TITLE:  Sterling Services, Inc., B-291625; B-291626, January 14, 2003
BNUMBER:  B-291625; B-291626
DATE:  January 14, 2003
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Sterling Services, Inc., B-291625; B-291626, January 14, 2003

   Decision
    
    
Matter of:    Sterling Services, Inc.
    
File:             B-291625; B-291626
    
Date:              January 14, 2003
    
Walter Bull for the protester.
Clarence D. Long, III, Esq., Department of the Air Force, for the agency.
Scott H. Riback, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
1.  Protester is not an interested party to maintain protest challenging
proposal evaluation where it did not acknowledge material amendment;
protester would be ineligible for award even if protest of evaluation were
sustained.
    
2.  Protest that awardee's offered fixed price is unreasonably low is
denied; purpose of price reasonableness determination in fixed-price
context is to ensure that price is not unreasonably high, as opposed to
unreasonably low. 
DECISION
    
Sterling Services, Inc. protests the award of contracts under request for
proposals (RFP) Nos. F04626-02-R-0114 (RFP 0114) and F04626-02-R-0115 (RFP
0115), issued by the Department of the Air Force to acquire aircraft wash
services and transient alert services, respectively, at Travis Air Force
Base, California.  Sterling maintains that the agency misevaluated
proposals under both solicitations.
    
We dismiss the protest as to RFP 0114 and deny the protest as to RFP 0115.
    
RFP 0114
    
The record shows that, after receiving and evaluating proposals but before
making award, the agency issued an amendment that changed the period of
performance (shortening it by 2 months) and incorporated a revised wage
determination from the Department of Labor into the solicitation.  The
amendment was issued September 24, 2002 and required that proposal
revisions be submitted by September 25.  Agency Report (AR), exhs. 18,
45.  The amendment was transmitted to Sterling by facsimile and e-mail on
September 24.  However, Sterling did not acknowledge the amendment or
submit a revised proposal in response to the amendment, despite the
agency's repeated inquiries at the time.  Shortly thereafter, on September
27, the agency sent Sterling a letter advising that its proposal had been
eliminated from consideration because of the firm's failure to acknowledge
the amendment.  AR, exh. 45.
    
Prior to receiving the agency's September 27 letter (and apparently in
response to being advised that award was made to another concern), by
letter of October 3 Sterling requested a debriefing.  In response, by
letter dated October 10, the agency described the evaluation of Sterling's
proposal, noted the firm's failure to acknowledge the amendment and
provided information on the technical and price ranking of the successful
offeror.  This letter was received by Sterling on October 21.
    
On October 30, Sterling filed a protest in our Office alleging that the
agency had misevaluated both its and the awardee's proposals.  Sterling's
initial letter of protest made no mention of the agency's rejection of the
proposal for failure to acknowledge the amendment.  In its report to our
Office, the agency noted this fact and asserted that, since the proposal
was properly rejected, Sterling is not an interested party to maintain a
protest with respect to any aspect of the evaluation, since the firm would
be ineligible for award even if its evaluation challenge were successful. 
In its comments responding to the agency report, Sterling asserted for the
first time that the amendment was not material, and that it therefore was
improper for the agency to reject its proposal for failing to acknowledge
it. 
    
Under our Bid Protest Regulations, protests such as this must be filed
within 10 days after the basis of protest was or should have been known. 
4 C.F.R. S: 21.2(a)(2) (2002).  Sterling was advised twice of the agency's
rejection of its proposal for failure to acknowledge the amendment, first,
in the agency's letter dated September 27, and again in the agency's
debriefing letter of October 10.  Consequently, any objection by Sterling
to the agency's rejection of its proposal for failure to acknowledge the
amendment had to be filed in our Office no later than 10 days after
October 21, the date Sterling received its debriefing letter.  Sterling's
October 30 protest made no mention of the agency's rejection of its
proposal on this basis; Sterling did not raise this argument until
December 13, in its comments responding to the agency report.  Since this
was more than 10 days after October 21, it amounts to an untimely
challenge to the agency's rejection of the Sterling proposal. 
    
In light of this, Sterling is not an interested party to challenge the
agency's evaluation of proposals.  In order to maintain a protest in our
Office, a firm must be an interested party, that is, an actual or
prospective offeror whose direct economic interest would be affected by
the award or failure to award a contract.  4 C.F.R.
S: 21.0(a).  A firm is not an interested party where it would be
ineligible to receive award under the protested solicitation if its
protest were sustained.  Acquest Dev., LLC, B-287439, June 6, 2001, 2001
CPD P: 101 at 6.  Since Sterling is foreclosed by our timeliness rules
from challenging the rejection of its proposal for failing to acknowledge
the amendment, Sterling is ineligible for award--an agency may not make
award to a firm that fails to acknowledge a material amendment. 
International Filter Mfg. Corp., B-235049, June 21, 1989, 89-1 CPD P: 586
at 3.  This being the case, Sterling is not interested to challenge the
propriety of the agency's evaluation of proposals.  We therefore dismiss
the protest with respect to RFP 0114. 
    
RFP 0115
    
The RFP contemplated the award of a fixed-price contract, and provided for
evaluation of proposals in two areas, past performance and price. 
Offerors were instructed to submit past performance and pricing
information, but were not otherwise required to submit technical proposals
showing proposed staffing or demonstrating the proposed approach.  The
agency rated Sterling's proposal satisfactory for past performance; the
firm's price was eleventh lowest.  The agency rated the awardee's proposal
exceptional for past performance; its price was the fifth lowest.
    
Sterling asserts that the awardee's price was unreasonably low, and that
the agency improperly failed to evaluate it as such.  Sterling, the
incumbent contractor, maintains that the awardee's low price is
attributable to inadequate staffing for the requirement.[1]
    
This argument is without merit.  The RFP required the submission of only
lump-sum monthly prices for performance of the services outlined in the
solicitation, and called for the agency to make a determination of price
reasonableness.  The purpose of a price reasonableness evaluation in a
fixed-price contract setting is to determine whether prices are too high,
as opposed to too low (the contractor, not the government, bears the risk
that a low price will not be adequate to meet the costs
of performance).  USATREX Int'l, Inc., B-275592, B-275592.2, Mar. 6, 1997,
98-1 CPD P: 99 at 7.  The record shows that the contracting officer
determined that the awardee's price was reasonable--that is, not too
high--based on adequate competition, AR, exh. 10, at 2, and Sterling's
protest that the awardee's price is too low provides no reason to question
this conclusion.  As noted, the RFP did not require technical proposals
detailing a firm's proposed staffing or approach, and did not provide for
an evaluation of proposals on any basis other than past performance and
price.  It follows that alleged understaffing by the awardee, even if
demonstrated to be the case (in fact, we find nothing supporting the
allegation), was not a basis for rejecting or downgrading the awardee's
proposal. 
    
Sterling also maintains that the agency erred in the evaluation of
Sterling's past performance.  However, even if Sterling were given the
highest possible past performance rating--exceptional--its rating would
only be equal to the awardee's.  (Sterling does not challenge the
evaluation of the awardee's past performance.)  Thus, there would be no
basis to question the agency's award decision, because
the awardee's price was significantly lower than Sterling's. 
    
The protest is dismissed with respect to RFP 0114 and denied with respect
to RFP 0115.
    
Anthony H. Gamboa
General Counsel
    
    
    

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   [1] In its initial protest Sterling also maintained that the agency had
improperly solicited prices for a base period of 2 months with five 1-year
options, but made award for a base period of 1 year with four 1-year
options.  Sterling makes no mention of this allegation in its comments,
despite the fact that the agency report responded to the assertion; we
deem this aspect of Sterling's protest abandoned. 
O. Ames Co., B-283943, Jan. 27, 2000, 2000 CPD P: 20 at 7.