TITLE: OSRAM SYLVANIA Products, Inc., B-287468, July 2, 2001
BNUMBER: B-287468
DATE: July 2, 2001
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OSRAM SYLVANIA Products, Inc., B-287468, July 2, 2001
Decision
Matter of: OSRAM SYLVANIA Products, Inc.
File: B-287468
Date: July 2, 2001
E. Sanderson Hoe, Esq., and Suzanne L. Karbarz, Esq., McKenna & Cuneo, for
the protester.
Judith A. Miller, Esq., Kathleen L. Beggs, Esq., and Lisa M. Duggan, Esq.,
Williams & Connolly, for COMSUP Commodities, Inc., an intervenor.
Michelle S. Pavlak, Esq., Defense Logistics Agency, for the agency.
Paul I. Lieberman, Esq., and Michael R. Golden, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Agency reasonably determined to award a contract for the sale of excess
stockpiled tungsten to the offeror whose evaluated price was high under
every reasonable price evaluation under a solicitation where all the award
criteria were effectively structured to provide for award to the technically
acceptable offeror that proposed the highest total evaluated price.
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2. Agency award of the entire sale quantity offered by the government to a
single commodities broker offeror is unobjectionable where it is permissible
under the solicitation and the agency properly performed the requisite
statutory market analysis to support its determination that the sale would
not cause undue market disruption.
DECISION
OSRAM SYLVANIA Products, Inc. protests the award of contract No.
SP0833-01-S-12055 to COMSUP Commodities, Inc., by the Defense National
Stockpile Center (DNSC), Defense Logistics Agency, for the sale of certain
excess stockpiled
tungsten. [1] OSRAM asserts that the agency evaluation is unreasonable and
improperly failed to credit benefits contained in OSRAM's offer, and that
award of the entire quantity of sale tungsten to COMSUP, a commodities
broker, violates the agency's obligation under the Strategic and Critical
Materials Stock Piling Act ("Stockpiling Act" or "Act"), 50 U.S.C. sect. 98 et
seq. (1994), to avoid undue market disruption by this sale of surplus
strategic material.
We deny the protest.
BACKGROUND
DNSC issued the instant solicitation of offers (SOO) for stockpile tungsten,
entitled "DLA--Tungsten Ores & Concentrates--002," on December 7, 2000, with
a January 11, 2001 due date for receipt of initial offers. The solicitation
offered for sale 4 million pounds of contained tungsten during the base year
and in each of four 1-year option periods, for a potential total sale
quantity of 20 million pounds of material, upon which DNSC's total price
evaluation was based.
The SOO contains a shopping list of all of DNSC's currently analyzed 13.2
million pounds of contained tungsten (SOO sect. I.2), permits offers for a
minimum of one lot and a maximum of 4 million pounds per year (SOO sect. B.3),
and allows DNSC to make either a single award or multiple awards (SOO sect.
B.7(a)). Section B.4(a) provides that offerors should express their unit
prices as a percentage of the monthly average of either the London Metal
Bulletin (LMB) ore price or the LMB APT [2] price, plus a premium or
discount to the respective reference price expressed as a percentage. The
actual contract price is to be determined by calculating the unit price for
material released to the contractor during each month based on the previous
calendar month's average applicable LMB reference price multiplied by the
percentage figure plus or minus the discount contained in the contract. SOO
sect. B.4(b). Section B.8, entitled "Evaluation of Offers," provides that the
evaluation factors are, in descending order of importance, unit price,
payment terms, and removal schedule, and notes that all evaluation factors
other than unit price, when combined, are significantly less important than
unit price.
The agency received nine offers by the initial due date. OSRAM's initial
offer contained a complex pricing scheme based on using as a reference price
the [deleted] LMB [deleted] index. Agency Report at 6-7. Both OSRAM and
COMSUP offered to purchase the entire sale quantity available and both
offers were included in the competitive range. After conducting discussions,
during which OSRAM was advised by the agency regarding pricing that it
should consider "keeping it simple," DNSC called for the submission of best
and final offers (BAFOs) by February 21. Agency Report at 7. Both offerors
timely submitted BAFOs with 30-day payment terms, for the full 20-million
pound quantity available in the base and all option years.
OSRAM's BAFO offered [deleted] unit price stated in dollars per STU (short
ton unit) [deleted] using a [deleted] formula referencing the average
monthly LMB [deleted] index price, which is expressed in MTUs (metric ton
units). OSRAM's offer was: if the [deleted] index is [deleted] then OSRAM's
unit price is [deleted]. OSRAM noted that for conversion of MTU to STU,
$/STU equals ($/MTU times 0.9072). In addition, OSRAM offered a floor price
of $[deleted], and agreed to remove at least [deleted] per [deleted] up to a
maximum of [deleted] per [deleted]. Agency Report, Tab 13, OSRAM BAFO, at
2-3.
COMSUP's BAFO contained [deleted]. For the [deleted], listed by the SOO
shopping list line items for approximately [deleted] of the total, COMSUP
offered as its unit price the average monthly LMB [deleted] price [deleted]
per MTU, and for the remaining [deleted], COMSUP offered as its unit price
the LMB [deleted] price [deleted] per MTU. For the [deleted], COMSUP offered
as its unit price the average monthly LMB [deleted] price [deleted] per MTU.
COMSUP also offered [deleted] $ [deleted] per MTU for [deleted]. COMSUP
agreed to remove all material within 12 months of the award. Agency Report,
Tab 12, COMSUP BAFO, at 2.
The agency has provided two different explanations of its evaluations of the
total value of the offerors' unit prices, both based on a "snapshot in time"
consisting of the average [deleted] LMB prices. Agency Report at 8; Revised
Agency Report, May 7, 2001, at 8. The original agency report indicates that
DNSC determined that the LMB ore price is 75 percent of the LMB APT price,
based on the LMB ore price average of $[deleted] per MTU divided by the LMB
APT price average of $[deleted] per MTU. Therefore, DNSC converted the APT
price per MTU to an ore equivalent price by multiplying the APT price by 75
percent. Agency Report at 8. This methodology and the resulting calculations
are supported to some extent by an underlying document entitled:
"Recommendation for Awards under Solicitation DLA-Tungsten-Ores &
Concentrates-002." Agency Report, Tab 19.
These calculations evaluate COMSUP's unit prices at $[deleted]. DNSC states
that it calculated a total evaluated price of $76,030,208 for COMSUP. Agency
Report at 8; Agency Report, Tab 19, at 5-6. OSRAM's price was evaluated at
[deleted] a total evaluated price stated to be $72,154,345. Agency Report at
8. OSRAM was not given any dollar credit for its floor price of $[deleted].
Agency Report at 12-13.
Subsequently, DNSC issued a "revised agency report" in which it offered a
correction, explaining that it had actually reduced each offer to an
absolute dollar value per MTU, without using any APT to ore conversion
factor, and then compared the prices to each other using average [deleted]
LMB ore and APT prices. Revised Agency Report, May 7, 2001, at 8. COMSUP's
price was calculated using the [deleted] LMB [deleted] price of $[deleted]
per MTU. After converting to STUs, DNSC calculated [deleted] COMSUP's
overall total evaluated price as $76,030,381.61. Id. at 8-9. For OSRAM's
offer, DNSC used direct calculations at $[deleted] to arrive at an overall
total evaluated price of $69,253,618.85. Again, nothing was added for the
floor price. Id. The revised report calculations are supported to some
extent by material contained in the original agency report at Tab 14,
entitled: "Tungsten Ores & Concentrates Award Presentation."
In making its award determination, the agency concluded that the total
evaluated value of COMSUP's BAFO based on its unit prices was so much higher
than OSRAM's that there was no need to consider the other evaluation factors
in order to determine that COMSUP's offer represented the best value to the
government. Agency Report at 9. The agency explained that if OSRAM's offer
had been closer in price to COMSUP's, DNSC would have assigned numerical
dollar values to the payment and removal terms based on the cost of money to
the government in order to determine which offer represented the best value.
Here, OSRAM's and COMSUP's payment terms were identical, and the removal
terms were not considered sufficiently different to make a difference. Id.
Accordingly, the agency determined to award to COMSUP without assigning
numerical values to these factors. Id. On March 1, DNSC determined to make
one award to COMSUP for the entire quantity available under the solicitation
and, after receiving a debriefing, OSRAM timely filed this protest with our
Office on March 23.
PROTEST CONTENTIONS
OSRAM's initial protest contained four allegations. First, OSRAM alleged
that it had been misled during discussions by DNSC's instructions to "keep
its offer simple," which OSRAM interpreted as indicating the agency's
disapproval of OSRAM's initial pricing approach, as a result of which OSRAM
changed its BAFO pricing approach, allegedly to its detriment. Protest at
5-6. Second, OSRAM asserted that the price conversion between LMB APT and
ore reference pricing may have been prejudicial to OSRAM because the agency
failed to show that it properly converted the prices based on the different
references permitted by the SOO in a manner that allowed a fair price
comparison. In addition, OSRAM asserted that pricing based on noncompliant
references had been offered and was improperly considered by DNSC. Protest
at 6-7. Third, OSRAM asserted that the evaluation was irrational and
inconsistent with the SOO evaluation scheme because the stated payment and
removal evaluation factors were not weighted or assessed in any specific
manner (e.g., color, points or adjectival) which would allow DNSC to perform
a tradeoff and rationally determine best value to the government. Protest at
8. In addition, OSRAM objected that DNSC did not give OSRAM any evaluation
credit for the floor price which it offered, and which COMSUP did not offer.
Protest at 8-9. Fourth, OSRAM asserted that the award violated DNSC's
mandate under the Stockpile Act to dispose of stockpiled materials in a
manner that would avoid undue market disruption. 50 U.S.C. sect. 98e(b)(2).
Specifically, OSRAM asserted that DNSC failed to consider the allegedly
prohibited market disruption that would result from the award of the entire
quantity offered to a single broker. Protest at 9-11.
In response to the agency report, OSRAM withdrew the first two allegations
concerning misleading discussions and improper price references and
conversions. Protester's Comments at 5. OSRAM focused its evaluation
objections on the agency's use of only the [deleted] LMB reference price for
calculation over the entire 5 years, and amplified its removal schedule
argument by presenting calculations purporting to show that an evaluation
applying a present value analysis would result in its BAFO actually having a
higher total dollar value to the government than COMSUP's. Protester's
Comments at 9. OSRAM also questioned the manner in which COMSUP's [deleted]
had been calculated, claiming that the award is inconsistent in this regard
with the agency's evaluation calculations. Protester's Comments at 3. In
addition, OSRAM expanded its statutory argument and suggested that award to
a commodities broker, such as COMSUP, was a particular violation of DNSC's
statutory obligation not to cause undue market disruption. Protester's
Comments at 16-17.
EVALUATION OF OFFERS
Basis of Review
In reviewing protests challenging an agency's evaluation of offers, we will
not substitute our judgment for that of the agency regarding the merits of
offers; rather, we will examine the agency's evaluation to ensure that it
was reasonable and consistent with the solicitation's evaluation criteria
and applicable statutes and regulations. Coastal Drilling, Inc., B-285085.3,
July 20, 2000, 2000 CPD para. 130 at 4. A protester's mere disagreement with the
agency's evaluation does not render it unreasonable. CORVAC, Inc., B-244766,
Nov. 13, 1991, 91-2 CPD para. 454 at 5. Here, the solicitation does specify
payment and removal terms as significantly less important criteria relative
to unit price. However, neither of these other factors reflects a technical
or other non-price consideration that would give rise to the need for the
agency to make a price/technical tradeoff. Rather, both of these factors
provide for possible price adjustments. Each represents the possibility that
the government will receive money earlier or later in time, which can be
quantified by considering the timing differences in terms of an appropriate
interest rate. That is, early removal will result in early payment of money
to the government (assuming identical payment terms), and vice versa. The
same is true for shorter payment terms versus longer payment terms. The
specific dollar value of these differences can be calculated by application
of a present value analysis.
Indeed, the protester recognizes this by virtue of the fact that its
arguments in this regard are made only on the basis of the specific dollar
impact on price of the non-unit price considerations, using a present value
analysis. OSRAM does not assert that its removal schedule provides any other
benefits besides the value of money that will be received relatively early.
OSRAM's allegation is that the respective total prices were misevaluated,
and that a reasonable evaluation would have led to the conclusion that
OSRAM's offer had a greater present dollar value to the government. Thus,
the protester's own argument reflects its understanding that, in effect, the
solicitation provides for award on the basis of the highest priced offer
from a technically acceptable offeror, taking into consideration the
possible price impact of differing removal and payment terms. No
cost/technical tradeoff is contemplated or required by the SOO.
Our Office will not sustain a protest unless the protester demonstrates a
reasonable possibility that it was prejudiced by the agency's actions, that
is, unless the protester demonstrates that, but for the agency's actions, it
would have had a substantial chance of receiving the award. McDonald
Bradley, B-270126, Feb. 8, 1996, 96-1 CPD para. 54 at 3; see Statistica, Inc. v.
Christopher, 102 F. 3d 1577, 1581 (Fed. Cir. 1996). Here, with respect to
the alleged evaluation improprieties, in order to show prejudice, there must
be a showing that if the total dollar values of the BAFOs had been properly
calculated, there is a substantial likelihood that COMSUP's total BAFO price
would not have been evaluated as higher than OSRAM's.
"Snapshot in Time" Unit Price Evaluation
We first consider OSRAM's objection that the [deleted] snapshot in time used
by DNSC for all unit price evaluations was inappropriate. Under the SOO
terms, DNSC had to use some LMB reference price in order to perform a
relative price evaluation of the respective offers. DNSC determined that the
[deleted] reference point was most equitable because it represented
[deleted]. Agency Report at 8. Because the contract can extend for 5 years
in a volatile market and offers are sensitive to the LMB reference price
that is used, OSRAM argues that a single monthly price is inadequate, and
posits that "[h]ad DNSC employed an appropriate reference price for
evaluation purposes, OSRAM's proposal would have been evaluated higher."
Protester's Comments at 12. However, OSRAM has provided no evidence with
respect to price fluctuations which shows or even suggests that it was
prejudiced relative to COMSUP by virtue of this "snapshot" price evaluation
methodology.
Both COMSUP's and OSRAM's reference prices will fluctuate, and OSRAM has not
made any showing that these fluctuations have occurred in the past or are
likely to occur over the future course of the contract in a pattern which
suggests that a "snapshot" calculation is relatively adverse to OSRAM's
price evaluation or favorable to COMSUP's. That is, while the actual price
received by the agency will change as a result of market fluctuations,
nothing in the record suggests that this will have any prejudicially
disproportionate effect on the relative prices of COMSUP and OSRAM. OSRAM's
mere pronouncement that an improved "appropriate reference" would have
caused its evaluated price to be higher, Protester's Comments at 12, has no
probative effect; it merely reflects OSRAM's view that the tungsten market
price will rise over the life of the contract. However, this would also
cause COMSUP's evaluated price to become comparably higher under a similar
more "appropriate reference." OSRAM effectively concedes that any price
fluctuations are likely to affect the two offers comparably when it cites
with approval DNSC's analysis showing that movements in [deleted] prices
have closely tracked each other over the past [deleted] years. Protester's
Comments on Revised Agency Report, May 14, 2001, at 4. OSRAM does not
suggest any other specific approach which it believes would have been more
accurate. OSRAM's argument here merely reflects the protester's disagreement
with the agency's evaluation methodology, but does not show that DNSC's
"snapshot in time" unit price evaluation was unreasonable in any way that
was prejudicial to OSRAM.
Floor Price
Next, we consider the agency's decision not to evaluate OSRAM's floor price.
DNSC correctly points out that a floor price was not included in the SOO as
a possible evaluation factor. Agency Report at 13. Accordingly, the
solicitation provided no basis to consider the floor in the unit price
evaluation. DNSC also notes that the present market price is substantially
above the $[deleted] floor price offered by OSRAM, that the market has been
in a steady upswing, and that indicators suggest that the market will
continue to be reasonably strong. Therefore, DNSC determined that the floor
price had no actual value. Id. at 12-13.
OSRAM points out that the LMB index price has fluctuated substantially over
the past 3 years, and notes out that it has previously honored floor prices
under other contract awards. Protester's Comments at 11-12. However, OSRAM
has also pointed out that the world market supply of tungsten is diminishing
and will continue to diminish over the contract term because suppliers other
than DNSC are decreasing their output. Protester's Comments at 14-16. As
COMSUP correctly points out, this analysis by OSRAM supports the likelihood
of rising market prices over the contract life, COMSUP's Comments at 6, in
which case the agency properly determined that OSRAM's proposed floor price
would have no applicability or value. OSRAM has not provided any basis to
conclude that the agency erroneously declined to consider and add evaluated
dollar value for OSRAM's below-market floor price, in a rising market, under
a solicitation in which the evaluation criteria did not contemplate the
evaluation of a floor price.
Unit Price Evaluation
In order to consider OSRAM's contention regarding the evaluation of its
removal schedule, we must first address DNSC's underlying extended unit
price evaluations. The statement in the initial agency report that the
evaluated extended total value of OSRAM's offered unit price was $72,154,345
appears to be simply erroneous. OSRAM states that it can find no basis for
the $72,154,345 total, which the agency now indicates is incorrect, and
OSRAM calculates its actual extended unit price total as $69,256,949.76.
Protester's Comments, exh. 2, at 4. This amount appears correct to our
Office, and is substantially equivalent to the $69,253,618.85 total for
OSRAM's offer that, as noted above, is presented in the revised agency
report. There is no dispute regarding the underlying unit pricing, and the
minimal discrepancy in these totals (amounting to less than $3,400) may
simply reflect rounding differences in making various unit conversions.
COMSUP's aggregate price is reported by the agency as $76,030,208 in the
original report and as $76,030,381.61 in the revised report, numbers which
are essentially identical, the difference in which, as OSRAM agrees, is
insignificant. Protester's Comments on Revised Agency Report, May 14, 2001,
at 6 n.6. While OSRAM questions whether the actual award terms concerning
COMSUP's volume-based premiums are consistent with this evaluated total
price, which will be addressed below, the protester concedes that the
properly calculated total value of COMSUP's BAFO unit prices is slightly in
excess of the agency's revised report total, under OSRAM's own calculations.
Id. at 6; Protester's Comments, Tab 2, at 5-6. Thus, OSRAM and DNSC agree
that a properly calculated snapshot in time evaluation of the respective
extended unit price totals under the BAFOs results in a calculation that
COMSUP's BAFO price is more than $6.7 million higher than OSRAM's.
Removal Schedule
OSRAM explains that its commitment to remove (that is, take delivery and pay
for) [deleted] of the yearly award amount by [deleted] provides DNSC with a
stream of money earlier than would COMSUP's offer, which commits only to
remove and pay for the full contract amount at the end of the year.
Protester's Comments at 8. OSRAM points out that DNSC did not evaluate the
greater relative value that an earlier stream of money provides to the
agency, and in this regard, OSRAM submitted a present value analysis using
various evaluation scenarios, applying interest rates of 5 percent, 6.75
percent and 8 percent, which purports to show that OSRAM's BAFO total would
have been evaluated as more than $5 million higher than COMSUP's if a
present value analysis had been performed by the agency. Protester's
Comments at 9.
In response, the agency pointed out that it appears that OSRAM's calculation
erroneously "divides the annual rate by 12 twice in order to generate a
monthly discount rate. That is effectively dividing by 144 and constitutes a
significant error." Agency Comments, May 14, 2001, exh. 2, Affidavit of
Thomas L. Rasmussen, at 3. The agency provides a corrected present value
analysis using a 6.75 percent Treasury interest rate. OSRAM agrees
(notwithstanding its having provided calculations at other interest rates)
that 6.75 percent is the appropriate rate for this present value analysis.
Protester's Comments at 9. DNSC's calculation shows that an accurate present
value analysis results in COMSUP's total BAFO value remaining $3,686,554.56
greater than OSRAM's. Agency Comments, exh. 2, supra, at 2. In response,
OSRAM states that it contacted the publisher of the software that OSRAM had
used to perform its present value analysis, and asked the publisher to run
the same calculations at its location. As OSRAM explains, "unexpectedly, the
publisher produced the numbers reported by the DNSC." Protester's Final
Comments, May 22, 2001, at 2. Thereafter, OSRAM itself recalculated present
value using different software, and itself produced the same results as
DNSC; accordingly, OSRAM concedes that it is "unable to dispute the DNSC
results." Id. at 2-3. In short, even under the present value analysis urged
by OSRAM, the protester concedes that its properly evaluated BAFO total
would remain more than $3.68 million below COMSUP's.
Award Amount versus Evaluation Amount
Finally, OSRAM asserts that COMSUP's BAFO value is overstated because the
award document (Agency Report, Tab 15) reflects a different application of
COMSUP's [deleted] than that which DNSC used to evaluate COMSUP's BAFO,
which OSRAM asserts decreases the total value under the evaluation.
Specifically, OSRAM argues that the actual [deleted] value under COMSUP's
award terms is $[deleted] rather than the [deleted] amount of $[deleted]
that was used by the agency in its evaluation. Protester's Comments on
Revised Agency Report, May 14, 2001, at 6. Adding in the evaluated [deleted]
amount, on which OSRAM and DNSC substantially agree, OSRAM contends that
COMSUP's BAFO total should have been evaluated as $74,688,046.81 rather than
the $76,030,381.61 amount used by the agency. Id. We need not resolve this
argument since, even if OSRAM were correct, the resulting $1,342,335
reduction in COMSUP's evaluated BAFO price would not come close to
eliminating the margin by which COMSUP's BAFO price is higher than OSRAM's.
Using DNSC's present value calculation, which OSRAM no longer disputes and
which provides the most favorable possible scenario from OSRAM's
perspective, COMSUP's total price is higher than OSRAM's by a margin of more
than $3.68 million
and would remain higher by substantially more than $2 million if this
reduction were taken. [3] Thus, OSRAM simply has not shown that it could
have been prejudiced by this alleged discrepancy.
In sum, OSRAM has not provided anything which suggests that its BAFO was
erroneously evaluated as lower in total value than COMSUP's; therefore, we
have no basis to question the evaluation and the resulting award
determination.
MARKET DISRUPTION
OSRAM asserts that the market supply of tungsten is decreasing because of
the depletion of reserves and resulting cutbacks in output by domestic and
foreign sources, and as a result, the tungsten released by DNSC will
constitute a significant and increasingly high percentage of the tungsten
available to Western consumers. Protester's Comments at 14-16. OSRAM
concludes from this that DNSC was required by the Stockpile Act not to make
a total award to a commodity broker, such as COMSUP, which would then be in
a position to disrupt market prices and supply and make it difficult for a
major user of tungsten, such as OSRAM, to obtain tungsten at a reasonable
price. Id. The protester does not dispute that the SOO itself permits a
total award to a single offeror, nor does it contend that the SOO in any way
restricts possible awards to brokers. OSRAM relies entirely on a provision
in the Stockpile Act which provides that disposal of stockpile materials
should be made using competitive negotiation procedures, and that:
efforts shall be made in the . . . disposal of such materials to avoid
undue disruption of the usual markets of producers, processors,
and consumers of such materials and to protect the United States
against avoidable loss.
50 U.S.C. sect. 98e(b)(2).
The agency's position concerning this requirement, for which it cites as
authority Associated Metals and Minerals Corp. v. Carmen, 704 F.2d 629 (D.C.
Cir. 1983), is that the Stockpile Act imposes no obligation on the agency to
perform the kind of award impact assessment and to impose the kind of award
allocation limitations that OSRAM urges is required. Agency Report at 14-15.
We agree with the agency.
In Associated Metals, in rejecting a challenge to the selling agency's
assessment that there would not be undue market disruption by a particular
sale under the Stockpile Act, the court concluded on the basis of the
language of the Act and the legislative history that the provision in
question was designed to "protect producers and traders against sudden
disposals of strategic materials no longer needed in such quantities as
might break the market," and that Congress was concerned only with
"significant disruptions in commodity markets caused by dumping of surplus
materials." 704 F.2d at 635. OSRAM does not question that DNSC determined
that the quantity of material being sold is not so great as to disrupt the
market. Rather, OSRAM seeks to read the Act as imposing an additional
obligation on DNSC to structure award allocation among competitors on the
basis of consideration of the possible increase in cost or decrease in
supply to major tungsten users such as OSRAM, which is clearly beyond the
contemplation of the Act. [4] Accordingly, OSRAM's assertion in this regard
is without merit.
In sum, OSRAM has provided no credible basis to question the propriety of
DNSC's determination to award to COMSUP.
The protest is denied.
Anthony H. Gamboa
General Counsel
Notes
1. Pursuant to GAO's Bid Protest Regulations, 4 C.F.R. sect. 21.13(a) (2001),
our Office has jurisdiction of this nonstatutory sale protest because DNSC
has requested such jurisdiction in writing, as is indicated in the
solicitation at sect. G.5(d). While there are no published regulations governing
DNSC stockpile sales, the agency states that its procurement procedures here
"follow the intent of the [Federal Acquisition Regulation]." Agency Report
at 2. There has been no stay of contract performance during the pendency of
the protest.
2. APT stands for Ammonium Paratungstate, which the protester explains is
chemically processed from tungsten ore concentrates and is the primary
tungsten commodity traded in the market. Protest at 6 n.8.
3. Using a present value calculation substantially similar to DNSC's, COMSUP
has calculated that the full effect of this claimed reduction under a proper
present value analysis shows its total BAFO evaluation remains $2,623,000
higher than OSRAM's BAFO evaluation. COMSUP's Supplemental Comments, May 14,
2001, at 7.
4. OSRAM provides no legal authority to support its interpretation of the
Stockpile Act. In questioning the holding in Associated Metals, OSRAM refers
to an earlier decision by our Office, Philipp Bros., Div. of Engelhard
Minerals & Chems. Corp., B -197060, June 12, 1980, 80-1 CPD para. 412, which
actually concerns the selling agency's efforts to meet its obligation under
the Act to protect the government from avoidable loss and does not support
OSRAM's interpretation of the Act. OSRAM also asserts that "Congress has
recognized through various anti-trust law[s] that disruption of the market
can be achieved through other means than dumping. See e.g. The Sherman Act,
15 U.S.C. sect.sect. 1-7." Protester Comments at 15 n.10. Neither reference has any
bearing on the court's analysis in Associated Metals regarding the
appropriate applicability of the Stockpile Act in assessing undue market
disruption. Incidentally, DNSC has also stated that there are additional
supplies of tungsten in its inventory, beyond the sale quantities, that
could be made available for release through sale in the event that there was
a market shortage of tungsten. Agency Report at 16.