BNUMBER: B-270702
DATE: February 15, 1996
TITLE: Carter Industries, Inc.
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Matter of:Carter Industries, Inc.
File: B-270702
Date: February 15, 1996
Marc Lamer, Esq., Kostos and Lamer, for the protester.
James G. Birnbaum, Esq., and Dawn Marie Piselli, Esq., Davis,
Birnbaum, Marcou, Seymour & Colgan, for ORC Industries, Inc., an
intervenor.
Gweyn Colaberdino, Esq., Defense Logistics Agency, for the agency.
Linda S. Lebowitz, Esq., Office of the General Counsel, GAO,
participated in the preparation of the decision.
DIGEST
Where the protester fails to timely protest a defect in the
solicitation's initial proposal award provision, that is, the failure
of the solicitation to include one of two mandatory alternate clauses
which indicate either the agency's intention to conduct discussions
prior to making an award or the agency's intention to award without
discussions, the agency's decision to award a contract on the basis of
initial proposals without discussions to an offeror which submitted a
higher technically rated, higher-priced proposal was reasonable and
consistent with the terms of the solicitation.
DECISION
Carter Industries, Inc. protests the award of a contract to ORC
Industries, Inc. under request for proposals (RFP) No.
SPO100-95-R-0148, issued by the Defense Personnel Support Center,
Defense Logistics Agency, for quantities of parkas and trousers.
Carter argues that the agency improperly awarded the contract on the
basis of initial proposals without discussions.
We dismiss the protest.
The RFP, issued on June 16, 1995, contemplated the award of a firm,
fixed-price, indefinite quantity contract for a base period with 2
option periods. The RFP stated that the award would be made to the
responsible offeror whose proposal was deemed to represent the most
advantageous proposal to the government, technical evaluation factors
and price considered. The RFP contained the following technical
evaluation factors, listed in descending order of importance: (1)
experience/past performance; (2) manufacturing plan; (3) quick
response; (4) electronic data interchange; and (5) quality assurance
plan. With respect to experience/past performance, the RFP stated
that "[i]f discussions are conducted, offeror's [sic] will be given an
opportunity to address especially unfavorable reports of past
performance and the offeror's response, or lack thereof, will be taken
into consideration." The RFP stated that technical evaluation factors
were considered more important than price.
As reflected in the source selection plan for this procurement, the
agency intended to award the contract on the basis of initial
proposals without discussions. However, the agency failed to
incorporate in the RFP, by marking the appropriate box, the clause at
Federal Acquisition Regulation (FAR) sec. 52.215-16, captioned "Contract
Award (Jul 1990) Alternate III (Aug 1991)," which states that "[t]he
Government intends to evaluate proposals and award a contract without
discussions with offerors. Therefore, each initial offer should
contain the offeror's best terms from a cost or price and technical
standpoint. However, the Government reserves the right to conduct
discussions if later determined by the Contracting Officer to be
necessary."[1]
Five firms, including Carter and ORC, submitted technical and price
proposals by the July 24 amended closing date for receipt of initial
proposals. Technical proposals were evaluated by assigning an
adjectival rating of highly acceptable (HA), acceptable (A),
marginally acceptable (MA), or unacceptable (UA) to each technical
evaluation factor. An offeror's technical proposal was also assigned
an overall adjectival rating. The technical proposals of Carter and
ORC were evaluated as follows:
Carter ORC
Experience/Past Performance UA A
Manufacturing Plan MA A
Quick Response MA A
Electronic Data Interchange MA HA
Quality Assurance Plan A A
Overall Rating MA A
Carter's price was approximately 1.6 percent less than ORC's price.
On November 27, the agency, on the basis of initial proposals without
discussions, awarded the contract to ORC whose higher technically
rated, higher-priced proposal was determined to represent the most
advantageous offer to the government. This protest followed.
Carter argues that since the agency did not incorporate in the RFP the
clause at FAR sec. 52.215-16 Alternate III, thereby failing to notify
offerors of its intention to award on the basis of initial proposals
without discussions, discussions were required prior to making an
award. See FAR sec. 15.610. Carter particularly focuses on the agency's
failure to conduct discussions with respect to the experience/past
performance evaluation factor. In this regard, Carter, a newly formed
company with no prior clothing manufacturing experience, was in the
process of acquiring the assets (including, according to its proposal,
the workforce, plant management, and supervisory personnel) of
Isratex, Inc., a clothing manufacturer which had been awarded numerous
contracts by the agency, but which had filed for bankruptcy. Because
Carter did not have any clothing manufacturing experience of its own
and because Carter would be the successor-in-interest to Isratex after
acquiring the firm's facility, equipment, and personnel, the agency
evaluated Carter's proposal for the experience/past performance
evaluation factor in light of Isratex's experience/past performance.
For this evaluation factor, Carter was rated unacceptable in light of
Isratex's inability to meet required delivery schedules, its
delinquency on 85 percent of its contracts, and its failure to
manufacture quality products. Carter maintains that had the agency
conducted discussions, it could have explained why Isratex's negative
performance history should not have been attributed to Carter.[2]
Under the Competition in Contracting Act of 1984 (CICA), 10 U.S.C. sec.
2305(a)(2)(B)(ii) (1994), solicitations for competitive proposals must
contain:
"either a statement that the proposals are intended to be
evaluated with, and award made after, discussions with the
offerors, or a statement that the proposals are intended to be
evaluated, and award made, without discussions with the offerors
(other than discussions conducted for the purpose of minor
clarification) unless discussions are determined to be
necessary."
This provision, as implemented by FAR sec. 15.407(d)(4), requires that
all solicitations for competitive proposals issued by the Department
of Defense include the clause at FAR sec. 52.215-16 Alternate II if the
agency intends to conduct discussions prior to making an award or the
clause at FAR sec. 52.215-16 Alternate III if the agency intends to award
without discussions.[3]
While the agency intended to award the contract on the basis of
initial proposals without discussions, it concedes that it failed to
incorporate in the RFP the mandatory clause at FAR sec. 52.215-16
Alternate III. Nevertheless, with respect to the experience/past
performance evaluation factor, the RFP did not guarantee that
discussions in this area would be conducted as evidenced by the
statement in the RFP that "if discussions are conducted" offerors
would be able to address unfavorable reports of past performance.
(Emphasis added). In addition, Carter acknowledged in its proposal
the possibility, but not the guarantee, of discussions. Specifically,
in addressing the quick response and electronic data interchange
requirements, Carter expressed its intention to be capable of having
these requirements immediately operational and that "[t]his will be
documented to the Government if and when discussions on this proposal
are opened." (Emphasis added).
Under our Bid Protest Regulations, protests based upon alleged
improprieties in a solicitation which are apparent prior to the
closing time for receipt of initial proposals must be filed prior to
that closing time. 4 C.F.R. sec. 21.2(a)(1) (1995); Engelhard Corp.,
B-237824, Mar. 23, 1990, 90-1 CPD para. 324. In this case, it was
apparent from the RFP that the agency had not incorporated either of
the two mandatory alternate clauses indicating either the agency's
intention to conduct discussions prior to making an award or the
agency's intention to award without discussions. In addition, the RFP
simply provided for the possibility of, but did not guarantee,
discussions regarding the experience/past performance evaluation
factor. Under these circumstances, where the RFP did not state that
discussions would be conducted prior to award, a fact acknowledged by
Carter in its proposal, we think it was incumbent upon Carter, if it
wanted to ensure that discussions would be conducted, to protest the
agency's failure to explicitly state its intention in this regard
prior to the amended closing date for receipt of initial proposals.
We conclude that Carter's post-award protest that the agency, by
failing to incorporate in the RFP the clause at FAR sec. 52.215-16
Alternate III, was required to conduct discussions is untimely. See
ADT Sec. Sys., Inc., B-249932.2, Feb. 4, 1993, 93-1 CPD para. 100.
Since the RFP did not guarantee discussions regarding the
experience/past performance evaluation factor, we cannot conclude that
the agency unreasonably determined not to conduct discussions with
Carter regarding the attribution of Isratex's negative performance
history to Carter. Accordingly, we have no basis to object to the
award to ORC on the basis of initial proposals without discussions as
ORC's higher technically rated, higher-priced proposal was determined
to represent the most advantageous offer to the government, consistent
with the terms of the RFP.
The protest is dismissed.
Comptroller General
of the United States
1. The agency also had the option of incorporating, by marking the
appropriate box, the clause at FAR sec. 52.215-16, captioned "Contract
Award (Jul 1990) Alternate II (Nov 1992)," which states that "[t]he
Government intends to evaluate proposals and award a contract after
written or oral discussions with all responsible offerors who submit
proposals within the competitive range. However, each initial offer
should contain the offeror's best terms from a cost or price and
technical standpoint." Again, the agency failed to incorporate this
clause by marking the appropriate box.
2. We point out that Carter does not argue that the agency should have
conducted discussions regarding the manufacturing plan, quick
response, and electronic data interchange evaluation factors for which
Carter received marginally acceptable ratings.
3. These clauses have subsequently been redesignated. See FAR sec.
52.215-16 (FAC 90-31).