Matter of: Composix Co. File: B-257551 Date: October 17, 1994

Matter of: Composix Co. File: B-257551 Date: October 17, 1994

Protest that solicitation failed to adequately notify offerors that agency intended to award on the basis of initial proposals is denied where solicitation incorporated by reference the Federal Acquisition Regulation (FAR) clause which so stated; agency was not required by FAR or otherwise to include full text of that clause in the solicitation.

Attorneys

DECISION

Composix Co. protests the proposed award of a contract to Sioux Manufacturing Corporation under request for proposals (RFP) No. DAAE07-93-R-A110, issued by the U.S. Army Materiel Command for spall liner kits. The protester contends that the award to Sioux on the basis of its initial proposal would be improper because the RFP did not include a statement that the agency intended to award the contract without discussions. Composix points out that agencies may make award on the basis of initial proposals only where the solicitation includes "a statement that proposals are intended to be evaluated, and award made, without discussions, unless discussions are determined to be necessary." See 10 U.S.C. Sec. 2305(b)(4)(A)(ii) (Supp. V 1993). While the protester concedes that the RFP incorporated by reference the Federal Acquisition Regulation (FAR) provision stating that the agency intended to award a contract without discussions, it contends that incorporating that provision by reference does not satisfy 10 U.S.C. Sec. 2305(b)(4)(A)(ii), which requires that an actual "statement" be included in full text.

We deny the protest.

The RFP, issued as a small business set-aside, provided that "this solicitation incorporates one or more solicitation provisions by reference, with the same force and effect as if they were given in full text. Upon request, the Contracting Officer will make their full text available." One of the provisions incorporated by reference was CONTRACT AWARD-ALTERNATE III, FAR Sec. 52.215-16, Alt. III (Aug. 1991), which provided as follows:

"(c) The Government intends to evaluate proposals and award a contract without discussions with offerors. Therefore, each initial offer should contain the offeror's best terms from a cost or price and technical standpoint. However, the Government reserves the right to conduct discussions if later determined by the Contracting Officer to be necessary."

After receipt and review of proposals, including those from Composix and the awardee, the agency advised Composix that Sioux was the apparent successful offeror, and that the agency would not consider proposal revisions. This protest followed.

Composix contends that the award, without discussions is improper because the solicitation did not comply with the statutory requirement that it contain an actual statement that award would be made without discussions.[1] The protester alleges that it was misled by the agency's failure to include such a statement in the RFP, in that it reasonably expected that discussions would be held, and therefore did not include its best terms in its initial proposal. In this regard, Composix explains that it has learned that "it is not prudent to try to get "best" pricing from material suppliers [at the time initial proposals are submitted] if there will be a best and final offer." According to the protester, had it understood that award would be based on initial proposals, it could have "aggressively leveraged our suppliers," in order to obtain their "best" prices and it may have been the low offeror.

We have held that the incorporation by reference of material solicitation provisions is sufficient to put offerors on notice of their contents. See Forbes Mfg. Inc., B-237806, Mar. 12, 1990, 90-1 CPD Para. 267; Tiernay Mfg. Co., B-209035, Dec. 20, 1982, 82-2 CPD Para. 552. Moreover, offerors are expected to read the entire solicitation and to do so in a reasonable manner. Jedco, B-223579, Aug. 26, 1986, 86-2 CPD Para. 228.

Here, we find that the incorporation of FAR Sec. 52.215-16, Alt. III was sufficient to put offerors on notice that the agency intended to award the contract without discussions such that the contract could properly be awarded on the basis of initial proposals. See Tiernay Mfg. Co., supra. In our view, to the extent that Composix failed to properly understand the solicitation, that misunderstanding resulted not from a defect in the solicitation but from a lack of reasonable diligence on the part of the protester to read the terms of the solicitation.[2] While the protester argues that incorporation by reference is insufficient because the statute requires a "statement," we have no basis to conclude that agencies are precluded from incorporating such a "statement" by reference into a solicitation in lieu of reproducing the full text. Solicitations typically incorporate dozens of material provisions by reference, and, as here, include the agency's offer to provide them in full text to offerors upon request. In this case, the FAR specifically authorizes incorporation by reference of the clause at issue here, including all possible alternates. FAR Sec. 52.301.[3] Accordingly, we think the solicitation was consistent with the statutory provision at issue here and sufficiently advised offerors of the agency's intent. We therefore have no basis to disturb the agency's proposed selection.

The protest is denied.

1. Composix has not challenged the evaluation of either its own or the awardee's proposal, or otherwise questioned the reasonableness of the selection decision.

2. While Composix apparently submitted its proposal with the assumption that the standard clause was in effect, we point out that even the standard clause cautions offerors that "[t]he Government may award a contract on the basis of initial offers received, without discussions. Therefore, each initial offer should contain the offeror's best terms from a cost or price and technical standpoint." See FAR Sec. 52.215-16.

3. The protester asserts that our Office has previously found that incorporation by reference of this same provision violated the FAR requirement that deviation provisions be set forth in full text. BDM Int'l, Inc., 71 Comp.Gen. 363 (1992), 92-1 CPD Para. 377. In that case, the clause was an authorized deviation from the FAR clause; deviation provisions are to be set forth in full text. Here, however, the same clause is no longer considered a deviation; rather, it is a FAR "alternate" which may be incorporated by reference.