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FAR 6.202: Alternative sources

Comptroller General - Key Excerpts

New SK Hart challenges the terms of the RLP relating to the use of a fixed price per square foot for the tenant improvement allowance. The protester argues that the use of the fixed amount will not allow the GSA to meaningfully evaluate the price of leases. Protest at 4. As the incumbent lessor, the protester asserts that its costs would be substantially below the fixed amount and that it would be competitively prejudiced because the fixed tenant improvement amount would artificially inflate its price. Id. In response, GSA explains that the tenant improvement requirements were not known when the RLP was issued, since they will not be fully developed until after award. AR, Legal Memorandum, at 3. The agency also observes that the RLP informs prospective offerors that after the construction was completed, if actual tenant improvements expenditures were less than the allowance, the agency would be able to return to the lessor any unused portion of the allowance, essentially crediting the lessor for existing improvements. Id. GSA asserts that the procurement is structured in a way to increase competition by not allowing the incumbent to claim savings for items for which the government has already paid. Id. at 5.

Agencies are required to consider the cost to the government in evaluating competitive proposals. Prosperity Metro Plaza of Virginia, LLC, B-411547, B-411548, Aug. 21, 2015, 2015 CPD ¶ 263 at 3. While it is up to the agency to decide upon an appropriate and reasonable method for proposal evaluation, the agency must use an evaluation methodology that provides a reasonable basis for comparing the relative costs of proposals. LCPP, LLC, B-413513.2, Mar. 10, 2017, 2017 CPD ¶ 90 at 3; TriWest Healthcare Alliance Corp., B-401652.12, B-401652.13, July 2, 2012, 2012 CPD ¶ 191 at 23. Further, agencies are not required to structure acquisitions in order to neutralize the competitive advantage of an incumbent, but may, nonetheless, use an evaluation method that attempts to foster competition by increasing the feasibility of a proposal being submitted by non-incumbent offerors. Prosperity Metro Plaza of Virginia, LLC, supra at 3.

Our review of the record and the agency’s rationale for utilizing the fixed tenant improvement allowance gives us no basis to question the RLP’s price evaluation methodology. Notwithstanding the protester’s contention that it could provide these improvements at a lower cost, the agency has provided a reasonable basis for using the fixed allowance amount in its evaluation of prices, and the protester’s disagreement with the approach does not render that choice unreasonable. Our Office has previously explained that the disadvantage that is the focus of the protester’s complaint (to reduce or eliminate its incumbent advantage) is unobjectionable in view of GSA’s broader objective of fostering competition, which is consistent with the overarching mandate of the Competition in Contracting Act to obtain full and open competition for the government’s requirements. Id. at 4.  (SK Hart Properties, LLC B-414338: May 11, 2017)

NMSU asserts that the agency improperly is excluding the non-proposed cost elements from competition for its requirements. Although NMSU takes issue with all of the agency’s exclusions, it has focused particular attention on the balloons that will be used to perform the requirement. In this connection, all parties agree that there is only one manufacturer of balloons that meet NASA’s requirements, a concern referred to as Raven/Aerostar. Contracting Officer’s Statement of Facts, at 3.

NMSU has an exclusive teaming agreement with Raven/Aerostar. By the terms of that teaming agreement, NMSU enjoys a [deleted] percent price advantage over any other concern wishing to purchase balloons from Raven/Aerostar for purposes of meeting NASA’s requirements under the contemplated contract. Teaming Agreement, exh. A. NMSU maintains that the agency’s exclusion of the cost associated with acquiring balloons in particular, and, more generally, the agency’s exclusion of the other costs identified in the RFP, improperly deprives NMSU of a competitive advantage it properly has obtained through its teaming agreement, and more generally, its experience as the incumbent contractor for this requirement.

NASA responds that it is using non-proposed cost plug numbers in order to foster competition for its requirement. As with NMSU, NASA’s position focuses principally on the cost associated with acquiring balloons from Raven/Aerostar, although it also argues more generally that excluding the other costs it has identified in the RFP also will promote competition. According to the agency, it included a plug number for the balloon cost element because of concerns raised by other potential competitors. In this connection, NASA has provided information presented by other potential competitors about their inability to obtain pricing from Raven/Aerostar that is as favorable as the pricing offered by Raven/Aerostar to NMSU. See generally, AR, exhs. 11, 13, Correspondence Between NASA and Other Prospective Competitors.

NASA explains that the protester has been the contractor for its balloon launching requirements for more than 25 years, and has been awarded a total of 4 contracts since 1987. NASA points out as well that only the protester submitted a proposal for the last solicitation it issued for these requirements and, as noted, the record includes correspondence from two other potential competitors in which they outline their essential inability to compete effectively for the agency’s requirements because of the existence of the NMSU-Raven/Aerostar teaming agreement. NASA concludes that its actions are necessary in order for it to obtain effective competition for its requirements.

As for the other non-proposed costs included in the RFP, NASA contends that there has been disagreement between NASA and NMSU concerning whether historical data relating to NMSU’s performance of the predecessor contracts could potentially be made available to the other competitors. In this connection, the record includes correspondence between NMSU and NASA that reflects a difference of opinion among the parties concerning the proprietary nature of the historical cost information for various contract elements, principally NMSU’s unburdened labor rates, but also, secondarily, information relating to its historical costs for certain materials and services. AR, exh. 12, Correspondence Between NASA and NMSU. NASA therefore takes the position that, in order for other potential competitors to be able to prepare proposals, and in order to ensure that NASA does not release information that NMSU views as proprietary, it has included plug numbers for the other costs identified in the RFP.

While as a general rule, agencies are not required to structure acquisitions in order to neutralize the competitive advantage of an incumbent, agencies may nonetheless use an evaluation method that attempts to foster competition by increasing the feasibility of a proposal being submitted by non-incumbent offerors. See Int’l Computaprint Corp., B-207466, Nov. 15, 1982, 82-2 CPD ¶ 440 at 3. In our view, NASA’s actions are consistent with the broad intent of the Competition in Contracting Act’s (CICA) central mandate that agencies use full and open competition to fulfill the government’s requirements. See 41 U.S.C. § 3301. These actions are also consistent with the central underlying policy of our Bid Protest function, which requires our Office to ensure that federal government contracts are awarded in a manner consistent with CICA’s broad mandate for full and open competition. 31 U.S.C. § § 3551-3556.

The record here amply demonstrates the difficulties faced by NASA in obtaining competition for its requirements. As noted, other potentially viable competitors for NASA’s requirement have expressed their inability effectively to compete because of the NMSU-Raven/Aerostar teaming agreement. NASA’s use of a plug number for the cost of balloons has the effect of enabling these other offerors to submit proposals that will be competitive with a proposal submitted by NMSU, at least insofar as the balloon element of the requirement is concerned.

With respect to the other non-proposed costs, the record also supports NASA’s decision to use plug numbers for these elements of its requirements. This decision emerges from a concern that NASA would be required to release potentially proprietary historical information relating to performance of the predecessor contracts. As noted, in correspondence between NASA and NMSU, NMSU has been adamant about the allegedly proprietary nature of the historical cost information. The protester cannot, on the one hand, insist that this information be withheld from other competitors because it is proprietary, and on the other hand, insist that other concerns prepare proposals with what essentially would amount to inadequate information to intelligently respond to NASA’s requirements.

In the final analysis, we conclude that NASA has structured the subject solicitation in a manner that attempts to promote, rather than stymie, competition. While the agency’s chosen method for leveling the playing field has the effect of reducing or eliminating NMSU’s incumbent advantage, we find that unobjectionable in view of NASA’s broader objective, which is consistent with the overarching mandate of CICA to obtain full and open competition for the government’s requirements. In fact, we note that the broad discretion given agencies to increase and maintain competition includes, when necessary, excluding an offeror to develop a second source. See, e.g., Hawker Externacell, Inc., B-283586, Nov. 23, 1999, 99-2 CPD ¶ 96 at 4. We see no violation of procurement law or regulation in these more modest and reasonably-tailored actions taken by NASA here to increase competition. We also decline, as a matter of policy, to allow NMSU to use our Bid Protest function essentially to restrict, rather than promote, competition for NASA’s requirements. Honeywell Technology Solutions, Inc., B-407159.4, May 3, 2012, 2012 CPD ¶ 110 at 3.  (New Mexico State University, B-409566: Jun 16, 2014)  (pdf)


Agency properly determined to exclude protester from the competition for award of batteries, where the protester currently held a contract for the same batteries and the agency reasonably found that another source was necessary to ensure the batteries' continuous availability, to satisfy projected needs, to provide for future competition, and to satisfy national defense interests.  (Hawker Eternacell, Inc., B-283586, November 23, 1999)

Comptroller General - Listing of Decisions

For the Government For the Protester
New SK Hart Properties, LLC B-414338: May 11, 2017  
New Mexico State University, B-409566: Jun 16, 2014)  (pdf)  
Hawker Eternacell, Inc., B-283586, November 23, 1999  

U. S. Court of Federal Claims - Key Excerpts

 
U. S. Court of Federal Claims - Listing of Decisions
For the Government For the Protester
   
   

 

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