BNUMBER: B-275798.3
DATE: July 9, 1997
TITLE: Custom Printing Company--Request for Costs, B-275798.3, July
9, 1997
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Matter of:Custom Printing Company--Request for Costs
File: B-275798.3
Date:July 9, 1997
Raymond Fioravanti, Esq., and Daniel B. Abrahams, Esq., Epstein Becker
& Green, P.C., for the protester.
Kerry L. Miller, Esq., Government Printing Office, for the agency.
Behn Miller, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protester's request to recover the costs of filing and pursuing its
protest challenging an agency's evaluation of bid prices is granted
where the agency failed to promptly or adequately investigate the
clearly meritorious protest allegations questioning the propriety of
the agency's calculations, and only took corrective action 3 weeks
before the decision due date.
DECISION
Custom Printing Company (CPC) requests that we recommend it recover
the costs of filing and pursuing its protest challenging the
evaluation of bid prices under invitation for bids (IFB) No. 1513-P,
issued by the Government Printing Office (GPO) for the production and
distribution of various Army publications.
We grant the request.
The IFB was issued on October 9, 1996, and contemplated the award of a
1-year contract to the responsible bidder submitting the
lowest-priced, responsive bid. The IFB advised bidders that GPO would
determine the lowest bid by applying the unit prices submitted in each
bidder's itemized pricing schedule to a corresponding list of
estimated production quantities set forth at page 18 of the IFB. The
solicitation also advised bidders that "[t]ransportation charges"--the
cost of shipping the publications from the contractor's production
facility to the designated delivery site--"are a factor in determining
award" and required bidders to "state the location of the plant from
which [the publications] will be shipped."
By the November 8 bid opening date, five bids were received. On
November 13, the contracting officer asked the agency's transportation
management section (TMS) to calculate the transportation charges to be
added to each bidder's total price. Using 50 delivery orders issued
under the predecessor contract for this requirement--which were
randomly selected by TMS--TMS provided the contracting officer with a
list of "estimated shipping charges" for each bidder. After adding
each bidder's estimated transportation charges to its bid, the
contracting officer determined that Braceland Brothers was the
apparent low bidder, and CPC was the second lowest-priced bidder.
Most of the publications required under this contract (approximately
90 percent) are to be delivered to St. Louis, Missouri. CPC's
production facility is located in Owensville, Missouri, and in its bid
CPC stated that "all shipments will be made to St. Louis at no
additional cost to the government." In contrast, Braceland Brothers's
bid did not offer any transportation rate discounts; moreover,
Braceland Brothers's bid stated that all shipments would be made from
an Atlanta, Georgia facility.
On November 20, after learning that GPO intended to award the contract
to Braceland Brothers, CPC--which was the incumbent for this
requirement--filed an agency-level protest with the contracting
officer. CPC contended that "[a] review of the print orders which we
have produced over the past two years indicates to us that Braceland
Brothers' freight assessment should be much larger than ours." CPC
also provided a detailed breakdown of its transportation charge
calculations and, relying on this breakdown, argued that the agency's
apparently different pricing evaluation results "seem[] to be skewed."
On November 27, in exchange for the contracting officer's promise that
the agency would reassess its evaluated transportation costs, CPC
withdrew its protest. The contracting officer then forwarded a copy
of CPC's withdrawn agency-level protest to TMS and asked for a
recalculation of the bidders' transportation costs. Using the
estimated quantities and destination sites set forth in 107 purchase
orders from the predecessor contract, TMS provided a second set of
"estimated shipping charges" for each bidder. After reviewing this
list, the contracting officer once again determined that Braceland
Brothers was the low bidder, and that CPC was the second lowest-priced
bidder. On December 11, the agency awarded the contract to Braceland
Brothers.
On December 6 and 11, CPC filed a second agency-level protest which
set forth a pricing "breakdown of the shipments on a per destination
basis" and requested additional details from the agency regarding its
pricing evaluation. In its protest, CPC asked to "find out exactly
how the [freight] rates were calculated for the shipments." On
December 19, CPC filed a protest at our Office which essentially
reiterated its agency-level protest grounds. CPC's protest stated
that "[d]espite CPC's best efforts, it has not been able to learn the
basis for the GPO's estimated shipping cost computations."
GPO submitted its report on the protest to our Office on January 21,
1997. In its report, GPO explained that TMS based its transportation
charge estimates on quantities and destinations set forth in 157
delivery orders issued under the predecessor contract, and further
maintained that the contracting officer was entitled to rely on the
TMS calculation.[1] The agency also stated:
"We believe the evaluation method used in the instant
solicitation was as realistic and accurate a method as possible.
[Citation omitted.] The [c]ontracting [o]fficer's analysis used
actual weights and destinations from 157 orders under the
contract the previous year. The TMS analysis also used actual
transportation costs derived from tariffs on file. If the
protester knows of another, more accurate method of estimating
transportation costs, it has yet to proffer it."
In its report, GPO also asserted that "Custom has presented no
evidence which would challenge either the method or result of the
[pricing] evaluation."
On February 3, CPC filed a supplemental protest based upon the
explanation set forth in the agency report. CPC contended that the
agency had deviated from the pricing evaluation scheme in the IFB by
using delivery orders issued under the predecessor contract instead of
the estimates set forth at page 18 of the IFB to calculate each
bidder's transportation costs.
On February 6, this Office held a telephone conference with the
parties and issued a written request for the agency to respond to
several questions. First, we asked GPO to explain the computation
used by TMS to calculate each bidder's transportation costs; although
GPO had explained the TMS methodology, no supporting analysis--for
example, the actual quantity estimates or delivery destination points
culled from the randomly selected delivery orders--was provided.
Additionally, our Office asked:
". . . if the current shipping charges are applied to the
estimates set forth in the current solicitation, is Braceland
still the low bidder? In this regard, why doesn't the GPO agree
with the protester's argument that the freight/shipping costs
should be calculated based on the current solicitation
estimates?"
On February 12, GPO responded with a supplemental agency report which
stated, in part:
"[i]t is impossible to take the estimates contained in the
current solicitation at page 18 and use them to directly estimate
freight costs. The estimates in the solicitation are stated in
the aggregate for a 12 month period. Actual shipments under
Program 1513-S are of much smaller quantities to many different
destinations. Therefore, using the past year's actual shipments
for weight and destinations, is the most accurate way to predict
the 1996-1997 weights and destinations for purposes of estimating
transportation costs."
On February 14, CPC filed its comments on GPO's supplemental report.
CPC reiterated its position that the agency's pricing evaluation
deviated from the evaluation scheme set forth in the IFB--which
required the agency to evaluate each bidder's proposed pricing using
the estimates set forth at page 18 of the IFB. On February 19, this
Office advised the parties that we required a hearing to address this
issue. On February 25, the eve of the scheduled hearing, GPO advised
that it was contemplating corrective action and that it was
reevaluating CPC's and Braceland Brothers's pricing. On March 13, a
little more than 2 weeks before the statutory due date (March 31) for
a decision on the protest, GPO terminated Braceland Brothers's
contract and made award to CPC. That same day, CPC filed this request
for reimbursement of its protest costs.
When an agency takes corrective action prior to our issuing a decision
on the merits, we may recommend that the protester recover the
reasonable costs of filing and pursing the protest. Bid Protest
Regulations, 4 C.F.R. sec. 21.8(e) (1997). We will make such a
recommendation where, based on the circumstances of the case, we
determine that the agency unduly delayed taking corrective action in
the face of a clearly meritorious protest. Holiday
Inn-Laurel--Protest and Request for Costs, B-270860.3; B-270860.4, May
30, 1996, 96-1 CPD para. 259 at 4.
In this case, GPO does not dispute that its corrective action was
taken in response to CPC's meritorious protest. Instead, GPO argues
that its corrective action was not unduly delayed because "it was not
until the filing of the protester's comments on the agency report that
the protester first clearly articulated its position." GPO also
asserts that the contracting officer's decision to "reconsider his
position" was not unduly delayed because the protest "was not a simple
matter, as it involved reviewing 157 prior [delivery] orders, each
with multiple delivery destinations and bills of lading."
In considering a protester's request for reimbursement of its protest
fees and costs by the contracting agency, the determinative question
for this Office is whether the agency's corrective action was prompt
under the circumstances. Ostrom Painting & Sandblasting,
Inc.--Entitlement to Costs, 72 Comp. Gen. 207, 210 (1993), 93-1 CPD para.
390 at 4. In this case, we conclude that GPO unduly delayed taking
corrective action.
CPC's December 19 protest to this Office clearly called into question
"the basis for the GPO's estimated shipping cost computations." CPC's
February 6 supplemental protest--filed after it received the first
detailed explanation of the evaluation method used, set out in the
agency report on the initial protest--clearly challenged the agency's
reliance on orders from the predecessor contract rather than the
estimates in the IFB. Similarly, the questions to the agency issued
by our Office raised this issue. In fact, the excerpts from the
initial and supplemental agency reports, quoted above, themselves
indicate that the agency was aware that the protester was challenging
its decision to calculate transportation costs based on actual orders
under the prior contract rather than on the IFB estimates. Thus,
contrary to the agency's assertion that it was unable to ascertain any
basis for corrective action until after it received CPC's comments on
the agency report on the supplemental protest, the record clearly
shows that the issue which prompted the agency's corrective action was
squarely presented early in the protest process.[2]
GPO also asserts that the complexity of reviewing the 157 delivery
orders from which the agency's evaluation results were initially
derived prevented a more prompt response. We find this argument
unpersuasive since it was not the detailed calculations derived from
the agency's methodology but the methodology itself--that is, using
orders under the prior contract instead of the IFB estimates--that was
inconsistent with the IFB and thus was the source of the impropriety
on which the corrective action was based.
In sum, we conclude that by waiting until March 13--almost 1 month
after receiving CPC's February 14 comments on the agency's
supplemental report--the agency unduly delayed taking corrective
action. Accordingly, we recommend that CPC recover the costs of
filing and pursuing the protest, including reasonable attorneys' fees.
CPC should submit its claim for costs, detailing and certifying the
time expended and costs incurred, directly to the agency within 60
days of receipt of this decision. 4 C.F.R. sec. 21.8(f)(1).
The request is granted.
Comptroller General
of the United States
1. The protester received its copy of the agency report on January 23,
and at that time first learned how TMS calculated the challenged
transportation charge estimates.
2. As noted above, CPC first raised its concerns about the
transportation charge calculations in its November 19 agency-level
protest. While the fact that an issue is brought to the agency's
attention before the protest is filed at our Office is not dispositive
of the promptness of subsequent corrective action, we think the
agency's apparent failure to confirm in response to a detailed
agency-level protest that it had followed the solicitation's
evaluation scheme supports our conclusion that the agency did not act
promptly here. See Griner's-A-One Pipeline Servs., Inc.--Entitlement
to Costs, B-255078.3, July 22, 1994, 94-2 CPD para. 41 at 6, n. 3.