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Friday, February 8, 2013

Sole sourcing can come in bundles

This is another report on the Lexicology online service from the informative and insightful guys, Anatoly M. Darov and Timothy J. Famulare at the law firm Burns & Levinson LLP.

The [Massachusetts Attorney General's] Bid Protest Unit addressed another protest in a line of recent “bundling” protests arising from pavement management services in the town of Kingston.

Pavement Maintenance Systems, Inc. (“PMS”) challenged Kinston’s latest procurement for roadway surface restoration services. In 2002, the town solicited bids for surface restoration seeking one contractor to perform three services: (1) infrared patching of utility and large pavement cuts, (2) small crack filling, and (3) “restorative sealing” of entire roadways. Subcontracting was not permitted, and the contractor had to have five years experience with all three services.

Felix Marino Co., Inc. was the only contractor that could meet the experience requirements and provide all three services, and, in fact, had developed the “restorative sealing” process. PMS challenged the award to Felix Marino in 2002, arguing that the three services are unrelated and should not have been bundled. The Massachusetts Appeals Court rejected this argument in a 2004 decision.

In its 2012 protest, PMS presented unrebutted evidence that the town has never used the restorative sealing process and has used the crack-filling process only twice; that Felix Marino charges the town twice as much for the infrared patching services as it does in towns where there is competition; and that these three processes would never actually be provided at the same time. The town also failed to demonstrate that working with one contractor has actually saved it any administrative costs.

The Attorney General determined that “administrative ease” is not a rational basis to bundle the services. Further, because only one bidder could meet the experience requirement for all three services, that requirement was overly restrictive and violated G.L. c. 30, §39M(b)

For another instance of bundling found to be restrictive, see Matter of: Sigmatech, Inc., File: B-296401, Date: August 10, 2005. This is a Decision under GAO's protest procedure. The official Digest of the decision states:
Protest challenging bundling of system engineering and support services with other requirements under a single-award BPA issued under awardee’s Federal Supply Schedule contract is sustained, where agency failed to perform bundling analysis or satisfy the requirements of Federal Acquisition Regulations sections 7.107 (a), (b); 10.001(c)(2); and 19.202-1.
Protest challenging bundling of system engineering and support services with other requirements under a single-award blanket purchase agreement (BPA) issued under awardee’s Federal Supply Schedule contract is timely, where record does not demonstrate that protester knew of basis for protest until task orders for work, which the protester had previously performed, were issued under the BPA, and the protester filed its protest within 10 days thereafter; GAO resolves doubts regarding timeliness in favor of protesters.

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