B-227865.3, Jan 13, 1988, 88-1 CPD 23

B-227865.3: Jan 13, 1988

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Where an agency makes a written determination that urgent and compelling circumstances which significantly affect the interests of the United States will not permit waiting for a decision by the General Accounting Office (GAO) on a bid protest. A protester need not protest until it has knowledge that the agency is intending action that is believed incorrect or inimical to the protester's interests and need not file a "defensive" protest where an agency has not made a final determination since a protester may presume that the agency will act properly. An offeror was not prejudiced by an agency's refusal to accept information relating to its responsibility after the closing date for receipt of best and final offers but before award where the offeror did not furnish this information by the date when award was reasonably required to be made.

B-227865.3, Jan 13, 1988, 88-1 CPD 23

PROCUREMENT - Bid Protests - Award Pending Appeals - Propriety DIGEST: 1. Where an agency makes a written determination that urgent and compelling circumstances which significantly affect the interests of the United States will not permit waiting for a decision by the General Accounting Office (GAO) on a bid protest, and orally notifies GAO prior to awarding a contract, the agency has complied with 31 U.S.C. Sec. 3553(c) (Supp. III 1985) in proceeding with the award. PROCUREMENT - Bid Protests - Premature Allegation - GAO Review 2. A protester need not protest until it has knowledge that the agency is intending action that is believed incorrect or inimical to the protester's interests and need not file a "defensive" protest where an agency has not made a final determination since a protester may presume that the agency will act properly. PROCUREMENT - Bid Protests - Non-Prejudicial Allegation - GAO Review 3. An offeror was not prejudiced by an agency's refusal to accept information relating to its responsibility after the closing date for receipt of best and final offers but before award where the offeror did not furnish this information by the date when award was reasonably required to be made. An agency is not required to delay an award indefinitely while an offeror attempts to cure the causes of its responsibility. PROCUREMENT - Competitive Negotiation - Best/Final Offers Modification - Late Submission - Acceptance Criteria 4. Substantial proposal revision not solely relating to the offeror's responsibility submitted after the date for receipt of best and final offers was properly rejected as a late proposal modification. PROCUREMENT - Bid Protests - GAO Procedures - Protest Timeliness - 10 day Rule - Effective Dates 5. General Accounting Office (GAO) resolves doubts regarding timeliness of contentions supporting an initial protest that are primarily based upon information, which the protester diligently pursued under the Freedom of Information Act but only obtained 3 months after its initial protest was filed, in favor of the protester and considers these contentions filed at GAO within 10 working days of when the protester obtained the information. PROCUREMENT - Competitive Negotiation - Offers - Evaluation - Shipment Costs 6. Where a request for proposals for transportation services to transport cargo between the United States and foreign ports authorizes partial awards, the procuring agency may reject all offerors' rates for a certain type of service.

Dock Express Contractors, Inc.:

Dock Express Contractors, Inc., protests the awards under request for proposals (RFP) N00033-87-R-2200, issued by the Military Sealift Command (MSC) for less than shipload lots of breakbulk ocean port-to port transportation services for the period October 1, 1987, through March 31, 1988. Dock Express also protests the rejection of its proposals for five trade routes under the RFP and MSC's determination not to accept certain rates from any offerors in making the awards.

We deny the protest.

Under the RFP, rates for transportation and associated services were solicited from ocean cargo carriers for transporting cargo between the continental United States (CONUS) and overseas ports. Contracts called "shipping agreements" were awarded to all responsible United States flag carriers who submitted offers responsive to The cargo booking procedures in the shipping agreements generally provide that the low cost carrier for each route meeting the storage and delivery requirements would receive the shipment.

Proposals were received on July 8, 1987, and discussions were conducted. MSC did not permit any proposal revisions after July 30, 1987. Fourteen carriers received awards under the RFP on August 19, 1987, for one or more trade routes.

Dock Express submitted offers for nine routes and received awards for three routes. Dock Express was found not to be a responsible offeror for the other six routes because it did not identify the vessel(s) to be used on those routes before July 30, 1987.

Additionally, in making the awards MSC declined to accept any offeror's "combination berth term/free in/out" rates that would be applicable for shipments where the government is responsible for loading or discharging cargo at one port and the carrier is responsible for loading or discharging at the other port. In making the awards, MSC did accept offerors' "free in/out" (FIO) rates for transportation where the government is responsible for loading and discharging at both ports and offerors' "berth term" rates for transportation where the carriers are responsible for loading and discharging at both ports.

This procurement was the subject of our decision in Dock Express Contractors, Inc., B-227865.2, Nov. 13, 1987, 87-2 CPD Para. 481, where we denied a protest that a number of RFP provisions favored ocean common carriers and were unfair to contract carriers. /l/ On August 12, 1987, during the pendency of that protest, MSC's head of the procuring activity made a written determination that urgent and compelling circumstances which significantly affect the interests of the United States required that the awards be made under the RFP, notwithstanding the pending protest of Dock Express. Awards were made on August 19, 1987; this protest followed on September 1.

In this case, Dock Express protests (1) MSC's decision to make those awards despite the pending protest; (2) MSC's rejection of Dock Express' proposal on five of the routes, and (3) MSC's rejection of the "combination berth term/FIO, rates of all offerors.

Dock Express first contends that the awards during the pendency of the previous protest violated 31 U.S.C. Sec. 3553(c)(2) (Supp. III 1985), which prohibits such awards until (1) the head of the procuring activity makes a written finding that urgent and compelling circumstances which significantly affect the interests of the United States will not permit waiting for a decision and (2) our Office is advised of the finding. Dock Express contends that the August 19 awards violated this statute because it believes our Office was not informed of the MSC determination until August 20, 1987.

As indicated above, the written determination is dated August 12, and our records show that MSC verbally notified our Office of this determination on August 19. MSC then proceeded to the awards. MSC sent a written confirmation of this notification to our Office; that confirmation was dated August 20. Although 31 U.S.C. Sec. 3553(c)(2) requires the determination to make award to be in writing, neither that nor any other statute requires that our Office receive other than verbal notice of this determination prior to award. Consequently, we find no violation of 31 U.S.C. Sec. 3553(c)(2).

Dock Express also contends that the circumstances stated in the agency's determination are not urgent and compelling. However, this determination is for the procuring agency to make. See Professional Construction Services Inc., B-225691, B-226177, Apr. 16, 1987, 87-1 CPD Para. 418. Dock Express' second basis for protest is the rejection of its proposal for five trade routes. Dock Express protests that it was a responsible contractor for the five routes since the vessel identified in its proposal, the Dock Express Texas, could provide regularly scheduled sailings for all eight routes. Dock Express also argues that since post- best and final offer communications with offerors regarding their responsibility is permissible, MSC's refusal to accept further information from Dock Express after July 30, 1987, the date set by MSC for final proposal revisions, was arbitrary and unreasonable. Dock Express finally argues that the rejection of its proposal on August 18, 1987, was "premature and speculative" since Dock Express did not propose to perform the service on the additional five routes until November 15, 1987.

Dock Express' proposal offered continuous service, one vessel every 60 days, for the three routes that were currently being served by its vessel, the Dock Express Texas, and MSC made awards to Dock Express for these three routes. Dock Express also proposed service with one vessel every 45 to 60 days commencing November 15, 1987, for five additional routes. /2/

The record shows, and Dock Express confirms, that it was advised on July 17 and 20 to demonstrate to MSC by July 30, 1987, how it would maintain the required regular service on the five routes in question since its offer only identified one vessel that currently serviced the three routes on which Dock Express ultimately received awards. On several occasions prior to July 28, Dock Express advised MSC that it was planning to acquire two additional vessels to service these additional routes. However, Dock Express stated that because of the "delicate stage of negotiations," it could not identify the additional vessels, but it should be able to do so by October 1, 1987. Dock Express also argued to MSC that it should not be required to supply this information relating to its responsibility by July 30 as required by MSC. In response, on July 28, MSC advised Dock Express that it was required to determine Dock Express was a responsible contractor before making award and reiterated that documentary evidence showing that Dock Express has or will have the additional vessels to inaugurate and maintain regularly scheduled service on the proposed routes must be received by MSC by 12 noon, July 30, 1987. On July 29, 1987, Dock Express confirmed its offer to MSC and stated it did "not intend to submit any changes."

By letter dated July 30, 1987, Dock Express "appealed" to MSC's head of the procuring activity that MSC exercise its discretion and make award to Dock Express for all offered routes or meet to discuss the issues further before rejecting its offer for the five routes not currently served by the Dock Express Texas.

On August 5, Dock Express responded to MSC's July 28 message and advised MSC that it was "always its intention" to serve all eight routes with the three proposed vessels on a continuous voyage and that meanwhile the Dock Express Texas could service all these routes on a continuous voyage. Dock Express also advised that this constituted a sufficient commitment and disclosure of explicit arrangements to allow MSC to make awards on all eight routes to Dock Express and that MSC could consider this information submitted after July 30 since it concerned Dock Express' responsibility, rather than the acceptability of its proposal.

On August 7, 1987, MSC rejected Dock Express' August 5 message as a late modification to its proposal since all information was required to be submitted by July 30. By message dated August 18, 1987, MSC rejected Dock Express' proposal for the five routes as "technically unacceptable" and proceeded to the awards on August 19. Dock Express then protested to our Office on September 1.

MSC argues that Dock Express' protest is untimely filed with our Office since the firm knew by July 30, 1987, and certainly no later than August 7, 1987, that MSC was going to reject Dock Express' proposal for these five routes, yet it did not protest this matter until September 1, 1987, more than 10 working days later.

Dock Express argues that it was entitled to wait until MSC formally rejected its offer for the five routes on August 18, 1987, before filing its protest. Dock Express contends that since it continued to communicate with MSC regarding its responsibility-- a matter about which MSC can obtain information after the submission of best and final offers-- and since MSC did not previously notify Dock Express that its proposal for the five routes was unacceptable, it would have been premature for Dock Express to file a protest prior to August 18. Dock Express states that an earlier protest would have been "defensive" in nature since it was entitled to presume the contracting officer would in good faith consider additional information relating to Dock Express' responsibility.

We agree with Dock Express. A protester need not protest until it has knowledge that the agency is intending action that is believed to be incorrect or inimical to the protest-er's interests. Custom Training Aids, Inc., B-224868, Feb. 6, 1987, 87-1 CPD Para. 131; Handyman Exchange Inc., B-224188, Jan. 7, 1987, 87-1 CPD Para. 23; Harnischfeger Corp, B-224371, Sept. 12, 1986, 86-2 CPD Para. 296. More-over, a protester need not file a "defensive" protest where an agency has not made a final determination since a protester may presume that the agency will act properly. Id.

Since an agency may continue to accept information regarding the responsibility of a proposed contractor up until award is made, see Hewlett-Packard Co. Medical products Group, B-216125.2, May 24, 1985, 85-1 CPD Para. 597, it would not have been unreasonable for Dock Express to expect MSC to accept further information after July 30. Therefore, we will resolve any doubt regarding the timeliness of this protest in favor of Dock Express. See Hooven-Allison-- Request for Reconsideration, S- 224785.2, Mar. 6, 1987, 87-1 CPD Para. 257.

As indicated above, agencies can obtain information relating to a proposed contractor's responsibility after the date set for best and final offers. Uniserv Inc., Marine Transport Lines, Inc., B-218196, B-218196.2, June 19, 1985, 85-1 CPD Para. 699. Consequently, MSC's refusal to accept information relating to responsibility in the period from July 30 to August 19 is questionable.

However, in the present case, not only did Dock Express decline to identify by July 30 the two vessels that would service the five routes in question here, it had not done so by the time the awards were made on August 19, 1987.

Indeed, Dock Express stated that it would not identify the vessels in any case until October 1, 1987, the date service under these shipping agreement commenced. /3/

An offeror has the duty to timely and clearly establish that it has the capability to perform a contract. Manufacturing Systems International, Inc., B-212173, May 30, 1984, 84-1 CPD Para. 586. An agency is not required to delay awards indefinitely until an offeror cures the causes of its nonresponsibility, and it may set a reasonable cut-off date for receipt of information relating to offeror responsibility. AquaSciences International, Inc.-- Request for Reconsideration, B-225452.2, Feb. 5, 1987, 87-1 CPD Para. 127; Roarga, Inc., B-204524.5, May 7, 1982, 82-1 CPD Para.438. But see Tomko Inc., 63 Comp.Gen. 218 (1984), 84-1 CPD Para. 202, where we found unreasonable a contracting officer's refusal to accept information relating to a proposed contractor's responsibility that was tendered 5 minutes after the stated cut-off date for receipt of the information.

Although Dock Express claims that MSC could have delayed the awards, MSC persuasively argues that the shipping agreements had to be in effect well prior to the commencement of service to allow for orderly planning of the shipments of military cargo. Consequently, because Dock Express had not furnished the necessary vessel information to support its proposal by the time awards were made, it was not prejudiced by MSC's refusal to accept information relating to its responsibility after July 30.

Dock Express argues that its August 5 message, which proposed that the Dock Express Texas would service all eight routes on a continuous voyage, should have been accepted to establish its responsibility. However, the record indicates that the August 5 message indicating a single voyage by the Dock Express Texas over the eight routes was significantly different from Dock Express' initial proposal to furnish multiple continuous sailings on multiple distinct trade routes. MSC states that since a complete evaluation of Dock Express' new proposal would be required, its August 5 message clearly constituted a late modification. We agree with MSC. The information in the August 5 message substantially modified Dock Express initial proposal and did not solely relate to its responsibility. Consequently, this message was properly rejected as a late proposal modification. See Uniserv Inc.; Marine Transport Lines Inc., B-218196, B-218196.2, supra.

By letter of October 21, 1987, Dock Express argues that MSC may have made awards to three other carriers, who had not evidenced to MSC their vessel commitments by July 30, 1987, and that if this was the case, Dock Express has been treated unfairly. Dock Express stated that it had requested MSC records concerning the carriers on August 27, 1987, under the Freedom of Information Act (FOIA), but that MSC had not yet furnished the records. Dock Express requested that our Office therefore "infer" that MSC had applied a different standard to Dock Express than it applied to other carriers in finding it was not a responsible contractor. On December 2, 1987, MSC finally provided Dock Express some material regarding these other carriers' proposals but declined to furnish other information. /4/ On December 10, 1987, Dock Express detailed its contentions that two of the other carriers had been afforded preferential treatment over Dock Express.

There is some doubt whether these contentions have been timely raised, since Dock Express seemed to have its suspicions regarding these carriers before it received copies of the proposals on December 2. However, since Dock Express' pursuit of this material under the FOIA was diligent and the contentions in Dock Express' December 10 letter are primarily based upon material received by Dock Express on December 2, we will resolve all doubts regarding timeliness in favor of Dock Express and consider these contentions. See Sperry Corp., B-225492, S-225492.2, Mar. 25, 1987, 87-1 CPD Para. 341; Professional Review of Florida, Inc.; Florida Peer Review Organization, Inc., B-215303.3, B-215303.4, Apr. 5, 1985, 85-1 C.P.D Para. 394.

One of the carriers that allegedly received preferential treatment was Marine Car Carriers, Inc., which received a contract award based on its proposal to perform six sailings on Route No. 1 and two sailings on Route No. 8 on a continuous transpacific voyage. Dock Express contends that this proposal is substantially similar to that offered by Dock Express to service all eight routes in its proposal on a continuous voyage with the Dock Express Texas, and that there is no apparent reason for accepting Marine Car Carrier's offer and rejecting Dock Express' offer. However, Marine Car Carrier's proposal was submitted by July 30 while Dock Express' single ship continuous voyage over eight routes offer was submitted on August 5, 1987. Therefore, Dock Express' August 5 proposal was rejected as a late modification and its complaint on this point has no merit.

Dock Express also claims that it received disparate treatment from that accorded Topgallant Group, Inc., which Dock Express claims has only two vessels serving two routes but which received awards for other routes without apparently identifying and furnishing evidence of commitment of other vessels for these routes. However, our in camera review shows that Topgallant identified to MSC other specific vessels to service these other routes and furnished evidence of these vessels' availability and commitment to this service prior to July 30. Moreover, the record shows that MSC rejected the proposals of a number of other carriers who did not demonstrate that they had or would have vessels to actually perform the service for the routes offered.

Therefore, the record does not support Dock Express' contention that it was not treated fairly.

Finally, Dock Express protests MSC's decision not to accept any offeror's "combination berth term/FIO" rates. Under the RFP and shipping agreements, MSC could elect to book cargo with combination berth term/FIO service, which is applicable where the government is responsible for loading or discharg-ing at one port and the carrier is responsible at the other port. The RFP solicited a "table of rates for combination berth term/FIO service" as follows:

"The Government may elect to book cargo in a combination of FIO and berth term service. In that event, a discount will be applied to the carrier's berth term rate for the CONUS or OVERSEAS port where the Government performs the loading or discharging with appropriate applica tion of the rates provided in the Table below. The combination of berth term discounts for CONUS and OVERSEAS ports must equal the difference between FIO and berth term service for each route."

After discussions were conducted and final revised proposals submitted by July 30, 1987, the contracting officer was made aware that the vast majority of the combination berth term/FIO rates/discounts offered by carriers in prior contracts and in response to this RFP violated the requirement that the combination of berth term discounts for CONUS and overseas ports equal the difference between FIO and berth term service for each route. MSC decided not to reopen discussions to resolve this discrepancy because it found that the combination service was optional with the government and the delay incident to resolving this matter through discussions and revised proposals was not in the best interests of the government. Consequently, on August 18, 1987, MSC rejected all offerors' combination berth term/FIO rates.

Dock Express protests that although the combination service is indeed optional at the sole discretion of the government, the shipping agreement still gives the government the right to order combination berth term/FIO service, notwithstanding the deletion from the contract of the applicable rates for this service. Dock express contends that MSC has not stated that it will not utilize combination service during the contract, and that if MSC does order combination service for a shipment, there is no way to determine the lowest cost carrier for that shipment. Dock Express further contends that its combination rates are integrated in its entire pricing structure and MSC does not have the right to pick and choose which rates to accept or reject; MSC only has the right to accept or reject a proposal in total for each route. Dock Express finally disputes MSC's contention that it did not have time to conduct discussions and receive revised proposals on this point, since the service under this contract was not to commence until October 1, 1987, and this matter could have been resolved by September 1, 1987.

In this case, we find MSC had the right to reject all combination berth term/FIO rates. In this regard, MSC has cited as authority for this action paragraph "L.8" of the RFP, which states "the government reserves the right to reject any or all offers in whole or in part." This provision vests MSC with the discretion to not accept an item of service offered in all proposals, so long as no offeror is prejudiced by this action. See Lou Ana Foods, Inc., B-209540, Mar. 21, 1983, 83-1 CPD Para. 278.

Dock Express argues that this provision is not applicable where the rates are integral to an offeror's price proposal. However, Dock Express has not indicated how to why the combination rates would be so integrated in its or other carriers' rate structures that the rejection of these rates would necessarily change the rest of the proposal, or that it was competitively prejudiced by MSC's action. Moreover, it appears that all carriers were treated the same, and none received a competitive advantage as a result of the deletion of the combination rates. /5/ In this regard, this combination service is a discreet item of service in the shipping agreements that is entirely optional with the government. That is to say, the government could forego this service, even if the rates had been accepted. Indeed, the government can satisfy its cargo shipping requirements using only berth term and FIO service.

Dock Express claims that the government will exercise its option to order combination service under the shipping agreements. However, MSC has specifically rejected this item of service under paragraph "C.8" of the RFP.

Finally, as discussed above, MSC needed shipping agreements in place well prior to the commencement of service on October 1 to allow for orderly planning of its military cargo movements. Accordingly, MSC was not required to reopen discussions in connection with the combination rates.

The protest is denied.

/1/ Ocean common carriers are regulated carriers with regular schedules, who hold themselves out to the general public to provide transportation by water between the United States and a foreign country for compensation published in tariffs. 46 U.S.C. App. Secs. 1702(6), 1702(18) (Supp. III 1985); see generally Dock Express Contractors Inc., B-223966, Dec. 22, 1986, 86-2 CPD Para. 695. Contract carriers, such as Dock Express, do not hold themselves out to the general public to provide regular service but perform services for particular shippers under individual contracts. Id.

/2/ Dock Express also stated in its proposal that it "anticipated" a voyage from the United States Great Lakes to the Mediterranean sometime during the contract term. Dock Express' proposal was rejected on this ninth route because this was not considered to be a commitment to provide "regular service" as required by the RFP. It has not protested this rejection.

/3/ To date Dock Express still has not identified these vessels on this record.

/4/ MSC has supplied all requested information to our Office, which we have reviewed in camera in making this decision.

/5/ None of the other 13 carriers receiving awards complained of MSC's rejection of the combination berth term/FIO rates.