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.