TITLE: Superior Optical Labs, Inc.; Diversified Ophthalmics, Inc., B-294662; B-294662.2, December 9, 2004
BNUMBER: B-294662; B-294662.2
DATE: December 9, 2004
**********************************************************************
Decision
Matter of: Superior Optical Labs, Inc.; Diversified Ophthalmics, Inc.
File: B-294662; B-294662.2
Date: December 9, 2004
Colin H. Luke, Esq., Balch & Bingham, for the protesters.
Dennis Foley, Esq., and Philip Kauffman, Esq., Department of Veterans
Affairs, for the agency.
Jennifer D. Westfall-McGrail, Esq., and Christine S. Melody, Esq., Office
of the General Counsel, GAO, participated in the preparation of the
decision.
DIGEST
1. Agency reasonably did not question authority to bind offeror of
individual who signed successful offer where offer designated him as
contractor's administrative representative with binding authority to act
on behalf of the contractor on administrative matters pertaining to the
contract.
2. Allegation that awardee violated Anti-Kickback Act and Federal
Healthcare Anti-Kickback Act will not be considered by GAO because both
statutes impose criminal penalties for their violation, and GAO has no
jurisdiction over alleged violations of criminal laws.
3. Protest of scoring of technical proposals is denied where it is
apparent that protesters suffered no prejudice as a result of alleged
evaluation errors.
4. Federal Acquisition Regulation S 52.219-14 (Limitation on
Subcontracting) has no application where solicitation is unrestricted.
DECISION
Superior Optical Labs, Inc. and Diversified Ophthalmics, Inc. protest the
rejection of their proposals and the award of a contract to Barnett &
Ramel Optical Company (B&R) under request for proposals (RFP) No.
541-039-04, issued by the Department of Veterans Affairs (VA) for the
provision of eyeglasses to VA beneficiaries in Ohio. The protesters take
issue with the agency's evaluation of the proposals.
We deny the protests.
The RFP contemplated the award of a fixed-price requirements contract for
a base and 4 option years. The contractor was to furnish
eyeglass-dispensing services at nine different VA Medical Centers and
outpatient clinics across Ohio. For each year, offerors were requested to
furnish prices for an estimated quantity of frames and for estimated
quantities of each of six different types of lenses (single vision
glass/plastic, bifocal glass/plastic, and trifocal glass/plastic).
Offerors were also requested to furnish prices for 14 line items
representing estimated quantities of various upgrades and related items
(e.g., anti-reflective coating).
The solicitation provided for award to the offeror whose proposal was most
advantageous to the government, price and other factors considered.
Proposals were to be evaluated in accordance with the following scheme:
1. Quality of Sample Frames--Sample frames shall be of quality
nature and durable with warranty. Selection of frames shall be
appropriate for male and female with current style. 30 POINTS
2. Technical Capabilities--Length of time in exact business,
education certificates, distribution capabilities. Management methods
used to insure accountability, timely and quality service. Rating will be
based upon written management plan that shows how orders are tracked and
processed and managed throughout the life cycle. 30 POINTS
3. Delivery of Prescriptions--How fast and to what extent can
the offeror provide normal and expedited prescriptions. Rating will be
based on information submitted pertaining to capability for normal and
expedited prescriptions as well as verifiable references as it compares to
offerors. Offerors must submit a[t] least (3) references for past
performance history. 20 POINTS
4. Price--Pricing for estimated quantities shall be evaluated
for price reasonableness based on competitive price offers. 20 POINTS
RFP at 39. The RFP further provided that technical and past performance,
when combined, were significantly more important than price.
Three offerors submitted proposals by the April 9, 2004 closing date.
Superior submitted three offers, a "high bid," a "low bid," and a "medium
bid"; after VA notified it that only one would be reviewed, it designated
its "medium bid" as the one to be evaluated.[1] Diversified submitted two
offers, one for all of the locations covered by the RFP and the other for
a subset of the locations; upon notification from VA that only one offer
would be considered, Diversified designated the former as the one to be
evaluated.
The evaluators assigned the proposals the following point scores:
+------------------------------------------------------------------------+
| |Superior|Diversified|Barnett & Ramel|
|-----------------------------------+--------+-----------+---------------|
|Quality of sample frames (30 |22.75 |30 |27.88 |
|points) | | | |
|-----------------------------------+--------+-----------+---------------|
|Technical capabilities (30 points) |27 |25.3 |28 |
|-----------------------------------+--------+-----------+---------------|
|Delivery of prescriptions |20 |20 |16.25 |
|(20 points) | | | |
|-----------------------------------+--------+-----------+---------------|
|Technical factors subtotal |69.75 |75.3 |72.13 |
|-----------------------------------+--------+-----------+---------------|
|Price (20 points) |12.7 |13.3 |20 |
|-----------------------------------+--------+-----------+---------------|
|Totals |82.45 |88.6 |92.13 |
+------------------------------------------------------------------------+
Agency Report at 5. According to the agency, Superior's total evaluated
price was $10,257,246.95, Diversified's was $9,799,550.90, and B&R's was
$6,503,680.[2] The contracting officer determined that B&R's proposal
represented the best value on the basis of the following considerations:
Based on the evaluation results, on technical points alone, Diversified
was slightly higher than B&R, which in turn scored slightly higher than
Superior. However, it was plainly evident that none of the offerors
"stood-out" technically, nor were any of them significantly weak or
deficient. In summary each vendor's offerings were as follows: one-year
warranty; a fair range of frame styles; quality was adequate and
equivalent; possessed adequate experience; similar turn around time and
adequate methods in management methods in automation and quality assurance
and follow-up; acceptable past performance references; and comparable
delivery time. Since all offerors appear to be substantially equal in
technical ability, the rational business decision is to select the offeror
that represents the most advantageous price to the VA. Analysis of
pricing shows B & R's total cumulative price is between 3 and 4 million
dollars less than the next lowest offeror. This price difference is
significant and clearly demonstrates the most advantageous offer to the
government.
Contracting Officer's Narrative Statement, Sept. 28, 2004, at 1. VA
awarded B&R a contract on August 17 and sent the protesters letters
notifying them of the award on August 24. The protesters subsequently
requested and received debriefings, whereupon they protested to our
Office.
Diversified and Superior raise multiple objections to the award to B&R.
Their first two complaints pertain to the status of the individual who
signed B&R's offer. The protesters allege that the signatory is not an
authorized officer or employee of B&R, and that he thus lacked the
authority to bind B&R. They also allege that the signatory represented
B&R on a contingent fee basis, in violation of the Anti-Kickback Act of
1986, the Federal Healthcare Anti-Kickback Act, and subpart 3.4 of the
Federal Acquisition Regulation (FAR).
We find the foregoing arguments to be without merit. The first rests upon
the incorrect premise that only an officer or employee has the authority
to bind a corporation, which is not the case.[3] A duly authorized agent
may also bind a corporation, provided evidence of his authority to do so
is furnished to the agency. See FAR S 4.102(e) ("When an agent is to sign
the contract, . . . the agent's authorization to bind the principal must
be established by evidence satisfactory to the contracting officer.").
The agency reports that it had no reason to question the authority of the
individual in question to sign the offer on behalf of B&R given that in
its proposal, B&R designated him as its "contractor administrative
representative," with "binding authority to act on behalf of the
Contractor on administrative matters pertaining to this contract." B&R
Proposal at 18. The protesters have demonstrated neither that the
agency's reliance upon this representation was unreasonable nor that the
individual in question in fact lacked the authority to bind B&R.
With regard to the protesters' contingent fee argument, FAR subpart 3.4
(Contingent Fees) does not apply to this procurement because it is an
acquisition of commercial items. See FAR S 12.503(a)(2). Further, we
will not consider the protesters' allegations regarding violations of the
Anti-Kickback Act and the Federal Healthcare Anti-Kickback Act since both
statutes impose criminal penalties for their violation, see 41 U.S.C. S 54
(2000), 42 U.S.C. S 1320-7b(b) (2000), and our Office has no jurisdiction
over alleged violations of criminal laws. Such allegations should be
referred to the Department of Justice since the interpretation and
enforcement of the criminal laws of the United States are functions of the
Attorney General and the federal courts. Corbin Superior Composites,
Inc., B-236777.2, Jan. 2, 1990, 90-1 CPD P 2 at 6.
The protesters also raise a number of objections to the evaluation of the
technical proposals. They object to the scoring of the proposals under
subfactors pertaining to frame warranty, frame selection, frame quality,
length of time in business, educational certificates, automation, past
performance, distribution capability, and delivery time.[4] While we
believe that several of the protesters' allegations have merit,[5] we also
believe that the protesters suffered no prejudice as a result of errors in
the technical evaluation. Given the strength of the technical point score
awarded B&R's proposal and the contracting officer's determination that
the proposal lacked any significant weaknesses or deficiencies, we see no
reasonable possibility that, even if the protesters' challenges to the
technical evaluation were sustained, the contracting officer would
determine either of their proposals to be significantly superior to
B&R's. As indicated above, the contracting officer viewed the proposals
as essentially equal technically, notwithstanding the difference in the
technical scores, a judgment that was within his discretion to make. See
Omega World Travel, Inc., B-283218, Oct. 22, 1999, 2002 CPD P 5 at 4. We
also see no reasonable possibility that the contracting officer would
determine that either protester's technical proposal would be worth a
price premium of approximately one-third, or over $3.5 million.
Accordingly, we see no reasonable possibility that the contracting officer
would conclude that a proposal other than B&R's represents the best value
to the government.
Similarly, while the protesters complain that the evaluators improperly
weighted the subfactors under the delivery of prescriptions factor by
assigning three times as much weight to the references subfactor as to the
delivery time subfactor (i.e., 15 points vs. 5), the record demonstrates
that the protesters, who received better scores than B&R under the references
subfactor and equivalent scores under the delivery time subfactor, not only
were not prejudiced, but indeed benefited, from the allegedly improper
weighting.
Next, the protesters argue that the estimated quantities for the 14
upgrade/related item line items are "so inflated . . . as to make any
pricing comparison meaningless and irrelevant." Protest at 3. According
to the protesters, while the solicitation advised that pricing was to be
based on estimated quantities of 5,000 for each line item, "[t]he actual
history of the utilization of these upgrades is much less than 5,000 and
is, in some cases, miniscule." Id.
We will not consider this argument because it was not raised in a timely
manner. It was apparent on the face of the solicitation that the
estimated quantity for each of the line items in question was 5,000;
accordingly, to be timely, any protest of the estimates would have needed
to be raised prior to the time set for receipt of proposals. See Bid
Protest Regulations, 4 C.F.R. S 21.2(a)(1) (2004) (to be timely, protest
based on alleged solicitation impropriety must be raised prior to the time
set for receipt of proposals).
The protesters further point out that a cover letter to B&R's proposal
stated that:
For frame prices, we will put a frame in the corresponding package at
double the price found in the latest issue of Frames Weekly, the industry
catalogue for optical frames.
The protesters argue that this statement "appears to contradict and/or
supplement the pricing contained in a portion of [B&R's] pricing
proposal." Protesters' Comments, Oct. 18, 2004, at 4.
The protesters fail to specify which portion of B&R's pricing proposal the
statement allegedly contradicts and/or supplements, and we see no
inconsistency between the statement and the rest of B&R's proposal. As
the opening sentence to the cover letter makes clear, the statement in
question pertains to B&R's proposed pricing for on-site retail sales. The
RFP countenanced such sales and the provision of price lists pertaining to
them, stating as follows:
At the contractor's discretion, they may enter into a separate agreement
with the Veterans Canteen Service (VCS) in order to do commercial sales on
VA premises. Any agreement with the VCS shall not impact the cost
schedule for services on this contract. If the contractor proposes to do
commercial sales on VA property, they must also submit a commercial price
list of the items and upgrades they intend to sell along with this
solicitation.
RFP at 13.
Diversified and Superior also complain that despite the fact that the RFP
incorporated FAR S 52.212-1, which at paragraph (e) encouraged offerors
"to submit multiple offers presenting alternative terms and conditions or
commercial items for satisfying the requirements of this solicitation" and
assured them that "each offer submitted [would] be evaluated separately,"
their alternate offers were not considered.
Again, the protesters' complaint is untimely. Diversified and Superior
were notified of the information giving rise to this ground of protest
(i.e., that the agency intended to review only one offer from each) on
April 16; thus, pursuant to our Bid Protest Regulations, 4 C.F.R. S
21.2(a)(2), to be timely, any protest based on this information would have
needed to be filed within 10 days after April 16.
Finally, the protesters complain that B&R indicates in its proposal that
it intends to subcontract all dispensing services to [deleted]. The
protesters allege that this subcontracting arrangement violates FAR S
52.219-14 (Limitations on Subcontracting) and FAR S 52.203-6 (Restrictions
on Subcontractor Sales to the Government), both of which were incorporated
into the solicitation by reference. RFP at 29.
The Limitations on Subcontracting clause applies only to solicitations (or
portions thereof) that are set aside for small business competition or the
8(a) program. See FAR S 19.508(e) ("The contracting officer shall insert
the clause at 52.219-14, Limitations on Subcontracting, in solicitations
and contracts for supplies, services, and construction, if any portion of
the requirement is to be set aside for small business and the contract
amount is expected to exceed $100,000"). See also FAR
S 19.811-3(e) ("The contracting officer shall insert the clause at
52.219-14, Limitations on Subcontracting, in any solicitation and contract
resulting from this subpart [i.e., subpart 19.8 (The 8(a) Program)]").
Accordingly, since the solicitation at issue here was unrestricted, the
clause has no application to it (despite the fact that it was incorrectly
incorporated by reference).
With regard to FAR S 52.203-6, the protesters have furnished no argument
in support of their allegation that B&R's stated intention to subcontract
with [deleted] would violate the clause, and we see no basis for such an
argument. Section 52.203-6 prohibits a contractor from entering into an
agreement with an actual or prospective subcontractor, or otherwise acting
in a manner, "which has or may have the effect of restricting sales by
such subcontractors directly to the Government of any item or process (. .
.) made or furnished by the subcontractor under this contract or under any
follow-on production contract." There is no evidence in the record here
that B&R has entered into an agreement with [deleted], or otherwise acted
in a manner, that violates the above provision.
The protests are denied.
Anthony H. Gamboa
General Counsel
------------------------
[1] The three offers differed in the quality and pricing of the frames
offered. In addition, the "medium bid" differed from the other two in its
pricing of lenses.
[2] We note that Diversified entered a sum in the blank for base year
price that was half the total of its line item prices for the base year,
i.e., $1,088,838.90 versus $2,177,678. (While the discrepancy is not
addressed in the record, we assume that Diversified did this because the
solicitation identified the base year as covering the "time of award to
September 30, 2004," and only approximately half a year remained until
September 30 at the time Diversified submitted its offer in early April
2004.) B&R and Superior, in contrast, each entered a sum in the blank for
base year price that equaled the total of their base year line item
prices. If the full amount of Diversified's line item pricing for the
base year is included in its evaluated price, its total evaluated price
rises to $10,888,390.
[3] B&R represented in its offer that it was a corporate entity.
[4] The evaluators translated the commentary furnished in the solicitation
into the following subfactor scoring scheme:
Quality of Sample Frames (30 points): warranty (10
points); frame selection (number of frame styles-5 points, variable
colors-2 points, variable sizes-3 points); durability/quality (10 points)
Technical Capabilities (30 points): Length of time in
business (5 points); related education certification (5 points);
distribution capabilities--turn-around time (5 points), manufacturing and
distribution capability (5 points); management
methods--automation/tracking/inventory control (5 points), quality
assurance (5 points)
Delivery of prescriptions: delivery time (5 points);
references (15 points)
Price (20 points)
[5] We agree, for example, that there was no reasonable basis for the
evaluators to have assigned Diversified a lower score than the other two
offerors under the distribution capability subfactor, and that some of the
evaluators appear to have lacked a reasonable basis for their assignment
of point scores under the educational certificates subfactor. We also
agree that there appear to have been errors on the point score summary
sheet with regard to the number of points that one evaluator (referred to
as SY in the record) intended to assign B&R under the frame selection
subfactor and the number of points that she intended to assign Superior
under the quality of frames subfactor.