B-182083, APR 22, 1975

B-182083: Apr 22, 1975

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"BEST AND FINAL" OFFER RECEIVED AFTER TIME AND DATE ESTABLISHED FOR RECEIPT OF OFFERS WAS PROPERLY EXCLUDED UNDER TERMS OF "LATE PROPOSALS. NOTWITHSTANDING FAILURE OF CONTRACTING OFFICER TO ADVISE OFFERORS THAT "BEST AND FINAL" OFFERS WERE SUBJECT TO CLAUSE. SINCE CLAUSE MADE THAT CLEAR AND LATENESS WAS NOT DUE SOLELY TO MISHANDLING BY GOVERNMENT AFTER RECEIPT AT GOVERNMENT INSTALLATION AS REQUIRED BY CLAUSE FOR CONSIDERATION. 2. PARTICULARLY IN LIGHT OF NAVY'S CURRENT POSITION THAT AS A RESULT OF ITS EXPERIENCE UNDER ITS NEGOTIATION PROCEDURES FOR MESS ATTENDANT SERVICES ALL FUTURE CONTRACTS OF THIS TYPE WILL BE FORMALLY ADVERTISED. WAS ISSUED BY THE NAVAL REGIONAL PROCUREMENT OFFICE. THE SERVICES WERE TO COMMENCE AT VARIOUS DATES SUBSEQUENT TO JULY 1.

B-182083, APR 22, 1975

1. "BEST AND FINAL" OFFER RECEIVED AFTER TIME AND DATE ESTABLISHED FOR RECEIPT OF OFFERS WAS PROPERLY EXCLUDED UNDER TERMS OF "LATE PROPOSALS, MODIFICATIONS OF PROPOSALS AND WITHDRAWALS OF PROPOSALS (1973 SEP)" CLAUSE OF RFP, NOTWITHSTANDING FAILURE OF CONTRACTING OFFICER TO ADVISE OFFERORS THAT "BEST AND FINAL" OFFERS WERE SUBJECT TO CLAUSE, SINCE CLAUSE MADE THAT CLEAR AND LATENESS WAS NOT DUE SOLELY TO MISHANDLING BY GOVERNMENT AFTER RECEIPT AT GOVERNMENT INSTALLATION AS REQUIRED BY CLAUSE FOR CONSIDERATION. 2. PARTICULARLY IN LIGHT OF NAVY'S CURRENT POSITION THAT AS A RESULT OF ITS EXPERIENCE UNDER ITS NEGOTIATION PROCEDURES FOR MESS ATTENDANT SERVICES ALL FUTURE CONTRACTS OF THIS TYPE WILL BE FORMALLY ADVERTISED, OPTIONS IN EXISTING CONTRACT ENTERED INTO UNDER IMPROPER NEGOTIATION PROCEDURES SHOULD NOT BE EXERCISED. FURTHERMORE, SINCE SPECIFIC CONTRACT IN QUESTION HAS SUBSTANTIALLY RUN ITS INITIAL 1-YEAR BASE PERIOD, LITTLE USEFUL PURPOSE IN TERMS OF REMEDY WOULD BE SERVED THROUGH FURTHER CONSIDERATION OF PROTESTS.

ARTISTIC CATERERS, INC.

JETS SERVICES, INC.

MILITARY BASE MANAGEMENT OF NEW JERSEY, INC.:

ON JUNE 6, 1974, REQUEST FOR PROPOSALS (RFP) N00140-74-R-6529 (A NEGOTIATED PROCUREMENT TOTALLY SET-ASIDE FOR SMALL BUSINESS), WAS ISSUED BY THE NAVAL REGIONAL PROCUREMENT OFFICE, NAVAL BASE, NEWPORT, RHODE ISLAND, FOR MESS ATTENDANT SERVICES AT CERTAIN NAVAL BASE FACILITIES. THE SERVICES WERE TO COMMENCE AT VARIOUS DATES SUBSEQUENT TO JULY 1, 1974, AND END JUNE 30, 1975. AN OPTION FOR UP TO TWO ADDITIONAL YEARS' SERVICES BEYOND JUNE 1975 WAS ALSO RESERVED.

THE PROCUREMENT WAS NEGOTIATED UNDER AUTHORITY OF 10 U.S.C. SEC. 2304(A)(1) (1970) AND ASPR SEC. 3-201.2(B)(II) (1974 ED.). READ TOGETHER, THE PROVISIONS PERMIT NEGOTIATION OF CONTRACTS FOR PROCUREMENTS MADE IN KEEPING WITH THE SMALL BUSINESS PROGRAM.

THE RFP PROVIDED THAT ALL OFFERORS WERE TO SUBMIT MANNING CHARTS WITH THEIR PROPOSALS WHICH WOULD PERMIT EVALUATION OF AN OFFEROR'S UNDERSTANDING OF "NAVY FOOD SERVICE OPERATIONS IN GENERAL AND OF THE SPECIFIC SERVICES REQUIRED" AND THE "SOUNDNESS AND ACCEPTABILITY OF THE OFFEROR'S APPROACH." TO THIS END, A NAVY MANNING ESTIMATE (164,284 MAN HOURS) WAS SET FORTH IN THE RFP AND OFFERORS WERE ADVISED THAT MANNING PROPOSALS BELOW THE GOVERNMENT ESTIMATE MIGHT RESULT IN REJECTION OF THE PROPOSAL UNLESS THE OFFEROR JUSTIFIED THE VARIANCE.

THE "ABSTRACT OF BIDS" SHOWS THAT ON THE JULY 11, 1974, "OPENING DATE" OF THE RFP 14 OFFERS WERE RECEIVED, INCLUDING OFFERS FROM ARTISTIC CATERERS, INC. (ARTISTIC), JETS SERVICES, INC. (JETS), AND MILITARY BASE MANAGEMENT OF NEW JERSEY, INC. (MBM). EVALUATION OF EACH OFFEROR'S PROPOSED MANNING AND PRICES CONTINUED INTO EARLY AUGUST. DURING THE EVALUATION, THE NAVY DETERMINED THAT ANY OFFEROR PROPOSING LESS THAN 140,000 MAN-HOURS FOR THE SERVICES WOULD NOT BE CONSIDERED IN THE COMPETITIVE RANGE FOR THE PROCUREMENT. BOTH JETS' OFFER (PROPOSING 103,241 MAN-HOURS) AND ARTISTIC'S OFFER (PROPOSING 131,280 MAN-HOURS) WERE EXCLUDED FROM THE COMPETITIVE RANGE BECAUSE OF THE 140,000 HOUR CUT-OFF.

MBM WAS AMONG THE COMPANIES DETERMINED TO BE IN THE COMPETITIVE RANGE FOR THE PROCUREMENT. BY MESSAGE DATED AUGUST 1, 1974, THE CONTRACTING OFFICER REQUESTED MBM TO SUBMIT ITS "BEST AND FINAL" OFFER AND ADVISED THAT THE "(MBM) REPLY MUST BE RECEIVED IN THE (PROCURING ACTIVITY) OFFICE BY 12:00 NOON, 12 AUGUST 1974." (BY COMPARISON, ASPR SEC. 3 805.3(D) (1974 ED.) REQUIRED, AS PERTINENT: "(NOTIFICATIONS REQUESTING 'BEST AND FINAL' OFFERS) SHALL INCLUDE INFORMATION TO THE EFFECT THAT (I) DISCUSSIONS HAVE BEEN CONCLUDED, *** AND (THAT) (III) *** ANY ('BEST AND FINAL' OFFER) *** IS SUBJECT TO THE LATE PROPOSALS AND MODIFICATIONS OF PROPOSALS PROVISION OF THE SOLICITATION.")

THE TIME OF RECEIPT OF MBM'S "BEST AND FINAL" OFFER AS SHOWN BY THE TIME/DATE STAMP OF THE PROCUREMENT OFFICE ON THE ENVELOPE CONTAINING MBM'S FINAL OFFER WAS: 11:00 A.M., AUGUST 15, 1974. BY LETTER DATED AUGUST 15, 1974, THE CONTRACTING OFFICER ADVISED MBM THAT THE OFFER COULD NOT BE CONSIDERED BECAUSE OF ITS RECEIPT AFTER THE CLOSING DATE.

T&S SERVICE ASSOCIATES, INC. (T&S), ALONG WITH OTHER COMPETITIVE RANGE OFFERORS, SUBMITTED A "BEST AND FINAL" OFFER WHICH WAS RECEIVED BY THE PROCURING OFFICE BY THE STATED TIME AND DATE. AFTER FINAL REVIEW OF THE SUBMITTED PROPOSALS, THE NAVY MADE AN AWARD TO T&S ON AUGUST 27, 1974, AT A FINAL PRICE OF $471,566.98.

MBM'S PROTEST

ESSENTIALLY, MBM ASSERTS THAT ITS FINAL OFFER SHOULD HAVE BEEN CONSIDERED BECAUSE ITS "CHECK WITH NEWPORT POST OFFICE INDICATES CONFUSION IN HANDLING CERTIFIED MAIL WITH THE NAVAL BASE."

ANALYSIS OF MBM'S PROTEST

ALTHOUGH THE CONTRACTING OFFICER FAILED TO ADVISE MBM AND THE OTHER OFFERORS THAT "BEST AND FINAL" OFFERS WERE SUBJECT TO THE LATE PROPOSALS CLAUSE OF THE RFP, THE CLAUSE MADE THAT CLEAR AS FOLLOWS:

"LATE PROPOSALS, MODIFICATIONS OF PROPOSALS AND WITHDRAWALS OF PROPOSALS (1973 SEP)

"(C) A MODIFICATION RESULTING FROM THE CONTRACTING OFFICER'S REQUEST FOR 'BEST AND FINAL' OFFER RECEIVED AFTER THE TIME AND DATE SPECIFIED IN THE REQUEST WILL NOT BE CONSIDERED UNLESS RECEIVED BEFORE AWARD AND THE LATE RECEIPT IS DUE SOLELY TO MISHANDLING BY THE GOVERNMENT AFTER RECEIPT AT THE GOVERNMENT INSTALLATION.

"(D)THE ONLY ACCEPTABLE EVIDENCE TO ESTABLISH:

"(II) THE TIME OF RECEIPT AT THE GOVERNMENT INSTALLATION IS THE TIME/DATE OF STAMP OF SUCH INSTALLATION ON THE PROPOSAL WRAPPER OR OTHER DOCUMENTARY EVIDENCE OF RECEIPT MAINTAINED BY THE INSTALLATION. ***"

MBM'S PROPOSAL WAS RECEIVED BEFORE AWARD, BUT THE DATE (AUGUST 15, 1974) OF RECEIPT OF MBM'S OFFER AT THE PROCUREMENT OFFICE SHOWS THAT THE LATE RECEIPT WAS NOT DUE "SOLELY TO MISHANDLING BY THE GOVERNMENT AFTER RECEIPT AT THE GOVERNMENT INSTALLATION." CONSEQUENTLY, MBM'S LATE "BEST AND FINAL" OFFER WAS PROPERLY EXCLUDED UNDER THE QUOTED CLAUSE FROM CONSIDERATION FOR AWARD EVEN IF THE CAUSE OF THE DELAY IN RECEIVING MBM'S OFFER IS PROPERLY ATTRIBUTED TO "CONFUSION" AT THE NEWPORT POST OFFICE.

THE MBM PROTEST IS THEREFORE DENIED.

JETS' PROTEST

JETS CONTENDS THAT IT WAS ARBITRARILY EXCLUDED FROM THE COMPETITIVE RANGE FOR THE PROCUREMENT. IT ACKNOWLEDGES THAT IT PROPOSED MANNING SIGNIFICANTLY BELOW THE GOVERNMENT ESTIMATE, BUT IT ASSERTS THAT IT JUSTIFIED THE VARIANCE IN A TWO-PAGE DOCUMENT SUBMITTED WITH ITS OFFER. CONSEQUENTLY, IT CONTENDS THAT THE CONTRACTING OFFICER HAD A "DUTY AND AN OBLIGATION, AT THE VERY LEAST, TO NEGOTIATE AND CONFER WITH US AT SOME LENGTH BEFORE ARRIVING AT AN ARBITRARY DECISION TO ACCEPT A HIGHER PROPOSAL."

ARTISTIC'S PROTEST

ARTISTIC QUESTIONS THE USE OF NEGOTIATION PROCEDURES FOR THE REQUIREMENT. IT CONTENDS THE PROCUREMENT COULD, AND SHOULD, HAVE BEEN ADVERTISED.

ANALYSIS OF JETS' AND ARTISTIC'S PROTESTS

THE PROBLEMS ASSOCIATED WITH THE MANNER IN WHICH FOOD SERVICE CONTRACTS HAVE BEEN NEGOTIATED HAVE BECOME MANIFEST IN RECENT YEARS. THESE PROBLEMS RESULTED IN NUMEROUS PROTESTS BY COMPETING FIRMS, WHICH IN THE AGGREGATE DEMONSTRATE THE DIFFICULTIES INHERENT IN THE STRUCTURE FOR EVALUATING PROPOSALS. SEE MATTER OF IRA GELBER FOOD SERVICE, INC.; T AND S SERVICE ASSOCIATES, INC., B-181663, MARCH 28, 1975, 54 COMP. GEN. .

THE NAVY HAS AGREED, AS A RESULT OF ITS EXPERIENCE UNDER ITS NEGOTIATION PROCEDURES FOR THESE CONTRACTS, THAT FUTURE MESS ATTENDANT SERVICE CONTRACTS WILL BE AWARDED ON A FORMALLY ADVERTISED BASIS. IT IS OUR VIEW, PARTICULARLY IN LIGHT OF THE NAVY'S CURRENT POSITION, THAT OPTIONS IN EXISTING CONTRACTS WHICH WERE REACHED UNDER IMPROPER NEGOTIATION PROCEDURES SHOULD NOT BE EXERCISED. SEE MATTER OF IRA GELBER FOOD SERVICE, INC., ET AL, SUPRA. EXERCISE OF THOSE OPTIONS WOULD UNNECESSARILY EXTEND THE EFFECT OF THE QUESTIONABLE PROCEDURES.

FURTHERMORE, BECAUSE THE SPECIFIC FOOD SERVICE CONTRACT PRESENTLY AT ISSUE HAS SUBSTANTIALLY RUN ITS INITIAL 1-YEAR BASE PERIOD, LITTLE USEFUL PURPOSE IN TERMS OF REMEDY WOULD BE SERVED THROUGH FURTHER CONSIDERATION OF THE PROTESTS.