Military Waste Management, Inc., B-294645.2, January 13, 2005

B-294645.2 Jan 13, 2005 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Military Waste Management, Inc. (MWM) protests the terms of request for quotations (RFQ) No.SPO410-04-Q-0071, issued by the Defense Logistics Agency (DLA) for solid waste collection and disposal services at a DLA installation in Chesterfield County, Virginia. The protester, the incumbent contractor, contends that the RFQ's weight-based rate structure is unduly restrictive of competition, on the basis that varying monthly payments will be difficult for a small business like MWM to budget for, and will provide a competitive advantage to large and local businesses with revenue from other contracts, since such firms allegedly will be more able to budget for business expenses during months of low refuse weights and agency payments by spreading performance costs among their other customer accounts. We deny the protest. View Decision B-294645.2, Military Waste Management, Inc., January 13, 2005 Decision Matter of: Military Waste Management, Inc. File: B-294645.2 Date: January 13, 2005 A. Gene Watts for the protester. Linwood I. Rogers, Esq., Defense Logistics Agency, for the agency. Susan K. McAuliffe, Esq., and Christine S. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest that solicitation's weight-based payment terms for solid waste disposal services are unduly restrictive is denied where record supports reasonableness of agency's determination that terms are necessary to meet agency's needs. DECISION Military Waste Management, Inc. (MWM) protests the terms of request for quotations (RFQ) No.SPO410-04-Q-0071, issued by the Defense Logistics Agency (DLA) for solid waste collection and disposal services at a DLA installation in Chesterfield County, Virginia. The protester, the incumbent contractor, contends that the RFQ's weight-based rate structure is unduly restrictive of competition, on the basis that varying monthly payments will be difficult for a small business like MWM to budget for, and will provide a competitive advantage to large and local businesses with revenue from other contracts, since such firms allegedly will be more able to budget for business expenses during months of low refuse weights and agency payments by spreading performance costs among their other customer accounts. We deny the protest. The solicitation's statement of work, as amended, requires the contractor, among other things, to develop a schedule for the collection and disposal of refuse before the installation's refuse containers become 75percent full. RFQ amend. 4, 3.2.3. The contractor is to be paid on the basis of the actual tonnage of waste it collects. The RFQ provides alternate methods for weighing refuse: the contractor may use an on-board computer weighing system for collection vehicles that will not be dedicated to the work under the RFQ (so agency waste can be weighed independent of any other waste on the vehicle); alternatively, where dedicated vehicles are used solely for the collection and disposal of agency installation refuse, the solid waste collected for disposal may be weighed on state certified scales at the municipal landfill. Id. 3.3.1. Tonnage reports generated by on-board weighing equipment or the landfill scales are to be submitted by the contractor for payment at the contractor's tonnage rate. MWM challenges the RFQ's weight-based payment terms, which differ from the payment terms under the protester's prior contract. [2] That contract provided for a fixed payment each month for refuse collection performed in accordance with an agency-imposed collection schedule without consideration of the amount or weight of refuse actually collected. The current RFQ, on the other hand, allows the contractor to set its own schedule for refuse collection, as long as each refuse container is emptied before it becomes 75percent full, and provides for payment based on the weight of refuse collected. MWM contends that, as a small business, it is disadvantaged by the change in payment terms because it will be difficult for the firm to cover its expenses during any month of low weight refuse collections and a resulting low payment. MWM explains that because many of its business expenses remain constant each month ( e.g. , payroll, overhead, and utilities), varying monthly payments will make it more difficult for the firm to budget for its operations. Conversely, MWM believes large businesses and local contractors with other contracts will have a competitive advantage over a small firm like MWM, since they will be able to spread their business expenses over other contracts to more easily budget for the firms' performance costs. While a contracting agency has the discretion to determine its needs and the best method to accommodate them, Mark Dunning Indus., Inc. , B-289378, Feb. 27, 2002, 2002 CPD 46 at 3-4; Parcel 47C LLC , B-286324; B-286324.2, Dec.