B-174018, JAN 28, 1972

BID PROTEST - ESTIMATED MAXIMUM OBLIGATION DECISION DENYING THE PROTEST OF LEO G. SANDS ASSOCIATES, INC., AGAINST THE AWARD OF A CONTRACT TO SYLVANIA TECHNICAL SYSTEMS, INC., UNDER AN RFP ISSUED BY THE AGENCY FOR INTERNATIONAL DEVELOPMENT. PROTESTANT'S CONTENTION THAT AWARD WAS MADE TO OTHER THAN THE LOW BIDDER IS WITHOUT MERIT SINCE THE RECORD CLEARLY INDICATES THAT SYLVANIA'S BID WAS LOWER THAN PROTESTANT'S BID WHEN BOTH THE FIXED PRICE AND REIMBURSABLE COST PROVISIONS ARE CONSIDERED.

TO LEO G. SANDS ASSOCIATES, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 1, 1971, PROTESTING THE AWARD OF A CONTRACT TO SYLVANIA TECHNICAL SYSTEMS, INC. (SYLVANIA) UNDER RFP CSD-10016, ISSUED BY THE AGENCY FOR INTERNATIONAL DEVELOPMENT (AID).

THE ABOVE-REFERENCED SOLICITATION WAS ISSUED ON FEBRUARY 8, 1971, IN CONTEMPLATION OF A TWO-YEAR CONTRACT TO PROVIDE ADVANCED TRAINING COURSES FOR FOREIGN POLICE PERSONNEL IN POLICE ADVANCED TELECOMMUNICATIONS TECHNICIAN TRAINING AND POLICE ADVANCED TELECOMMUNICATIONS MANAGEMENT. THE FORMER COURSE WOULD BE CONDUCTED IN ENGLISH, SPANISH OR FRENCH, DEPENDING ON THE NATIONALITY OF THE PARTICIPANTS, AND THE LATTER COURSE WOULD BE CONDUCTED IN ENGLISH. THE SOLICITATION SCHEDULE REQUESTED PRICES BASED UPON A MAXIMUM OF EIGHT COURSES, WITH THE GOVERNMENT OBLIGATED TO ORDER A MINIMUM OF TWO COURSES. A FIRM FIXED PRICE PER COURSE WAS REQUESTED AS FOLLOWS:

QUANTITY

ADVANCED POLICE TELECOMMUNICATIONS

MANAGEMENT ONE PER YEAR

ADVANCED POLICE TELECOMMUNICATIONS

TECHNICIAN TRAINING ONE PER YEAR

EACH IN SPANISH,

FRENCH AND ENGLISH

THE SOLICITATION ADVISED OFFERORS THAT THE CLASS SIZE PER COURSE COULD VARY FROM 6 TO 15 PARTICIPANTS. SINCE THIS WOULD RESULT IN THE INCURRENCE OF CERTAIN VARIABLE COSTS, OFFERORS WERE REQUESTED TO EXCLUDE THOSE COSTS FROM THE FIRM FIXED PRICE AND TO PROPOSE UPON THEM AS COST REIMBURSABLE ITEMS. THE COSTS TO BE THUS SEPARATELY PROPOSED WERE THOSE OF TRAVEL AND TRANSPORTATION OF PARTICIPANTS AND CONTRACTOR ESCORTS IN CONNECTION WITH CERTAIN FIELD TRIPS, TRAVEL AND TRANSPORTATION OF GUEST LECTURERS, AND TEXT BOOKS AND SUPPLIES.

PARAGRAPH 10.A. OF THE RFP'S "INSTRUCTIONS TO OFFERORS" STATED:

"IT IS CONTEMPLATED THAT A CONTRACT WILL BE AWARDED TO THAT RESPONSIBLE OFFEROR WHOSE PROPOSAL WILL BE THE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. THE RIGHT IS RESERVED TO AWARD TO OTHER THAN THE LOWEST OFFEROR AND TO REJECT ANY OR ALL PROPOSALS."

OFFERORS WERE REQUIRED TO SUBMIT SEPARATE BUSINESS MANAGEMENT AND TECHNICAL PROPOSALS. IN REGARD TO THE LATTER, THE SOLICITATION EMPHASIZED: "YOUR TECHNICAL PROPOSAL WILL BE THE MOST IMPORTANT CONSIDERATION IN THE AWARD OF A CONTRACT AND, THEREFORE, SHOULD BE SPECIFIC AND COMPLETE." THE TECHNICAL EVALUATION CRITERIA AND THEIR NUMERICAL WEIGHTS WERE SET FORTH ON PAGE III-B-3 OF THE RFP "IN ORDER THAT ALL PROPOSERS MAY HAVE COMPLETE INFORMATION ON HOW THEIR SUBMISSIONS WILL BE SCORED, REVEALING THE AREAS THAT REQUIRE EMPHASIS IN THE PREPARATION OF A PROPOSAL."

OF THE 45 FIRMS SOLICITED, THE FOLLOWING SUBMITTED OFFERS BY MARCH 31, 1971, THE CLOSING DATE FOR RECEIPT OF PROPOSALS:

SYLVANIA TECHNICAL SYSTEMS, INC.

PAGE COMMUNICATIONS ENGINEERS, INC.

LEO G. SANDS ASSOCIATES, INC.

AV - TECH SCHOOL

A PRELIMINARY TECHNICAL EVALUATION INDICATED THAT ALL OFFERORS WERE TECHNICALLY ACCEPTABLE EXCEPT AV - TECH SCHOOL, WHOSE PROPOSAL WAS NOT WITHIN THE COMPETITIVE RANGE. THE TECHNICAL EVALUATION WAS COMPLETED AFTER AN ON-SITE EVALUATION OF THE OFFERORS' FACILITIES HAD BEEN ACCOMPLISHED. THE TECHNICAL AND INITIAL PRICE STANDING OF THE OFFERORS WAS AS FOLLOWS:

OFFEROR TECHNICAL WEIGHTING PROPOSED PRICE

SYLVANIA TECHNICAL

SYSTEMS, INC. 2550 $361,455

PAGE COMMUNICATIONS

ENGINEERS, INC. 2314 274,236

OFFEROR TECHNICAL WEIGHTING PROPOSED PRICE

LEO G. SANDS 2273 $338,818

ASSOCIATES, INC.

BY LETTER OF JUNE 16, 1971, THE CONTRACTING OFFICER ADVISED EACH OF THE TECHNICALLY ACCEPTABLE OFFERORS THAT NEGOTIATIONS WOULD BE CONDUCTED, WITH A CLOSING DATE FOR BEST AND FINAL OFFERS OF JUNE 21. THE LETTER FURTHER STATED:

"REVISIONS RECEIVED (AFTER THE CLOSING DATE) WILL BE RETAINED UNTIL SUCH TIME AS THE SUCCESSFUL OFFEROR HAS BEEN SELECTED. LATE REVISIONS WHICH MAKE THE TERMS AND CONDITIONS OF AN OTHERWISE SUCCESSFUL OFFEROR MORE FAVORABLE TO THE GOVERNMENT WILL THEN BE CONSIDERED."

DURING NEGOTIATIONS, EACH OFFEROR AGREED THAT A CEILING WOULD BE PLACED ON THE REIMBURSABLE COSTS, WITH THE CONTRACTOR ABSORBING ANY OVERRUN. THE FOLLOWING REVISED OFFERS WERE TIMELY RECEIVED:

SYLVANIA TECHNICAL

SYSTEMS, INC. $276,146

PAGE COMMUNICATIONS

ENGINEERS, INC. 263,660

LEO G. SANDS ASSOCIATES,

INC. 270,082

ON JUNE 29, SYLVANIA SUBMITTED A LATE OFFER REDUCING ITS FIRM FIXED PRICE TO $240,128. IN A SUBSEQUENT LATE OFFER, SYLVANIA REDUCED ITS CEILING ON THE REIMBURSABLE COSTS TO $24,146. THESE LATE MODIFICATIONS WOULD REDUCE SYLVANIA'S TOTAL PRICE TO $264,274. SYLVANIA WAS ADVISED BY THE CONTRACT NEGOTIATOR THAT THE LATE MODIFICATIONS WOULD BE CONSIDERED ONLY IN THE EVENT THAT SYLVANIA WAS THE OTHERWISE SUCCESSFUL OFFEROR ON THE BASIS OF ITS TIMELY REVISION AS OF JUNE 21.

A COMPARISON OF THE OFFERS RECEIVED AS OF THE CLOSE OF NEGOTIATIONS SHOWED THAT SYLVANIA'S PRICE AND TECHNICAL WEIGHTING EXCEEDED THAT OF PAGE, THE LOW OFFEROR, BY 4.7 AND 10.2 PERCENT, RESPECTIVELY. SYLVANIA'S PRICE EXCEEDED THAT OF YOUR FIRM BY 2.2 PERCENT AND ITS TECHNICAL WEIGHTING WAS 12.2 PERCENT GREATER THAN YOURS. IN VIEW OF THE MAJOR EMPHASIS GIVEN BY THE SOLICITATION TO TECHNICAL CONSIDERATIONS, AND THE FACT THAT THE MEMBERS OF THE TECHNICAL EVALUATION PANEL HAD INDEPENDENTLY AND UNANIMOUSLY EVALUATED SYLVANIA ABOVE PAGE, IT WAS DETERMINED THAT AWARD SHOULD BE MADE TO SYLVANIA ON THE BASIS OF ITS TIMELY REVISION RECEIVED BY JUNE 21. SINCE SYLVANIA WAS THE OTHERWISE SUCCESSFUL OFFEROR, ITS LATE MODIFICATIONS ALSO COULD PROPERLY BE CONSIDERED.

AS A RESULT OF CERTAIN FUNDING CONSIDERATIONS, THE PROPOSED CONTRACT DOCUMENT PLACED A CEILING PER COURSE ON THE REIMBURSABLE COSTS, RATHER THAN A CEILING ON THE MAXIMUM OF EIGHT COURSES. IN RESPONSE TO SYLVANIA'S OBJECTION TO THIS PROVISION, IT WAS AGREED THAT THE CEILING PER COURSE (BASED UPON THE MEDIAN OF THE 6 TO 15 PARTICIPANT RANGE) BE ADDED TO THE FIRM FIXED PRICE PER COURSE AND ALL COST REIMBURSEMENT PROVISIONS OF THE CONTRACT WOULD BE ELIMINATED. THEREFORE, THE FINAL CONTRACT PRICE WAS AS FOLLOWS:

ADVANCED POLICE TELECOMMUNICATIONS

TECHNICIAN COURSES

ENGLISH $33,575

FRENCH 33,575

SPANISH 32,763

SUBSEQUENT COURSES (THREE) 32,763 $198,202

ADVANCED POLICE TELECOMMUNICATIONS

MANAGEMENT COURSE

ENGLISH (ONLY) 33,033 66,066

TOTAL $264,268

YOUR LETTER OF PROTEST SETS FORTH SIX "PERTINENT FACTS" REGARDING THE AWARD TO SYLVANIA. NO QUESTION APPEARS WITH RESPECT TO THE FIRST THREE: I.E., THAT YOUR FIRM HAD PROVIDED ESSENTIALLY THE SAME SERVICES UNDER A PRIOR AID CONTRACT; THAT YOUR PROPOSAL WAS RESPONSIVE TO THE REQUIREMENTS OF THE RFP; AND THAT YOUR PROPOSAL WAS TECHNICALLY ACCEPTABLE. YOUR LAST THREE ALLEGATIONS ARE:

"(4) WE WERE ADVISED THROUGH SENATOR BUCKLEY'S OFFICE THAT THE AID CONTRACT OFFICER HAD SAID THAT WE WERE THE HIGHEST BIDDER OF THE THREE QUALIFYING BIDDERS.

"(5) IN THE NOTICE OF CONTRACT AWARD PUBLISHED IN THE AUGUST 20, 1971 ISSUE OF COMMERCE BUSINESS DAILY, IT WAS STATED THAT THE CONTRACT WAS AWARDED TO THE SELECTED BIDDER FOR THE MAXIMUM AMOUNT OF $263,728.

"(6) OUR FINAL BID WAS $224,866 *** , BUT THE CONTRACT WAS AWARDED TO ANOTHER BIDDER FOR A SUM OF $38,862 HIGHER."

THE THRUST OF THESE ALLEGATIONS IS THAT ALTHOUGH YOU POSSESSED INFORMATION THAT YOUR OFFER WAS THE HIGHEST RECEIVED, AWARD WAS MADE TO SYLVANIA AT A PRICE $38,862 IN EXCESS OF YOURS.

YOUR FOURTH ALLEGATION IS CORRECT, IN THAT YOUR OFFER WAS THE HIGHEST OF THE THREE FINAL OFFERS RECEIVED, INCLUDING SYLVANIA'S LATE MODIFICATIONS WHICH WERE CONSIDERED SINCE THAT FIRM WAS THE OTHERWISE SUCCESSFUL OFFEROR. HOWEVER, INSOFAR AS YOUR ALLEGATION IMPLIES THAT PROCUREMENT INFORMATION WAS IMPROPERLY DISCLOSED, IT IS ADMINISTRATIVELY REPORTED:

"NONE OF THE A.I.D. CONTRACTING OFFICERS OR CONTRACT SPECIALISTS CONCERNED RECALLS HAVING HAD ANY CONVERSATION WITH SENATOR BUCKLEY'S OFFICE ABOUT THIS PROCUREMENT. THEY DID ANSWER TELEPHONE INQUIRIES FROM THE DIRECTOR OF A.I.D.'S OFFICE OF LEGISLATIVE AFFAIRS CONCERNING THE STATUS OF THE PROCUREMENT, AND THE LATTER OFFICIAL THEN ADVISED SENATOR BUCKLEY'S OFFICE AS TO WHEN AN AWARD WAS EXPECTED TO BE MADE AND, SUBSEQUENTLY, AS TO THE IDENTITY OF THE SUCCESSFUL OFFEROR. THE CONTRACTING OFFICERS AND CONTRACT SPECIALISTS HAVE NO RECOLLECTION OF ANY MENTION OF PRICE OR THE RELATIVE POSITION OF SANDS WITH REGARD TO PRICE IN ANY SUCH CONVERSATION WITH THE DIRECTOR OF THE OFFICE OF LEGISLATIVE AFFAIRS. MOREOVER, THERE IS NO RECORD IN THE FILES OF EITHER THE LATTER OFFICE OR SENATOR BUCKLEY'S OFFICE OF ANY MENTION OF PRICE OR THE RELATIVE POSITION OF SANDS WITH REGARD TO PRICE DURING THE TELEPHONE CONVERSATIONS BETWEEN THOSE OFFICES CONCERNING THIS PROCUREMENT. *** ."

IN REGARD TO YOUR FIFTH AND SIXTH ALLEGATIONS, THE NOTICE OF AWARD PUBLISHED IN THE COMMERCE BUSINESS DAILY STATED THAT THE CONTRACT WAS AWARDED TO SYLVANIA "FOR A MAXIMUM OF $263,728 AND A MINIMUM OF $67,150 *** ." THE PUBLISHED MAXIMUM PRICE WAS IN ERROR AND SHOULD HAVE BEEN $264,268. THE MAXIMUM PRICE WAS BASED UPON SYLVANIA'S OBLIGATION TO CONDUCT UP TO EIGHT TRAINING COURSES, UPON RECEIPT OF ORDERS FROM AID, AND THE PUBLISHED MINIMUM WAS BASED UPON AID'S OBLIGATION UNDER THE CONTRACT TO ORDER AT LEAST TWO OF SUCH COURSES. THESE ARE FIRM FIXED PRICES FOR THE ENTIRE COURSES. IN CONTRAST, UNDER YOUR FINAL OFFER, THE MAXIMUM OF EIGHT COURSES WOULD HAVE BEEN A FIXED PRICE OF $224,866 PLUS AN ESTIMATED $45,216 IN REIMBURSABLE COSTS, OR $270,082. THEREFORE, THE MAXIMUM OBLIGATION UNDER YOUR OFFER EXCEEDED THAT OF SYLVANIA'S BY $5,814. THEREFORE FIND NO MERIT IN YOUR CONTENTION THAT THE CONTRACT WAS AWARDED TO SYLVANIA AT A PRICE WHICH EXCEEDED YOURS BY $38,862.

ACCORDINGLY, YOUR PROTEST IS DENIED.