TITLE:  American Recycling Systems, Inc., B-292500, August 18, 2003
BNUMBER:  B-292500
DATE:  August 18, 2003
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American Recycling Systems, Inc., B-292500, August 18, 2003

   Decision
    
    
Matter of:   American Recycling Systems, Inc.
    
File:            B-292500
    
Date:              August 18, 2003
    
Vincent J. Cerniglia for the protester.
Richard G. Welsh, Esq., and Arthur F. Thibodeau, Esq., Naval Facilities
Engineering Command, for the agency.
Tania Calhoun, Esq., and Christine S. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
Protest that contracting agency improperly found protester's quotation to
be technically unacceptable is denied where the agency possessed
significant countervailing evidence that created doubt whether the vendor
could comply with a material requirement of the solicitation and the
vendor failed to take the opportunity to provide support for its claimed
ability to comply with the requirement; under such circumstances, an
agency may not accept at face value a quotation's promise to meet a
material requirement. 
DECISION
    
American Recycling Systems, Inc. (ARS) protests the Department of the
Navy's determination that the quotation it submitted for a trailer-mounted
brass ordnance shell deformer, in response to request for quotations (RFQ)
No. N6921803-RC-00264, was technically unacceptable.  ARS argues that it
should have received the award because it submitted the lowest-priced
quotation, it had previously supplied similar units to the Navy, and its
quotation stated that it would comply with all of the specifications.
    

   We deny the protest.
    
On March 24, 2003, the Navy posted this combined solicitation/synopsis on
the Federal Business Opportunities (FedBizOps) Internet site in accordance
with subpart 12.6 of the Federal Acquisition Regulation's (FAR)
streamlined procedures for evaluation and solicitation for commercial
items.  The procurement, set aside for small businesses, was for one
trailer-mounted brass ordnance shell deformer, maintenance manuals, a
replacement parts package, and freight to the Naval Construction Battalion
Center in Gulfport, Mississippi.  The solicitation/synopsis set forth a
number of technical specifications for the deformer.  Among other things,
the deformer was required to have a shell deforming capacity equal to or
greater than 7,000 pounds per hour, and the ability to process up to size
.50 caliber shells.  The solicitation/synopsis incorporated by reference
the clause at FAR S: 52.212-1, *Instruction to Offerors--Commercial
Items,* which requires the submission of a technical description of the
item offered in sufficient detail to evaluate compliance with the
requirements of the solicitation.  FAR S: 52.212-1(b)(4).  Award was to be
made to the vendor offering the lowest-priced technically acceptable
item. 
    
The agency received three quotations, including one from ARS and one from
Bouldin Corporation.[1]  Bouldin's quotation, at a price of $94,398, was
based upon its federal supply schedule (FSS) contract.  The Navy found the
firm's quotation to be technically acceptable but believed that there was
an ambiguity regarding the firm's small business status.  ARS's quotation,
at a price of $92,500, was for an *OD5000 Deformer with Trailer Mount
Option . . . 'The Diesel Deployer.'*  ARS Quotation at 1.  ARS attached
its commercial specification for the offered item, stated that this was
the *same specification* under which it had previously been awarded a Navy
contract for two mobile units, and provided several references.  Id.  The
attached commercial specification indicated that the unit had a capacity
of *7,000 [pounds] per hour including 20mm shells.*  Id. at 2.  ARS's
quotation concluded by stating, *100% Compliance with Specification.*  Id.
at 3. 
    
In evaluating ARS's quotation, the Navy's technical evaluator made note of
ARS's assertion that the commercial specification attached to its
quotation was the *same specification* under which it had previously been
awarded a Navy contract for mobile units.  He determined, however, that
the earlier solicitation's specification called for a capacity of 5,000
pounds per hour, not the 7,000 pounds per hour required here.  In light of
this discrepancy that cast doubt on ARS's ability to meet the capacity
requirement, the technical evaluator looked to the information on the ARS
website to ascertain whether the quoted unit could meet the solicitation's
capacity requirement.  The ARS website lists three configurations for the
OD5000 deformer, including a deployable configuration.  Each configuration
relies upon the same technical specification for an *ARS OD5000 Ordnance
Deformer,* which is described as a fixed position ordnance deformer that
can be made mobile if the optional trailer mount package is ordered. 
Technical Specification Sheet at 1.  The first page of the technical
specification states that the unit processes *over 5,000 pounds of
expended shells per hour,* but does not indicate how much over 5,000
pounds or under what circumstances the unit can process over 5,000 pounds
of expended shells per hour.  Id.  The second page of the technical
specification lists the characteristics of the unit as capable of
deforming *5,000 lbs. of expended shells per hour,* and as having a
capacity of *5,000 lbs. per hour.*  Id. at 2. 
    
Since the information on the ARS website indicated that the unit's
capacity was 5,000 pounds per hour or some unspecified amount over 5,000
pounds per hour, but was vague as to whether it could process the required
7,000 pounds per hour of shells up to .50 caliber in size, the technical
evaluator turned to the website of the unit's manufacturer for more
information.  Since the only information available on the manufacturer's
website stated that the OD5000 could deform *more than* 5,000 pounds per
hour, without being more specific as to how much more over 5,000 pounds
the unit could deform, the technical evaluator telephoned the manufacturer
of the unit to obtain more information.  His contemporaneous memorandum to
the contract specialist indicates that the manufacturer's representative
told him that the OD5000's processing capacity *averages* 5,000 pounds per
hour.  Technical Evaluator's Memorandum at 1.  The technical evaluator
reported that the manufacturer's representative declined to say what the
unit's maximum rate might be and, instead, referred him to a current
customer stationed at Camp Pendleton, one of the references listed on
ARS's quotation.  The individual contacted at Camp Pendleton advised the
technical evaluator that he did not believe the machine would be able to
process 6,000 pounds per hour, and that it would not *come close* to
processing 6,000 pounds per hour of .50 caliber shells because the
processing rate is shell size dependent; that is, large shell sizes such
as .50 caliber typically take longer to process by weight than the smaller
shell sizes.  Id.
    
At the technical evaluator's request, the contract specialist sent an
e-mail to ARS requesting an explanation for these discrepancies and asked
the firm to identify the correct capacity for the OD5000 Deployer as
configured in its quotation[2] and to forward *any supporting
documentation (field or manufacturer testing) that verifies the stated
capacity.*  E-mail from Contract Specialist to ARS, Apr. 10, 2003.  In
its     e-mailed reply, ARS stated, *We can meet the requirement for 7,000
pounds per hour.  The 5,000 pounds per hour is a minimum.  We set the
throughput for the customers' requirements at time of fabrication and
test.  This is not inconsistent with our performance and the referenced
units previously bid.*  E-Mail from ARS to Contract Specialist, Apr. 10,
2003.  ARS did not provide any of the supporting documentation requested
by the agency.
    
Since ARS's assertion was inconsistent with the evidence in the agency's
possession regarding the OD5000's capacity, and since the Navy believed
the manufacturer, not ARS, was responsible for fabrication, the contract
specialist and another contracting officer contacted the manufacturer
regarding the capacity of the machine.  The contemporaneous record of
their conversation shows that a manufacturer's representative advised the
agency that, *at .50 caliber [the unit] can only do at 5,000 lbs/hr,* and
the cost of spare parts will increase each time the machine breaks if
capacity is used up to 7,000 pounds per hour.  Record of Telephone Call
with Manufacturer at 1.
    
In view of the Navy's inability to reconcile the limited and conflicting
information in its possession concerning the ability of ARS's quoted unit
to meet the required technical specifications, the contracting officer
determined that no acceptable open market quotation had been received. 
The contracting officer canceled the solicitation and determined that it
was appropriate to place an order for the item under Bouldin's FSS
schedule.  After the Navy denied its agency-level protest, ARS filed the
instant protest.  ARS essentially argues that the Navy should have taken
its claim of *100% Compliance with Specification* at face value. 
    
In reviewing an agency's technical evaluation of vendor submissions under
an RFQ, we will not reevaluate the quotations; we will only consider
whether the agency's evaluation was reasonable and in accord with the
evaluation criteria listed in the solicitation and all applicable
procurement statutes and regulations.  Applied Mgmt. Solutions, Inc.,
B-291191, Nov. 15, 2002, 2002 CPD P: 202 at 2; Envirodyne Sys. Inc.,  
B-279551, B-279551.2, June 29, 1998, 98-1 CPD P: 174 at 4.  In determining
the technical acceptability of a quotation, an agency may not accept at
face value a quotation's promise to meet a material requirement, where
there is significant countervailing evidence reasonably known to the
agency evaluators that should create doubt whether the vendor will or can
comply with that requirement.  See Maritime Berthing, Inc., B-284123.3,
Apr. 27, 2000, 2000 CPD P: 89 at 9; Koehring Cranes & Excavators; Komatsu
Dresser Co., B-254731.2, B-245731.3, Nov. 23, 1992, 92-2 CPD P: 362 at 8. 
    
As discussed above, ARS's quotation introduced countervailing evidence as
to whether its unit could meet the capacity requirement by claiming that
it had been awarded a prior Navy contract under the same specification
when the specifications actually differed as to the capacity requirement. 
The Navy's technical evaluator attempted to resolve this discrepancy by
reviewing the ARS website and the manufacturer's website, but the
information available in both places added additional countervailing
evidence to ARS's claim, and his further efforts to resolve this
discrepancy by speaking with representatives of the manufacturer and a
current user added still more countervailing evidence to ARS's claim. 
Even after being advised of these disparities, ARS did not take the
opportunity to comply with the Navy's request to provide supporting
documentation to verified its stated capacity.  In light of the
significant countervailing evidence in its possession that created doubt
whether ARS could comply with the capacity requirement, and in light of
ARS's failure to provide support of its claimed ability to comply with the
capacity requirement when asked to do so, we find that the Navy reasonably
determined that it could not accept ARS's claim at face value and that the
firm's quotation was technically unacceptable.   
    
ARS's arguments challenging the Navy's decision are unpersuasive.  Again,
while the firm insists that the Navy should have accepted its assertion
that it could meet all of the specifications at face value, an agency may
not do so where, as here, it possesses significant countervailing evidence
creating doubt as to whether ARS could comply with the capacity
requirement.  ARS's complaint that the agency took Bouldin's claims at
face value overlooks the fact that there was no countervailing evidence
casting doubt on Bouldin's claims.
    
ARS also objects to the fact that the Navy contacted the manufacturer to
obtain information about the OD5000's capacity, arguing that the
manufacturer had no part in the *bidding process.*  Protester's Comments
at 1.  Given the countervailing evidence in its possession casting doubt
on ARS's ability to meet the capacity requirement, we cannot fault the
Navy for its attempts to attempt to resolve these doubts by seeking
information from the manufacturer.  In this regard, ARS argues that it had
the responsibility to comply with the specifications, not the
manufacturer, and that the manufacturer merely supplies the base unit per
its specifications.  As the Navy explains, however, it is the base unit
that performs the actual deforming operation; ARS only adds certain
options external to the deformer component such as a trailer mount. 
While, as the Navy acknowledges, ARS asserts that it could set the
throughput at 7,000 pounds per hour at the time of fabrication, ARS did
not explain how this throughput could be adjusted or what the consequences
with respect to durability would be if such adjustments were made; even if
these adjustments could be made, they might have an adverse effect on the
reliability, service life, and safety of the unit.  In response to the
Navy's position, ARS merely repeats that it was not the manufacturer's
responsibility to meet the specifications and that it would do whatever it
took to meet the capacity requirement.  ARS's response does not address
the Navy's concerns, which we find reasonable.  Under the circumstances,
we have no basis to question the Navy's finding that ARS's quotation was
technically unacceptable.
    
The protest is denied.
    
Anthony H. Gamboa
General Counsel
    

   ------------------------

   [1] The third vendor withdrew its quotation.
[2] Citing the agency's references to its quotation as offering an OD5000,
ARS objects that it did not submit a quotation for an OD5000 but, rather,
for an OD5000 Deployer.  As the Navy points out, however, the OD5000 is
the base unit that does the actual work of deforming the shells, and the
use of the term *deployer* merely indicates that the unit is
trailer-mounted.  ARS has not persuasively rebutted the Navy's position.