[Protests of Navy Purchase Orders for Computer Services]
Highlights
An individual protested the Navy's failure to solicit his bid for computer services, contending that he was wrongfully excluded from competing for two micro-purchases of computer services. GAO held that the Navy: (1) properly conducted the acquisitions in accordance with micro-purchase procedures; (2) was entitled to procure the services without obtaining competitive bids, since the value of the purchases did not exceed the micro-purchase threshold; and (3) reasonably sought quotes from only two sources and issued a purchase order to the low bidder after it determined that the quoted price was reasonable. Accordingly, the protest was denied.
B-216447, SEP 27, 1984, 84-2 CPD 364
BIDS - UNBALANCED - PROPRIETY OF UNBALANCE DIGEST: 1. AN OFFER IS NOT MATERIALLY UNBALANCED MERELY BECAUSE SOLICITATION ESTIMATES ARE NOT PRECISE; THE ESTIMATES MUST BE INACCURATE, SUCH AS TO CAST DOUBT ON THE GOVERNMENT'S GETTING THE LOWEST PRICE BY ACCEPTANCE OF THE UNBALANCED OFFER, FOR THE OFFER TO BE REGARDED AS MATERIALLY UNBALANCED. BIDS - PRICES - BELOW COST - NOT BASIS FOR PRECLUDING AWARD 2. A BELOW-COST OFFER, OR "BUY-IN," IS NOT LEGALLY OBJECTIONABLE.
GYRO SYSTEMS CO.:
GYRO SYSTEMS CO. PROTESTS AWARD OF A CONTRACT TO ANOTHER COMPANY UNDER REQUEST FOR PROPOSALS NO. N00189-84-R-0075 ISSUED BY THE NAVAL SUPPLY CENTER, NORFOLK, VIRGINIA. GYRO ALLEGES THAT THE AWARDEE'S PRICES ARE UNREASONABLE BECAUSE THEY ARE "MATERIALLY UNBALANCED" AND BECAUSE THE HOURLY BID RATE IS "UNREASONABLY LOW."
WE UNDERSTAND THAT THE SOLICITATION CALLED FOR DIFFERENT CATEGORIES OF LABOR, WITH ESTIMATED HOURS FOR EACH CATEGORY INDICATED. THE PROTESTER ADVISES THAT IT BID DIFFERENT RATES FOR THE VARIOUS LABOR CATEGORIES, BUT THAT THE AWARDEE BID ONE RATE FOR ALL CATEGORIES. THE ALLEGED MATERIAL UNBALANCING COMES FROM THE USE OF THAT SINGLE RATE, SINCE, AS THE PROTESTER PUTS IT, THE "HOURLY RATE FOR A GYROCOMPASS MECHANIC SUPERVISOR ON OVERTIME IS THE SAME AS FOR AN APPRENTICE ELECTRICIAN. ..." AWARD, THE PROTESTER ADVISES, WAS MADE ON THE BASIS OF PRICE.
A NUMERICALLY UNBALANCED OFFER MAY BE ACCEPTED; IT IS ONLY A MATERIALLY UNBALANCED OFFER THAT MUST BE REJECTED. A NUMERICALLY UNBALANCED OFFER WILL BE MATERIALLY UNBALANCED IF THE SOLICITATION ESTIMATES ARE UNRELIABLE SUCH THAT THERE IS DOUBT THAT ITS ACCEPTANCE WOULD RESULT IN THE LOWEST COST TO THE GOVERNMENT. EDWARD B. FRIEL, INC., 55 CMP.GEN. 231 (1975), 75-2 CPD PARA. 164. HERE, THE PROTESTER STATES ONLY THAT "THE EXACT TYPE OF HOURS ... FOR EACH WORK CLASSIFICATION" IS NOT KNOWN. THAT, OF COURSE, IS ALWAYS THE SITUATION WHEN ESTIMATES ARE USED, WHICH IS WHY THE ESTIMATES ARE USED IN THE FIRST PLACE. SINCE THE PROTESTER ALLEGES ONLY THAT THE ESTIMATES ARE NOT PRECISE RATHER THAN THAT THEY ARE NOT ACCURATE, THERE WOULD BE NO BASIS FOR US TO CONCLUDE THAT THE AWARDEE'S OFFER WAS MATERIALLY UNBALANCED.
THE PROTESTER ALSO ASSERTS THAT THE AWARDEE'S SINGLE RATE IS UNREASONABLY LOW BECAUSE IT CANNOT PROVIDE FOR VARIOUS DIRECT AND INDIRECT COSTS, AS WELL AS PROFIT, ASSOCIATED WITH PERFORMANCE. THE PROTESTER STATES THAT THE AWARDEE WAS BUYING-IN BY SUBMITTING A BELOW COST OFFER. THERE IS NO LEGAL BASIS TO OBJECT TO AN AWARD ON THE BASIS OF A BELOW-COST OFFER. TECHNICAL FOOD SERVICES, INC., B-210024, DEC. 21, 1982, 82-2 CPD PARA. 563. WHETHER THE OFFEROR WILL BE ABLE TO MEET CONTRACT REQUIREMENTS IN LIGHT OF ITS OFFERED PRICE IS A MATTER OF RESPONSIBILITY. BEFORE AWARD, AN AGENCY MUST MAKE AN AFFIRMATIVE DETERMINATION THAT THE OFFEROR IS RESPONSIBLE. BECAUSE THAT IS A VERY SUBJECTIVE DETERMINATION BASED ON BUSINESS JUDGMENT, WE WILL NOT REVIEW A CHALLENGE TO SUCH AN AFFIRMATIVE DETERMINATION UNLESS THERE IS A SHOWING OF POSSIBLE FRAUD OR BAD FAITH ON THE PART OF CONTRACTING OFFICIALS OR AN ALLEGATION THAT A SPECIFIC RESPONSIBILITY CRITERION SET FORTH IN THE SOLICITATION WAS NOT MET.
THE FACT THAT A "BUY-IN" MAY BE INVOLVED DOES NOT INVALIDATE THE OFFER. CONTRACTING OFFICERS, HOWEVER, ARE REQUIRED TO "TAKE APPROPRIATE ACTION TO ENSURE BUYING-IN LOSSES ARE NOT RECOVERED" THROUGH CHANGE ORDERS OR OTHERWISE. SEE FEDERAL ACQUISITION REGULATION, SEC. 3.501-2(A), 48 FED. REG. 41.102, 42,112 (1983) (TO BE CODIFIED AT 48 C.F.R. SEC. 3.501-2(A); TOMBS & SONS, INC., B-206810, MAY 10, 1982, 82-1 CPD PARA. 447.
THE PROTEST IS DISMISSED.