B-173340, NOV 30, 1971

B-173340, NOV 30, 1971

BID PROTEST - BID BELOW COST - RESPONSIBILITY V RESPONSIVENESS DECISION DENYING PROTEST AGAINST AWARD OF A CONTRACT TO FEDERAL FOOD SERVICE, INC., LOW BIDDER UNDER AN RFP ISSUED BY THE NAVAL AIR STATION, JACKSONVILLE, FLA., FOR MESS ATTENDANT SERVICES. WHILE IT IS CONTENDED BY PROTESTANT THAT THE OFFERED PRICE OF FEDERAL FOOD SERVICE, INC. IS LESS THAN THE BARE COSTS IF THE MINIMUM HOURS SPECIFIED IN AN AMENDMENT ARE OBSERVED IN PAYING THE WAGES SPECIFIED BY THE DEPARTMENT OF LABOR, THE COMP. GEN. HAS HELD THAT THE FACT THAT THE LOW BIDDER OR OFFEROR MIGHT INCUR A LOSS IN PERFORMING THE CONTRACT AT THE PRICE SHOWN IN ITS BID OR OFFER DOES NOT JUSTIFY REJECTING AN OTHERWISE ACCEPTABLE BID OR OFFER. FURTHER, ALTHOUGH SUCCESSFUL OFFEROR'S INITIAL OFFER WAS OUTSIDE THE NUMERICAL RANGE OF MANNING HOURS SPECIFIED IN THE RFP FURTHER NEGOTIATIONS WERE PROPER SINCE MANNING CHARTS ARE USED AS AN AID IN DETERMINING RESPONSIBILITY, NOT RESPONSIVENESS.

TO MILLAR & FALLIN:

REFERENCE IS MADE TO LETTER OF AUGUST 11, 1971, FROM JOB EMPLOYMENT TEMPORARY SERVICES, INC. (JETS), AND PRIOR CORRESPONDENCE FROM YOU AND JETS, PROTESTING THE AWARD OF A CONTRACT TO FEDERAL FOOD SERVICE, INC., UNDER REQUEST FOR PROPOSALS (RFP) NO. N00207-71-R-0017, ISSUED BY THE UNITED STATES NAVAL AIR STATION, JACKSONVILLE, FLORIDA.

THE RFP SOLICITED OFFERS FOR MESS ATTENDANT SERVICES AT THE U.S. NAVAL AIR STATION, CECIL FIELD, FLORIDA, FOR THE PERIOD JULY 1, 1971, THROUGH JUNE 30, 1972.

SECTION 5.1 OF THE RFP, AS MODIFIED BY AMENDMENT P00001, PROVIDED:

"ALL OFFERORS SHALL SUBMIT MANNING CHARTS WITH THEIR PROPOSALS, IN THE FORMAT OF ATTACHMENT A, SHOWING THE ESTIMATED NUMBER OF PERSONNEL PROPOSED IN EACH SPACE EACH HALF HOUR OF A REPRESENTATIVE WEEKDAY AND OF A REPRESENTATIVE WEEKEND DAY. THE GOVERNMENT ESTIMATES THAT UNDER PRESENT CONDITIONS SATISFACTORY PERFORMANCE WILL REQUIRE TOTAL MANNING HOURS AS FOLLOWS:

BID A - BETWEEN 243 AND 290 ON A REPRESENTATIVE WEEKDAY;

BETWEEN 216 AND 246 ON A REPRESENTATIVE WEEKEND DAY;

BID B - BETWEEN 87 AND 93 ON A REPRESENTATIVE WEEKDAY;

BETWEEN 71 AND 84 ON A REPRESENTATIVE WEEKEND DAY;

"MANNING CHARTS WHOSE HOURS DO NOT APPROXIMATE THESE RANGES MAY RESULT IN REJECTION OF THE OFFER WITHOUT DISCUSSION. FOR THE PURPOSE OF ESTABLISHING A COMPETITIVE RANGE EVALUATION OF THE OFFERORS MANNING CHARTS WILL BE BASED ON THE FOLLOWING FACTORS:

1. THE COST OF THE NUMBER OF MANHOURS PER YEAR SHOWN ON THE MANNING CHART INCLUDING WAGE RATES; IF APPLICABLE, FRINGE BENEFITS, (HEALTH AND WELFARE, VACATION, AND HOLIDAYS); AND OTHER EMPLOYEE-RELATED EXPENSES (FOR EXAMPLE FICA), WILL BE COMPARED WITH THE OFFERORS PRICE TO VERIFY THAT OFFEROR'S MANHOURS ARE CONSISTENT WITH THE OFFERED PRICE. THE GOVERNMENT WILL USE 253 WEEKDAYS AND 112 WEEKEND DAYS (INCLUDING HOLIDAYS) TO COMPUTE THE OFFEROR'S NUMBER OF MANHOURS PER YEAR. THE GOVERNMENT MAY REJECT ANY OFFER WITHOUT DISCUSSION WHEN THE NUMBER OF HOURS IS NOT SUPPORTED BY THE PRICE OFFERED.

2. ACCEPTABILITY OF DISTRIBUTION OF MANHOURS TO PERFORM THE REQUIRED SERVICES SATISFACTORILY, AND TO ASSURE PROPER STAFFING IN SPACE/JOB CATEGORIES PRIOR TO, DURING, AFTER MEAL HOURS AND AT PEAK PERIODS.

"NOTHING IN THIS SECTION, OR ELSEWHERE IN THIS CONTRACT, SHALL BE CONSTRUED AS LIMITING THE CONTRACTOR'S RESPONSIBILITY FOR FULFILLING ALL OF THE REQUIREMENTS SET FORTH IN THIS CONTRACT."

IT IS REPORTED THAT TO PRECLUDE ANY MISUNDERSTANDING OF SECTION 5.1, QUOTED ABOVE, EACH OFFEROR WAS INFORMED THAT THE MANNING CHARTS SHOULD APPROXIMATE THE RANGES SPECIFIED IN AMENDMENT P00001, BUT THAT THE MANNING CHARTS DID NOT HAVE TO FALL BETWEEN OR WITHIN THE STATED RANGES TO RECEIVE FURTHER CONSIDERATION.

EIGHT OF THE NINE OFFERS RECEIVED RANGED FROM A NET YEARLY COST OF $149,940 TO $194,278. THE NINTH OFFER WAS IN THE AMOUNT OF $895,900 FOR THE YEAR. THE LOWEST OFFER WAS SUBMITTED BY FEDERAL FOOD SERVICE, INC. THE CONTRACTING OFFICER DETERMINED THAT IT WOULD BE MEANINGFUL TO CONDUCT NEGOTIATIONS AND FURTHER DISCUSSIONS WITH ALL OFFERORS EXCEPT THE HIGHEST OFFEROR. AFTER COMPLETION OF NEGOTIATIONS AND DISCUSSIONS, A CONTRACT WAS AWARDED TO FEDERAL FOOD SERVICE, INC., ON THE BASIS OF A NET YEARLY COST OF $159,897.60.

IN REGARD TO THE COMPLAINT THAT JETS WAS NOT FURNISHED AN ABSTRACT SHOWING THE OFFERORS AND THE OFFERED PRICES AFTER AWARD, THE RECORD INDICATES THAT SUCH INFORMATION WAS FURNISHED TO JETS BY THE CONTRACTING OFFICER BY LETTER DATED JULY 20, 1971.

IT IS CONTENDED THAT THE OFFERED PRICE OF FEDERAL FOOD SERVICE IS LESS THAN THE BARE COSTS IF THE MINIMUM HOURS SPECIFIED IN AMENDMENT P00001 DATED MAY 12, 1971, ARE OBSERVED IN PAYING THE WAGES SPECIFIED BY THE DEPARTMENT OF LABOR IN WAGE DETERMINATION NUMBERED 67-207 (REV. 4) ISSUED ON FEBRUARY 10, 1971, FOR DUVAL COUNTY, FLORIDA. IN LETTER OF AUGUST 11, 1971, JETS STATED THAT THE CITED WAGE DETERMINATION PROVIDED FOR BASIC WAGES OF $1.77 PER HOUR, PLUS $0.08 FOR HEALTH AND WELFARE, TOGETHER WITH VACATION AND HOLIDAY PAY, WOULD MAKE THE TOTAL MINIMUM MAN-HOUR COST $2.0675 PER HOUR. JETS MAINTAINS THAT SINCE THE MINIMUM SPECIFIED BY THE GOVERNMENT IN THE SOLICITATION IS 85,671 MAN HOURS PER YEAR, THE LEAST THAT COULD BE QUOTED IN RESPONSE TO THE RFP WOULD BE $177,120 (85,671 X $2.0675), WHICH DOES NOT COVER OVERHEAD COST, SUPERVISORY EXPENSE AND PROFIT. IT IS CONTENDED THAT ANY OFFER IN AN AMOUNT LESS THAN $177,120 CANNOT POSSIBLY BE IN COMPLIANCE WITH THE RFP AND MUST BE DETERMINED TO BE NONRESPONSIVE TO THE SOLICITATION. JETS REFERRED TO THE FOLLOWING STATEMENT IN THE SOLICITATION: "THE GOVERNMENT MAY REJECT ANY OFFER WITHOUT DISCUSSION WHEN THE NUMBER OF HOURS IS NOT SUPPORTED BY THE PRICE OFFERED." JETS CONTENDS THAT THE FOREGOING LANGUAGE SHOULD BE CHANGED BY THE GOVERNMENT SO THAT IT WOULD BE MANDATORY RATHER THAN PERMISSIVE ON THE PART OF THE CONTRACTING OFFICER.

UNDER THE RFP, THE NAVY'S ESTIMATED NUMBER OF MANHOURS FOR "BID A," UPON WHICH AWARD WAS MADE, WERE: "BETWEEN 243 AND 290 HOURS ON A REPRESENTATIVE WEEKDAY; BETWEEN 216 AND 246 ON A REPRESENTATIVE WEEKEND DAY."

FEDERAL FOOD SERVICE'S INITIAL OFFER UNDER "BID A" WAS:

"BUILDING 91

WEEKDAYS 149 HOURS

WEEKEND DAYS 91 HOURS

"BUILDING 606

WEEKDAYS 49 HOURS

WEEKEND DAYS 36 HOURS"

IT IS REPORTED THAT FURTHER NEGOTIATIONS WITH FEDERAL FOOD SERVICE RESULTED IN INCREASED MANHOURS AS FOLLOWS:

"BUILDING 91

WEEKDAYS 165 HOURS

WEEKEND DAYS 136 1/2 HOURS

"BUILDING 606

WEEKDAYS 65 HOURS

WEEKEND DAYS 63 1/2 HOURS"

ALTHOUGH FEDERAL FOOD SERVICE'S INITIAL OFFER WAS OUTSIDE THE NUMERICAL RANGE OF MANNING HOURS SPECIFIED IN SECTION 5.1 OF THE RFP, THE CONTRACTING OFFICER BELIEVED THAT IT WOULD BE MEANINGFUL TO CONDUCT FURTHER NEGOTIATIONS WITH ALL OFFERORS EXCEPT THE HIGH OFFEROR. SINCE PROSPECTIVE OFFERORS WERE INFORMED THAT THE TOTAL NUMBER OF HOURS ON THE MANNING CHARTS DID NOT HAVE TO FALL BETWEEN OR WITHIN THE STATED RANGES TO RECEIVE FURTHER CONSIDERATION, WE WOULD NOT OBJECT TO FEDERAL FOOD SERVICE BEING FOUND TO BE WITHIN THE COMPETITIVE RANGE FOR NEGOTIATION. FURTHER, WE WOULD NOT OBJECT TO SUCH A FINDING SINCE WE HAVE CONCLUDED PREVIOUSLY THAT MANNING CHARTS ARE USED AS AN AID TO THE CONTRACTING OFFICER IN DETERMINING RESPONSIBILITY, NOT RESPONSIVENESS, FOR WHICH THE CONTRACTING OFFICER HAS QUITE BROAD DISCRETION. B 173576, B-173579, OCTOBER 12, 1971.

CONCERNING THE CONTENTION THAT FEDERAL FOOD SERVICE'S OFFER WAS LESS THAN THAT REQUIRED TO PAY MINIMUM WAGES SPECIFIED BY THE DEPARTMENT OF LABOR, ATTENTION IS INVITED TO THE FACT THAT THE RFP DOES NOT REQUIRE THE REJECTION OF AN OFFER WHEN THE PRICE DOES NOT COVER THE BARE COST OF THE GOVERNMENT'S MANHOURS AS STATED THEREIN. THE RFP DOES STATE THAT AN OFFER "MAY" BE REJECTED WITHOUT DISCUSSION IF THE OFFEROR'S PRICE DOES NOT COVER THE COST OF THE OFFEROR'S MANHOURS. IN THIS CONNECTION, THE ADMINISTRATIVE OFFICE HAS FURNISHED THE FOLLOWING ANALYSIS OF FEDERAL FOOD SERVICE'S ORIGINAL OFFER:

"INITIAL NET PRICE PER YEAR $149,904

"MANNING CHART HOURS:

WEEKDAY - 198 TIMES 253 WEEKDAYS 50,094

WEEKEND DAY - 127 TIMES 112 WEEKEND DAYS 14,224

"TOTAL HOURS PER YEAR 64,318

"PRICE PER HOUR ($149,904 DIVIDED BY 64,318 HRS.) $2.33"

WE BELIEVE THAT THE INITIAL PRICE OFFERED BY FEDERAL FOOD SERVICES ADEQUATELY COVERED ITS INITIAL MANNING CHART HOURS, AS SHOWN ABOVE, AND, THEREFORE, THE CONTRACTING OFFICER WOULD NOT HAVE BEEN JUSTIFIED IN REJECTING ITS OFFER WITHOUT DISCUSSION.

THE ADMINISTRATIVE OFFICE ALSO HAS FURNISHED THE FOLLOWING ANALYSIS OF FEDERAL FOOD SERVICE'S FINAL OFFER:

"FINAL NET PRICE PER YEAR $159,897.60

"MANNING CHART HOURS:

WEEKDAY - 230 TIMES 253 WEEKDAYS 58,190

WEEKEND DAY - 200 TIMES 112 WEEKEND DAYS 22,400

"TOTAL HOURS PER YEAR 80,590

"PRICE PER HOUR ($159,897.60 DIVIDED BY 80,590 HOURS) $1.984"

ALTHOUGH IT WOULD APPEAR FROM THE RECORD THAT THE FEDERAL FOOD SERVICES FINAL LOW OFFER MAY BE BELOW THAT REQUIRED TO ENABLE FEDERAL FOOD SERVICES TO PAY THE COST OF PERFORMANCE (IF ALL OF THE OFFERED HOURS ARE UTILIZED) AND MAKE A PROFIT, WE ARE UNABLE TO CONCLUDE THAT THE OFFERED PRICE IS INSUFFICIENT TO PERMIT IT TO SATISFACTORILY PERFORM THE CONTRACT. IN THIS CONNECTION, WE HAVE HELD THAT THE FACT THAT THE LOW BIDDER OR OFFEROR MIGHT INCUR A LOSS IN PERFORMING THE CONTRACT AT THE PRICE SHOWN IN ITS BID OR OFFER DOES NOT JUSTIFY REJECTING AN OTHERWISE ACCEPTABLE BID OR OFFER. 49 COMP. GEN. 311 (1969); B-173088, JULY 27, 1971.

IN B-173576, B-173579 SUPRA, IT WAS STATED:

"WE THINK THAT ONCE IT HAS BEEN DETERMINED THAT AN OFFEROR'S MANNING CHART INDICATES HIS UNDERSTANDING OF, AND HIS ABILITY TO FULFILL, THE CONTRACT REQUIREMENTS, INCLUDING WAGE RATES, NUMBER OF WORKERS AND TOTAL ESTIMATED LABOR HOURS, HE SHOULD BE CONSIDERED TO BE IN THE COMPETITIVE RANGE FOR NEGOTIATION PURPOSES. THE EVALUATION CRITERIA NOW BEING EMPLOYED IN MESS ATTENDANT SOLICITATIONS ARE INTENDED TO MORE FULLY ADVISE OFFERORS OF THE EXACT ROLE THE MANNING CHARTS ARE TO PLAY IN EVALUATING THE OFFERS, TO HELP MINIMIZE THE RECEIPT OF OFFERS WHICH QUOTE PRICES THAT BEAR NO REASONABLE RELATION TO THE NUMBER OF MANNING HOURS OFFERED, AND TO PRECLUDE THE ACCEPTANCE OF THE LOWEST RATE PER MANHOUR, RATHER THAN THE LOWEST OVERALL PROPOSAL."

IN VIEW OF THE FOREGOING, THE PROTEST IS DENIED.