TITLE: B-400345, Frontier Transportation, Inc., September 9, 2008
BNUMBER: B-400345
DATE: September 9, 2008
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B-400345, Frontier Transportation, Inc., September 9, 2008

   Decision

   Matter of: Frontier Transportation, Inc.

   File: B-400345

   Date: September 9, 2008

   Romona Doty, Frontier Transportation, Inc., for the protester.
   Heather M. Self, Esq., Department of Agriculture, for the agency.
   Linda C. Glass, Esq., and Ralph O. White, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Protest that agency improperly rejected protester's quotation after
   unreasonably concluding that its price was too high is denied where the
   record shows that protester's price was significantly higher than the
   government estimate and significantly higher than the prices received from
   other small businesses during the competition.

   DECISION

   Frontier Transportation, Inc. protests the rejection of its quotation
   under request for quotations (RFQ) No. AG-0343-S-08-9004, issued by the
   Department of Agriculture for mobile refrigerated trailer units for use on
   incident assignments in the Northern Rockies geographic area. Frontier
   argues that the agency improperly rejected its quotation on the basis of
   unreasonable price.

   We deny the protest.

   This solicitation was posted on the federal business opportunities
   (FedBizOpps) internet website on February 29, 2008. The RFQ was issued as
   a small business set-aside, simplified commercial acquisition. The RFP
   provided that the quotations would be used to establish emergency
   equipment rental agreements, which the agency terms a form of blanket
   purchase agreement (BPA), against which orders could be placed for mobile
   refrigerated trailer units. RFQ para.B. The RFQ contemplated the award of
   BPAs to all vendors submitting reasonably priced, technically acceptable
   quotations. RFQ para.E.2.

   The RFQ also contained a clause entitled, "Method of Award-Cascading
   Set-Aside Procedure." RFQ at 5. The relevant portions of this clause
   advised that:

     1. Multiple awards of Blanket Purchase Agreements (BPA) resulting from
     this solicitation will be made using the following cascading set-aside
     order of preference:

       a. In accordance with FAR [Federal Acquisition Regulation] Subpart
       19.13, awards will be made on a competitive basis first to
       responsible, eligible HUBZone small business concerns.

       b. Secondly, additional awards will be made on a competitive basis in
       accordance with FAR Subpart 19.14, to responsible, eligible Service
       Disabled Veteran Owned Small Business (SDVOSB) concerns.

       c. Thirdly, additional awards will be made on a competitive basis in
       accordance with FAR Subpart 19.5, to responsible small business
       concerns.

   The RFQ provided that quoted prices would be evaluated for reasonableness
   and that price was not the determining factor for award, but rather, a
   factor for consideration. RFQ at 67.

   Eight quotations were received. Frontier was the only HUBZone vendor to
   submit a quote. There were no quotations received from SDVOSB vendors.
   Contracting Officer's (CO) Statement at 3. The agency reports that the
   quotations ranged in price from $125 to $450 daily and that the
   independent government estimate (IGE) was $250 per day. Three quotes
   exceeded the IGE--the quotes submitted by Frontier and two of the small
   business vendors.

   The agency determined that the five quotations priced below the government
   estimate were reasonably priced, but might not be sufficient to satisfy
   the government's needs during the upcoming season and decided that it
   would instead prefer to award to all eight vendors. Id. As a result, all
   three vendors that exceeded the IGE, including the protester, were
   contacted and each was given an opportunity to revise its quotation by
   June 25.

   Frontier was contacted by the agency on June 17, 2008. Frontier attempted
   to explain that its prices should be deemed reasonable, in part because
   the agency had paid this price in the past. The CO gave Frontier until
   June 25 to submit a revised quote. According to the CO, Frontier advised,
   during a telephone conversation on June 18, that it would not re-submit a
   quotation but would instead seek to be listed as a potential source with
   the Missoula, Montana regional office of the U.S. Forest Service.

   Only one of the small business vendors submitted a revised quotation by
   the June 25 deadline. The CO awarded six agreements with the following
   daily equipment rates: $125, $165, $170, $200, $200 and $250. On June 26,
   after awards had been made, Frontier submitted a revised quotation
   offering $400 per day and imposing a per unit surcharge of $1,000 per
   year. Since Frontier submitted the only quote from a HUBZone small
   business concern, the CO determined that Frontier's revised quote was
   unreasonably priced based on comparison with the IGE. CO's Statement at 4.
   Successful vendors were notified by mail and an on-line announcement was
   posted on June 20, 2008. Frontier subsequently filed this protest with our
   Office.

   Frontier argues that its quote was reasonable and that the CO failed to
   properly evaluate its quoted price in accordance with the terms of the
   RFQ. Frontier also argues that the IGE was flawed and should not be used
   as a basis to determine price reasonableness. The protester further argues
   that since it was the only HUBZone small business vendor to submit a
   quote, the CO could not evaluate its price by comparing it to the prices
   quoted by other small business concerns.[1]

   As noted above, the procurement was conducted under simplified acquisition
   procedures. Simplified acquisition procedures are designed to, among other
   things, reduce administrative expenses, promote efficiency and economy in
   contracting, and avoid unnecessary burdens for agencies and contractors.
   Federal Acquisition Regulation (FAR) sect. 13.002. These procedures
   provide discretion to COs to use one or more of the evaluation procedures
   in FAR Parts 14 and 15. See FAR sect. 13.106-2(b); Finlen Complex, Inc.,
   B-288280, Oct. 10, 2001, 2001 CPD para. 167 at 8-10. When using these
   procedures, an agency must conduct the procurement consistent with a
   concern for fair and equitable competition and must evaluate quotations in
   accordance with the terms of the solicitation. In reviewing protests of an
   allegedly improper simplified acquisition evaluation, we examine the
   record to determine whether the agency met this standard and exercised its
   discretion reasonably. Russell Enters. of N. Carolina, Inc., B-292320,
   July 17, 2003, 2003 CPD para. 134 at 3.

   The primary issue here is Frontier's claim that the CO improperly used an
   "unreasonable price" determination to reject the quote of a HUBZone
   business concern.[2] As stated above, the RFQ specifically provided that a
   BPA would be issued to those vendors who submitted a technically
   acceptable quote at a reasonable price. RFP para. E.2. The RFQ further
   stated that price would be evaluated in accordance with the FAR. Id. Under
   simplified acquisition procedures price reasonableness is determined by
   the CO. FAR sect. 13.106-3(a). The CO may make a reasonableness
   determination based on a comparison to an IGE. FAR
   sect. 13.106-3(a)(2)(vi). Here, the CO, in accordance with the FAR, based
   her price reasonableness decision on an IGE that was prepared using market
   research. Frontier's quote was significantly higher than the IGE and was
   therefore determined to be unreasonably priced. We do not find this
   determination to be unreasonable. [3]

   The protester also argues that the IGE used here was developed after an
   inadequate evaluation of the market for the required equipment. In
   calculating the IGE, the agency reports that it contacted companies in
   Montana, Idaho and Washington who offered mobile refrigerated units for
   rent and the prices from these firms ranged from $125 through $175 with
   variations in pricing schemes depending on length of rental. AR, Tab 2, CO
   Statement at 6. The agency also did an internet search to establish a
   price range for similar units meeting OSHA (Occupational Safety and Health
   Administration) requirements. Finally, the IGE was established by adding a
   premium amount to an average of the market prices to take into
   consideration the excessive wear and tear the equipment would experience.
   Id.

   On this record, we have no basis to conclude that the IGE was not
   reasonably based or that the market research was inadequate. If anything,
   the adequacy of the agency's market research was vindicated by the quotes
   it received from numerous other small business concerns. Frontier's
   argument that the IGE was based on an inadequate evaluation of the market
   reflects mere disagreement with the agency's assessment and provides no
   basis for our Office to sustain a protest.

   The protest is denied.

   Gary L. Kepplinger
   General Counsel

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

   [1] In its initial protest, Frontier also protested the eligibility of one
   of the successful vendors, Watkins and Shepard Leasing, LLC on the basis
   that Watkins did not qualify as a small business vendor. On August 19,
   2008, the Small Business Administration (SBA) determined that Watkins was
   other than a small business and the agency cancelled Watkins's agreement
   on August 21.

   [2] The protester suggests that the agency rejected its quote in order to
   issued a BPA to Watkins, a local hometown large business concern.
   Essentially, the protester is alleging that agency officials acted in bad
   faith. Government officials are presumed to act in good faith and any
   argument that contracting officials are motivated by bias or bad faith
   must be supported by convincing proof; we will not attribute unfair or
   prejudicial motives to procurement officials on the basis of inference or
   suppositions. ACC Constr. Co., Inc., B-289167, Jan. 15, 2002, 2002 CPD
   para. 21 at 4. Moreover, the protester's allegations of bad faith are
   undercut by the agency's decision to terminate the award to Watkins on
   August 21, upon learning that the SBA had concluded that Watkins was
   ineligible for award under a small business set-aside.

   [3] Frontier also complains that, in the course of this procurement it has
   requested specific information and documents regarding actions taken by
   the CO after notification of the protest. These documents included the
   notice of protest to successful vendors, suspension of performance or
   termination of the BPAs, and notice to our Office concerning the agency's
   intent to continue contract performance in the face of a protest. We
   simply note that in this procurement, the agency issued BPAs to all
   vendors with reasonable prices. The remedy available to Frontier was not
   for the agency to remove another company's BPA, but to issue a seventh BPA
   to Frontier. Under these circumstances, these documents were irrelevant to
   Frontier's protest.