BNUMBER: B-262029
DATE: November 6, 1995
TITLE: Ameriko, Inc.
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Matter of:Ameriko, Inc.
File: B-262029
Date: November 6, 1995
Christopher Solop, Esq., Ott & Purdy, for the protester.
William A. Roberts III, Esq., Lee P. Curtis, Esq., and Brian A. Darst,
Esq., Howrey & Simon, for Del-Jen, Inc., an interested party.
Eric W. Hanger, Esq., and Diane D. Hayden, Esq., Department of the
Navy, for the agency.
Katherine I. Riback, Esq., and Paul Lieberman, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Allegation that agency improperly caused protester to increase its
price in its best and final offer is denied where record shows only
that protester was invited to "provide a breakdown" of the prices in
question; protester's determination to increase its prices in
response reflects its own business judgment.
DECISION
Ameriko, Inc. protests the award of a contract to Del-Jen, Inc. under
request for proposals (RFP) No. N44255-95-R-6046, issued by the
Department of the Navy for base operating services for the Naval
Station Everett Family Support Complex, Marysville, Washington. The
protester contends that the Navy misled it during discussions into
increasing its offered prices.
We deny the protest.
The RFP, issued on February 2, 1995, contemplated the award of a
contract which consisted primarily of fixed-price line items, and also
included a number of relatively small indefinite quantity line items,
for a base year with 2 option years to provide base operating
services, such as building and grounds maintenance, pest control and
custodial services. The RFP advised that award would be made to the
responsible offeror whose offer was most advantageous to the
government and that technical merit and price were of equal
importance. The RFP provided that technical proposals were to be
evaluated under the subfactors of (1) experience and past performance;
(2) proposed staffing; (3) resources; and (4) quality control, with
the first subfactor equal to the total of all other subfactors, and
the remaining subfactors of equal importance.
On February 23, proposed offerors were taken on a site visit; however
the participants were confined to a bus because the Family Support
Complex was still under construction. Five offerors submitted initial
proposals by the March 17, closing date. Ameriko's proposal received
an acceptable technical rating, and its total price of $2,641,143 was
second low. Del-Jen's proposal received a highly acceptable technical
rating, and its price of $3,624,016 was the highest received. The
government estimate was $3,157,998.81. After evaluation, three
proposals, including Ameriko's and Del-Jen's, were included in the
competitive range.
The agency concluded that discussions were necessary because the
prices offered could not be determined reasonable or realistic on the
basis of the available information. The agency first conducted
written discussions with each offeror whose proposal was in the
competitive range. Among other things, the agency informed Ameriko
during discussions that its firm, fixed price (FFP) component of
$825,756 for the base year was too low, and asked for a breakdown of
the major elements of its price. The agency also informed Ameriko
that it considered its indefinite quantity (IQ) component price of
$54,625 to be unrealistically high and asked for a similar breakdown.
The agency was concerned that Ameriko's proposal was unbalanced
between the FFP and IQ components. The agency advised Del-Jen that it
viewed its FFP of $1,181,037 and its IQ price of $35,530 for the base
year to be high, and asked for a breakdown of these prices. In order
to provide an opportunity to more carefully examine the entire
facility, each competitive range offeror was given a personal site
visit of the entire, virtually completed, facility.
Revised proposals were received by May 12. The technical ratings and
the total revised prices for the three competitive range offerors were
as follows:
Technical RatingTechnical Rank Price (3 years)
Del-Jen highly acceptable 1 $3,225,483.00
Offeror A highly acceptable 2 $3,039,304.23
Ameriko highly acceptable 3$2,819,463.65
The revised government estimate was $3,145,609.50. In its revised
proposal Ameriko lowered its IQ price to $43,548.96, and raised its
FFP for the base year to $889,661.88. Following evaluation of the
revised proposals, the agency determined that further discussions were
not necessary.
BAFOs were received by June 26. The technical ratings and BAFO prices
for the three competitive range offerors were as follows:
Technical RatingTechnical Rank Price (3 years)
Del-Jen highly acceptable 1 $2,627,457.00
Offeror A highly acceptable 2 $3,038,040.00
Ameriko highly acceptable 3 $2,798,236.50
The agency determined that Del-Jen's proposal offered the best value
to the government and made award to that company on July 16.
Ameriko protests that it was improperly misled by the agency during
discussions into substantially increasing the FFP portion of its
price, which resulted in a substantial increase in its BAFO price.
Agencies are required to conduct meaningful discussions with all
offerors whose proposals are in the competitive range; the requirement
is satisfied by advising them of weaknesses, uncertainties, excesses,
or deficiencies in their proposals which require amplification or
correction and by affording them the opportunity to submit revised
proposals. Federal Acquisition Regulation (FAR) 15.610(c)(2) and
(5); Crestmont Cleaning Serv. & Supply Co., Inc.; Scott & Sons
Maintenance, Inc.; Son's Quality Food Co., B-254486 et. al., Dec. 22,
1993, 93-2 CPD 336.
The protester's initial price for the FFP work was approximately 18
percent below the agency's FFP estimate. The Navy's written
discussions statement was "[t]he Government considers your price for
item 0001 (the price for the FFP work for the base year) to be too
low. Please provide a breakdown of the major elements of your prices
using the attached format." We see nothing misleading or coercive
about this statement, and the record provides nothing which suggests
that during oral discussions, Ameriko was otherwise instructed or
coerced into raising its price. Rather, in response to written and
oral discussions, Ameriko responded that it had made a "lengthy and
detailed examination of all elements of our price for CLIN 0001, and
have raised our price accordingly"; this statement suggests that
Ameriko's price increase was based on judgments it made in response to
its own review.
See Eagle Technology, Inc., B-236255, Nov. 16, 1989, 89-2 CPD 468.
In this regard, the agency has submitted a declaration from the
contracting officer, who personally conducted Ameriko's second site
visit, in which he related statements made by an Ameriko
representative that its price would increase based on information
gained as a result of the second site visit. This statement belies
the assertion that Ameriko was coerced into raising its prices, and
indicates that the change reflects business judgment based on a better
appreciation of the nature and scope of the required work.
Ameriko also objects that the agency abandoned its initial price
analysis method, upon which the discussion questions were based, in
its subsequent price analyses. Specifically, the agency based its
discussion questions on a comparison of Ameriko's prices and the other
prices received and the government estimate, but in subsequent price
analyses compared Ameriko's revised prices to the other prices
received and only used the FFP portion of the government estimate for
comparative purposes.
However, rather than being prejudiced by the agency's failure to use
the IQ portion of the government estimate after the initial
evaluation, if anything, Ameriko benefited from the discussion
question concerning its IQ prices. Ameriko was informed by the agency
during discussions that it considered its IQ prices too high, and
Ameriko lowered its IQ prices. As a result, Ameriko's IQ price
compared more favorably to other offerors' IQ prices then it otherwise
would have. Under the circumstances, the agency's alleged error was
not prejudicial to Ameriko. Prejudice is an essential element of
every viable protest. See Lithos Restoration, Ltd., 71 Comp. Gen. 367
(1992), 92-1 CPD 379.[1]
The protest is denied.
Comptroller General
of the United States
1. Ameriko also argues that the agency's release during the protest
process of Ameriko's protest, which was marked with the legend,
"PROTECTED MATERIALS NOT TO BE DISCLOSED," to Del-Jen, violated the
procurement integrity provisions of the Office of Federal Procurement
Policy (OFPP) Act, 41 U.S.C. 423, and its implementing regulations,
FAR 3.104. Clearly this release of information had no impact on the
propriety of the award, and in any event, the inadvertently released
material consisted only of bottom line prices, which should not have
been considered confidential in any event.