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B-164951, SEP. 30, 1968

B-164951 Sep 30, 1968
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TO MANPOWER OF NEW HAVEN: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF JULY 30. PROSPECTIVE BIDDERS WERE ADVISED ON PAGE 3 OF THE REQUEST FOR PROPOSALS THAT SERVICES WOULD BE DISCONTINUED IN FOOD SERVICE BUILDING NO. 151 AS SOON AS NEW FOOD SERVICE BUILDING NO. 446 WAS READY FOR USE. THE RECORD INDICATES THAT PROPOSALS AS INITIALLY RECEIVED AND AS FINALLY NEGOTIATED WERE AS FOLLOWS: EVALUATED TOTALS INITIAL AS FINALLY PROPOSALS NEGOTIATED (PER MONTH) (PER MONTH) J. WAS REJECTED FOR FAILURE TO OFFER AN ADEQUATE MANNING TABLE (STAFFING PLAN). A CONTRACT AWARD WAS MADE ON JULY 26. LIKELY WILL OCCUR IN NOVEMBER 1968. IN REGARD TO YOUR STATEMENT THAT A CONTRACT MODIFICATION TO THE CONTRACT WITH DYNAMIC ENTERPRISES LIKELY WILL OCCUR IN NOVEMBER 1968.

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B-164951, SEP. 30, 1968

TO MANPOWER OF NEW HAVEN:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF JULY 30, 1968, PROTESTING THE AWARD OF A NEGOTIATED CONTRACT TO DYNAMIC ENTERPRISES, INC., DUNN, NORTH CAROLINA, UNDER DEPARTMENT OF THE NAVY REQUEST FOR PROPOSALS NO. N00140-68-R-0659, COVERING THE FURNISHING OF MESS ATTENDANT SERVICES AT THE NAVAL SUBMARINE BASE, NEW LONDON, CONNECTICUT.

BY THE REQUEST FOR PROPOSALS, AS AMENDED, THE NAVY PURCHASING OFFICE, BROOKLYN, NEW YORK, SOLICITED OFFERS FOR FURNISHING NECESSARY LABOR AND MATERIALS TO PERFORM MESS ATTENDANT SERVICES IN VARIOUS SUBSISTENCE AND HOSPITAL BUILDINGS AT THE NEW LONDON SUBMARINE BASE DURING THE SPECIFIED PERIOD. PROSPECTIVE BIDDERS WERE ADVISED ON PAGE 3 OF THE REQUEST FOR PROPOSALS THAT SERVICES WOULD BE DISCONTINUED IN FOOD SERVICE BUILDING NO. 151 AS SOON AS NEW FOOD SERVICE BUILDING NO. 446 WAS READY FOR USE.

THE RECORD INDICATES THAT PROPOSALS AS INITIALLY RECEIVED AND AS FINALLY NEGOTIATED WERE AS FOLLOWS:

EVALUATED TOTALS

INITIAL AS FINALLY

PROPOSALS NEGOTIATED

(PER MONTH) (PER MONTH) J. V. MOAN COMMISSARY CO.

$31,490.60 $31,490.60 DYNAMIC ENTERPRISES, INC. 31,920.30 31,584.00 QUALITY MAINTENANCE CO. 36,143.36 36,143.36 MANPOWER OF NEW HAVEN 37,815.18 36,360.00 MILITARY BASE MGT., INC. 42,666.24 35,520.00 FRANK G. SHUTTUCK CO. 47,243.04 46,030.38 THE LOW PROPOSAL OF J. V. MOAN COMMISSARY CO. WAS REJECTED FOR FAILURE TO OFFER AN ADEQUATE MANNING TABLE (STAFFING PLAN). A CONTRACT AWARD WAS MADE ON JULY 26, 1968, TO THE SECOND LOW OFFEROR, DYNAMIC ENTERPRISES, INC., FOR A FIRM FIXED-PRICE OF $33,600 PER MONTH (LESS DISCOUNT) OR $369,600 FOR AN ELEVEN MONTH PERIOD.

YOU ALLEGE THAT DYNAMIC ENTERPRISES, INC., HAS KNOWINGLY OFFERED A PRICE LESS THAN ITS ANTICIPATED COSTS WITH THE EXPECTATIONS OF RECOVERING ITS LOSSES DURING THE PERIOD OF CONTRACT PERFORMANCE THROUGH A MODIFICATION WHICH, YOU STATE, LIKELY WILL OCCUR IN NOVEMBER 1968. YOU CONTEND THAT DYNAMIC ENTERPRISES BY SUBMITTING A BELOW COST BID HAS VIOLATED THE PROHIBITION AGAINST "BUY IN IN" AS SET FORTH IN ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-311.

IN REGARD TO YOUR STATEMENT THAT A CONTRACT MODIFICATION TO THE CONTRACT WITH DYNAMIC ENTERPRISES LIKELY WILL OCCUR IN NOVEMBER 1968, THE UNITED STATES NAVY PURCHASING OFFICE IN A REPORT DATED AUGUST 21, 1968, MADE THE FOLLOWING COMMENT: "4. THE ABOVE QUOTATION FROM THE PROTESTANT'S TELEGRAM MAKES REFERENCE TO -A CONTRACTUAL MODIFICATION LIKELY TO OCCUR IN NOVEMBER 1968-. THIS OFFICE CAN ONLY ASSUME THAT SUCH A STATEMENT IS CONNECTED IN SOME WAY TO THE CHANGE IN BUILDING LOCATIONS TO BE SERVICED. AS INDICATED IN THE RFP, A BUILDING CHANGE IS SCHEDULED TO TAKE PLACE ON 1 NOVEMBER 1968. HOWEVER, THE REFERENCE TO RECOVERING LOSSES IS NOT UNDERSTOOD. SECTION 4.0 OF THE RFP TITLED -PERIOD OF PERFORMANCE- LISTS THE BUILDINGS TO BE SERVICED WITH TIME PERIODS INDICATED FOR THE DIFFERENT BUILDINGS (SEE AMENDMENT NO. 0001, DATED 17 JUNE 1968 FOR CORRECTION). THE SAME SECTION OF THE SCHEDULE STATES THAT -PROPOSALS SHALL BE SUBMITTED FOR THE ENTIRE PERIOD SPECIFIED. PROPOSALS SPECIFYING A SHORTER PERIOD OF TIME WILL NOT BE CONSIDERED-. THUS, THE CHANGE IN BUILDINGS SCHEDULED TO TAKE PLACE IN NOVEMBER 1968 IS CLEARLY INDICATED IN THE RFP WITH ARE QUEST FOR A PRICE WHICH WOULD TAKE INTO CONSIDERATION THIS CHANGE IN LOCATION. THE GOVERNMENT'S REQUIREMENT IS CLEAR. THE BASIS FOR BIDDING IS CLEAR. CONTRACTUAL MODIFICATION IS CONTEMPLATED. "5. AS INDICATED ABOVE, THE RESPONSE WAS HIGHLY COMPETITIVE WITH THE PROTESTING FIRM, MANPOWER OF NEW HAVEN, SUBMITTING THE FIFTH LOWEST OFFER (SEE PRICES AS FINALLY NEGOTIATED). THE SUCCESSFUL OFFEROR, DYNAMIC ENTERPRISES, INC., SUBMITTED A MANNING TABLE (STAFFING PLAN) WHICH INDICATES AWARENESS OF THE PERSONNEL LEVELS NEEDED. AS INDICATED UNDER SECTION 9.33 ( STAFFING LEVELS) (NUMBER OF EMPLOYEES/-), THIS MANNING CHART BECOMES AN INTEGRAL PART OF THE CONTRACT. THIS SAME SECTION PROTECTS THE GOVERNMENT'S INTEREST BY PROVIDING THAT: -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, MANNING CHART-. "6. IN VIEW OF THE SPECIFICITY OF THE BUILDINGS TO BE SERVICED AND THE RELATED PERIODS OF SERVICE, THE COMPETITION RECEIVED, THE PROTECTIVE STIPULATIONS SET FORTH IN SECTION 9.33 AND THE ABSENCE OF ANY RELATED OR FOLLOW-ON PROCUREMENTS, THE PROTESTANT'S REFERENCE TO -BUYING- IN- IS CONSIDERED INAPPLICABLE.'

ASPR 1-311 DEFINES "BUYING-IN" AS THE PRACTICE, IN PROCUREMENTS INVOLVING PRICE COMPETITION, OF ATTEMPTING TO OBTAIN A CONTRACT BY KNOWINGLY OFFERING A PRICE LESS THAN ANTICIPATED COSTS WITH THE EXPECTATION OF EITHER INCREASING THE CONTRACT PRICE DURING PERFORMANCE THROUGH CHANGE ORDER OR OTHER MEANS OR BY RECEIVING FUTURE "FOLLOW-ON" CONTRACTS AT PRICES HIGH ENOUGH TO RECOVER ANY LOSSES ON THE ORIGINAL "BUY-IN" CONTRACT. FURTHER, THE REGULATION PROVIDES THAT WHERE THERE IS REASON TO BELIEVE "BUYING-IN" HAS OCCURRED, CONTRACTING OFFICERS SHALL ASSURE THAT AMOUNTS THEREBY EXCLUDED IN THE DEVELOPMENT OF THE ORIGINAL CONTRACT PRICE ARE NOT RECOVERED IN THE PRICING OF CHANGE ORDERS OR IN FOLLOW-ON PROCUREMENTS SUBJECT TO COST ANALYSIS.

WE HAVE HELD THAT AN ATTEMPTED "BUYING-IN" BY A BIDDER DOES NOT AFFORD A BASIS FOR REJECTION OF A BID UNDER ASPR 1-311, THERE BEING NO PROVISION IN THE REGULATION FOR THE REJECTION OF A BID FOR SUCH REASON, BUT ONLY PROVISION FOR SPECIFIC ACTION TO BE TAKEN BY THE CONTRACTING OFFICER IN THE EVENT IT IS BELIEVED THAT "BUYING-IN" HAS OCCURRED. B 156888, JULY 2, 1965. EVEN ASSUMING THAT DYNAMIC ENTERPRISES IS ATTEMPTING TO "BUY IN," WE ARE NOT AWARE OF ANY SPECIFIC LEGAL PROHIBITION AGAINST ACCEPTANCE OF A BID ON THAT GROUND. B-163828 DATED JUNE 18, 1968.

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