BNUMBER:  B-276755 
DATE:  July 24, 1997
TITLE: MAC's General Contractor, B-276755, July 24, 1997
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Matter of:MAC's General Contractor

File:     B-276755

Date:July 24, 1997

McKinley Darden for the protester.
Diane D. Hayden, Esq., George N. Brezna, Esq., Christopher Bellomy, 
Esq., and Marilyn W. Johnson, Esq., Department of the Navy, for the 
agency.
C. Douglas McArthur, Esq., and Christine S. Melody, Esq., Office of 
the General Counsel, GAO, participated in the preparation of the 
decision.

DIGEST

Agency conducting evaluation of past performance could properly 
consider prior termination of the protester's contract for default, 
notwithstanding protester's appeal of Armed Services Board of Contract 
Appeals decision upholding the default,  since agency may rely on its 
reasonable perception of inadequate past performance even where the 
contractor disputes the agency's position.

DECISION

MAC's General Contractor protests the issuance of an order to Intra 
Systems, Inc. dba Historic Holdings, under request for quotations 
(RFQ) No. N62467-97-Q-7255, issued by the Naval Facilities Engineering 
Command for interior renovations and painting.  MAC's primarily 
contends that the agency should not have considered its termination 
for default under a prior contract as a basis for selecting another, 
higher-priced offeror for award.

We deny the protest.

On February 12, 1997, the agency issued the solicitation as a 
set-aside for emerging small businesses, calling for issuance of a 
firm, fixed-price order for all material, equipment, labor, tools, 
transportation, and management necessary to accomplish interior 
renovations and painting at seven units located within the Texas 
Terrace family housing complex at the Naval Air Station (NAS) in 
Kingsville, Texas.  The solicitation contained a cover page, in 
capital letters and boldface type, advising vendors that the agency 
would conduct the procurement in accordance with the simplified 
acquisition procedures of Federal Acquisition Regulation (FAR) Part 
13.  Specifically, the solicitation cover page, as well as the first 
page of the solicitation, advised vendors of the agency's intention to 
issue an order to the vendor providing the best value to the 
government, based upon price and past performance.  Similarly, both 
pages advised vendors that there would be no public opening of 
quotations.

The agency received nine quotations; MAC's quoted the lowest price.  
With respect to past performance, the contracting officer noted that a 
prior contract awarded to MAC's for janitorial services at Kingsville 
NAS had been terminated for default.  The contracting officer also 
noted that on two prior procurements, MAC's asked and was allowed to 
withdraw its low quotations based on its misreading of the 
specifications.  Taking past performance into account, the contracting 
officer determined that the third lowest quotation, from Intra 
Systems, represented the best value to the government.  On April 1, 
the contracting officer issued an order to Intra Systems, and this 
protest followed.

MAC's argues that the award was contrary to FAR  sec.  14.101, which 
allegedly requires agencies to consider only price and price-related 
factors in selecting contractors.  In this regard, the protester 
contends, the simplified acquisition procedures of FAR Part 13, at 
least as followed in this procurement, contemplate a sealed bidding 
process requiring award based solely on price and price-related 
factors.

The sealed bidding process is characterized by competitive bids (all 
firms base their prices on the same requirements and level of 
services), public opening of bids, and selection of a contractor based 
solely on price and price-related factors (although the firm selected 
must be found responsible before award can be made).  FAR  sec.  14.101.  
As distinguished from the rigid rules applicable to sealed bidding, 
the simplified acquisition procedures encourage "innovative 
approaches," FAR  sec.  13.103(j), and emphasize efficiency and economy in 
adapting the procedures most suitable for each individual procurement.  
FAR  sec.  13.104(a).  As noted above, the solicitation here specifically 
advised vendors that there would be no public bid opening and no 
exposure of prices and that the agency would consider a factor--past 
performance--other than price in its selection decision.  On its face, 
therefore, the solicitation in this case is clearly not an invitation 
to submit a sealed bid.[1]

MAC's submitted the lowest quotation for the work, and it is 
uncontested that the principal reason for the agency's selection of a 
higher-priced vendor was the protester's poor performance record at 
Kingsville--primarily the termination for default of the janitorial 
contract.  The protester contends that it is improper to consider the 
termination of its janitorial contract given that it has an appeal of 
the action pending in the United States Court of Appeals for the 
Federal Circuit.  

Since the relative merit of competing proposals (or quotations, as in 
this case) is primarily a matter of agency discretion, we will review 
an evaluation of an offeror's past performance solely to ensure that 
it was reasonable and consistent with the evaluation criteria.  Dragon 
Servs., Inc., B-255354, Feb. 25, 1994, 94-1 CPD  para.  151 at 6.  Here, the 
record shows no basis to conclude that the contracting officer's 
evaluation was improper.

MAC's received a combination fixed-price, indefinite quantity contract 
for janitorial services at Kingsville NAS in 1995.  Four months after 
award, the protester demanded that the agency pay it for estimated 
quantities of indefinite quantity work stated in the solicitation, 
whether the work was ordered or not.  When the agency refused, MAC's 
abandoned performance; the agency then terminated the contract for 
default.  MAC's appealed its default termination to the Armed Services 
Board of Contract Appeals (ASBCA), which denied the appeal as without 
merit.  Mac's Cleaning and Repair Serv., ASBCA No. 49652, 97-1 BCA  para.  
28,748.  MAC's states that it has appealed the ASBCA's decision to the 
United States Court of Appeals for the Federal Circuit.

The termination for default clearly provides a reasonable basis for 
the contracting officer's concerns about the firm's past performance.  
See JCI Envtl. Servs.,           B-250752.3, Apr. 7, 1993, 93-1 CPD  para.  
299 at 7.  The fact that MAC's may be appealing the ASBCA decision 
upholding the termination does not mean that it was unreasonable for 
the agency to rely on the termination as evidence of the firm's past 
performance; we review not whether the contracting officer's 
determination ultimately proves correct, but only whether it was 
reasonable at the time it is made.  JCI Envtl. Servs., supra; see also 
MCI Constructors, Inc., B-240655, Nov. 27, 1990, 90-2 CPD  para.  431 at 4; 
S.A.F.E. Export Corp., B-208744, Apr. 22, 1983, 83-1 CPD  para.  437 at 2-3, 
aff'd, S.A.F.E. Export Corp.--Recon., B-208744.2, July 14, 1983, 83-2 
CPD  para.  90.  In this regard, an agency's evaluation of past performance 
may be based on its reasonable perception of inadequate prior 
performance even where, as here, the contractor disagrees with the 
agency's position.  Cessna Aircraft Co., B-261953.5, Feb. 5, 1996, 
96-1 CPD  para.  132 at 17; Pannesma Co. Ltd., B-251688, Apr. 19, 1993, 93-1 
CPD  para.  333 at 6.  In any event, MAC's suggests no reason why the 
termination was improper or why it might be successful in its appeal 
from the ASBCA decision, and none appears in the record.[2]

While the termination for default was the primary basis for the 
contracting officer's evaluation of the protester's past performance, 
the contracting officer also noted that, in connection with two prior 
procurements, MAC's submitted quotations which did not reflect the 
scope of work solicited and which were withdrawn only after the agency 
provided oral explanations of the statement of work to the protester.  
MAC's argues that since quotations do not constitute offers that the 
government can accept to create a contract, FAR  sec.  13.108 and 
15.402(e), MAC's had no obligation to stand behind its quotations, and 
that the agency therefore cannot consider the protester's withdrawal 
of the two quotations.  Regardless of the nature of the legal 
obligation arising from submission of a quotation, we think the agency 
reasonably could view the withdrawal of the two quotations for the 
reasons given by MAC's as evidence, at a minimum, of a lack of care by 
MAC's in its prior contracting efforts.

In its comments on the report submitted by the agency in response to 
the protest, MAC's raised two additional issues, alleging that the 
government estimate was unreasonable and that minority contractors are 
not receiving a fair share of awards at Kingsville NAS.  These issues 
are untimely.  Our Bid Protest Regulations, 4 C.F.R.  sec.  21.2(a)(2), 
require that protests, other than those alleging an impropriety in the 
solicitation, must be filed with our Office, or with the agency, no 
later than 10 days after the basis of protest is known or should have 
been known.[3]

The protest is denied.

Comptroller General
of the United States

1. To the extent that the protester contends that the RFQ's format, 
evaluation plan, and selection scheme were improper or ambiguous, its 
protest is untimely.  Under our Bid Protest Regulations, 4 C.F.R.  sec.  
21.2(a)(1) (1997), protests based upon alleged improprieties in a 
solicitation which are apparent prior to bid opening or the time set 
for receipt of initial proposals shall be filed prior to bid opening 
or the time set for receipt of initial proposals.  Thus, MAC's should 
have raised its objections to the solicitation, if any, prior to March 
11, rather than waiting, over a month, until the agency had selected 
another vendor based on the terms of the solicitation issued.

2. MAC's asserts generally that its performance under the contract was 
outstanding before the termination for default.  Although the 
protester's assertion, even if correct, would not make unreasonable 
the contracting officer's reliance on the termination for default as 
an indication of poor past performance, we note that the record in 
fact shows that there were performance problems before MAC's stopped 
work and the contract was terminated.

3. In any event, MAC's provides no support for its allegation 
regarding awards to minority contractors; in contrast, the Navy points 
to 34 contracts that NAS Kingsville has with small disadvantaged 
businesses, along with six section 8(a) contracts, and three 
contracts, including the protester's defaulted janitorial contract, 
currently being performed by minority contractors.  Similarly, with 
respect to the government estimate, the protester provides no support 
for its assertion, and in fact did not respond to our request for a 
breakdown of its own quotation ($24,900, considerably lower than the 
government estimate of $87,500), in support of this allegation.  
Moreover, it is not clear how MAC's would be prejudiced, since its 
quotation was rejected based on its poor performance, not because its 
price was considered too low.