TITLE: B-309999.3, Capitol Supply, Inc., January 22, 2008
BNUMBER: B-309999.3
DATE: January 22, 2008
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B-309999.3, Capitol Supply, Inc., January 22, 2008
DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective
Order. This redacted version has been approved for public release.
Decision
Matter of: Capitol Supply, Inc.
File: B-309999.3
Date: January 22, 2008
Holly A. Roth, Esq., McDermott Will & Emery, and Jon W. van Horne, Esq.,
for the protester.
Kacie A. Haberly, Esq., General Services Administration, for the agency.
Nora K. Adkins, Esq., and James Spangenberg, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
Agency properly excluded from consideration vendor's quotation for failing
to follow the solicitation's mandatory pricing instructions under
solicitation of Federal Supply Schedule vendors for issuance of multiple
blanket purchase agreements for office supplies.
DECISION
Capitol Supply, Inc. protests the agency's decision to exclude its
quotation from consideration under request for quotations (RFQ) No.
189760, issued by the General Services Administration (GSA) to all vendors
with Federal Supply Schedule (FSS) contracts for Special Item Number (SIN)
75 200 Office Products, for the issuance of multiple non-mandatory blanket
purchase agreements (BPA) to provide general office supplies, toner and
paper.
The RFQ was to implement the goals of the Federal Strategic Sourcing
Initiative (FSSI).[1] It provided for the issuance of BPAs that would
establish streamlined and common contracting vehicles that could be
leveraged by users throughout the government, better allow socioeconomic
goals to be satisfied by participating agencies, capture valuable
expenditure data to support the FSSI, and achieve cost savings.
The RFQ requested vendors to quote commercially available office products
from their GSA Schedule contracts (except for furniture, electronic
information technology (with a few exceptions), janitorial cleaning
supplies and "break room" supplies). Multiple BPAs were to be issued as a
result of the RFQ. The decision as to what vendors were to be issued BPAs
was to be made on a best-value basis for a base 1-year BPA with two 1-year
options. Each quotation was to be evaluated based on the following
evaluation factors: socio-economic status, technical and management
approach, capability and capacity, past performance, and price (including
discount terms). RFQ amend. 1, at 5.
Quotations were to be submitted in writing, and be fully and completely in
compliance with the RFQ instructions. Each quotation was to clearly
demonstrate understanding of both the general and specific requirements as
well as convey the vendor's capability for transforming its understanding
into successful performance under a BPA order. The RFQ cautioned that
"[i]ncomplete quotes will be considered non-responsive and will not be
further evaluated." RFQ at 24.
Vendors were required to submit their price quotations on an electronic
pre-formatted spreadsheet provided as part of an Excel workbook by the
agency.[2] Vendors were to enter their item prices as both a discount
against the applicable S.P. Richards (SPR) catalog list price and as a
discount against the vendor's own GSA Schedule price. RFQ amend. 2, Office
Supplies Price Quote Sheet. Vendors were also required to provide with
their price quotations additional volume discounts based upon designated
tiered thresholds.
The Excel workbook contained six tabs: instructions, contact information,
definitions, SPR catalog, item pricing and volume discounts. The item
pricing tab spreadsheet was presented as follows:[3]
+------------------------------------------------------------------------------------------------------------------------+
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
|------------+------------+------------+--------+--------+--------+-----------+--------+--------+--------+------+--------|
|Office |Manufacturer|Stripped |Current |Proposed|Quantity|Item |Unit of |Quantity|Discount|SPR |Discount|
|supplies |name | |GSA |BPA |per |Description|measure |per |off |list |off |
| | |manufacturer|schedule|price |selling |(for times |(for |selling |current |price | |
|sub-category| | |price |($) |unit |NOT in `SPR|items in|unit |GSA |($) |SPR list|
| | |part number |($) | |(for |Catalog' |SPR |(for |schedule| |price |
|(use pull | | | | |items |tab) |catalog)|items in|price | |(%) |
|down list) | |(Reference | | |NOT in | | |SPR |(%) | | |
| | |SPR catalog | | |`SPR | | |catalog)| | | |
| | |tab for | | |Catalog'| | | | | | |
| | |correct | | |tab) | | | | | | |
| | |format) | | | | | | | | | |
|------------+------------+------------+--------+--------+--------+-----------+--------+--------+--------+------+--------|
|Calendar |At-A-Glance | AAG47294 | $24.00 | $21.00 | | | EA | 1 EA | -13% |$27.39| -23% |
+------------------------------------------------------------------------------------------------------------------------+
The instructions tab contained detailed six-step instructions on how to
complete the spreadsheet together with a flow chart providing an example
of the steps to be followed by the vendors in completing the spreadsheet.
Step 3 of the instructions[4] asked vendors to
Review the list of "stripped manufacturer part numbers" in the "SPR
Catalog" tab, since step 4 below requires that you enter part numbers
for the office supplies items in your catalog in a very specific format.
Note that the entire Q1 2007 S.P. Richards catalog is contained in the
tab "SPR Catalog" for your reference.
Id., Tab 1, Instructions, at 1.
Step 4, "LIST OFFICE SUPPLIES ITEMS BY DEFINED SUB-CATEGORY IN QUOTE
SHEET," provided specific information on completing the spreadsheet, in
particular the need to cross-reference the stripped part numbers from the
SPR catalog for those items carried in the vendor's own catalog:
List all office supplies items you offer in the "Item Pricing" tab . . .
These items must be listed by manufacturer name (in column 2) and
"stripped manufacturer part number (in column 3). The "stripped
manufacturer part number" is the manufacturer part number without any
non-alphanumeric characters and without any spaces. ... A complete list
of "stripped manufacturer part numbers" (from the S.P. Richards catalog)
can be found in the "SPR Catalog" tab. It is very important to correctly
enter the "stripped manufacturer part number" since this information
will be used to automatically lookup the S.P. Richards list price and
other related information. Failure to correctly enter accurate "stripped
manufacturer part numbers" will result in invalid quotes.
NOTE: FOR ITEMS ENTERED THAT ARE NOT IN THE S.P. RICHARDS CATALOG --
Upon entering the specified information, you will notice that the
columns designated as "8" [SPR unit of measure], "9" [SPR quantity per
unit], and "11" [SPR list price] will populate automatically (if the
entered "stripped manufacturer part number" is contained in the S.P.
Richards catalog).[5] However, if the item entered in column 3 is not
contained in the S.P. Richards catalog, an error (`#N/A') will appear in
these columns. Disregard this error if the item entered is not contained
in the S.P. Richards catalog but is a valid manufacturer part number.
Step 5 required vendors, upon entering each item, to provide their current
GSA schedule price (in column 4) as well as their proposed BPA price (in
column 5) on the spreadsheet. The RFQ cautioned here, "Note that the
pricing being provided must be in reference to the specified `Unit of
Measure' in column 8 and the `Quantity per Selling Unit' in column 9 for
items listed in the `SPR Catalog' tab."
In summary, the RFQ required that the data for columns 1 through 5 must be
entered by the vendor for every item offered whether they were in the SPR
catalog or not. Vendors quoting items not found in the SPR catalog had to
also enter data in columns 6 and 7. If data was correctly entered into
these previous columns, columns 8 through 12 would automatically be
populated, although columns 8, 9, 11 and 12 would only show "#N/A" if the
item was not listed in the SPR catalog or if the stripped manufacturer
part number was not properly entered into column 3.
The RFQ stated that the use of SPR catalog list prices in the evaluation
was "for the sole purpose of having a consistent reference point for
pricing analysis and comparison across all suppliers during the proposal
process," and did not mean that the vendor must use SPR as its supplier.
RFQ at 32. Price was to be evaluated considering both the vendor's
discounts from the SPR prices and the discounts from the vendor's GSA
Schedule prices. RFQ amend. 1, at 6.
Forty-two quotations were received by the closing date of March 30, 2007.
AR at 2. After the quotations were evaluated, GSA established 13 BPAs on
August 3. Capitol's quotation was rejected because GSA found that it had
not been prepared in accordance with the RFQ's pricing instructions. After
an agency-level protest was denied, this protest followed. Capitol
contends that GSA improperly rejected its quotation.
Capitol's quotation offered 55,974 items. As initially submitted, Capitol
ignored the fact that the spreadsheet was only pre-formatted for the first
15,002 items and continued entering items beyond that limitation, which
meant that the items beyond the first 15,002 could not be evaluated. On
May 14, Capitol was given an opportunity to correct this problem by
copying and pasting, to a new spreadsheet, the pre-formatted columns to
allow entry of additional items. In addition, the contracting officer
informed Capitol that its price quote was not in the proper format and
could not be evaluated as submitted, and advised Capitol that it had
inserted improper part numbers in the submitted spreadsheet. AR at 2-3;
Contracting Officer's Statement at 6-7. Capitol submitted revised
spreadsheets on May 17.
Capitol's revised spreadsheet was also found by GSA to not comply with the
pricing instructions in several significant respects. Most particularly,
40,005 of Capitol's proposed 55,974 items were not identified in
accordance with the pricing instructions and for this reason the prices of
these items could not be evaluated. A spot check by GSA revealed that many
of these items were in the SPR catalog; however, Capitol did not enter the
proper stripped manufacturer part number as required by the pricing
instructions that would allow the item prices to be compared to the SPR
baseline price. In addition, many of these items were for out of scope
items (e.g., toilet paper dispenser, break room supplies) or had
quantities for SPR catalog items different from those identified in the
catalog.[6] With regard to the 15,959 items for which a proper stripped
manufacturer part number had been entered on the spreadsheet by Capitol,
2,181 of these items were out of scope items and 1,513 items stated valid
part numbers but designated quantities different from those identified in
the SPR catalog.
As indicated above, the solicitation pricing instructions clearly
indicated that, for items the vendor was quoting from its GSA Schedule
that were also found in the SPR catalog, the vendor was required to
cross-reference to the SPR catalog to provide and correctly enter the SPR
stripped manufacturer part number in column 3 to allow the pre-formatted
spreadsheet to be populated, which would enable the agency to conduct its
baseline price evaluation.[7] Our review of the record confirms that
Capitol did not provide the proper stripped manufacturer part numbers for
a majority of items it quoted from the SPR catalog and consequently a
baseline price was not established for these items. As a result, Capitol's
quotation could not be evaluated in accordance with the GSA's evaluation
scheme that envisioned a comparison of the relative discounts of items
that were listed in the SPR catalog.
An agency is not required to adapt its evaluation to comply with a
vendor's submission. It is the vendor that bears the burden of submitting
an adequately written quotation by including all information that was
requested or necessary for its proposal to be evaluated. See HealthStar
VA, PLLC, B-299797, June 22, 2007, 2007 CPD para. 114 at 2. While Capitol
argues that the agency could have evaluated the price of its quote based
only on the items for which it did provide the proper stripped
manufacturer part numbers, this would provide a benefit to Capitol that
other vendors did not have. Under the solicitation's instructions, vendors
were required to be evaluated against the baseline SPR price for those
items quoted that were found in the SPR catalog. Vendors could not choose
to opt out of the baseline evaluation by not providing the proper stripped
manufacturer numbers for items in the SPR catalog.[8] This would allow
Capitol the unfair advantage of deciding which method of item
identification would be more advantageous to it in the price evaluation,
which would have prejudiced the other vendors who adhered to the
solicitation requirements. Where a vendor's quotation contains an
irregularity that could provide a benefit to that vendor not extended to
all vendors by the RFQ, and which is prejudicial to other vendors, the
quotation is unacceptable. See The Mangi Envtl. Group, Inc., B-294597,
Nov. 29, 2004, 2004 CPD para. 238 at 2.
Accordingly, the agency's decision to reject Capitol's quotation was
reasonable.[9]
The protest is denied.
Gary L. Kepplinger
General Counsel
------------------------
[1] The FSSI involves the collaborative and structured analysis of federal
spending across a number of Federal agencies in order to, among other
things, establish vehicles that increase total cost savings, value, and
socioeconomic participation, and create a strategic sourcing community of
practice.
[2] This spreadsheet was pre-formatted for only the first 15,002 cells.
[3] The "calendar" item on the spreadsheet above is for illustrative
purposes only.
[4] Steps 1 and 2 are not pertinent to our decision here.
[5] Entering the stripped manufacturer part numbers also enables the
automatic calculation and population of column 12, "Discount off SPR list
price."
[6] GSA did not catalog the numerous instances of noncompliance within
these 40,005 items, but found the prices for these items could not be
evaluated because of the absence of proper stripped manufacturer part
numbers.
[7] Since vendors provide differing fair and reasonable prices for the
same items in their FSS contracts, comparing quotations only against
vendors' FSS contract prices would not result in a common baseline
evaluation.
[8] The protester's assertions that it was not appropriate or consistent
with the RFQ instructions for it to provide stripped manufacturer part
numbers where it did not intend to obtain the items from SPR and that it
would be improper for the agency to require the offeror to identify items
in a manner different from how they are identified in its FSS contract
reflect a lack of understanding of the RFQ's price evaluation scheme,
which clearly stated that the SPR catalog evaluation was only a reference
point for the price analysis of the quotations. Capitol was further
alerted to the requirement for SPR catalog identifiers in GSA's questions
and answers document provided to vendors on February 13 where several
vendors stated their prices were based on another company's catalog and
requested that they be allowed to quote based on that other company's
catalog. In response, GSA stated, "Answer: No. The use of S.P. Richards'
list price is for the sole purpose of having a consistent reference point
for pricing analysis and comparison across all suppliers during the
proposal process." Comments of Protester, November 26, 2007, Exhibit 1,
Questions and Answers, at 18 & 24.
[9] Capitol also challenges the price evaluation actually employed,
arguing that it was inconsistent with the RFQ. Because Capitol's quotation
was properly rejected for failing to provide the requested pricing
information for price evaluation purposes, it is not an interested party
under our Bid Protest Regulations eligible to protest how the prices were
evaluated, since there are other vendors with a more direct economic
interest to protest this issue. 4 C.F.R. sections 21.0(a), 21.1(a) (2007).