B-160537, OCT. 17, 1967

B-160537, OCT. 17, 1967

BIDDERS - RESPONSIBILITY - PERFORMANCE CAPABILITY DECISION TO SECRETARY OF THE NAVY CONCERNING PROTESTS FROM THREE LOWEST BIDDERS: QUALITY MAINTENANCE CO., INC., J.V. MOAN COMMISSARY CORP. AND ABC FOOD SERVICE, INC. FOR REJECTION OF BIDS FOR MESS ATTENDANT SERVICES AT U.S. NAVAL STATION, TREASURE ISLAND, SAN FRANCISCO. THE REJECTION OF THREE LOW BIDDERS BECAUSE THE STAFFING SCHEDULES SUBMITTED WERE INADEQUATE WHEN THE INVITATION DID NOT INDICATE THE WEIGHT TO BE GIVEN SUCH SCHEDULE IN EVALUATION RESULTED IN AN AWARD THAT DID NOT MEET THE CRITERIA OF COMPETITIVE BIDDING STATUTES IN 10 U.S.C. 2305. HOWEVER, IN VIEW OF THE ADVERSE EFFECTS THAT WOULD RESULT FROM CANCELLATION OF THE CONTRACT AWARDED TO MANPOWER, INC., OBJECTION TO THE AWARD WILL NOT BE MADE. THE NAVAL SUPPLY SYSTEMS COMMAND WILL WLIMINATE THE PROBLEM IN FUTURE PROCUREMENTS BY PERMITTING RESPONSIVE BIDDERS BEING CONSIDERED FOR AWARD TO SUBMIT THE MANNING SCHEDULE AFTER OPENING TO DETERMINE BIDDER'S RESPONSIBILITY.

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTERS DATED AUGUST 23 AND SEPTEMBER 29, 1967, FILE REFERENCE 0232, WITH ENCLOSURES, FROM THE DEPUTY COMMANDER, PURCHASING, NAVAL SUPPLY SYSTEMS COMMAND, REPORTING ON THE PROTESTS OF QUALITY MAINTENANCE CO., INC., J.V. MOAN COMMISSARY CORP. AND ABC FOOD SERVICE, INC., IN CONNECTION WITH THE REJECTION OF THEIR BIDS UNDER INVITATION FOR BIDS NO. N00228-67-B-6054, ISSUED BY THE NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA.

THE INVITATION, ISSUED ON MAY 8, 1967, REQUESTED BIDS FOR FURNISHING LABOR AND MATERIALS TO PERFORM MESS ATTENDANT SERVICES AT THE UNITED STATES NAVAL STATION, TREASURE ISLAND, SAN FRANCISCO, CALIFORNIA, FOR A PERIOD OF 12 MONTHS, WITH AN OPTION TO EXTEND NOT TO EXCEED A TOTAL CONTRACT PERIOD OF 3 YEARS.

AS A PART OF THE INVITATION, EACH BIDDER WAS REQUIRED BY SECTION 5.0 (A) THEREOF TO SUBMIT A MESS ATTENDANT AND MANNING SCHEDULE SETTING FORTH THE NUMBER OF MAN-HOURS PER DAY ESTIMATED BY THE BIDDER AS BEING REQUIRED TO "SATISFACTORILY PERFORM THE CONTRACT SERVICES.' SECTION 5.0 (A) PROVIDED THAT:

"SECTION 5.0 - NOTICES TO BIDDERS

"/A) ALL BIDDERS SHALL SUBMIT WITH THEIR BID AN EMPLOYEE MESS ATTENDANT SCHEDULE, FIGURE 1, ATTACHED, ESTIMATED BY THE BIDDER AS BEING REQUIRED TO SATISFACTORILY PERFORM THE CONTRACT SERVICES. FAILURE TO SUBMIT THIS SCHEDULE WITH THE BID MAY BE CAUSE FOR REJECTION OF THE BID. NOTHING IN THIS SECTION, OR ELSEWHERE IN THIS CONTRACT SHALL BE CONSTRUED AS LIMITING THE CONTRACTOR'S RESPONSIBILITY FOR PROVIDING SUFFICIENT PERSONNEL TO ACCOMPLISH ALL OF THE REQUIREMENTS SET FORTH HEREIN.' WITH RESPECT TO THE MANNING SCHEDULE, SECTION 9.27 OF THE INVITATION PROVIDED THAT:

"9.27 - STAFFING LEVELS (NUMBER OF EMPLOYEES)

"THE STAFFING LEVELS ENTERED BY THE CONTRACTOR ON THE CIVILIAN MESS ATTENDANT SCHEDULE SHALL BECOME AN INTEGRAL PART OF THE CONTRACT, AND THE CONTRACTING OFFICER MAY REQUIRE THAT THIS STAFFING LEVEL BE FULFILLED SHOULD PERFORMANCE OF THIS CONTRACT FALL BELOW ACCEPTABLE STANDARDS. THE CONTRACTOR MAY BE REQUIRED TO MAKE MONETARY ADJUSTMENTS FOR ANY MANHOURS LESS THAN THOSE SPECIFIED, SHOULD THE CONTRACTING OFFICER DETERMINE THAT A LESS THAN SATISFACTORY LEVEL OF PERFORMANCE IS CAUSED BY PERSONNEL STAFFING BELOW THAT SET FORTH IN FIGURE 1,MESS ATTENDANT SCHEDULE.'

OTHER THAN THE TWO PROVISIONS QUOTED ABOVE, NO INDICATION WAS GIVEN IN THE INVITATION TO BIDDERS AS TO HOW, OR IN WHAT MANNER, THE MANNING SCHEDULE WOULD BE USED, THE IMPORTANCE THAT WOULD BE PLACED BY THE PROCUREMENT OFFICE ON THE NUMBER OF HOURS SET FORTH IN THE SCHEDULE, OR THE WEIGHT THAT WOULD BE ATTRIBUTED TO THE MANNING SCHEDULE IN THE EVALUATION OF BIDS. NOTHING IN THE INVITATION ADVISED PROSPECTIVE BIDDERS OF A MINIMUM NUMBER OF MAN-HOURS DEEMED NECESSARY OR AN ESTIMATE OF WHAT WAS EXPECTED IN THE WAY OF MAN-HOURS FROM PROSPECTIVE BIDDERS.

BIDS WERE OPENED ON JUNE 1, 1967, AND THE BIDDERS, THEIR RESPECTIVE BID AMOUNTS, AND THE NUMBER OF MAN-HOURS PER DAY ESTIMATED BY EACH TO DO THE JOB WERE AS FOLLOWS:

BIDDER MONTHLY PRICE ESTIMATED

HOURS PER DAY

1. MURCOLE, INC. - (DISQUALIFIED BECAUSE OF ERROR IN BID)

2. QUALITY MAINTENANCE CO., INC. $63,759.50 849 HOURS

3. J.V. MOAN COMMISSARY CORP. 68,773.68 645 HOURS

4. ABC FOOD SERVICE, INC. 71,769.47 743.5 HOURS

5. MANPOWER, INC. 72,968.00 849 HOURS

6. SERVOMATION DUCHESS, INC. 76,666.67 923.5 HOURS

7. U.S. EAGLE INC. 81,092.67 992 HOURS

8. DYNAMIC ENTERPRISES 135,973.41 (NO MANNING CHART)

IT IS REPORTED THAT ON JUNE 2, 1967, THE BIDS WERE REFERRED TO THE NAVAL STATION, TREASURE ISLAND, FOR REVIEW AND RECOMMENDATION AS TO AWARD ON THE BASIS OF STAFFING SCHEDULES SUBMITTED BY BIDDERS. CONCURRENT WITH THIS REFERRAL, A PREAWARD SURVEY WAS REQUESTED ON THE APPARENT LOW BIDDER, QUALITY MAINTENANCE CO., INC. ON JULY 26, 1967, AFTER ADMINISTRATIVE EVALUATION OF THE THREE LOWEST BIDS, THE CONTRACTING OFFICER MADE THE FOLLOWING DETERMINATIONS OF NONRESPONSIBILITY CONCERNING QUALITY MAINTENANCE CO., INC., J.V. MOAN COMMISSARY CORP. AND ABC FOOD SERVICE, INC.: "IN ACCORDANCE WITH ASPR 1-904.1, THE QUALITY MAINTENANCE CO. INC., KANSAS CITY, MISSOURI, IS HEREBY DETERMINED NOT TO BE A RESPONSIBLE BIDDER UNDER IFB N0022867B6054 FOR THE FOLLOWING EASONS: "THE CONTRACTING OFFICER HAS DETERMINED ON THE BASIS OF THE DEPARTMENT OF LABOR WAGE DETERMINATION WHICH IS PART OF THE INVITATION FOR BIDS, AND MAKING ALLOWANCE FOR SUCH PAYMENTS REQUIRED BY STATUTE AS UNEMPLOYMENT INSURANCE AND WORKMEN'S COMPENSATION INSURANCE, THAT BIDDER'S PROBABLE COST OF PROVIDING 849 HOURS PER DAY OR 25,470 HOURS PER MONTH AT AN AVERAGE NET COST, EXCLUDING OVERHEAD AND PROFIT, OF $2.75 PER MAN HOUR IS ESTIMATED AT $70,042.50, WHEREAS THE PRICE BID PER MONTH, NET OF DISCOUNT, IS $63,679.80. THEREFORE APPEARS THAT THIS BIDDER IS BIDDING A LOSS CONTRACT, AND THAT THE STAFFING LEVEL SUBMITTED WOULD NOT BE MAINTAINED DURING THE PERIOD OF PERFORMANCE. FOR THIS REASON THE CONTRACTING OFFICER IS UNABLE TO DETERMINE THAT QUALITY MAINTENANCE CO. IS A RESPONSIBLE BIDDER UNDER THIS INVITATION. "IN ACCORDANCE WITH ASPR 1-904.1, THE J.V. MOAN COMMISSARY CORP., LAFAYETTE, CALIFORNIA, IS HEREBY DETERMINED NOT TO BE A RESPONSIBLE BIDDER UNDER INVITATION FOR BIDS IFB N0022867B6054, BECAUSE BIDDER HAS SUBMITTED A STAFFING CHART INDICATING HE EXPECTS TO COMPLY WITH THE REQUIREMENTS OF THE PROPOSED CONTRACT BY PROVIDING 645 MAN HOURS PER DAY OF SERVICES, WHEREAS IN THE OPINION OF THE FOOD SERVICE OFFICER, U.S. NAVAL STATION, TREASURE ISLAND A MINIMUM OF 849 MAN HOURS PER WEEKDAY WORKING DAY IS REQUIRED TO COMPLY WITH THE TERMS OF THE CONTRACT. "IN ACCORDANCE WITH ASPR 1-904.1, THE ABC FOOD SERVICE CO., EL PASO, TEXAS, IS HEREBY DETERMINED NOT TO BE A RESPONSIBLE BIDDER UNDER INVITATION FOR BIDS IFB N0022867B6054, BECAUSE BIDDER HAS SUBMITTED A STAFFING CHART INDICATING HE EXPECTS TO COMPLY WITH THE REQUIREMENTS OF THE PROPOSED CONTRACT BY PROVIDING 743-1/2 MAN HOURS PER DAY OF SERVICES, WHEREAS IN THE OPINION OF THE FOOD SERVICE OFFICER, U.S. NAVAL STATION, TREASURE ISLAND, A MINIMUM OF 849 MAN HOURS PER WEEKDAY WORKING DAY IS REQUIRED TO COMPLY WITH THE TERMS OF THE CONTRACT.'

IT IS REPORTED THAT THE CONTRACTING OFFICER DETERMINED TO PROCEED WITH AWARD, NOTWITHSTANDING THE FACT THAT THREE PROTESTS WERE MADE TO OUR OFFICE AGAINST THE POSSIBLE REJECTION OF THE THREE LOWEST BIDS. THIS DETERMINATION WAS MADE ON THE BASIS OF THE URGENT NEED FOR UNINTERRUPTED OPERATION OF THE TREASURE ISLAND MESS HALL, AND THE FACT THAT EXTENSION OF THE EXISTING CONTRACT, AS AN ALTERNATIVE, WOULD INVOLVE AN ADDITIONAL EXPENSE OF APPROXIMATELY $8,100 PER MONTH. ACCORDINGLY, AWARD OF THE CONTRACT WAS MADE TO MANPOWER, INC., ON JULY 26, 1967.

INSOFAR AS THE BIDS SUBMITTED BY J.V. MOAN AND ABC WERE CONCERNED, THE CONTRACTING OFFICER DETERMINED THAT THESE BIDDERS WERE NONRESPONSIBLE ON THE BASIS THAT THE NUMBER OF MAN-HOURS SUBMITTED BY THESE BIDDERS ON THEIR MANNING SCHEDULE WAS FOUND TO BE INADEQUATE TO MEET THE NEEDS OF THE NAVY. J.V. MOAN HAS CONTENDED THAT, IN VIEW OF THE "RESPONSIBILITY" ASPECT OF THE MANNING SCHEDULE, IT SHOULD HAVE BEEN ALLOWED TO SUBMIT A REVISED MANNING SCHEDULE WITH INCREASED HOURS AFTER BID EVALUATION BUT PRIOR TO AWARD. IN THIS RESPECT THE PROCUREMENT AGENCY ADVISED THAT:

"* * * J.V. MOAN COMMISSARY CORP., SHOULD NOT BE PERMITTED TO SUBMIT A REVISED STAFFING CHART BECAUSE THE STAFFING CHART, * * * ...SHALL BECOME AN INTEGRAL PART OF THE CONTRACT, AND THE CONTRACTING OFFICER MAY REQUIRE THAT THIS STAFFING LEVEL BE FULFILLED...- FOR THIS REASON, REVISION OF THE STAFFING CHART WOULD AMOUNT TO ALTERING A BID AFTER OPENING RATHER THAN PROVIDING INFORMATION TO DOCUMENT RESPONSIBILITY. * * *"

WE DO NOT AGREE THAT THE REQUIREMENT FOR SUBMISSION OF THE MANNING CHART UNDER THE INVITATION AFFECTED THE RESPONSIVENESS OF BIDDERS. IT IS WELL ESTABLISHED THAT A BIDDER IS ENTITLED AT ANY TIME AFTER BID AND PRIOR TO AWARD TO SUBMIT INFORMATION THAT BEARS ON ITS RESPONSIBILITY TO PERFORM THE CONTRACT. 43 COMP. GEN. 285; 41 ID. 555. THIS IS SO EVEN THOUGH THE INVITATION, AS HERE, STATES THAT FAILURE TO SUBMIT THE REQUESTED INFORMATION MAY BE CAUSE FOR REJECTION OF THE BID. 41 COMP. GEN. 106, 108.

THE COMPETITIVE BIDDING STATUTE CODIFIED AT 10 U.S.C. 2305 REQUIRES THAT (1) THE SPECIFICATIONS AND INVITATION BE SO DRAWN AS TO PERMIT FREE AND FULL COMPETITION; (2) THE SPECIFICATIONS BE SUFFICIENTLY DESCRIPTIVE IN LANGUAGE AND ATTACHMENTS TO PERMIT SUCH COMPETITION; AND (3) IF THE SPECIFICATIONS DO NOT CARRY THE NECESSARY DESCRIPTIVE LANGUAGE AND ATTACHMENTS OR IF SUCH ATTACHMENTS ARE NOT ACCESSIBLE TO ALL BIDDERS, THE INVITATION IS INVALID AND NO AWARD MAY BE MADE THEREUNDER.

EVEN ACCEPTING THAT THE MANNING SCHEDULE IN THE SUBJECT INVITATION IS AN "INTEGRAL PART" OF THE SPECIFICATIONS AND, THEREFORE, RELATED TO THE RESPONSIVENESS OF THE BID, WE HAVE HELD THAT SUCH INVITATIONS ARE FATALLY DEFECTIVE FOR FAILURE TO ALLOW FOR THE PREPARATION AND EVALUATION OF BIDS ON A COMMON BASIS. THE RULE IS STATED IN 36 COMP. GEN. 380, 384-385, AS FOLLOWS:

"THE PURPOSE OF STATUTES REQUIRING THE AWARD OF CONTRACTS TO THE LOWEST RESPONSIBLE BIDDER AFTER ADVERTISING IS TO GIVE ALL PERSONS EQUAL RIGHT TO COMPETE FOR GOVERNMENT CONTRACTS, TO PREVENT UNJUST FAVORITISM, COLLUSION, OR FRAUD IN AWARDING GOVERNMENT CONTRACTS, AND TO SECURE FOR THE GOVERNMENT THE BENEFITS WHICH FLOW FROM FREE AND UNRESTRICTED COMPETITION. SEE UNITED STATES V. BROOKRIDGE FARM, 111 F.2D 461. PERMIT BIDDERS TO COMPETE ON EQUAL TERMS, THE INVITATION MUST BE SUFFICIENTLY DEFINITE TO PERMIT THE PREPARATION AND EVALUATION OF BIDS ON THE COMMON BASIS. BIDDERS CANNOT COMPETE ON AN EQUAL BASIS AS REQUIRED BY LAW UNLESS THEY KNOW IN ADVANCE THE BASIS ON WHICH THEIR BIDS WILL BE EVALUATED. * * *

"THE -BASIS' OF EVALUATION WHICH MUST BE MADE KNOWN IN ADVANCE TO THE BIDDERS SHOULD BE AS CLEAR, PRECISE AND EXACT AS POSSIBLE. IDEALLY, IT SHOULD BE CAPABLE OF BEING STATED AS A MATHEMATICAL EQUATION. IN MANY CASES, HOWEVER, THAT IS NOT POSSIBLE. AT THE MINIMUM, THE -BASIS' MUST BE STATED WITH SUFFICIENT CLARITY AND EXACTNESS TO INFORM EACH BIDDER PRIOR TO BID OPENING, NO MATTER HOW VARIED THE ACCEPTABLE RESPONSES, OF OBJECTIVELY DETERMINABLE FACTORS FROM WHICH THE BIDDER MAY ESTIMATE WITHIN REASONABLE LIMITS THE EFFECT OF THE APPLICATION OF SUCH EVALUATION FACTOR ON HIS BID IN RELATION TO OTHER POSSIBLE BIDS. BY THE TERM -OBJECTIVELY DETERMINABLE FACTORS' WE MEAN FACTORS WHICH ARE MADE KNOWN TO OR WHICH CAN BE ASCERTAINED BY THE BIDDER AT THE TIME HIS BID IS BEING PREPARED. FACTORS WHICH ARE BASED ENTIRELY OR LARGELY ON A SUBJECTIVE DETERMINATION TO BE ANNOUNCED BY REPRESENTATIVES OF THE CONTRACTING AGENCY AT THE TIME OF OR SUBSEQUENT TO THE OPENING OF BIDS VIOLATE THE PRINCIPLE FOR THE REASON THAT THEY ARE NOT DETERMINABLE BY THE BIDDER AT THE TIME HIS BID IS BEING PREPARED.'

THE FREE AND FULL COMPETITION ENVISAGED BY THE STATUTE CAN ONLY BE OBTAINED WHEN BIDDERS ARE ADVISED FULLY AS TO THE BASIS UPON WHICH THEIR BIDS WILL BE EVALUATED FOR AWARD. HOWEVER MERITORIOUS THE PURPOSE OF THE MANNING SCHEDULE MAY BE, THE INVITATION DID NOT WARN OR ADVISE BIDDERS AS TO THE EFFECT SUCH SCHEDULE WOULD HAVE UPON THE EVALUATION OF BIDS. THE EVALUATION OF BIDS WAS LEFT TO THE DISCRETION OF THE CONTRACTING OFFICER AS TO WHAT HE CONSIDERED THE MINIMUM OR APPROPRIATE NUMBER OF HOURS REQUIRED TO PROVIDE THE SERVICES REQUESTED. THEREFORE, IT IS SEEN THAT PROSPECTIVE BIDDERS WERE FACED WITH AN UNKNOWN EVALUATION FACTOR WHICH COULD NOT HAVE BEEN CONSIDERED BY BIDDERS AT THE TIME BIDS WERE BEING PREPARED. FOR THESE REASONS, WE FEEL THAT THE SUBJECT INVITATION WAS NOT IN COMPLIANCE WITH THE STATUTORY ADVERTISING REQUIREMENTS. SEE 44 COMP. GEN. 392, 395.

HOWEVER, ON THE BASIS OF THE FOLLOWING ADMINISTRATIVE PRESENTATION, WE WILL NOT, IN THIS INSTANCE, OBJECT TO THE AWARD MADE TO MANPOWER, INC. THE COMMANDING OFFICER, NAVY SUBSISTENCE OFFICE, HAS STRESSED THE FOLLOWING ADVERSE EFFECTS THAT WOULD RESULT IF THE AWARD WERE CANCELED AND THE PROCUREMENT READVERTISED: "2. THE GENERAL MESS AT THE NAVAL STATION, TREASURE ISLAND, THE ONLY ENLISTED DINING FACILITY ON THE ISLAND, SERVES AN AVERAGE OF 10,000 MEALS DAILY TO THE PERSONNEL OF THE VARIOUS TENANT COMMANDS IT SUPPORTS. A HIGH QUALITY FOOD SERVICE OPERATION IS BASIC TO THE MORALE OF ENLISTED PERSONNEL AND IT FOLLOWS THAT CONTINUOUS ADEQUATE STAFFING IS A MANDATORY REQUIREMENT. WITH THE IMPLEMENTATION OF THE CONTRACT MESSMEN PROGRAM, MILITARY PERSONNEL PREVIOUSLY ASSIGNED FOR THIS FUNCTION WERE REASSIGNED TO FLEET OR OVERSEAS UNITS. "3. THE FOLLOWING ADVERSE CONDITIONS WOULD RESULT FROM A TERMINATION OF THE SUBJECT PERSONNEL SERVICE CONTRACT: "A. THE REMOVAL OF A LARGE NUMBER OF STUDENTS FROM THE CLASSROOM, NECESSITATING THAT THEY BE ASSIGNED TO THE GENERAL MESS, THEREBY SERIOUSLY DELAYING THEIR SCHEDULED TRAINING AND AS AN END RESULT, REDUCE THE NUMBER OF TRAINED SPECIALISTS AVAILABLE FOR ASSIGNMENT TO THE FLEET.

"B. A TERMINATION OF THE EXISTING MESSMEN CONTRACT WOULD NOT ONLY JEOPARDIZE THIS VITAL FOOD SERVICE OPERATION, IT WOULD SERIOUSLY ERODE THE FUNCTIONAL SUPPORT THAT THE NAVAL STATION AND SUPPORTED COMMANDS RENDER TO FLEET UNITS. "C. DETAILING OF MILITARY PERSONNEL (STUDENTS) TO A TWELVE TO FOURTEEN HOUR DAY, WITH AN AVERAGE OF FOUR DAYS OFF A MONTH, WOULD NOT BE CONDUCIVE TO RETENTION, PROPER UTILIZATION OF THEIR EXPENSIVE TRAINING, OR REALIZING THEIR POTENTIAL, AND UNDOUBTEDLY WOULD SERIOUSLY UNDERMINE MORALE.'

ALSO, WE HAVE BEEN ADVISED IN A LETTER DATED SEPTEMBER 29, 1967, FROM THE DEPUTY COMMANDER, PURCHASING, NAVAL SUPPLY SYSTEMS COMMAND, THAT IN AN EFFORT TO AVOID PROBLEMS SIMILAR TO THOSE ENCOUNTERED IN THIS PROCUREMENT, THE PROVISION FOR SUBMISSION OF A MANNING SCHEDULE WITH THE BID WILL BE ELIMINATED IN FUTURE SOLICITATIONS FOR MESS ATTENDANT SERVICES. INSTEAD, A PROVISION WILL BE INCLUDED IN THE SOLICITATION DOCUMENT TO THE EFFECT THAT THE GOVERNMENT WILL REQUIRE THE RESPONSIVE BIDDER OR BIDDERS BEING CONSIDERED FOR AWARD TO SUBMIT A MANNING SCHEDULE AFTER BID OPENING FOR USE IN DETERMINING THE BIDDER'S RESPONSIBILITY, AND THAT SUCH MANNING SCHEDULE WILL BECOME A PART OF ANY RESULTING CONTRACT.

ACCORDINGLY, IN VIEW OF THE ABOVE REPRESENTATIONS AND ADVICE AS TO FUTURE CORRECTIVE ACTION, WE ARE ADVISING THE THREE PROTESTING BIDDERS THAT THEIR PROTESTS ARE DENIED INSOFAR AS THE AWARD TO MANPOWER, INC., IS CONCERNED.