B-400198, Sea Box, Inc., August 25, 2008

B-400198 Aug 25, 2008 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Sea Box, Inc., protests the cancellation, after bid opening, of invitation for bids (IFB) No. W912L1-08-B-0001, issued by the Department of the Army, U.S. Property and Fiscal Officer, Texas, for supply of dry storage containers (connexes) for units of the Texas Army National Guard (TXARNG). We deny the protest. View Decision B-400198, Sea Box, Inc., August 25, 2008 Decision Matter of: Sea Box, Inc. File: B-400198 Date: August 25, 2008 Robert A. Farber for the protester. Maj. William J. Nelson, Department of the Army, for the agency. Paul E. Jordan, Esq., and John M. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Determination to cancel invitation for bids after bid opening was unobjectionable where all bids exceeded funding allocated for project, notwithstanding protester's challenge to validity of funding estimate and reasonableness of low responsive bid. 2. After cancellation of solicitation, agency decision to lease storage containers under Economy Act, without conducting a new competition, was unobjectionable where lease was consistent with requirements of act and applicable regulations require that agency use pre-existing contract for all such leases. DECISION Sea Box, Inc., protests the cancellation, after bid opening, of invitation for bids (IFB) No. W912L1-08-B-0001, issued by the Department of the Army, U.S. Property and Fiscal Officer, Texas, for supply of dry storage containers (connexes) for units of the Texas Army National Guard (TXARNG). We deny the protest. The IFB contemplated the award of a fixed-priced contract for 238 20'foot connexes for use at local armories throughout Texas and for use by the 36th Infantry Division in support of brigades mobilizing for service in both Iraq and Afghanistan. This is the second solicitation for this requirement. The prior solicitation, a request for proposals set aside for small businesses, resulted in a contract in the amount of $624,750. Sea Box protested that award, challenging the awardee's small business status and its compliance with the Buy American Act (BAA). The agency took corrective action--terminating the contract and resoliciting the requirement--and we dismissed the protest as academic (B'310562, Nov. 5, 2007). Based on its experience in the prior procurement, the agency budgeted $624,750 for the requirement here. The IFB was issued on an unrestricted basis but, as before, required compliance with the BAA. The agency received seven bids; five, including the low bid ($634,500.86) offered connexes manufactured in China. Sea Box, with a bid of $1,721,930, offered connexes from Turkey. None of the offered products--Chinese or Turkish--complied with the BAA. While the agency concluded that it could not award a contract for Chinese-made connexes, it determined that, in accordance with the World Trade Organization Government Procurement Act (WTOGPA), it could award a contract for connexes that were manufactured or substantially transformed in Turkey. In order to ensure compliance with the WTOGPA, the contracting officer requested that Sea Box (and another –Turkish— bidder) certify that their products met the applicable manufacturing country requirements. Sea Box certified that 100 of its connexes were manufactured or substantially transformed in Turkey, but indicated that, due to delays in the procurement, it could no longer obtain the remaining units from its source in Turkey. As a result, the other 138 units were to be manufactured in China. The other bidder, whose price was significantly higher than Sea Box's, certified that all 238 units would come from Turkey. Because the prices of the Turkish products exceeded the budgeted amount, the contracting officer sought additional funds. However, she found that an increase of only $323,600 was available, for a total of $948,350.65. Subsequently, she became aware that the Army Intermodal Distribution Platform Management Office (AIDPMO) could lease the agency all the connexes it needed for approximately $200,000. In this regard, the record shows that, under Army regulations, AIDPMO must approve all purchases of intermodal containers and all leases must be conducted through AIDPMO using the current Military Surface and Distribution Command (SDDC) container leasing contract. Army Regulation (AR) 56-4 paras. 3'7a(3), 3-7b. The SDDC issued a master lease streamlining contract (MLSC) to Textainer Equipment Management Limited in 2003 and, in April 2004, the Army issued a message to all of its agencies--including the National Guard Bureau--mandating that all Army leasing requirements for intermodal distribution platforms (including connex containers) be processed using the MLSC. Army Message, para. 4.