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).