Proposal Technically Unacceptable Because it Was Based on an Alternative Approach to Lifting Boat Out of Water for Dry-Dock Repairs
Antico Cantiere Del Legno Giovanni Aprea Di Cataldo S.R.L., of Sorrento, Italy ("Antico") submitted a quote for boat repairs to the Navy. The Navy rejected its proposal as technically unacceptable because the method for lifting the boat out of the water differed from the dry-docking procedures set forth in the solicitation. Specifically, the solicitation stated that the "[t]he craft will be removed [from the water] thru the use of a boat ramp and winch heaving system.” Antico planned on vertically removing the boat from the water with a boat travel lift.
Antico argued that its dry-docking procedures were preferred and that use of an inclined slipway hauling system was “obsolete,” “lacking of approved technical, engineering & safety certifications issued by the competent Italian Port Authorities,” and “known to transfer a great amount of undesired tensional stress [to] the boat’s wooden hull and superstructure elements.”
Even if Antico's dry-docking procedures were better than what was specified in the solicitation, the GAO held that it will not disturb the Agency's determination of its needs. Further, if Antico felt that the requirements were unduly restrictive it should have protested before the closing date for quotes. In this regard, the GAO stated:
Antico does not dispute that its proposed dry-docking procedures were not those required by the solicitation. Rather, the protester argues that its alternate approach was preferable to--in fact, better than--those required by the RFQ. Contracting agencies, however, have broad discretion to determine their needs and the best way to meet them.4 See, e.g., Trandes Corp., B-411742.4, Feb. 22, 2016, 2016 CPD ¶ 61 at 6; URS Fed. Support Servs., Inc., B-407573, Jan. 14, 2013, 2013 CPD ¶ 31 at 4. Here, the RFQ’s dry-docking requirements were unambiguous. To the extent Antico believed that these requirements were improper, or that vendors should have been permitted to propose alternate drydocking approaches, it was required to challenge this perceived solicitation defect prior to the closing date for receipt of quotations. See 4 C.F.R. § 21.2(a)(1); DOER Marine, B-295087, Dec. 21, 2004, 2004 CPD ¶ 252 at 4 n.3. A vendor simply cannot wait until after award to dispute the merits of solicitation requirements with which it disagrees. The protest is denied.
The lesson learned here is not to wait until award to contest a solicitation requirement. You must do so before proposals are due.
Antico Cantiere Del Legno Giovanni Aprea Di Cataldo S.R.L. , B-414112 (February 21, 2017)
CBCA Awards Contractor $904,575.00 in Restocking Fees
In the appeal of Paradise Pillow, Inc. CBCA 5179 (February 1, 2017), the Civilian Board of Contract Appeals awarded a contractor $904,575.00 in restocking fees for blankets ordered by the GSA after a hurricane in New Jersey, but later returned because they were not needed. At first, the Contracting Officer agreed to pay the restocking fees and even signed a bilateral modification totaling $904,575.00. However, the GSA would later dishonor this modification and terminated the contract for default instead because the blankets were allegedly not delivered on time. The contractor appealed the termination for default and won. The Board held that the GSA could not prove that the contractor did not meet the delivery deadline. The termination for default was therefore converted to a termination for convenience.
Next, came monetary damages for the termination for convenience. The GSA argued that restocking fees were expressly prohibited by the contract because it included the terms, “RESTOCKING: Not Applicable.” The Board held that this language did not prevent the parties from agreeing, as they did, that restocking fees were “fair consideration” for the termination costs. The Board noted that the contractor incurred the cost of “accumulating 150,000 blankets, delivering them to specified locations on short notice and under difficult conditions in the wake of a hurricane, maintaining the blankets in trailers at locations for several weeks, retrieving the blankets, and restocking the blankets in the warehouse.” Under these circumstances, the Board held that the restocking fees were reasonable and the Contracting Officer had authority to pay them. The GSA must therefore honor the modification in which it previously agreed to pay $904,575.00 in restocking fees.
The Board's decision preserves the integrity of our procurement system. When signing a bilateral modification, absent fraud or misrepresentation, both parties are bound by its terms.
