SDS Petroleum Products, Inc., B-280430, September 1, 1998

B-280430 Sep 01, 1998 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Exclusion of protester's proposal from competitive range was not improper where agency reasonably concluded that the proposal failed to demonstrate the ability to purchase and transport natural gas at certain rates and terms. The RFP was issued on February 24 and. Award would be made to the offeror whose proposal conformed to the solicitation requirements and was most advantageous to the government. (4) price. /2/ Seven proposals were received by the May 11 closing time. The evaluators initially found that SDS's proposal was technically deficient because it contained no past performance delivery information and failed to show an ability to procure natural gas below the index price or natural gas transportation below the tariff rate. View Decision Matter of: SDS Petroleum Products, Inc. File: B-280430 Date: September 1, 1998 * Redacted Decision DIGEST Attorneys DECISION SDS Petroleum Products, Inc. protests the exclusion of its proposal from the competitive range, and the subsequent award of a contract to Tiger Natural Gas, Inc., under request for proposals (RFP) No. 693-16-98, issued as a competitive section 8(a) set-aside by the Department of Veterans Affairs for the supply and delivery of natural gas to 91 facilities nationwide. We deny the protest. On February 3, 1998, the contracting officer prepared and furnished to the Small Business Administration (SBA) an offering letter in which he determined that adequate competition existed among 8(a) contractors to set aside this national procurement for the 8(a) program. Previously, the agency had procured its gas supplies through four regional contracts by means of unrestricted procurements. By letter dated February 4, the SBA accepted the offer for a competitive 8(a) procurement. The RFP was issued on February 24 and, as amended, contemplated award of an indefinite-delivery, indefinite-quantity (ID/IQ) contract for a base period of 1 year, with four 1-year options. The RFP stated that, following competitive negotiations, award would be made to the offeror whose proposal conformed to the solicitation requirements and was most advantageous to the government, price and other factors considered. Section M of the RFP contained the following evaluation factors, listed in descending order of importance: (1) past performance from January 1, 1995 to present; (2) evidence of ability to purchase (a) natural gas and transportation below the Inside FERC (Federal Energy Regulatory Commission) index /1/ price and (b) natural gas transportation below tariff rate; (3) quality; and (4) price. /2/ Seven proposals were received by the May 11 closing time. The evaluators initially found that SDS's proposal was technically deficient because it contained no past performance delivery information and failed to show an ability to procure natural gas below the index price or natural gas transportation below the tariff rate. SDS's proposal received 35 of the 90 available technical points (price was worth 10 points), and under the index factor, only 3 of 30 possible points. In contrast, Tiger's proposal was found to contain detailed and extensive documentary evidence of its ability to procure gas below the index price and transportation below the tariff rate. Tiger's proposal received all 90 available technical points. (The other proposals scored very low technically and are not relevant here.) Despite the serious technical deficiencies in its proposal, SDS's proposal was retained in the competitive range for purposes of discussions. By letter dated May 18, the contracting officer advised SDS that its proposal was deficient under the past performance and index factors. Revised proposals were due on May 26. In the meantime, on May 21, amendment No. 7 was issued, making certain changes to RFP sections C, G, and H, and clarifying the minimum and maximum order quantities. On May 23, SDS submitted additional information in a revised technical proposal, specifically, two signed natural gas contracts containing prices below-index price and letters purportedly demonstrating its ability to obtain below-tariff rate transportation under similar contracts. On May 28, the evaluators reviewed the revised proposal. SDS's score for the past performance factor increased from 12 to 32 (out of 40 possible points). However, its score for the index factor was unchanged, the evaluators concluding that, although SDS had submitted additional information in this area, it was not sufficient to establish the ability to obtain gas and gas transportation prices below the index price and tariff rate.