Raymond Express International, LLC

B-409872.2 Nov 06, 2014 Jump To FULL REPORT VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Raymond Express International, of Los Angeles, California, protests the terms of request for proposals (RFP) No. HDEC09-14-R-0002, issued by the Defense Commissary Agency (DeCA) for fresh fruit and vegetables (FF&V) for commissary stores in South Korea, Japan (to include Okinawa), and Guam. Raymond asserts that the solicitation includes flawed pricing and delivery terms and is ambiguous in several respects. We sustain the protest in part and deny it in part. We sustain the protest in part and deny it in part. View Decision DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release. Decision Matter of: Raymond Express International File: B-409872.2 Date: November 6, 2014 John E. Jensen, Esq., Alexander B. Ginsberg, Esq., and Meghan D. Doherty, Esq., Pillsbury Winthrop Shaw Pittman LLP, for the protester. Helen J.S. White, Esq., Defense Commissary Agency, for the agency. Matthew T. Crosby, Esq., and Christina Sklarew, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Protest against solicitation’s price evaluation methodology is sustained where record shows that challenged terms may produce misleading evaluation results in analysis of whether one proposal is more competitive than another. 2. Protest alleging that solicitation provision requiring offerors to bear cost of transporting produce to overseas commissaries violates statutory requirement for use of appropriated funds to pay “second destination transportation” costs is denied where solicitation’s delivery terms eliminate second destination transportation as defined in Department of Defense Financial Management Regulation. DECISION Raymond Express International, of Los Angeles, California, protests the terms of request for proposals (RFP) No. HDEC09-14-R-0002, issued by the Defense Commissary Agency (DeCA) for fresh fruit and vegetables (FF&V) for commissary stores in South Korea, Japan (to include Okinawa), and Guam. Raymond asserts that the solicitation includes flawed pricing and delivery terms and is ambiguous in several respects. We sustain the protest in part and deny it in part. BACKGROUND DeCA operates commissary stores throughout the world for the resale of groceries and household items to members of the military and other authorized patrons. Contracting Officer’s Statement at 1. Raymond is the incumbent contractor for the agency’s current produce requirement in South Korea, Japan, and Guam (known as the “Pacific Area” FF&V requirement). Id. at 2. The solicitation here, which the agency issued on February 3, 2014, and amended five times, contemplated the award of one or more requirements-type indefinite-delivery contracts with a base period of two years and three one-year option periods. RFP at 1, 21, 26, 62. The agency estimated the value of award to be approximately $198 million. See Contracting Officer’s Statement at 3. Award was to be made based on a best-value tradeoff considering the following factors: technical capability/risk; past performance; and price.[1] RFP at 21. The technical capability/risk factor was stated to be significantly more important than the past performance factor, and the technical capability/risk and past performance factors, when combined, were stated to be significantly more important than price. Id. Regarding pricing, the solicitation required offerors to propose a “patron savings” discount percentage for “high volume core items” (HVCI).[2] RFP at 5-10; RFP, amend. No. 0005, at 3. The solicitation defined patron savings as “a price savings to the commissary patron when compared to the prices of like items from comparable private sector retail stores in the local commuting area.” RFP, amend. No. 0004, at 5. The solicitation provided that during performance, the contractor would update its FF&V pricing on a weekly basis, but that the patron savings discount always would apply. Id. The solicitation further provided that during performance, the agency would monitor the contractor’s prices for reasonableness using monthly “market basket surveys” based on FF&V pricing in local retail stores. Id. Hence, although the FF&V prices paid by commissary patrons would fluctuate with the market during performance, the discount they would receive relative to prices in local stores would remain constant. In addition to the patron savings discount, the solicitation required offerors to provide HVCI unit prices valid for the week of July 14, 2014. RFP, amend. No. 0005, at 3. The unit prices were to reflect the application of the offeror’s proposed patron savings discount. Id. The solicitation stated that the agency would evaluate the proposed unit prices--as adjusted to include the patron savings discount--for price reasonableness and realism. Id.