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B-173576, B-173579, NOV 22, 1971, 51 COMP GEN 309

B-173576,B-173579 Nov 22, 1971
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THAT MANNING CHARTS DO NOT AFFECT THE RESPONSIVENESS OF BIDS OR OFFERS AS SUCH LANGUAGE IS BUT INITIAL PROBATIVE EVIDENCE OF AN OFFEROR'S RESPONSIBILITY. SINCE MANNING CHARTS ARE NOT AN EXACT FORMULA. ACCEPTANCE OF THE DETERMINATION AN OFFEROR IS WITHIN A COMPETITIVE RANGE IS JUSTIFIED. 1971: YOU CONTEND THAT OUR DECISION OF OCTOBER 12 IS ERRONEOUS IN THREE DISTINCT AREAS AND THERE IS GREAT NEED OF CLARIFICATION OF OUR POSITION. YOU ASSERT THAT THE CURRENT LANGUAGE OF THE NAVY SOLICITATIONS INDICATING THAT: (1) MANNING CHARTS WITH INSUFFICIENT HOURS MAY BE REJECTED AND (2) THE MANNING CHARTS WILL BE USED IN DETERMINING WHETHER A BIDDER IS WITHIN THE COMPETITIVE RANGE. IS TOTALLY INCONSISTENT WITH OUR DECISION THAT MANNING CHARTS IN THIS INSTANCE WOULD BE USED ONLY IN DETERMINING RESPONSIBILITY.

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B-173576, B-173579, NOV 22, 1971, 51 COMP GEN 309

CONTRACTS - NEGOTIATION - EVALUATION FACTORS - MANNING REQUIREMENTS THE FACT THAT A SOLICITATION PROVIDED THAT MANNING CHARTS WHOSE HOURS DO NOT APPROXIMATE THE GOVERNMENT'S ESTIMATES MAY RESULT IN REJECTION OF AN OFFEROR WITHOUT DISCUSSION DOES NOT ALTER THE CONCLUSION IN 51 COMP. GEN. THAT MANNING CHARTS DO NOT AFFECT THE RESPONSIVENESS OF BIDS OR OFFERS AS SUCH LANGUAGE IS BUT INITIAL PROBATIVE EVIDENCE OF AN OFFEROR'S RESPONSIBILITY, AND SINCE MANNING CHARTS SERVE AS AIDS IN DETERMINING RESPONSIBILITY, THE CHARTS CANNOT BE MADE A MATTER OF RESPONSIVENESS BY ANY LANGUAGE IN THE REQUEST FOR PROPOSALS. FURTHERMORE, CONSIDERING MANHOURS AND PRICE SEPARATELY DOES NOT IMPLY THERE NEED BE NO REASONABLE RELATION BETWEEN HOURS AND DOLLARS, AND THE REQUIREMENT THAT MANHOURS BE CONSISTENT WITH PRICES CONNOTES A TEST OF REASONABLENESS RATHER THAN AN EXACT REQUIREMENT FOR MINIMUM PRICE PER MANHOUR, AND SINCE MANNING CHARTS ARE NOT AN EXACT FORMULA, ACCEPTANCE OF THE DETERMINATION AN OFFEROR IS WITHIN A COMPETITIVE RANGE IS JUSTIFIED.

TO SELLERS, CONNER AND CUNEO, NOVEMBER 22, 1971:

YOU CONTEND THAT OUR DECISION OF OCTOBER 12 IS ERRONEOUS IN THREE DISTINCT AREAS AND THERE IS GREAT NEED OF CLARIFICATION OF OUR POSITION. FIRST, YOU ASSERT THAT THE CURRENT LANGUAGE OF THE NAVY SOLICITATIONS INDICATING THAT: (1) MANNING CHARTS WITH INSUFFICIENT HOURS MAY BE REJECTED AND (2) THE MANNING CHARTS WILL BE USED IN DETERMINING WHETHER A BIDDER IS WITHIN THE COMPETITIVE RANGE, IS TOTALLY INCONSISTENT WITH OUR DECISION THAT MANNING CHARTS IN THIS INSTANCE WOULD BE USED ONLY IN DETERMINING RESPONSIBILITY. RATHER, YOU CLAIM THAT THE MANNING CHARTS GO TO THE RESPONSIVENESS OF THE OFFER (TO THE EXTENT THAT CONCEPT IS APPLICABLE IN NEGOTIATED PROCUREMENTS).

THE PERTINENT LANGUAGE OF THE SOLICITATION FOUND IN SECTION 5.1 THEREOF IS QUOTED ON PAGE 3 OF OUR DECISION UNDER DISCUSSION. WHILE IT MAY BE ARGUED THAT THE LANGUAGE, "MANNING CHARTS WHOSE HOURS DO NOT APPROXIMATE THESE RANGES (THE GOVERNMENT'S ESTIMATES) MAY RESULT IN REJECTION OF THE OFFER WITHOUT DISCUSSION," IS SOMEWHAT AKIN TO THE FAILURE OF A BIDDER UNDER AN ADVERTISED PROCUREMENT TO FURNISH SOMETHING REQUIRED BY THE INVITATION (E.G., A BID BOND) RESPONSIBILITY MAY NOT BE MADE A QUESTION OF RESPONSIVENESS BY REQUIRING EVIDENCE OF RESPONSIBILITY. WE THINK THE MANNING CHARTS, WHEN VIEWED IN THE CONTEXT OF THE QUOTED LANGUAGE, ARE INITIALLY PROBATIVE EVIDENCE OF AN OFFEROR'S RESPONSIBILITY. RESPONSIBILITY ORDINARILY CANNOT BE DETERMINED BY THE OFFER ALONE. HENCE, THE REASON FOR ADVISING OFFERORS OF THE FACTORS TO BE USED IN EVALUATING THE MANNING CHARTS FOR THE PURPOSE OF ESTABLISHING A COMPETITIVE RANGE, AND USE OF THE WORDS "MAY RESULT IN REJECTION OF THE OFFER WITHOUT DISCUSSION." EVEN WHERE AN OFFEROR'S MANNING CHART DOES NOT APPROXIMATE THE GOVERNMENT'S ESTIMATE AND IT IS DETERMINED THAT DISCUSSIONS SHOULD NOT BE CONDUCTED WITH HIM, IN OUR VIEW THIS IS AN INITIAL DETERMINATION OF NONRESPONSIBILITY BASED UPON AN APPARENT MISUNDERSTANDING OF THE REQUIREMENTS NECESSARY TO SATISFACTORILY PERFORM THE SERVICES IN QUESTION.

WE THEREFORE CONTINUE TO BE OF THE BELIEF THAT MANNING CHARTS DO NOT AFFECT THE RESPONSIVENESS OF BIDS OR OFFERS. B-160537, OCTOBER 17, 1967. THE QUOTED LANGUAGE DOES NOT CHANGE THE ESSENCE OF THE PURPOSE FOR WHICH THE MANNING CHARTS ARE REQUIRED, AND SINCE IT IS OUR UNDERSTANDING THEY ARE REQUIRED BY THE CONTRACTING ACTIVITY AS AN AID IN DETERMINING RESPONSIBILITY, THEY CANNOT BE MADE A MATTER OF RESPONSIVENESS BY ANY LANGUAGE IN THE RFP.

THE SECOND ERROR YOU ALLEGE TO BE PRESENT IN OUR DECISION OF OCTOBER 12 RESULTS FROM YOUR BELIEF THAT OUR OFFICE FAILED TO VIEW THE OFFER OF MANHOURS IN THE MANNING CHARTS, AND THE PRICE OFFERED, AS TWO PARTS OF ONE WHOLE. YOU STATE:

THE DECISION CONVENIENTLY SPLITS THESE TWO QUESTIONS, CONTRARY TO THE LANGUAGE OF THE SOLICITATION. YOUR DECISION FIRST FINDS THAT THE MANHOURS OFFERED BY SPACE SERVICES PUTS SPACE SERVICES WITHIN THE COMPETITIVE RANGE FOR NEGOTIATIONS. THEN WITHOUT RECOGNIZING THE RELATION BETWEEN HOURS AND DOLLARS, YOU FIND THAT IT IS ACCEPTABLE FOR A CONTRACTOR TO OFFER A BID UNDER WHICH IT MIGHT INCUR A LOSS AND COULD NOT PAY MINIMUM WAGES FOR THE MANHOURS PROMISED.

IF OUR DECISION CAN BE PROPERLY SO CONSTRUED, WHICH WE DO NOT AGREE THAT IT CAN BE, IT IS ATTRIBUTABLE TO OUR EFFORT TO BE RESPONSIVE TO YOUR INITIAL PROTEST. THE THRUST OF ABC'S PROTEST WAS THAT UNDER SOLICITATION NO. 0037 SPACE SERVICES DID NOT OFFER THE TOTAL MINIMUM HOURS ESTIMATED BY THE GOVERNMENT TO ASSURE SATISFACTORY PERFORMANCE, AND THAT IN BOTH PROCUREMENTS THE SUCCESSFUL OFFEROR'S PRICES FAILED TO INCLUDE ENOUGH MONEY TO PAY FOR THE MINIMUM LABOR COSTS AND PAYROLL TAXES WHICH IT PROMISED IN ITS MANNING CHARTS. CONSEQUENTLY, OUR DECISION DEALT FIRST WITH THE CONTENTION OF INSUFFICIENT HOURS UNDER 0037 AND NEXT WITH THE ARGUMENT THAT UNDER BOTH PROCUREMENTS THE OFFERED PRICES WERE AT VARIANCE WITH THE MANHOURS OFFERED. IT WAS NOT OUR INTENT TO IMPLY THAT THERE NEED BE NO REASONABLE RELATION BETWEEN HOURS AND DOLLARS. INDEED, WE THINK THE PENULTIMATE PARAGRAPH OF OUR DECISION, WHICH STATED IN PART, "THE EVALUATION CRITERIA NOW BEING EMPLOYED IN MESS ATTENDANT SOLICITATIONS ARE INTENDED TO MORE FULLY ADVISE OFFERORS OF THE EXACT ROLE THE MANNING CHARTS ARE TO PLAY IN EVALUATING OFFERS, TO HELP MINIMIZE THE RECEIPT OF OFFERS WHICH QUOTE PRICES THAT BEAR NO REASONABLE RELATION TO THE NUMBER OF MANNING HOURS OFFERED, AND TO PRECLUDE ACCEPTANCE OF THE LOWEST RATE PER MANHOUR, RATHER THAN THE LOWEST OVERALL PROPOSAL" IS CLEARLY INDICATIVE OF THE FACT THAT OFFERORS ARE NOT FREE TO OFFER A PRICE SUBSTANTIALLY AT VARIANCE WITH THE MANHOURS OFFERED.

THE QUESTION, OF COURSE, TO BE DECIDED IN EACH CASE IS WHETHER THE OFFERED PRICE IS SUBSTANTIALLY AT VARIANCE WITH THE OFFERED MANHOURS. THIS REGARD, OUR OFFICE HAS CONSISTENTLY RECOGNIZED THE BROAD AUTHORITY VESTED IN THE PROCURING ACTIVITIES IN NEGOTIATED PROCUREMENTS TO ESTABLISH A COMPETITIVE RANGE FOR THE PURPOSE OF DETERMINING THOSE BIDDERS WITH WHOM WRITTEN OR ORAL NEGOTIATIONS WILL BE UNDERTAKEN. WE CONTINUE TO BE OF THE VIEW THAT THE CONTRACTS HERE INVOLVED WERE AWARDED IN A MANNER CONSISTENT WITH THE LANGUAGE AND INTENT OF THE SOLICITATIONS, AND WE FAIL TO FIND THAT THE EXPERIENCED OFFERORS HERE INVOLVED WERE IN ANY WAY MISLEAD AS TO THE INTENDED USE OF THE MANNING CHARTS, OR WERE PLACED AT A COMPETIVE DISADVANTAGE BY SUCH USE.

YOUR THIRD ASSIGNMENT OF ERROR IN OUR DECISION IS YOUR ASSERTION THAT THE PRICES OFFERED BY THE SUCCESSFUL OFFEROR WERE NOT CONSISTENT WITH THE MANHOURS OFFERED; THAT IT IS CLEAR THE OFFEROR DID NOT INTEND TO OFFER MANHOURS APPROXIMATING THOSE IN THE GOVERNMENT'S ESTIMATE; AND THAT THE OFFERS SHOULD THEREFORE HAVE BEEN REJECTED AS BEING OUTSIDE THE COMPETITIVE RANGE. YOU STATE THAT THE DISCREPANCY BETWEEN PRICE AND OFFERED MANHOURS IS 5 PERCENT AT NEW ORLEANS (0037) AND NEARLY 10 PERCENT AT GULFPORT (0040). ABC ARRIVES AT THESE FIGURES BY ADDING TO THE MINIMUM HOURLY RATE (MINIMUM WAGE PLUS HEALTH AND WELFARE) "CONCOMITANT COSTS" OF 11 PERCENT, CONSISTING OF FICA AMOUNTING TO 5.2 PERCENT; STATE AND FEDERAL UNEMPLOYMENT TAXES OF 3.2 PERCENT, AND WORKMEN'S COMPENSATION AND LIABILITY INSURANCE OF 2.6 PERCENT.

THE SOLICITATIONS DID NOT REQUIRE THE OFFEROR'S PRICE, WHEN COMPARED TO MANHOURS, TO COVER SUCH ELEMENTS. IT DID GIVE AS AN EXAMPLE OF OTHER EMPLOYEE-RELATED EXPENSES THE COST FOR FICA. HOWEVER, WE THINK THE REQUIREMENT THAT OFFEROR'S MANHOURS BE CONSISTENT WITH OFFERED PRICES CONNOTES A TEST OF REASONABLENESS, RATHER THAN AN EXACT REQUIREMENT TO QUOTE A CERTAIN MINIMUM PRICE PER MANHOUR. EVEN IF ABC'S CALCULATIONS ARE ACCEPTED, WE CANNOT SAY THAT A 5 PERCENT OR A 10 PERCENT DISCREPANCY SHOULD AUTOMATICALLY OUST AN OFFEROR FROM CONSIDERATION BECAUSE ITS OFFER DID NOT APPROXIMATE THE GOVERNMENT'S ESTIMATED RANGE. ON THE OTHER HAND, WE HAVE HELD THAT A 30 PERCENT DISCREPANCY WAS SUFFICIENT TO JUSTIFY THE CONTRACTING OFFICER'S REFUSAL TO NEGOTIATE WITH THE OFFEROR THERE INVOLVED. B-173628, SEPTEMBER 9, 1971. SINCE WE DO NOT THINK THAT MANNING CHARTS CAN PROPERLY BE USED AS AN EXACT FORMULA IN THE EXERCISE OF THE DISCRETIONARY AUTHORITY GIVEN THE CONTRACTING AGENCIES IN THIS AREA, UNLESS THERE IS A CLEAR ABUSE OF SUCH AUTHORITY WE WOULD NOT BE JUSTIFIED IN INTERPOSING ANY OBJECTION TO THE DETERMINATIONS OF WHICH OFFERORS ARE PROPERLY CONSIDERED TO BE WITHIN THE COMPETITIVE RANGE.

IN VIEW OF THE FOREGOING WE MUST CONCLUDE THAT YOU HAVE NOT PRESENTED ANY FACTUAL OR LEGAL ARGUMENTS WHICH WOULD SUPPORT YOUR POSITION THAT OUR DECISION OF OCTOBER 12 WAS ERRONEOUS, AND CONSEQUENTLY THAT DECISION IS AFFIRMED. WE ARE HOPEFUL, HOWEVER, THAT OUR RECONSIDERATION OF THIS MATTER MAY HAVE CLARIFIED OUR PRIOR DECISION, AS YOU REQUESTED.

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