BNUMBER: B-271197
DATE: June 3, 1996
TITLE: Cartridge Technology Network, Inc.
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Matter of:Cartridge Technology Network, Inc.
File: B-271197
Date:June 3, 1996
David S. Cohen, Esq., and Victor G. Klingelhofer, Esq., Cohen & White,
for the protester.
Christopher G. Lill, for American Laser, Inc., an intervenor.
Benjamin G. Perkins, Esq., Defense Logistics Agency, for the agency.
Sylvia Schatz, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
Awardee's offer is not unbalanced where awardee's last 2 option year
prices were lower than protester's and lower than awardee's prices for
the base year and first two option years, but there is no evidence of
overstated prices in awardee's offer in the earlier contract years.
DECISION
Cartridge Technology Network, Inc. (CTN) protests the award of a
contract to American Laser, Inc. (ALI) under Defense General Supply
Center (DGSC) request for proposals (RFP) No. SPO450-95-R-3056, for
laser printer toner cartridges to be used by the Defense Supply Center
in Richmond, Virginia (DSCR). CTN argues that ALI's proposal
contained unbalanced prices and should have been rejected.
We deny the protest.
The RFP contemplated the award of a fixed-price requirements contract
on a best value basis, for a base year with four 1-year options, for
an annual estimated 25,000 cartridges. The solicitation set forth two
equally weighted factors, price and past performance. Past
performance was evaluated using an Automated Best Value Model (ABVM)
score (ranging from 0 points for poor performance to 100 points for
excellent performance), which indicated the offeror's performance on
DSCR contracts for the type of supplies required here, performed over
a 12-month period beginning 14 months prior to generation of the
offeror's ABVM score. Price (for the base and option years) was to be
evaluated for reasonableness.
DSCR received 13 offers. Following discussions, the agency requested
and received best and final offers (BAFO). ALI's BAFO was assigned an
ABVM score of 99.3 points, while CTN's was 89.7 points. The
offerors' prices were as follows:
ALI CTN
Base price $57.90 $53.90
Option period 1 48.90 48.90
Option period 2 40.90 43.00
Option period 3 29.30 43.00
Option period 4 26.20 43.50
TOTAL $5,080,000 $5,795,000
The contracting officer made award to ALI based on its highest past
performance score and lowest price.
CTN argues that ALI's BAFO was unbalanced, and could not be accepted
for award, because its base year and first 2 option year prices were
substantially higher than the prices for the last 2 option years. CTN
maintains that ALI's BAFO will not result in the lowest price to the
government, "since demand for the toner cartridge models procured
under [this] RFP is likely to diminish over a five year period," as
Hewlett-Packard introduced a new "next generation" series of laser
printers which utilize different toner cartridges from those required
here.
Before an offer can be rejected as unbalanced, it must be found to be
both mathematically and materially unbalanced. An offer is
impermissibly mathematically unbalanced where it contains nominal
prices for some items and overstated prices for others. SIMSHIP
Corp., B-253655.2, Dec. 2, 1993, 93-2 CPD para. 293. A mathematically
unbalanced offer is considered materially unbalanced, and cannot be
accepted, where there is a reasonable doubt that acceptance of the
offer will result in the lowest overall cost to the government, or
where it is so grossly unbalanced that its acceptance would be
tantamount to allowing an advance payment, even if the offer
represents the lowest cost to the government. Star Brite Constr. Co.,
Inc., B-244122, Aug. 20, 1991, 91-2 CPD para. 173.
It does not appear that ALI's BAFO was mathematically unbalanced. A
mathematically unbalanced offer must contain both nominal prices and
overstated prices. Although ALI's last 2 option year prices were
lower than CTN's and lower than ALI's own prices for the base year and
first 2 option years, there is no evidence of overstated prices in the
earlier contract years--ALI's base and first 2 option year prices
($57.90, $48.90, and $40.90, respectively) were very similar to CTN's
($53.90, $48.90, and $43.00, respectively). Accordingly, we cannot
say that ALI's offer is mathematically unbalanced, and therefore there
is no basis to find it materially unbalanced.[1]
The protest is denied.
Comptroller General
of the United States
1. Moreover, the agency reports that CTN's assumption that more
cartridges will be ordered in the early contract years is based on a
faulty premise, i.e., that the printers which use these cartridges
likely will be replaced with new generation printers during the life
of the contract. The agency states that, in fact, it currently has no
plans to do so; indeed, the agency reports that, given the cutbacks in
government spending, it is unlikely DSCR will switch to this new
printer during the next 5 years.