Moore's Cafeteria Services d/b/a MCS Management
B-299539, Jun 5, 2007
Moore's Cafeteria Services d/b/a MCS Management (MCS) protests the award of a contract to the Kentucky Office for the Blind (KOB), a state licensing agency for the blind (SLA), under request for proposals (RFP) No. W9124D-07-R-0012, issued by the Department of the Army for food services at Fort Campbell, Kentucky. The protester argues that the price offered by the KOB is not reasonable.
We deny the protest.
B-299539, Moore's Cafeteria Services d/b/a MCS Management, June 5, 2007
DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release.
1. Contracting officer was not required to apply definition of fair and reasonable price set forth in interagency statement of policy issued in response to Congressional directive in evaluating reasonableness of price offered by state licensing agency for the blind where at the time the procurement was conducted, the policy had not been implemented through the issuance of regulations.
2. Contracting officer reasonably determined price offered by state licensing agency for the blind to be fair and reasonable based on comparison to prices offered by other offerors with technically acceptable proposals and to government estimate.
Moore's Cafeteria Services d/b/a MCS Management (MCS) protests the award of a contract to the Kentucky Office for the Blind (KOB), a state licensing agency for the blind (SLA), under request for proposals (RFP) No. W9124D-07-R-0012, issued by the Department of the Army for food services at
The RFP, which was issued on
fixed-price contract for a 1-year period without options. The acquisition was set aside for Historically Underutilized Business Zone (HUBZone) small businesses, but also permitted the submission of offers by qualified SLAs in accordance with the Randolph-Sheppard Act. As initially issued, the solicitation advised prospective offerors that the acquisition was subject to exercise of the Department of Defense preference policy regarding qualified [SLAs] in accordance with the Randolph-Sheppard Act and that [a] technically acceptable offer from a qualified [
The Joint Report to Congress, dated
METHOD OF AFFORDING THE RANDOLPH-SHEPPARD PRIORITY.--Defense Department contracts for the operation of a military dining facility must be awarded as the result of full and open competition, unless there is a basis for direct negotiations . . . . When competing such contracts, contracting officers shall afford State licensing agencies a priority under the R-S Act when (1) the State licensing agency has demonstrated that it can provide such operation at a fair and reasonable price, with food of high quality comparable to that available from other providers of cafeteria services and comparable to the quality and price of food currently provided to military service members; and (2) the State licensing agency's final proposal revision, or initial proposal if award is made without discussions, is among the highly ranked final proposal revisions with a reasonable chance of being selected for award. . . . The term fair and reasonable price means that the State licensing agency's final proposal revision does not exceed the offer that represents the best value (as determined by the contracting officer after applying its source selection criteria contained in the solicitation) by more than five percent of that offer, or one million dollars, whichever is less, over all performance periods required by the solicitation.
Joint Report at 5.
Subsequent to issuance of the RFP, the contracting officer received an e-mail message from an
Five offerors submitted proposals by the February 21 closing date. Three of the proposals were determined to be technically acceptable; the prices of those proposals were as follows:
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The government estimate for the work was [deleted]. The contracting officer determined that the price offered by the KOB was fair and reasonable based on comparison to the prices proposed in the other technically acceptable proposals and the government estimate. On February 27, the agency awarded a contract to the KOB.
MCS argues that, by finding the price offered by the KOB, which exceeded MCS's own price by [deleted] percent, to be reasonable, the agency acted contrary to the guidance furnished in the Joint Report, which defines a fair and reasonable price from an SLA as one that does not exceed the best value offer by more than 5 percent.
While we recognize that the statement of policy in the Joint Report was issued at the instruction of Congress, we think that the contracting officer correctly concluded that adherence to the policy was not mandatory until it had been implemented through the issuance of regulations, which has not yet occurred. In our view, until such regulations are issued, the policy is the equivalent of internal agency guidance, which does not establish legal rights and responsibilities such that actions taken contrary to it are subject to objection. See, e.g., Indian Res. Int'l, Inc.,
The protester further argues that the contracting officer did not conduct an adequate analysis of the reasonableness of the price offered by the KOB. MCS maintains that the contracting officer's determination was based on a comparison of the KOB's price to a government estimate that was grossly inflated. Protester's Comments at 7. The agency responds that the government estimate was not faulty, and that, in any event, the contracting officer's determination of price reasonableness was based not simply on a comparison of the KOB's price to the government estimate, but also on a comparison to competitors' prices. We see no basis to question the agency's determination of price reasonableness.
Regarding the government estimate, MCS, the incumbent contractor on the current contract for these services, asserts that the government figure is based on inaccurate projections of operational days and meal counts at the facilities to be served. Specifically, MCS asserts that the government estimate is flawed because the estimates reflected in the RFP on which the government estimate is based are considerably higher than the actual requirements under the current contract. The agency responds that the estimate was prepared by
The agency also asserts that comparison to other offerors' prices provided the contracting officer with a separate basis for finding the KOB's price reasonable. We agree. The Federal Acquisition Regulation (FAR) recognizes comparison of offerors' prices to one another as a permissible technique for determining price reasonableness. FAR sect. 15.404-1(b)(2)(i); U.S. Dynamics Corp., B'298889,
The protest is denied.
Gary L. Kepplinger
 As amended, the RFP provided:
Randolph-Sheppard Act Compliance: This solicitation is subject to exercise of the preference policy regarding qualified [SLAs] in accordance with the Randolph-Sheppard Act. A technically acceptable offer from a qualified [
RFP amend. 1, at 33-34.