B-176431, DEC 21, 1972

B-176431, DEC 21, 1972

BID PROTEST - BIDDER'S PAST PERFORMANCE - STATUTORY PREFERENCE DECISION CONCERNING THE DENIAL OF A PROTEST ON BEHALF OF CARRY-ON, INC., AGAINST THE AWARD OF A CONTRACT BY THE NATIONAL PARK SERVICE (NPS), TO GOVERNMENT SERVICES, INC. (GSI), FOR OPERATION OF CONCESSIONS AT VARIOUS LOCATIONS IN THE NATIONAL CAPITAL PARKS, WASHINGTON, D.C. A "FACT SHEET" PREPARED BY NPS AND DISTRIBUTED TO ALL PROSPECTIVE BIDDERS REQUESTED CONCESSION SERVICE AT ALL THE NPS SITES IN THE WASHINGTON AREA. SINCE THE PROPOSAL OF CARRY-ON WAS LIMITED TO ONLY ONE SITE AND CONTAINED OTHER DEFICIENCIES, THE CONTRACT WAS AWARDED TO GSI PRIMARILY ON ITS PAST PERFORMANCE RECORD WITH GOVERNMENT CONCESSION CONTRACTS. THUS, THE AWARD TO GSI WAS PROPER SINCE 16 U.S.C. 20 ENCOURAGES CONTINUITY OF OPERATIONS, FACILITIES, AND SERVICES BY GIVING PREFERENCE TO CONCESSIONERS WHO HAVE SUCCESSFULLY PERFORMED THEIR OBLIGATIONS UNDER PRIOR CONTRACTS.

TO H. NEIL GARSON:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 6, 1972, WITH ENCLOSURES, AND PRIOR CORRESPONDENCE, SETTING FORTH THE PROTEST OF CARRY-ON, INCORPORATED (CARRY-ON), AGAINST THE AWARD OF A CONTRACT BY THE NATIONAL PARK SERVICE (NPS), TO GOVERNMENT SERVICES, INCORPORATED (GSI), FOR OPERATING THE CONCESSIONS AT VARIOUS LOCATIONS IN THE NATIONAL CAPITAL PARKS, WASHINGTON, D.C.

GSI HAS OPERATED THE CONCESSIONS IN THE NATIONAL CAPITAL PARKS, WASHINGTON, D.C., PURSUANT TO A LONG-TERM CONTRACT WHICH EXPIRED DECEMBER 31, 1970. THE CONTRACT WAS EXTENDED BY FORMAL AMENDMENT FOR ONE YEAR, AND DURING THE FIRST EIGHT MONTHS OF 1972, GSI OPERATED THE CONCESSIONS WITHOUT A FORMAL EXTENSION OF THE CONTRACT. DURING THE EXTENDED CONTRACT PERIOD, GSI AND NPS ENGAGED IN DISCUSSIONS CONCERNING IMPROVEMENTS IN CONCESSION FACILITIES IN THE NATIONAL CAPITAL PARKS AREA AND THE TERMS OF A NEW CONTRACT COMMENSURATE WITH THOSE DISCUSSIONS. AS A RESULT, NPS PREPARED A "FACT SHEET" UNDER WHICH A NEW CONTRACT WOULD BE NEGOTIATED.

THE FACT SHEET NOTED THAT GSI HAD BEEN CONDUCTING CONCESSION OPERATIONS AT NATIONAL CAPITAL PARKS, WASHINGTON, D.C., IN A MANNER SATISFACTORY TO THE SECRETARY OF THE INTERIOR AND THAT:

"*** IN CONNECTION WITH THE NEGOTIATION OF A NEW LONG-TERM CONCESSION CONTRACT FOR THIS OPERATION, ATTENTION IS INVITED TO SECTION 5 OF THE ACT OF OCTOBER 9, 1965 (79 STAT. 969; 16 U.S.C. 20) WHICH PROVIDES AS FOLLOWS:

"'SEC. 5. THE SECRETARY SHALL ENCOURAGE CONTINUITY OF OPERATION AND FACILITIES AND SERVICES BY GIVING PREFERENCE IN THE RENEWAL OF CONTRACTS OR PERMITS AND IN THE NEGOTIATION OF NEW CONTRACTS OR PERMITS TO THE CONCESSIONERS WHO HAVE PERFORMED THEIR OBLIGATIONS UNDER PRIOR CONTRACTS OR PERMITS TO THE SATISFACTION OF THE SECRETARY. TO THIS END, THE SECRETARY, AT ANY TIME IN HIS DISCRETION, MAY EXTEND OR RENEW A CONTRACT OR PERMIT, OR MAY GRANT A NEW CONTRACT OR PERMIT TO THE SAME CONCESSIONER UPON THE TERMINATION OR SURRENDER BEFORE EXPIRATION OF A PRIOR CONTRACT OR PERMIT. BEFORE DOING SO, HOWEVER, AND BEFORE GRANTING EXTENSIONS, RENEWALS OR NEW CONTRACTS ***, THE SECRETARY SHALL GIVE REASONABLE PUBLIC NOTICE OF HIS INTENTION SO TO DO AND SHALL CONSIDER AND EVALUATE ALL PROPOSALS RECEIVED AS A RESULT THEREOF.'"

AS REQUIRED BY THE ABOVE LAW, NPS PUBLISHED IN THE FEDERAL REGISTER OF NOVEMBER 5, 1971, A NOTICE OF INTENT TO NEGOTIATE A LONG-TERM CONCESSION CONTRACT FOR THE NATIONAL CAPITAL PARKS. THE NOTICE ALSO STATED THAT GSI HAD PERFORMED SATISFACTORILY UNDER THE PRESENT CONTRACT AND THAT GSI WOULD BE GIVEN A PREFERENCE IN THE NEGOTIATION OF A NEW CONTRACT IN ACCORDANCE WITH THE ABOVE-QUOTED ACT.

A FACT SHEET WAS SENT TO CARRY-ON AT ITS REQUEST AND IT SUBMITTED A PROPOSAL. CARRY-ON'S PROPOSAL WAS EVALUATED AND THEN REJECTED BASED ON A DETERMINATION THAT CARRY-ON DID NOT HAVE ADEQUATE MANAGERIAL AND FINANCIAL RESOURCES. THE EVALUATION TEAM ALSO NOTED THAT CARRY-ON'S PROPOSAL WAS ONLY FOR THE COLUMBIA ISLAND MARINA, WHEREAS IT WAS CONTEMPLATED THAT THE CONTRACT WOULD COVER SOME 20 EXISTING FACILITIES. A CONTRACT WAS AWARDED TO GSI ON AUGUST 22, 1972, RETROACTIVE TO JANUARY 1, 1972.

YOU CONTEND THAT GSI AND NPS WORKED TOGETHER IN ORDER TO PRODUCE A FACT SHEET HIGHLY FAVORABLE TO GSI, ELIMINATING ANY POSSIBILITY OF FAIR AND EQUAL COMPETITIVE BIDDING. YOU ASSERT THAT THE FACT SHEET WAS DEFICIENT IN 16 RESPECTS SO AS TO PRECLUDE ALL BUT GSI FROM SUBMITTING A RESPONSIVE PROPOSAL. SOME OF THE DEFICIENCIES CITED ARE FAILURE TO STATE THAT THE CONCESSION CONTRACT WOULD INCLUDE THE ENTIRE 20 OPERATIONS DISCUSSED THEREIN; LACK OF FINANCIAL DATA ON THE COLUMBIA ISLAND MARINA (COLUMBIA) OPERATION; FAILURE TO PROVIDE A LISTING OF GOVERNMENT VERSUS GSI OWNERSHIP OF PROPERTY AT COLUMBIA; FAILURE TO INDICATE WHETHER THE CONCESSIONER OR GOVERNMENT IS TO PAY FOR THE CONSTRUCTION AND IMPROVEMENT PROGRAM; NO INFORMATION ON EXPECTED OR HISTORIC MAINTENANCE AND OPERATING COSTS OF EACH OF THE CONCESSIONS; AND LACK OF DETAILS FOR THE IMPROVEMENTS CONTEMPLATED AT THE COLUMBIA MARINA.

YOU ALSO QUESTION THE VALIDITY OF NPS'S CONCLUSION THAT THE PRESENT CONCESSIONER'S PERFORMANCE WAS SATISFACTORY. IN THIS CONNECTION, YOU CONTEND THAT GSI'S PERFORMANCE AT THE COLUMBIA MARINA WAS UNSATISFACTORY BECAUSE OF VIOLATIONS OF FIRE AND SAFETY LAWS AND REGULATIONS; PERMITTING AND ENCOURAGING RACIAL DISCRIMINATION; POOR MANAGEMENT THROUGH HAPHAZARD ASSIGNMENT OF SLIPS AND OPERATION AT 50 PERCENT OF CAPACITY WHEN THERE IS A WAITING LIST FOR SLIPS; FAILURE TO PROVIDE PROPER PROTECTIVE SERVICE; AND FAILURE TO PROPERLY MAINTAIN THE PIERS. YOU ALSO ARGUE THAT NPS'S DETERMINATION SHOULD NOT STAND IN THE ABSENCE OF A HEARING AND AN OPPORTUNITY TO PRESENT EVIDENCE ON THESE CHARGES.

FINALLY, YOU QUESTION NPS'S JUDGMENT IN CONCLUDING THAT CARRY-ON LACKED THE REQUISITE MANAGERIAL AND FINANCIAL CAPACITY, POINTING OUT THAT THE BIOGRAPHIES OF ITS OFFICERS INDICATE THAT THEY ARE QUALIFIED THROUGH EDUCATION AND BUSINESS EXPERIENCE AND IT HAS BOTH BANKING AND INDIVIDUAL INTEREST IN FINANCING ITS OPERATION UPON RECEIPT OF THE NECESSARY FINANCIAL DATA FROM NPS.

IT IS NPS'S POSITION THAT UNDER THE ACT IT IS REQUIRED ONLY TO GIVE REASONABLE PUBLIC NOTICE OF ITS INTENTION TO NEGOTIATE A NEW CONTRACT, WHICH IT DID BY PUBLICATION IN THE FEDERAL REGISTER, AND THAT THERE IS NO REQUIREMENT FOR THE ISSUANCE OF A FACT SHEET. HOWEVER, IN RECOGNITION OF THE CONGRESSIONAL MANDATE FOR CONTINUITY OF OPERATIONS WITH EXISTING SATISFACTORY CONCESSIONERS, AND TO ASSIST OTHER INTERESTED PARTIES IN PREPARING OFFERS, NPS'S CONCESSIONS MANAGEMENT GUIDELINES PROVIDE THAT,

"UPON MAKING A DETERMINATION THAT THE CONCESSION OPERATION SHOULD CONTINUE AND THE PRESENT CONCESSIONER WISHES TO CONTINUE, A PROPOSED FACT SHEET SHOULD BE DRAWN UP TAKING INTO CONSIDERATION THE CONCESSIONER'S PROPOSAL AND THE DESIRES OF THE SERVICE."

IN ADDITION, THE GUIDELINES PROVIDE, IN GENERAL TERMS, SUGGESTED ITEMS FOR INCLUSION IN THE PROPOSED FACT SHEET, AND FOR THE CONCESSIONER'S ACCEPTANCE OF THE PROPOSED FACT SHEET PRIOR TO PUBLICATION IN THE FEDERAL REGISTER. FURTHERMORE, NPS POINTS OUT THAT ITS REPRESENTATIVES WERE AVAILABLE TO PROVIDE ADDITIONAL INFORMATION DURING THE 30-DAY PERIOD FOR SUBMISSION OF PROPOSALS, AND THAT CARRY-ON AVAILED ITSELF OF THIS SERVICE.

BASED UPON ITS EVALUATION OF CARRY-ON'S PROPOSAL SUBMITTED WITHIN THE 30 DAYS, NPS SUMMARIZED ITS CONCLUSION THAT THE PROPOSAL WAS NOT ACCEPTABLE FROM A MANAGERIAL AND FINANCIAL STANDPOINT, AND BECAUSE IT RELATED TO ONLY THE COLUMBIA MARINA, IN THE FOLLOWING WORDS.

"1. THE FACT SHEET ANTICIPATED ALL OPERATIONS WOULD BE INCLUDED UNDER ONE CONTRACT. IT WAS NOT THE INTENT TO AUTHORIZE ANY ONE SEPARATELY. ANY DECISION TO GO ON INDIVIDUAL OPERATIONS WOULD REQUIRE THE ISSUANCE OF A NEW FACT SHEET, PERMITTING ALL INTERESTED APPLICANTS TO SUBMIT OFFERS ON THAT BASIS.

"2. THE FINANCIAL QUALIFICATIONS OF CARRY-ON, INC., ARE INADEQUATE. THERE IS NO CASH COMMITTED TO THE OPERATION OTHER THAN WHAT IS PROPOSED TO BE OBTAINED FROM GSI THROUGH THE TRANSFER OF SLIP RENTALS FOR THE 3 MONTH PERIOD JANUARY 1 THROUGH MARCH 31, 1972. FUNDS FOR THE ACQUISITION OF GSI POSSESSORY INTEREST AND THE CONSTRUCTION AND IMPROVEMENT PROGRAM ARE TO BE OBTAINED ENTIRELY THROUGH BORROWING.

"3. THE PROPOSAL INCLUDES ALL ITEMS IN THE FACT SHEET OF THE IMPROVEMENT AND BUILDING PROGRAM. IT ALSO INCLUDES ADDITIONAL ITEMS, SEVERAL OF WHICH ARE NOT NORMALLY PROVIDED IN A MARINA OPERATION AND NOT PLANNED FOR THIS OPERATION. IF IT WERE PROPOSED TO GO ON THE EXPANDED BASIS, IT WOULD BE NECESSARY TO REISSUE THE FACT SHEET, INVITING OFFERS ON THAT BASIS.

"4. THE PROPOSAL WAS SIGNED BY MR. GARY PELPHREY WHO IS THE ONLY MEMBER OF THE FIRM IDENTIFIED. WHILE THERE IS NO EXPERIENCE INDICATED IN THE OPERATION OF A MARINA, OR ANY OTHER BUSINESS, MR. PELPHREY'S NAVAL EXPERIENCE WOULD UNDOUBTEDLY BE BENEFICIAL. HOWEVER, IN THE OVERALL, THE MANAGERIAL QUALIFICATIONS ARE QUESTIONABLE."

NPS ACKNOWLEDGES THE NEED FOR IMPROVEMENTS AT THE COLUMBIA MARINA AND, IN THIS REGARD, POINTS OUT THAT THE FACT SHEET PROVIDES FOR CERTAIN IMPROVEMENTS. HOWEVER, NPS ALSO POINTS OUT THAT ITS DETERMINATION CONCERNING GSI'S SATISFACTORY PERFORMANCE IS BASED UPON AN OVERALL VIEW OF ITS OPERATIONS AT SOME 20 FACILITIES AND NOT JUST AT THE COLUMBIA MARINA. FURTHERMORE, NPS REPORTS THAT AS A RESULT OF CARRY-ON'S CHARGES MADE AFTER SUBMISSION OF ITS PROPOSAL AN INSPECTION WAS MADE AND THE ALLEGATIONS WERE NOT SUBSTANTIATED.

OUR REVIEW OF THE FACT SHEET IN THE INSTANT CASE DISCLOSES THAT IT IS LACKING IN SOME OF THE DETAILS WHICH YOU HAVE MENTIONED. FOR EXAMPLE, THE INFORMATION CONCERNING FRANCHISE FEES, BONDS, AND INSURANCE, MAY BE CONSIDERED INSUFFICIENT. ON THE OTHER HAND, WE BELIEVE THE FACT SHEET IS CLEAR WITH REGARD TO OTHER DETAILS ABOUT WHICH YOU COMPLAIN. FOR EXAMPLE, IT IS CLEAR THAT THE CONCESSION CONTRACT TO BE NEGOTIATED WAS TO INCLUDE NOT ONLY THE COLUMBIA MARINA BUT THE OTHER 19 FACILITIES LISTED THEREIN, AND THAT THE CONSTRUCTION AND IMPROVEMENT PROGRAM ESTIMATED TO COST $1,000,000, IS THE OBLIGATION OF THE CONTRACTOR. FURTHERMORE, WE BELIEVE THAT BOTH THE DETERMINATION AS TO THE ACCEPTABILITY OF CARRY-ON'S PROPOSAL, AND THE DETERMINATION CONCERNING GSI'S PAST PERFORMANCE, ARE THE PRIMARY RESPONSIBILITY OF THE NPS AND NOT SUBJECT TO OBJECTION UNLESS CLEARLY ARBITRARY. WE FIND NO BASIS IN THE RECORD TO REACH SUCH A CONCLUSION. MOREOVER, THERE IS NOTHING IN THE ACT GOVERNING THE AWARD OF THIS CONTRACT WHICH REQUIRES THAT THE CONTRACT BE AWARDED UNDER THE NORMAL COMPETITIVE RULES. AS WE SAID IN 49 COMP. GEN. 88, 95 (1969);

"*** INDEED, SECTION 5 OF THE 1965 ACT WAS NOT INTENDED BY THE CONGRESS TO SET UP A BIDDING PROCEDURE BUT ONLY TO ASSURE ALL INTERESTED PARTIES THAT IN NEGOTIATING THE CONTRACT ALL RELEVANT FACTORS WOULD BE TAKEN INTO ACCOUNT. ONE OF THESE FACTORS, AND A VERY IMPORTANT ONE IN THE EYES OF THE CONGRESS, WAS THE DESIRABILITY OF MAINTAINING CONTINUITY OF OPERATIONS AND OPERATORS. SEE H. REPT. NO. 591 TO ACCOMPANY H.R. 2091 (THE BILL WHICH BECAME LAW), 89TH CONG., 1ST SESS., PAGE 5, AND S. REPT. NO. 765 TO ACCOMPANY H.R. 2091, 89TH CONG., 1ST SESS., PAGES 4 AND 5. BOTH REPORTS CONTAIN THE FOLLOWING IDENTICAL COMMENTS ON SECTION 5 OF H.R. 2091:

"SIXTH, THE BILL PROVIDES THAT ESTABLISHED CONCESSIONERS WHO HAVE PERFORMED SATISFACTORILY SHALL BE GIVEN PREFERENCE IN THE RENEWAL OF OLD CONTRACTS AND IN THE NEGOTIATION OF NEW CONTRACTS. THE SECRETARY MAY ALSO, IF CIRCUMSTANCES SUGGEST THE DESIRABILITY OF SUCH A COURSE OF ACTION, EXTEND OR RENEW EXISTING CONTRACTS UPON OR BEFORE THEIR EXPIRATION. EXTENSIONS OR RENEWALS BEFORE EXPIRATION ARE SOMETIMES NECESSARY TO ENABLE A CONCESSIONER TO RAISE CAPITAL FOR EXPANDED IMPROVEMENTS OR, IN CASES OF CONTRACTS DUE TO EXPIRE WITHIN A YEAR OR TWO, TO PERMIT BOTH THE GOVERNMENT AND THE CONCESSIONAIRE TO KNOW WHERE THEY WILL STAND IN THE FUTURE AND THUS TO ASSURE CONTINUITY OF PARK OPERATIONS. NEITHER THE PREFERENCE JUST SPOKEN OF NOR THE RIGHT TO EXTEND OR RENEW IS ABSOLUTE. THE BILL REQUIRES THE SECRETARY TO GIVE PUBLIC NOTICE OF HIS INTENTIONS TO EXTEND OR RENEW AND TO CONSIDER AND EVALUATE ALL PROPOSALS RECEIVED AS A RESULT THEREOF. THIS IS NOT, AND IS NOT INTENDED TO BE, A BIDDING PROCEDURE, WITH THE AWARD AUTOMATICALLY GOING TO THE HIGH BIDDERS, BUT IT IS INTENDED TO BRING TO THE ATTENTION OF THE PUBLIC, THE SECRETARY, AND ALL INTERESTED PARTIES THE SITUATION AND TO ASSURE ALL CONCERNED THAT IN NEGOTIATING THE NEW CONTRACT ALL RELEVANT FACTORS ARE TAKEN INTO ACCOUNT. ONE OF THESE FACTORS, OF COURSE, AND A VERY IMPORTANT ONE, IS THE DESIRABILITY OF CONTINUITY OF OPERATIONS AND OPERATORS."

ACCORDINGLY, YOUR PROTEST IS DENIED.