Rodolfo

Good morning, I would need your valuable advice suggestions regarding this existing scenario. An American firm formed a JV with an Italian firm in order to participate in a tender for a MATOC in Italy as it would not have had the requisites to participate (for example SOA certifications which in Italy are certifications that qualify a company to participate in public contracts in categories of works and rankings of amount, both commensurate with the skills and experience that the company has shown to the Certification Body). Keep in mind that all the documentation that had to be sent for evaluation by the government was provided by the Italian company. The American firm only provided the bid bond in the form of a bank letter. The contract was outsourced to the JV. After a few months, the American firm expressed its desire to leave the JV for logistical and commercial reasons; the Italian company, on the other hand, would like to continue with the contract and would be able to provide all the guarantees required by the contract. The Italian firm would like to ask the government for a novation so that the contract is entrusted to it and no longer to the JV as it is about to dissolve. However, the Italian company is not able to clearly understand whether it will have to request an Agreement to recognize contractor's change of name or a Recognition of a successor in interest to Government contracts. The latter would not seem to the Italian firm the right way as the JV does not intend to transfer the contract to a third party but simply to continue the performance as a single entity without the American firm; the request for a change name would seem more logical, ie from the name of the JV to the name of the remaining law, namely the Italian one, which among other things already has other contracts in place with the Italian government. I hope I have explained myself well as English is not my mother tongue. Could someone kindly provide us with some suggestions? Thanks in advance.

He might but the point is this: does the GVT have the right to re-evaluate using new documentation after an award? I know that it can T4C the contract, but not re-evaluate the past performance. Am I wrong?

This is what at the end has happened. No company made a protest to the award to firm A. However, the requiring activity produced additional information about company A adverse past performance information that the KO was not aware of it when he made the award. The KO, based on this additional documentation received AFTER AWARD, has decided to re-evaluated the past performance of firm A from substantial to satisfactory and, being firm A no longer the best value for the Government, has T4C the contract with A. KO justified this stating that the government has the unilateral right right to change the evaluation scores also after the award of a contract and then go to another offeror. KO stated that each offeror, after an award has made to anothe offeror, has the right to discredit the awardee and if what it alleges is true, he, the KO, will terminate also the second award, the third as so on. I never hear of this way to do contracting. Have I missed something since I left the office? I have done many reserches but I cannot find any case similar to this (re-evaluate the scores after award using new documentation not at hand when award was made but provided by somebody else after award). Your opinion? Thanks

First of all, thank you for the replies. The contract was awarded 1 week ago. Firm A has absolutely not defrauded the GVT; she simply chose 5 recent and relevant projects where she had worked very well and was therefore sure of having good references. The RFQ stated that the KO had the right to obtain other information regarding the past performance of the quoters without limiting himself to the projects presented. However, he had the right but no obligation to do so. I am convinced that Company B can make a protest to either the agency or the GAO but what would the GAO or the agency say? The KO did not have the additional information that Company B gave him when he awarded the contract. I’m of the opinion that the GAO or the agency would not re-evaluate the past information assessment but only verify whether the KO has assessed the past performance IAW the terms of the RFQ and based on the material and information in its possession at the time of the award of the contract. But I could be wrong and so I'm asking your opinion on this forum. No KO can know all the past performances of a firm. Each company has its own skeleton inside the wardrobe. So the KO should become an investigator otherwise every company in theory would have the possibility to report the bad past performances of the awardee to the KO or file a protest because the KO failed to consider other information. So doing, it would be a never ending story. A protest after a protest. Am I saying something that makes sense or am I on the wrong track? Thanks again for the help.

Can a KO, after he has awarded a contract to a firm, re-evaluate the firm's past performance based simply on the request of another firm? A service contract has awarded in writing to firm A. The RFQ provided for best value trade off. Past performance was one of the evaluation factors. RFQ requested that quoters provided a minimum of 3 maximum 5 past performance information of contracts similar to the service requested. Company A provided 5 recent and relevant contracts for an amount well above the requested service. Based on the information obtained by the customers of the 5 contracts on how company A had or was performing, the KO gave to company A the maximum score to its past performance factor. After the award, company B wrote to the KO saying that company A should not have got the maximum score because it had performed other similar services in a non satisfactory manner and provided clear and documented evidence of this. Question: The KO was unaware of this additional information at the time of the award. He based his assessment on the information received from the customers of the 5 contracts. Can company B ask and get the KO to re-evaluate the past performance of company A?

Good morning and thank you. "It would appear from your description that the dispute concerns the assessment of liquidated damages and that this has already been filed as an appeal to the ASBCA". This is correct. "Why hasn't the BCA addressed the initial appeal?" First the Government requested an extension to prepare the rule4. Then, Government moved to dismiss the KTR appeal on the ground that it was not timely filed. KTR presented his arguments and is waiting for Board’s decision. "The Mod appears to offset the additional work/costs against the assessed LD's per the KO decision that you appealed". The mod is tricky. The project was completed and accepted on 30 Jan 2012 and the GOVT has withheld from the final invoice the amount due for the liquidated damages. If the intent of the mod was ONLY to settle the KTR's claim as per Contracting Officer's Final Decision dated 22 January 2013, the KTR would not have problem to sign it but it makes also reference to the liquidated damages which are in dispute. KTR is afraid that if he signs the mod as it is, the appeal will be dismissed. KTR maintains that the GOVT should issue two mods: A Bilateral agreement for the additional work with proper statement release. An unilateral mod for the assessment of the liquidated damages awaiting for the BOARD decision. Instead, if the KTR wants the money for the additional work performed he must agree to sign a mod that makes reference to the liquidated damages. KTR would like to submit a separate appeal to have the KO to pay him for the work already performed. His question is: can I appeal before the BOARD because the KO does not want to pay me in accordance with his final decision unless I accept to sign the mod with the assessment of liquidated damages? Thank you again for your assistance

BACKGROUND: On late April 2012, a KTR requested that the KO issued a final decision regarding his claim for additional work and the remission of the liquidated damages that the agency intended to assess. In spite of the KTR’s repeated written requests, the KO failed to issue a decision with a reasonable time (more than 8 months). The KTR then filed a notice of appeal to the ASBCA citing the KO failure to issue a decision. By action of the board, on late January 2013 the KO issued the final decision. With the final decision the KO denied the remission of liquidated damages; however approved the KTR claim in whole. The KTR appealed before the ASBCA the KO’s final decision to assess liquidated damages. As of today, the Board has not taken a decision yet. On late May 2013, the agency e-mailed to the KTR a bilateral modification with the request to return it signed. Block 13c of the modification cited FAR clause 52.233-1 Disputes. The modifications reads as follows [VERBATIM]: “The purpose of this modification is to settle Contractor's claim as per Contracting Officer's Final Decision dated 22 January 2013 regarding additional costs for purchase and installation of the heat recovery units, repair of the HVAC system in building XXX, and reconsideration of the assessment of liquidated damages under Contract no. XXXXXXXXXXXXX” It should be noted that the contract price shown in the modification (i.e., from) had already been deducted of the amount of liquidated damages and that, included in the supplemental agreement, there was a release (disclaimer) which said [VERBATIM]: ....”the Contractor hereby fully releases the Government its officers, agents and employees of and from all liabilities, obligations, claims, appeals and demands, which it now has or may hereafter have arising under or in any way related to this contract”. The KTR kowns that is customary for the government to include release languages in contract modifications (see FAR 43.204 (e)) to avoid subsequent controversies that may result from a supplemental agreement containing an equitable adjustment. However, he does not agree to sign a supplemental agreement that: 1. Makes reference to the liquidated damages that are in dispute. 2. De facto deducts the amount of the disputed liquidated damages from the contract price. The contractor holds that: 1. The language of the modification and of the disclaimer will bar him from pursuing his appeal. 2. The government’s assessment of liquidated damages and his claim are two separate issues; thus, they should not be incorporated into the same modification. 3. The supplemental agreement contains a Contractor's Statement of Release that makes reference to “appeals”. 5. By signing the supplemental agreement as written, de facto he would accept the assessment of liquidated damages. The KTR’s concerns were brought to the attention of the KO but, as of today, nothing has happened. QUESTION: Can the KTR appeal before the BOARD the KO’s failure to honor what he has established to accomplish with his final decision (i.e., pay the KTR’s additional work)?

Good morning gentlemen, I'm assisting an Italian company in the preparation of an appeal against a contracting officer's final decision to assess liquidated damages in the amount of € 28,557.80 (less than $50,000). This is the first time I do this, and I must admit that I have a problem primarily due to the fact that the English is not my mother tongue. Therefore, I kindly ask if someone could answer/clarify the following questions offhandedly whenever possible. The questions refer to the rules of the ASBCA dated 11 May 2011 and the FILING GUIDANCE Rev. 25 July 2012. RULE 1. QUESTION 1 - Can you submit a notice of appeal via electronic mail (asbca.recorder @ mail.mil) or facsimile ((703) 681-8535) or you have to submit it peremptorily via registered mail? QUESTION 2 - If you must submit it by registered mail, in the computation of the 90 calendar days is the date of receipt by the dell'ASBCA that attests or the date of receipt of the Italian post office? RULE 2. QUESTION 1 - Does the notice of appeal only require some information such as the contract number, the department and / or agency involved in the disputes, the decision from which the appeal is taken (i.e., the opposition to the assessment of the liquidated damages), and the amount in dispute (i.e., € 28,557.800)? QUESTION 2 - Can you skip in this phase (i.e., the submission of a notice of appeal) to explain word for word the grounds, attaching supporting documentation, for the company's appeal against the contracting officer's decision (i.e., the assessment of liquidated damages) and do it instead after the notice of docketing of appeal in accordance with the rule 6? RULE 4. QUESTION 1 - Shall documents, submitted by the company in addition to those submitted by the government, be in original and/or contain a notarized statement? QUESTION 2 - Do they have to be submitted by registered mail or can they be also submitted via facsimile or e-mail? RULE 6. QUESTION 1 - Is it in this phase that the company explains word for word the reasons for the appeal to the contracting officer's decision? QUESTION 2 - To strengthen the appeal, can you, in this phase, attach supporting documentation or the latter had to be submitted in accordance with RULE 4 (in other words, you cannot submit any additional document but only explain the grounds for the appeal)? For the moment this is enough for me to proceed. Thank you in advance. Rodolfo

Sorry if I ask these dummy questions. QUESTION 1 - If a contractor appeals a KO’s final decision to the Armed Services Board of Contract Appeals (ASBCA), the consultant's fee is reimbursable in case his appeal is sustained? The consultant must be an attorney or can be anyone? QUESTION 2- If the appeal is denied, shall the contractor reimburse the costs incurred by the government (e.g., the attorney's fee)? Thanks

I agree but the ultimatum, given today, falls due tomorrow. If the Contractor does not accept, he will be required to install the missing outlets. It sounds unbelievable, but it is true. What can he do?

Contractor had to renovate an existing building under a design/build contract. At the completion of the performance, Contracting Officer notified Contractor that he did not meet the standard required by the Scope of Work (corridors must have outlets ever; 6 meters and rooms/offices every 2.5 meters). Since Government had no longer need for the missing outlets, Contractor was notified that the Contracting Officer will deduct from the contract the cost for each outlet missing (44 outlets). Government estimated that the total amount to be deducted was euro 7.800,00. Contractor concurred with the amount. Contracting Officer proposed to swap the amount to be deducted with additional electrical work (in scope modification). According to the Contracting Officer the additional work balanced the work that had to be reduced (increase minus decrease = 0). Contractor rebuted that the additional work was worth more than euro 7,800 and therefore refused to accept the exchange (Contractor has already performed additional work for which is going to submit claim). Contractor stated he was available to perform the additional work but requested an equitable adjustement between the work to be deleted and the work to be added (a few thousands euro). The two parties did not arrive to an agreement. At this point Contracting Officer has given an ultimatum: or the Contractor accepts to perform the additional work at no additional cost (addition – less deletion = 0) or he will be required to install the missing outlets. Of course to install them after the completion of the work will cost more than to perform the additional work at no cost. So the Contractor will be forced to accept the Contracting Officer proposal. What are your thoughts?

No doubt about. KO was informed in writing. Government investigated the site and provided instructions on how to proceed. Two differing site conditions were category I, one category II. Thanks

Thanks for your quick reply. I was afraid to hear what you just said. It makes sense; the mod was bilateral and probably the Government issued it in that knew that otherwise the clause could not be enforced. We have three (3) outstanding differing site conditions and we have proposed to the Government to trade them for a time extension. The amount claimed by us is greater than the amount of L.D the Government will assess; however, we?d prefer to loose some money rather than to look bad. Government stated that it is too late (completion date was 19 Dec 2011). I remember when I was a KO we have issued modifications such this (but maybe we were wrong). I know that only Compt General can make remission of the whole or any part of the damages, but I do not know what prevents an agency from trading claims for L.D.? Do you mind to provide your comment? Thanks

Good evening to everyone. I am writing from Italy because I have a very important question and I am sure somebody will be able to help me. The company I am working for has been awarded a construction contract for the installation of new heating lines. IT IS IMPORTANT TO KNOW THAT THE STATEMENT OF WORK DOES NOT REQUIRE THE REPLACEMENT OF THE EXISTING HEATING LINES BUT ONLY THE INSTALLATION OF NEW LINES. IN OTHER WORDS, THE BARRACKS WILL NOT REMAIN W/OUT HEATING IN CASE OF A DELAY. The contract consists of a basic project and an option project. Each item has its own performance period. The contract contains the liquidated damages clause (FAR 52.211-12) in the amount of Euro 2.104,73 (same amount for both the basic and the option) for each day of delay beyond the contract completion date. The basic project was completed on schedule; however, the firm has been experiencing problems with the option. When it was evident that the option would not have been completed on schedule, the Government issued a bilateral modification to reduce drastically the amount of the liquidated damages (only for the option) from Euro 2.104,73 to Euro 242,50. The KO stated, in writing, that the reduction was due to the fact that also the Government caused delay. However, later the Government extended the completion date under the changes clause w/out explanation. Notwithstanding the extension, the firm missed the completion date (19 Dec 2011) and estimates to complete the option project not earlier than 28 Feb 2012. The Government issued a letter stating that the company from 20 Dec 2011 will work under L.D. In accordance with FAR, liquidated damages are a fixed amount set forth in a contract by an agency to compensate the agency for unexcused delay in the performance of the contract and are established by the Government prior to the issuance of the solicitation. These damages, expressed as a daily amount to be assessed against the contractor for each day of delay beyond the contract completion date, must be a reasonable forecast of the damages the Government will incur for each day of delay and not be in the nature of a penalty, however. If the liquidated damages do not meet this test, then they could be deemed an unenforceable penalty by a court or administrative contract appeals board. We are convinced that the amount set forth in the contract was greatly disproportionate to the presumable actual damages that should have been anticipated and that they erroneously included other ?specific losses?. Therefore, we believe that the readjustment was due to reflect a much more realistic and reasonable forecast of the damages the Government will incur for each day of delay (inspection and superintendence costs only). In fact, as stated above, the new heating lines DO NOT interfere with the existing ones. At present all the buildings are heated by the existing heating lines. I know that to be enforceable, the liquidated damages must be a reasonable forecast of the likely or actual damages if a delay occurs and not disproportionate to the presumed loss or injury to the non-breaching party. I also know that if forecast of damages was unreasonable and excessive, then the courts and boards will consider these damages to be a penalty and, hence, unenforceable. I also know that THE TIME FOR EVALUATING REASONABLENESS OF LIQUIDATED DAMAGES IS THE TIME OF CONTRACT FORMATION AND NOT THE TIME OF BREACH. Here comes the question: IN YOUR OPINION, THE REASONABLENESS OF THE GOVERNMENT'S FORECAST OF LIQUIDATED DAMAGES SHALL BE LOOKED TO THE CIRCUMSTANCES AT THE TIME OF CONTRACT FORMATION (WHICH WAS SEP 2010), OR THE TIME OF THE MODIFICATION WAS ISSUED TO REDUCE THE AMOUNT (WHICH WAS NOV 2011) WHEN THE GOVERNMENT WELL KNEW THAT THE FIRM WAS BEHIND SCHEDULE AND BY NO WAY COULD HAVE COMPLETED THE OPTION PROJECT BY THE REQUIRED COMPLETION DATE? IN OTHER WORDS, IS THE CLAUSE ENFORCEABLE BECAUSE THE GOVERNMENT READJUSTED THE AMOUNT WITH THE MODIFICATION OR IT IS NOT ENFORCEABLE BECAUSE WHEN THE CONTRACT WAS FORMED THE AMOUNT WAS A UNREASONABLE?

Mr. Jacques, thank you very much for your help. You really helped us. There is no doubt that this is a lost battle. Our firm knows the rule of the "Interested Party" very well. In challenges of the evaluation of proposals and the awards of contracts, this generally means an offeror that would potentially be in line for the award if the protest were sustained. The agency does not confute our theory of the unbalanced offer, but its confuting argument is that we are not an interested party to protest the award because we would not be in line for award anyway if our protest were to be sustained. The agency points out that there is one proposal with a total price lower than ours that would be considered for award ahead of us. However, we have found out that we were the third lowest offeror only after having received the redacted version of the Agency's request to summarily dismiss our protest. For this reason, we would like to point out that both the Government and our company could have saved money and time if the Agency would have taken into consideration to meet with us, as per our written request to resolve our concerns at Contracting Officer level through an open and frank discussion. We have reason to believe that also the second lowest offeror, who is an interested party, could not have known that it could have filed a protest claiming that the awardee submitted an unbalanced offer in that the unsuccessful letter issued by the Agency states only that the contract has been awarded to Firm XXXXX for the total award amount of Euro 134.735,00. We believe, for the transparency of the all procurement process, that it would have been better to state that an award had been made for the basic year (Euro 54.760,00) and that the Government had accepted the offer for option year one with the amount of Euro 41.240,00 and option year two with the amount of Euro 38,735.00. This would have allowed an interested party, thus the second lowest offeror, to consider filing a protest due to the unbalanced offer. Notwithstanding the GAO will find us a non Interested Party, we disagree with the Contracting Officer?s Statement dated 3 March 2011 and we would like, in order to avoid further confusion in the future, that GAO provides its comments. In reading the redacted Contracting Officer Statement we find out that he/she evaluated the offers for award purposes by adding the total price for all options to the total price of the basic requirements, therefore the Grand Total of all three years. The Contracting Officer concluded that the acceptance of the most favorable offer XXXXXX (grand total Euro 134.735,00) resulted in a fair and reasonable price for the Government totally ignoring the requirement under FAR 52.212-2( which was incorporated into the RFQ. This means that the Agency, independently if the prices are balanced or unbalanced, makes an award to the offeror who proposes the lowest price. Supposed the lowest offeror had proposed Euro 74.760, Euro 31.240, and Euro 28.735, it would have got the award because, according to the Contracting Officer, its total price was the lowest. We maintain that all offers with separately priced line items or subline items shall be analyzed to determine if the prices are unbalanced. If cost or price analysis techniques indicate that an offer is unbalanced, the Contracting Officer shall: (i) Consider the risks to the Government associated with the unbalanced pricing in determining the competitive range and in making the source selection decision; and (ii) Consider whether award of the contract will result in paying unreasonably high prices for contract performance. The low priced offer is significantly unbalanced, and the redacted award decision does not address at all the risk of unbalanced pricing. Here is the Contracting Officers statement (VERBATIM): 1. The Request For Quotation was evaluated IAW FAR Provision 52.212-2 "EVALUATION- COMMERCIAL ITEMS (JAN 1999)" paragraph (a) "The Government will award a contract resulting from this solicitation to the responsible offeror whose offer conforming to the solicitation will be most advantageous to the Government, price only considered". Furthermore in paragraph ( Options. "The Government will evaluate offers for award purposes by adding the total price for all options to the total price for the basic requirement". Therefore the Contracting Officer considered price only, and evaluated by adding the total price of all options to the basic requirement, therefore a Grand Total of all three years. 2. A comparison of the final prices revealed that the lowest offer Grand Total price for Base plus Two Year Options was ?134,735. 00 proposed by XXXXX. The second lowest Grand Total price for Base plus two Year Options was ?146,198.76 proposed by another offeror. The third lowest Grand Total price for Base plus two Year Options was ?156,327.00 proposed by the protestor. Based on price competition the Contracting Officer concluded that reasonable competition existed and that the acceptance of the most favorable offer XXXXX (Grand Total ?134,735.00), resulted in fair and reasonable price for the Government. AS YOU SEE NO MENTION TO THE UNBALANCED OFFER. By the way, our price for the basic year was lower than the price proposed by the awardee. In any case, thank you very much for having provided your comments. A lost battle, but a learned lesson. Thanks from Italy.

Would you be kind to help me to understand if I am in the right path???? An agency issued on 30 December 2010 a Request for Quotation (RFQ) for maintenance of Electric Substations for a base year and two option years. On 7 February 2011 during a meeting had with the agency to find if the contract had been already awarded or not, the Contracting Officer handed to us a letter by which he informed us that award had been made to firm XXXX and that the total amount of award was of Euro 134.735,00. Since the FAR provision 52.212-2 -- Evaluation -- Commercial Items incorporated in the full text under the RFQ states (VERBATIM) ?The Government will evaluate offers for award purposes by adding the total price for all options to the total price for the basic requirement. The Government may determine that an offer is unacceptable if the option prices are significantly unbalanced [EMPHASIS ADDED]. Evaluation of options shall not obligate the Government to exercise the option(s)? and the RFQ contained the FAR clause 52.217-9 ? ?Option to Extend the Term of the Contract?, we arrived at the conclusion that the total amount of award indicated in the aforementioned letter was erroneous in that it was inclusive also of the prices of the two option year periods. Thus, we requested in writing the unit prices of each line item of the basic year and of each option as well as the total price of the basic year and of each option year period. On 8 February 2011, the Agency provided the requested information. An analysis of the prices provided indicates that the price of the Base Year (Euro 54.760,00) is 33% over the first option year and 41% over the second option year (see below). BASE YEAR: Euro 54,760,00 1ST OPTION YEAR: Euro 41,240,00 2ND OPTION YEAR: Euro 38.735,00 GRAND TOTAL: Euro 134.735,00 The crucial question in this case is whether the pricing of each year is reasonable related to the actual costs that the successful offeror will incur in each year. In other words, each year should carry its proportionate share of cost plus reasonable profit. Instead, this offer was based on overpricing the base year and under pricing the option prices perhaps to shift risk of options not being exercised by the Government, or to secure advance payment. However, federal law requires that Contractor must bear the risk that options are not exercised and prohibits advance payment. Sometimes offerors unbalance offers by overpricing the base year to obtain Government financing of equipment requirement; however, to perform this service there is not a requirement to purchase any equipment that is suitable for use only in this contract to justify a base year price 33% over first option year and 41% over second option year. This is a recurring service expected to cost roughly the same from year to year (same quantities, same tasks to be performed, same difficulties, same efforts, etc.). A comparison with historical prices paid by the Government for the same type of service indicates the non-existence of base/option year excessive price differentials except for small increases due to the cost of inflation. Below we provide the prices for the previous years (noting that prices are lower because the quantity of the electrical substations to be serviced was inferior): BASE YEAR - 14 SEP 2007 - 13 SEP 2008 Euro 49.199,00 1st OPTION YEAR - 14 SEP 2008 - 13 SEP 2009 Euro 50.257,00 2nd OPTION YEAR - 14 SEP 2009 - 13 SEP 2010 Euro 54.008,00 Information in our possession indicates that also the Independent Government Estimate (IGE) did not provide base/option year excessive price differentials. Although at present we do not have the ranking of the other four offerors, we have reason to believe that also their prices do not provide base/option year excessive price differentials. In other words, we strongly believe that the successful offeror?s base/option year prices do not fall within the range of the IGE and other quotes. Under the awarded contract, during the base year the Government will pay a good chunk of the costs that the successful offeror will incur during the option year periods, and will not get the benefit of the low offer until halfway through the first option period (if the option is exercised). Even great confidence that options will be exercised will not dispel the doubt created by excessive differentials. We have arrived at the conclusion that Government should have determined that the offer was unacceptable since the option prices are significantly unbalanced (IAW FAR provision 52.212-2 -- Evaluation -- Commercial Items incorporated in full text under the RFQ). We claim that when an offer is grossly unbalanced mathematically it should be viewed as materially unbalanced since acceptance of the offer would be tantamount to allowing an advance payment. The successful offeror has mathematically unbalanced its quotes by front loading costs and profit that should have been allocated over both the base and the option periods. The effect of this is the interest free use of money, with obvious benefits for contract financing. The successful offeror will, in effect, receive advance payment for later contract work (if options are exercised) and advance payments continue to be illegal (IAW 31 U.S.C. 3324 formerly 31 U.S.C. 529), although the rules have been liberalized somewhat. Furthermore, in this case a materially unbalanced quote exists in the light of the possibility that options will not be exercised. We also note that our price for the base year is lower than the price of the successful offeror contrary to what we were verbally told during the meeting of February 7, 2011. Since our written request dated 14 February 2011 to resolve our concerns at Contracting Officer level through an open and frank discussion was not taken into consideration, we filed a protest to the GAO After the protest has been filed, the agency has provided us with the Contracting Officer?s Statement and with the price abstract. However, the price abstract only shows the grand total price (Base plus two Year Options) of the successful offeror, the grand total price (Base plus two Year Options) of the second lower offeror, and the grand total price (Base plus two Year Options) of our quotation. We were not provided with the unit prices of each line item of the basic year and of each option as well as the total price of the basic year and of each option year period of the other quoters and of the IGE. These prices were covered up. In the document, the Contracting Officer states that 6 offers were received and evaluated them by adding the total price of all options to the basic requirement, therefore a Grand Total of all three years. A comparison of the final prices revealed that the lowest offer Grand Total price for Base plus Two Year Options was ?134, 735. 00 proposed by XXXX. The second lowest Grand Total price for Base plus two Year Options was ?146, 198.76 proposed by another offeror. The third lowest Grand Total price for Base plus two Year Options was ?156,327.00 proposed by the protestor. Based on price competition the Contracting Officer concluded that reasonable competition existed and that the acceptance of the most favorable offer XXXX (Grand Total ?134,735.00), resulted in fair and reasonable price for the Government. Since there is not a doubt that the offer is unbalanced, we find the Contracting Officer?s statement (VERBATIM) ?the acceptance of the most favorable offer XXXX (Grand Total ?134,735.00), resulted in fair and reasonable price for the Government? not in compliance with the new regulations. While the new regulation continues to define an unbalanced price as one where one or more contract line items is significantly overstated or understated, the critical issue of unbalanced offers is now an assessment of risk. Therefore, the Contracting Officer, before to accept the unbalanced offer, had to consider the risks which would result in accepting it and had to make a determination whether award "will result in paying unreasonably high prices for contract performance or not?. Thus, the Contracting Officer should have reviewed it as a matter of risk and not simply accept it because most favorable to the Government. If the risk were acceptable, then offer could be accepted. We find that the Contracting Officer? s Statement is missing of a mandatory determination that the pricing does not pose an unacceptable level of risk, and the prices the agency is likely to pay under the contract are not unreasonably high. WHAT IS YOUR OPINION ON THIS STATEMENT? The agency maintains that (VERBATIM) only "interested party" may protest a federal procurement. An interested party is an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of a contract or by failure to award a contract. A bidder or offeror must be "next-in-line" for award to be an interested party. Protester's price of ?156,327.00 was the third-lowest offer in a procurement evaluated solely on price. The offeror whose price is ?146,198.76 is next-in-line and would be an interested party whose direct economic interests have been affected by the award of the contract to the awardee. Therefore, Protester's assertion that "its direct economic interests have been affected by the Government (sic) acceptance of the unbalanced offer" is incorrect and fails to consider the determinative fact that Protester is third-in-line for award. Assuming arguendo that awardee's prices are impermissibly unbalanced, Protester would not have a substantial chance of receiving the award as the third-in-line offeror in a procurement evaluated exclusively on price. Protester is not an interested party, and this protest should be dismissed accordingly. Our firms knows the rule of the "Interested Party". In challenges of the evaluation of proposals and the awards of contracts, this generally means and offeror that would potentially be in line for award if the protest were sustained. The agency does not confute our theory of the unbalanced offer, but as the only matter argues that we are not an interested party to protest the award because we would not be in line for award if our protest were to be sustained. The agency points out that there is one proposal with a total price lower than ours that would be considered for award ahead of us. (Just for the benefit of whom is reading this, we have found out that we were the third lower quoter only after having received the price abstract and our written request dated 14 February 2011 to resolve our concerns at Contracting Officer level through an open and frank discussion was not taken into consideration). Here, while there is a quotation lower in price than ours, the agency has not considered that a quotation is not an offer and, consequently, cannot be accepted by the Government to form a binding contract. ?Offer? means a response to a solicitation that, if accepted, would bind the offeror to perform the resultant contract. Responses to requests for proposals (negotiation) are offers called ?proposals?; however, responses to requests for quotations (simplified acquisition) are ?quotations,? not offers. Thus, the existing record does not establish that there would be an offeror in line for award ahead of us were our protest to be sustained. Absent such a showing, we consider ourselves to have a reasonable possibility of award, and thus to qualify as an interested party here. WHAT IS YOUR OPINION ON THIS STATEMENT? I would like to say thank you on advance to everyone who will respond to my concerns. Rodolfo from Italy

No, we have not talked to the KO yet. If the KO had sent to us only the second letter, I would say: it is right. Our technical proposal contains deficiencies and the Government correctly rejected it as unsatisfactory. But they conducted discussions and for me discussions must be meaningful. We were provided an opportunity to resolve those deficiencies, why not all of them? Why to have us to hurry to respond to the first letter when the Government knew that the technical proposal could not be considered acceptable even correcting the deficiencies addressed because there were other deficiencies into our technical proposal which were not brought to our attention? Why to call us the day after, requesting clarifications if, according to them, our past performance is marginal and no award can be made to a quoter, based on the RFQ, whose past performance is marginal or unsatisfactory?Isn?t a waste of time and efforts? Isn't somenthing strange? What I stated is true. I did not quote the deficiencies addressed in the first letter for space reasons; however, if somebody is interested I can quote them and you will see that they are not the same quoted in the second letter. I agree that even if the GAO will sustain our protest, we probably do not get the contract; however, I think it will be a lesson learned for us and for them too. Thanks for your time.

FIRST ?HAPPY THANKSGIVING? TO ALL YOU. I am writing from Italy since we are considering to file a protest to the GAO for the reason outlined here below. Since we only have 9 days left, if any of you could provide a quick comment it will be much appreciated. I have to say that I have been helped a lot by reading some articles posted in this forum. Sorry for the lengthy of this topic but I had to provide you with all the facts. A medical agency has issued a Request for Quotation for non-personal custodial services for base year plus four option years using the simplified acquisition procedures. The estimated amount of the resulting contract will be over the simplified acquisition threshold ($150,000). The quotation contains FAR provision 52.212-1 Instructions to Offerors--Commercial Items and FAR provision 52.212-2 Evaluation - Commercial Items. FAR provision 52.212-1 Instructions to Offerors--Commercial Items contains the following addendum (I quote only the portion of text that is relevant to this case): Paragraph (h) ?Multiple awards?. The following is added: The Government intends to issue a single order without discussions, based on initial quotes, to only one quoter as a result of this RFQ. FAR provision 52.212-2 Evaluation - Commercial Items contained the following addendum (I quote only the portion of text that is relevant to this case) ?a) The Government will issue an order resulting from this Request for Quotation (RFQ) to the responsible quoter whose quote conforming to the RFQ will be most advantageous to the Government, price and other factors considered. The Government will select the best overall quote based upon an integrated assessment of technical, past performance, and price factors, and whose quote conforms to the RFQ requirements to include all stated terms, conditions, representations, certifications required of this RFQ. Quotes will be evaluated using FAR Part 13.106-2procedures. The technical and past performance factors, when combined, are significantly more important than price, although price may become the deciding factor when determining the best overall value. Tradeoffs will be made to consider award to other than the lowest priced quote, other than the highest technically rated quote or to a higher rated, higher price quote. The technical factor and past performance factor are considered equal in importance. If any single technical subfactor is rated ?Unsatisfactory? or ?Marginal?, then the quoter will no longer be considered to receive an order. If either the technical factor or past performance factor is rated ?Marginal? or ?Unsatisfactory?, then the quoter will no longer be considered to receive an order. An order will be issued to the quoter whose quote represents the best overall value to the Government. The following factors shall be used to evaluate quotes: Factor I - Technical Subfactor (1) Approach, Subfactor (2) Resources, Subfactor (3) Contract Manager, Subfactor (4) Subcontracting Factor II - Past Performance Factor III - Price. On 16 November 2010 we received via e-mail the following letter (VERBATIM), signed by the Contracting Officer on 15 November 2010. I am going to omit the six findings for space reason and the POC name for privacy reasons: "The Government has evaluated Co.Lo.Coop Searl's quote submitted in response to the solicitation cited above based on the requirement and the evaluation factors set forth in the solicitation. This letter constitutes Co.Lo.Coop Searl's opportunity to revise its quote by addressing apparent deficiencies, weaknesses, and/or adverse past performance information stated below. Co.Lo.Coop Searl may address aspects of its quote that could be altered or explained to enhance materially the quote's potential for award. Based on the deficiencies, weaknesses, and/or adverse past performance findings outlined herein, Co.Lo.Coop Searl may submit a final quote revision. Government findings???????????????? Please provide your written response by 1300 CET, Wednesday, 17 Nov 2010. Any changes made to your quote should be highlighted to enhance visibility. Ensure that the changes made to the technical quote are reflected in the price quote. In other words, if the number of personnel is increased, or decreased, or if there is a change in the technical approach, then the price quote should be updated to reflect these changes. Should you have any questions, you may contact???????..." It should be noted that no adverse past performance findings were outlined in the letter received. By the due in date for the revision (17 November 2010), we timely submitted a revised price proposal and we addressed all the six deficiencies, weaknesses noted (half of them were misunderstandings on the part of the Government). On 18 November 2010 around 8:30 am our company was contacted telephonically by the Government?s POC for this acquisition. She needed further clarifications about two of the six issues addressed in the letter we received on 16 November 2010. She asked to provide written clarifications as soon as possible because they were to come within an award. To the question ?are we in the competitive range because otherwise it would be a waste of time for us? the answer was ?certainly, you are?. By 1 pm of the same date we provided the required clarifications. On 24 November 2010 we received the following letter (VERBATIM): ?Reference: Solicitation Number W9114F-I 0-T-0113, Custodial Services Contract - Vicenza (CSC-V) Dear Mr. Valerio: Pursuant to the procedures prescribed at FAR Part 13.106-2, as implemented by request for quotation (RFQ) provision 52.2 12-2, the Government has completed its evaluation of the quote submitted in response to the subject RFQ. We regret to inform you that, after careful evaluation against the factors established in the RFQ, your technical quote was rated "Unsatisfactory" and your past performance was rated "Marginal". The evaluation identified six distinctive deficiencies in your technical quote. Specific deficiencies under the technical subfactors were: (1) lack of understanding of the technical requirements associated to cleaning and disinfecting surgical areas, (2) failure to specify which employees will be fully dedicated to the contract and which will be employed on a part-time basis, (3) lack of understanding of the PWS requirements by proposing a different quantity of workers and team leaders in the quote narratives for Subfactor (1) and Subfactor (2); (4) a lack of understanding of PWS requirements resulting in overstaffing the "managerial" and "general worker" labor categories, (5) inconsistent quantity of proposed "Managers/specialists" (proposed a number in one section and a different number in another section), and (6) incomplete organizational chart that is inconsistent with the narrative for Subfactor (2) "Resources" . Therefore, your quote is no longer eligible for award consideration. The Government will not consider subsequent revisions of your company's quote, and no response to this letter is required. We thank you for providing your quote and wish you success in future endeavors.? It should be noted that none of these six deficiencies (I haven?t yet verified them so I can say if they are deficiencies or not) were addressed by the Government on its letter dated 15 November 2010. Furthermore, nor adverse past performance findings were outlined on the aforementioned letter. I am fully aware that FAR Part 13.106-2 is totally different than FAR Part 15, however I am of the impression that this evaluation was not performed in an impartial manner for the following reason: Although an agency is not required to establish a competitive range or conduct discussions under simplified acquisition procedures, I think that where an agency avails itself of these negotiated procurement procedures, the agency should fairly and reasonably treat quoters in establishing the competitive range and conducting discussions. The RFQ stated that no discussions would have been conducted. Discussions are exchanges between the Government and offerors, that are undertaken with the intent of allowing the offeror to revise its proposal. Since the Government allowed us to revise our quote, I would say that discussions took place. While agencies have considerable discretion in determining whether and how to conduct discussions, an agency must identify deficiencies and significant weaknesses, at a minimum, in the proposals of each offeror in the competitive range. Discussions must be meaningful, meaning that the discussions must be sufficiently detailed so as to lead an offeror into the areas of its proposal requiring amplification or revision. It is well established in federal procurement law that discussions between the contracting officer of an agency and an offeror must be meaningful. Once discussions have been opened, the FAR dictates that an agency "shall...indicate to, or discuss with, each offeror still being considered for award, significant weakness, deficiencies, and other aspects of its proposal that could, in the opinion of the contracting officer, be altered or explained to enhance materially the proposal's potential for award." In order to be meaningful, a discussion must generally lead an offeror into specific areas of their proposal which require modification. Additionally, discussions should be as specific as practical considerations permit, and give offerors a reasonable opportunity to address any potential weaknesses or deficiencies in its proposal which could impact the offeror's competitiveness. For the above I think we were prejudiced, given that the contracting officer must indicate in his/her letter dated 15 November 2010 all the deficiencies and or significant weaknesses he/she had found. In our case the Government on its letter dated 15 November 2010 did not address any of the six deficiencies which rendered our technical proposal unsatisfactory. I am right? In your opinion, would the GAO sustain our protest? What could happen if we win the protest? Thanks for your time and patient

I have also believed that a service contract could not exceed one year period. Maybe I was wrong. 37.106 -- Funding and Term of Service Contracts. (a) When contracts for services are funded by annual appropriations, the term of contracts so funded shall not extend beyond the end of the fiscal year of the appropriation except when authorized by law (see paragraph ( of this section for certain service contracts, 32.703-2 for contracts conditioned upon availability of funds, and 32.703-3 for contracts crossing fiscal years). ( The head of an executive agency, except NASA, may enter into a contract, exercise an option, or place an order under a contract for severable services for a period that begins in one fiscal year and ends in the next fiscal year if the period of the contract awarded, option exercised, or order placed does not exceed one year (10 U.S.C. 2410a and 41 U.S.C. 2531).. Funds made available for a fiscal year may be obligated for the total amount of an action entered into under this authority. © Agencies with statutory multiyear authority shall consider the use of this authority to encourage and promote economical business operations when acquiring services.

Mr. Hoffman, I don't want to create more troubles. It seems I have upset some members of this forum and I really apologize for having done that. I have believed this was an open forum for discussions but I am afraid my different culture, my different language, and the fact that I am new to this forum put me into troubles. It is not the cost of a couple of new faucets to make happy the COR which bothers me (the firm). The point is: can the USG rejects items only because do not like them or should reject items because not conforming to specs or not working? I was told this is a recurring issue. I have conducted extensive researches and I only wanted someone to tell me if I am or I am not on the right track. Nothing else. I was not looking for free service, nor I wanted to annoy anyone. But maybe my approach was totally wrong. So again, sorry. The issue is close and I will not reopen it.

So far the Contracting Officer did not take any action; only wrote an e-mail to my company (I am not an employee but a consultant) quoting verbatim the COR comment on the faucet ?drinking fountain: when we received the fountain submittal, we never received a submittal for the actual fountain faucet and do not like what has been installed, thus we have requested the contractor submit another solution". In design & build projects the contracting agency shall develop, either in-house or by contract, a scope of work that defines the project and states the Government's requirements. The design-build specifications prepared by the technical office in Vicenza are often functional specifications rather than design specifications describing the end product without describing a means of accomplishing it. Design specifications required to follow them as one would a road map; whereas, functional specifications simply set forth an objective or end result to be achieved, and the contractor may select the means of accomplishing the task. In most of the cases they do not specify any particular approach or product to be used in achieving the objectives. In this particular instance the drinking fountains where described as follows [VERBATIM]. ?The water shall serve the service counters and the toilet facilities to include two drinking fountains?. The offeror formulated the offer based on the provided technical specifications; however, since the specifications were totally silent about the drinking fountains, the offeror based its offer on industry-standard specifications. We must keep in mind that these contracts are Firm Fixed Prices. A firm-fixed-price contract provides for a price that is not subject to any adjustment on the basis of the Contractor?s cost experience in performing the contract. This contract type places upon the contractor maximum risk and full responsibility for all costs and resulting profit or loss. There is a misunderstanding, in my opinion, on how the COR interprets the design & build projects. COR requires the Contractors to submit for his prior approval all the equipment, material, or supply that is not clearly described in the specifications/drawings and it is up to him and other technical members to unilaterally decide whether they like or not the equipment, material, or supply the Contractor contemplates incorporating into the work regardless the fact they are suitable for their intended purpose. What is not approved must be resubmitted. Often the Contractors incur in additional cost in order to satisfy the desires of the Government and to maintain a good relationship. COR makes reference to paragraph b of FAR clause 52.236-5 -- Material and Workmanship [VERBATIM] ?When required by this contract or by the Contracting Officer, the Contractor shall also obtain the Contracting Officer?s approval of the material or articles which the Contractor contemplates incorporating into the work?. However the clause continues stating ?Machinery, equipment, material, and articles that do not have the required approval shall be installed or used at the risk of subsequent rejection [motivated ? emphasis added]?. The Government cannot invoke the right to reject work, equipment, material, or article incorporated into the work simply because it did not obtain its prior approval or because it does not like it. Its right to reject is dependent to the failure to strictly comply with a contract requirement specifically called out in the contract and susceptible to some form of precise measurement. Where either of the requirements are not present, the Government may only reject if the work will not be suitable for its intended purpose. Thus, the strict compliance rule will be enforced where the contract contains precise design (dimensions, tolerances, materials, etc.) or performance (weight, speed, etc.) requirement. When the Government rejects the work, it has the burden of going forward with evidence that the contract requirements have not been met. In Inter-West, Ltd., DOTBCA 2238, 92-1 BCA 24,601, op. withdraw on other grounds, 92-3 BCA 25,075, the board stated that ?where the Government holds the Contractor responsible for nonconforming work, the Government bears the burden of persuasion that the rejected work was not in compliance with the contract requirement.? To assert that the faucet was not submitted for approval and it does not like, by no means constitutes a clear and convincing evidence that the contract requirements have not been met. Any other thought, comment, advise? Thanks to your patience and sorry for syntactic and grammar errors. Rodolfo Prischich

My company has been awarded a construction contract to Install Pavilion at Hoekstra Field, Caserma Ederle, Vicenza, Italy in the amount of $ 541,429.48 with a completion date 24 April 2010. The contract is firm fixed price design & build at it contains the FAR Clause 52.246-12 -- Inspection of Construction (Aug. 1996). At page 4 of 10 of the WORK REQUIREMENT dated 15 April 2009 you read in paragraph C. 2 ?The water shall serve the service counters and the toilet facilities to include two drinking fountains?. In no other part of the specification or drawings you can find other references to the fountains (no type, no model, and no size). In absence of a specific type of drinking fountain, in preparing our offer we have considered a standard product of a manufacturer specializing in the construction of fountains. Performance was substantially completed on 24 April 2010 pending correction of a few punch list items (most of them already fixed). The COR is rejecting the ?faucets? because ?they are not of his liking?. For your information, our firm installed two different types of faucets but neither satisfied the desires of the COR. As of today the COR failed to inform us in writing why the faucet does not meet the work requirement. The COR maintains that (VERBATIM): ?drinking fountain: when we received the fountain submittal, we never received a submittal for the actual fountain faucet and do not like what has been installed, thus we have requested the contractor submit another solution" IAW the WORK REQUIREMENT Government approval was required for design, critical material, deviations, O&M manuals or equipment whose compatibility with the entire system must be checked, and other items as designated by the Contracting Officer. We have submitted the drinking fountain for approval (it was approved) but not the ?faucet? because its submittal was not part of the Government approval (it was not a critical material, a deviation, an equipment whose for Government approval compatibility with the entire system must be checked, or an item designated by the Contracting Officer). Furthermore, because a component of a standard product of a manufacturer specializing in the construction of fountains. Under Government contract law, the Government has a right to strictly enforce compliance with its specifications. See H. L. C. &Associates Construction Co. v. United States, 367 F.2d 586, 598(Ct.Cl. 1966) and Maxwell Dynamometer Co. v. United States, 386F.2d 855, 868 (Ct.Cl. 1967). FAR Clause 52.246-12 -- Inspection of Construction (Aug. 1996) incorporated under this contract states ? The Contractor shall, without charge, replace or correct work found by the Government not to conform to contract requirements, unless in the public interest the Government consents to accept the work with an appropriate adjustment in contract price. ? However, the Armed Service Board of Contract Appeal has reiterated in various occasions that when the Government rejects work as non conforming, it must be prepared to show that the contract requirement have not been met. See Hardeman-Monier-Hutcherson, ASBCA 11785, 67-1 BCA ? 6210 (1967); Ramar Co., ASBCA 16060, 72-2 BCA ? 9644 (1972); Pams Products, Inc., ASBCA 15847, 72-1 BCA ? 9401 (1972). To simply maintain that it is not of his liking (we have installed two different types of faucets and both were rejected) does not give to the Government the right to reject it as non conforming. The Government has the burden to prove that is not conforming to the specifications incorporated as part of the contract. If the Government had a specific model of faucet in its mind, he had the duty to clearly address the model, the type, and any other information which would have assisted us in taking its cost in consideration when we formulated our offer. To show our good will to cooperate with the Government we may replace for the third time the faucet with a type indicated to us by the Government if the price for the item will not be too exorbitant. However, we do not intend to continue to explore the market and to propose to the COR different types of faucets until we find one of his liking. What is your opinion? You may find the issue ridiculous, however it is becoming a recurring issue in Vicenza. My opinion is that unless the Government clearly indicates in the specifications/drawings what type of material/supply it wants, Contractors, in absence of specific information, should formulate their offer considering standard products. What is your opinion? Is there any court case that addresses this issue? Thanks

In Italy we use this regulation: "ARMY in EUROPE (AE) Regulation 190-16, Installation Access Control". I hope this may help you.