LETTER TO SEYMOUR EFROS FROM (SANITIZED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85B01152R000600730036-5
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 21
• Document Creation Date: December 21, 2016
• Document Release Date: June 2, 2008
• Sequence Number: 36
• Publication Date: July 5, 1983
• Content Type: LETTER

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ROUTih. , AND TRANSMITTAL SUP
TO: (Name. Office symbol, room number,
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Initials
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REMARKS
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DO NOT use this form as a RECORD of approvals, concurrences, disposals,
clearances, and similar actions
FROM: (Name, org. symbol, Agency/Post)
OPTIONAL FORM 41 (Rev. 7-76)
hssaibsd by GSA
FPMR (41 CFR) 101-11.206
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CENTRAL INTELLIGENCE AGENCY
WASHINGTON, D.C. 20505
5 July 1983
Seymour Efros, Esquire
Associate General Counsel
United States General Accounting Office
Washington, D.C. 20548
DD/A Registry
Re: Procurement Document: RFP 83A-160
Issuing Activity: Central Intelligence Agency
Contract: No. 83-A822700-000
Awarded 26 May 1983
Your Reference No. B-211817
I have been asked to respond to your letter of 2 June 1983,
advising the Central Intelligence Agency (CIA or Agency) that a
bid protest has been filed by Spacesaver Systems, Inc., a
Maryland corporation. This report will describe the factual
situation on which the bid protest is founded and the Agency's
position on the matter.
EXECUTIVE SUMMARY
Spacesaver Systems, Inc. (Spacesaver), has filed a bid
protest, in the form of three letters to the General Accounting
Office (GAO) and one letter to Congressman Michael D. Barnes,
protesting the award of CIA Contract No. 83-A822700-000 on
26 May 1983 to REMCO Business Systems, Inc. The first letter
was filed the day after contract award, 27 May 1983. The second
was filed on 31 May 1983, and the third was filed on 3 June 1983.
These letters raise four basic issues concerning the propriety of
the competition.
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First, Spacesaver is "challenging the assertion of REMCO
Business Systems that they satisfy all.specifications of the
subject RFP." (Letter of 27 May 1983.) The Agency's position is
that any determination of whether REMCO is capable of meeting the
requirements of the solicitation requires an affirmative
determination of responsibility by the contracting officer, which
has been made, and is not subject to GAO review under Bid Protest
Procedures absent a showing of fraud. (Aerosonic Corporation,
B-193469, January 19, 1979, 79-1 CPD 35.)
Second, Spacesaver protests that "CIA did not use the GSA
Federal Supply Schedule." (Letter of 31 May 1983.) The Agency
did not use the schedule because the procurement was anticipated
to exceed the Maximum Order Limitation of the schedule, and the
appropriate authorization exempting the Agency from the schedule
had been granted by GSA. Further, since the Agency's decision
not to use the schedule was clearly apparent on the face of the
Request for Proposals (RFP), the Spacesaver protest is untimely
and should have been raised before the closing date for receipt
of initial proposals. (4 CFR ? 21.2(b)(1); Precision
Environments, Inc., B-198418, April 29, 1980, 80-1 CPD 306.)
Third, Spacesaver claims the procurement "should have been a
total small business set aside." (Letter of 31 May 1983.) This
bid protest was registered well after the closing date for receipt
of proposals, even though the contracting officer had decided not to
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make this procurement a small business set-aside, and his
decision was reflected on the face of the initial RFP.
The protest is, therefore, untimely. (4 CFR ? 21.2(b)(1); J.H.
Rutter Rex Manufacturing Co., Inc., B-184157, February 23, 1976,
76-1 CPD 122.) In addition, "the contracting officer has broad
discretion under the Small Business Act ... whether or not to
set aside a particular procurement." (Bell & Howell, B-206333,
September 14, 1982, 82-2 CPD 224.) This discretion will not be
questioned absent a positive showing of bad faith or fraud,
neither of which have been alleged by Spacesaver. In fact, it
would be virtually impossible to do so, since all of the bidders
have certified that they are small businesses, rendering the
entire question academic.
Fourth, Spacesaver has inferred that the Agency's landlord
will be unable to install the specified shelving in compliance
with the Fire Prevention Code. (Letter of 3 June 1983.) If, as
Spacesaver alleges, the RFP specification was defective, then
their protest is untimely and should have been filed prior to the
closing date for receipt of proposals. Further, compliance with
the Fire Prevention Code is, according to the Agency's lease
agreement, the legal responsibility of the
Agency's landlord. The question is, therefore, a matter of
contract administration under the separate lease agreement, and
is inappropriate as a bid protest on this contract. Once again,
however, the question is purely academic,
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has provided the Agency with a letter from the Fairfax
County Deputy Chief Fire Marshal advising
that a halon or carbon dioxide fire suppression system will be
adequate to meet the Fire Prevention Code requirements.
An examination of the records in this matter, and the
following chronology of events, should clearly indicate that the
Spacesaver bid protest is without merit.
CHRONOLOGY
04 Feb 83 The CIA Office of Logistics received a request for
procurement of highly specialized mobile shelving
systems from the CIA Office of Security. It was
anticipated that the procurement would require
an expenditure of $330,000.
14 Feb 83 The contracting officer, after having evaluated the
request, determined that a competitive procurement
would be appropriate. A detailed Statement of Work
was prepared, and a formal Request for Proposal
(RFP) was developed.
25 Feb 83 After further review and editing, RFP-83A-160 was
issued. The following vendors were selected for the
competition and issued a copy of RFP-83A-160. All
certified that they are small businesses.
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Lundia/Nations Capitol
415 South Jefferson St.
Arlington, VA 22204
National Office Systems
2000 N. 16th St.
Arlington, VA 22201
REMCO Business Systems, Inc.
8000 Parston Dr.
Forestville, MD 20747
Spacesaver Corporation
10605 Concord St.
Kensington, MD 20895
Stacor Corporation
285 Emmet St.
Newark, N.J.
(withdrew prior to
bid submission)
28 Feb 83 The General Services'Administration (GSA) was advised
that the proposed procurement was anticipated to
exceed the GSA Maximum Order Limitation of $250,000
set forth in the Federal Property Management
Regulations, Schedule 71-III-J (FSC, Group 71, Part
III, Section J). The GSA mandatory requirements
schedule, negotiated annually by GSA, would
therefore be inapplicable to this procurement.'
10 Mar 83 GSA was provided with a copy of the proposal and
the list of vendors to be solicited.
11 Mar 83 A bidders conference was held at CIA Headquarters,
with all bidders on the bidder's list represented
and expressing interest in the procurement.
17 Mar 83 Amendment No. 1 to the RFP was issued in response
to approximately sixteen points raised at the
bidders conference and subsequent to the
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conference. These points included the types of
file folders to be used; the configuration of the
cabinets, or bays, and dividers; the leveling of
the floor; and carpeting requirements.
24 Mar 83 GSA wrote to advise the CIA that our request for
authority to purchase movable shelving exceeding
the Maximum Order Limitation had been formally
granted. GSA also requested that copies of the
procurement documents be provided for their files
after award of a contract.
28 Mar 83 Amendment No. 2 was issued, responding to three
additional questions raised by the bidders after
measuring and inspecting the building site. These
questions concerned the minimum center aisle width,
carpeting, and row length.
01 Apr 83 Stacor Corporation advised the contracting officer
via telephone that it declined to bid, leaving four
bidders in the competition.
07 Apr 83 Amendment No. 3 was issued, responding to four more
questions asked by several of the bidders. These
questions concerned end panels, individually
controlled units, safety systems, and carpeting.
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19 Apr 83 The contracting officer concluded that the bidders
should be provided with additional information and
the opportunity to participate in further
discussions on the procurement. All bidders were
so advised by telephone. On the same day,
proposals were received from all four bidders.
21 Apr 83 Amendment No. 4 was issued, providing clarification
of the evaluation procedures and criteria.
25 Apr 83 The initial preliminary evaluation of the four
proposals was conducted by representatives from the
Office of Logistics and the Office of Security. it
was determined that all four proposals were
inadequate and incomplete.
26-28 Apr 83 Meetings were held with all four bidders to discuss
the technical specifications and the CIA's
requirements.
29 Apr 83 The Office of Security concluded that of the four
proposals, that of Lundia most closely approached
the needs of the Agency, although all four were
still inadequate.
04 May 83 The contracting officer from the Office of
Logistics concurred with the Office of Security.
The Office of Security provided additional
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documentation supporting the need for contract
performance by 1 September 1983. Amendment No. 5
was issued, setting COB 9 May 1983 as the deadline
for final proposals.
06 May 83 Spacesaver notified the contracting officer that
they would be unable to install the shelving in the
required 19 days, between 13 August and 1 September
1983.
09 May 83 All four bidders submitted final proposals. They
were reviewed and evaluated, and all found to be
deficient in meeting the mandatory requirements.
10 May 83 Amendment No. 6 was issued, requesting that all
bidders conform to the mandatory speicifications
cited in the RFP and subsequent amendments. A new
deadline of COB 12 May 1983 was set for final
proposals, and the requirement for 18-gauge steel
was modified to also include 20-gauge or less.
12 May 83 All bidders submitted their final proposals in a
timely fashion.
16 May 83 The four proposals were evaluated by Office of
Logistics representatives, and all four were found
to be deficient in meeting the mandatory
specifications.
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17 May 83 The proposals were delivered to the Office of
Security for review by their technical team.
18 May 83 The Office of Security concluded that all four
proposals were deficient in meeting the mandatory
specifications.
18 May 83 The contracting officer was advised by Office of
Logistics and Office of Security personnel that
construction of the building where the shelving was
to be installed had encountered some minor
obstacles and that the scheduled occupancy date was
being set back to 30 September 1983. This would
allow the specification on installation time to be
relaxed from a requirement that installation be
completed by 1 September and in a period of 19
days, to the new requirement that installation be
completed by 30 September, within a 49-day period.
19 May 83 Amendment No. 7 was issued, incorporating the new
installation requirement (30 September, 49 days.)
The amendment also deleted an ambiguous
specification and advised bidders that carpeting
would be provided as Government-furnished equipment.
20 May 83 Letters were sent to each of the four bidders
requesting that they clarify points in their
respective proposals.
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25 May 83 All bidders responded to the letters of 20 May 1983,
and to Amendment No. 7 to the RFP.
26 May 83 All four bids were evaluated and all were found to
be technically complete and acceptable. The
contracting officer determined that the contract
would be awarded to the lowest bidder. The bids
were as follows:
Lundia/Nations
Capitol
$243,295.95
National Office
Systems,
Inc.
314,750.00
REMCO Business
Systems,
Inc.
227,341.60
Spacesaver Systems, Inc.
228,383.24
On the basis of their low bid, REMCO was awarded
the contract. The contract was awarded by
telephone, including the assignment of contract
number 83-A822700-000 to the procurement.
27 May 83 All bidders were advised in person or by telephone
of the contract award. Following notification,
Spacesaver advised the contracting officer that it
intended to file a bid protest with GAO. A bid
protest was recorded as having been filed with GAO
at 4:56 p.m. on 27 May 1983.
31 May 83 Spacesaver filed a second bid protest letter with GAO.
The Agency sent REMCO written confirmation of the award.
02 June 83 All bidders were notified in writing of the
contract award to REMCO. Spacesaver expressly
asked Congressman Michael Barnes for his assistance
in connection with the GAO bid protest.
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06 June 83 The contracting officer received a letter from GAO,
dated 2 June 1983, advising him that a bid protest
had been filed.
10 June 83 The contracting officer received a letter from GAO
containing a copy of a letter filed by Spacesaver
with GAO on 3 June 1983. On this same date,
Congressman Michael Barnes wrote to the Director of
Central Intelligence, advising him that Spacesaver
was seeking assistance.
14 June 83 The CIA's landlord at the building site,
which is responsible for compliance
with all applicable building and fire code
requirements, received a formal notice from the
Fairfax County Deputy Chief Fire Marshal advising
should install a halon or
carbon dioxide fire suppression system with the
mobile filing system. Such a system would be in
compliance with the appropriate codes.
ISSUES PRESENTED
The four basic issues upon which Spacesaver Systems, Inc.
(Spacesaver) bases their bid protest are cited in the Spacesaver
letters to the General Accounting Office (GAO) of 27 May 1983,
31 May 1983, and 3 June 1983. Pertinent excerpts are included below.
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Please enter a protest on behalf of Spacesaver
Systems challenging the assertion of Remco Business
Systems that they satisfy all specifications of the
subject RFP.
-Letter of 27 May 1983
1. The CIA did not use the GSA Federal Supply
Schedule. The items requested are on schedule as a
total small business set aside and three qualified
small business firms are listed on schedule.
2. In addition to not buying on schedule,
the CIA solicited this on an unrestricted basis
when it should have been a total small business set
aside. The reason it should be a small business
set aside is that the Federal Procurement
Regulations clearly states an item or service shall
be set aside for exclusive small business
participation if the contracting officer has
reasonable expectations of sufficient offers will
be received (sic) from small business so awards can
be made at reasonable prices.
-Letter of 31 May 1983
P.S. We have talked with the Fire Marshall's Office
of Fairfax County (phone #[phone]), and if
the CIA has awarded a contract in accordance
with their specifications, they are in
violation of the Boca Fire Prevention Code/1975
F-305.3- Inside Storage: Storage in buildings
and structures shall be orderly, shall not be
within two (2) feet of the ceiling, and
located so as not to obstruct egress from the
building.
The Fire Marshall told us on the phone 6/3/83,
that they had not received a waiver to this fire
code regulation.
-Letter of 3 June 1983
The Spacesaver bid protest involves the award of CIA Contract
No. 83-A822700-000 on 26 May 1983, to REMCO Business Systems, Inc.
The first bid protest letter, filed with GAO the day after award
of the contract, raises the first of the four issues.
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I. REMCO's Capability to Perform the Contract - The initial
issue raised by Spacesaver concerns the ability of REMCO to
perform the contract, even though the contracting officer
reviewed all proposals and determined that REMCO had presented a
proposal that meets all mandatory specifications. Although
Spacesaver does not elaborate on this point, elaboration is
unnecessary. Under the rule cited in Aerosonic Corporation,
supra, whether a contractor can perform a contract in compliance
with contract requirements is a matter of contract administration
and is not for consideration under GAO Bid Protest Procedures.
Regarding the protestor's suggestion that GAO
check the actual contract performance to see if Waltham
does deliver on schedule, it should be pointed out that
whether the contractor is complying with the contract
requirements is a matter of contract administration and
not for consideration under our Bid Protest Procedures.
See, Robert Burger Associates, Inc., B-188450, June 1,
1977, 77-1 CPD 378. It is the Air Force's
responsibility to monitor the contract and to take the
appropriate action if Waltham delivers late.
That decision also held that a determination of whether a bidder
is capable of meeting the'requirements of a solicitation requires
an affirmative determination of responsibility, which GAO no
longer reviews unless either fraud is shown on the part of
procuring officials or the solicitation contains definitive
responsibility criteria which have not been applied. The
Comptroller General ruled in that case:
Aerosonic alleges that Waltham is incapable of
meeting the requirements of the RFP...Whether a bidder
can meet the requirements of a solicitation requires a
determination of responsibility. This Office no longer
reviews protests against affirmative determinations of
responsibility, unless either fraud is shown on the part
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of the procuring officials or the solicitation contains
definitive responsibility criteria which allegedly have
not been applied. See, Central Metal Products, Inc., 54
Comp. Gen. 66 (1974), 74-2 CPD 64; Oregon Wilbert Vault
Corporation, B-191000, January 18, 1978, 78-1 CPD 49.
In the present case there is no allegation that-the
responsibility determination resulted from either fraud
or that definitive criteria have not been applied.
In this instance the contracting officer reviewed REMCO's
proposal and determined that it met all specifications,
notwithstanding Spacesaver's challenge to the contrary. In
addition, no allegation has been made by Spacesaver that fraud
exists or that definitive criteria have not been applied. This
rule has been consistently applied in several other Comptroller
General decisions. In Colorado Research and Prediction
Laboratory, Inc., B-199755, March 5, 1981, 81-1 CPD 170, it was
held:
To the extent that Colorado Research is questioning the
ability of Megapulse to conduct theoretical studies, the,
protest is not reviewable. Our Office does not review
affirmative determinations of responsibility except where
there is a showing of fraud or misapplication of definitive
responsibility criteria. Security Assistance Forces and
Equipment International, Inc., B-195196, July 10, 1980, 80-2
CPD 24.
In Precision Environments, Inc., B-198418, April 29, 1980, 80-1
CPD 306, it was held:
Whether the awardee is in fact performing in
accordance with contract requirements is a matter of
contract administration which is the function and
responsibility of the procuring activity. Consequently,
we do not consider such matters under our Bid Protest
Procedures. School Transportation, B-192799, January
10, 1979, 79-1 CPD 12.
See also Dynal Associates, Inc., B-197348, July 14, 1980, 80-2
CPD 29; and A.R.&S. Enterprises, Inc., B-197303, 80-2 CPD 17.
Under well-established rules adopted by GAO, the awardee's
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ability to perform the contract in compliance with the
specifications is a matter of contract administration, not for
consideration under GAO Bid Protest Procedures.
II. Use of the GSA Federal Supply Schedule - The second
issued raised by Spacesaver concerns the contracting officer's
decision not to use the GSA Federal Supply Schedule. As the file
clearly demonstrates, this action was taken with the express
authorization of GSA, since the procurement was originally
anticipated to exceed the Maximum Order Limitation established in
the Federal Property Management Regulations, Group 71, Part III,
Section J. The authorization letter from GSA, dated 24 March
1983, establishes the propriety of the subsequent procurement
activities.
If Spacesaver objected to this procedure, which procedure was
apparent on the face of the RFP, they failed to meet their
responsibility of filing their bid protest in a timely
fashion--before the closing date for the receipt of proposals.
The rule is stated at 4 CFR ? 21.2(b)(1):
Protests based upon alleged improprieties in any
type of solicitation which are apparent prior to bid
opening or the closing date for receipt of initial
proposals shall be filed prior to bid opening or the
closing date for receipt of initial proposals. In the
case of negotiated procurements, alleged improprieties
which do not exist in the initial solicitation but which
are subsequently incorporated therein must be protested
not later than the next closing date for receipt of
proposals following the incorporation.
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In Precision Environments, Inc., supra, the bid protest was
dismissed based on this consideration.
With respect to the second allegation, our Bid
Protest Procedures require that protests based upon
alleged improprieties in a solicitation which are
apparent prior to bid opening must be filed prior to bid
opening. Since the allegation involves an alleged
impropriety in the solicitation which was apparent prior
to bid opening, it should have been raised prior to that
date. The protest, however, was not received in our
Office until after bid opening. Consequently, this
allegation is untimely filed and not for consideration.
Picker Corporation; Ohio-Nuclear, Inc., B-192565,
January 19, 1979, 79-1 CPD 31.
In the present case, the bid protest was not filed until
after the submission of several revised proposals and award of
the contract, rendering the protest singularly untimely. See
also Security Assistance Forces and Equipment International,
Inc., B-195196, July 10, 1980, 80-2 CPD 24; Colorado Research and
Prediction Laboratory, Inc., supra; and A.R.&S. Enterprises,
Inc., supra.
III. Contracting Officer's Authority on Small Business
Set-Asides - The third issue raised by Spacesaver challenges the
authority of the contracting officer to determine that the
procurement need not be a formal total small business set-aside.
The decisions are quite clear on this question. In Bell & Howell,
supra, the Comptroller General ruled:
Similarly, here, the contracting officer has broad
discretion under the Small Business Act, 15 U.S.C.
??
631, 644
(1976), and implementing reulations, FPR
??
1-1.706.5
(1964 ed. amend. 192), whether or not to
set
aside a particular procurement. (Emphasis added.)
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The Comptroller General has indicated on several occasions that
this broad discretion of the contracting officer will not be
questioned unless there is a showing of bad faith or fraud. In
Kinnett Dairies, Inc., B-187501, March 24, 1977, 77-1 CPD 209,
for example, the Comptroller General decided:
Determination under ASPR ? 1-706.5(a)(1) (1976 ed.)
concerning both price reasonableness and whether
adequate competition may reasonably be anticipated are
basically business judgments requiring the exercise of
broad discretion by the contracting officer. See Falcon
Rule Company; Akron Rule Corporation, B-187024, November
16, 1976, 76-2 CPD 418; 45 Comp. Gen. 228 (1965).
Therefore, in reviewing a set-aside protest situtation,
our Office will not substitute its judgment for that of
the contracting officer and will sustain determinations
concerning those matters absent bad faith or fraud.
Tenco Construction Company, B-187137, December 21, 1976,
76-2 CPD 512; 45 Comp. Gen. supra.
In the present case, no such showing of bad faith or fraud has
been made. The entire question is, in fact, moot, since an
obvious effort was made to include small businesses on the
bidder's list, and all of the eventual bidders, including the
successful bidder, have certified with CIA that they are small
businesses.
Spacesaver's objection to this procurement action not being a
formal small business set-aside must also fail because it is
untimely in the extreme. The nature of this procurement was
clear on the face of the RFP and Spacesaver should have filed a
bid protest before the closing date for receipt of proposals. In
J.H. Rutter Rex Manufacturing Company, Inc., supra, the
Comptroller General decided:
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Pursuant to section 20.2(b)(1) of our Bid Protest
Procedures, 40 Fed. Reg. 17979 (1975), protests based
upon alleged improprieties in a solicitation which are
apparent prior to bid opening shall be filed prior to
bid opening. Consequently, Rutter Rex's protest against
the set-aside is untimely since it should have been made
prior to bid opening; therefore it will not be
considered on the merits.
In the present case, Spacesaver delayed not only beyond the
closing date for receipt of initial proposals, but also beyond
three subsequent closing dates and the award of the contract.
The question of small business set-asides is, therefore,
inappropriate for GAO consideration as a bid protest.
IV. The Responsibility of CIA's Landlord to Comply With Fire
Code Requirements - As its fourth issue, Spacesaver has protested
the CIA's landlord
will be unable to meet the Fire Prevention Code
requirements of Fairfax County, Virginia. Spacesaver has drawn
this conclusion from their examination of the RFP and its
amendments. If, as Spacesaver alleges, the technical
specifications in the RFP are defective, then the bid protest is
untimely under 4 CFR 20.2 (b)(1), and should have been filed
before the closing date for receipt of proposals. See also, J.H.
Rex Rutter Manufacturing Company, Inc., supra; and Precision
Environments, Inc., supra.
The question of compliance with the Fairfax County Fire
Prevention Code is a matter for which the CIA's landlord is
legally responsible. The lease agreement
18
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provides that the lessor shall provide fire protection
systems in compliance with all applicable codes:
94. CODE VIOLATIONS
Equipment, services, or utilities furnished and
activities of other occupants shall be free of safety,
health, and fire hazards. When hazards are detected,
they must be promptly corrected at the Lessor's expense.
Where requirements conflict, the decision of the
contracting officer shall be final
120. SPECIAL REQUIREMENTS . . .
B. The following is a general listing of special
items that will be required: . . .
2. Special Fire Protection Systems - In addition
to all standard fire protection and detection systems
required by local codes and ordinances, the Government
will require that all secure enclosures, as described
elsewhere, be equipped with special fire detection
systems. These may be either heat and rate of rise type
or smoke detection type. In some cases, both may be
required.
In light of the fact that this matter arises from a separate and
distinct contract and is the legal concern of the landlord--not
of CIA or the bidders on the shelving contract--the question is
inappropriate for review by GAO as a bid protest. Although the
question is irrelevant to this bid protest, nevertheless it
should be noted that Spacesaver's concern is without foundation.
has provided the CIA with a letter dated 14
June 1983 from the Fairfax County Deputy Chief Fire Marshal,
indicating that Code requirements will be satisfactorily met by
installation of a halon or carbon dioxide fire suppression
system. The letter states:
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 Approved For Release 2008/06/02 : CIA-RDP85B01152R000600730036-5
Seymour Efros, Esquire
and I have reviewed the data submitted
on the proposed filing systems at the above referenced
project. We agree that sprinkler protection would be
ineffective due to the file design; however we do not
feel the installation of an early warning fire detection
system meets the spirit or intent of the Code.
Therefore with respect to the above, an alternative
suppression system, i.e. halon or carbon dioxide is to
be installed.
If you have any questions or I can be of further
assistance, please call me at your convenience.
Yours truly,
Deputy Chief Fire Marshal
It is the position of this Agency that, in light of the
foregoing, the bid protest filed by Spacesaver Systems, Inc., is
untimely and without foundation, and should be denied.
SincerelX,
Acting Chief, ocurement Division
Office of Logistics
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