Sea-Land Service, Inc., B-219665
| Decision Date | 17 December 1985 |
| Docket Number | B-219665.2,B-219665 |
| Parties | SEA-LAND SERVICE, INC. No. 85-2 CPD 677 |
| Court | Comptroller General of the United States |
Contracts - negotiation - offers or proposals - discussion with all offerors requirement - what constitutes discussion digest: 1. Submission, after best and final offers, of additional evidence of an offeror's financial resources does not constitute improper discussions or require an agency to request revised proposals from all offerors when the information does not affect the acceptability of the proposal but relates to the offeror's responsibility. Contracts - labor stipulations - service contract act of 1965 - applicability of act 2. Agency was not required to amend RFP and solicit a second round of best and final offers based on an increase in the applicability of the service contract act where there was uncertainty whether the additional coverage would be required and agency's analysis of protester's and eventual awardee's proposals indicated competitive standing would not be affected by proposed change. Contracts - labor stipulation - service contract of 1965 - applicability of act 3. Agency's communication to proposed awardee of potential for expansion in SCA coverage did not constitute "discussions" requiring the reopening of negotiations.
Sea-land service, Inc. (sea-land) protests the award on August 16 1985, of a fixed-price contract totaling $30, 709, 896 to bay tankers, Inc., under request for proposals (RFP) No N00033-85-r-4006, issued by the military sealift command (msc), department of the navy, for the operation and maintenance of four t-akr fast sealift ships. Sea-land protested to this office on August 9, 1985, that the MSC conducted inappropriate discussions concerning bay tankers' financial condition after receipt of best and final offers (bafos) on July 18, 1985, and allowed that firm to modify its proposal without providing a similar opportunity to other offerors. September 19, 1985, sea-land also protested to this office that it was adversely affected by the msc's inaction on its agency level protest concerning the application of the service contract act to this procurement. We consolidated these individual protests for administrative development and disposition on September 19, 1985.
We deny the protests in part and dismiss them in part.
The navy sought proposals for the operation and maintenance over a five- year period beginning August 16, 1985, of four t-akr ships assigned to the military sealift command's fast sealift ships program, a navy initiative designed to significantly increase the capability for fast sealift of military equipment and supplies from the United States to any overseas area of the world. The solicitation was issued on March 29, 1985, and required offerors to submit three separate proposal segments covering (1) the technical feasibility of the offeror's proposal to maintain and man the ships in a high state of readiness and achieve full operational status for sustained overseas deployment upon short notice; (2) the total cost to the government for the operation of the four fast sealift ships over five years; and (3) the demonstrable managerial capability and resources of the offeror devoted to this program. The solicitation indicated that the cost proposal was more important than technical, and technical was more important than management. By June 12, 1985, the source selection evaluation board completed its evaluations and a competitive range was established. Negotiations were then conducted with all offerors in the competitive range with BAFOS to be submitted by July 18, 1985. The source selection evaluation board reevaluated the BAFOS, reassigning grades for each offeror's cost, technical and management categories, and revising a comparative analysis. Applying the predetermined weights prescribed in the source selection plan, bay tankers had the best composite score and the lowest price at $30 709, 896, and the recommendation of bay tankers as the awardee was approved by the chairman of the source selection advisory committee. The award was made on August 16, 1985 based on a finding that urgent and compelling circumstances justified the award notwithstanding the protest.
Initially we note that the MSC has not provided the protester with the complete administrative report. Although the MSC has denied the protester access to its competitor's proposal and to much of the technical evaluation material, it has provided all of the requested material to our office for our review. DUE to the proprietary nature of much of this material we have reviewed it in camera. Our discussion of its contents, however, is limited because of the restriction on its disclosure. Eaton- kenway, B-212575.2, June 20, 1984, 84-1 CPD Para. 649; robert e. Derecktor of rhode island, inc.; Boston shipyard corp., B-211922, B-211922.2, feb. 2, 1984, 84-1 CPD Para. 140.
Financial condition
The navy reports that in order to protect the government as contemplated by the federal acquisition regulation (far), 48 C.F.R. Sec. 9.104-1 (1984), and in accordance with the terms of the solicitation, the contracting officer conducted a preaward survey to determine bay tankers' financial responsibility. To this end, a preaward survey team was formed and sent to bay tankers' headquarters to examine certain corporate documents on July 31, 1985. Based upon this examination, the preaward survey team recommended that bay tankers obtain a line of credit at approximately $1, 226, 000 and a letter of credit at $2, 363, 000, based on the government's analysis of the cash flow requirements necessary to perform this contract. Bay tankers countered with the suggestion for an irrevocable line of credit for the life of the contract with any draw- downs from this line of credit replaced immediately. The contracting officer analyzed bay tankers' suggestion; determined that it was sufficient to protect the government; found bay tankers responsible within the meaning of far, 48 C.F.R. Sec. 9-104-1, supra; and made award to bay tankers on August 16, 1985.
In all government procurements, an offeror's financial condition is a factor in determining contractor responsibility, that is, the offeror's capacity to perform the work. In contrast, evaluation criteria are used to make the graded assessments of the relative merits of individual proposals which form the basis for award. See delta data systems Corp. v. Webster, 744 F.2d 197, 200 (D.C. Cir. 1984), citing delta data systems corp., B-213396, apr. 17, 1984, 84-1 CPD Para. 430, at 5, 6. The protester contends that here the MSC used financial information in its evaluation of the acceptability of bay tankers' proposal. Since bay tankers' line of credit and letter of credit were essential for finding bay tankers' offer acceptable, sea-land argues, acceptance of these documents by the navy constituted improper discussions and a revision of bay tankers' proposal.
In support of this allegation, the protester offers the decision of the United States court of appeals for the District of Columbia circuit in delta data systems Corp. v. Webster, supra, as a controlling example of a procuring agency properly considering the financial condition of each offeror to be an evaluation criterion. In upholding the use of offerors' financial strengths in evaluating proposals in the delta data case, the court found that an evaluation factor listed in the solicitation, "vendor considerations, " was broad enough to include the vendors' financial condition. Sea-land urges that, like the RFP in the delta data case, the RFP for the present procurement provides evaluation criteria which focus on the characteristics of the offeror and encompass its financial condition. For example, sea-land points to the "management" subfactor "corporate description" which indicates that the evaluation will be based not only on the manpower and resources dedicated to the performance of this contract but the "additional manpower, expertise and resources available or ability to otherwise obtain additional manpower, expertise and resources if and when needed." Sea-land concludes that the "resources" referred to here are "financial resources" and therefore the financial condition of each offeror was an essential element of the evaluation scheme. As a result, sea-land argues, it was improper for the MSC to discuss with bay tankers the firm's financial condition after BAFOS had been submitted, and the protester contends bay tankers' revision of its offer with respect to its financial condition should not have been allowed.
The MSC responds that communications with bay tankers concerning its financial strength and leading to bay tanker's obtaining an irrevocable line of credit related solely to the determination of that proposed awardee's responsibility, and therefore those communications were a proper exercise of the contracting officer's discretion in making determinations of responsibility consistent with far, 48 C.F.R. Sec. 9.104-1. The MSC further emphasizes that the "resources" referred to in the "corporate description" subfactor of the management evaluation category were not specifically delineated as financial resources or financial condition, and were neither evaluated by the management source selection team for financial responsibility nor available for use by any of the other source selection teams.
The MSC further states that certain "financial statements" requested by attachment F to the solicitation were obtained as a start-off point to facilitate the preaward survey for financial responsibility which was analyzed separately after selection of the apparent successful offeror and before award; thus the solicitation advised offerors that a preaward survey would be conducted when insufficient...
To continue reading
Request your trial