DDD Company, B-276708, July 16, 1997

B-276708 Jul 16, 1997 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Is unobjectionable where agency's evaluation of proposals and determination that awardee's higher- priced proposal was worth the additional cost were reasonable and consistent with the evaluation scheme. DDD contends that the agency's decision to award to Federal Express based on its higher-priced proposal was unreasonable. This is a follow-on procurement of a contract awarded to Federal Express in 1994 for the Premium Service System previously run from a government-owned. The technical and management proposals were of equal importance and significantly more important than cost/price. The following evaluation subfactors were identified in order of descending importance: for the technical proposal. View Decision Matter of: DDD Company File: B-276708 Date: July 16, 1997 * Redaacted Decision DIGEST Attorneys DECISION DDD Company protests the award of a contract to Federal Express Corporation under request for proposal (RFP) No. SPO410-96-R-3145, issued by the Defense Logistics Agency (DLA), Defense Supply Center Richmond, for warehousing, order processing, and expedited transportation services. DDD contends that the agency's decision to award to Federal Express based on its higher-priced proposal was unreasonable. We deny the protest. The RFP, issued on September 30, 1996, contemplates the award of a firm, fixed-price requirements contract for a base year plus 4 option years for a Premium Service System under which DLA's federal agency customers store various equipment and parts at a contractor-owned and -operated facility. The RFP provides for the contractor to receive and store material, maintain inventory control, process customer orders, prepare packages for shipment, maintain appropriate billing, provide quality assurance, and provide commercial, expedited delivery services for the material to any location in the continental United States (CONUS) or outside CONUS (OCONUS). This is a follow-on procurement of a contract awarded to Federal Express in 1994 for the Premium Service System previously run from a government-owned, contractor-operated facility at the Defense Depot Memphis, Tennessee (DDMT). Due to the impending scheduled closure of DDMT, the RFP requires the contractor to relocate the materials and Premium Service System operation to the contractor's facility by June 30, 1997. The RFP's statement of work includes requirements for the provision of the following: sufficient warehouse space for the storage of existing items to be transferred and to accommodate 50-percent growth in the amount of material stored; a computerized inventory management system that records the receipt and storage of items, processes customer orders for items and tracks delivery of items to their destination, provides for electronic data interchange and Defense Digital Network communications--interfacing with the government's Military Standard Requisitioning and Issue Procedures/Military Standard Transaction Reporting and Accounting Procedures (MILSTRIP/MILSTRAP) information systems; and four levels of transportation services. Under section M of the RFP, the technical and management proposals were of equal importance and significantly more important than cost/price. The following evaluation subfactors were identified in order of descending importance: for the technical proposal--transportation services, inventory management/automated data processing system(s), and equipment and warehouse; for the management proposal--master program management plan, and past performance. Prices were to be evaluated for realism, reasonableness, and completeness. The RFP provided for a cost/technical tradeoff analysis, and award was to be made to the offeror determined to have submitted the overall most advantageous offer to the government. DDD and Federal Express submitted the only two proposals. DDD's proposal included information about the firm's experience in warehousing and distribution services in operating the United States Postal Service (USPS) Critical Parts Center in Indianapolis, Indiana; DDD proposed subcontracting with Emery Worldwide for the provision of the RFP's transportation-related services. DDD proposed modifying its computerized warehouse management system (WMS) currently in use under its USPS contract to meet the RFP's inventory management system requirements. Federal Express, the incumbent contractor of the required services, proposed its current Premium Service System inventory management system. Discussions were held with both offerors (through the issuance of numerous written clarification requests and deficiency reports and in person).