Lance Ordnance, Inc., B-281342, January 26, 1999

B-281342 Jan 26, 1999 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights A firm protested an Army contract award for ordnance simulators, contending that the: (1) awardee received an unfair competitive advantage through its proposed use of government facilities; and (2) Army unreasonably evaluated the awardee's past performance. GAO held that the awardee did not receive an unfair competitive advantage over the protester, since the awardee: (1) leased the facilities from a prime contractor; (2) paid the fair market rental value for the facilities; and (3) obtained the lease prior to the issuance of the solicitation. Accordingly, the protest was denied. View Decision Matter of: Lance Ordnance, Inc. File: B-281342 Date: January 26, 1999 * Redacted Decision DIGEST Attorneys DECISION Lance Ordnance, Inc. protests the award of a contract to Fireworks by Grucci by the Department of the Army, pursuant to request for proposals (RFP) No. DAAA09-98-R-0068, for the manufacture and delivery of 420,400 ground burst projectile simulators and 212,600 hand grenade simulators. Lance argues that Grucci received an unfair competitive advantage through its proposed use of government facilities at the Radford Army Ammunition Plant, in Radford, Virginia, and that the Army conducted an unreasonable evaluation of Grucci's past performance. We deny the protest. The RFP, issued April 2, 1998, anticipated award of a fixed-price contract to the offeror whose proposal represented the best value to the government. The RFP identified two evaluation factors--past performance and price, and advised that past performance would be slightly more important than price. RFP, Amend. 0001, Sec. M-1. This procurement was reserved for small business participation only. The Army received six proposals in response to the RFP, with prices and past performance ratings /1/ as set forth below: OFFEROR PRICE PAST PERFORMANCE RATING Offeror A $ 4.7 million Neutral Offeror B $ 4.8 million Unsatisfactory Fireworks by Grucci $ 5.0 million Excellent Lance Ordnance $ 5.4 million Excellent Offeror C $ 5.6 million Excellent Offeror D $ 7.9 million Good Source Selection Statement, Sept. 10, 1998, at first and second unnumbered pages. Based on the past performance ratings of the two lowest-priced offerors, the contracting officer concluded that the proposal submitted by Grucci offered the best value to the government. Id. at third unnumbered page. Lance's protest followed. Lance argues that Grucci received an unfair price advantage because Grucci proposed to use facilities at the Radford Ammunition Plant, which were not made available to other offerors. According to Lance, the Army should have either adjusted Grucci's price to compensate for the competitive advantage, or advised other offerors of the availability of space at the arsenal. As Lance contends, it is a fundamental principal of government procurement that competition must be conducted on an equal basis; that is, offerors must be treated equally and be provided with a common basis for the preparation of their proposals. Meridian Management Corp.; Consolidated Eng'g Servs., Inc., B-271557 et al., July 29, 1996, 96-2 CPD Para. 64 at 5. Based on our review of the record, however, we do not agree that Grucci has received an unfair advantage over other offerors by virtue of its lease at the Radford Ammunition Plant. Grucci leases space at the Radford Ammunition Plant pursuant to the Armament Retooling and Manufacturing Support (ARMS) Initiative, authorized by the ARMS Act of 1992, 10 U.S.C.A. Sec. 2501 (West Supp. 1998) (Notes). From fiscal year 1993 through 1998, this Act authorized the Army to enter into prime contracts for the operation and management of unused or underused Army ammunition production facilities. Id. Sec. 194(a)(1). The prime contractor was permitted to negotiate and enter into multiyear leases with other contractors for the commercial use of the facilities. Id. Sec. 194(a)(2). Grucci learned of the availability of space at the Radford Ammunition Plant in early 1995 from advertisements and notices widely distributed to industry. Affidavit of Felix J. Grucci, Dec. 9, 1998, paras. 3-6. After contacting the Army's prime contractor, Alliant Techsystems, Inc., about leasing space at the underutilized facility, Grucci and Alliant jointly prepared a proposal to the Army for Grucci's commercial use of certain Radford buildings. The proposal estimated that improvements and repairs of approximately $1.5 million would be necessary to render the buildings habitable for commercial use. Concept Proposal, June 2, 1995, at 2. On September 30, 1995, the Army approved the proposal, and agreed to make the requested improvements.