B-170544, MAY 10, 1971

B-170544, MAY 10, 1971

BID PROTEST - EVALUATION FACTORS - INCORRECT COMPUTATION DENYING PROTEST OF DYNAMICS CORPORATION OF AMERICA, FERMONT DIVISION, AGAINST THE AWARD OF A CONTRACT TO WHITTAKER CORPORATION, HOL-GAR DIVISION, UNDER AN RFP ISSUED BY THE DEFENSE GENERAL SUPPLY CENTER, RICHMOND, VA., FOR DIESEL-ELECTRIC GENERATOR SETS AND WHEEL MOUNTINGS. WHERE THE GOVERNMENT HAD AN OPTION TO ORDER ALL GENERATOR SETS AS EITHER SKID MOUNTED OR WHEEL MOUNTED, THE PROPER FACTOR FOR EVALUATION OF THE WHEEL MOUNTINGS MUST BE AS CLOSE AS POSSIBLE TO THE GOVERNMENT'S ACTUAL NEEDS, IN THIS CASE 15, FOR THE ESTIMATED NUMBER OF SETS TO BE ORDERED WITH WHEELS AND NOT THE POSSIBLE 165, THE MAXIMUM NUMBER OF SETS THAT MIGHT BE ORDERED WITH WHEELS. WHILE THE SOLICITATION DID NOT SPECIFICALLY IDENTIFY THE TOTAL ANNUAL ESTIMATED QUANTITY AS THE FACTOR TO BE USED, SUCH IMPLICATION WAS APPARANT FROM ITS WORDING.

TO FERMONT DIVISION OF DYNAMICS CORPORATION OF AMERICA

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF JANUARY 29, 1971, AND SUBSEQUENT COMMUNICATIONS, PROTESTING THE AWARD OF A CONTRACT TO HOL GAR DIVISION OF WHITTAKER CORPORATION (HOL-GAR) FOR ITEMS 1, 2, 3, 4, 7 AND 8 UNDER REQUEST FOR PROPOSALS (RFP) NO. DSA 400-70-R-8075 ISSUED BY THE DEFENSE GENERAL SUPPLY CENTER, RICHMOND, VIRGINIA, ON JUNE 30, 1970. YOUR FIRM WAS AWARDED ITEMS 5, 6, 9 AND 10.

THE SOLICITATION REQUESTED OFFERS FOR FIVE DIFFERENT SIZES OF DIESEL ELECTRIC GENERATOR SETS, AND FIVE COMPATIBLE SIZES OF WHEEL MOUNTINGS, PLUS DATA. THE PROCUREMENT WAS UNDERTAKEN TO SATISFY THE REQUIREMENTS OF A MILITARY INTERDEPARTMENTAL PURCHASE REQUEST (MIPR) FROM THE DEPARTMENT OF THE AIR FORCE REFLECTING THAT THE REQUIREMENTS TO BE COVERED ARE BASICALLY THOSE OF FISCAL YEAR 1971, WITH THE AIR FORCE FURNISHING ITS BEST ESTIMATE FOR THE QUANTITY OF EACH OF THE GENERATOR SETS AND WHEEL MOUNTINGS IT ANTICIPATED WOULD BE REQUIRED.

YOU ASSERT THAT THE GOVERNMENT DID NOT PROPERLY AND ACCURATELY UTILIZE THE EVALUATION FACTORS SET FORTH IN THE SOLICITATION. THE PERTINENT EVALUATION FACTORS SET FORTH IN SECTION D, PAGES 21 AND 21A OF AMENDMENT NUMBER 6 PROVIDED:

"THE GOVERNMENT WILL MAKE AWARDS TO THE LOW RESPONSIVE RESPONSIBLE OFFERORS BASED ON THE BELOW FORMULA:

"A. THE UNIT PRICES OFFERED FOR EACH INCREMENT OF EACH GENERATOR SET SIZE WILL BE MULTIPLIED BY THE ESTIMATED NUMBER OF UNITS TO BE ORDERED IN EACH INCREMENT. THESE EXTENDED AMOUNTS WILL BE ADDED TO ARRIVE AT A TOTAL PRICE FOR THE ESTIMATED TOTAL ANNUAL QUANTITIES FOR EACH SIZE SET.

"B. PLUS THE UNIT PRICE OFFERED FOR EACH SIZE WHEEL MOUNTING WILL BE MULTIPLIED BY THE TOTAL ANNUAL ESTIMATED QUANTITY OF THAT SIZE.

"D. PLUS THE PRICES OFFERED FOR LEVELS OF PRESERVATION, PACKAGING AND PACKING FOR EACH FSN (SEE PAGE 40) WILL BE ADDED THEN DIVIDED BY 3 TO ARRIVE AT AN AVERAGE UNIT PRICE WHICH WILL BE MULTIPLIED BY THE TOTAL ANNUAL ESTIMATED QUANTITY."

SINCE A COMMON PROCEDURE WAS USED TO EVALUATE EACH SIZE GENERATOR AND WHEEL MOUNTS, OUR DISCUSSION OF THIS ISSUE WILL BE LIMITED TO THE PROPRIETY OF THE EVALUATION OF THE FIRST SIZE GENERATOR SET, THE MB-19 (ITEM 1) AND THE ASSOCIATED WHEEL MOUNTS (ITEM 2).

AS SHOWN IN THE RFP, THE GOVERNMENT ESTIMATED THAT IT WOULD REQUIRE 165 MB-19S ANNUALLY, ALL OF WHICH WOULD BE SKID MOUNTED BECAUSE OF THE CONFIGURATION OF THE SET. HOWEVER, IT WAS ESTIMATED THAT OF THIS NUMBER OF SKID MOUNTED SETS, 15 WERE ESTIMATED TO BE REQUIRED WITH ADDITIONAL WHEEL MOUNTINGS, WITH THE NOMENCLATURE OF MB-19W BEING GIVEN TO THOSE SETS WITH WHEELS. FOR ITEM 2 THE RFP PROVIDED:

"(SAME AS ITEM 1 ABOVE, BUT WHEEL MOUNTED FOR 5 MPH TOWING, TYPE MB 19W)

FOB ORIGIN

TOTAL ANNUAL ESTIMATED QUANTITY - 15 EA

THE ESTIMATED ANNUAL QUANTITY FOR THIS ITEM IS INCLUDED IN THE ESTIMATED ANNUAL QUANTITY FOR ITEM 1 ABOVE.

THESE UNIT PRICES TO BE FOR WHEEL MOUNTING ONLY."

SPECIFICALLY, YOU ARGUE THAT "WITH RESPECT TO ITEMS 1 AND 2 THE GOVERNMENT IN EVALUATING THE BIDS UNDER SECTION DB) ONLY USED A FACTOR OF 15 TO MULTIPLY BY THE COST QUOTED FOR ITEM 2, WHEEL MOUNTING, WHEN IT SHOULD HAVE USED A FACTOR OF 165 WHICH WAS THE STATED TOTAL 'ANNUAL ESTIMATED QUANTITY OF THAT SIZE'."

THE INTERPRETATION GIVEN THE ABOVE-QUOTED PORTION OF SECTION DB) BY THE CONTRACTING OFFICER IS THAT:

"THIS SENTENCE DISCUSSES ONLY WHEEL MOUNTING AND THAT IT IS APPARENT THAT THE GOVERNMENT INTENDS TO MULTIPLY THE UNIT PRICE OFFERED FOR EACH SIZE WHEEL MOUNTING BY THE TOTAL ANNUAL ESTIMATED QUANTITY OF THAT SIZE WHEEL MOUNTING WHICH IT IS ANTICIPATED WILL BE REQUIRED."

IN SUPPORT OF YOUR ARGUMENT ON THIS ISSUE YOU OBSERVE THAT SINCE THE "NOTICE" CLAUSE ON PAGE 32 OF AMENDMENT 6 INDICATES THE GOVERNMENT HAD THE OPTION TO ORDER ALL GENERATOR SETS OF EACH SIZE AS EITHER SKID MOUNTED OR WHEEL MOUNTED, A FACTOR OF 165 IN THE CASE OF THE MB-19 SIZE WHEEL MOUNTINGS WOULD HAVE BEEN THE APPROPRIATE FACTOR FOR EVALUATION PURPOSES. THIS CONTENTION MUST FAIL SINCE IT IS WELL ESTABLISHED THAT EVALUATION FACTORS MUST BE REALISTIC IN COMPARISON WITH THE GOVERNMENT'S ACTUAL NEEDS, AND THE RESERVING OF THE ABOVE OPTION DOES NOT DETRACT FROM THE FACT THAT THE GOVERNMENT'S BEST ESTIMATES OF ITS NEEDS WERE THAT 150 SETS OF THE MB-19 SIZE WOULD BE ORDERED ANNUALLY AS SKID UNITS AND THAT ONLY 15 SETS WOULD BE ORDERED WITH WHEELS. THE USE OF AN EVALUATION FACTOR OF OTHER THAN 15 FOR THE WHEEL MOUNTINGS COVERED BY ITEM 2 WOULD HAVE BEEN INCONSISTENT WITH THE GOVERNMENT'S ESTIMATED REQUIREMENTS AND THEREFORE IMPROPER.

IN ADDITION, YOU SAY THAT SINCE THE EVALUATION FACTOR IN SECTION DD CONCERNING PRESERVATION AND PACKAGING UTILIZED A QUANTITY OF 180 UNITS IN THE CASE OF MB-19S, WHICH WAS IN EXCESS OF THE 165 TOTAL ANNUAL ESTIMATED QUANTITIES OF THAT SIZE, FERMONT BELIEVED THAT SINCE A PHILOSOPHY OF EVALUATION BASED ON QUANTITIES IN EXCESS OF INTENDED PURCHASE HAD BEEN ESTABLISHED BY SECTION DD, THAT SIMILAR EVALUATION WAS INTENDED TO BE USED FOR SECTION DB. WE HAVE BEEN INFORMALLY ADVISED, HOWEVER, THAT THE EVALUATION FACTOR USED UNDER SECTION DD IN THE CASE OF MB-19S WAS NOT 180 UNITS, AS YOU CONTEND, BUT RATHER A TOTAL OF 165 - 150 UNITS AS SKID MOUNTED AND 15 AS WHEEL MOUNTED. WE CONSIDER THE USE OF THE 150 SKID UNITS AND THE 15 WHEEL UNITS IN EVALUATING THE PRESERVATION AND PACKING COSTS TO BE IN ACCORD WITH THE PLAIN NOTIFICATION IN THE RFP THAT THE 165 TOTAL ANNUAL ESTIMATED QUANTITY IS INCLUSIVE OF THE 15 WHEEL UNITS.

WITH REFERENCE TO SECTION DB, THAT SECTION DOES NOT SPECIFICALLY IDENTIFY THE TOTAL ANNUAL ESTIMATED QUANTITY DESIGNATED THEREIN AS THE MULTIPLICATION FACTOR TO BE USED. WE AGREE, HOWEVER, WITH THE POSITION OF THE CONTRACTING OFFICER THAT SINCE SECTION DB DEALS SOLELY WITH THE EVALUATION OF WHEEL MOUNTINGS, AND A TOTAL ANNUAL ESTIMATED QUANTITY IS FURNISHED FOR EACH ITEM CONCERNING WHEEL MOUNTINGS, THE LOGICAL IMPORT OF SECTION DB IS THAT THE MULTIPLICATION FACTOR REFERRED TO THEREIN IS THE TOTAL ANNUAL ESTIMATED QUANTITY SHOWN UNDER EACH ITEM FOR WHEEL MOUNTINGS RATHER THAN THE TOTAL ANNUAL ESTIMATED QUANTITY FOR BOTH WHEEL AND SKID UNITS SHOWN UNDER OTHER ITEMS.

WHILE THE REFERENCES IN THE PERTINENT EVALUATION FACTORS TO TOTAL ANNUAL ESTIMATED QUANTITIES MAY NOT REFLECT THE MOST DESIRABLE DEGREE OF SPECIFICITY, IT IS OUR VIEW THAT THE INTENDED TOTAL ANNUAL ESTIMATED QUANTITIES WERE ADEQUATELY ASCERTAINABLE FROM THE PROVISIONS OF THE SOLICITATION. SINCE WE CANNOT FIND THAT THE METHOD OF EVALUATION UTILIZED BY THE AGENCY WAS IMPROPER OR CONTRARY TO THE TERMS OF THE SOLICITATION, OR THAT ALL OFFERS WERE NOT EVALUATED ON THE SAME BASIS, WE PERCEIVE NO LEGAL OBJECTION TO THE EVALUATION PROCEDURES USED IN MAKING THE AWARDS TO YOUR FIRM AND HOL-GAR.

YOU ALSO CONTEND THAT SINCE THE GOVERNMENT APPARENTLY DID NOT CONSIDER ANY OTHER FACTORS BUT PRICE IN MAKING THE AWARDS, THERE WAS NO REASON FOR THE GOVERNMENT TO HAVE UTILIZED A NEGOTIATED PROCUREMENT PROCEDURE, BUT RATHER AN ADVERTISED PROCUREMENT WOULD HAVE BEEN THE PROPER MODE OF PROCUREMENT.

THE INSTANT PROCUREMENT WAS NEGOTIATED UNDER 10 U.S.C. 2304(A)(13) PURSUANT TO A SECRETARIAL DETERMINATION AND FINDING (D&F) BY THE AIR FORCE, SUBSEQUENT TO AND IN CONSONANCE WITH OUR DECISION B-153145, APRIL 27, 1964, COPY ENCLOSED, WHEREIN WE CONSIDERED THE NEED OF THE AIR FORCE TO STANDARDIZE THE GENERATOR SETS INCLUDED IN THIS PROCUREMENT. CONCLUDED THAT SUCH D&F WOULD BE REQUIRED BEFORE SUCH PROCUREMENT COULD BE CONSUMMATED, ESPECIALLY WHERE PROPRIETARY SUBITEMS WERE BEING PROCURED. WHILE IT IS CLEAR THAT SINCE THE GENERATOR SETS BEING PROCURED ARE STANDARDIZED IN THEIR MAIN COMPONENTS THE GOVERNMENT IS PRIMARILY INTERESTED IN OFFERED PRICES, THIS IN NO WAY AFFECTS THE RIGHT OF THE GOVERNMENT TO EMPLOY THIS METHOD OF PROCUREMENT USING EXISTING, BUT RESTRICTIVE, DRAWINGS AND DATA WHICH SPECIFY CERTAIN COMPONENTS BY MANUFACTURER'S MAKE AND MODEL. IN ANY EVENT, SUCH DETERMINATIONS ARE MADE FINAL UNDER 10 U.S.C. 2310(B).

LASTLY, YOU SUBMIT THAT IT WOULD HAVE COST THE GOVERNMENT ONLY APPROXIMATELY $17,000 MORE TO HAVE AWARDED THE ENTIRE CONTRACT TO FERMONT, AND A SINGLE AWARD AS OPPOSED TO SPLIT AWARDS WOULD HAVE BEEN IN THE BEST INTEREST OF THE GOVERNMENT SINCE THIS PRICE DIFFERENCE WOULD HAVE BEEN MORE THAN OFFSET BY THE ADDITIONAL COSTS WHICH WILL BE INCURRED THROUGH AWARDING TWO CONTRACTS. OUR OFFICE HAS HELD THAT IN DETERMINING THE BEST INTEREST OF THE GOVERNMENT IN THESE MATTERS, THE PHRASE "PRICE AND OTHER FACTORS CONSIDERED" DOES NOT JUSTIFY AWARD TO OTHER THAN THE LOW BIDDER OR OFFEROR, UNLESS THE PROSPECTIVE CONTRACTOR IS FOUND NOT QUALIFIED. COMP. GEN. 550 (1958). CONSIDERATIONS OF CENTRALIZED MANAGEMENT, ADMINISTRATION, ADDITIONAL CONFERENCES AND FIRST ARTICLE TESTING MAY JUSTIFY A SINGLE AWARD AT A HIGHER PRICE ONLY WHEN THE HIGHER COST IS CLEARLY OFFSET BY ADMINISTRATIVE SAVINGS; AND EVEN IN THOSE CIRCUMSTANCES THE SOLICITATION MUST PROVIDE FOR SUCH AWARD AND ESTABLISH THE ADMINISTRATIVE COST SAVING TO BE USED IN EVALUATING THE OFFERS. CF. 47 COMP. GEN. 233 (1967). NO SUCH PROVISION WAS CONTAINED IN THE INSTANT SOLICITATION, AND THE CONTRACTING OFFICER HAS DETERMINED THAT ANY ADMINISTRATIVE SAVINGS SUBJECT TO BEING REALIZED ON THE ABOVE BASES COULD NOT BE ANYWHERE CLOSE TO THE $17,000 FIGURE WHICH YOU MENTION.

FOR THE FOREGOING REASONS, YOUR PROTEST IS DENIED.