BNUMBER:  B-272830
DATE:  September 25, 1996
TITLE:  Gulf Copper Ship Repair, Inc.

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Matter of:Gulf Copper Ship Repair, Inc.

File:     B-272830

Date:September 25, 1996

William A. Scott, Esq., Martin Law Firm, for the protester.
Keith L. Baker, Esq., Jeffrey E. Weinstein, Esq., and Timi E. 
Nickerson, Esq., Eckert Seamans Cherin & Mellott, for South Texas Ship 
Repair, Inc., an intervenor.
Rhonda L. Russ, Esq., Department of the Navy, for the agency.
Paula A. Williams, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Award of a contract for less than the actual quantity of work 
initially solicited was proper where the solicitation specifically 
informed offerors that the agency may award a contract for any item or 
group items listed in the solicitation unless an 
offeror qualified the acceptance terms of its offer, which was not the 
case here.

DECISION

Gulf Copper Ship Repair, Inc. protests the award of a contract to 
South Texas Ship Repair, Inc., under request for proposals (RFP) No. 
N68958-96-R-0027, issued by 
the Resident Supervisor of Shipbuilding, Conversion and Repair, 
Department of 
the Navy for the post shakedown availability (PSA) of the USS ORIOLE 
(MHC 55).[1]  Gulf Copper contends that award to South Texas based on 
initial proposals was improper because the Navy should have requested 
revised proposals after it deleted one of three production sub-line 
items from the solicitation following receipt of initial offers but 
prior to award.

We deny the protest.

The RFP, issued on June 17, 1996, and amended six times, contemplated 
award of a fixed-price PSA contract to the lowest-priced, technically 
acceptable, responsible offeror.  No evaluation factors other than 
price were identified in the RFP for the evaluation of proposals.  
Offerors were required to propose unit prices for three contract line 
items (CLIN) covering the work to be performed under the contract.  Of 
significance to this protest is CLIN 0001, which was divided into 
three sub-CLINs to reflect different funding sources and funding 
limits; in addition, each sub-CLIN corresponded to different work 
items and types of effort.[2]  Each sub-CLIN was to be separately 
priced, and the sum of the prices for the sub-CLINs would constitute 
the offeror's total price for CLIN 0001.   

The RFP included provisions of Federal Acquisition Regulation (FAR)  sec.  
52.215-16, Alternate II, informing offerors that the agency intended 
to evaluate proposals and award a contract without discussions; each 
offeror therefore was cautioned to ensure that its initial offer 
contained the offeror's best terms from a cost or price and technical 
standpoint.  The RFP clause also advised that "[t]he Government may 
accept any item or group of items of an offer, unless the offeror 
qualifies the offer 
. . . [t]he Government reserves the right to make an award on any item 
for a quantity less than the quantity offered, at the unit cost or 
prices offered, unless the offeror specifies otherwise in the offer."

Three proposals were received by the July 15 closing date, of which 
only the awardee's and the protester's are relevant and therefore 
discussed here.  As set forth below, South Texas submitted the low 
overall price for CLIN 0001.

  OFFEROR      0001AA       0001AB       0001AC       TOTAL

South Texas  $764,508     $309,003        $99,473   $1,172,984

Gulf Copper  $778,404     $304,468      $107,939    $1,190,811
After reviewing the initial proposals, the contracting officer 
determined that the proposed prices for sub-CLIN 0001AC exceeded the 
budgeted funding by more than 100 percent.  Since additional funding 
for this sub-CLIN was not available, the funding authority directed 
the contracting officer to delete sub-CLIN 0001AC from the PSA 
package.  The contracting officer issued amendment 0006 on July 16 to 
delete sub-CLIN 0001AC from the solicitation, and correspondingly 
deleted the unit price for that sub-CLIN from each offeror's total 
price.  In doing so, the competitive standing of the offerors remained 
the same.  Consistent with FAR  sec.  52.215-16, Alternate II, discussions 
were not conducted nor were revised proposals requested from any 
offeror.  The contract was awarded to South Texas, the lowest-priced, 
responsible offeror, on July 17.  Upon learning of the award to South 
Texas and the awardee's prices, Gulf Copper filed this protest with 
our Office.  Performance of the contract has been suspended pending 
resolution of this protest.

Gulf Copper challenges the agency's determination to make award on the 
basis of initial proposals, arguing that deletion of sub-CLIN 0001AC 
was a significant and  material change to the solicitation 
requirements, which affected the offerors' proposed prices, and that 
discussions were in the government's best interest and should have 
been held.  The protester contends that given the opportunity to   
submit a best and final offer (BAFO) it would have offered a reduced 
price for the remaining work.  
  
We conclude that the award was proper.  The RFP expressly advised 
offerors that the government could make an award for "a quantity less 
than the quantity offered" provided the offeror did not qualify its 
proposal in that regard, and further warned that offerors should 
submit their best terms from a cost or price standpoint.  Thus, firms 
were on notice to submit their best prices.  This clause permitted the 
agency to make an award without regard to the materiality of the items 
deleted.  See E. W. Bliss Co., 73 Comp. Gen. 134 (1994), 94-1 CPD  para.  
280, in which we upheld a partial award of a small portion of the line 
items, 6 of 54 line items, under identical award language.  Here, in 
accordance with this RFP provision, the Navy properly awarded those 
CLINs for which funding was available to South Texas as the low 
offeror for the CLINs since the awardee had not qualified acceptance 
of its offer.  Given that the RFP placed Gulf Copper on notice that a 
partial award could be made on the basis of initial proposals and that 
it should submit its best prices initially, Gulf Copper cannot now in 
effect complain that it was prejudiced by its own failure to heed 
these warnings.  See Essex Electro Eng'rs, Inc., B-238207; B-238207.2, 
May 1, 1990, 90-1 CPD  para.  438.

The protest is denied.

Comptroller General
of the United States

1. Typically, a PSA is performed after the delivery of a newly built, 
activated or converted ship.  The work includes correction of defects 
noted during the ship's guaranty period, correction of deficiencies 
remaining from the acceptance trials, and performance of class 
modifications that were not undertaken during the ship's construction.

2. For example, the statement of work for sub-CLIN 0001AA listed 45 
work items for work deferred from the ship's initial construction 
period.  Sub-CLIN 0001AB contained 37 work items to correct various 
ship deficiencies that were identified during the ship's acceptance 
trials; sub-CLIN 0001AC consisted of only 1 work item, the 
installation of a plastic waste storage compartment on board the ship.