TITLE: B-297099, Europe Displays, Inc., December 5, 2005
BNUMBER: B-297099
DATE: December 5, 2005
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B-297099, Europe Displays, Inc., December 5, 2005

   Decision

   Matter of: Europe Displays, Inc.

   File: B-297099

   Date: December 5, 2005

   Thomas C. Papson, Esq., and Jason N. Workmaster, Esq., McKenna Long &
   Aldridge, LLP, for the protester.

   Joseph A. Pixley, Esq., Department of Transportation, for the agency.

   Henry J. Gorczycki, Esq., and James A. Spangenberg, Esq., Office of the
   General Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   1. Agency unreasonably awarded a contract for the design and construction
   of an exhibition pavilion on a sole-source basis under simplified
   acquisition procedures to a firm that the agency believed the exhibit
   organizer required be used, where the agency's belief was erroneous and
   unreasonable.

   2. A firm's statement of interest and technical capability to compete in
   response to an agency's published notice of intent to negotiate a contract
   on a sole-source basis is not a bid or proposal for which the GAO will
   recommend reimbursement of bid and proposal preparation costs where
   protest of sole-source award is sustained.

   DECISION

   Europe Displays, Inc. protests the sole-source award of a contract to
   Connexion under solicitation No. FTA-05-0256, issued by the Department of
   Transportation, Federal Transit Administration (FTA), for the design,
   construction, maintenance and dismantling of a pavilion at the Mobility
   and City Transport Exhibition in Rome, Italy.

   We sustain the protest.

   The Mobility and Transport Exhibition, which is organized by the
   UITP-International Association of Public Transport, is a bi-annual
   international exhibition for the public transportation industry. This
   year's exhibition was held on June 6-9, 2005 in Rome.

   On April 18, FTA announced on the Federal Business Opportunities
   (FedBizOpps) Internet site its intent to negotiate with "Fransquin &
   Chaiban: Connexion Company" on a sole-source basis for the design and
   construction of a United States pavilion at the exhibition. The notice
   stated that the agency was acting under sole source authority pursuant to
   "41 U.S.C. sect. 253(c)(1), only one responsible source" for the services.
   Agency Report, Tab T, FedBizOpps Solicitation/Notice, at 1. The notice
   further announced that other potential sources wishing to demonstrate that
   they could meet the agency's requirements could submit a written response
   with a technical capabilities statement "no later than 15 days after" the
   April 18 publication date. Id. at 2.

   On May 2, 14 days after the publication date, Europe Displays timely
   submitted a written response with a technical capabilities statement. On
   May 9, the contracting officer informed Europe Displays by phone that the
   agency would not give the firm an opportunity to compete. The agency's
   initial basis for excluding Europe Displays was that the agency believed
   that UITP (the exhibition organizer) required the use of Connexion for
   these services. Contracting Officer's Statement at 1. However, following
   communications with Europe Displays and others, the contracting officer
   learned that the agency's understanding of the requirement was incorrect,
   and that other firms could design and construct exhibition stands if
   custom designs were submitted to the exhibition architect at least 30 days
   prior to the start of the exhibition. Id.; Agency Report, Tab V,
   Exhibitor's Handbook, at 14. The contracting officer then determined that,
   since the exhibition was to start in less than 30 days, it was too late to
   get approval for another firm's design.[1] Contracting Officer's Statement
   at 1-2.

   The agency subsequently issued a justification and approval (J&A) for a
   sole-source award to Connexion based on the authority stated at Federal
   Acquisition Regulation (FAR) sect. 6.302-1(a)(2)(ii)(B) and 41 U.S.C.
   sect. 253(d)(1)(B) (2000), which authorizes the award of a follow-on
   contract for the continued development of a major system or highly
   specialized equipment when it is likely that award to a source other than
   the original source would result in unacceptable delays in fulfilling the
   agency's requirements. Agency Report, Tab I, J&A, May 18, 2005, at 1. The
   J&A stated the following explanation as to why Connexion was the only
   responsible source available:

     Given that Connexion is the only official exhibition management company
     for the show, they have the unique ability to coordinate the required
     efforts to design, build, and maintain the Pavilion in a timely manner
     and in compliance with the regulation of the UITP and the City Transport
     Exhibition. The UITP and the City Transport Exhibition recognize no
     other company. Connexion is the most economical and efficient solution
     to meet FTA's needs.

   Id. at 2. On May 19, the agency made award to Connexion at a price of
   $40,300.90. Agency Report, Tab G, Order for Supplies or Services.

   On May 19, Europe Displays filed an agency-level protest of the
   sole-source award to Connexion. On June 3, the agency determined that it
   was in the best interests of the agency to continue performance by
   Connexion while the agency considered Europe Displays' protest. Agency
   Report, Tab E, Authorization to Proceed with Contract Performance. On
   August 16, Europe Displays received the agency's decision denying its
   protest. This protest followed. The protested contract has been fully
   performed. Agency Report at 4 n.3.

   Europe Displays alleges that the authority cited in the agency's J&A does
   not support an award to Connexion because the award is not a follow-on
   award under a continuing project. It also alleges that the agency had no
   reasonable basis to determine that Connexion was the only firm permitted
   to design and construct stands at the UITP exposition, and that the agency
   did not conduct this procurement in a manner that permitted other
   responsible firms to compete.

   The agency does not dispute that Europe Displays is qualified and capable
   of performing the solicitation requirements. The agency also does not
   dispute that the sole-source authority cited in the J&A does not apply
   here. Rather, the agency states that regardless of what was stated in the
   J&A, the procurement was conducted under simplified acquisition
   procedures, and thus the laws and regulations applicable to simplified
   acquisitions as set forth at FAR Part 13 apply. We agree with these agency
   positions.

   Under the Federal Acquisition Streamlining Act of 1994 (FASA), simplified
   acquisitions--used to purchase supplies and services, including
   construction, research and development, and commercial items, the
   aggregate amount of which does not exceed certain dollar thresholds (FAR
   sections 2.101, 13.000, 13.003(a))--are excepted from the general
   requirement that agencies obtain full and open competition through the use
   of competitive procedures when conducting procurements. See 41 U.S.C.
   sections 253(a)(1)(A), (g)(1), and (g)(4) (2000). Part 13 of the FAR
   establishes procedures for simplified acquisitions, which are designed to
   promote efficiency and economy in contracting, and to avoid unnecessary
   burdens for agencies and contractors. To facilitate these objectives, FASA
   only requires that agencies obtain competition to the maximum extent
   practicable. 41 U.S.C. sect. 427(c); FAR sect. 13.104; Information
   Ventures, Inc., B-293541, Apr. 9, 2004, 2004 CPD para. 81 at 3. Under the
   maximum-extent-practicable standard, an agency "may solicit from one
   source if the contracting officer determines that the circumstances of the
   contract action deem only one source is reasonably available (e.g.,
   urgency, exclusive licensing agreements, or industrial mobilization)." FAR
   sect. 13.106-1(b)(1). We review protests of sole-source determinations
   made in these procurements for reasonableness. Information Ventures, Inc.,
   supra.

   The agency has not demonstrated that it had a reasonable basis to make a
   sole-source award here. Essentially, the agency states that it acted in
   "good faith" based on the best information available at the time. This is
   not a legitimate defense to this protest. Our review is based on whether
   the agency's sole-source decision was reasonable based on the information
   reasonably available to the agency at the time of the sole-source
   decision, not whether the agency acted in good faith. See Ultraviolet
   Purification Sys. Inc., B-226941, Sept. 10, 1987, 87-2 CPD para. 229
   at 3-4.

   The agency has not clearly identified the basis for its belief that UTIP
   required Connexion to be used for this work, but has provided the UITP
   Exhibitor's Handbook, which sets forth the parameters for the exhibitors.
   The handbook addresses "shell scheme stands" and "custom-designed stands"
   for use at the exhibit. A shell scheme stand is a standard, furnished
   module occupying 12 square meters for use by exhibitors that do not want
   to provide their own stands. Agency Report, Tab V, UITP Exhibitor's
   Handbook, sect. 5.5. The FTA's requirements here are for a larger,
   custom-designed pavilion with 150 square meters of usable space. Agency
   Report, Tab T, FedBizOpps Solicitation/Notice, at 2. The handbook stated
   the following requirements for custom-designed stands:

     Those companies that opt to have custom-designed stands must send the
     project drawings . . . to the exhibition architect Fransquin & Chaiban
     for approval. . . . The project must be submitted 30 days before the
     beginning of the exhibition at the latest. . . . Exhibitors are obliged
     to perform the assembly of their stands . . .

   Agency Report, Tab V, UITP Exhibitor's Handbook, sect. 5.6. Thus, the
   Handbook clearly contemplates that Fransquin & Chaiban (with which
   Connexion is associated) is not responsible for designing and/or building
   custom-designed stands, but will review project drawings for
   custom-designed stands submitted to it for approval, and that the
   exhibitor (not the exhibition architect) is responsible for stand
   assembly. While the agency states that it understood "Fransquin & Chaiban:
   Connexion" to have a dual role as both the exhibition architect to review
   stand designs, and as the official stand constructor, to design and build
   exhibit stands, Agency Report at 6; Contraction Officer's Statement at 1,
   the Handbook specifically identified SDI srl of Rome, Italy (not Fransquin
   & Chaiban or Connexion) as the official stand constructor for the
   exhibit.[2] Agency Report, Tab V, UITP Exhibitor's Handbook, sect. 10.5.

   The agency states that, once it became aware that UITP did not restrict
   the design and construction of exhibit stands to Connexion, the 30-day
   deadline for submitting project drawings to the exhibition architect had
   passed, and thus the agency did not have sufficient time to conduct a
   competition for this procurement. Agency Report at 7. This provides no
   basis for the sole-source award. In this regard, the record shows that if
   the agency had reasonably read the UITP Exhibitor's Handbook (or asked
   UITP), instead of assuming a sole-source award to Connexion was required,
   it would have had sufficient time to obtain competition to the maximum
   extent practicable, which would have allowed Europe Displays to compete
   for the custom-designed exhibition stand.[3] In this regard, we note that
   the agency knew of its requirements and began discussing plans for its
   custom-designed stand with Connexion in 2004, and had the time to obtain
   competition for the stand. Agency Report, Tab S, E-mail from Connexion to
   FTA, Dec. 13, 2004. Thus, the agency's actions in awarding a sole-source
   contract under simplified acquisition procedures without providing Europe
   Displays with a reasonable opportunity to compete was not reasonable, and
   we sustain the protest on this basis. See Information Ventures, Inc.,
   supra; Ultraviolet Purification Sys. Inc., supra, at 2-4.

   We do not recommend that the sole-source contract be disturbed inasmuch as
   it has been fully performed and the exhibition at which the agency needed
   the pavilion has long since closed. We do recommend that the agency
   reimburse the protester its costs of pursuing this protest, including
   reasonable attorney's fees. 4 C.F.R. sect. 21.8(d) (2005). The protester
   should submit its certified claim for costs, detailing the time expended
   and the costs incurred, directly to the contracting agency within 60 days
   of receipt of this decision. 4 C.F.R. sect. 21.6(f)(1).

   The protester requests that our Office also recommend reimbursement of its
   bid/proposal preparation costs, which in this case Europe Displays claims
   are its costs of responding to the FedBizOpps announcement of the proposed
   sole-source award. Where, as here, our Office determines that a
   solicitation, proposed award or award does not comply with statute or
   regulation, we may recommend that the agency reimburse the protester's bid
   or proposal preparation costs. Competition in Contracting Act of 1984
   (CICA), 31 U.S.C. sect. 3554(c)(1)(B); 4 C.F.R. sect. 21.8(d). However,
   the protester's response to the solicitation/notice here was a statement
   demonstrating its interest in and qualifications for providing the type of
   design and construction services required by the agency. Agency Report,
   Tab R, Europe Displays' Response. Thus, the response was nothing more than
   a request to be considered a capable source for the agency's requirement
   and does not constitute a proposal for which we could recommend
   reimbursement of preparation costs.[4] See Rotair Indus., Inc.,
   B-224332.2, B-225049, Mar. 3, 1987, 87-1 CPD para. 238 at 6 (source
   approval requests are not bids or proposals).

   The protest is sustained.

   Anthony H. Gamboa

   General Counsel

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

   [1] After the agency received Europe Displays' response, the contracting
   officer requested a waiver of the 30-day deadline. UITP's exhibition
   manager responded that this waiver could not be granted due to the size
   requirements of the agency's pavilion. Agency Report, Tab M, E-mail
   Between Agency and UITP, May 12, 2005, at 1.

   [2] The UITP Exhibitor's Handbook clearly contemplates that exhibitors may
   use firms other than SDI to construct custom-designed stands. Agency
   Report, Tab V, UITP Exhibitor's Handbook, sections 2.5, 3.4, 5.1, 6.1.

   [3] The agency alleges that, although Europe Displays submitted a timely
   response to the solicitation/notice, the agency could have allowed the
   firm to compete if Europe Displays had not delayed in responding to the
   solicitation/notice. Agency Report at 8-9. We see no basis for this
   attempt to shift the blame for the agency's unreasonable action to a firm
   that submitted a timely response.

   [4] The protester also requests that our Office recommend when the agency
   should issue similar solicitations for future exhibition requirements, and
   that future competitions should be set aside for small business concerns.
   We note that under CICA and our Bid Protest Regulations, 4 C.F.R.
   sect. 21.1, our Office's jurisdiction is limited to considering protests
   involving solicitations already issued by federal agencies and awards made
   or proposed under those solicitations. We also note that any decision on a
   protest of a future solicitation would be based on the specific
   circumstances surrounding that solicitation, and thus, current assumptions
   about the facts and circumstances of possible future solicitations would
   be speculative and prone to error. We therefore decline the protester's
   request for additional recommendations.