Matter of: Professional Ambulance Inc. File: B-248474 Date: September 1, 1992

PROCUREMENT Competitive Negotiaiton Requests for proposals Competition rights Contractors Exclusion Protest that agency deprived incumbent contractor of opportunity to compete because agency did not provide it with a copy of the solicitation is sustained where record shows that contracting officer failed to properly list protester on solicitation's mailing list, protester had a reasonable expectation that it would receive a solicitation, and only minimal competition was obtained.

Attorneys

DECISION

Professional Ambulance Inc. (PAI) protests the agency's failure to provide it with a copy of request for proposals (RFP) No. 539-07-92, issued by the Department of Veterans Affairs (VA) for wheelchair van transportation services. As relief, PAI, the incumbent contractor, asks that it be given an opportunity to submit a proposal.

We sustain the protest.

In October 1990, PAI was awarded a 1-year sole-source contract to provide these services; however, in response to a protest filed with this Office, [1] this award was subsequently terminated in December 1990. Since that time, PAI has continued to provide these services under a series of short-term purchase orders. [2]

This procurement represents the agency's third attempt to competitively procure these services. On February 13, 1991, the agency issued RFP No. 539-25-91, which was subsequently canceled on May 23 as a result of apparent solicitation defects; the amendment which canceled this RFP advised the offerors that they would be issued a copy of the resolicitation. On September 19, a replacement solicitation was advertised as RFP No. 539-02-92 in the Commerce Business Daily (CBD) with an anticipated issuance date of October 1 and a prospective closing date of October 25; however, due to internal agency delays, this solicitation was never issued. The current RFP was issued as a small business set-aside on March 13, 1992, and was synopsized in the CBD on March 26; the synopsis advised contractors that this RFP replaced the previously advertised solicitation and that initial proposals were due by April 15. The notice also stated that all contractors who had responded to the September synopsis were being provided with a copy of the new RFP.

According to the agency, in addition to the CBD synopsis, a copy of the solicitation was mailed to every contractor set forth on the solicitation mailing list; this list contained the names of 11 contractors who had either submitted proposals or expressed interest in the prior procurements for these services. Although the correct address for PAI was set forth on the solicitation mailing list, the protester's company name was erroneously identified as "Professional Medical Services."

At the April 15 closing date, three proposals were received; an offer was not received from PAI. On April 17, the contracting officer contacted PAI and asked why the firm had not submitted a proposal. PAI responded that it had never received a copy of the new RFP and was therefore unaware of the resolicitation effort. PAI then asked the contracting officer to extend the solicitation's closing date so that it could submit a proposal for this procurement; the contracting officer denied this request. On April 24, PAI filed this protest with our Office. [3]

The Competition in Contracting Act of 1984 (CICA), 41 U.S.C. Sec. 253(a)(1)(A) (1988), requires contracting agencies to obtain full and open competition through the use of competitive procedures. "Full and open competition" is obtained where all responsible sources are permitted to submit sealed bids or competitive proposals. 41 U.S.C. Sec. 403(6). In pursuit of this goal, it is a contracting agency's affirmative obligation to use reasonable methods for the dissemination of solicitation documents to prospective contractors. See Phillip Sitz Constr., B-245941, Jan. 22, 1992, 92-1 CPD Para. 101.

The Federal Acquisition Regulation (FAR) provides that solicitation mailing lists are to be maintained by contracting activities, that lists are to include those considered capable of filling agency requirements, and that solicitations normally are to be sent to those on the lists. FAR Secs. 14.203-1, 14.205-1, and 15.403. Although the FAR permits agencies to rotate names on a list so that not all those on an excessively lengthy list need be solicited for every procurement, the regulation clearly provides that where agencies rotate names they must solicit the "previously successful bidder." FAR Sec. 14.205-4(b). Thus, contracting agencies are expected to solicit their satisfactorily-performing incumbent contractors; in fact, we, the courts, and the General Services Administration Board of Contract Appeals have recognized that in light of these requirements, the incumbent generally must be solicited. Pratt & Lambert, Inc., B-245537; B-245538, Jan. 9, 1992, 92-1 CPD 48; Abel Converting Co., 67 Comp.Gen. 201 (1988), 88-1 CPD Para. 40; Abel Converting, Inc. v. United States, 679 F. Supp. 1133 (D.D.C. 1988); Dan's Moving & Storage, Inc., B-222431, May 28, 1986, 86-1 CPD Para. 496; United States v. The Thorson Co., 806 F.2d 1061 (Fed. Cir. 1986). In addition, an agency must send solicitations to all small business concerns set forth on the solicitation mailing list. FAR Sec. 19.202-4(c).

Here, the record establishes that the agency failed to comply with these obligations. In copying the names and addresses from the previous RFP's solicitation mailing list--which correctly identified the protester's company name--the contracting officer erroneously listed PAI as "Professional Medical Services" on the current mailing list; a copy of this new list was then cut into mailing labels and affixed to each solicitation envelope for distribution to the 11 contractors. While the contracting officer's failure to properly identify PAI's company name appears to have been inadvertent, [4] this transcription error resulted in the firm not learning that the agency was ready to complete the long-delayed procurement.

In the agency report, VA argues that notwithstanding the contracting officer's error, the CICA mandate for full and open competition was obtained since three offers were received. We disagree. Under CICA, full and open competition is accomplished only when (1) all qualified vendors are allowed and encouraged to submit offers on federal procurements; and (2) a sufficient number of offers is received to ensure that the government's requirements are filled at the lowest possible cost. See H.R. Rep. No. 1157, 98th Cong., 2d Sess. 17 (1984). In our view, failure to solicit the incumbent, with the result that an identified responsible source was prevented from competing where there was only a minimal level of competition, resulted in failure to obtain full and open competition. See United States v. The Thorson Co., 806 F.2d 1061; EMSA Ltd. Partnership, B-237846, Mar. 23, 1990, 90-1 CPD Para. 326.

This conclusion follows the opinion of the court in Abel Converting Inc. v. United States, 679 F. Supp. at 1141, a similar case to this one. In Abel, the agency had notified potential bidders by publication in the CBD, mailing several hundred pre-invitation notice letters, and posting the solicitations in a number of business centers; but, the agency had neglected to include the incumbent on the bidders list or otherwise send the firm a solicitation. We denied the incumbent's protest with respect to line items of the solicitation for which there were two bidders. This holding was consistent with previous opinions that three offers were sufficient to satisfy the requirement for full and open competition where an agency had inadvertently failed in its duty to solicit the incumbent. Rut's Moving & Delivery Service Inc., 67 Comp.Gen. 240 (1988), 88-1 CPD Para. 39. In reversing our resolution of the protest, the court stated that:

"Where so few bidders participate in a solicitation, the absence of even one responsible bidder significantly diminishes the level of competition. This is particularly so when the absent bidder is the incumbent contractor since that contractor previously submitted the lowest bids. Because [the agency's] action "prevented a responsible source from competing[,] . . . the CICA mandate for full and open competition was not met." [Citations omitted.]

The court in Abel also supported its view that receiving a few bids does not constitute full and open competition by pointing out that the "participation of Abel will also further CICA's goal of assuring that the government receives the lowest possible price." Id. The same is true here. In our opinion, the incumbent's price may provide a pivotal indicator of the market price for a particular requirement--and thus, of price reasonableness--since the firm's experience places it in the best position to understand the cost aspects of a particular requirement. Accordingly, where, as here, agency error prevents the incumbent from competing, it has effectively eliminated a benchmark against which to judge the current reasonable market price, and thus has lost the best assurance of obtaining a reasonable price.

While this Office has not objected to an agency's failure to solicit the incumbent in procurements where 25 bids were received, Transwestern Helicopters, Inc., B-235187, July 28, 1989, 89-2 CPD Para. 95, we find little difference between the significance of the incumbent's absence where there were two bidders in Abel and where there were three in this case.

The agency also argues that the contracting officer's error did not deprive the protester of the opportunity to compete since the agency synopsized this requirement in the CBD on September 19, 1991, and again on March 26, 1992. Decisions of this Office and the courts have made clear that publication in the CBD is not sufficient notification to an incumbent which reasonably expects to be considered for the new contract and to receive a solicitation. See United States v. The Thorson Co., 806 F.2d 1061; Abel Converting, Inc. v. United States, 679 F. Supp. 1133; Packaging Corp. of Am., B-225823, July 20, 1987, 87-2 CPD Para. 65.

We note that this is not a case in which the incumbent failed to take reasonable opportunities to obtain the solicitation. E.g., NRC Data Sys., 65 Comp.Gen. 735 (1986), 86-1 CPD Para. 84 (protester failed to correct mistake in address used by the agency). The protester had been specifically notified in the amendment which canceled RFP No. 539-25-91-- the last issued solicitation before the September 19 synopsis--that "[w]hen the new solicitation is reissued, a copy will be forwarded to you." Under these circumstances, we believe that PAI officials had every reason to expect that they could anticipate receiving the solicitation.

As a result of VA's failure to solicit PAI and the minimal competition achieved, the CICA mandate for full and open competition was not met in this case. We therefore recommend that VA resolicit this requirement, giving the incumbent an opportunity to compete. We also find that PAI is entitled to recover its protest costs. Bid Protest Regulations, 4 C.F.R. Sec. 21.6(d)(1) (1992).

The protest is sustained.

The Honorable Edward J. Derwinski The Secretary of Veterans Affairs

Dear Mr. Secretary:

Enclosed is a copy of our decision of today sustaining the protest by Professional Ambulance Inc. (PAI), under request for proposals No. 539-07-92, issued by the Department of Veterans Affairs for wheelchair van transportation services. PAI--who is the incumbent contractor for these services--protested the agency's failure to provide it with a copy of the follow-on solicitation.

We sustained the protest based on our finding that the agency's failure to solicit PAI for this requirement constituted a violation of the "full and open competition" requirement of the Competition in Contracting Act (CICA), 41 U.S.C. Sec. 253(a)(1)(A) (1988).

Since the enclosed decision contains a recommendation for corrective action, we direct your attention to that portion of CICA which requires the head of the procuring activity responsible for the solicitation to report to our Office if the agency has not implemented our recommendation within 60 days of receipt of our decision. See 31 U.S.C. Sec. 3554(e)(1) (1988). In any event, please advise our Office of the action taken. We also find that the protester is entitled to recover the costs of filing and pursuing the protest.

1. On November 1, 1990, Transportation Networks challenged the sole- source award to PAI as improper; on December 17, we dismissed the protest based on the agency's decision to resolicit the requirement.

2. We consider PAI to be the incumbent contractor since the firm has been performing the identical services required under this RFP directly for the government. See United States Elevator Corp., B-241772, Mar. 5, 1991, 91-1 CPD Para. 245.

3. Evaluation of proposals has been postponed pending the outcome of this protest.

4. In her statement to this Office, the contracting officer asserts:

"The writing of `Professional Medical Service' instead of `[PAI]' was an error. I was unfamiliar with the local concerns because I was new to the area and wrote Professional Medical Service instead of [PAI]. I know of no company by the name of Professional Medical Service."