OSRAM SYLVANIA Products, Inc., B-287468, July 2, 2001

B-287468 Jul 02, 2001 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Agency reasonably determined to award a contract for the sale of excess stockpiled tungsten to the offeror whose evaluated price was high under every reasonable price evaluation under a solicitation where all the award criteria were effectively structured to provide for award to the technically acceptable offeror that proposed the highest total evaluated price. 2. Agency award of the entire sale quantity offered by the government to a single commodities broker offeror is unobjectionable where it is permissible under the solicitation and the agency properly performed the requisite statutory market analysis to support its determination that the sale would not cause undue market disruption. For the sale of certain excess stockpiled tungsten. /1/ OSRAM asserts that the agency evaluation is unreasonable and improperly failed to credit benefits contained in OSRAM's offer. View Decision OSRAM SYLVANIA Products, Inc., B-287468, July 2, 2001 DIGEST Attorneys DECISION OSRAM SYLVANIA Products, Inc. protests the award of contract No. SP0833-01-S-12055 to COMSUP Commodities, Inc., by the Defense National Stockpile Center (DNSC), Defense Logistics Agency, for the sale of certain excess stockpiled tungsten. /1/ OSRAM asserts that the agency evaluation is unreasonable and improperly failed to credit benefits contained in OSRAM's offer, and that award of the entire quantity of sale tungsten to COMSUP, a commodities broker, violates the agency's obligation under the Strategic and Critical Materials Stock Piling Act ("Stockpiling Act" or "Act"), 50 U.S.C. Sec. 98 et seq. (1994), to avoid undue market disruption by this sale of surplus strategic material. We deny the protest. BACKGROUND DNSC issued the instant solicitation of offers (SOO) for stockpile tungsten, entitled "DLA -- Tungsten Ores & Concentrates -- 002," on December 7, 2000, with a January 11, 2001 due date for receipt of initial offers. The solicitation offered for sale 4 million pounds of contained tungsten during the base year and in each of four 1-year option periods, for a potential total sale quantity of 20 million pounds of material, upon which DNSC's total price evaluation was based. The SOO contains a shopping list of all of DNSC's currently analyzed 13.2 million pounds of contained tungsten (SOO Sec. I.2), permits offers for a minimum of one lot and a maximum of 4 million pounds per year (SOO Sec. B.3), and allows DNSC to make either a single award or multiple awards (SOO Sec. B.7(a)). Section B.4(a) provides that offerors should express their unit prices as a percentage of the monthly average of either the London Metal Bulletin (LMB) ore price or the LMB APT /2/ price, plus a premium or discount to the respective reference price expressed as a percentage. The actual contract price is to be determined by calculating the unit price for material released to the contractor during each month based on the previous calendar month's average applicable LMB reference price multiplied by the percentage figure plus or minus the discount contained in the contract. SOO Sec. B.4(b). Section B.8, entitled "Evaluation of Offers," provides that the evaluation factors are, in descending order of importance, unit price, payment terms, and removal schedule, and notes that all evaluation factors other than unit price, when combined, are significantly less important than unit price. The agency received nine offers by the initial due date. OSRAM's initial offer contained a complex pricing scheme based on using as a reference price the [deleted] LMB [deleted] index. Agency Report at 6-7. Both OSRAM and COMSUP offered to purchase the entire sale quantity available and both offers were included in the competitive range. After conducting discussions, during which OSRAM was advised by the agency regarding pricing that it should consider "keeping it simple," DNSC called for the submission of best and final offers (BAFOs) by February 21. Agency Report at 7. Both offerors timely submitted BAFOs with 30-day payment terms, for the full 20-million pound quantity available in the base and all option years. OSRAM's BAFO offered [deleted] unit price stated in dollars per STU (short ton unit) [deleted] using a [deleted] formula referencing the average monthly LMB [deleted] index price, which is expressed in MTUs (metric ton units). OSRAM's offer was: if the [deleted] index is [deleted] then OSRAM's unit price is [deleted]. OSRAM noted that for conversion of MTU to STU, $/STU equals ($/MTU times 0.9072). In addition, OSRAM offered a floor price of $[deleted], and agreed to remove at least [deleted] per [deleted] up to a maximum of [deleted] per [deleted]. Agency Report, Tab 13, OSRAM BAFO, at 2-3. COMSUP's BAFO contained [deleted].