B-171177, JUL 13, 1971

B-171177, JUL 13, 1971

BID PROTEST - REEVALUATED COSTS AFFIRMING PRIOR DECISION WHICH DENIED PROTEST AGAINST AWARD OF A CONTRACT TO DONOVAN, LOW BIDDER, UNDER A SOLICITATION ISSUED BY THE ARMY AMMUNITION PROCUREMENT AND SUPPLY AGENCY FOR A QUANTITY OF SHELLS. ALTHOUGH THE PRIOR DECISION WAS BASED ON "EVALUATED UNIT PRICES" WHICH DID NOT INCLUDE AN ADJUSTMENT MADE BY THE ARMY TO THE UTILITIES FACTOR INCLUDED IN THE EVALUATION OF DONOVAN'S BID, A SUBSEQUENT ADJUSTMENT RESULTS IN A FINDING THAT DONOVAN IS STILL THE LOW BIDDER.

TO CHAMBERLAIN MANUFACTURING CORPORATION:

YOUR LETTER DATED MAY 18, 1971, COMMENTING ON OUR DECISION B-171177, MAY 11, 1971, 50 COMP. GEN.

, IN WHICH WE DENIED YOUR PROTEST AGAINST THE AWARDS OF CONTRACTS UNDER A SOLICITATION ISSUED BY THE AMMUNITION PROCUREMENT AND SUPPLY AGENCY (APSA), DEPARTMENT OF THE ARMY, HAS BEEN FORWARDED FOR OUR CONSIDERATION.

IN OUR DECISION WE FOUND NO BASIS TO OBJECT TO THE AWARD OF A GREATER QUANTITY TO AN OFFEROR (DONOVAN), WHICH HAD A HIGHER EVALUATED UNIT PRICE THAN CHAMBERLAIN - NEW BEDFORD FOR THAT QUANTITY, WHERE THE RESULTING COMBINATION OF AWARDS, DICTATED BY THE NEED TO MAINTAIN FOUR SOURCES OF SUPPLY, WAS EVALUATED AS BEING THE LOWEST OVERALL COST TO THE GOVERNMENT. YOU QUESTION THIS PREMISE IN THE FOLLOWING LANGUAGE:

"ON PAGE 4, THERE IS AN EXHIBIT WHICH SHOWS THE MONTHLY TOTAL DOLLAR OUTLAY OF $6,611,063 FOR 250,000 SHELLS. IF CHAMBERLAIN'S FULLY EVALUATED PRICE OF $24.3936 FOR 85,000 IS USED AND DONOVAN'S FULLY EVALUATED PRICE OF $27.92605 IS USED, LEAVING THE OTHER TWO BIDDERS AS SHOWN, THE TOTAL DOLLAR OUTLAY FOR 250,000 SHELLS IS $6,586,983 OR OVER $24,000 PER MONTH LESS EXPENSIVE THAN THE WAY THE PURCHASE WAS ACTUALLY MADE. IN OTHER WORDS, THE ARMY'S OWN FULLY EVALUATED FIGURES SEEM TO SUPPORT OUR PROTEST, AND YET, OUR PROTEST WAS DENIED."

THE FIGURES FOR DONOVAN'S "EVALUATED UNIT PRICES" SET FORTH IN OUR MAY 11, 1971, DECISION WERE INADVERTENTLY BASED ON AN INITIAL SET OF FIGURES FURNISHED BY ARMY WHICH DID NOT INCLUDE AN ADJUSTMENT WHICH HAD BEEN MADE BY ARMY TO THE UTILITIES FACTOR INCLUDED IN THE EVALUATION OF DONOVAN'S BID. OUR OFFICE HAD BEEN ADVISED OF THIS ADJUSTMENT TO THE UTILITIES FACTOR BY ARMY ON FEBRUARY 11, 1971.

WE INDICATED IN OUR MAY 11 DECISION THAT THE UTILITIES FACTOR WAS ADDED TO DONOVAN'S OFFER SINCE SERVICES SUCH AS GAS, WATER AND SEWERAGE WERE SUPPLIED TO DONOVAN BY ANOTHER CONTRACTOR. ARMY'S EVALUATORS INITIALLY INCLUDED THE SAME UTILITIES FACTOR OF $0.78 FOR ALL OF THE QUANTITY RANGES INCLUDED IN DONOVAN'S BID. APSA QUESTIONED THIS EVALUATION SINCE IT WAS APSA'S VIEW THAT THE FACTOR FOR UTILITIES SHOULD VARY ACCORDING TO THE NUMBER OF UNITS. ON RE-EVALUATION THE FOLLOWING FACTORS FOR UTILITIES WERE INCLUDED IN DONOVAN'S "EVALUATED UNIT PRICES":

QUANTITY UTILITIES FACTOR

50,000 *1.00

55,000 1.00

60,000 0.93

65,000 0.93

70,000 0.86

75,000 0.86

80,000 0.78

85,000 0.78

THE FOLLOWING ARE DONOVAN'S "EVALUATED UNIT PRICES" AS ADJUSTED FOR THE UTILITIES FACTOR AND THESE FIGURES WERE THE BASIS FOR ARMY'S DETERMINATION THAT THE COMBINATION OF AWARDS AS MADE REPRESENTS THE LOWEST OVERALL COST TO THE GOVERNMENT:

EVALUATED UNIT PRICES

DONOVAN

UNITS PRICES

LAAP* RAAP**

50,000 $28.14605 $27.7866

55,000 27.92205 27.5626

60,000 27.54455 27.1851

65,000 27.31455 26.9551

70,000 26.99595 26.6365

75,000 26.89085 26.53140

80,000 26.55945 26.200

85,000 26.24305 25.8836

*LAAP - LOUISIANA ARMY AMMUNITION PLANT

**RAAP - RAVENNA ARMY AMMUNITION PLANT

A FACTOR FOR UTILITIES WAS NOT INCLUDED IN THE EVALUATION OF THE OTHER THREE OFFERS; CONSEQUENTLY, NO ADJUSTMENTS FOR UTILITIES WERE MADE TO THESE OFFERS. WE HAVE NO BASIS FOR QUESTIONING THE ADJUSTMENT TO THE UTILITIES FACTOR IN THE EVALUATION OF DONOVAN'S BID.

IN DECIDING WHICH COMBINATION OF AWARDS RESULTED IN THE LOWEST OVERALL COST TO THE GOVERNMENT, ARMY HAD CONSIDERED THE PLAN PROPOSED IN YOUR LETTER OF MAY 18 AS ONE OF THE ALTERNATIVES. BASED ON THE ADJUSTED "EVALUATED UNIT PRICES," IT WAS DETERMINED BY ARMY THAT THIS COMBINATION OF AWARDS WOULD RESULT IN THE FOLLOWING OVERALL COST TO THE GOVERNMENT:

OFFEROR QUANTITY DESTINATION UNIT PRICE AMOUNT

CHAMBERLAIN-

NEW BEDFORD 85,000 RAAP $24.393576 $2,073,454

CHAMBERLAIN- 65,000 2500-RAAP 25.0513 6I,628

SCRANTON 62,500-LAAP 26.10075 1,631,297

DONOVAN 50,000 LAAP 28.14605 1,407,303

SPERRY

RAND 50,000 LAAP 29.2006 1,460,030

$6,634,712

THE ABOVE COMBINATION OF EVALUATED AWARD PRICES IS, OF COURSE, HIGHER THAN THE EVALUATED PRICES ON THE COMBINATION OF AWARDS MADE. IN THE CIRCUMSTANCES WE FIND NO BASIS FOR CHANGING OUR CONCLUSION IN THE DECISION OF MAY 11.