TITLE: B-297807, Al Long Ford, April 12, 2006
BNUMBER: B-297807
DATE: April 12, 2006
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B-297807, Al Long Ford, April 12, 2006
Decision
Matter of: Al Long Ford
File: B-297807
Date: April 12, 2006
Tarik S. Daoud for the protester.
William A. Roberts III, Esq., Richard B. O'Keeffe, Jr., Esq., and
Antonella Karlin, Esq., Wiley Rein & Fielding LLP, for American Equipment
Company, Inc., the intervenor.
Vera Meza, Esq., U.S. Army Materiel Command, 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
Where, after discussions had concluded, agency identified concerns
pertaining to the achievability of protester's proposed delivery schedule
that should have been apparent to the agency prior to discussions,
discussions should have been reopened since proposed delivery schedule was
an area that had to be addressed in order for the protester to be in line
for award.
DECISION
Al Long Ford (ALF) protests the rejection of its offer and the award of a
contract to American Equipment Company, Inc. (AMECO) under request for
proposals (RFP) No. W56HZV-05-R-D117, issued by the U.S. Army
Tank-automotive and Armaments Command (TACOM) for light utility trucks and
accompanying spare parts and manuals. The protester argues that its
proposal represented a better value to the government than AMECO's because
it offered a substantially shorter delivery schedule.
We sustain the protest.
The RFP provided for the award of a 2-year, fixed-price,
indefinite-delivery/ indefinite-quantity contract for a minimum quantity
of 500 and a maximum quantity of 6,000 light utility trucks to be
delivered to Iraq. Offerors were requested to furnish separate unit prices
for the guaranteed minimum number of trucks, trucks in excess of the
minimum quantity ordered during the first year, and trucks ordered during
the second year.[1] The solicitation advised offerors that TACOM
considered the requirement to be urgent, and that timely delivery and
performance were essential. RFP at 5.
The RFP provided for a two-step evaluation process. During Phase I,
offerors' technical proposals were to be evaluated on an acceptable/not
acceptable basis, with only those proposals found acceptable advancing to
Phase II. During Phase II, proposals were to be evaluated under the
factors of delivery, small business participation, and price to determine
which proposal represented the best value to the government. The
solicitation advised offerors that in the tradeoff determination, delivery
was more important than price, which was in turn more important than small
business participation.
With respect to delivery, section M of the RFP advised offerors that their
offers would be evaluated on the basis of a single date for completion of
delivery of the guaranteed minimum quantity to the destination point in
Iraq. Section M further advised that the "objective delivery date" for the
guaranteed quantity was 120 days after receipt of order (DARO) and that
proposals would be evaluated both to assess the extent to which the
objective delivery schedule was satisfied and the level of risk in meeting
the objective delivery date. The solicitation also furnished the following
guidance regarding delivery in section I, under the clause entitled
"Delivery Schedule For Delivery Orders":
Proposing an accelerated delivery schedule will not prejudice your offer.
However, if you propose a delivery schedule longer than the schedule
listed above [which identified the objective delivery date for the minimum
quantity as 120 DARO], your offer may be determined unacceptable for
award.
RFP amend. 5, at 14.
With respect to the small business participation factor, section M advised
offerors that their proposals would be evaluated "based upon the risk and
extent of the Offeror credibly achieving the Government's goals for U.S.
small business concern participation." RFP at 68. The RFP defined the
"goals for evaluation" as small business concern participation (including
all subcategories of small business concerns) of 10 percent or more and
U.S. small disadvantaged business concern participation of 2.2 percent or
more. Id.
Finally, with regard to price, the RFP advised that "[t]he Price Area will
be assessed based upon total evaluated price to the Government to include
an assessment of price reasonableness, realism and affordability to the
Government." sect. M.2b. The solicitation explained that the realism
analysis would be used to measure whether the proposed price "accurately
reflects the Offeror's approach in meeting the solicitation requirements
and objectives, as well as an expectation that the solicitation
requirements and objectives will be met at a price that will not result in
a net loss to the Offeror." Id.
Twelve proposals were received by the December 6, 2005 due date. The
agency found seven of the proposals to be technically acceptable and
conducted discussions with each of the seven offerors. By letter dated
December 19, the contracting officer notified the offerors that
discussions had been concluded and that final proposal revisions (FPR)
were due the following day.
All seven offerors whose proposals were found technically acceptable,
including ALF and AMECO, submitted FPRs. Since the evaluation of the other
five proposals is not relevant to the protest, we address the evaluation
of only ALF's and AMECO's proposals. Both ALF and AMECO proposed to
furnish Ford Model F-350 trucks, which were to be produced at the Ford
plant in Louisville, Kentucky. In their FPRs, ALF offered a delivery
period of 110 DARO, and AMECO, a delivery period of 150 DARO.[2] The
agency evaluated ALF's total price as $207,824,347 and AMECO's as
$191,443,169. Both proposals were rated as good under the small business
participation factor. In performing a tradeoff analysis of the two
proposals, the Source Selection Authority (SSA) found that while ALF's
proposed delivery period was more advantageous than AMECO's proposed
delivery period, ALF's proposed schedule had a very high risk associated
with it. Agency Report (AR), Tab 18, Memorandum of Source Selection
Decision, at 5. In this regard, the SSA noted that on the delivery
questionnaire that ALF submitted with its proposal, the protester
identified its production lead time for the trucks as 53 days.[3] When
members of the source selection evaluation board contacted the Ford Fleet
Regional Marketing Manager on December 22 to verify Ford's anticipated
production schedule for the vehicles, however, he informed them that "any
award made between now and the end of the calendar year would realize a 90
day production lead time for F-350 trucks manufactured at [Ford's]
Louisville, KY facility." Id. at 6.[4] Using a production lead time of 90
days, the SSA recalculated ALF's total delivery time as 147 DARO.[5] The
SSA then compared ALF's proposal to AMECO's and concluded that there was
no meaningful distinction between the two offers with regard to the small
business participation factor and that "the advantage of 3 days in
delivery of the Al Long Ford proposal [did] not justify paying [an] 8.6%
price premium." Id. The SSA concluded that AMECO's proposal, which had the
lowest evaluated price, represented the best value to the government. On
December 29, TACOM awarded a contract to AMECO and issued it a delivery
order for the minimum guaranteed quantity of trucks.
ALF protests the award to AMECO, arguing that the SSA should not have
recalculated its delivery period for purposes of the tradeoff
determination as 147 days because it offered to deliver--and would in fact
have delivered--the trucks within 110 DARO, as it proposed to do. The
protester further complains that the recalculation was performed without
its being given the opportunity to validate its proposed delivery
schedule. ALF contends that given that delivery was to have carried
greater weight than price in the determination of best value, its proposal
should have been determined a better value than AMECO's and selected for
award.
As a preliminary matter, the agency argues that ALF is not an interested
party to protest the award to AMECO because it would not be next in line
for award if the award to AMECO were set aside. The agency contends in
this regard that there is another offeror (offeror C) with a lower
evaluated price than ALF's.
In order for a protest to be considered by our Office, a protester must be
an interested party, which means that it must have a direct economic
interest in the resolution of a protest issue. Bid Protest Regulations, 4
C.F.R. sect. 21.0(a) (2005); Cattlemen's Meat Co., B-296616, Aug 30, 2005,
2005 CPD para. 167 at 2 n.1. A protester is an interested party to
challenge the evaluation of its own proposal where there is a reasonable
possibility that the proposal would be in line for award if the protest
were sustained. Transportation Research Corp., B-231914, Sept. 27, 1988,
88-2 CPD para. 290 at 3.
It is not apparent from the record here which offeror--offeror C, ALF, or
another offeror--would be in line for award if the award to AMECO were set
aside. The source selection document did not establish an overall ranking
for the proposals. Moreover, while it is true that offeror C's evaluated
price was slightly lower (less than 1 percent) than ALF's, offeror C
proposed a delivery period 10 days longer than ALF's; thus, it is not
clear that the agency would have determined offeror C's proposal to
represent a better value to the government than ALF's. Because we think
that there is a reasonable possibility that ALF's proposal would be in
line for award if its protest objecting to the recalculation of its
delivery schedule were sustained, we conclude that ALF is an interested
party to maintain the protest.
With regard to the protester's argument that the SSA should not have
relied on his recalculation of ALF's delivery schedule without giving ALF
the opportunity to validate its proposed schedule, the agency responds
that "it was perfectly reasonable for TACOM to independently verify the
proposed delivery schedule information with Ford Motor Company, the
identified vehicle manufacturer," Agency Legal Memorandum at 2, since ALF
provided no information from the manufacturer to support its proposed
schedule despite a solicitation instruction to provide substantiating
information confirming the achievability of the offeror's proposed
delivery schedule. The agency further argues that in its FPR, AFL reduced
its production lead time by 7 days and its overall delivery time by 10
days without explanation or support,[6] and that it was under no
obligation to reopen discussions to allow the protester to address
concerns regarding the achievability of this shortened schedule.
First, regarding TACOM's assertion that the protester failed to
substantiate its proposed schedule in its offer despite a solicitation
clause instructing it to do so, the clause in question, sect. L.2.2.2,
provided as follows:
In addition to the Offeror's proposed delivery schedule, completion of
the Delivery Questionnaire in Attachment 004 will require the offeror to
provide substantiating information which confirms the achievability of
the Offeror's proposed schedule, either as a Manufacturer or as a
Dealer/Distributor. Offerors are advised that Attachment 004
questionnaires require the offeror to identify Points of Contact in
order for the Government to verify certain proposal information. These
Points of Contact must speak English and be readily available either by
telephone or by email. In the event the Government cannot contact these
Points of Contact, validation of the Offeror's proposal may be
considered to lack credibility and will be assessed accordingly.
The only reasonable reading of the above clause is that the substantiating
information confirming the achievability of their proposed schedules
required of offerors was the information required by the delivery
questionnaire, and the delivery questionnaire, while asking offerors to
identify the number of days after receipt of order that it would take them
to have the specified quantity available for shipment, did not ask them to
substantiate that number.[7] Thus, we do not think that ALF can be said to
have acted contrary to the instructions of the solicitation by failing to
provide substantiation of this aspect of its proposed delivery schedule in
its proposal.
Further, while we agree with the agency that where an offeror introduces
an element in a post-discussions revision to its proposal that the agency
views as a weakness or a deficiency, the agency is not required to reopen
discussions to address the new concern, Cube-All Star Servs. Joint
Venture, B-291903, Apr. 30, 2003, 2003 CPD para. 145 at 10-11, it is clear
from the record that it was not ALF's shortening of its overall delivery
and production lead times in its FPR that gave rise to the agency's
concern regarding the achievability of its proposed schedule; rather, it
was ALF's proposal of a production lead time of less than 90 days and an
overall delivery period of substantially less than 150 days, both elements
that were also present in ALF's initial proposal. In this regard, the
record shows that the agency recalculated the production lead time and
overall delivery period for all offerors proposing a production lead time
of less than 90 days and an overall delivery period of less than 150 days.
In other words, the aspects of ALF's proposal that caused the agency
concern were also present in its initial proposal. The question thus
arises as to whether the achievability of ALF's proposed production lead
time and overall delivery schedule should have been a topic for
discussions, and whether the fact that the agency did not become aware of
the information that gave rise to its concerns about the achievability of
the protester's proposed schedule until after discussions had closed
relieved the agency of any obligation to raise the matter in discussions.
Where contracting agencies conduct discussions with offerors whose
proposals are within the competitive range, the discussions must be
meaningful. Professional Servs. Group, Inc., B-274289.2, Dec. 19, 1996,
97-1 CPD para. 54 at 3. Discussions cannot be meaningful if an offeror is
not advised of the weaknesses, deficiencies, or excesses in its proposal
that must be addressed in order for the offeror to be in line for award.
Mechanical Contractors, S.A., B-277916.2, Mar. 4, 1998, 98-1 CPD para. 68
at 4. Here, we think that the agency's failure to raise its concerns
regarding the achievability of ALF's proposed delivery schedule
constituted a failure to conduct meaningful discussions because the
protester might well have been determined to be in line for award if it
had been able to validate its proposed schedule.[8] Further, we do not
think that the agency was relieved of its obligation to conduct
discussions due to the circumstance that it did not learn of the
information giving rise to its concerns until after discussions had
concluded. If, after discussions are completed, the agency identifies
concerns pertaining to the proposal as it was prior to discussions that
would have had to be raised if they had been identified before discussions
were held, the agency is required to reopen discussions in order to raise
the concerns with the offerors. See DevTech Sys., Inc., B-284860.2, Dec.
20, 2000, 2001 CPD para. 11 at 4.
The key fact is that the concerns (while identified after discussions have
been closed) relate to the proposal as it was prior to discussions.[9] Id.
Before we will sustain a protest, the protester must demonstrate that, but
for the agency's actions, it would have had a substantial chance of
receiving award. McDonald-Bradley, B-270126, Feb. 8, 2006, 96-1 CPD para.
54 at 3; Statistica, Inc. v. Christopher, 103 F.3d 1577, 1581 (Fed. Cir.
1996). With regard to the issue of prejudice to the protester here as a
result of the agency's failure to discuss its proposed delivery schedule
with it, on the basis of the record before us it is reasonable to conclude
that ALF could have demonstrated that its proposed schedule--or perhaps,
an amended one of more than 110, but substantially less than 147,
days--was achievable. In this regard, the protester, who is a Ford dealer,
maintains that it "had discussions with Ford Motor Company in early
December 2005, wherein Ford told us that they expected they would be able
to get greater allocations of vehicles than they had been getting and
could produce the vehicles required in 45 days." Protester's Comments,
Feb. 10, 2006, at 2. We think that the protester's assertion that Ford
officials represented to it that they expected to be able to produce the
vehicles requested in 45 days is supported by the fact that two offerors
other than the protester proposed production lead times substantially
similar to the protester's (that is, production lead times of
significantly less than 90 days). We also think that the representation by
the Ford manager during his December 22 conversation with the agency
evaluators that while only 250 trucks could be manufactured in February,
"any quantity up to 1,000 could be produced in March," strongly suggests
that it will take substantially less than the full month of March to
manufacture the remaining 250 of the guaranteed minimum quantity, which
would result in a significant reduction of the projected production lead
time. Accordingly, we conclude that the record supports a finding that ALF
was prejudiced by the agency's failure to discuss the achievability of its
production lead time and overall delivery schedule with it, and we sustain
ALF's protest.
ALF also argues that it was unreasonable for the agency to have assigned
its proposal the same rating as AMECO's under the small business
participation factor, given that it is a small business and AMECO is not.
In response, the agency explains that it rated both ALF's and AMECO's
proposals as excellent for small business participation and as poor for
small disadvantaged business participation, leading to overall ratings of
good under the small business participation factor for both offerors,
based on both having proposed small business concern participation in
excess of the solicitation's defined goal of 10 percent and small
disadvantaged business participation of less than the solicitation's
defined goal of 2.2 percent. The agency's position is in essence that it
was reasonable for it to rate a proposal as excellent with regard to small
business participation so long as the offeror's proposed level of small
business participation exceeded the solicitation's defined goal. We agree.
The RFP provided that proposals would be evaluated to determine the extent
to which they proposed levels of small business participation meeting the
government's goals; thus, we think that it was consistent with the
solicitation's terms and reasonable for the agency to assign its highest
rating to proposals fully meeting or exceeding the government's goals. The
fact that the protester is a small business did not require that it
receive a higher rating than a non-small business.
ALF further argues that AMECO's prices for the second ordering period are
unrealistically low and will result in a loss on each truck ordered.
While an agency is not required to conduct a realism analysis where a
solicitation contemplates award on a fixed-price basis, an agency may, as
the agency did here, provide for the use of a price realism analysis for
the limited purposed of measuring an offeror's understanding of the
requirements or to assess the risk inherent in an offeror's approach.
Cross Match Tech., Inc., B-293024.3, B-293024.4, June 25, 2004, 2004 CPD
para. 193 at 14 n.6.
Here, the record shows that the agency did perform an analysis of the
realism of AMECO's pricing through comparison with other offerors'
pricing, and that it concluded that AMECO's prices, while lower than other
offerors', were realistic. While the protester disputes this conclusion,
it has not offered any evidence in support of its position; instead, it
merely asserts that it has been able to determine, based on information
furnished to it by Ford and its own knowledge of the costs involved, that
"it is absolutely and obviously impossible for AMECO to sell these trucks
at the price offered without resulting in a `net loss to the offeror.'"
Protester's Comments at 3. The protester's assertion that it can tell,
based on information that it has not shared with our Office, that AMECO's
prices are so low that they will result in a loss, is simply not enough to
support its position here.
Finally, ALF complains that while clauses 34 and 36 of section I of the
RFP require offerors to identify their contractor's and subcontractor's
plants, AMECO incorrectly identified Ford Motor Company, Detroit, Michigan
as its contractor's plant and failed to identify its subcontractor's
plant. The protester asserts that AMECO's failure to identify its
subcontractor's plant may imply that AMECO does not realize that the
trucks must be modified to meet the solicitation's requirements after
their manufacture by Ford and that AMECO may therefore not have accounted
for the expense or time required to make these modifications in its
proposal.
The clauses in question require the offeror to specify the location where
the supplies to be furnished will be available for government
inspection.[10] Even assuming that AMECO's entry of Ford Motor Company,
Detroit, Michigan as its point of inspection was in error because the
trucks in question are to be manufactured at Ford's Kentucky plant,
identification of the point of inspection has no bearing on the
acceptability of an offer. See Heieck Supply, B-171588, June 7, 1971.
Moreover, we see no basis for the protester's argument that AMECO's
failure to identify a subcontractor's plant as its inspection point
implies that it does not intend to have a subcontractor modify the
vehicles after their manufacture by Ford.[11]
Because we find that the agency should not have determined ALF's delivery
schedule high risk and recalculated it to the protester's prejudice
without raising the matter with the protester in discussions, we sustain
ALF's protest. However, because the agency has proceeded with performance
of the delivery order for the minimum guaranteed quantity and the trucks
are urgently required, we do not recommend that discussions be reopened to
give the protester the opportunity to validate its schedule. Instead, we
recommend that the protester be reimbursed its proposal preparation
costs.[12] Bid Protest Regulations, 4 C.F.R. sect. 21.8(d)(2). We also
recommend that the agency reimburse the protester the costs of filing and
pursuing the protest. 4 C.F.R. sect. 21.8(d)(1). In accordance with
section 21.8(f), ALF's claim for such costs, detailing the time expended
and the costs incurred, must be submitted directly to the agency within 60
days after receipt of the decision.
The protest is sustained.
Anthony H. Gamboa
General Counsel
------------------------
[1] Unit prices for operator manuals and spare parts were also requested.
[2] The other five offerors proposed delivery periods of 110, 120, 150,
160, and 180 DARO.
[3] Offerors were required to complete a "delivery questionnaire"
furnishing substantiating detail regarding their proposed delivery
schedules. In addition to asking offerors the number of days after receipt
of order that it would take to have the minimum required quantity
available for shipment (which is the number that the agency refers to as
"production lead time"), the questionnaire instructed each offeror to
identify its shipping company and port of embarkation and to explain how
the vehicles would be transported from the original location to the point
of embarkation and the number of days to do so; how the vehicles would be
transported from the point of embarkation to the port of debarkation and
the number of days to do so; and how the vehicles would be transported
from the point of debarkation to the final delivery point and the number
of days to do so. The delivery questionnaire also asked offerors to
furnish the name of a point of contact capable of communicating in
English.
[4] A summary of the conversation prepared by one of the evaluators
furnished the following additional detail regarding the information
conveyed by the Ford manager:
We [the evaluators] learned quite a bit of information about when in the
cycle an order would have to be placed to achieve maximum delivery
flexibility. In essence, if orders were placed before the middle of the
month, they could be slotted into production the next month. If orders
went beyond the middle of the month, basically they would have to wait
an additional 30 days before getting into the production schedule. In
this regard, any order placed now would not begin production until
February 06.
[The Ford manager] indicated there is a block of 250 vehicles slated for
February production on an "if come" basis for TACOM. The February
schedule can not be moved up. When asked if there were another 250
vehicles required, when could they be manufactured--[the manager's]
reply was "March", no sooner. We confirmed with [the manager] that if we
were to make an award within the next week, the 250 each would be
produced in Feb and any quantity up to 1,000 could be produced in March
06.
When we posed the question that this would indicate a 90 day production
lead time, [the manager's] answer was "Yes".
AR, Tab 14.
[5] The SSA recalculated ALF's delivery period by adding the number of
days that ALF had identified in its delivery questionnaire for
transportation from the point of embarkation to the port of debarkation
(45) to the 90 days that he had determined to be the correct production
lead time. He then added another 12 days to the sum to "reflect the time
required by Al Long Ford to ship from the Ford plant to the refit
facility, refit the vehicles, inspect and accept the vehicles, load them
onto the ship . . . and offload the vehicles at the port of debarkation."
AR, Tab 18, Memorandum of Source Selection Decision, at 6. The SSA assumed
that 12 days was the time period that it would take ALF to complete these
tasks because this was the difference between its overall offered delivery
period of 110 days and the sum of 53 (the number of days to get the
minimum required quantity ready for shipment) and 45 (the number of days
for shipping).
[6] In its initial proposal, ALF offered a production lead time of 60 days
and an overall delivery period of 120 days.
[7] The questionnaire posed the following questions under the heading
"Delivery Availability":
Manufacturers (Original Equipment Manufacturers):
What is the normal or routine production lead time, in days after
contract award, for the above line item? _______. Do not include
transportation time to destination.
Do you have any quantity of the above line item currently in inventory
or otherwise available for immediate delivery? _______ If so, how many
are available and where are they located?
Suppliers (Dealers/Distributors for OEMs):
Do you have any quantity of the above line item currently in inventory
or otherwise available for immediate delivery: ___No ____ If so, how
many are available and where are they located? __________________
If you do not have the quantity of the above line item currently in
inventory or otherwise available for immediate delivery, how many days
after receipt of order would it take to have the above quantity
available for shipment? ______ . If incremental deliveries are planned,
state the quantity and DARO for each incremental shipment ______
[8] We recognize that the agency did ask ALF to furnish additional detail
regarding its shipping schedule during discussions, but there was nothing
in the agency's request that would have placed the protester on notice
that the agency had concerns regarding the achievability of ALF's proposed
production lead time or overall delivery schedule.
[9] To the extent that the agency takes the position that the urgency of
the requirement precluded it from reopening discussions here, we point out
that according to the agency, the Ford spokesperson informed the
evaluators that orders placed before the middle of the month could be
slotted into production that month, whereas orders received after the
middle of the month could not be slotted into production until the
following month, meaning that production on any order placed prior to the
middle of January would begin at the same time (i.e., the beginning of
February) as an order placed in late December. In other words, the agency
could have delayed award of the contract here by up to two weeks without
any impact on the commencement of production.
[10] Clause 34 (Inspection Point: Origin Acceptance Point: Destination)
provides as follows:
The Government's inspection of the supplies offered under this order
shall take place at ORIGIN. The Government's acceptance of the supplies
offered under this order shall take place at DESTINATION. Offeror must
specify below the exact name and address of his facility, or his
subcontractor's facility, where supplies to be furnished under this
order will be available for origin inspection.
Contractor's Plant: ___________________________
Subcontractor's Plant: ________________________
Similarly, clause 36 (Inspection Point: Origin) provides as follows:
We will inspect the supplies as described elsewhere in this
solicitation/contract before acceptance. Fill-in the location,
contractor's or subcontractor's plant, where origin inspection will
occur.
Contractor's Plant: __________________________________
___________________________________
Subcontractor's Plant: _________________________________
_________________________________
[11] ALF also objects to the agency's override of the stop work order
issued in response to its protest; our Office, however, does not consider
such challenges. Shel-Ken Properties, Inc.; McSwain and Assocs., Inc.,
B-261443, B-261443.2, Sept. 18, 1995, 95-2 CPD para. 139 at 3.
[12] While the protester also requests that it be reimbursed for its lost
profits, we will not make such a recommendation because even where an
offeror has been wrongfully denied award of a contract, there is no legal
basis for allowing recovery of lost profits. Firebird Constr.
Corp.--Recon., B-246182.2, May 27, 1992, 92-1 CPD para. 473 at 2.