADVERTISING ALL FUTURE MESS ATTENDANT PROCUREMENTS. AS A BASIS OF PROTEST, THIS MATTER IS APPARENTLY UNTIMELY UNDER 4 C.F.R. SEC. 20.2 (1974) SINCE IT WAS NOT RAISED PRIOR TO THE DATE FOR RECEIPT OF PROPOSALS. HOWEVER, SINCE THE OVERALL QUESTION OF THE PROPRIETY OF THE NAVY'S METHOD OF PROCURING THESE SERVICES IS OF WIDESPREAD INTEREST, WE REGARD THE BROAD ISSUE PRESENTED AS A SIGNIFICANT ISSUE FOR CONSIDERATION IN ACCORDANCE WITH 4 C.F.R. SEC. 20.2(B) (1974). SEE 52 COMP. GEN. 20 (1972).

THE INSTANT PROCUREMENT WAS NEGOTIATED UNDER 10 U.S.C. SEC. 2304(A)(1) (1970) AND ARMED SERVICES PROCUREMENT REGULATION (ASPR) SEC. 3- 201.2(B)(II) (1973 ED.) SINCE IT WAS TOTALLY SET ASIDE FOR SMALL BUSINESS. IN THIS SITUATION, ASPR SEC. 1-706.5 (1973 ED.) GAVE THE NAVY THE OPTION OF USING EITHER CONVENTIONAL NEGOTIATION TECHNIQUES (AS WAS DONE HERE) OR A PROCESS KNOWN AS SMALL BUSINESS RESTRICTED ADVERTISING WHICH IS CONDUCTED IN THE SAME MANNER AS FORMAL ADVERTISING WITH THE EXCEPTION THAT IT IS LIMITED TO SMALL BUSINESSE. HOWEVER, ASPR SEC. 1- 706.5(B) (1973 ED.) STATES THAT "THE *** LATTER METHOD SHALL BE USED WHEREVER POSSIBLE."

OUR OFFICE MADE INQUIRY OF THE NAVY AS TO THE BASIS FOR USING COMPETITIVE NEGOTIATION RATHER THAN RESTRICTED ADVERTISING. THE ACTING DEPUTY COMMANDER, PROCUREMENT MANAGEMENT, NAVAL SUPPLY SYSTEMS COMMAND, IN A LETTER DATED DECEMBER 6, 1974, RESPONDED AS FOLLOWS:

*** THE PRIMARY BASIS FOR NEGOTIATING THE MESS ATTENDANT SERVICES AT THE NAVAL AIR STATION, KEY WEST, FLORIDA, WAS DUE TO A LACK OF CONFIDENCE ON BEHALF OF THE PROCURING ACTIVITY REGARDING THE GOVERNMENT'S ESTIMATE OF MANHOUR REQUIREMENTS. THIS LACK OF CONFIDENCE WAS IN FACT BORNE OUT IN THAT THE SUCCESSFUL OFFEROR (MBM) SUBMITTED DOCUMENTATION SUBSTANTIATING A PROPOSED NUMBER OF MANHOURS OF 20% LESS THAN THE GOVERNMENT'S ESTIMATE. THIS, OF COURSE, TRANSLATED INTO SIGNIFICANT DOLLAR SAVINGS WHICH INURED TO THE GOVERNMENT'S BENEFIT. MOREOVER, THE NAVY HAS EXPERIENCED IN THE PAST VARIATIONS IN ITS MEAL ESTIMATES RANGING FROM 11% TO AS MUCH AS 56%. AS I AM SURE YOU WILL AGREE, SUCH INACCURACIES IN VOLUME VARIATION OF MEALS DOES NOT LEND ITSELF TO A FORMAL ADVERTISED PROCUREMENT. THE PROBLEM, OF COURSE, IS OBTAINING RELIABLE MEAL ESTIMATES FROM OUR FOOD SERVICE OFFICERS. TOWARD THIS END, A REVIEW IS CURRENTLY BEING CONDUCTED OF FY 1974 SOLICITATIONS FOR MESS ATTENDANT SERVICES TO DETERMINE, AMONG OTHER THINGS, WHAT CORRECTIVE ACTION CAN BE TAKEN IN THIS REGARD. THIS REVIEW WILL INCLUDE A SCHEDULED CONFERENCE WITH SEVERAL OF OUR MAJOR FIELD PURCHASING ACTIVITIES THROUGHOUT THE UNITED STATES TOGETHER WITH COGNIZANT FOOD SERVICE OFFICERS. UPON COMPLETION OF THIS REVIEW, A DECISION WILL BE MADE AS TO THE FEASIBILITY OF EXPANDING OUR FORMAL ADVERTISING PILOT TEST PROGRAM INAUGURATED IN FY 1974. WE SHALL ADVISE YOU OF THE RESULTS OF THIS STUDY AT THE EARLIEST POSSIBLE DATE.

WE DO NOT AGREE WITH THE ABOVE-NOTED POSITION AND DO NOT FEEL THAT THIS HAS DEMONSTRATED TO OUR SATISFACTION THAT THE USE OF SMALL BUSINESS RESTRICTED ADVERTISING WAS NOT POSSIBLE. HOWEVER, SINCE DECEMBER 6, 1974, THE NAVY'S POSITION HAS CHANGED AS NOTED IN ITS LETTER TO OUR OFFICE OF FEBRUARY 21, 1975. THAT LETTER STATES:

THIS IS IN FURTHER REFERENCE TO YOUR OFFICE'S DECISION (B-178955) DATED MARCH 11, 1974, WHEREIN IT WAS RECOMMENDED THAT THE NAVY SERIOUSLY CONSIDER FORMALLY ADVERTISING ALL FUTURE PROCUREMENTS FOR MESS ATTENDANT SERVICES.

ALTHOUGH THE FORMAT FOR NEGOTIATED SOLICITATIONS FOR MESS ATTENDANT SERVICES WAS REVISED PRIOR TO ISSUANCE OF FY 1974 SOLICITATIONS, TWENTY PROTESTS WERE FILED WITH YOUR OFFICE ON THE 29 NEGOTIATED SOLICITATIONS BY 13 DIFFERENT OFFERORS. AS SET FORTH IN GREATER DETAIL BELOW, A REVIEW OF THESE NEGOTIATED PROCUREMENTS INDICATED THAT A SIGNIFICANT CONTRIBUTING CAUSE OF THE PROTESTS RESULTED FROM DIFFERING APPLICATIONS BY THE VARIOUS CONTRACTING OFFICERS OF THE EVALUATION CRITERIA FOR AWARD. SPECIFICALLY, WE FOUND AMPLE EVIDENCE SUGGESTING THAT CONTRACTORS WERE UNABLE TO REASONABLY PREDICT THE APPLICATION OF THE EVALUATION FACTORS BY THE VARIOUS CONTRACTING OFFICERS WITHIN THE COMMAND'S FIELD PURCHASING SYSTEM. FURTHERMORE, IT IS FELT THAT THESE SAME CRITERIA RESULTED IN THE GOVERNMENT NOT OBTAINING THE FULL BENEFIT OF THE COMPETITION AVAILABLE AND CONSEQUENTLY FAILING TO OBTAIN THESE SERVICES AT THE LOWEST REALISTIC PRICE.

THE IMPROVIDENCE OF NOT SPECIFICALLY DEFINING OR ENUMERATING THE SATISFACTORY "SPECIFIC DOCUMENTATION" REQUIRED PRIOR TO SUBMISSION OF OFFERS BASED ON A LESSER NUMBER OF MANHOURS THAN THOSE ESTIMATED BY THE GOVERNMENT, HAS RESULTED IN THE SAME DOCUMENTATION BEING ACCEPTED BY ONE CONTRACTING OFFICER AND REJECTED BY ANOTHER.

THE APPLICATION OF THE "DOLLAR/HOUR RATIO" FACTOR HAS RESULTED IN THE REJECTION OF MANY LOW PROPOSALS WITH CONSEQUENT PROTESTS. THIS EVALUATION FACTOR IS CONTINGENT IN NATURE AND SOMEWHAT UNREALISTIC AS IT PRESUPPOSES THE OFFEROR WILL EXPEND EXACTLY THE NUMBER OF MANHOURS ON THE MANNING CHART WHEN, IN FACT, THE CONTRACTOR USUALLY UTILIZES A LESSER NUMBER OF HOURS IN PERFORMING THE CONTRACT. THIS FACTOR IGNORES THE FACT THAT THE GOVERNMENT IS BUYING SATISFACTORY SERVICE, NOT MANHOURS, AND THAT BY EFFICIENT MANAGEMENT THE CONTRACTOR CAN REDUCE DIRECT LABOR HOURS WITH CONCOMITANT COST REDUCTIONS.

THE EVALUATION FACTOR BASED ON THE OFFERED PER MEAL ADJUSTMENTS FOR VOLUME VARIATIONS ADMONISHES OFFERORS NOT TO SUBMIT "UNBALANCED BIDS," BUT DOES NOT SET FORTH ANY CRITERIA OR PARAMETERS FOR DETERMINING THAT A BID IS UNBALANCED. BECAUSE THE EVALUATION FORMULA IS BASED ON A LARGER DECREASE THAN INCREASE, OFFERORS WHO PROPOSE A LARGE ADJUSTMENT FOR DECREASES MAY SUPPLANT THE OFFEROR WHO SUBMITS THE LOWEST MONTHLY PRICE. IF DECREASES IN THE ACTUAL NUMBER OF MEALS SERVED DURING A MONTH DO NOT EXCEED THE ALLOWABLE 15% VARIATION FROM THE ESTIMATED NUMBER OF MEALS, THE DOWNWARD PRICE ADJUSTMENT DOES NOT MATERIALIZE AND THE GOVERNMENT EFFECTIVELY AWARDS A CONTRACT TO OTHER THAN THE LOW OFFEROR. THE INCLUSION OF THE GOVERNMENT'S ESTIMATED NUMBER OF MANHOURS TENDS TO INHIBIT OFFERORS IN MANY INSTANCES FROM SUBMITTING PROPOSALS ON THE BASIS OF A LOWER NUMBER OF HOURS BECAUSE OF CONCERN OF BEING DECLARED INITIALLY UNACCEPTABLE AND OUTSIDE THE COMPETITIVE RANGE. SINCE EXPERIENCE HAS SHOWN THAT THE GOVERNMENT'S ESTIMATE IS INVARIABLY OVERSTATED, THE GOVERNMENT DOES NOT OBTAIN THE FULL BENEFITS OF UNRESTRICTED TECHNICAL AND PRICE COMPETITION. BASED ON OUR EXPERIENCE WITH FORMAL ADVERTISING THIS YEAR, AND THE MAJOR PROBLEM AREAS NOTED ABOVE WITH THE NEGOTIATION METHOD, IT HAS BEEN DETERMINED THAT PROCUREMENT OF MESS ATTENDANT SERVICES BY FORMAL ADVERTISING IS THE METHOD THAT WILL RESULT IN A MORE UNIFORM TREATMENT OF BIDDERS, IN ADDITION TO ENCOURAGING MORE REALISTIC COMPETITION. ACCORDINGLY, ALL SOLICITATIONS FOR THESE SERVICES ISSUED AFTER MARCH 15, 1975, WILL BE FORMALLY ADVERTISED.

WE COMMEND THE NAVY FOR ITS CHANGE OF POSITION. MOREOVER, SINCE BOTH OUR OFFICE AND THE NAVY APPARENTLY NOW AGREE THAT THERE IS AND WAS NO REASONABLE BASIS NOT TO USE SMALL BUSINESS RESTRICTED ADVERTISING FOR THESE SERVICES, WITH REGARD TO THE INSTANT PROCUREMENT, WE RECOMMEND THAT NO OPTION BE EXERCISED UNDER THE CONTRACT AWARDED TO MBM. FURTHER, WE TRUST THAT THIS RECOMMENDATION WILL BE MADE APPLICABLE TO ALL SIMILAR NAVY MESS ATTENDANT CONTRACTS AT THE EARLIEST PRACTICABLE DATE.