Autofrigo Europe S.r.l.

B-292753, Autofrigo Europe S.r.l., November 20, 2003

Decision

Matter of: Autofrigo Europe S.r.l.

File: B-292753

Date: November 20, 2003

Michael J. Gardner, Esq., Robert E. Korroch, Esq., Francis E. Purcell, Jr., Esq., and Michael Zuppa, Esq., Williams Mullen, for the protester.
John A. Burkholder, Esq., McKenna Long & Aldridge, for EBREX Food Services S.a.r.l., an intervenor.
J. Albert Calluso, Esq., and Marlene M. Surrena, Esq., Defense Logistics Agency, for the agency.
Linda S. Lebowitz, Esq., and Michael R. Golden, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Agency reasonably awarded a contract for commercially available, prime vendor food and non-food distribution services to the offeror which submitted the higher technically rated, lower priced proposal.

DECISION

Autofrigo Europe S.r.l. protests the award of a prime vendor contract to EBREX Food Services S.a.r.l. under request for proposals (RFP) No. SPO300-02-R-4003, issued by the Defense Supply Center Philadelphia, Defense Logistics Agency, for full line food and non-food distribution services in Southern Europe (the Azores, Spain, France, Italy, Greece, Turkey, Bulgaria, Macedonia, Kosovo, Romania, ships at any port of call in Europe south of the Alps, and United States military exercises in Europe south of the Alps or northern Africa). Autofrigo challenges the agencys evaluation of proposals.

We deny the protest.

BACKGROUND

The RFP for this commercial item acquisition was issued on May 10, 2002 on an unrestricted basis and contemplated the award of an indefinite-delivery/indefinite-quantity, fixed-price contract with an economic price adjustment for the base period and four 1-year option periods to the responsible offeror whose proposal was determined to represent the best value to the government, with technical evaluation factors being considered significantly more important than price. The RFP contained the following technical evaluation factors, listed in descending order of importance: experience/past performance, product availability, distribution systems/capability, quality assurance, contingencies, and back-up zone plans. Each of these technical evaluation factors contained a number of subfactors. The RFP provided that these factors and subfactors would be evaluated by assigning one of the following adjectival ratings: excellent, good, fair, and poor.

With respect to price, the RFP contained the following pricing formula:

Unit price = Delivered Price + Fixed Distribution Price
The RFP defined unit price as the total price (in United States currency) that is charged to the agency per unit for a product delivered to the government. RFP at 141. The RFP defined delivered price as the manufacturer/suppliers actual invoice price (in United States currency) to deliver the product to the prime vendors distribution point. RFP at 140. Under the RFP, the delivered price may change once every 2 weeks, i.e., [v]endors may change prices in their STORES [Subsistence Total Order and Receipt Electronic System] Vendor Item Catalog once every two weeks. RFP at 12.[2] Finally, the RFP defined fixed distribution price as a fixed price, offered as a dollar amount, which represents all elements of the unit price (except the delivered price), for example, general and administrative expenses, overhead, profit, packaging costs, transportation costs, and any other projected expenses associated with the distribution function; under the RFP, the distribution price remains fixed for each year of contract performance. RFP at 140.

In order to evaluate offerors prices on an equal basis, the RFP required offerors to propose prices for 86 core food and non-food items. For a number of these core items, the RFP required an offeror to provide invoices or written quotations to support the prices proposed. For each core item, the RFP listed an estimated quantity (based on previous customer usage) that would be multiplied by an offerors unit price (i.e., delivered price per unit plus distribution price per unit), and the extended prices from these computations would be added together to determine an offerors aggregate price. While the RFP emphasized that core item delivered prices were for evaluation purposes only, the RFP also advised that these proposed delivered prices should not dramatically change for orders placed early in the contract unless documented market conditions were established. RFP at 117. Under the RFP, an offerors aggregate price for the base period and for each of the option periods would be added together to determine the offerors total aggregate price to the government. The RFP stated that an offerors distribution and aggregate prices would be evaluated in accordance with Federal Acquisition Regulation (FAR) 15.4. RFP at 153. The RFP also stated that an offerors aggregate price would be evaluated for reasonableness and overall low price to the government. The RFP further called for the agency to evaluate the cost/price realism of the offerors proposal to determine an offerors understanding of the RFP requirements and whether the prices proposed were realistic in terms of the performance requirements. RFP at 160.

Two firms--Autofrigo, as teamed with MDV/Nash Finch, and EBREX, as teamed with Lankford SYSCO--submitted initial proposals. (EBREX has been the incumbent prime vendor contractor for Southern Europe for the past 5 years. Under the predecessor contract, Lankford SYSCO, which holds a number of prime vendor contracts in its own right, was EBREXs domestic food supplier, and Autofrigo handled warehouse functions for EBREX in Italy and at other southern Mediterranean locations. MDV/Nash Finch is a domestic food supplier and has held an agency prime vendor contract for ship support in Norfolk, Virginia.) The proposals of Autofrigo and EBREX were included in the competitive range and following discussions, both of these firms submitted final proposal revisions that were evaluated as follows:

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