Petro Star, Inc. (SPE605-20-R-0222)

B-419347,B-419347.2,B-419347.3,B-419347.4 Jan 25, 2021 Jump To FULL REPORT VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Crowley Government Services, Inc., of Jacksonville, Florida, and Petro Star, Inc., of Anchorage, Alaska, protest the award of various contracts under request for proposals (RFP) No. SPE605-20-R-0222, issued by the Defense Logistics Agency to acquire various petroleum products. Both protesters argue that the agency misevaluated prices in connection with the awarded contracts. We sustain the protests. View Decision Decision Matter of:  Crowley Government Services, Inc.; Petro Star, Inc. File:  B-419347; B-419347.2; B-419347.3; B-419347.4 Date:  January 25, 2021 James Y. Boland, Esq., Christopher G. Griesedick, Esq., and Krista A. Nunez, Esq., Venable LLP, for Crowley Government Services, Inc.; and Damien C. Specht, Esq., and James A. Tucker, Esq., Morrison and Foerster, LLP, for Petro Star, Inc., protesters. Howard W. Roth, Esq., and Michael Schmidt, Esq., Oles Morrison Rinker & Baker, LLP, for Delta Western, LLC, an intervenor. Jacqueline Neumann, Esq., Matthew Vasquez, Esq., and Howard M. Kaufer, Esq., Defense Logistics Agency, for the agency. Scott H. Riback, Esq., and Tania Calhoun, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protests challenging agency’s evaluation of price proposals and award of contracts are sustained where record shows agency’s evaluation was not in accordance with the terms of the solicitation. DECISION Crowley Government Services, Inc., of Jacksonville, Florida, and Petro Star, Inc., of Anchorage, Alaska, protest the award of various contracts under request for proposals (RFP) No. SPE605-20-R-0222, issued by the Defense Logistics Agency to acquire various petroleum products.  Both protesters argue that the agency misevaluated prices in connection with the awarded contracts. We sustain the protests. BACKGROUND The RFP contemplates the award of multiple fixed-price requirements type contracts on a lowest-price technically acceptable (LPTA) basis to provide petroleum products to Department of Defense and federal civilian agencies in Alaska during a 5-year ordering period.  The RFP included 164 contract line item numbers (CLINs) and firms were advised that awards would be made individually on a CLIN-by-CLIN basis.  RFP at 123.  These protests involve just a single issue relating to the interpretation of the RFP’s price evaluation provisions. Because of the volatility of prices for the solicited products, the RFP includes an economic price adjustment (EPA) clause that contemplates price adjustments on what amounts to a continuous basis throughout the contracts’ period of performance.  Specifically, the RFP advises that the resulting contracts will include an EPA clause providing for the daily adjustment of prices to be paid under the contracts (prices are to be adjusted daily Monday through Friday, and prices paid on Saturday and Sunday will be based on prices established on the preceding Friday).  RFP at 2.  These price adjustments are keyed to “escalation publications” or indexes identified in the RFP.  Id.; RFP attach. B, Government Preferred Base Reference Indexes.  The escalation publications identified in the RFP are referred to as the government’s “preferred base reference indexes.”  RFP, attach. B, Government Preferred Base Reference Indexes.  (Throughout the discussion below, we refer to these preferred base reference indexes as the “government-preferred escalator(s).”)  For each CLIN being solicited, there is a corresponding government-preferred escalator identified, along with a “base reference price,” which is the published price for a given product on the identified index as of January 17, 2020.  As originally issued, the RFP required offerors to establish their proposed pricing using the government-preferred escalators and base reference prices included in the RFP.  For example, CLIN 0001, for the provision of automotive gasoline, identified the government-preferred escalator as “ODFBNKU9,” and identified a base reference price of $2.375000 per gallon.[1] After issuing the original RFP, the agency issued a series of amendments.  Of relevance to the protests is amendment No. 0004, which provided an alternative approach for the way offerors could price their proposals.  Specifically, offerors were advised that they could choose not to use the government-preferred escalators, and could instead use an escalator/index of their own choosing.  These are referred to in the RFP and throughout the record as “uncommon escalators.”  RFP, amend. No. 0004, at 10.  In the event an offeror elected to use an “uncommon escalator,” it was required to submit something known as a “posting history worksheet.”  RFP, attach. C, Posting History Worksheet.