TITLE: Total Industrial & Packaging Corporation, B-295434, February 22, 2005
BNUMBER: B-295434
DATE: February 22, 2005
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Decision
Matter of: Total Industrial & Packaging Corporation
File: B-295434
Date: February 22, 2005
Byron W. King, Esq., Jones, Gregg, Creehan & Gerace, for the protester.
Steven B. Hilkowitz, Esq., Defense Logistics Agency, for the agency.
Katherine I. Riback, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Agency reasonably awarded noncompetitive contracts for sandbags to four
qualified Historically Underutilized Business Zone firms to meet agency*s
urgent requirement for sandbags in support of military operations.
DECISION
Total Industrial & Packaging Corporation protests the noncompetitive award
by Defense Supply Center Philadelphia, Defense Logistics Agency of
contracts to C.H.K. Manufacturing Co. Inc.; La Pac Manufacturing, Inc.;
Ampack, LLC; and Dayton Bag & Burlap Co., for polypropylene sandbags.
We deny the protest.
Prior to the noncompetitive awards at issue here, on March 4, 2004, the
agency issued a competitive solicitation for the sandbags, set aside for
offerors that would manufacture the product in a Historically
Underutilized Business Zone (HUBZone), as certified by the Small Business
Administration (SBA).[1] On July 27, five contracts were awarded to
HUBZone firms, including Total, under that solicitation.[2] On August 4,
a stop-work order was issued to Total after the agency learned that
Total*s subcontractor (located in Texas) for this contract, which was
manufacturing the sandbags, was not a certified HUBZone firm, and thus the
sandbags being produced by that subcontractor did not meet the
solicitation*s requirement that the sandbags be produced by a certified
HUBZone firm. On August 19, Total informed the agency that it had located
a new HUBZone manufacturer in Puerto Rico that it intended to use as a
subcontractor. On that same date, the agency rescinded the stop-work
order. On October 18, the agency notified Total that it had failed to
adhere to the delivery schedule as established by its contract. Total
replied on October 27 that its new subcontractor has a *much smaller
capacity* to manufacture, and that it could not complete the deliveries
until March 31, 2005. Agency Report, Tab 10, Letter from Total to
Agency. On November 9, 2004, after receiving information that the
material used by Total*s new subcontractor to manufacture the sandbags
might be foreign and that not all of the sandbags were produced at the
subcontractor*s facility, the agency issued another stop-work order. The
agency noted that the contract included the requirement that the material
for the sandbags, as well as the final product, be domestically
manufactured, and therefore, the agency requested proof regarding the
actual manufacturer of the sandbag. The record evidences that Total has
not provided the requested proof, the stop-work order is still in effect,
and the agency and Total are still engaged in discussions concerning the
performance of that contract.
From November 5 to November 10, the agency noncompetitively issued
contracts to C.H.K., La Pac, Ampack, and Dayton to satisfy urgent
requirements for polypropylene sandbags in support of Operation Iraqi
Freedom. As indicated in the Justification and Approval, dated November
22, of these noncompetitive contracts, the sandbag requirements could not
be met under current contracts for a variety of unforeseen reasons.
First, developments in Iraq at the time these noncompetitive awards were
made indicated that more sandbags were needed on an expedited basis to
meet force-protection requirements. In addition, the sandbags currently
in use in Iraq have deteriorated at an unexpectedly fast rate due to the
extreme climate conditions; the sun*s ultraviolet rays (UV) and the
wind-driven sand have more quickly broken down the polypropylene fabric
than was anticipated.[3] Because of the time that would be necessary to
competitively procure these urgently needed sandbags, the agency instead
elected to contact known qualified HUBZone manufacturers to ascertain
their capability to manufacture and deliver sandbags meeting revised UV
requirements by March 2005. The contracting officer decided not to
contact Total because of the delinquent deliveries under its existing
contract, the outstanding questions concerning the acceptability of its
offered sandbags, and the fact that even if Total were able to resolve the
agency*s concerns regarding supplying compliant material, Total still
would not have been able to complete delivery under its contract until
March 31, 2005. The four noncompetitive awards were made to those
qualified HUBZone manufacturers that DLA found were able to produce and
deliver compliant sandbags by March 2005.
Total protests that the agency*s award of the four contracts on a
noncompetitive basis for sandbags was improper. The Competition in
Contracting Act of 1984 (CICA) provides for the use of noncompetitive
procedures where an agency*s need for the property or services is of such
an unusual and compelling urgency that the United States would be
seriously injured unless the agency is permitted to limit the number of
sources from which it solicits proposals. 10 U.S.C. S 2304(c)(2) (2000).
Although CICA requires that the agency request offers from *as many
potential sources as is practicable under the circumstances,* 10A U.S.C. S
2304(e); see Federal Acquisition Regulation (FAR) S 6.302(c)(2), an agency
may still limit the procurement to the only firm it reasonably believes
can properly perform the work in the available time. McGregor Mfg. Corp.,
B-285341, Aug. 18, 2000, 2000 CPD P 151 at 6; Hercules Aerospace Co.,
B-254677, Jan. 10, 1994, 94-1 CPD P 7 at 3. We will object to the
agency*s determination only where the decision lacks a reasonable basis.
Signals & Sys., Inc., B-288107, Sept. 21, 2001, 2001 CPD P 168 at 12. In
this regard, a military agency*s assertion that there is a critical need
related to human safety and which affects military operations carries
considerable weight. McGregor Mfg. Corp., supra, at 7. The
reasonableness of the contracting officer*s judgments must be considered
in the context of the time when they were made and the information that
was available at that time. Equa Indus., Inc., B-257197, Sept. 6, 1994,
94-2 CPD P 96 at 3 n.1.
We find the contracting officer had a reasonable basis for the
noncompetitive awards. The basic undisputed facts known to the
contracting officer at the time he decided that it would be necessary to
make noncompetitive awards, providing for delivery of the sandbags in
March 2005, were: (1)A the demand for sandbags had increased over the
past year in support of Operations Enduring Freedom and Iraqi Freedom, (2)
sandbags that were being used in Iraq were deteriorating at an
unexpectedly fast rate, (3) the contractor that had received the largest
share of the award under the previous contract for sandbags--that is,
Total--was delinquent in its deliveries and its performance had been
suspended because of concerns about the compliance with the contract*s
HUBZone and domestic manufacturing requirements, and (4) prior awards for
this item were set aside 100 percent for HUBZone firms by the SBA. In
view of the fact that the sandbags were reasonably found critical to
successful military operations, the contracting officer reasonably
determined that the requirement was urgent and that the procurement
process must be expedited through the multiple noncompetitive awards.
Total claims that the urgency-based noncompetitive contracts were caused
by a lack of advance procurement planning and by the agency*s decision to
obtain these sandbags only from HUBZone manufacturers. The record does
not establish that a lack of advance procurement planning was the cause of
this urgent requirement; instead, the record shows that the urgency of the
requirement was caused by the unexpected rapid deterioration of sandbags,
increased demand for sandbags in Iraq, and the performance problems on
Total*s current contract. The record also does not show that the urgency
here was caused by the agency*s determination that the sandbag requirement
should be set aside for certified HUBZone firms, given that four HUBZone
firms have been found that are able to satisfy the agency*s urgent
delivery requirements. In any case, FAR S 19.1306 provides express
authority to make noncompetitive awards to HUBZone concerns.
Total argues that it should have been solicited for this requirement,
contending that it has supplied sandbags and that, if solicited, it could
have satisfactorily met the agency*s delivery requirements, given that it
has a significant number of sandbags in stock and ready for delivery.
Total also argues that it is currently in negotiations with another
subcontractor, and that it was in a position to compete for the current
procurement to provide sandbags that meet the more rigorous UV
specifications.
Given Total*s delinquency and suspension of performance under its current
contracta**-which contributed to the urgent need here--we find no basis to
disagree with the agency*s judgment not to consider Total for an award for
delivery of the sandbags by March 2005. We also note in this regard that
Total has not established that the sandbags that it has available for
immediate delivery are manufactured by qualified HUBZone firms and meet
the more rigorous UV specifications.
Additionally, while Total stated that it is in negotiations with another
subcontractor, and can produce sandbags that meet the new specifications,
Total has not stated that it can do so by March 2005.
Total challenges Dayton*s and La Pac*s HUBZone status and manufacturing
capabilities, stating that DLA did not give the same scrutiny to these
firms as it did to Total before making the noncompetitive awards.
However, under 15 U.S.C. SA 637(b)(6) (2000), the SBA has conclusive
authority to determine matters of size status for federal purposes and our
Office will neither make nor review size status determination. Bid
Protest Regulations, 4 C.F.R. SA 21.5(b)(1) (2004). Similarly, the SBA is
the designated authority for determining whether a firm is an eligible
HUBZone small business concern, and it has established procedures for
interested parties, including procuring agencies, for challenging a firm*s
status as a qualified HUBZone small business concern. 15 U.S.C. SS
632(p)(5)(A), 657a(c)(1); 13A C.F.R. SSA 126.503, 126.801 (2004); FAR SS
19.306, 19.1303. As a consequence, our Office will neither make nor
review HUBZone status determinations. Ashe Facility Serv., Inc.,
Ba**292218.3, Ba**292218.4, March 31, 2004, 2004 CPD P 80 at 17.
With regard to the manufacturing capabilities, the record evidences that
DLA has sufficiently confirmed the ability of these firms to meet the
contract requirements, including the HUBZone requirements. To the extent
Total asserts that these firms are not in fact meeting contract
requirements, this is a matter of contract
administration. We do not review matters of contract administration
absent circumstances not present here; rather, such matters are within the
discretion of the contracting agency and for review by a cognizant board
of contract appeals or the Court of Federal Claims. 4 C.F.R. SA 21.5(a).
The protest is denied.
Anthony H. Gamboa
General Counsel
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[1] In 2002, the SBA recommended that procurements of sandbags be set
aside for HUBZone firms.
[2] Total received the largest award share under the solicitation.
[3] We note that the sandbags that were in use in Iraq were not
manufactured by Total.