TITLE: B-400255, Murray-Benjamin Electric Company, L.P., August 7, 2008
BNUMBER: B-400255
DATE: August 7, 2008
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B-400255, Murray-Benjamin Electric Company, L.P., August 7, 2008

   Decision

   Matter of: Murray-Benjamin Electric Company, L.P.

   File: B-400255

   Date: August 7, 2008

   Brad Benjamin for the protester.
   Todd Bailey, Esq., Federal Bureau of Prisons, Department of Justice, for
   the agency.
   Paul N. Wengert, Esq., and Ralph O. White, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Protest is denied where, even though agency evaluated proposals for
   requirements contract using higher estimated quantities than stated in
   solicitation, a recalculation of the prices using the quantities stated in
   solicitation confirms that awardee's total price remains lower than the
   protester's price, and where the protester has not shown that the small
   change in the estimated quantity would have resulted in a change in its
   proposed prices.

   DECISION

   Murray-Benjamin Electric Company, L.P. (MBE), a small business, protests
   the award of a contract to Allied Wire & Cable Inc. by Federal Prison
   Industries (UNICOR) under request for proposals (RFP) No. EP2466-08 for
   coaxial cable. MBE argues that the contracting officer (CO) erred in
   calculating MBE's price by using a different quantity of cable from the
   amount specified in the RFP.

   We deny the protest.

   UNICOR issued the RFP[1] on April 14, 2008, seeking proposals to supply
   cable compliant with military specification M17/84-RG223 to the federal
   correctional institution (FCI) at Loretto, Pennsylvania. The RFP was
   issued as a small business set-aside, commercial item solicitation, and
   sought proposals for a requirements contract for a 5-year period.

   After receiving initial proposals, UNICOR amended the RFP. The amendments
   added two additional delivery locations, changed the term of the contract
   to a 1-year base period followed by four annual options, provided for
   fixed pricing per foot, and requested revised proposals. The amendments
   also provided the following "estimated maximum quantit[ies]" in feet of
   cable:[2]

+------------------------------------------------------------------------------+
|                   |   Loretto, PA    |   Fairton, NJ    |   Lexington, KY    |
|-------------------+------------------+------------------+--------------------|
|Base Year          |     800,000      |    400,000[3]    |      500,000       |
|-------------------+------------------+------------------+--------------------|
|Option Year 1      |     800,000      |     400,000      |      100,000       |
|-------------------+------------------+------------------+--------------------|
|Option Year 2      |     800,000      |     400,000      |      100,000       |
|-------------------+------------------+------------------+--------------------|
|Option Year 3      |     800,000      |     400,000      |      100,000       |
|-------------------+------------------+------------------+--------------------|
|Option Year 4      |     800,000      |     400,000      |      100,000       |
|-------------------+------------------+------------------+--------------------|
|       Total       |   4,000,000      |   2,000,000      |      900,000       |
+------------------------------------------------------------------------------+

   The RFP provided that "[a]ward(s) will be based on the best value to the
   Government with past performance and delivery significantly more important
   than price." RFP at 8. The RFP explained that UNICOR desired a delivery
   time of 75 days or sooner from the time of issuance of each order. Revised
   proposals were due by June 2, 2008.

   UNICOR received timely revised proposals from six offerors, including MBE
   and Allied. Both MBE and Allied proposed to provide cable 75 days after an
   order, submitted past performance information, and proposed prices per
   foot for each location and time period. While evaluating offers, the CO
   noticed that the RFP option quantities for Lexington were too low by
   25,000 feet per year.[4] In calculating prices for evaluation purposes,
   the CO used the corrected quantity for the Lexington option years. She
   then multiplied each quantity by the corresponding per-foot price for each
   offeror. Allied's total estimated price was $7,134,725, while MBE's was
   $7,216,775. CO Statement at 5.

   The CO also evaluated past performance, and concluded that Allied had
   excellent past performance, while MBE had good past performance.
   Accordingly, since Allied had higher-rated past performance than MBE, the
   same delivery schedule, and a lower price, the CO selected Allied for
   award on June 4. AR, Tab 9, Award Notice, at 1.

   After reviewing the award notice and obtaining a debriefing, MBE filed
   this protest.

   DISCUSSION

   MBE argues that UNICOR was required to amend the RFP and request revised
   proposals, rather than making an award based on prices calculated for the
   larger quantity of cable. MBE also argues that it was competitively
   prejudiced by the error because, if the competition had been reopened, MBE
   would have offered a lower price.

   UNICOR responds that the offerors' total prices can be recalculated with
   certainty, using the quantities in the RFP, and that under this approach
   also, Allied proposed a lower total evaluated price than MBE. CO Statement
   at 4. UNICOR also argues that the difference in quantity was not
   significant enough to affect the offered prices.

   MBE does not dispute that Allied's prices were lower under both
   calculations,[5] but argues that it was prejudiced by the erroneous
   estimate because between the deadline for submission of offers (June 2)
   and award (June 4), the prices of copper and crude oil in commodities
   markets dropped. MBE argues that since copper is a raw material used in
   producing the cable, and oil is a component of the cost of delivery, if
   UNICOR had reopened the competition on June 4 to revise the quantities,
   MBE could have submitted a lower price than Allied. Protester's Comments
   at 2.

   Generally, where an agency's requirements change after a solicitation has
   been issued, it must issue an amendment to notify offerors of the changed
   requirements and afford them an opportunity to respond. FAR
   sect. 15.206(a). The object of the requirement is to avoid award decisions
   not based on the agency's most current view of its minimum needs. One
   circumstance requiring the issuance of an amendment is a significant
   change in the government's estimate of the quantity it expects to order.
   Symetrics Indus., Inc., B-274246.3 et al., Aug. 20, 1997, 97-2 CPD
   para. 59 at 6. In the context of a requirements contract, we have held
   that a change in the estimated quantity must be shown to have more than a
   trivial effect on the prices offered. See Microform, Inc.; Government
   Printing Office--Recons., B-231411.2; B-231411.3, Dec. 13, 1988, 88-2 CPD
   para. 587 at 2 (amendment decreasing estimated quantity in requirements
   contract was not material where there was no evidence that the change
   would have had more than a trivial effect on prices). Consistent with
   this, our Office will not sustain a protest unless the protester
   demonstrates a reasonable possibility that it was prejudiced by the
   agency's actions, that is, unless the protester demonstrates that, but for
   the agency's actions, it would have had a substantial chance of receiving
   the award. McDonald-Bradley, B-270126, Feb. 8, 1996, 96-1 CPD para. 54 at
   3; see Statistica, Inc. v. Christopher, 102 F.3d 1577, 1581 (Fed. Cir.
   1996).

   Here, MBE does not attempt to quantify how much the decrease in the cost
   of copper would influence the cost of producing the cable, nor how much
   the decrease in the cost of crude oil would affect the cost of delivery.
   Nor has MBE shown that it was uniquely-positioned among the competitors to
   benefit from the fortuitous short-term movement of the commodities markets
   that it has identified. Moreover, MBE has offered no explanation of how
   these issues are at all related to the small change in the estimated
   maximum quantity for one of the locations. Taken together, MBE has not
   shown that it was competitively prejudiced by UNICOR's evaluation of
   proposals using a slightly greater quantity than the maximum estimate
   stated in the RFP in the context of a requirements contract.

   The protest is denied.[6]

   Gary L. Kepplinger
   General Counsel

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

   [1] UNICOR refers to the solicitation as a request for quotations, and
   refers to the responses as quotes. See, e.g., CO Statement at 2-3.
   However, the record reflects that the solicitation itself was marked as a
   request for proposals. RFP at 1. Although we note the discrepancy, it does
   not affect the outcome of the protest.

   [2] Federal Acquisition Regulation (FAR) sect. 16.503(a)(1) requires the
   solicitation for a requirements contract to state "a realistic estimated
   total quantity."

   [3] Amendment 3 actually described the pricing lines for Fairton, New
   Jersey as "Option Year One (1)" through "Option Year Five (5)," instead of
   as UNICOR apparently intended: a base year and four option years. RFP
   amend. 3. Since the offerors apparently understood what UNICOR intended,
   we note the discrepancy for sake of accuracy, and conclude that it does
   not affect the resolution of the protest.

   [4] Since the base year quantity for Lexington of 500,000 feet was
   correct, the change to the option years increased the total estimated
   maximum quantity from 6.9 million feet to 7 million--a change of less than
   2 percent.

   [5] MBE is not represented by counsel, and Allied's line-item prices were
   redacted from the copy of the agency report provided to MBE. Our Office
   has reviewed the unredacted copy of the agency report to confirm that it
   supports the agency's argument in this regard.

   [6] In its comments, MBE also argues that its past performance should have
   been evaluated as excellent. Protester's Comments at 4-7. While we do not
   believe that protester's arguments show that the past performance
   evaluation was unreasonable, we note that even assuming MBE had received
   an "excellent" past performance rating, given its proposal of identical
   delivery terms, and a higher price than Allied, the protester has not
   shown that any error here affected the likelihood of MBE being awarded the
   contract.