TITLE: Prisoner Transportation Services, LLC; V1 Aviation, LLC; AAR Aircraft Services, B-292179; B-292179.2; B-292179.3, June 27, 2003
BNUMBER: B-292179; B-292179.2; B-292179.3
DATE: June 27, 2003
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Prisoner Transportation Services, LLC; V1 Aviation, LLC; AAR Aircraft Services,
B-292179; B-292179.2; B-292179.3, June 27, 2003
Decision
Matter of: Prisoner Transportation Services, LLC; V1 Aviation, LLC; AAR
Aircraft Services
File: B-292179; B-292179.2; B-292179.3
Date: June 27, 2003
Chuck Zubarik, Prisoner Transportation Services, LLC; Chip Hunter, V1
Aviation, LLC; and Frederick W. Claybrook, Jr., Crowell & Moring, for AAR
Aircraft Services, for the protesters.
Allen Weh, CSI Aviation Services; Joseph W. Tasler, Air Charter Team; and
James P. Flynn, Aviation Enterprises, Inc., for the intervenors.
Gerald M. Auerbach, Esq., and Joni M. Gibson, Esq., Department of Justice,
for the agency.
Sharon L. Larkin, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Solicitation term limiting offers to particular make and model of
aircraft unduly restricts full and open competition, where the agency
concedes that other aircraft can meet its needs.
2. Solicitation term limiting offers to aircraft manufactured after 1990
is reasonably related to the agency's needs because the agency has shown
that limitation was designed to avoid the problems associated with aging
aircraft.
3. Protest that agency should have provided for multi-year pricing
instead of requiring proposals based on a 1-year contract with multiple
options totaling 10 years is denied, where the agency has the discretion
to decide whether to allow multi-year contracts under 41 U.S.C. S: 254c(a)
and reasonably determined that the approach included in its solicitation
will provide economy in administration, performance, and operation.
DECISION
Prisoner Transportation Services, LLC; V1 Aviation, LLC; and AAR Aircraft
Services protest the terms of request for proposals (RFP) No. MS-03-R-0008
(RFP -0008), issued by the United States Marshals Service (USMS), for the
lease and maintenance of six Boeing 737 passenger aircraft for up to 10
years for prisoner transfer and other purposes.
We sustain the protests of Prisoner and AAR in part and deny them in part,
and deny the protest of VI Aviation.
The USMS currently operates a fleet of aircraft to transport prisoners and
criminal aliens throughout the United States and to certain countries in
Latin America, and seeks to replace this fleet with a long-term lease for
jet aircraft.
Before issuing a solicitation for these aircraft, the USMS conducted
several market studies in 2000 and 2002 to assess the best methods of
fulfilling the agency's needs. After considering acquisition costs,
support and maintenance costs, operational costs, and availability, the
agency's study concluded that *the Boeing 737-300 [and] 400 and the
[McDonnell Douglas (MD)] 83 through 90 series aircraft are the aircraft
that would best meet the [agency's] mission requirements, and would be
readily available in the desired quantities to meet the [agency's]
needs.* USMS Market Research, Large Aircraft Replacement Program, at 2;
see Large Aircraft Replacement Study for USMS (Sept. 2000), at 26; Agency
Report at 4. One study concluded that the Boeing 737‑300 and
‑400 aircraft provided *the most cost effective solution,* and that
the MD-83 through ‑90 aircraft provided the *next most cost
effective* solution because its costs were *very close* to those of the
Boeing 737-300 and -400 models. Large Aircraft Replacement Study for USMS
(Sept. 2000), at 26. This study also found that the Boeing 737-300 and
-400 aircraft were *not in abundant supply,* and that the MD aircraft had
better availability, which the agency noted *may translate into a somewhat
lower purchase price or lease cost.* Id.
After the studies were completed, the USMS issued an RFP on June 7, 2002,
under commercial items procedures, for the long‑term lease and
maintenance of jet aircraft, under which offerors were permitted to
propose different makes or models of aircraft. The RFP stated a
preference for aircraft less than 10 years old and noted that aircraft
manufactured earlier than 1990 would not be excluded, but would be given a
lower rating in the evaluation process. RFP No. MS‑02-R-0012 (RFP
‑0012) S: II, Part A, P: B.1.k. Moreover, the proposed aircraft
were required to meet detailed performance and design requirements,
including meeting requirements included in three trip scenarios. The
solicitation finally provided for three alternate pricing formats: a
10-year lease using a multi-year approach with cancellation ceilings; a
5‑year lease using a multi-year approach with cancellation ceilings;
or a 1‑year lease with nine 1‑year options that could be
unilaterally exercised by the government; offerors could complete one or
all alternates as their price proposal. RFP ‑0012 S: I, P: A.
Four proposals were received in response to the solicitation. The agency
selected for award CSI, Inc.'s alternate proposal of a Boeing 737-300
aircraft. The agency found that the Boeing 737-300, as compared to models
of aircraft proposed by the other offerors, exhibited the most
cost-effective solution based on the total operational cost of the
aircraft. The award was protested to our Office primarily on the grounds
that the awardee's proposed 737-300 aircraft did not meet certain
performance requirements, particularly those included in one of the three
trip scenarios. After considerable case development, the agency took
corrective action and cancelled the solicitation, and we dismissed the
protest as academic. AAR Aircraft Servs.--Costs, B-291670.6, May 12,
2003, 2003 CPD P: 100, at 2-4. Subsequently, we recommended that the
protester be reimbursed the costs of filing and pursuing the protests
because the agency had unduly delayed taking corrective action in the face
of a clearly meritorious protest.[1] Id. at 10.
On April 9, 2003, the USMS issued the solicitation at issue here as a
commercial item acquisition under Federal Acquisition Regulation (FAR)
Part 12. This solicitation sought proposals to lease the six jet
passenger and transport aircraft, but limited those aircraft to Boeing 737
model numbers -300 or -400 manufactured in 1990 or later. RFP
‑0008, S: II, Part A, at 1. The solicitation provided for award of
a fixed-price contract based upon a 1‑year base lease period, with
nine options that combined form a 10-year period of performance. RFP
‑0008 S: I, at 1. Award was to be *made to the lowest
priced-technically acceptable offeror,* based upon an evaluation of the
technical proposal (which included an assessment of aircraft
acceptability, and the offeror's maintenance and logistics plan), price,
and past performance. RFP -0008 S: VII, at 1-2, 5. Offerors were
provided 30 days from issuance of the solicitation to submit proposals.
RFP ‑0008, Cover Letter, at 1. Three protests were filed
challenging the solicitation's terms.
Prisoner and AAR contend that the solicitation requirement limiting
aircraft to only the Boeing 737-300 and -400 models unlawfully restricts
competition, since both MD and Boeing aircraft can satisfy the agency's
needs.
In preparing a solicitation for supplies or services, a contracting agency
must specify its needs and solicit offers in a manner designed to achieve
full and open competition, and include restrictive provisions or
conditions only to the extent necessary to satisfy the agency's needs.
Competition in Contracting Act of 1984 (CICA), 41 U.S.C. S: 253a(a)
(2000). Contrary to the agency's assertion, the CICA mandate for full and
open competition is not satisfied by the agency's view that *adequate*
competition has been obtained. See Marine Research Specialists,
B‑265869, Jan. 2, 1996, 96-1 CPD P: 1 at 5 n.7. The FAR also
provides that:
Agency requirements shall not be written so as to require a particular
brand-name, product, or feature of a product, peculiar to one
manufacturer, thereby precluding consideration of a product manufactured
by another company, unless --
(a) The particular brand name, product, or feature is essential to the
Government's requirements, and market research indicates other companies'
similar products, or products lacking the particular feature, do not meet,
or cannot be modified to meet, the agency's needs[.]
FAR S: 11.105.[2] When a protester challenges a solicitation provision as
unduly restrictive of competition, we will review the requirements to
ensure that they are reasonably related to the agency's needs. CairnsAir,
Inc., B-278141, Jan. 2, 1998, 98‑1 CPD P: 1 at 2.
Here, in its report on the protest, the agency concedes that aircraft
other than the Boeing 737 models meet its needs, specifically the MD-83
through -90 series identified in its market studies. Agency Report at 4.
Moreover, during the original competition, proposals offering the MD
series aircraft were specifically found to be acceptable, and the agency
does not claim that its needs have changed. Thus, the solicitation
restriction is more limiting than is necessary to meet the agency's needs
and therefore unduly restricts full and open competition.
The agency argues only that Boeing models are more desirable because they
are more cost efficient, in that they *would reduce maintenance costs,
significantly reduce operational costs by reducing fuel consumption, and
provide greater aircraft reliability,* and that because, in contrast to
the MD series aircraft, *the Boeing 737 series aircraft are still in
production, [the agency] is assured of the availability of parts and
support.* Agency Report at 4; Contracting Officer's Statement at 2-3.
However, the agency's conclusions, as it readily concedes, are based upon
the same market studies that resulted in the issuance of the first
solicitation, which sought proposals for multiple makes and models of
aircraft. Agency Report at 4. The agency has not explained why, based
upon this same survey information, it is now *necessary* to further
restrict the competition. Furthermore, the agency's market studies
indicate that the MD aircraft are *very close* in cost effectiveness to
the Boeing models and are more advantageous in terms of availability, and
that the product support for the MD-83 through -90 series aircraft *will
be almost as good* as
that for the Boeing 737 series aircraft.[3] Large Aircraft Replacement
Study for USMS (Sept. 2000), at 17, 26. Moreover, the protesters assert
that the significantly lower lease prices of the MD series models will
more than offset the higher fuel efficiency costs. Based on the
foregoing, we find the agency has not advanced a reasonable basis for the
restriction of this competition to Boeing 737 series aircraft, and we
sustain Prisoner's and AAR's protests on this basis. See ITT Courier
Terminal Sys., B‑218563, Aug. 8, 1985, 85-2 CPD P: 148 at 3; Cleaver
Brooks, B-213000, June 29, 1984, 84-2 CPD P: 1 at 3.
Prisoner and AAR also protest that the solicitation requirement limiting
competition to aircraft manufactured after 1990 unduly restricts
competition. The agency explains, and the protesters do not dispute, that
the age requirement *was designed to avoid the problems associated with
aging aircraft, while guaranteeing that the USMS would have newer, more
reliable, aircraft with improved capability to perform its missions
throughout the ten year life of this lease.* Moreover, older aircraft
have to comply with additional Federal Aviation Administration (FAA) Aging
Fleet requirements that take effect when aircraft reach 20 years of age,
including additional inspections and repairs, which increase aircraft
downtime and maintenance expenses; imposing a requirement that aircraft be
of more recent manufacture makes the imposition of the FAA requirements
less likely. The agency also explains that aircraft manufactured after
1990 are adequately available, so that the agency could avoid most of the
aging fleet issues. Contracting Officer's Statement at 2; see Large
Aircraft Replacement Study for USMS (Sept. 2000), at 3-4.
In response, AAR argues only that the age restriction should be lifted
since the prior solicitation allowed older aircraft to be proposed, and
Prisoner argues that the restriction should be lifted for *cost
competitive reasons* and disagrees with the agency's conclusions
concerning the reliability and cost impact of an aging fleet. With regard
to this requirement, the agency's market survey study concluded:
To avoid the problems associated with aging aircraft, the aircraft to be
acquired should not be older than 10 years at the time of acquisition.
This means that at the [end of 10 years] the aircraft will be 20 years
old, which is the point at which aging aircraft inspection programs start.
Large Aircraft Replacement Study for USMS (Sept. 2000) at 7. While the
agency does not explain why it permitted such older aircraft to be
proposed under the prior solicitation (albeit with the caveat that
proposals offering such aircraft would be lower rated), the protesters
have not shown that the agency's determination, consistent with its market
research, that aging aircraft would not meet its needs was unreasonable,
and we deny this protest basis. See DGS Contract Servs., Inc.,
B‑249845.2, Dec. 23, 1992, 92-2 CPD P: 435 at 2-3.
Finally, VI Aviation and AAR protest that the 1-year lease requirement
unduly restricts competition because it is more expensive to lease
aircraft for 1-year increments as opposed to a longer period of years. As
noted above, this too is a change from the prior solicitation, which
permitted offerors to propose multi-year pricing.
The Federal Acquisition Streamlining Act of 1994 (FASA), as implemented by
FAR Subpart 17.1, gave agencies the authority to enter into multi-year
contracts as follows:
An executive agency may enter into a multiyear contract for the
acquisition of property or services if--
* * * * *
(2) the executive agency determines that --
(A) the need for the property or services is
reasonably firm and continuing over the period of the contract; and
(B) a multiyear contract will serve the best interests of the United
States by encouraging full and open competition or promoting economy in
administration, performance, and operation of the agency's programs.
41 U.S.C. S: 254c(a) (2000) (emphasis added).
That is, FASA has provided agencies with the discretion, but does not
require them, to enter into multi-year contracts where certain conditions
are satisfied. Simply because the agency previously allowed for proposals
on a multi-year basis does not preclude the agency from declining to use
this authority, even if the conditions allowing the use of this authority
are satisfied. Here, while it may be that lower prices could be obtained
through a multi-year contractual vehicle, the agency could reasonably
prefer to have a single year contract with multiple options, since then
the agency can terminate its relationship with a contractor by simply not
exercising an option. The agency made its decision not to provide for a
multi-year contract approach based on the results of the first
competition, in which half of the competitors proposed the same prices for
a 1-year contract with multiple options as for a multi-year contract, all
of which prices had been determined to be reasonable. The agency thus
declined to accept multi-year contract pricing because a *long term lease
using the [single year with multiple options] approach will provide
economy in administration, performance, and operation.* Contracting
Officer's Statement at 3. Under the circumstances, we find no basis to
object to the agency's decision not to allow for a multi-year contract
pricing, and deny this protest basis.
The protests of Prisoner and AAR are sustained in part and denied in part,
and the protest of V1 Aviation is denied.
We recommend that the agency amend its solicitation to allow consideration
of all make and model aircraft that meet its needs.[4] We also recommend
that the agency reimburse Prisoner and AAR the reasonable costs of filing
and pursuing the portion of their protests that we sustained. The
protesters are to file their certified claims for costs, detailing the
time expended and costs incurred, with the agency within 60 days of this
decision. 4 C.F.R. S: 21.8(f) (2003).
Anthony H. Gamboa
General Counsel
------------------------
[1] The record indicated that the agency failed to reasonably determine
that CSI's proposed 737-300 aircraft satisfied the requirements of one of
the trip scenarios, given the evidence in the record that they did not.
AAR Aircraft Servs.--Costs, supra, at 6-8.
[2] Where such a brand name restriction is used, an agency is required to
obtain a written *justification[] and approval[]* for other than full and
open competition. FAR S: 11.105(b).
[3] Although the agency now contends that availability of the Boeing
aircraft *is no longer an issue,* Agency Report at 5, this is disputed by
the protesters. In any event, the agency is free to include factors such
as availability, cost effectiveness (or life-cycle costs), and reliability
as part of its selection criteria in the solicitation.
[4] The protesters also challenged the 30-day proposal response time set
forth in the solicitation. However, the agency has suspended the closing
date in response to the protests. In any case, in light of our
recommendation, this issue is academic and we therefore do not address it.