B-165561, DEC. 27, 1968

B-165561, DEC. 27, 1968

TO MR. PETER J. STATILE:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF NOVEMBER 2, 1968, PROTESTING THE REJECTION OF YOUR PROPOSAL SUBMITTED IN RESPONSE TO REQUEST FOR QUOTATIONS (RFQ) NO. N00024-69-Q-7024, ISSUED BY THE NAVAL SHIP SYSTEMS COMMAND.

THE PROCUREMENT WAS SET ASIDE 100 PERCENT FOR SMALL BUSINESS CONCERNS. THE SUBJECT RFQ WAS ISSUED ON AUGUST 5, 1968, AND CLOSED SEPTEMBER 4, 1968. PROPOSALS WERE SOLICITED ON A COST-PLUS-A-FIXED FEE BASIS. THE SCHEDULE OF THE RFQ PROVIDED FOR THE PROSPECTIVE CONTRACTOR TO: "1. FURNISH CONTRACT DRAWINGS AND SPECIFICATIONS FOR NEW DESIGN GARBAGE LIGHTER (YGN). "2. FURNISH CONTRACT DRAWING AND SPECIFICATION FOR MODIFIED REPEAT DESIGN REFRIGERATION BARGE (YFRN). "3. FURNISH THREE HUNDRED (300) MAN-DAYS (MAX) OF TECHNICAL EFFORT FOR PREPARATION OF VARIOUS STUDIES AND STANDARD PLANS FOR SERVICE CRAFT.'

THE SCHEDULE WENT ON TO SPECIFY IN MORE DETAIL WHAT WAS REQUIRED UNDER EACH OF THE ABOVE GENERAL STATEMENTS OF WORK REQUIREMENTS. FOR EXAMPLE, EACH CRAFT WAS TO BE DESIGNED BASED ON ITS SHIP CHARACTERISTICS FURNISHED BY THE GOVERNMENT, THE FORMAT OF THE DRAWINGS WAS SPECIFIED AND THE MINIMUM TYPES OF DRAWINGS, SUCH AS LINES AND OFFSETS, FOR EACH VESSEL WERE INDICATED. FURTHER, THE MINIMUM STUDIES TO BE MADE WERE IDENTIFIED; EACH RELATED TO THE DESIGN OF THE GARBAGE LIGHTER OR THE REFRIGERATION BARGE OR BOTH CRAFT. IN ADDITION, THE RFQ REQUIRED THE SUBMISSION OF TECHNICAL DISSERTATIONS OR PROPOSALS AND PROVIDED THAT THE INFORMATION IN THE TECHNICAL PROPOSAL WOULD BE A PRIMARY FACTOR IN DETERMINING EACH PROSPECTIVE CONTRACTOR'S TECHNICAL COMPETENCE FOR THE WORK AND IN DETERMINING AWARD. NINE PROPOSALS WERE RECEIVED IN RESPONSE TO THE RFQ BY AUGUST 5, 1968, AND AFTER TECHNICAL EVALUATION A CONTRACT WAS AWARDED TO THE W.C. NICKUM AND SONS COMPANY FOR ALL WORK REQUIREMENTS AT THE ESTIMATED COST OF $70,184, PLUS FIXED FEE OF $4,913, OR A TOTAL ESTIMATED COST TO THE GOVERNMENT OF $75,097.

IN YOUR TELEGRAM OF NOVEMBER 2, 1968, YOU PROTEST THE AWARD OF THE CONTRACT ON THE GROUND THAT AWARD WAS MADE FOR ONLY ONE OF THE REQUIREMENTS AT AN ESTIMATED COST WHICH WAS HIGHER THAN YOUR QUOTATION OF $40,177 FOR ONE OF THE REQUIREMENTS. IT IS REPORTED THAT YOUR PRICING PROPOSAL ON FORM DD 633-4 SHOWED AN ESTIMATED COST OF $38,755 AND A FIXED FEE OF $2,712, OR A TOTAL OF $41,467 FOR THIS ONE ITEM REFERRED TO BY YOU. IT IS ALSO REPORTED THAT THE LETTER DATED OCTOBER 30, 1968, FROM THE ADMINISTRATIVE OFFICE TO THE UNSUCCESSFUL OFFERORS, ANNOUNCING THE AWARD, MAY HAVE BEEN MISLEADING IN THAT IT SPECIFICALLY REFERRED TO ONLY ONE OF THE THREE WORK REQUIREMENTS. IN ANY CASE, THE RECORD SHOWS THAT BY LETTER DATED NOVEMBER 21, 1968, IT WAS MADE CLEAR TO ALL OFFERORS THAT AWARD WAS MADE FOR ALL THREE WORK REQUIREMENTS TO W.C. NICKUM AND SONS COMPANY. IS ALSO REPORTED THAT YOU QUOTED AN ESTIMATED COST INCLUDING FEE FOR ALL WORK REQUIREMENTS OF $107,355, WHICH WAS THE HIGHEST OF THE NINE PROPOSALS RECEIVED.

IT APPEARS, THEREFORE, THAT THE FACTUAL PREMISE UPON WHICH YOU BASE YOUR PROTEST, I.E., LOWER ESTIMATED COST, IS ERRONEOUS. MOREOVER, UNDER A NEGOTIATED COST-REIMBURSEMENT TYPE CONTRACT THERE IS NO FIRM PREESTABLISHED PRICE. THE COST OF THE CONTRACT TO THE GOVERNMENT IS GENERALLY ESTABLISHED ON THE BASIS OF THE ACTUAL COSTS OF PERFORMANCE PROPERLY INCURRED BY THE CONTRACTOR. IN VIEW THEREOF, PARAGRAPH 3 805.2 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) PROVIDES THAT THE CONTRACTOR'S ESTIMATED COST OF CONTRACT PERFORMANCE AND PROPOSED FEE ARE NOT TO BE CONSIDERED AS CONTROLLING IN THE AWARD SELECTION. THE REGULATION FURTHER PROVIDES THAT "THE PRIMARY CONSIDERATION IN DETERMINING TO WHOM THE AWARD SHALL BE MADE IS: WHICH CONTRACTOR CAN PERFORM THE CONTRACT IN A MANNER MOST ADVANTAGEOUS TO THE GOVERNMENT.' UNDER THIS CRITERION, THE RELATIVE TECHNICAL COMPETENCE OF PROSPECTIVE CONTRACTORS IS OF PARAMOUNT IMPORTANCE. IN THAT CONNECTION, IT IS ADMINISTRATIVELY REPORTED THAT THE SUCCESSFUL CONTRACTOR'S TECHNICAL PROPOSAL WAS THE ONLY ONE TO BE RATED "OUTSTANDING" AND THAT YOUR TECHNICAL PROPOSAL RECEIVED THE LOWEST TECHNICAL RATING OF THE EIGHT PROPOSALS THAT WERE SCORED. IS CLEAR, THEREFORE, THAT YOU WERE NOT THE PROSPECTIVE CONTRACTOR WHO COULD PERFORM THE WORK REQUIREMENTS IN A MANNER MOST ADVANTAGEOUS TO THE GOVERNMENT.