B-200541, JAN 6, 1981

B-200541: Jan 6, 1981

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DIGEST: BIDDER WHICH IS INELIGIBLE FOR AWARD BECAUSE OF FAILURE TO SUBMIT BID BOND REQUIRED BY SOLICITATION IS NOT AN "INTERESTED PARTY" WITHIN CONTEXT OF GAO BID PROTEST PROCEDURES FOR PURPOSE OF CHALLENGING ACCURACY OF GOVERNMENT'S ESTIMATE OF COSTS OF PERFORMING WORK IN-HOUSE VERSUS CONTRACTING-OUT. THIS SOLICITATION WAS ISSUED BY WRIGHT-PATTERSON AIR FORCE BASE. A CONTRACTOR WOULD QUALIFY FOR AWARD ONLY IF ITS EVALUATED PRICE WAS BOTH LOW AND AT LEAST 10 PERCENT BELOW AN UNDISCLOSED ESTIMATE OF THE IN-HOUSE COST. BIDDERS WERE REQUIRED TO PROVIDE A BID BOND. FAILED TO PROVIDE A BID BOND AND THE THIRD BIDDER'S PRICE WAS SUBSTANTIALLY IN EXCESS OF THE ESTIMATE OF THE IN-HOUSE COST EVEN BEFORE THE EVALUATION FACTORS WERE APPLIED.

B-200541, JAN 6, 1981

DIGEST: BIDDER WHICH IS INELIGIBLE FOR AWARD BECAUSE OF FAILURE TO SUBMIT BID BOND REQUIRED BY SOLICITATION IS NOT AN "INTERESTED PARTY" WITHIN CONTEXT OF GAO BID PROTEST PROCEDURES FOR PURPOSE OF CHALLENGING ACCURACY OF GOVERNMENT'S ESTIMATE OF COSTS OF PERFORMING WORK IN-HOUSE VERSUS CONTRACTING-OUT.

DE WEAVER AND ASSOCIATES:

DE WEAVER AND ASSOCIATES PROTESTS THE PROPOSED AWARD OF A THREE YEAR CONTRACT FOR VEHICLE OPERATION AND MAINTENANCE SERVICES TO TALLEY SUPPORT SERVICES, INC. UNDER INVITATION FOR BIDS (IFB) NO. F33601-80-B 0103.

THIS SOLICITATION WAS ISSUED BY WRIGHT-PATTERSON AIR FORCE BASE, OHIO, IN CONNECTION WITH AN EFFORT TO DETERMINE THE RELATIVE ECONOMIES OF CONTRACTING-OUT VERSUS PERFORMING THESE SERVICES IN-HOUSE USING GOVERNMENT PERSONNEL. A CONTRACTOR WOULD QUALIFY FOR AWARD ONLY IF ITS EVALUATED PRICE WAS BOTH LOW AND AT LEAST 10 PERCENT BELOW AN UNDISCLOSED ESTIMATE OF THE IN-HOUSE COST. IN ADDITION, BIDDERS WERE REQUIRED TO PROVIDE A BID BOND. OF THE THREE BIDS SUBMITTED BY THE AUGUST 26, 1980 BID OPENING DATE, ONLY THE BID OF TALLEY MET THESE REQUIREMENTS. THE SECOND LOW BIDDER, DE WEAVER, FAILED TO PROVIDE A BID BOND AND THE THIRD BIDDER'S PRICE WAS SUBSTANTIALLY IN EXCESS OF THE ESTIMATE OF THE IN-HOUSE COST EVEN BEFORE THE EVALUATION FACTORS WERE APPLIED.

IMMEDIATELY FOLLOWING THE BID OPENING, THE COST COMPARISON WAS RELEASED AND THE BIDDERS WERE ALLOWED FIVE DAYS TO COMMENT ON OR APPEAL THE RESULTS. AFTER REVIEWING THE IN-HOUSE ESTIMATE, DE WEAVER ALLEGED THERE WERE SEVERAL "ERRORS IN CALCULATIONS, OMISSIONS, AND POOR JUDGMENTAL ASSUMPTIONS" ON THE PART OF THE AIR FORCE, AND BROUGHT THESE FINDINGS TO THE ATTENTION OF CONTRACTING OFFICIALS IN AN ADMINISTRATIVE APPEAL. ALTHOUGH THE AIR FORCE CONCEDED THAT SOME OF DE WEAVER'S CRITICISMS WERE VALID, IT DEEMED THE RESULTING CHANGES IN THE IN-HOUSE ESTIMATE NOT OF SUFFICIENT MAGNITUDE TO AFFECT THE RELATIVE STANDING OF THE BIDDERS VIZ-A- VIZ THE IN-HOUSE ESTIMATE AND DENIED THE APPEAL.

IF WE PUT ASIDE FOR THE MOMENT THE FACT THAT THE PROTESTER FAILED TO PROVIDE A BID BOND, THERE ARE TWO MAJOR OBSTACLES TO AN AWARD TO THE PROTESTER: (1) ITS EVALUATED BID WAS WITHIN 10 PERCENT OF THE GOVERNMENT'S ESTIMATE OF THE COST OF DOING THE WORK IN-HOUSE AND (2) IT WAS UNDERBID BY TALLEY. THE MAJORITY OF THE PROTESTER'S ARGUMENTS ARE TO THE EFFECT THAT THE GOVERNMENT'S ESTIMATE OF THE COST OF DOING THE WORK ITSELF CONTAINED ERRORS WHICH MADE IT TOO LOW: IF THESE ERRORS WERE CORRECTED, DE WEAVER ASSERTS, ITS BID WOULD BE ELIGIBLE FOR AWARD INSOFAR AS IT WOULD BE MORE THAN 10 PERCENT LESS EXPENSIVE THAN THE GOVERNMENT'S COST DOING THE WORK IN-HOUSE. AS FOR TALLEY, THE PROTESTER DOES NOT ALLEGE THAT THE FIRM IS NOT CAPABLE OF DOING THE WORK AT ITS BID PRICE. RATHER, THE PROTESTER ARGUES THAT ITS BID, WHICH IS APPROXIMATELY $5 MILLION ABOVE TALLEY'S, WAS "MORE RESPONSIVE" TO THE GOVERNMENT'S NEEDS (APPARENTLY BECAUSE IT MORE CLOSELY APPROXIMATES THE GOVERNMENT'S ESTIMATE OF THE COST OF THE WORK) AND THAT AN AWARD TO THE PROTESTER WOULD THEREFORE BE "IN THE BEST INTEREST OF THE GOVERNMENT."

THE AIR FORCE DOES NOT SPECIFICALLY ADDRESS DE WEAVER'S OBJECTIONS TO THE COST COMPARISON, POINTING OUT THAT DE WEAVER'S BID WAS NONRESPONSIVE BECAUSE OF ITS FAILURE TO FURNISH A BID BOND IN ACCORDANCE WITH THE IFB. ON THIS BASIS, THE AIR FORCE CONCLUDES THAT DE WEAVER IS NOT ELIGIBLE FOR THE AWARD AND THUS, IS NOT AN "INTERESTED PARTY" QUALIFIED TO PURSUE THIS PROTEST UNDER OUR BID PROTEST PROCEDURES, 4 C.F.R. PART 20 (1980). MUST AGREE.

OUR BID PROTEST PROCEDURES, SUPRA, STATE THAT A PARTY MUST BE "INTERESTED" BEFORE WE WILL CONSIDER THE MERITS OF ITS PROTEST. CLIMATOLOGICAL CONSULTING CORPORATION, B-197906, AUGUST 14, 1980, 80-2 CPD 81. WE WILL CONSIDER A NUMBER OF FACTORS IN DETERMINING WHETHER A PROTESTER SATISFIES THE INTERESTED-PARTY CRITERION, INCLUDING THE PROTESTER'S STATUS IN RELATION TO THE PROCUREMENT (E.G., PROSPECTIVE BIDDER, BIDDER ELIGIBLE FOR AWARD, BIDDER NOT ELIGIBLE FOR AWARD, NONBIDDER), THE NATURE OF THE ISSUES RAISED, AND THE DIRECT OR INDIRECT BENEFIT OR RELIEF SOUGHT BY THE PROTESTER. ABC MANAGEMENT SERVICES, INC., 55 COMP.GEN. 397 (1975), 75-2 CPD 245. WHERE A PROTESTER HAS BEEN DETERMINED INELIGIBLE FOR AN AWARD AND IT DOES NOT APPEAR THAT CIRCUMSTANCES WOULD WARRANT CANCELLATION AND RESOLICITATION OF THE PROCUREMENT (THEREBY PERMITTING THE PROTESTER TO REBID), THE POTENTIAL BENEFIT TO THE PROTESTER IS INTANGIBLE AND INDIRECT AND THAT PARTY GENERALLY WILL NOT BE CONSIDERED SUFFICIENTLY INTERESTED TO MAINTAIN THE PROTEST. SEE, FOR EXAMPLE, DON GREENE CONTRACTOR, INC., B-198612, JULY 28, 1980, 80-2 CPD 74.

IN THE INSTANT CASE, DE WEAVER WAS DECLARED NONRESPONSIVE AND INELIGIBLE FOR AWARD BECAUSE IT FAILED TO SUBMIT A BID BOND IN ACCORDANCE WITH THE IFB. IT IS WELL-SETTLED THAT A BID GUARANTEE REQUIREMENT IS A MATERIAL TERM OF AN IFB AND THAT, EXCEPT AS PROVIDED IN REGULATIONS NOT APPLICABLE HERE, A PROCURING ACTIVITY MUST REJECT AS NON-RESPONSIVE ANY BID THAT DOES NOT CONFORM TO THAT REQUIREMENT. DEFENSE ACQUISITION REGULATION (DAR) SEC. 2-404.2(B) (1976 ED.); ELEVATOR SALES & SERVICE, INC., B-193519, FEBRUARY 13, 1979, 79-1 CPD 102. DE WEAVER CONCEDES THAT IT DID NOT FURNISH A BID BOND BUT ARGUES THAT THIS DEFICIENCY SHOULD BE WAIVED BECAUSE THE AMOUNT OF THE REQUIRED BOND WAS SO HIGH AS TO DISCRIMINATE AGAINST SMALL BUSINESSES. SINCE THE REQUIRED AMOUNT OF THE BID BOND WAS APPARENT ON THE FACE OF THE IFB, HOWEVER, A PROTEST BASED THEREUPON HAD TO BE FILED PRIOR TO BID OPENING. 4 C.F.R. 20.2(B)(1); ELEVATOR SALES & SERVICE, INC., SUPRA. BIDS HERE WERE OPENED ON AUGUST 26, 1980 AND DE WEAVER DID NOT PROTEST UNTIL SEPTEMBER 24, 1980. CONSEQUENTLY, THIS ARGUMENT IS UNTIMELY AND NOT FOR CONSIDERATION ON ITS MERITS. WE CONCLUDE THAT THE AIR FORCE WAS CORRECT IN CHARACTERIZING DE WEAVER'S BID AS NONRESPONSIVE.

IT FOLLOWS THAT EVEN IF THE ADJUSTMENTS TO THE IN-HOUSE ESTIMATE REQUESTED BY DE WEAVER WERE MADE, DE WEAVER WOULD NEVERTHELESS BE INELIGIBLE FOR THE AWARD. FURTHERMORE, IN VIEW OF THE APPARENT ACCEPTABILITY OF TALLEY'S BID, THE CIRCUMSTANCES HERE ARE NOT SUCH AS WOULD PRESENT THE POSSIBILITY OF CANCELLATION AND RESOLICITATION OF THE PROCUREMENT. THEREFORE, WE FIND DE WEAVER LACKS THE NECESSARY DIRECT AND SUBSTANTIAL INTEREST WITH RESPECT TO AWARD UNDER THIS SOLICITATION TO BE REGARDED AS AN INTERESTED PARTY UNDER OUR BID PROTEST PROCEDURES. DON GREENE CONTRACTOR, INC., SUPRA; THERM-AIR MFG. CO., INC., B-195401.2, FEBRUARY 11, 1980, 80-1 CPD 119. THE PROTEST IS THEREFORE DISMISSED.

DE WEAVER HAS REQUESTED A CONFERENCE ON THE PROTEST AS PROVIDED FOR IN SECTION 20.7 OF OUR BID PROTEST PROCEDURES. WHERE THE MERITS OF A PROTEST ARE NOT FOR CONSIDERATION, HOWEVER, WE BELIEVE THAT NO USEFUL PURPOSE WOULD BE SERVED BY CONVENING SUCH A CONFERENCE. KENTUCKY BUILDING MAINTENANCE, INC., B-196368, JANUARY 16, 1980, 80-1 CPD 49.