BNUMBER:  B-270172
DATE:  February 13, 1996
TITLE:  Marine Pollution Control Corporation

**********************************************************************

Matter of:Marine Pollution Control Corporation

File:     B-270172

Date:     February 13, 1996

Thomas G. Rollins, Esq., for the protester.
Isaac Johnson, Jr., Esq., United States Coast Guard, for the agency.
Christine Davis, Esq., and Guy R. Pietrovito, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Where offerors are required to propose on a firm, fixed-price basis in 
a negotiated procurement, a proposal, which does not contain an 
unequivocal offer to perform at a firm, fixed price, cannot be 
accepted for award.

DECISION

Marine Pollution Control Corporation (MPC) protests the award of a 
contract to DonJon Marine Co., Inc. under request for proposals (RFP) 
No. DTCG84-95-R-HYR752, issued by the United States Coast Guard, for 
the removal of oil from a sunken tank barge.  MPC argues that the 
Coast Guard made various errors in evaluating its proposal, including 
determining that it failed to offer firm, fixed prices, and that the 
Coast Guard awarded the contract to a firm which suffers from an 
organizational conflict of interest.

We deny the protest.

The tank barge Cleveco sank in Lake Erie in 1942.  The RFP requires 
the contractor to remove an estimated 164,750 gallons of oil from the 
barge, to sell or otherwise dispose of any recovered oil, and to clean 
the site.  The RFP contemplated a combination firm, fixed-price and 
time-and-materials contract to perform these services.  In this 
regard, the RFP pricing schedule contained four contract line items 
(CLIN); lump-sum, fixed-prices were requested for CLIN No. 0001, 
"Removal of Oil," and CLIN No. 0003, "Clean Up/Remediation Services."  
(The non-fixed-price, time-and-materials CLINs (Nos. 0002 and 0004) 
are not relevant to this decision.)  The RFP provided for an 
evaluation of the realism and reasonableness of the prices proposed, 
and asked offerors to submit cost breakdown information for this 
purpose.  The RFP established a "best value" evaluation scheme, in 
which technical quality was more important than price.

MPC's initial proposal provided prices for both fixed-priced CLINs, as 
well as cost breakdown information showing how it arrived at these 
prices.  In the preface to its cost breakdown information, the 
protester stated that it had made assumptions regarding the site 
conditions it expected to encounter and it had estimated certain 
project costs based upon these assumptions.  For example, the 
protester estimated that its vessels would consume 32,000 gallons of 
fuel; that it would pump 100,000 gallons of water in addition to the 
oil; that it would experience 3 "down days" owing to inclement 
weather; and that it would operate a MARISAT satellite-based 
communication system for a total of 20 hours.  The protester stated 
that its proposed fixed prices did not account for costs in excess of 
the stated estimated quantities and that, "[i]f the requirements for 
each item exceed the amounts provided herein, then MPC will bill as 
extras the additional quantities per the unit pricing" provided in the 
cost breakdown information.

The agency determined that the protester had improperly qualified its 
firm, fixed prices.  Consequently, the Coast Guard directed MPC during 
discussions to propose firm, fixed prices for CLIN Nos. 0001 and 0003 
and advised MPC that "[o]nce the contract is awarded there will be no 
increases made to CLIN 0001 and CLIN 0003 as a result of inaccurate 
estimates on your part."

In response, the protester's best and final offer (BAFO) advised:

     "MPC provided firm fixed price offers for CLINs 0001 and 0003.  
     As stated in our proposal, assumptions had to be made with regard 
     to various aspects of the work to be performed.  While MPC did 
     outline the assumptions made in our cost proposal, the two key 
     factors that are truly beyond the control of MPC are inclement 
     weather and the Coast Guard's use of the MARISAT unit.  Inclement 
     weather resulting in suspended operations will have a profound 
     impact on overall project cost  .  .  .  While MPC can make 
     assumptions as to how often the Coast Guard will choose to use 
     the MARISAT unit, it is not possible for the contractor to 
     accurately determine."

MPC also noted that its BAFO cost estimate included 4 "down days" for 
inclement weather; MPC's BAFO prices somewhat increased because MPC's 
initial proposal only accounted for 3 "down days."  The Coast Guard 
determined that the protester continued to qualify its firm, fixed 
prices in its BAFO and that its proposal was therefore unacceptable.

In a negotiated procurement, a proposal which fails to conform to one 
or more of an RFP's material terms or conditions is technically 
unacceptable and cannot form the basis for an award.  BEMW, Inc., 
B-238654.2, Aug. 9, 1990, 90-2 CPD  para.  117; Cajar Defense Support Co., 
B-237522, Feb. 23, 1990, 90-1 CPD  para.  213.  The requirement for fixed 
prices is a material term or condition of an RFP requiring such 
pricing, and a proposal that does not offer fixed prices cannot be 
accepted for award.  Id.  We find that MPC's offer materially deviated 
from the RFP's firm, fixed- price requirements and was properly 
rejected.

The protester advised in its initial proposal that "MPC will bill as 
extra" costs for certain items, which exceeded the cost estimates 
underlying MPC's proposed firm, fixed prices.  By imposing this 
condition, MPC did not commit itself to providing all services at its 
proposed firm, fixed prices--a fact which MPC has not disputed during 
the course of this protest.  During discussions, the Coast Guard 
invited MPC to cure the deficiency in its proposal by directing the 
firm to provide firm, fixed prices and warning the firm that the Coast 
Guard could not be billed extra if MPC's cost estimates proved 
inaccurate.  Notwithstanding this advice, MPC did not retract the 
qualification made in its initial proposal.  Instead, the protester 
reiterated that at least "two key factors" (inclement weather and the 
use of the MARISAT unit) were "truly beyond the control of MPC" and 
could have a profound impact on overall project cost.  In our view, 
the agency reasonably interpreted this statement as qualifying the 
protester's firm, fixed prices, at least with respect to these "two 
key factors."  Although the protester argues that its response was 
meant merely to explain why it increased its BAFO prices, we note that 
the Coast Guard asked the protester to retract an improper price 
qualification from its proposal and MPC's BAFO did not do so.  
Therefore, MPC's proposal was properly determined to be unacceptable.

MPC claims that the Coast Guard should have conducted another round of 
discussions to enable the protester to cure any remaining defect in 
its price proposal.  We disagree.  The agency carefully and explicitly 
explained during written discussions that MPC's proposal contained an 
improper price qualification and offered MPC an opportunity to 
withdraw that qualification in its BAFO.  MPC declined to do so, and 
the agency was not required to afford it yet another opportunity to 
commit itself unequivocally to its firm, fixed prices.  See Ways, 
Inc., B-255219, Feb. 17, 1994, 94-1 CPD  para.  120.

Because MPC's proposal was properly determined unacceptable for 
failing to offer firm, fixed prices, we need not consider the 
protester's remaining allegations that the agency misevaluated its 
technical proposal or conducted an improper cost/technical tradeoff.  
See BEMW, Inc., supra.

Finally, MPC is not an interested party eligible to challenge the 
contract award on the basis that DonJon had an organizational conflict 
of interest.  Under our Bid Protest Regulations, only an interested 
party may protest a federal procurement.  That is, a protester must be 
an actual or prospective supplier whose direct economic interest would 
be affected by the award of a contract or the failure to award a 
contract.  Bid Protest Regulations section 21.0(a), 60 Fed. Reg. 
40,737, 40,739 (Aug. 10, 1995) (to be codified at 4 C.F.R.  sec.  21.0(a)).  
A protester is not an interested party where it would not be in line 
for award were its protest to be sustained.  ECS Composites, Inc., 
B-235849.2, Jan. 3, 1990, 90-1 CPD  para.  7.  In this case, the agency 
evaluated four BAFOs and rejected two as technically unacceptable, 
including the protester's.  Because there was another technically 
acceptable, reasonably priced proposal besides the awardee's eligible 
for award, MPC is not an interested party to challenge the award.  See 
Advanced Health Sys.--Recon., B-246793.2, Feb. 21, 1992, 92-1 CPD  para.   
214.

The protest is denied.

Comptroller General
of the United States