BNUMBER:  B-266199
DATE:  January 30, 1996
TITLE:  Vantex Service Corporation

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Matter of:Vantex Service Corporation

File:     B-266199

Date:     January 30, 1996

D. J. Brown for the protester.
Michael J. O'Farrell, Jr., Esq., Department of the Army, for the 
agency.
Linda S. Lebowitz, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Agency properly determined to use competitive negotiation procedures, 
as opposed to sealed bidding, to procure its requirements where, based 
on prior performance problems, the agency determined that discussions 
would be necessary to ensure that offerors understood the requirements 
of the solicitation prior to award and where the award would not be 
based solely on price.

DECISION

Vantex Service Corporation protests the decision of the Department of 
the Army to use competitive negotiation procedures to procure portable 
latrines and related services at Fort Hood, Texas under request for 
proposals (RFP) No. DAKF48-95-R-0015.  Vantex maintains that the 
agency should conduct this procurement using sealed bidding 
procedures.

We deny the protest.

The RFP, issued as a total small business set-aside, contemplated the 
award of a firm, fixed-price contract for a base period with 4 option 
years.  The RFP required offerors to submit technical and price 
proposals.  Technical proposals were to describe an offeror's supplies 
and equipment, company experience, and quality control program.  With 
respect to an offeror's supplies and equipment and quality control 
program, the RFP required offerors to furnish particular information, 
demonstrating the firm's understanding of the solicitation 
requirements.  With respect to experience, the RFP stated that a 
minimum of 2 years experience was desired, and that an offeror with 
less than the desired experience would be referred to the Small 
Business Administration (SBA) for the possible issuance of a 
certificate of competency (COC).  

The RFP provided that the award would be made to the responsible 
offeror that submitted the lowest-priced, technically acceptable 
proposal.  The RFP included the following technical evaluation 
factors:  (1) material and equipment list; (2) company experience; and 
(3) quality control program.  The RFP stated that once technical 
acceptability was established based on these evaluation factors, price 
would become the determining factor for award.

Vantex, a small business, maintains that the agency should procure its 
requirements using sealed bidding procedures because discussions are 
not necessary for these "uncomplicated and low-tech" requirements and 
because the award will be based solely on price.[1]

Under the Competition in Contracting Act of 1984 (CICA), contracting 
agencies are required to obtain full and open competition and, in 
doing so, are required to use competitive procedures--negotiation or 
sealed bids--that they determine to be best suited to the 
circumstances of a given procurement.  10 U.S.C.  sec.  2304(a)(1) (1994); 
Military Base Management, Inc., 66 Comp. Gen. 179 (1986), 86-2 CPD  para.  
720.  CICA further provides that, in determining which competitive 
procedure is appropriate, an agency must solicit sealed bids if:  (1) 
time permits; (2) award will be based on price; (3) discussions are 
not necessary; and (4) more than one bid is expected.  10 U.S.C.  sec.  
2304(a)(2)(A); see JT Constr. Co., Inc., B-244404.2, Jan. 2, 1992, 
92-1 CPD  para.  1.  Negotiated procedures are authorized only if sealed 
bids are not appropriate under 10 U.S.C.  sec.  2304(a)(2)(A).   See 10 
U.S.C.  sec.  2304(a)(2)(B).  While the decision whether to employ 
negotiated procedures involves the exercise of business judgment, such 
decision must be reasonable.  Racal Corp., 70 Comp. Gen. 127 (1990), 
90-2 CPD  para.  453.

The agency explains that the contracting officer decided to conduct 
this procurement using competitive negotiation procedures in order to 
have an opportunity to conduct discussions.  The agency reports that 
while it previously procured portable latrines for military training 
field exercises using small purchase procedures, it encountered 
problems with timely delivery and servicing of the latrines in a 
military training field environment, often in a remote area under 
various weather conditions.  Given recent performance problems, the 
contracting officer believed it would be necessary to conduct 
discussions to ensure that the offerors understood, prior to award, 
the solicitation requirements and the magnitude of logistical 
considerations involved in providing portable latrines and related 
services during military training field exercises.  The agency 
anticipates that discussions could result in the amendment of 
solicitation requirements.[2]

Moreover, the award will not be based solely on price.  The RFP listed 
three technical evaluation factors which the agency states will be 
evaluated on a "go/no-go" basis to determine the technical 
acceptability of an offeror's proposal. According to the RFP, only 
when technical acceptability is established will price become the 
determining factor for award.  The RFP specifically states that the 
award will be made to the responsible offeror that submits the 
lowest-priced, technically acceptable proposal.

The protester does not establish that the agency's determination that 
discussions might well be necessary to evaluate an offeror's 
understanding of the solicitation requirements is unreasonable.  
Moreover, award is to be based on an assessment of an offeror's 
technical acceptability and price, not only on price as Vantex states.  
In these circumstances, we have no basis to object to the agency's use 
of competitive negotiation procedures, instead of sealed bidding, to 
procure its requirements.  See D.M. Potts Corp., B-247403, May 29, 
1992, 92-1 CPD  para.  479.

Vantex is concerned that the agency will improperly use responsibility 
factors to determine the technical acceptability of an offeror's 
proposal, thereby circumventing the SBA's referral procedures for COC 
purposes.

The use of traditional responsibility factors as evaluation criteria 
in a negotiated procurement is permissible.  Premier Enters., Inc., 
B-259027, Mar. 1, 1995, 95-1 CPD  para.  118.  However, if an agency 
evaluates proposals on a "go/no-go" basis using traditional 
responsibility factors, as the agency reports it intends to do in this 
case, and solely as a result of these factors finds a proposal from a 
small business unacceptable, the agency would be required to refer the 
matter to the SBA for a final determination under COC procedures.  Id.

The agency reports that it is evaluating proposals.  Since the agency 
has not completed the evaluation process, Vantex is merely 
anticipating improper agency action, that is, that the agency will 
fail to refer a small business whose proposal is found to be 
technically unacceptable on the basis of responsibility factors to the 
SBA for the possible issuance of a COC.  Protests that merely 
anticipate improper agency action are speculative and premature.  See 
General Elec. Canada, Inc., 
B-230584, June 1, 1988, 88-1 CPD  para.  512.  Consequently, we have no 
basis to consider Vantex's concern at this time.

Finally, Vantex basically challenges the agency's decision to procure 
its requirements under a single solicitation, as opposed to dividing 
its requirements and using small purchase procedures, as previously 
was done.

In procuring its current requirements, the agency has determined that 
its minimum needs can best be satisfied by conducting a negotiated 
procurement and awarding a single requirements contract.  The 
determination of the agency's minimum needs and the best method of 
accommodating them are primarily within the agency's discretion; we 
will not question such a determination unless the record shows that it 
does not have a reasonable basis.  RMS Indus., B-247233; B-247234, May 
1, 1992, 92-1 CPD  para.  412.  The Army believes that a single contract, 
under which one vendor will be responsible for satisfying all of the 
agency's requirements, will allow the agency to manage its needs more 
efficiently and to better address previous performance problems.  
Vantex has failed to show that the agency's determination in this 
regard is unreasonable. 

The protest is denied.

Comptroller General 
of the United States

1. Vantex raised this argument in an agency-level protest filed prior 
to the closing time for receipt of initial proposals.  The agency 
denied the agency-level protest prior to the closing time.  This 
protest was timely filed within 10 working days after the denial of 
Vantex's agency-level protest (which was also before the closing 
time).  Bid Protest Regulations, 4 C.F.R.  sec.  21.2(a)(3) (1995).

2. In the protest, Vantex also raised four arguments involving various 
solicitation requirements.  In its administrative report, the agency 
notes, for example, that in response to one of Vantex's arguments, it 
amended the solicitation with respect to the designation of an on-site 
project manager, a requirement which Vantex characterized as an "ivory 
tower" or "gold-plated" administrative requirement.  The agency 
believes that this example is representative of solicitation 
requirements that could be amended based on input from offerors during 
discussions.  In its comments to the administrative report, Vantex 
withdrew these four arguments.