BNUMBER: B-274317
DATE: December 2, 1996
TITLE: Hentzen Coatings, Inc.
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Matter of:Hentzen Coatings, Inc.
File: B-274317
Date:December 2, 1996
William E. Hughes III, Esq., Whyte, Hirschboeck, Dudek, for the
protester.
M. Sherman Drew, Jr., Niles Chemical Paint Co., Inc., an intervenor.
Emily Hewitt, Esq., and Elizabeth L. Kruger, Esq., General Services
Administration, for the agency.
Peter A. Iannicelli, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Award of a contract to the offeror of the higher-priced proposal was
proper where: (1) the request for proposals indicated that proposals
would be evaluated on two factors--delivery and price--and that
delivery was more important than price; and (2) the contracting
officer reasonably determined that it was worth spending additional
money to obtain the entire quantity of urgently required camouflage
coating kits faster under the awardee's accelerated delivery schedule.
DECISION
Hentzen Coatings, Inc. protests the General Services Administration's
(GSA) award of a contract for waterborne polyurethane camouflage
coating kits to Niles Chemical Paint Co. pursuant to request for
proposals (RFP) No. TFTP-96-DS-2000.[1] The protester contends that a
proper evaluation of proposals would have resulted in award of the
contract to Hentzen on the basis of its lowest-priced proposal.
We deny the protest.
Issued on July 12, 1996, the RFP solicited offers for supplying 16,400
waterborne polyurethane camouflage kits.[2] Each kit consists of two
separate components that are mixed together and then painted on
various types of Marine tactical equipment, including troop carriers
and other vehicles, artillery, and support equipment. The waterborne
polyurethane mixture is used as a finish coat on military equipment
because it provides a surface that is easily and effectively
decontaminated after exposure to liquid chemical agents. The
waterborne polyurethane coating specification is a new specification
intended to replace the solvent borne chemical agent resistant coating
that had previously been used to coat Marine Corps equipment; the old
solvent can no longer be used due to environmental regulations. The
RFP stated that offers would be evaluated on the basis of two
factors--time of delivery and price--and advised that the agency might
award a contract on the basis of initial offers.
After evaluating the four proposals received, the contracting officer
decided to make award on the basis of initial proposals. Hentzen's
total offered price of $464,719 was the lowest; Niles's total offered
price of $569,228 was second-lowest.[3] Niles proposed to deliver the
entire requirement (i.e., all 16,400 camouflage coating kits) just 35
days after receipt of order; Hentzen proposed a staggered delivery
schedule in which varying portions of the camouflage coating kit
requirement would be delivered at 22, 25, 27, 30, and 45 days after
receipt of order.[4]
The contracting officer determined that Niles's accelerated delivery
schedule was better than Hentzen's and that it was worth spending an
additional $104,509 to obtain faster delivery of the entire
requirement from Niles. Even though Hentzen proposed to deliver some
of the camouflage coating kits faster than Niles, the contracting
officer noted that Niles offered to complete delivery of all required
kits to the Georgia base 13 days faster than Hentzen and to the
California base 10 days faster than Hentzen. The contracting officer
also noted that Niles's price for delivery to the Georgia base was
only about 22 percent more than Hentzen's price and that Niles's price
for delivery to the California base was only about 23 percent more
than Hentzen's. The contracting officer determined that Niles's
prices were reasonable because they were within the price objectives
previously established by the agency (i.e., Niles's prices were close
to the low end of the price range the agency had established by means
of an informal market survey for negotiating purposes) and because the
contracting officer believed that Niles's higher prices were justified
since Niles would have to incur additional effort and expense to meet
its accelerated delivery schedule. Therefore, on August 7, the
contracting officer awarded the contract to Niles.
Hentzen contends that it should have been awarded the contract because
it offered to deliver substantial quantities of the camouflage coating
kits before Niles's earliest proposed deliveries, because it proposed
to deliver all of the camouflage coating kits in less than the 60 days
required under the RFP, and because its total proposed price was
$104,509 less than Niles's total proposed price. Thus, Hentzen
asserts that its proposal was superior to Niles's proposal regarding
both delivery and price.
The evaluation of proposals is primarily within the discretion of the
procuring agency, not our Office; the agency is responsible for
defining its needs and the best means of accommodating them and must
bear the consequences of a defective evaluation. HospitalKlean, Inc.,
B-245158 et al., Dec. 17, 1991, 91-2 CPD para. 550; PW Constr., Inc.,
B-272248; B-272248.2, Sept. 13, 1996, 96-2 CPD para. 130. Consequently,
our Office will question an agency's evaluation of proposals only if
the evaluation lacks a reasonable basis or is inconsistent with the
RFP's evaluation criteria. SRS Technologies, B-270341.2, Mar. 1,
1996, 96-1 CPD para. 120. A protester's mere disagreement with the agency
does not establish that the evaluation was unreasonable. Id.
The RFP stated that there was an urgent and compelling requirement for
all 16,400 waterborne polyurethane camouflage coating kits and that:
"Delivery is required within 60* calendar days after receipt of
order. *If you are able to offer less, please indicate:
(See method of award below)." [Emphasis in original.]
The RFP also stated that delivery schedule and price were the only
significant evaluation factors for award and specified that delivery
schedule was considered more important than price. Thus, reading the
RFP as a whole, it was clear that, even though GSA was willing to
accept delivery as late as 60 days after an order was placed if
necessary, proposals offering accelerated delivery schedules could be
more favorably evaluated than lower-cost proposals offering only the
60-day required delivery schedule.
In view of the Marine Corps's urgent need for the camouflage kits and
the RFP's emphasis on the importance of accelerated delivery over
price, we cannot find unreasonable the contracting officer's decision
to award the contract to Niles. The agency's statement of unusual and
compelling urgency justifying procuring on the basis of limited
competition specifically states that the Marine Corps has decided that
it will no longer use solvent borne chemical agent resistant coating
on its equipment in order to comply with environmental regulations.
The justification statement also specifies that neither the Marine
Corps nor GSA had any waterborne polyurethane camouflage coating
materials--the replacement for the solvent based camouflage coating
material--in stock. Thus, the justification states that the Marine
Corps had "an extremely urgent need" to obtain 16,400 waterborne
polyurethane camouflage coating kits immediately for use on its
tactical equipment until GSA could set up a mechanism to procure large
quantities of the material for use in the long term.
Furthermore, the record shows that the new coating material is
critical to the Marine Corps's mission. According to the Marines:
"[A] failure to paint the equipment precludes their use and thus
renders the equipment unavailable. This is causing a severe
negative impact to mission readiness and is essentially
preventing the use of millions of dollars worth of equipment.
The equipment must be coated to allow them to be available in the
event of a national emergency. Use of the equipment without
proper coatings could lead to premature corrosion of equipment,
reduced performance of equipment, and a detriment to the safety
of human life, possibly resulting in death."
The record also shows that at about the time the RFP was issued, the
contracting officer had several telephone conversations with personnel
at the Naval Surface Warfare Center; the gist of the conversations was
that due to tension in Bosnia and a recent bombing in Saudi Arabia, it
was critical that tactical equipment be coated and ready for
deployment.
In short, in these circumstances, the contracting officer could
reasonably decide that it was worth spending an extra $104,509 to
obtain the entire urgently needed quantity 10 to 13 days faster from
Niles. See, e.g., Miltope Corp.; Aydin Corp., B-258554.4 et al., June
6, 1995, 95-1 CPD para. 285.
The protest is denied.
Comptroller General
of the United States
1. GSA has an agreement with the Department of Defense under which GSA
procures the coating material for use by the Marine Corps.
2. Citing the unusual and compelling urgency exception to the general
requirement for full and open competition, 41 U.S.C. sec. 253(c)(2), GSA
issued the RFP to four prospective offerors only.
3. All figures are rounded off to the nearest dollar.
4. The RFP contained six separate line items representing three
different colors of camouflage coating kits to be delivered to two
different Marine Corps logistics bases. Thus, line items 1a, 1b, and
1c, respectively, were for various quantities of red, black, and brown
camouflage kits to be delivered to the Marine Corps logistics base at
Albany, Georgia, and line items 2a, 2b, and 2c, respectively, were for
various quantities of red, black, and brown camouflage kits to be
delivered to the Marine Corps Logistics Base at Barstow, California.