B-201527, JUNE 1, 1981, 60 COMP.GEN. 495

B-201527, JUNE 1, 1981, 60 COMP.GEN. 495

BIDS - EVALUATION - SAVINGS TO GOVERNMENT - EVALUATION REQUIREMENT SOLICITATION TO MAINTAIN GROUNDS MAINTENANCE EQUIPMENT, WHICH ALLOWED BIDDERS TO OFFER SPECIAL DISCOUNTS FOR OFF-SEASON WORK AS WELL AS PROMPT PAYMENT DISCOUNTS, BUT PROVIDED FOR EVALUATION OF ONLY PROMPT PAYMENT DISCOUNT IN DETERMINING LOW BID, RESULTED IN AWARD THAT DID NOT REFLECT MOST FAVORABLE COST TO GOVERNMENT FOR TOTAL WORK TO BE PERFORMED, I.E., SEASONAL AND OFF-SEASON WORK, AND THUS VIOLATED STATUTE GOVERNING ADVERTISED PROCUREMENTS.

MATTER OF: REPPERT MARINE SALES AND SERVICE, JUNE 1, 1981:

REPPERT MARINE SALES AND SERVICE PROTESTS THE AWARD OF A CONTRACT TO BOB'S SMALL ENGINES (BSE), THE LOW BIDDER UNDER GENERAL SERVICES ADMINISTRATION (GSA) INVITATION FOR BIDS GSD-6DPR-10017, A TOTAL SMALL BUSINESS SET-ASIDE FOR THE REPAIR AND MAINTENANCE OF GROUNDS MAINTENANCE EQUIPMENT AND AIR COOLED ENGINES FOR THE PERIOD JANUARY 1, 1981, TO DECEMBER 31, 1981. THE PROTESTER COMPLAINS THAT ALTHOUGH TWO DISCOUNTS WERE ASKED FOR IN THE SOLICITATION-- A PROMPT PAYMENT DISCOUNT, AND A SPECIAL DISCOUNT FOR WORK PERFORMED DURING THE OFF SEASON OF NOVEMBER, DECEMBER, JANUARY AND FEBRUARY-- ONLY THE PROMPT PAYMENT DISCOUNT WAS CONSIDERED IN DETERMINING THE LOW BIDDER. REPPERT ALSO PROTESTS THAT BSE DOES NOT HAVE THE CAPACITY TO SATISFACTORILY PERFORM THE CONTRACT, MAINTAINING THAT THE AWARDEE HAS AN INSUFFICIENT AMOUNT OF SPACE AND LACKS THE NECESSARY WELDING FACILITIES. REPPERT SUGGESTS THAT THE AWARDEE THEREFORE IMPROPERLY INTENDS TO SUBCONTRACT THE WELDING EVEN THOUGH IT DID NOT SO INDICATE IN ITS BID.

WE DO NOT AGREE THAT UNDER THE SOLICITATION AS ISSUED THE OFFERED SPECIAL DISCOUNTS SHOULD HAVE BEEN EVALUATED IN DETERMINING THE LOW BIDDER. HOWEVER, WE BELIEVE THAT THE SOLICITATION WAS DEFECTIVE BECAUSE THE EVALUATION CRITERIA DID NOT PROVIDE FOR AN AWARD AT THE MOST FAVORABLE COST TO THE GOVERNMENT. THEREFORE, WE RECOMMEND THAT THE REQUIREMENT BE RESOLICITED.

THE METHOD OF AWARD SECTION OF THE SOLICITATION, PARAGRAPH 26, PROVIDED THAT AWARD WOULD BE MADE TO THE LOW RESPONSIVE, RESPONSIBLE BIDDER OFFERING THE LOWEST HOURLY RATE. THE SECTION INCLUDED THE FOLLOWING EXAMPLE: (TABLE OMITTED)

BIDDER A IS THE LOW BIDDER.

PARAGRAPH 27, ENTITLED PROMPT PAYMENT DISCOUNT, INDICATED THAT ANY OFFERED PROMPT PAYMENT DISCOUNT WOULD BE INCLUDED IN THE CALCULATION OF THE LOW BID. THE BID SCHEDULE, PARAGRAPH 29, LISTED EIGHT LOCATIONS WHERE SERVICE WOULD BE NEEDED AND THE VOLUME REPORTED AT EACH FOR THE PERIOD JANUARY 1979 TO SEPTEMBER 1979 AND PROVIDED SPACES FOR A BIDDER TO ENTER AN HOURLY RATE FOR EACH LOCATION. BELOW THE BID SCHEDULE, AND JUST ABOVE THE SPACE FOR THE BIDDER'S SIGNATURE, WAS THE FOLLOWING PROVISION:

SPECIAL DISCOUNT: BIDDER OFFERS A SPECIAL DISCOUNT OF -% ON ALL REPAIR WORK, PERFORMED DURING THE MONTHS OF NOVEMBER, DECEMBER, JANUARY, AND FEBRUARY.

PARAGRAPHS 26-29 AND THE SPECIAL DISCOUNT PROVISION WERE ALL ON THE SAME PAGE OF THE IFB.

BOTH REPPERT AND BSE BID AN HOURLY RATE OF $15 FOR ONE OF THE LISTED LOCATIONS, FORT LEONARD WOOD, MISSOURI. THE PROTESTER OFFERED A 2 PERCENT PROMPT PAYMENT DISCOUNT FOR WORK PAID FOR WITHIN 20 CALENDAR DAYS, AND A 5 PERCENT SPECIAL DISCOUNT FOR WORK PERFORMED DURING THE OFF-SEASON. BSE OFFERED A 2.1 PERCENT PROMPT PAYMENT DISCOUNT AND A 1.5 PERCENT SPECIAL DISCOUNT. BECAUSE OF BSE'S GREATER PROMPT PAYMENT DISCOUNT, THE FIRM'S BID WAS EVALUATED AS LOW ($14.68 PER HOUR, AS OPPOSED TO $14.70 PER HOUR FOR THE PROTESTER).

REPPERT ARGUES THAT THE SPECIAL DISCOUNT SHOULD HAVE BEEN CONSIDERED BY GSA IN EVALUATING BIDS, AND THAT IN VIEW OF REPPERT'S KNOWLEDGE OF THE PREVIOUS YEAR'S VOLUME OF OFF-SEASON WORK, ACCEPTANCE OF REPPERT'S BID WOULD RESULT IN THE LOWEST COST TO THE GOVERNMENT.

IN RESPONSE, GSA CONTENDS THAT THE METHOD OF AWARD AND PROMPT PAYMENT DISCOUNT PARAGRAPHS OF THE SOLICITATION (26 AND 27( CLEARLY INDICATED THAT ONLY THE PROMPT PAYMENT DISCOUNT WOULD BE CONSIDERED IN THE EVALUATION OF BIDS FOR AWARD, NOT THE SPECIAL DISCOUNT. GSA ALSO ADVISES THAT THE PURPOSE FOR SOLICITING A SPECIAL DISCOUNT FOR OFF SEASON WORK WAS TO ENCOURAGE USING ACTIVITIES TO SEND EQUIPMENT IN FOR MAINTENANCE AND REPAIR AT THAT TIME SO THAT THE CONTRACTOR WOULD NOT BE INUNDATED WITH WORK DURING THE OTHERWISE BUSY MONTHS OF THE CONTRACT YEAR.

WE AGREE WITH GSA TO THE EXTENT THAT REPPERT SHOULD HAVE REALIZED THAT ANY SPECIAL DISCOUNT OFFERED WOULD NOT BE CONSIDERED IN DETERMINING THE LOW BIDDER. THE INVITATION'S METHOD OF AWARD PROVISION SIMPLY DID NOT MENTION THE SPECIAL DISCOUNT NOTWITHSTANDING THAT A SPACE FOR SUCH DISCOUNT WAS INCLUDED ON THE SAME PAGE. FURTHER, IN CONTRAST TO THE PROMPT PAYMENT DISCOUNT PARAGRAPH WHICH SPECIFIED THAT ANY SUCH DISCOUNT WOULD BE APPLIED TO THE BID FOR PURPOSES OF BID EVALUATION, THE SPECIAL DISCOUNT PROVISION INCLUDED NO SUCH INDICATION. FINALLY, THERE IS NO ESTIMATE IN THE INVITATION OF THE AMOUNT OF EQUIPMENT THAT WOULD NEED TO BE SERVICED DURING THE OFF SEASON BY WHICH A SPECIAL DISCOUNT COULD BE MULTIPLIED FOR EVALUATION PURPOSES.

NONETHELESS, WE DO NOT BELIEVE THAT THE AWARD UNDER THE IFB WAS PROPER BECAUSE IT WAS BASED ON DEFECTIVE EVALUATION CRITERIA. THE ADVERTISING STATUTE REQUIRES THAT AWARD BE MADE TO THE RESPONSIBLE BIDDER WHOSE BID IS MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. 41 U.S.C. 253(B)(1976). THAT LANGUAGE MANDATES AWARD ON THE BASIS OF THE MOST FAVORABLE COST TO THE GOVERNMENT AS MEASURED BY THE TOTAL AMOUNT OF WORK TO BE AWARDED. SEE CROWN LAUNDRY AND CLEANERS, B-196118, JANUARY 30, 1980, 80-1 CPD 82; SQUARE DEAL TRUCKING CO., INC., B-183695, OCTOBER 2, 1975, 75-2 CPD 206.

AS STATED ABOVE, BSE'S EVALUATED HOURLY LABOR RATE WAS TWO CENTS LESS THAN REPPERT'S BECAUSE OF BSE'S 2.1 PERCENT PROMPT PAYMENT DISCOUNT AS OPPOSED TO REPPERT'S 2 PERCENT PROMPT PAYMENT DISCOUNT. HOWEVER, REPPERT'S OFFERED SPECIAL DISCOUNT WAS 5 PERCENT, WHILE BSE'S WAS ONLY 1.5 PERCENT. IT IS EVIDENT THAT IF EVEN A MINIMAL AMOUNT OF OFF-SEASON WORK IS NECESSARY THE OVERALL COST TO THE GOVERNMENT WOULD BE LESS UNDER A CONTRACT WITH REPPERT, BECAUSE OF THE 5 PERCENT SPECIAL DISCOUNT, THAN IT WOULD BE UNDER BSE'S CONTRACT. IN THIS REGARD, THERE IS NO SUGGESTION IN THE RECORD THAT GSA COULD NOT REASONABLY ESTIMATE THE ANTICIPATED VOLUME OF OFF-SEASON WORK SO THAT ANY OFFERED SPECIAL DISCOUNTS PROPERLY COULD BE EVALUATED. THE RECORD SHOWS THAT GSA HAS BEEN CONTRACTING FOR THESE SERVICES AT FORT LEONARD WOOD SINCE 1970, AND THAT SPECIAL DISCOUNTS HAVE BEEN SOLICITED SINCE 1973. WE ASSUME THAT THIS PROCUREMENT HISTORY WOULD PROVIDE SUFFICIENT INFORMATION FOR THE CALCULATION OF A REASONABLE ESTIMATE OF OFF-SEASON WORK UNDER THE 1981 CONTRACT.

ACCORDINGLY, THE SOLICITATION WAS DEFECTIVE BECAUSE IT DID NOT PROVIDE FOR THE EVALUATION OF SPECIAL DISCOUNTS. THUS, THE AWARD DID NOT RESULT IN A CONTRACT AT THE MOST FAVORABLE PRICE DISCLOSED IN THE COMPETITION FOR THE WORK THAT COULD BE EXPECTED TO BE PERFORMED, I.E., THE AGGREGATE OF BOTH THE SEASONAL AND OFF-SEASON WORK. TO THAT EXTENT, THE PROTEST IS SUSTAINED.

WE COULD NOT, OF COURSE, RECOMMEND THAT BSE'S CONTRACT BE TERMINATED AND A CONTRACT AWARDED TO REPPERT SINCE AN ADVERTISED CONTRACT MUST BE AWARDED BASED ON THE TERMS UNDER WHICH THE COMPETITION WAS CONDUCTED, WHICH IN THIS CASE DID NOT INCLUDE THE EVALUATION OF SPECIAL DISCOUNTS IN DETERMINING THE LOW BIDDER. SEE COM-TRAN OF MICHIGAN, INC., B-200840, NOVEMBER 11, 1980, 80-2 CPD 407. HOWEVER, IN VIEW OF THE SOLICITATION DEFECT, WE RECOMMEND THAT GSA EXPEDITIOUSLY SOLICIT NEW BIDS FOR THE REQUIREMENT FOR THE BALANCE OF BSE'S CONTRACT TERM. GSA SHOULD INCLUDE IN THE INVITATION AN ESTIMATE OF THE AMOUNT OF OFF SEASON WORK TO BE EXPECTED (NOW ONLY NOVEMBER AND DECEMBER), AND ADVISE THAT OFFERED SPECIAL DISCOUNTS WILL BE APPLIED TO THAT ESTIMATE AND THUS CONSIDERED IN CALCULATING THE BID THAT REPRESENTS THE LOWEST COST TO THE GOVERNMENT. A FIRM OTHER THAN BSE IS LOW AS EVALUATED, BSE'S CONTRACT SHOULD BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT AND A NEW CONTRACT AWARDED. IF BSE IS LOW AS EVALUATED, BSE'S CURRENT CONTRACT NEED ONLY BE MODIFIED TO REFLECT ANY CHANGES. SEE DATAPOINT CORPORATION, B-186979, MAY 18, 1977, 77-1 CPD 348.

WE NOTE HERE THAT GSA INVITED BIDS FOR WORK AT SEVEN LOCATIONS OTHER THAN FORT LEONARD WOOD. SINCE NO PROTEST INVOLVING ANY OF THOSE SEVEN HAS BEEN FILED, WE HAVE NO INFORMATION REGARDING THE BIDDING RESULTS FOR THOSE LOCATIONS. THEREFORE, WE RECOMMEND THAT GSA REVIEW THOSE RESULTS. WHERE THE MOST ADVANTAGEOUS SPECIAL DISCOUNT WAS OFFERED BY OTHER THAN THE AWARDEE SO THAT THE AWARD PRICE DOES NOT REFLECT THE MOST FAVORABLE PRICE FOR ALL WORK TO BE PERFORMED, GSA SHOULD TAKE CORRECTIVE ACTION CONSISTENT WITH THE ABOVE.

THE REMAINING ISSUE INVOLVES WHETHER BSE HAS THE ABILITY TO MEET THE CONTRACT'S REQUIREMENTS WITHOUT SUBCONTRACTING THE WELDING WORK WHICH REPPERT ARGUES WOULD BE IMPROPER, AND THUS WHETHER BSE SHOULD HAVE BEEN AWARDED THE CONTRACT IN ANY CASE. THIS IS NOT A MATTER WHICH WE CONSIDER. THE ABILITY TO SATISFACTORILY PERFORM A CONTRACT IS A MATTER OF THE PROSPECTIVE AWARDEE'S RESPONSIBILITY. AEROSONIC CORPORATION, B-193469, JANUARY 19, 1979, 79-1 CPD 35, AND GSA FOUND BSE TO BE A RESPONSIBLE CONCERN. OUR OFFICE DOES NOT REVIEW AFFIRMATIVE DETERMINATIONS OF RESPONSIBILITY UNLESS EITHER FRAUD ON THE PART OF CONTRACTING OFFICIALS IS ALLEGED OR THE SOLICITATION CONTAINED DEFINITIVE RESPONSIBILITY CRITERIA WHICH ALLEGEDLY WERE NOT APPLIED. OREGON WILBERT VAULT CORPORATION, B-191000, JANUARY 18, 1978, 78-1 CPD 49. NEITHER EXCEPTION APPLIES HERE. WE POINT OUT HERE THAT THE SPECIFICATIONS REQUIRED ONLY THAT THE CONTRACTOR "HAVE AVAILABLE, OR HAVE ACCESS TO" A WELDING CAPABILITY, AND THAT THE INVITATION SPECIFICALLY ALLOWED SUBCONTRACTING, EVEN IF THE INTENTION TO DO SO WAS NOT INDICATED IN THE BID SUBMITTED, AS LONG AS THE CONTRACTING OFFICER APPROVED.

THIS DECISION CONTAINS A RECOMMENDATION FOR CORRECTIVE ACTION TO BE TAKEN. THEREFORE, WE ARE FURNISHING COPIES TO THE SENATE COMMITTEES ON GOVERNMENTAL AFFAIRS AND APPROPRIATIONS AND THE HOUSE COMMITTEES ON GOVERNMENT OPERATIONS AND APPROPRIATIONS IN ACCORDANCE WITH SECTION 236 OF THE LEGISLATIVE REORGANIZATION ACT OF 1970, 31 U.S.C. 1176(1976), WHICH REQUIRES THE SUBMISSION OF WRITTEN STATEMENTS BY THE AGENCY TO THE COMMITTEES CONCERNING THE ACTION TAKEN WITH RESPECT TO OUR RECOMMENDATION.