March 9, 2001

P.S. Protest No. 00-24

XTRA LEASE, INC.

Solicitation No. NTL 00-001

XTRA Lease, Inc. (XTRA), protests the revision of the delivery schedule of a contract for the lease of truck trailers in connection with its delayed award, contending that the competition should have been reopened instead.

On April 28, 2000, National Mail Transportation Purchasing at Postal Service headquarters issued solicitation NTL 00-001 seeking (as revised by four amendments) 4,406 trailers for lease over a six-year contract term. The trailers of various sizes were to be delivered to numerous postal facilities nationwide on two delivery dates: 1,637 were to be delivered on "delivery date A," September 10, 2000, and 2,769 were to be delivered on "delivery date B," July 1, 2001. Amendment Modification 1, May 15, revised the solicitation provision setting out these dates by adding the following: "These contract/delivery dates in the initial term and any renewal term may be adjusted at the discretion of the Contracting Officer."

The solicitation contemplated a two stage process: In the first stage, offerors were to submit written technical/management proposals which the Postal Service would evaluate to prequalify offerors to participate in the second stage. The second stage was an on-line reverse auction called a competitive bidding event (CBE) in which offerors would submit prices expressed in terms of a daily rental rate per trailer. While the initial solicitation provided for award only in the aggregate for the entire quantity of trailers, it was amended to provide for award either in the aggregate or on the basis of seven individual DN groups. Proposals were due on May 26; the CBE was to be held on June 8.

Solicitation provision K.2, Modification or Withdrawal of Proposals and Acceptance Period, provided that technical proposals could be withdrawn prior to the start of the CBE, but that "after the CBE has begun and the offeror has submitted a price bid, it may not withdraw its proposal prior to expiration of the proposal acceptance period." The acceptance period was established as "60 days after the date of the CBE or a longer period proposed by an offeror."

A preproposal conference was held on May 8. It included the following:

XTRA submitted its proposal in the first phase of the competition. It took exception to two aspects of the requirement. First, XTRA proposed a revised delivery schedule, offering to provide delivery of 259 trailers to three DN groups on September 10, and the balance due for delivery date A on November 10, and to postpone delivery of all of the quantity due on delivery date B from July 1, 2001, to August 1, 2001. Second, XTRA took exception to the requirement at B.4 of the solicitation that "the supplier will be a preferred supplier with respect to the DN groups to which the supplier’s contract is applicable[,] . . . required to provide . . . additional trailers needed within the applicable DN group at the prevailing per trailer, per day rate . . . ."

The contracting officer states that he sought clarification of these two exceptions from XTRA, and that in a discussion on June 5 he advised XTRA that "these [exceptions] would most likely result in a low technical score, and might preclude XTRA from becoming a prequalified supplier." He also states that he advised "that if XTRA opted to withdraw from the procurement, they must do so in writing." XTRA’s version of that discussion differs in asserting that it initiated the conversation, that it requested a revision of delivery date A, and that in the absence of the revision (which the contracting officer declined to make) it announced it would have to withdraw its offer. By letter dated June 6, XTRA requested that it be "remove[d] . . . from the bidding process."

The CBE was held, as scheduled on June 8. XTRA did not participate. The lowest overall daily rate for the total quantity of trailers was proposed by Transport International Pool (TIP). Award did not occur in mid-June. The contracting officer states that TIP was advised that the Postal Service had accepted its proposal on September 7². Under the awarded contract, delivery of the initial quantity (those due on delivery date A) was to be completed by November 30.

The other offerors who had participated in the CBE were advised of the award by letters dated September 7. XTRA states that it learned of the contract award from the Postal Service on September 8, and that it learned of the extension of delivery date A to November 30 on September 21 from a Denver, CO, postal representative in the course of a telephone conversation inquiring whether XTRA could provide holiday trailers.

XTRA’s protest was received on September 25. It contends that the award to TIP was improper because TIP’s proposal failed to meet the solicitation’s required delivery dates, because the Postal Service arbitrarily failed to amend the solicitation’s delivery schedule as XTRA had requested while intending to relax it subsequently to TIP’s advantage, or because the Postal Service failed to amend the delivery schedule when award was delayed.

XTRA explains that the quantity of trailers containing the "unique" features which the Postal Service sought were "not readily available on the commercial market," and that because of market conditions, XTRA could not, in good faith, propose on the total requirement for delivery on delivery date A or agree to the preferred provider provision of the solicitation. Accordingly, it qualified its offer in that respect. It then asserts, as recited above, that it withdrew its offer when the contracting officer declined to extend the first delivery date. XTRA asserts that had the delivery schedule been extended, as it claims it later was for TIP, "prior to the CBE, as it should have been, XTRA would not have been forced to withdraw from the CBE, would have submitted a fully conforming and unqualified technical proposal, and likely would have been able to underbid TIP and receive award . . . ."

XTRA contends that its protest is timely under both the requirements of Purchasing Manual (PM) 3.6.4.c., that it "be received within 15 days after award of the contract," here assumed to be September 8, and extended to the first business day after the 15th day, September 23, a Saturday, per PM 3.6.2.d; and "not later than 10 days after the basis of protest is known or should have been known," here September 21, when XTRA first learned "that Delivery Date A had been relaxed for all DN Groups." It also contends that it has standing, as "an actual or prospective offeror whose direct economic interest would be affected" (PM 3.6.2.a.), despite its withdrawal from the competition because it had participated in the procurement before the withdrawal, citing cases from various non-postal fora "that a protester that . . . withdraws its proposal as a result of violations of the law and without knowledge thereof, can later protest once it acquires that knowledge."

On the merits, XTRA contends that the Postal Service failed to comply with PM 4.2.2.i(1)’s requirement that solicitations be amended when changes in delivery schedules are required and improperly accepted TIP’s nonconforming technical proposal, which XTRA assumes "indicated a November 30 delivery date";³ and "improperly denied XTRA’s request to amend the solicitation with the intention of later relaxing the specification for TIP" (initial capitals omitted).⁴

The contracting officer’s statement includes the following jurisdictional objections:

• XTRA lacks standing because it would not be eligible for award if the protest were sustained. XTRA voluntarily withdrew from the solicitation,⁵ knowingly taking itself out of the competition, and "abandoned any direct economic interest it had in the contract award process when it chose to withdraw" (quoting Federal Data Corp. v. United States, 911 F.2d 699 (Fed. Cir., 1990)).⁶

• The protest is untimely, since XTRA knew or should have known of TIP’s revised delivery schedule at least as of September 10, when it knew that TIP had not delivered its trucks to one of the required delivery points, Los Angeles, where XTRA had trailers which TIP’s trailers were to replace, and which the Postal Service had not directed XTRA to remove.⁷

On the merits, the contracting officer’s statement makes the following contentions, among others:

• XTRA never asked that the solicitation delivery dates be amended, it only took exception to them in its proposal, so the Postal Service never denied a request for an amendment. Further, the delay in the award arose from a need to make a lease-vs.-buy comparison, required by "postal management," when this solicitation was found to conflict with a separately pending proposal to purchase 1,000 trailers. The delay did not arise from any intention to benefit TIP. The decision to proceed with the lease occurred on August 15, and final discussions with TIP were then initiated.

• The delivery schedule was not relaxed for TIP. "The solicitation anticipated that contract award should have been made no later than June 24, 2000[,] providing for a lead time of 78 days from award to delivery. The effective date of award was September 9, 2000[,] with . . . delivery no later than November 30, 2000, a lead time of 82 days. . . . The four additional days would not [have given] an advantage to any awardee, including TIP."

• XTRA cannot show that it was prejudiced by the extension of the delivery date for TIP. XTRA’s need for a delay resulted from its intention to manufacture the needed trailers, and it could not have performed even on TIP’s eventual schedule.

XTRA responded to the contracting officer’s statement in submissions which made the following points:

• Contrary to the contracting officer’s assertion, the solicitation did not contemplate award by June 24. XTRA calculates the worst case delivery lead time as 34 days, calculated from August 7 (the 60th day after the CBE) to September 10. Accordingly, XTRA views TIP as having benefited from a 48 day extension in delivery lead time. The contracting officer’s misstatement of the extent of the extension is a "misrepresentation of objective facts" which may be "a cynical attempt to take advantage of the ‘presumption of correctness’" which ordinarily attaches to the contracting officer’s assertions of the fact.

• The contracting officer further undercuts his credibility by representing that XTRA’s proposal might have been eligible for consideration, since the solicitation explicitly provided that proposals offering different delivery dates than those specified "will NOT be accepted" (quoting J.4.(a)(3), emphasis in original).

• Given the magnitude of the delivery date extension,⁸ PM 4.2.1.a and applicable decisions require that the solicitation be amended and recompeted. The original delivery schedule was material, and these circumstances necessitate that the requirement be resolicited. XTRA has demonstrated the prejudice to it of the extension, which would also have had a significant impact on all the offerors’ prices.

• An offeror who submits a nonconforming offer has standing to protest where it seeks a recompetition in which it could compete (citing cases). Federal Data is distinguishable, since there the protester knew of the basis for protest prior to award, but voluntarily withdrew its proposal before it filed its protest. XTRA did not know of the basis for protest when it withdrew, and was involuntarily forced to withdraw because of the contracting officer’s insistence on maintaining the delivery schedule (citing cases for the proposition that prospective offerors who did not propose when improper circumstances precluded their proposing). Information Ventures, Inc., Comp. Gen. Dec. B-232094, November 4, 1988, 88-2 CPD ¶ 433, is relevant here:

• The contracting officer’s contentions on timeliness lack merit. That TIP’s trailers were not in Los Angles on September 10 did not trigger knowledge of the substantial extension of the delivery schedule; "the ten day period did not commence until the protester has enough . . . information reasonably to be on notice of the ‘central’ basis for the protest."⁹ In this case, XTRA did not know of the delivery date until September 21, when the Postal Service advised it of the date in connection with administration of XTRA’s ongoing contract. Alternatively, if "XTRA should have inquired about the relaxation of the delivery date prior to September 21," it need not have done so before September 17, when TIP’s Los Angles trailers had not appeared, since a week of slippage (from September 10) would not have been significant.¹⁰ XTRA also rebuts the contracting officer’s suggestion that it should have known of the postponement of the delivery schedule in mid-August.

The awardee, TIP, submitted comments on the contracting officer’s statement and on XTRA’s response in two rounds of submissions:

• Federal Data controls the standing issue; XTRA cannot fit within the exception it asserts because there was no "violation of law which resulted in the withdrawal of its proposal" since the contracting officer "had no intent to extend the schedule for TIP" when XTRA withdrew.

• XTRA cannot establish that it withdrew because of the contracting officer’s actions; the contracting officer has denied that XTRA requested an extension of delivery date A, and that denial is entitled to the presumption of correctness. Instead, XTRA voluntarily withdrew "for reasons of its own," so it does not fall within the scope of Information Ventures, which, in any event, is no longer good law after Federal Data.

• XTRA’s protest is also untimely; it is either against the terms of the solicitation (and thus needed to be lodged before May 26) or late in relation to September 10, when XTRA knew that TIP had not delivered trailers to Los Angeles.¹¹

• The contracting officer did not intend, prior to the CBE, to extend the delivery schedule for TIP; that contention rests on the false assumption that TIP’s proposal had taken exception to the delivery requirement. Instead, the delay in award arose "only because of events that occurred after the CBE."

• XTRA has not shown any prejudice from the revision of the delivery date because it has not shown that it could have meet the November 30 delivery date following the September award.

• XTRA’s contention that it likely would have underbid TIP had it participated in the CBE is unsupported, and thus is "too speculative and self serving to warrant sustaining a protest"¹² and "fail[s] to make the requisite showing of prejudice."¹³

• XTRA’s objections to the preferred provider provision of the solicitation and to delivery date B further demonstrates that it was not prejudiced by the contracting officer’s actions.

• XTRA’s "attack on the good faith of the contracting officer" is premised, baselessly, on the contention that the contracting officer intentionally misled the General Counsel. To the contrary, the contracting officer "has consistently maintained" the intent to award by June 24; there is no basis to waive the contracting officer’s presumption of correctness, and XTRA "cannot[] meet the high standard necessary to prove bad faith."¹⁴

• XTRA’s position that the worst-case lead time was only 34 days was unreasonable; it has not provided evidence that its proposal was based on the assumption of award on August 7, and it could not reasonably assume such an award given what was said at the pre-proposal conference.

The contracting officer responding to XTRA’s comments asserting the accuracy "to the best of [his] recollection" of his previous submissions. The contracting officer notes his factual disagreement with XTRA about whether XTRA requested an amendment of the solicitation, refers to the discussion of delivery dates in the pre-proposal conference, quoted supra, as evidence that he "was not [then] anticipating a delay in the delivery schedule as the result of internal policy debates or to favor a particular supplier," but explains that "[i]n early July [he] was asked to study the merits of buying vs. leasing trailers," a study which was not completed until mid-August, delaying the award to September. Accompanying this submission were various documents relating to the lease/purchase analysis (but not any documents indicating when the analysis was ordered), and correspondence in July through September relating to the award.

XTRA commented on the contracting officer’s submission and TIP’s comments:

• The documents do not preclude the possibility of the contracting officer’s knowledge on or before June 5 that the award would have to be postponed for the lease/purchase analysis, and are otherwise incomplete and inconclusive.

• The pre-proposal conference cannot be "understood as a binding commitment" regarding the award and offerors "had no right to rely on it as altering the solicitation. Further, the conference’s discussion of award is inconsistent with the contracting officer’s current contention that award was contemplated to occur on June 24.

• The contracting officer’s September 8 message (discussed in footnote 2, supra) was a "pre-award directive" which relaxed the delivery schedule for TIP "in direct violation of the Purchasing Manual."

• TIP’s contention that XTRA was not prejudiced by the relaxation because it had also taken exception to delivery date B is incorrect; because the date was well in the future, "it presents no performance difficulty at all," and thus is distinguishable from instances in which "the protester’s technical proposal demonstrates that it cannot possibly alter its approach in . . . a new competition."

• TIP’s contention that XTRA improperly contemplated a possible 34-day lead-time is rebutted by the affidavit of XTRA’s proposal manager that he did.

Because they are jurisdictional, we turn first to the issues involving the protester’s standing and the protest’s timeliness. With regard to standing, the issue is whether XTRA is an interested party "whose direct economic interest [was] affect by the award of [the] contract." PM 3.6.2.a. The relief which XTRA seeks is the recompetition of the requirement with a relaxed initial delivery schedule consistent with that which TIP was given. It is clear from XTRA’s technical proposal and its discussion of the delivery schedule with the contracting officer prior to its decision to withdraw its offer that it viewed the original initial delivery schedule as a barrier to its competition, so that a recompetition on a relaxed schedule would affect its direct economic interest.¹⁵ This case is thus dissimilar from Federal Data, where the protester lacked that interest because its protest did not seek the chance to compete again, and akin to Information Ventures, as the protester contends. Accordingly, XTRA has standing to protest.¹⁶

Here, XTRA knew of the award on September 8, and it then knew (or should have known) that information about the delivery schedule of TIP’s contract was relevant to its (potential) claim.¹⁸ However, XTRA took no affirmative steps to inquire concerning that important fact. Instead, it learned of TIP’s actual delivery schedule only when so advised by a postal representative in an unrelated context.

The General Accounting Office’s protest decisions discuss a protester’s obligation diligently to pursue its protest in various circumstances, including seeking information which would have been evident from review of publicly opened bids or provided in debriefings or in response to formal information requests. (See, e.g., Thomas May Construction Company, Comp. Gen. Dec. B-255683, March 23, 1994,, 94-1 CPD ¶ 210 (protester did not diligently pursue basis of protest based on information publicly available at the bid opening when it sought the information under FOIA only after award) and Ranco Construction, Inc., Comp. Gen. Dec. B-281242, January 12, 1999, 99-1 CPD ¶ 11 (protest of bid’s nonresponsiveness raised after award untimely, citing Thomas May); Geo-Centers, Inc., Comp. Gen. Dec. B-276033, May 5, 1997, 97-1 CPD ¶ 182 (protest timely when "protester clearly sought a debriefing within 10 days of learning of the award, and diligently sought more information at each step in the process—at no point allowing more than 10 days to pass before making its next request"); J&J Maintenance Inc., Comp. Gen. Dec. B-223355.2, August 24, 1987, 87-2 CPD ¶ 197 (protest untimely when "protester waited 3 weeks from notice of cancellation of the solicitation to orally request information . . . and then waited an additional 4 weeks before filing a Freedom of Information Act request," distinguishing cases in which FOIA requests were filed "within 1 to 25 days.")

This case is not identical to any of the decisions which our research has disclosed, and the elapsed time between XTRA’s notice of the award (September 8) and the filing of its protest (September 25) is shorter than any time period identified in those decisions as indicating an absence of diligence in pursuit of a protest. As in several of those decisions, however, XTRA took no identifiable steps to solicit the information which it required, and it was mere happenstance that it learned when it did of TIP’s delivery schedule. Finding XTRA’s protest timely in these circumstances would render the requirement that protests be filed within ten days of the date that they "should have been known" a nullity. Accordingly, XTRA’s protest must be dismissed as untimely.¹⁹

We will, however, comment briefly on the omission which gave rise to the protest.

The solicitation was deficient in failing to indicate an assumed date of award and a provision explaining the effect of delay in award beyond that date. As a recent decision has noted:

Pitney Bowes Corporation, P.S. Protest No. 00-16, December 1, 2000.²⁰

The amendment of the solicitation allowing the contracting officer to "adjust" the stated delivery dates did not remedy that defect in the solicitation, because the language did not give the Postal Service any right it did not already have under the Changes clause at H.8 of the solicitation,²¹ nor was there any indication that the adjustment was intended to relate to any change in the anticipated date of award.

The protest is dismissed.

William J. Jones
Senior Counsel
Contract Protests and Policies