TITLE:  Petchem Incorporated, B-287071.3, August 1, 2001
BNUMBER:  B-287071.3
DATE:  August 1, 2001
**********************************************************************
Petchem Incorporated, B-287071.3, August 1, 2001

Decision

Matter of: Petchem Incorporated

File: B-287071.3

Date: August 1, 2001

Robert G. Fryling, Esq., and Edward J. Hoffman, Esq., Blank Rome Comisky &
McCauley, for the protester.

Edward J. Tolchin, Esq., Fettmann, Tolchin & Majors, for Universal Yacht
Services, Inc., an intervenor.

Robert M. Elwell, Esq., and George N. Brezna, Esq., Department of the Navy,
for the agency.

Linda S. Lebowitz, Esq., and Michael R. Golden, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Where the solicitation did not require an offeror's proposed personnel
transfer vessel to be outfitted and configured to comply with material
solicitation requirements at the time of award, but rather provided a 40-day
post-award period for compliance, agency reasonably selected the awardee's
lower-priced, technically equal proposal for award.

DECISION

Petchem Incorporated protests the award of a contract to Universal Yacht
Services, Inc. (UYS) under request for proposals (RFP) No. N00033-00-R-1033,
issued by the Department of the Navy, Military Sealift Command, for a
personnel transfer vessel (PTV) which will be used to conduct open ocean
transfers of passengers and cargo between sea-borne submarines and the shore
in the area of Port Canaveral, Florida. Petchem contends that UYS should not
have been eligible for award because its proposed PTV did not satisfy
material solicitation requirements at the time of award.

We deny the protest. [1]

The RFP, issued as a total small business set-aside on September 22, 2000,
contemplated the award of a fixed-price time charter [2] contract for a base
period and three 1-year option periods to the responsible offeror whose
proposal was determined to be most advantageous to the government,
considering price, technical characteristics of the proposed vessel, and an
offeror's past performance. (These three factors were equally weighted.) The
RFP's statement of work contained a list of required minimum vessel
characteristics. For example, and as relevant here, the RFP contained the
following minimum vessel characteristics:

 Characteristic              Minimum

 Surface/Subsurface          Configured to prevent
 Configurations              metal-to-hull contact with
                             surface/subsurface vessels under
                             all conditions of pitch and roll

 Passenger Capacity          49 passengers; seating required
                             for at least 50 percent of
                             passengers; a sheltered HVAC
                             area required for at least 75
                             percent of passengers

 Maximum Draft               16 feet at any time and
                             sufficient to prevent the vessel
                             from riding up on the submarine
                             hull while engaging in personnel
                             transfer operations

 Surface/Subsurface          Fendering sufficient to prevent
 Fendering                   metal-to-metal contact with
                             surface/subsurface vessels under
                             all conditions of pitch and roll

 Brow                        One brow on port side to allow
                             for safe transfer of 2
                             passengers at a time

RFP at 6-7; RFP amend. 3 at 2.

The RFP contained as an attachment a blank "Vessel Characteristic Sheet" on
which an offeror was required to insert the particular characteristics for
the vessel being proposed. The RFP stated that the contractor "shall provide
the vessel [proposed] with the characteristics offered and accepted at the
time of award." RFP at 6. The RFP also contained the following "layday"
delivery provision which stated in relevant part:

The Vessel . . . shall be delivered to the Charterer . . . not later than
1600 hours local time (place of delivery) on the canceling date stated in
the solicitation . . . . Hire shall commence upon acceptance of the Vessel
by the Charterer but not before the commencing date stated in the
solicitation . . . . Charterer shall have the liberty to cancel this Charter
at no cost to the Government should the Vessel . . . not be ready in
accordance with the provisions hereof by the canceling date stated in the
solicitation.

RPF at 15.

The RFP, as amended, provided that the "commencing date" was the date of
award and the "canceling date" was "40 [d]ays after award." RFP amend. 9
at 2.

In reopening discussions with Petchem and UYS, the agency advised the firms
of technical deficiencies and weaknesses in their proposals. (The firms were
advised that past performance and price would not be discussed because the
agency was using the offerors' previously submitted, and evaluated, past
performance and pricing information.) Petchem proposed the same vessel--the
"Christine S"--which it used to successfully perform the PTV requirements
under the predecessor contract. UYS proposed the vessel known as the
"Captain Roy." While each firm completed a vessel characteristic sheet for
its proposed vessel without taking exception to any of the RFP's minimum
vessel characteristics, there was a basic difference in the proposed
vessels. Specifically, Petchem's vessel was currently outfitted and
configured to satisfy the RFP's minimum vessel characteristics, while the
UYS vessel would require the installation of fendering and a brow and Coast
Guard approval to carry 49 passengers. In other words, if awarded the
contract, Petchem could immediately provide a vessel compliant with the
RFP's minimum vessel characteristics, while UYS would need the 40-day layday
period, as described above, to outfit and configure its vessel to satisfy
the RFP requirements.

The contracting officer, who served as the source selection authority,
determined that the proposals of Petchem and UYS were essentially
technically equal. In commenting on the technical characteristics of the
proposed vessels, the contracting officer noted that Petchem proposed a
proven vessel currently configured for performing the PTV requirements; that
there were no concerns expressed by the customer and end-users with respect
to the capabilities of Petchem's vessel; and that Petchem's vessel could
carry 52 passengers in an area with 100-percent HVAC and seating for all.
AR, Tab 20, Source Selection Document, at 1-2.

In contrast, the contracting officer noted that UYS warranted that its
proposed vessel would meet all RFP requirements. The contracting officer
recognized that UYS provided detailed information on how its vessel would be
outfitted and configured, including the installation of fendering and a
brow; that the UYS vessel could carry 49 passengers in an area with
100-percent HVAC and seating for all; and that the UYS vessel offered
three-engine redundancy and a higher speed. Id. at 2.

In summarizing his view that the proposals of Petchem and UYS were
technically equal, the contracting officer commented that although Petchem's
vessel offered a higher passenger capability that could reduce the number of
voyages, this benefit was of nominal value since it would only come into
play during the summer months when large groups of midshipmen were
transferred. The contracting officer also commented that while the UYS
vessel offered higher speeds, the value of those speeds was nominal because
of the short distances involved in the transfers. In addition, the
contracting officer did not consider the decreased technical risk associated
with Petchem's already-installed fendering and brow to be a significant
advantage because UYS submitted a detailed plan for the installation of
these items on its proposed vessel. The contracting officer determined that
although the vessels proposed by Petchem and UYS each had characteristics
that provided marginal increases in value, these items did not constitute
true technical discriminators between the two vessels. The contracting
officer concluded that UYS was as capable as Petchem in terms of delivering
a technically compliant vessel. Id.

With respect to past performance, the contracting officer recognized that
Petchem, as the incumbent contractor, had directly relevant experience.
Petchem's proposal was rated excellent in the past performance area. The
contracting officer pointed out that UYS received a neutral past performance
rating since it was a relatively new company with no corporate past
performance history; however, UYS did have personnel with experience in the
specific mission requirements contemplated by the RFP. Id. at 3. With
respect to price, Petchem's proposed price was approximately 14 percent
higher than the UYS proposed price. Id.

In making his selection decision, the contracting officer stated that the
only aspect of Petchem's proposal that was of greater value than that of the
UYS proposal was Petchem's excellent past performance rating, as compared to
the UYS neutral rating. According to the contracting officer, "[a]ll that
can be accurately said, however, is that Petchem's performance is known and
[the UYS performance] is not, as nothing can be inferred from the latter's
neutral rating." Id. at 3. The contracting officer continued that
"[a]lthough the value of Petchem's known performance would be worth a
slightly higher price, [it is not] worth the significantly higher price."
Id. at 3-4. The contracting officer concluded that the performance risks
associated with the UYS proposal were insufficient to justify paying such a
higher price to Petchem. Id. at 4. Accordingly, on June 12, 2001, the
contracting officer awarded the contract to UYS, whose technically equal,
lower-priced proposal was determined most advantageous to the government.

Initially, we point out that the evaluation record shows that the proposals
of Petchem and UYS were technically acceptable since neither offeror, in its
respective proposal, took exception to the RFP's minimum vessel
characteristics. Petchem does not identify any instance in which UYS took
exception in its proposal to any RFP requirement, but rather argues that UYS
should not have been eligible for award because, at the time of award, its
proposed vessel was not immediately outfitted and configured to satisfy the
RFP's minimum vessel characteristics, as shown in the graphic above. Petchem
believes that its proposed vessel, which would be immediately compliant at
the time of award, should have been selected to perform the agency's PTV
requirements. We disagree.

Here, the RFP did not require an offeror's proposed vessel to be outfitted
and configured at the time of award in order to be eligible for award.
Rather, under the terms of the RFP, as set forth above, the successful
offeror had up to 40 days after award, during the layday period, to outfit
and configure its proposed vessel, as evaluated by the agency, and to
deliver a vessel in compliance with the terms of the RFP. We note that in
its protest, Petchem acknowledges that the UYS "proposal was accepted,
apparently because Amendment 0009 to the Solicitation allowed offerors time
between award of the contract and the actual submission of the vessel to
begin work on the contract." Protest at 6. On this record, where the RFP did
not require an offeror's proposed vessel to comply with material RFP
requirements at the time of award, but rather provided a 40-day post-award
period for compliance, the agency reasonably selected the UYS lower-priced,
technically equal proposal for award. [3]

Petchem further expresses concern, based on its own knowledge and on reports
and analyses provided by naval architects consulted by the firm, that the
UYS vessel, even if outfitted and configured as proposed, will not be able
to perform the RFP requirements. For example, Petchem believes that because
of its aluminum hull and shallow draft, the UYS proposed vessel will "ride
the hull" of the submarine and will have "metal to metal contact" under
conditions of pitch and roll. Protester's Comments, July 16, 2001, at 11.

To the extent that Petchem's concern materializes at the time of delivery
and performance, it will involve a matter of contract administration over
which we do not exercise jurisdiction. In this respect, our Office considers
bid protest challenges to the award or proposed award of contracts. 31
U.S.C. sect. 3552 (Supp. IV 1998). Therefore, we generally do not review matters
of contract administration, which are within the discretion of the
contracting agency and for review by a cognizant board of contract appeals
or the Court of Federal Claims. Bid Protest Regulations, 4 C.F.R. sect. 21.5(a)
(2001).

Therefore, on this record, we have no basis to question the award to UYS
whose technically equal, lower-priced proposal was determined most
advantageous to the government. [4]

The protest is denied.

Anthony H. Gamboa

General Counsel

Notes

1. This protest follows the agency's implementation of our recommendation
for corrective action, as described in Universal Yacht Servs., Inc.,
B-287071, B-287071.2, Apr. 4, 2001, 2001 CPD para. 74. In this earlier protest,
UYS protested the award to Petchem (the incumbent contractor), arguing that
the agency improperly waived a material transit speed solicitation
requirement for Petchem and improperly accepted Petchem's nonconforming
proposal for award. We sustained the UYS protest, concluding that because
Petchem's proposal failed to conform to the RFP's transit speed requirement,
the proposal was technically unacceptable and could not form the basis for
award. We recommended that the agency reopen discussions with Petchem and
UYS, request another final technical proposal revision from each firm for
evaluation, and make a new source selection decision.

2. A time charter is a maritime contract giving the charterer--here, the
agency--exclusive use of a named vessel for a designated period of time.

3. The layday provision of the RFP gives the agency the right to cancel the
UYS contract at no cost to the government if the UYS vessel does not comply
with the RFP requirements by the canceling date 40 days after award.

4. In its initial protest, Petchem challenged the contracting officer's
decision that the firm's excellent past performance as the incumbent
contractor did not justify the payment of a significant price premium. In
its administrative report, the agency addressed this matter. In its comments
on the agency report, Petchem did not meaningfully rebut the agency's
position. Accordingly, we deem this basis for protest to be abandoned. See
Heimann Sys. Co., B-238882, June 1, 1990, 90-1 CPD para. 520 at 4 n.2.