BNUMBER:  B-278521 
DATE:  February 9, 1998
TITLE: Braswell Services Group, Inc., B-278521, February 9, 1998
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Matter of:               Braswell Services Group, Inc.

File:       B-278521

Date:       February 9, 1998

William A. Scott, Esq., Pedersen & Scott, for the protester.
Sharon Hershkowitz, Esq., Naval Sea Systems Command, for the agency.
Sylvia Schatz, Esq., and John M. Melody, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest that solicitation for ship repair services is defective for 
failing to specify the  location of required work and interferences 
that must be moved in order to perform the work, and that offers 
therefore cannot be prepared intelligently and on an equal basis, is 
denied where (1) nature of emergent repairs and variable nature of 
shipboard conditions make it impossible to specify location of repairs 
in advance; (2) agency provided offerors with ship plans, drawings, 
manuals, and provided 1-1/2 months for a shipboard inspection; and (3) 
alternative of structuring contract to include "pool" of hours to 
cover unanticipated work which may be necessary to perform the 
required work would shift all risk of increased cost during contract 
performance to agency; agency is permitted, instead, to structure 
solicitation to require offerors to develop prices taking 
contingencies into account. 

DECISION

Braswell Services Group, Inc. protests the terms of Department of the 
Navy's request for proposals (RFP) No. N62670-97-R-0007, for ship 
repair work of an emergent, time-critical nature on FFG-7 (frigate) 
class vessels homeported at the Mayport Naval Station in Jacksonville, 
Florida. 

We deny the protest.

The RFP contemplates the award of a fixed-price, indefinite delivery, 
indefinite quantity (IDIQ) contract for a base year, with four 1-year 
options, to the responsive, responsible offeror with the lowest 
evaluated price for the base and option years.  The RFP's pricing 
schedule contains numerous contract line item numbers (CLIN) and 
subline item numbers (subCLIN) that require submission of unit and 
extended prices.  An enclosure to the RFP set forth the exact work 
required under each subCLIN and stated that the location and quantity 
of the work would be identified after award, as per delivery order.  
The schedule provides further as follows:

     The determination of the type, nature, and extent of any 
     interference[1] removal required to be accomplished in order to 
     complete work required by each individual CLIN or SUBCLIN, shall 
     be the responsibility of the contractor.  Accordingly, the 
     contractor shall price any anticipated interference 
     removal/reinstallation costs in CLIN pricing.

Braswell protested to the agency 2 days prior to the closing date, 
arguing that the RFP is defective because it fails to identify the 
amount and shipboard location of required work under six CLINs.[2]  
The agency proceeded with the closing.  Four proposals were received, 
with prices for the base year ranging from $2,998,190 to $9,183,268.  
Braswell submitted a proposal without pricing the anticipated removal 
and reinstallation costs of the interferences in the CLIN pricing.  
The agency subsequently denied Braswell's agency-level protest, and 
Braswell then filed this protest with our Office.

Braswell argues that, without more information as to the location of 
the work under the six CLINs (which comprise more than 35 percent of 
the required work), offerors will be unable to determine what 
interferences will be involved in repairs, and thus will not be able 
to prepare their prices intelligently and on an equal basis.  In this 
regard, it is undisputed in the record that the cost of certain 
otherwise relatively inexpensive repairs may become very expensive 
depending on the interferences and the exact location on the ship.  
For example, work located in areas that are difficult to reach--behind 
a bulkhead, in a tank, in the bilge, or under the main engine--is more 
expensive than work located in open spaces.  Braswell asserts that the 
RFP, by leaving offerors to develop average prices covering all 
eventualities, exposes the contractor to unwarranted risk, and will 
result in inflated prices for all of the work.  Braswell maintains 
that this unacceptable level of risk is reflected in the wide 
disparity in base year prices received (from $2,998,190 to 
$9,183,268).  Braswell suggests that the Navy eliminate the problem by 
listing the removal and reinstallation of interferences as a separate 
RFP work item and including an additional government requirement (AGR) 
clause, which would allow the agency to pay  the contractor separately 
for removal of interferences, in addition to its proposed fixed price 
for a repair.[3]

The Navy responds that the variable nature of shipboard conditions 
associated with emergent repairs makes the location of repair or 
replacement work for these CLINs impossible to establish in the RFP; 
needed pipe repairs, for example, could occur anywhere on the ship 
where pipes are located.  The Navy maintains that the resulting 
contractor risk is mitigated to the extent possible by the information 
made available to offerors in the RFP and the opportunity for an 
extended ship inspection prior to the closing time.  It is the Navy's 
position that the remaining risk can be factored into offerors' prices 
based on offerors' experience and business judgment.

A procuring agency must provide sufficient information in a 
solicitation to enable offerors to compete intelligently and on a 
relatively equal basis.  State Management Servs., Inc., B-251715, May 
3, 1993, 93-1 CPD  para.  355 at 5.  However, there is no legal requirement 
that competition be based on plans and specifications which state the 
work in such detail as to completely eliminate all risk or remove 
uncertainty from the mind of every prospective offeror.  Braswell 
Servs. Group, Inc., supra, at 2-3.  It is within an agency's 
discretion to solicit a proposed contract imposing maximum risk upon 
the contractor and minimum administrative burdens upon the agency.  
Jewett-Cameron Lumber Corp., et al., B-229582 et al., Mar. 15, 1988, 
88-1 CPD  para.  265 at 5.   

The RFP meets this standard.  While the protester is correct that the 
RFP imposes significant risk on the contractor by virtue of the need 
to formulate average prices for the CLINs in question, this fact alone 
does not render the RFP defective.  The RFP advises offerors of the 
availability of ship and equipment plans, drawings,  manuals, and 
provides a substantial amount of time for offerors to inspect the type 
of vessel covered by the requirement (the agency reports that Braswell 
apparently did not avail itself of the inspection opportunity).  In 
this regard, bids for service contracts, by their nature, often 
require the computation of prices based on visual inspection.  Mark 
Dunning Indus., Inc., B-243757, Aug. 22, 1991, 91-2 CPD  para.  187 at 3.  
There is no indication that the agency possesses any significant 
additional information that it has not made available.[4]  Moreover, 
the risk to the contractor is mitigated to some extent by the 
exclusion (in standard item 009-23) of certain system components from 
the definition of interferences for which the contractor is 
responsible.  We conclude that the available information and 
inspection opportunity provides offerors with sufficient information 
to prepare their offers intelligently, without undue risk, by using 
estimating techniques to develop average prices for the CLINs in 
question; that is, if a pipe repair will be significantly more 
expensive in one area than in another, offerors should factor these 
and other relevant considerations--including how much risk the offeror 
is willing to accept--into their item price.  (We note that this 
solicitation approach is not uncommon where details surrounding a task 
are unpredictable and will be unknown prior to actual performance.  
See, e.g., id., at 3-4.) 

Much of Braswell's protest is aimed at compelling the Navy to include 
an AGR clause in the RFP to alleviate offeror risk.  The Navy has 
considered and rejected this approach because, while such a clause 
indeed would reduce or eliminate the contractor's risk under the CLINs 
in question, it would do so by shifting all risk to the government; 
instead of the contractor being required to perform a repair at a 
fixed price, the Navy essentially would pay the contractor its 
additional labor and material costs for removal and reinstallation of 
interferences.  The Navy also notes that an AGR clause would entail a 
substantial administrative burden--the Navy would have to scope, 
negotiate, and write change orders for interferences on each recurring 
shipboard repair--and that when it used an AGR clause in prior ship 
repair contracts, prices for the additional work often greatly 
exceeded the government's estimates, since the clause encouraged 
contractors to "buy in" on the basic repair work and later attempt to 
"get well" through change order pricing.  See A&E Indus., Inc. et al., 
66 Comp. Gen. 523, 525 (1987), 87-1 CPD  para.  616 at 3-4.[5]  The agency's 
concerns are reasonable, and requiring offerors to include pricing for 
interferences in their proposals, on a competitive basis, clearly 
alleviates these concerns.  In any case, again, under the 
circumstances here, there simply is no requirement that an agency 
structure a solicitation to impose risk on the government instead of 
on the contractor.  See Sunrise Int'l Group, Inc., B-261448, July 21, 
1995, 95-2 CPD  para.  43 at 4.[6]
 
The protest is denied.

The Comptroller General
of the United States

1. Standard Item No. 009-23 (incorporated by reference in the RFP) 
defined an interference as "any part of a ship, whether installed or 
portable, that must be moved or disturbed in the accomplishment of 
work specified in the Job Order."

2. The CLINs at issue cover tank plating repairs, tank weld joint 
repairs, bulkhead and deck penetration replacement, and ferrous and 
non-ferrous piping replacement.

3. In its comments on the agency report, Braswell specifically asserts 
that the agency was required to include in the RFP historical 
information concerning the required work.  This alleged RFP deficiency 
is untimely asserted, however, since Braswell did not raise it prior 
to the closing date.  Bid Protest Regulations, 4 C.F.R.  sec.  21.2(a)(1) 
(1997); Braswell Servs. Group, Inc., B-276694, July 15, 1997, 97-2 CPD  para.  
18 at 6-7.  Braswell also argues the RFP deviates from the policies 
and procedures in the Navy's operating manual.  Those internal agency 
guidelines were not a part of the solicitation and do not have the 
force and effect of law.  The alleged failure to comply with them 
therefore is a matter for consideration within the agency itself, 
rather than through the bid protest process.  See Litton Sys., Inc., 
B-239123, Aug. 7, 1990, 90-2 CPD  para.  114 at 8 n.7. 

4. For example, Braswell initially generally asserted that the agency 
previously has made available detailed design specifications for this 
type of requirement.  However, the agency apparently has not developed 
such specifications for the CLINs in question.  Moreover, given the 
unpredictable nature of the work under those CLINs, it is not clear 
(and Braswell does not explain) how design specifications would 
provide any more useful information to offerors than the information 
and shipboard inspection already provided for under the RFP.

5. In contrast, the Navy reports that a similar 1996 contract awarded 
under RFP No. N62670-95-R-0014 contained specifications virtually 
identical to those to which Braswell objects here, and that there have 
been no performance difficulties involving removal and reinstallation 
of interferences.

6. Braswell asserts that the need to factor risk into the prices will 
result in higher repair prices.  The Navy states that it is well aware 
of this possibility, and is willing to accept the risk of higher 
prices in light of the potential benefits of the approach relative to, 
for example, an approach using an AGR clause.  There is nothing 
improper in the agency's decision to accept this risk.  Braswell also 
cites the disparity in prices received as evidence that offerors could 
not compete on an equal basis under the RFP as written.  However, 
where, as here, we have found no basis for objecting to a 
solicitation, a wide range of prices is not by itself conclusive 
evidence that proposals could not be prepared on an equal basis.  See 
Tumpane Servs. Corp., 70 Comp. Gen. 406, 413 (1991), 91-1 CPD  para.  369 at 
8.