Bid Protest Weekly — January 10, 2012

January 20, 2012

1. All Points International Distributors, Inc., B-405954, December 16, 2011

Link: GAO Opinion

Agency: General Services Administration

Disposition: Protest denied.

Keywords: Past Performance; Past Performance Information Retrieval System (PPIRS)

General Counsel P.C. Highlight: The existence of positive past performance is irrelevant if it is not available to the Contracting Officer pursuant to the solicitation which in this case was the Past Performance Information Retrieval System (PPIRS).

GAO denies the protest of All Points International Distributors, Inc. (API), regarding the issuance of a delivery order to another offeror, under a request for quotations (RFQ), issued by the General Services Administration(GSA), for soft shelters and related equipment for the United States Sustainment Command, 580thSignal Company in Bagram, Afghanistan.

API protests the agency’s evaluation of its past performance as unacceptable contending that its performance on previously completed projects has been exceptional. The protester contends that GSA’s best value determination was flawed because the agency improperly reviewed only a single example of API’s past performance despite the fact that GSA knew API had performed many similar contracts in the past. GAO states that the evaluation of past performance is a matter of agency discretion, and GAO will review the evaluation only to ensure that it was reasonable and consistent with the solicitation’s stated evaluation criteria and applicable statutes and regulations. The evaluation by its very nature is subjective; an offeror’s disagreement with the agency’s evaluation judgments does not demonstrate that those judgments are unreasonable.

The contracting officer, consistent with the terms of the RFQ, considered available Past Performance Information Retrieval System (PPIRS) data for both vendors. The information in PPIRS for API indicated that API’s past performance had been poor. That report also indicated that API was given the opportunity to respond to this assessment but did not do so. Moreover, the protester does not argue that the information in the PPIRS is inaccurate nor does the protester attempt to explain its prior performance. Although API generally suggests that it has other examples of positive past performance that were ignored by the agency, it has not identified those examples nor asserted that this information was included in the PPIRS. In short, the protester has provided no basis to question the reasonableness of the agency’s findings that its unfavorable recent performance of similar work suggests that similar incidences of delinquent delivery could be anticipated under this contract, which may increase the ultimate cost of performance for the agency. The protest is denied.

2. Commandeer Construction Company LLC, B-405771, December 29, 2011

Link: GAO Opinion

Agency: Department of Veterans Affairs

Disposition: Protest sustained.

Keywords: SDVOSB; CVE; VIP Database; Set-aside

General Counsel P.C. Highlight: Just as an offeror is bound by the terms of the RFP, the government is also bound. When the VA said it would fast-track verification for a SDVOSB if awarded it is not relevant if the intent was only for those already listed in the VIP Database.

GAO sustains the protest of Commandeer Construction Company LLC (CCC), where its bid was rejected under a Department of Veterans Affairs (VA) invitation for bids (IFB), issued as a set-aside for service-disabled veteran-owned small businesses (SDVOSB), for renovation of an existing medical facility in Chillicothe, Ohio.

CCC asserts that the agency improperly rejected its bid without reviewing its SDVOSB status under the fast track verification process set forth in the deviation clause included in the solicitation. In addition, CCC contends that it was misled into participating in this procurement by the solicitation clause, which indicates, in CCC’s view, that any apparent successful offeror–even those not currently listed in the VIP database–would be eligible for fast track verification of its status. GAO states that although procuring agencies have broad discretion regarding selection of the evaluation criteria to be applied, they are required to disclose all evaluation factors and significant subfactors in order for offerors to meaningfully compete on an equal basis. An agency may not induce offerors to prepare and submit proposals based on one premise, then make source selection decisions based on another.

Here, the solicitation’s deviation clause provided an opportunity for “the apparent successful offeror, unless currently listed as verified in the [VIP],” to have its SDVOSB status reviewed under the fast track process. While the agency asserts that this language was only intended to apply to firms already listed in the VIP, but not yet verified, the solicitation clause does not, on its face, indicate that qualification. Indeed, as discussed above, based on the language of the clause, even the contract specialist was prepared to include CCC in the fast track process. GAO agrees with CCC’s contention that the language “unless currently listed as verified” could mean either: (1) firms that are listed, but not verified; or (2) firms that are not listed at all. Thus, under the solicitation clause, either of these types of firms is entitled to a fast track verification review. Since CCC is not yet listed as verified, and since CCC is the low bidder here, CCC is entitled to the expedited verification review. Accordingly, GAO finds the agency’s refusal to consider CCC’s bid under the fast track process to be inconsistent with the IFB’s evaluation criteria, and GAO sustains the protest on this basis.

GAO recommends that the agency review CCC’s SDVOSB status to determine whether the company can be verified. If the protester is properly verified at the end of this review, and if the protester is otherwise found to be responsible, the agency, consistent with the terms of the solicitation clause, should award it the contract. GAO also recommends that the protester be reimbursed its costs of filing and pursuing the protest, including reasonable attorneys’ fees. The protest is sustained.

3. Pacific Lock Company, B-405800, December 27, 2011

Link: GAO Opinion

Agency: Defense Logistics Agency

Disposition: Protest denied.

Keywords: Prejudice; Domestic Production Requirement; Reliance on the Proposal

General Counsel P.C. Highlight: An agency is required to rely on the proposal. The government is only required to verify compliance with a solicitation requirement when it has reason to believe that offeror will not provide compliant products.

GAO denies the protest of Pacific Lock Company, regarding the issuance of a delivery order under a request for quotations (RFQ), issued by the Defense Logistics Agency (DLA), for 6,000 padlock sets.

Pacific Lock protests that the awardee will not provide a domestic end item. In this regard, the Pacific Lock contends that, based on its industry knowledge, the awardee does not manufacture locks in the United States. GAO states that when a vendor responds to a solicitation by representing that it will furnish products that comply with a solicitation’s domestic production requirements, the vendor is contractually obligated to comply with such representation. Absent a basis to question a vendor’s representation in this regard, the agency may properly rely on the representation in making its source selection decision. However, where an agency has reason to believe that the firm will not provide compliant products, the agency should go beyond the firm’s representations to verify compliance, and GAO will review a procuring agency’s actions to ensure that the agency’s assessments and conclusions were reasonable.

Pacific Lock has not shown that the agency had any reason to question the awardee’s representation, given that nothing on the face of its quotation indicated that the firm would not provide a domestic part.

The protester also complains that agency extended from 90days to 180 days the time for delivery in the order issued to the awardee. The agency responds that it extended the delivery schedule to accommodate product verification testing. GAO states that it need not resolve this dispute because Pacific Lock does not show that it was prejudiced by the agency’s actions. Competitive prejudice is an essential element of a viable protest, and where the protester fails to demonstrate prejudice, GAO will not sustain a protest. Here, Pacific Lock does not state what it would have done differently had it been aware that the agency would accept a longer delivery schedule for the locks. The protest is denied.


Bid Protest Weekly – December 27, 2011

January 13, 2012

1. Symbion Power, LLC-Haytrac, JV; Symbion Power, LLC, B-405507; B-405507.2; B-405507.3, November 16, 2011

Link:  GAO Opinion

Agency:  United States Agency for International Development

Disposition:  Protest denied.

Keywords:  Best Value; Cost/Technical Tradeoff

General Counsel P.C. Highlight:  It is difficult to prove an awardees price is unrealistically low when it is 11% higher than the first Government estimate and 2% higher than the final government estimate.

GAO denies the protest of Symbion Power, LLC-Haytrac, JV where it was denied award of a contract, by the U.S. Agency for International Development (USAID), for the rehabilitation and upgrade of five electrical substations in Port-au-Prince, Haiti.

Symbion argues that USAID improperly awarded the contract on a lowest price, technically acceptable basis. Symbion contends that the solicitation required USAID to award the contract to the offeror offering the best value based on a cost-technical tradeoff analysis. GAO first stated that Symbion is correct that the solicitation contained language that could lead offerors to believe the basis for award was best value rather than lowest-price, technically acceptable. However, the RFP was amended to clarify that award would be made to the lowest-priced, technically acceptable offeror. That is, prior to the closing date for receipt of proposals, in response to a question concerning conflicting language in the RFP, USAID stated that award would be made on a lowest-price, technically acceptable basis.

Symbion also argues that USAID failed to conduct a cost realism analysis as required by the solicitation, which Symbion claims would have shown that the eventual awardees price was unrealistically low. GAO states that cost realism is ordinarily not considered in the evaluation of proposals for the award of fixed-price contracts because these contracts place the risk and responsibility of loss upon the contractor. However, an agency may, in its discretion, provide for the use of cost realism analysis in a solicitation for the award of a fixed-price contract for the limited purpose of measuring an offeror’s understanding of the solicitation’s technical requirements or to assess the risk inherent in an offeror’s approach.

While it is true that the RFP advised offerors to ensure that the cost information provided is sufficient to provide a basis for USAID to determine that the costs proposed are reasonable and realistic, the RFP was amended to eliminate the requirement for cost or pricing data. Instead, the RFP required offerors to propose fixed prices on price schedule line items for equipment and tasks to be performed by the contractor. This schedule did not provide for identification of labor mix or labor rates or any cost elements for each line item. Consistent with the RFP’s instructions, neither Symbion nor the awardee submitted detailed cost information that would permit the sort of cost realism analysis that Symbion now asserts was required.

Finally, Symbion generally challenges the adequacy of USAID’s price analysis, arguing, for example, that the agency was required to conduct line-by-line analyses and was inconsistent in its application of a government cost estimate. However, Symbion fails to demonstrate that USAID’s actions were improper, or that Symbion was prejudiced by the government’s actions. GAO states that the depth of an agency’s price analysis is a matter within the sound exercise of the agency’s discretion.

Here, the agency compared both Symbion’s and the awardees proposed prices with the initial March 2011 government cost estimate (GCE) of $11,327,318. As Symbion notes, the source selection decision refers to the April 2011 GCE of $12.5 million as the basis for determining that the awardees price was reasonable and realistic. Regardless of which GCE is relied upon by the agency in its price analysis, Symbion has not demonstrated that USAID unreasonably determined that the awardees price was reasonable and realistic. The awardees price is approximately 11% higher than the March 2011 estimate and almost 2% higher than the April 2011 estimate. Thus, under the circumstances of this case, the record supports the agency’s determination that the awardees price was not unrealistically low. The protest is denied.

2. JSR, Inc., B-405463, November 8, 2011

Link:  GAO Opinion

Agency:  Department of the Air Force

Disposition:  Protest denied.

Keywords:  Evaluation Criteria

General Counsel P.C. Highlight:  An offeror’s must submit an adequately written proposal or they run the risk that their proposal will be downgraded or rejected.

GAO denies the protest JSR, Inc. where its proposal was rejected, under a request for proposals (RFP), issued by the Department of the Air Force, for construction services.

JSR asserts that the Air Force did not evaluate proposals in accordance with the stated evaluation criteria. More specifically, JSR contends that its drawings for seed project nos. 3 and 4, which JSR terms 100 [percent] drawings, sufficiently document the materials it intends to use and satisfy the RFP’s requirements. GAO states that in reviewing protests challenging the evaluation of proposals, it will not conduct a new evaluation or substitute its judgment for that of the agency but will examine the record to determine whether the agency’s judgment was reasonable and in accord with the RFP evaluation criteria. A protester’s mere disagreement with an agency’s judgment is not sufficient to establish that an agency acted unreasonably. Moreover, it is an offeror’s responsibility to submit an adequately written proposal that demonstrates the merits of its approach; an offeror runs the risk of having its proposal downgraded or rejected if the proposal is inadequately written.

Here, the record supports the Air Force’s determination that JSR’s responses to seed project nos. 3 and 4 were insufficient. With respect to JSR’s response to seed project no. 3 (replacing line feeder conductors on existing electrical poles), the agency found that although JSR provided a Pole Line Demolition and Construction Schedule, which listed all 12 existing poles, neither this schedule nor the drawings provided with JSR’s proposal identify any work to be done on six of the poles. JSR has not shown that the agency’s judgment in this regard was unreasonable. The affidavit that JSR provided from its engineer does no more than state the protester’s disagreement about the acceptability of its drawings. GAO agrees with the Air Force that the lack of information pertaining to six of the 12 poles identified under the statement of objectives (SOO) for seed project no. 3 raises a question as to whether JSR’s proposal satisfies the requirements of the RFP.

JSR also does not show to be unreasonable the agency’s concern that the protester intended to replace six of the 12 poles without supporting information in its proposal. Although the protester now states in its comments that it did not intend to replace the existing poles in seed project no. 3, it does not explain why its proposal provided a table for seed project no. 3 showing the depths at which the electrical poles should be set into the ground.

GAO also does not agree with JSR that the Air Force’s concerns with its proposal reflected the consideration of unstated evaluation criteria. The RFP required offerors to provide supporting data as needed to clearly present the contractor’s proposed design concept, including material proposed, to comply with the government’s requirements for the seed projects. All of the agency’s concerns with the protester’s submissions for seed project nos. 3 and 4 are specifically encompassed by the solicitation requirements for preparation of the seed project proposals. The protest is denied.


Bid Protest Weekly – December 14, 2011

December 14, 2011

1. SECO Systems, Inc., B-404905.3; B-404905.4, October 4, 2011

Link: GAO Opinion

Agency: General Services Administration

Disposition: Protest denied.

Keywords: Competitive Range

General Counsel P.C. Highlight: If there is no reasonable possibility that a proposal will be considered amount the highest rather offers the GAO is not going to sustain a protest absent a very clear showing that the agency acted unreasonably.

GAO denies the protest of SECO Systems, Inc. where its proposal was excluded from the competitive range under a request for proposals (RFP), issued by the General Services Administration (GSA), Public Buildings Service (PBS), for administrative and technical support services for GSA’s Rocky Mountain Region.

SECO challenges its exclusion from the competitive range, arguing that the contracting officer (CO) told SECO that GSA was looking for “over and above strengths,” which SECO’s proposal did not provide. SECO also complains that GSA downgraded SECO’s proposal because the price proposal did not provide a narrative discussion, and because of SECO’s key personnel. GAO states that it will review an agency’s evaluation and exclusion of a proposal from the competitive range for reasonableness and consistency with the solicitation criteria and applicable statutes and regulations. Contracting agencies are not required to retain in the competitive range proposals that are not among the most highly rated or that the agency otherwise reasonably concludes have no realistic prospect of being selected for award. In this regard, a protester’s mere disagreement with an agency’s evaluation and competitive range judgment does not establish that the agency acted unreasonably.

Here, the record establishes no reasonable possibility that SECO’s proposal would be considered to be among the most highly rated offers, even accepting the protester’s arguments concerning its price proposal and key personnel. The agency determined that, contrary to the RFP’s requirements, SECO failed to provide references for two of its key personnel and failed to identify two projects for its past performance. SECO does not challenge the agency’s determination in this regard. Instead, SECO’s arguments focus upon the two statements in the competitive range determination memorandum that it contends are unreasonable. Even accepting SECO’s arguments, however, SECO’s proposal failed to satisfy all of the RFP’s requirements. GAO cannot say based upon this record that SECO’s proposal should have received higher than a marginal rating, given the proposal’s material deficiencies. Furthermore, SECO’s proposal was substantially higher priced than all but one of the offers included in the competitive range, and the one offer that was slightly lower priced was rated significantly higher technically. Although SECO disagrees with the CO’s competitive range judgment, the protester failed to show that the agency unreasonably concluded that SECO’s proposal was not among the most highly rated offers for inclusion in the competitive range. The protest is denied.

2. SBBI, Inc., B-405754, November 23, 2011

Link: GAO Opinion

Agency: Department of Transportation

Disposition: Protest denied.

Keywords: Uniform Time Act of 1996

General Counsel P.C. Highlight: The time listed in the invitation for bids is always local time for governmental purposes.

GAO denies the protest of SBBI, Inc., under an invitation for bids (IFB), issued by the Department of Transportation (DOT), Federal Highway Administration (FHWA), for a roadway construction project for the Coronado National Forest, Graham County, Arizona.

The protester maintains that although the agency changed the location of the bid opening to Phoenix, Arizona, the agency did not change the time for submission of bids. The protester argues that bids were originally required to be submitted by 1:00 p.m. MST which is actually 12:00 p.m. Arizona time, and that bids received after 1:00 p.m. Colorado time should be rejected. GAO has previously held, that under the Uniform Time Act of 1996, 15 U.S.C. sect. 262 (2006), there is one standard time for most governmental purposes, including the time designated for receipt of proposals or opening bids, and that time is the local time, regardless of whether it is referred to as standard time or as daylight savings time in the solicitation.

The agency responds that both Colorado and Arizona are in the MST time zone, but that Arizona does not observe daylight saving time. The agency states that during the months of daylight saving time Arizona is one hour behind the rest of the MST zone. It is the agency’s position that 1:00 pm MST on the IFB referred to the time in Arizona where the solicitation designated bids were to be received, and that all bids were received timely and opened at the proper time and that the awardee was properly declared the apparent low bidder. GAO agrees and states that all bids were submitted to the FHWA Phoenix, Arizona office as required by the IFB and all were received prior to the 1:00 p.m. scheduled bid opening. Thus, all the bids were timely received at the 1:00 p.m. local time for Arizona, the designated place for receipt of bids. The protest is denied.

3. MICCI Imaging Construction Company, Inc., B-405654, November 28, 2011

Link: GAO Opinion

Agency: Department of Veterans Affairs

Disposition: Protest dismissed.

Keywords: Interested party; set-aside; SDVOSB

General Counsel P.C. Highlight: A protestor must be an interested party as defined in the Competition in Contracting Act of 1994 to successfully protest a contract award. In a set aside if the protestor is not qualified for the set aside it cannot be considered an interested party.

GAO dismisses the protest of MICCI Imaging Construction Company, Inc., under a request for proposals (RFP), issued by the Department of Veterans Affairs (VA) for phase II of a parking garage expansion.

MICCI argues that the VA improperly rejected its proposal because it was not listed in the VA’s database of veteran-owned small business concerns. GAO states that under the bid protest provisions of the Competition in Contracting Act of 1984, 31 U.S.C. sections 3551-3556 (2006), only an “interested party” may protest a federal procurement. That is, a protester must be an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of a contract or the failure to award a contract. Determining whether a party is interested involves consideration of a variety of factors, including the nature of issues raised, the benefit or relief sought by the protester, and the party’s status in relation to the procurement. A protester is not an interested party where it would not be in line for contract award were its protest to be sustained.

Here, MICCI would not be in line for award even if GAO was to sustain the protest because the VA’s Center for Veterans Enterprise (CVE) has denied its application for inclusion in the Vendor Information Pages (VIP) database as a service-disabled, veteran-owned small business (SDVOSB) concern. Although MICCI has filed a request for reconsideration, the determination that MICCI is not an eligible SDVOSB concern remains in effect, and thus provides no basis for GAO to consider the agency’s actions. The protest is dismissed.

4. WingGate Travel, Inc.; AirTrak Travel; and Alamo Travel Group, B-405007.9, November 29, 2011

Link: GAO Opinion

Agency: Department of Defense

Disposition: Protest denied.

Keywords: Risk; Changes clause; equitable adjustment

General Counsel P.C. Highlight: Shifting greater risk to the contractor is not grounds for protest. “The increasing burden of risk in federal contracting” an article published in the Washington Business Journal by Lee Dougherty regarding this protest.

GAO denies the protest of WingGate Travel, Inc., et al., based on the terms of a request for proposals (RFP), issued by the Defense Human Resources Activity (DHRA), on behalf of the Defense Travel Management Office (DTMO), for travel management services to support the commercial travel office (CTO).

The protesters specifically challenge the RFP provision, establishing that fixed transaction fees will not be adjusted as a consequence of variations from the solicitation’s estimated workload quantities absent a determination that the variation constitutes an “out of scope” change. According to the protesters, this provision, which was not included in prior contracts, puts undue risk on prospective small business contractors. GAO states that as a general rule, the contracting agency must give offerors sufficient detail in a solicitation to enable them to compete intelligently and on a relatively equal basis. However, the contracting agency has the primary responsibility for determining its needs and the method of accommodating them, including the choice of the appropriate contracting format. GAO will not question an agency’s choice of procurement approach, absent clear evidence that its decision is arbitrary or unreasonable, or in violation of statute or regulation. It is within the administrative discretion of an agency to offer for competition a proposed contract that imposes maximum risks on the contractor and minimum burdens on the agency, and an offeror should account for this in formulating its proposal. Risk is inherent in most types of contracts, particularly fixed-price contracts, and firms must use their professional expertise and business judgment in anticipating a variety of influences affecting performance costs. A mere difference of opinion between the protester and the agency concerning what will best suit the agency does not establish that the agency’s determination as to its requirements placed undue risk on the contractor.

The agency acknowledges that prior procurements for these services have included equitable adjustment provisions based on specified variations in estimated volumes of transactions. It explains, however, that this was done because the agency lacked historical data that would assist offerors in responding to the solicitation and in assessing risk. Having now provided that historical data in this procurement, the agency chose the current solicitation method to ensure that it would pay fixed rates for only those travel services that it required and only as they were required. Contracting agencies are not required to conduct present procurements in a certain manner simply because they conducted past procurements in that manner. Given the agency’s inclusion of extensive historical data in the current solicitation, information that was not available under prior solicitations, the protesters’ challenge, based on the agency’s deviation from former practice, lacks merit.

In addition, the protesters argue that GAO’s decision in BMAR & Assocs., Inc., B-281664, Mar. 18, 1999, 99-1 CPD para. 62, requires a different outcome. In BMAR, GAO sustained a protest on the basis that the solicitation at issue subjected contractors to unreasonable risk because it required fixed lump sum pricing for largely undefined civil engineering services. However, GAO state that here, the agency is procuring specific types of services on a fixed‑price, transaction fee basis; the more transactions a prospective contractor performs, the more fee revenue it will earn. Moreover, the solicitation in BMAR had been issued in connection with a public/private competition under Office of Management and Budget Circular A-76. In the unique context of that competition GAO found that the lump sum pricing arrangement put private sector offerors at a competitive disadvantage in relation to the public sector competitor because the public sector competitor, unlike the private sector competitor, would not need to account for contingencies in its pricing. The solicitation here was not issued in connection with OMB Circular A-76. The protest is denied.

5. Globecomm Systems, Inc., B-405303.2; B-405303.3, October 31, 2011

Link: GAO Opinion

Agency: General Services Administration

Disposition: Protest denied.

Keywords: Competitive range; source selection plan

General Counsel P.C. Highlight: A poorly written protest that fails to properly argue the facts and law will not be sustained where the record indicates the agency’s action were reasonable.

GAO denies the protest of Globecomm Systems, Inc. where its proposal was eliminated from the competitive range by the General Services Administration (GSA) under a request for proposals (RFP), issued by GSA for worldwide commercial satellite communications (COMSATCOM) end-to-end solutions.

Globecomm specifically asserts that its proposal fully met the evaluation criteria and should have received ratings that were higher than unacceptable under both the technical/management evaluation factor and the corporate experience evaluation factor. GAO states that it will review an agency’s evaluation and exclusion of a proposal from the competitive range for reasonableness and consistency with the solicitation criteria and applicable statutes and regulations. Contracting agencies are not required to retain proposals in the competitive range that are not among the most highly rated or that the agency otherwise reasonably concludes have no realistic prospect of being selected for award. Further, the evaluation of proposals is a matter within the discretion of the contracting agency, since the agency is responsible for defining its needs and the best method of accommodating them. In reviewing an agency’s evaluation, GAO will not reevaluate proposals, but instead will examine the agency’s evaluation to ensure that it was reasonable and consistent with the solicitation’s stated evaluation criteria and with procurement statutes and regulations. Finally, it is the offeror’s responsibility to submit a well-written proposal, with adequately detailed information to demonstrate compliance with the solicitation requirements, and an offeror’s mere disagreement with the agency’s judgment concerning the adequacy of the proposal is not sufficient to establish that the agency acted unreasonably.

First, based on GAO’s review of the record, GAO finds nothing unreasonable in the agency’s determination that Globecomm’s proposal failed to demonstrate an adequate understanding of the importance of the RFP’s requirement regarding timely delivery where the proposal failed to provide a detailed delivery schedule and simply asserted that Globecomm was committed to timely delivery. Although the protester maintains that, even if the solicitation reasonably contemplated more detailed scheduling information, the proposal’s deficiency in this regard should not be considered a significant weakness, it fails to meaningfully dispute or otherwise show to be unreasonable the agency’s analysis of the specific weaknesses in its proposal regarding the delivery requirement; accordingly, Globecomm’s assertions constitute mere disagreement with the agency’s judgment. On the record here, GAO does not question the agency’s determination that Globecomm’s proposal failed to meaningfully comply with the solicitation’s scheduling and delivery requirements.

Next, nothing in Globecomm’s protest nor its comments refute, and in most instances fail to even address why Globecomm believes the agency’s evaluation of its corporate experience was unreasonable. In pursuing this protest, Globecomm has copied portions of its proposal, yet provided virtually no supporting explanation as to why the various copied portions of its proposal render the agency’s criticisms invalid. Based on the record presented, GAO again finds no basis to question the agency’s evaluation of Globecomm’s proposal as unacceptable with regard to the corporate experience factor.

Globecomm also contends that the agency improperly used a predetermined cutoff score to establish the competitive range based on whether or not an offeror has one or more significant weaknesses for the technical/management evaluation factor. The record fails to support the protester’s argument in this regard. The record shows that all eight of the offerors eliminated from the competitive range were rated unacceptable under both the technical/management factor and the corporate experience factor. The record does not indicate that there was a predetermined cutoff based on the number of weaknesses for the technical/management evaluation factor.

Similarly, the protester asserts that the agency failed to consider all of the evaluation factors in making the competitive range decision. However, the record shows that the competitive range consisted of other offerors. Globecomm and seven other offerors were eliminated based on their ratings of unacceptable for both the technical/management and corporate experience evaluation factors. The record indicates that the agency conducted a detailed evaluation of all offerors under all evaluation factors, including price, to make the competitive range determination. On this record, Globecomm’s assertion that the agency failed to consider all of the evaluation factors is without merit.

Finally, Globecomm argues that the agency failed to comply with the source selection plan when determining the competitive range. An agency’s source selection plan is an internal guide that does not give rights to parties; it is the RFP’s evaluation scheme, not internal agency documents such as source selection plans, to which an agency is required to adhere in evaluating proposals. The protest is denied.


Bid Protest Weekly – December 5, 2011

December 5, 2011

1. Beckman Coulter, Inc., B-405452, November 4, 2011

Link: GAO Opinion

Agency: Department of Health and Human Services

Disposition: Protest denied.

Keywords: Technical Requirements

General Counsel P.C. Highlight: Agencies may reasonably rely on the accuracy of information provided by an offeror in its proposal.

GAO denied the protest of Beckman Coulter, Inc. regarding the issuance of a delivery order, under a request for quotations (RFQ) issued by the Department of Health and Human Services (HHS), Food and Drug Administration (FDA), for a laboratory centrifuge.

Beckman asserts that the awardee’s centrifuge does not satisfy the RFQ’s compatibility and containment requirements where vendors were informed that their centrifuges must be compatible with Beckman’s centrifuge rotors and Beckman’s rotors are unique to its own centrifuges and are not interchangeable. GAO states that a contracting agency has the primary responsibility for determining its legitimate needs and for determining whether an offered item will satisfy those needs, since it is the agency that is most familiar with the conditions under which the supplies or services will be used and that must bear the burden of difficulties incurred by reason of a defective evaluation. In this regard, a procuring agency enjoys a reasonable degree of discretion in determining whether a particular product meets the solicitation’s technical requirement as set forth in the salient characteristics and GAO will not disturb the agency’s determination unless it is shown to be unreasonable. Thus, in reviewing an agency’s technical evaluation under an FSS competitive acquisition, GAO will not reevaluate quotations, but will examine the record to ensure that the agency’s evaluation was reasonable and consistent with the terms of the solicitation and the stated evaluation criteria.

The awardee submitted detailed technical literature which included specifications such as speed, capacity, temperature range, and dimensions, as well as relevant relative centrifugal field (RCF) formulas and calculations. The awardee’s technical literature also assured that its centrifuge was compatible with 90 different models of rotors, including the eight rotors used by the FDA’s Center for Biologics Evaluation and Research (CBER) lab. Moreover, the awardee represented that other parts of HHS had been using Thermo centrifuges, including the model quoted here, with Beckman rotors for years without any problems. Contrary to Beckman’s arguments, the agency could reasonably rely on the awardee’s technical literature and assurances of compatibility in finding that the awardee’s ultracentrifuge met the RFQ’s salient requirements. As a general matter, in evaluating proposals an agency may reasonably rely as accurate upon information provided by an offeror in its proposal. The protest is denied.

2. Y&K Maintenance, Inc., B-405310.2, August 26, 2011

Link: GAO Opinion

Agency: Department of the Army

Disposition: Protest denied.

Keywords: Experience; past performance; price realism analysis

General Counsel P.C. Highlight: There is nothing unreasonable with establishing different experience evaluation criteria for the prime and sub, and price realism analysis is within the sound exercise of the agency’s discretion.

Y&K Maintenance, Inc. (Y&K) protests the terms of a request for proposals (RFP), issued by the Department of the Army, for operation and maintenance (O&M) of Medical Command-Korea (MEDDAC-K) facilities in the Republic of Korea.

Y&K complained that requirements under the two experience subfactors are inconsistent, given that proposed key personnel are required to have experience at the Joint Commission (TJC) accredited facilities, while the prime contractor can rely on experience at unaccredited facilities. The protester also contends that the explicit solicitation statement that prime contractors need not show experience at TJC accredited facilities is inconsistent with a number of performance work statement (PWS) requirements. GAO states that a contracting agency has the discretion to determine its needs and the best method to accommodate them. However, those needs must be specified in a manner designed to achieve full and open competition. A protester’s mere disagreement with the agency’s judgment concerning the agency’s needs and how to accommodate them does not show that the agency’s judgment is unreasonable. The fact that a requirement may be burdensome or even impossible for a particular firm to meet does not make it objectionable if the requirement properly reflects the agency’s needs.

GAO finds nothing improper about the agency’s decision to establish different requirements for the prime contractor and key personnel subfactors under the experience evaluation factor. The PWS requires the contractor to provide certain personnel with experience at TJC accredited facilities and to perform the contract work in accordance with TJC standards. The agency reasonably concluded that it could address these requirements with key personnel, while not requiring that the contractor itself have TJC experience.

Y&K next complains that the RFP unreasonably provides for assigning an acceptable past performance rating to an offeror having no relevant record of past performance in violation of FAR sect. 15.305(a)(2)(iv), which provides that under such circumstances an offeror may not be evaluated favorably or unfavorably. GAO states that FAR sect. 15.305(a)(2)(iv) provides that, “In the case of an offeror without a record of relevant past performance or for whom information on past performance is not available, the offeror may not be evaluated favorably or unfavorably on past performance.” This provision embodies the principle that an offeror neither be punished nor rewarded for the lack of relevant past performance. Thus, GAO has found, consistent with this provision, that an evaluation scheme that penalizes an offeror for neutral past performance ratings is improper. Likewise, an offeror should not have its competitive position improved because of a lack of relevant past performance.

Therefore, where award will be made on a lowest-price, technically acceptable basis, assigning an acceptable past performance rating to offerors without relevant past performance will be, effectively, no different than assigning a neutral rating to that offeror’s past performance. Accordingly, GAO finds no basis to object to the RFP’s stated methodology for evaluating past performance.

Finally Y&K complains that the RFP’s warning that certain contract line items (CLINs or subCLINs) may be terminated for the convenience of the government places undue risk upon the contractor. Y&K also complains that the solicitation improperly requires offerors to provide detailed cost information, including their indirect costs, for each CLIN or subCLIN, because offerors cannot predict their indirect costs for each CLIN since “indirect costs do not relate to specific work items.” GAO states that under a fixed-price contract, as contemplated here, the risks associated with performance and cost escalation are borne by the contractor. There is also a unique requirement that the government act in the interest of the society it serves, and so it retains a special power to terminate its contract obligations when such action serves the public interest.

The RFP advises that after two years the agency may in-source certain functional areas, and therefore those CLINs or subCLINs may be subject to termination for convenience. The RFP incorporates the standard FAR “Contract Terms and Conditions–Commercial Items” clause, which reserves the government’s right to terminate the contract, or any part thereof, for the convenience of the government and describes the contractor’s rights under such circumstances. The RFP here requests that offerors propose fixed prices for a number of functional areas (each of which was included as a CLIN or subCLIN) and, in this respect, requires offerors to provide detailed cost information, such as their direct and indirect costs for CLINs, subCLINS, and ELINS, to allow the agency to perform a price realism analysis. An agency may provide for the use of a price realism analysis in a solicitation for the award of a fixed-price contract for the limited purpose of measuring an offeror’s understanding of the requirements or to avoid the risk of poor performance from a contractor who is forced to provide services at little or no profit. The depth of an agency’s price realism analysis is a matter within the sound exercise of the agency’s discretion. The protest is denied.

3. J&J Maintenance, Inc., B-405310, October 17, 2011

Link: GAO Opinion

Agency: Department of the Army

Disposition: Protest denied.

Keywords: Set-aside; Status of Forces Agreement (SOFA); invited contractor

General Counsel P.C. Highlight: An agency must comply with the terms international agreements in its acquisition.

GAO denied the protest of J&J Maintenance, Inc., (J&J) based on the terms of a request for proposals (RFP), issued by the Department of the Army, for operation and maintenance (O&M) services for Medical Command-Korea (MEDDAC-K) facilities in the Republic of Korea.

J&J complains that setting aside the RFP for local sources under the Status of Forces Agreement (SOFA) (and not granting invited contractor status to non-local offerors) unnecessarily restricts competition. GAO states that a contracting agency has the discretion to determine its needs and the best method to accommodate them. However, those needs must be specified in a manner designed to achieve full and open competition. Solicitations may include restrictive requirements only to the extent they are necessary to satisfy the agency’s legitimate needs. Where a protester challenges a specification or requirement as unduly restrictive of competition, the procuring agency has the responsibility of establishing that the specification or requirement is reasonably necessary to meet the agency’s needs. GAO will examine the adequacy of the agency’s justification for a restrictive solicitation provision to ensure that it is rational and can withstand logical scrutiny. A protester’s mere disagreement with the agency’s judgment concerning the agency’s needs and how to accommodate them does not show that the agency’s judgment is unreasonable.

The record here establishes that the agency reasonably found from its market research that there were a number of local firms that could perform the operation and maintenance (O&M) services at TJC standards. Specifically, in response to the Army’s sources sought notice, five Korean firms expressed interest in providing the hospital O&M services to the agency, including the protester’s subcontractor on the incumbent contract. The agency also searched the central contractor registration (CCR) and found that there were 24 active Korean firms available to perform hospital O&M services. Prior to conducting its market research, the agency’s MEDDAC-K facilities director began investigating O&M practices of hospitals across South Korea and toured several Korean hospitals to determine the level of service that their O&M staff was providing. The facilities director found that there were number of Korean hospitals that had been accredited by the Joint Commission International (JCI). In this regard, the Army states that, since the requirement for these services was last competed in 2006 (when the protester was granted invited contractor status), ten Korean hospitals have been accredited by the JCI. The Army found that, although there were some differences between the TJC and JCI standards, the two accreditation standards had substantial similarities and, in some regards, were almost identical. Moreover, the agency found that, to the extent that JCI and TJC accreditation standards differed, the agency’s requirements would be satisfied by requiring the contractor to provide experienced key personnel with the specific, working knowledge of TJC standards. In sum, GAO finds that the agency’s decision not to grant invited contractor status to non-local offerors under SOFA is reasonable and that the record adequately justifies the RFP’s restriction to local sources. The protest is denied.

4. Paragon TEC, Inc., B-405384, October 25, 2011

Link: GAO Opinion

Agency: National Aeronautics and Space Administration

Disposition: Protest denied.

Keywords: Innovations; teaming agreement,

General Counsel P.C. Highlight: Innovations that can be applied immediately along with strong teaming partners and experience will win most contracts.

Paragon first objects to the agency’s assignment of two significant strengths to the awardee’s proposal for its proposed innovations and its proposed teaming arrangement. Paragon also challenges the assignment of a strength to the awardee for its action tracking system. GAO states that where a protester challenges an agency’s technical evaluation, GAO will review the evaluation record to determine whether the agency’s judgments were reasonable and consistent with the stated evaluation criteria and applicable procurement statutes and regulations. A protester’s mere disagreement with an agency’s judgments does not render the evaluation unreasonable.

GAO finds that the agency’s judgment regarding the strengths of the awardee’s proposal was reasonable and did not reflect disparate treatment. With regard to Paragon’s argument concerning the relative merits of the two firms’ proposed innovations, the agency explains that it considered all of Paragon’s proposed innovations, but found that many of them were already being performed and thus did not merit additional credit. In contrast, the agency found that the awardee offered realistic and operational innovations that could be used immediately after the start of the contract. GAO concludes that the protester merely disagrees with the agency’s judgment, which does not demonstrate that the agency’s evaluation was unreasonable. With regard to Paragon’s objection that both firms should have received similar strengths for their proposed teaming arrangements, NASA explains that the awardee was assigned a significant strength because a major subcontractor was the developer of the “Knowledge Now” management collaboration system, which NASA’s Safety Center (NSC) currently uses. Regarding the challenge to the agency’s assessment of a strength under the understanding the requirements subfactor for the awardee’s proposal of an action tracking system, NASA found that, although Paragon also proposed an integrated action tracking system, Paragon failed to provide any detail about its system and had not presented evidence that its system presently existed. In response, Paragon disagrees that it failed to detail its proposed system, but does not challenge the agency’s conclusion that its system does not currently exist. Given this, GAO finds reasonable the agency’s evaluation of the firms’ respective offers of an action tracking system.

Paragon next asserts that NASA improperly credited the awardee for the experience of its subcontractor where the RFP did not provide for the evaluation of the experience and past performance of firms that were not major subcontractors. GAO finds that, although the source evaluation committee considered the subcontractor’s experience and past performance in evaluating the awardee’s proposal, this consideration did not affect the source selection authority’s (SSA) judgment that the awardee’s experience and past performance was superior to Paragon’s. Specifically, the SSA’s contemporaneous selection decision shows that the SSA concluded that the awardee’s own experience and past performance was superior to Paragon’s, because the awardee itself had highly relevant past performance and experience, whereas Paragon’s own experience and past performance was of limited relevance. In making this determination, the SSA specifically credited Paragon for the highly relevant experience of its major subcontractor. Nevertheless, the SSA, concluded that “the directly relevant experience of [the awardee] and [Paragon's] lack of the same is a meaningful discriminator between the offerors because they are the proposed prime contractors and will be responsible for the management of the overall contract work.” Under the circumstances, the record does not show any reasonable possibility that Paragon was prejudiced by the agency’s consideration of the subcontractor’s experience and past performance. Competitive prejudice is an essential element of a viable protest; where the protester fails to demonstrate that, but for the agency’s actions, it would have had a substantial chance of receiving the award, there is no basis for finding prejudice, and GAO will not sustain the protest. The protest is denied.

5. Kingdomware Technologies, Inc., B-405533.2, November 10, 2011

Link: GAO Opinion

Agency: Department of Education

Disposition: Protest denied.

Keywords: SDVOSB; set-aside; agency report rebuttal

General Counsel P.C. Highlight: An error in the solicitation is likely not prejudicial if there is no vendor question asked regarding it and if a protestor fails to respond to an agency report the GAO will consider those grounds abandonded.

GAO denies the protest of Kingdomware Technologies, Inc. in reference to the terms of a request for quotations (RFQ), issued to vendors holding General Services Administration (GSA) Federal Supply Schedule (FSS) contracts by the Department of Education, Federal Student Aid (FSA), for an emergency notification subscription service.

Kingdomware, which is a service-disabled, veteran-owned small business (SDVOSB), argues that the agency failed to comply with FAR sect. 19.502-2(b), which generally requires than an agency set aside acquisitions with an anticipated dollar value of more than $150,000 for small businesses where there is a reasonable expectation of receiving fair market prices from at least two small business concerns. GAO states that the regulations that implement small business programs and the GSA FSS program expressly anticipate and exclude FSS purchases from the set-aside requirements in FAR part 19. In particular, FAR sect. 8.404(a) and FAR sect. 38.101(e)–both of which pertain to FSS purchasing–provide that FAR part 19 does not apply to orders placed against FSS contracts. Similarly, FAR sect. 19.502-1(b), which pertains to small business set-aside requirements, also provides that FAR part 19 set-aside requirements do not apply to FSS purchases. In sum, the FAR part 19 regulations on which Kingdomware’s protest is predicated do not impose a requirement on agencies to first evaluate whether a solicitation should be set-aside for small businesses–or SDVOSBs–before purchasing the goods or services through the FSS program. Accordingly, it was not improper for the agency here not to set this requirement aside for SDVOSBs, and Kingdomware’s arguments to the contrary provide no basis on which to sustain the protest.

Kingdomware objects to the solicitation’s reference to the a separate GSA schedule (MOBIS) and to the requirement that the emergency notification service include a capability to notify and receive responses through social media, such as Instant Messenger, Facebook, and Twitter. With respect to the solicitation’s reference to MOBIS, the agency responds that the reference was an error. The agency, however, maintains that the error did not prejudice Kingdomware because the solicitation was sent only to vendors that hold GSA Schedule 70 contracts–including Kingdomware– and because the agency received no vendor questions regarding the reference. With respect to the solicitation’s social media notification capability requirement, the agency responds that the requirement reflects the agency’s need to quickly alert staff as to a potential emergency in a broad range of formats. The social media format is necessary, the agency explains, in the event that problems arise with other communication formats, such as when cellular telephone service is disrupted or overloaded. The agency further explains that the social media notification capability is useful for reaching employees when they are not in the workplace. Where Kingdomware in its comments on the agency report did not rebut the agency’s responses regarding the MOBIS reference or the social media notification capability requirement, GAO considers these protest grounds to be abandoned. The protest is denied.


Bid Protest Weekly – November 30, 2011

December 5, 2011

1. Vizada Inc., B-405251; B-405251.2; B-405251.3, October 5, 2011

Link: GAO Opinion

Agency: Department of Homeland Security

Disposition: Protest denied.

Keywords: Price realism analysis; misleading discussions

General Counsel P.C. Highlight: In a fixed price contract it is unobjectionable for a offeror to submit a below cost proposal as the contractor bears the risk and an agency is not required to afford offerors all-encompassing discussions.

GAO denied the protest of Vizada Inc. where it was denied award of a contract under a request for proposals (RFP), issued by the Department of Homeland Security, United States Coast Guard, for maritime data communications system to support the Coast Guard’s large cutter fleet.

Vizada first asserts that the agency failed to conduct a proper price realism analysis and that the awardee’s price was unrealistically low. GAO stated that where, as here, a fixed-price contract is to be awarded, a solicitation may provide for the use of a price realism analysis to measure an offeror’s understanding of the requirements or to assess the risk inherent in a proposal. As GAO has repeatedly held, the depth of an agency’s price realism analysis is a matter within the agency’s discretion. In reviewing protests challenging price realism evaluations, GAO’s focus is whether the agency’s review was reasonable and consistent with the terms of the solicitation. As a general matter, it is unobjectionable for an offeror to submit a below-cost proposal for a fixed-price contract, since fixed-price contracts generally are not subject to adjustment during performance, and the contractor, not the agency, bears the financial risk of cost overruns.

The RFP stated that offerors’ fixed-priced proposals would be evaluated for price realism to determine if there were proposals that were unrealistic in terms of overall price or reflective of an inherent lack of management and/or technical competence or comprehension of the requirements. The awardee’s proposal was the lowest priced and within 23% of the independent government cost estimate (IGCE). Because the awardee’s price was significantly lower than the prices in the other proposals, an additional review of the price proposal was undertaken to ascertain if it was unrealistically low. The agency concluded that the price was realistic, and reflected an exercise of business judgment, rather than a lack of competence, or a lack of understanding the RFP requirements. Based on GAO’s review of the record, GAO finds that the agency’s analysis of the awardee’s price was reasonable and consistent with the terms of the solicitation.

Vizada challenges the agency’s evaluation of the awardee’s proposal asserting that the agency should have disqualified the awardee as technically unacceptable for its failure to meet the mandatory technical requirements of the solicitation. GAO states that the evaluation of technical proposals is a matter within the agency’s discretion, and GAO will not disturb an agency’s judgments regarding the relative merits of competing proposals absent a showing those judgments are unreasonable or inconsistent with the RFP’s evaluation criteria. In this regard, a protester’s mere disagreement with the agency’s judgments does not render an evaluation unreasonable.

GAO finds that the agency reasonably interpreted and understood the awardee’s explanation “subject to space segment availability” as a realistic statement about the limits of satellite space segment availability. Because the agency did not set a maximum order amount and, at some point, all offerors’ satellites would reach their maximum capacity of available space segments, it would be impossible for any offeror to guarantee, based upon only the satellites proposed, that it could meet the agency’s unlimited demand for bandwidth. Also, Vizada’s assertion that the awardee cannot comply with the 36 Mbps requirement is based upon the assumption that the awardee’s proposal language “maximum of 18 Mbps” in its section 5.3.6 response was meant to limit its total bandwidth capacity to 18 Mbps. The agency, however, did not read and evaluate the awardee’s statement of work (SOW) section 5.3.6 in the same manner as Vizada, particularly given that the awardee’s proposal otherwise demonstrated compliance with the 36 Mbps requirement. Instead, the agency understood this phrase to address the requirements in section 5.1 of the SOW that required the contractor to provide a total of 6 Mbps of Ku-band bandwidth in year one; a total of 12 Mbps of Ku-band bandwidth in year two; and for years three through five a total of 18 Mbps of Ku-band bandwidth. GAO finds the agency’s interpretation to be reasonable.

Vizada also claims that the awardee misrepresented the status and condition of one of the satellites it proposed, and that the agency failed to reasonably find and evaluate this misrepresentation where the satellite has reached its end-of-life status and will not be available to fulfill the requirements of the contract because it is scheduled to be replaced in the third quarter of 2011. GAO states that an offeror’s misrepresentation that materially influences an agency’s consideration of its proposal generally provides a basis for proposal rejection or termination of a contract award based upon the proposal. For a protester to prevail on a claim of material misrepresentation, the record must show that the information at issue is false. However, the record provided no convincing evidence, beyond Vizada’s speculation and innuendo, that the awardee knew or should have known that the satellite would be replaced in the near term. The fact that the satellite will in fact be replaced early in the contract does not show that the agency or the awardee knew or should have known of the replacement prior to contract award.

Finally, Vizada argues that the discussions were misleading because the agency failed to notify it of its two assigned weaknesses under the management approach evaluation factor, and one weakness under the relevant past performance factor. GAO states that the Federal Acquisition Regulation (FAR) requires agencies conducting discussions to inform offerors of deficiencies, significant weaknesses, and adverse past performance information to which the offeror has not had the opportunity to respond. Although discussions must address deficiencies and significant weaknesses identified in proposals, the precise content of discussions is largely a matter of the contracting officer’s judgment. Agencies are not required to “spoon-feed” an offeror during discussions; agencies need only lead offerors into the areas of their proposals that require amplification or revision. An agency is not required to afford offerors all-encompassing discussions, or to discuss every aspect of a proposal that receives less than the maximum score, and is not required to advise an offeror of a minor weakness that is not considered significant, even where the weakness subsequently becomes a determinative factor in choosing between two closely ranked proposals.

The record shows that the agency did not conduct misleading discussions. For example, the record shows that none of the proposal weaknesses referenced in the protest were significant weaknesses. While the protester makes much of the agency’s terminology in its technical evaluation consensus report to the contracting officer, which listed all strengths and weaknesses as “significant discriminators,” GAO does not believe that the weaknesses assigned to Vizada under the management approach or relevant past performance evaluation factors were matters that the FAR required to be brought to Vizada’s attention. The protest is denied.

2. Vital Link, Inc., B-405123, August 26, 2011

Link: GAO Opinion

Agency: Department of the Air Force

Disposition: Protest denied.

Keywords: Past Performance;

General Counsel P.C. Highlight: Disagreement with an agency’s evaluation of past performance without more to show unreasonableness on the part of the agency is not enough for GAO to disturb an agency decision.

GAO denies the protest of Vital Link, Inc. under a request for proposals (RFP) issued by the Department of the Air Force for the relocation, and repair/refurbishment of two A/F32T-9 (T-9) noise suppressors and the fabrication and installation of thrust frames and testing systems within each T-9.

Vital Link challenges the Air Force’s evaluation of the awardee’s past performance specifically arguing that the agency’s determination that the awardee’s prior contracts were relevant did not comport with the terms of the solicitation. According to Vital Link, the RFP established two definitions of relevant contracts. First, the solicitation required relevant past performance for relocation (disassembly, remanufacturing/repair, shipping and reassembly) of T-9 noise suppressors or similar jet engine test cells. Second, the solicitation required relevant past performance for the fabrication and installation of thrust frames, monorails, and hoists, specifically for T-9 noise suppressors. GAO states that where a solicitation calls for the evaluation of past performance, it will examine the record to ensure that the evaluation was reasonable and consistent with the terms of the solicitation and procurement statutes and regulations. Additionally, where, as here, a protester and agency disagree over the meaning of solicitation language, GAO will resolve the matter by reading the solicitation as a whole and in a manner that reasonably gives effect to all its provisions. GAO will not read a provision restrictively where it is not clear from the solicitation that such a restrictive interpretation was intended by the agency.

While the RFP did include the language referenced by the protester in support of its position, it also included other provisions that make it clear the agency intended to assess the degree of relevancy of an offeror’s past performance. As noted, the RFP included provisions defining the degree of relevance of an offeror’s past performance ranging from “very relevant” to “not relevant.” If, as asserted by the protester, the agency intended to confine its consideration of an offeror’s past performance exclusively to those contracts that included the specific attributes identified in the language relied on by the protester, these definitions of relevancy would be superfluous. Further, the RFP specified that the agency would consider not only contracts that were the same as the requirements of the RFP, but also those that included work that was similar to the requirements of the RFP. Finally, even the language relied on by the protester is not exclusive; rather, it identifies relevant past performance as “including” the performance attributes listed in the provision, but does not exclude consideration of other performance attributes as relevant. The record also shows that the agency’s evaluators gave careful consideration to the contracts included by the awardee in its proposal for both it and its subcontractor, and specifically compared the relevance of the performance attributes in those contracts to the requirements of the RFP. In sum, the record shows that the agency’s evaluators gave careful consideration to the specific performance attributes reflected in the past performance examples included by the awardee in its proposal, and made reasonable judgments concerning the comparative relevance of those performance attributes to the work required under the RFP. Vital Link has not demonstrated that these judgments were unreasonable, but simply disagrees with the agency’s conclusions by relying on an unreasonably narrow definition of relevance. Such disagreement, without more, is inadequate to show that the agency’s evaluation was unreasonable. The protest is denied.

3. Outdoor Venture Corporation, B-405423, October 25, 2011

Link: GAO Opinion

Agency: Defense Logistics Agency

Disposition: Protest denied.

Keywords: Sole-Source, industrial mobilization

General Counsel P.C. Highlight: The GAO will not disturb a sole source set aside for maintaining the industrial base unless the agency has abused its discretion.

Outdoor Venture Corporation (OVC) protests the award of a contract for lightweight maintenance enclosures (LMEs) by the Defense Logistics Agency (DLA), on a sole-source basis. The sole-source award was justified under 10 U.S.C. sect. 2304(c)(3) (2006), which provides for award of a contract to a particular source to maintain the source for a national emergency or to achieve industrial mobilization. GAO denies the protest.

OVC asserts that it was unreasonable for the agency not to have considered OVC for this contract award. GAO states that agencies have authority to conduct procurements using other than full and open competition and may properly award sole-source contracts to a particular concern for purposes of establishing or maintaining industrial mobilization base sources of supply. Where a military agency makes a sole-source award for purposes of maintaining a particular supplier of an item, concern for maximizing competition is secondary to the agency’s industrial mobilization needs. Decisions as to which producers should be included in the mobilization base, and which restrictions are required to meet the needs of industrial mobilization, involve complex judgments that must be left to the discretion of the military agencies. GAO will question those decisions only if the evidence convincingly shows that the agency has abused its discretion.

OVC does not challenge the awardee’s participation in the relevant industrial base or assert that the agency’s analysis of the awardee’s current minimum sustaining rate (MSR) and business condition is unreasonable or incorrect. More importantly, although OVC contends that it also would benefit from the award of a contract, it nonetheless concedes that it is producing at its MSR production capacity. The record establishes that the awardee may cease its operations which, the agency has determined, would seriously jeopardize the industrial base for MIL-SPEC tents. The record also shows that the agency gave specific consideration to whether OVC required additional work in order to maintain its production capability and concluded that it had adequate work at this time to maintain its MSR. GAO concludes that the agency reasonably exercised its discretion in making award to another offeror and in deciding not to make award to OVC. The protest is denied.

4. Crosstown Courier Service, Inc., B-405492, B-405493, March 29, 2010

Link: GAO Opinion

Agency: Department of Veterans Affairs

Disposition: Protests denied.

Keywords: SDVOSB; Veterans First; sole-source award

General Counsel P.C. Highlight: When the VA awards a sole-source award under Veterans First it is not required to set aside the award for SDVOSBs.

Crosstown Courier Service, Inc. (Crosstown), a service-disabled veteran-owned small business (SDVOSB) protests the Department of Veterans Affairs’ (VA) decision to award two sole-source contracts for courier services to another offeror under two solicitations.

The protester contends that the sole-source awards are improper because the VA failed to consider other qualified SDVOSBs for award. GAO states that under the Veterans First Contracting Program, the VA has authority to award contracts using other than full and open competition (including set-aside procurements and sole-source awards) in certain circumstances. With regard to setting aside procurements exclusively for veteran-owned small businesses (VOSBs) or SDVOSBs, a contracting officer can award contracts on the basis of competition restricted to VOSBs or SDVOSBs if the contracting officer has a reasonable expectation that two or more VOSBs or SDVOSBs will submit offers and that the award can be made at a fair and reasonable price that offers best value to the government. The VA has authority to award sole-source contracts to SDVOSBs when: (1) such concern is determined to be a responsible source with respect to performance of such contract opportunity; (2) the anticipated award price of the contract (including options) will exceed the simplified acquisition threshold . . . but will not exceed $5,000,000; and (3) in the estimation of the contracting officer, the contract award can be made at a fair and reasonable price that offers best value to the United States. Subsection (b) of 38 U.S.C. sect. 8127 provides that, for contracts with SDVOSBs for amounts less than the simplified acquisition threshold, the VA is also authorized to use noncompetitive procedures.

Here, the VA awarded the sole-source contracts to the awardee pursuant to its authority under the Veterans First Contracting Program. The protester’s assertion that the VA should have set aside the procurements for SDVOSBs is without merit because the requirement to set aside certain procurements only applies when the VA does not use its sole-source authority under the Veterans First Contracting Program. Therefore, because the VA used the authority provided in 8127(b) and 8127(c) to award sole‑source contracts to the awardee, the VA was not required to set aside for SDVOSBs these procurements. The record shows that the agency’s decision to award these sole-source contracts to the awardee was in accord with the statute authorizing the award of sole-source contracts to SDVOSBs. The protests are denied.

5. Serco Inc., B-405280, October 12, 2011

Link: GAO Opinion

Agency: Department of the Army

Disposition: Protest denied.

Keywords: Independent Government Estimate (IGE); meaningful discussions

General Counsel P.C. Highlight: When an agency reviews staffing needs it can look at the historical data to determine whether a proposed staffing plan is the best value to the government.

GAO denies the protest of Serco Inc. where it was denied award of a contract by the Department of the Army, under a request for proposals (RFP), for personal effects (PE) processing services for the Army Human Resource Command.

Serco contends that the independent government estimate (IGE) prepared by the agency and used in the evaluation of offerors’ proposals was unreasonable because it failed to accurately reflect the level of effort that will be required to process PE cases under the contract. Specifically, the protester argues that the agency’s IGE unreasonably disregarded the staffing levels required by the reach-back order under the incumbent contract. GAO states that the evaluation of an offeror’s proposal is a matter within the agency’s discretion. A protester’s mere disagreement with the agency’s judgment in its determination of the relative merit of competing proposals does not establish that the evaluation was unreasonable. In reviewing a protest against an agency’s evaluation of proposals, GAO will not reevaluate proposals, but instead will examine the record to determine whether the agency’s judgment was reasonable and consistent with the stated evaluation criteria and applicable procurement statutes and regulations. To resolve this issue, GAO first reviews the staffing-level history under the predecessor contract, the IGE, and the proposals submitted.

Serco was the incumbent contractor for the Joint Personal Effects Depot (JPED) contract. The protester began performing the requirement in July 2008, under a labor-hour contract with a maximum authorized full-time equivalent (FTE) level of 98 FTEs. In August 2010, an Army contracting officer’s representative (COR) prepared a memorandum for the CO concerning a backlog in work at the JPED. The COR noted that Serco had not been providing the full level of 98 FTEs authorized for the JPED contract. The COR recommended that the agency exercise the “reach-back” provisions of the contract, which requires the contractor to provide additional staffing on short notice, in order to address the backlog. On September 30, the Army issued a 10-month reach-back order directing Serco to provide up to 47 additional FTEs to address the backlog of work; this order raised the authorized staffing limit from 98 to 145 FTEs. On November 10, the Army prepared its initial IGE for this RFP, which addressed the estimated costs and staffing levels required to perform the contract. The initial IGE assumed that the work would require 99 FTEs, as well as 47 additional FTEs to perform reach-back work. On January 25, 2011, the agency prepared a revised IGE, which deleted the reach-back order staffing levels, and reduced the non-reach-back staffing levels to 98 FTEs. The Army states that the reach-back staffing was deleted from the IGE because the enhanced levels of performance were not anticipated to be required under the new contract. In this regard, the CO states that part of the increased workload was the result of the backlog created during Serco’s performance, the agency assumed that the reach-back order represented a temporary staffing level that would not be required for the new contract.

Serco’s proposal assumption that the JPED contract will be required to process only 234 PE cases per month also undercuts its challenge to the reasonableness of the IGE, particularly in light of the protester’s performance on the incumbent contract. The data show that for nine of the 30 months before Serco began to experience a backlog and was authorized to increase its FTE levels (January 2008 – June 2010), the company was able to address more PE cases than what its proposal assumes would be required under the current award. Specifically, during the period that Serco was limited to no more than 98 FTEs, the protester met the following levels of performance for processing of PE cases: 272 cases (Jan-08), 289 cases (Feb-08), 320 cases (Apr-08), 245 cases (Jun-08), 291 cases (Jul-08), 307 cases (Sep-09), 264 cases (Oct-09), and 272 cases (Nov-09). In sum, GAO does not think the record supports the protester’s argument that the requirements for the JPED contract, as identified by the workload data set forth in the RFP, could not be performed with the 98 FTEs identified in the IGE or the 105 FTEs proposed by the awardee.

Serco next argues that the Army’s evaluation of its proposal under the staffing plan factor was unreasonable because the agency conducted misleading discussions, and also treated the protester and intervener unequally during evaluations. GAO states that the Federal Acquisition Regulation (FAR) requires agencies to conduct discussions with offerors in the competitive range concerning, “at a minimum . . . deficiencies, significant weaknesses, and adverse past performance information to which the offeror has not yet had an opportunity to respond.” Discussions, when conducted, must be meaningful; that is, they may not mislead offerors and must identify proposal deficiencies and significant weaknesses that could reasonably be addressed in a manner to materially enhance the offeror’s potential for receiving award.

GAO finds that the agency’s discussions were not misleading, as they meaningfully advised the protester of the agency’s concern regarding its proposed staffing, and permitted the protester to revise its proposal in a way that improved its prospect for award. In this regard, the protester’s response to the discussions question resulted in the agency’s elimination of the weakness for the protester’s proposal, and an increase in Serco’s score for staffing plan subfactor from good to excellent. In any event, even if the agency had improperly led the protester into increasing its price, there is no possibility that Serco could have been prejudiced by the agency’s actions. Where, as here, an agency’s discussions are alleged to be misleading as to price or cost, GAO will not sustain the protest where the protester’s and awardee’s proposal were rated equal and the protester’s price or cost would have still remained lower than the awardee’s in the absence of the disputed discussions. Here, any adjustment to this relatively minor element of cost could not affect the result of the competition, in light of the more than a slight difference between the offerors’ proposed prices.

The Army responds that the concern raised in discussions with Serco did not relate to the number of labor categories or the details regarding those categories, as alleged by the protester. Instead, the agency states that the concern related to the designation of personnel, which were lower-paid categories under the Service Contract Act (SCA) wage determination. The protester argues that the agency’s argument is not supported by the record, because the discussion question related to a “limited labor mix,” rather than the designation of personnel under the SCA wage determination. The protester clearly understood that agency’s question related to the classification under different SCA categories; indeed, Serco’s response directly addressed the reclassification of personnel performing these positions. The Army accepted the protester’s response as addressing the concern, removed the weakness from the evaluation, and increased Serco’s rating for the staffing approach subfactor to the highest rating of excellent. On this record, GAO finds no basis to conclude that the agency assessed a weakness based on the number or diversity of labor categories proposed by Serco or that the agency treated the offerors unequally by not assessing a weakness for the awardee based on its proposal of fewer labor categories than Serco. The protest is denied.


Bid Protest Weekly – November 10, 2011

November 11, 2011

1. CCSC, Inc., B-404802.3, July 18, 2011

Link: GAO Opinion

Agency: Department of Homeland Security

Disposition: Protest denied.

Keywords: Late proposal; mail-box rule

General Counsel P.C. Highlight: The offeror is responsible for taking reasonable steps to ensure timely delivery and only where the agency is the paramount cause of the late receipt will a protest be sustained.

GAO denies the protest of CCSC, Inc., a small business, where the Department of Homeland Security (DHS), United States Customs and Border Protection (CBP), rejected its proposal under a request for proposals (RFP), for an indefinite-delivery/indefinite-quantity (ID/IQ) contract to supply coastal interceptor vessels and associated equipment and training.

CCSC’s argues that the firm followed the delivery directions in the RFP which permitted the use of FedEx, but that the RFP did not make offerors aware of the existence of either the “consolidated remote delivery site” (CRDS) or the attendant screening delay. CCSC argues that following the RFP directions was the paramount cause of the late delivery of the firm’s proposal. GAO states that it is an offeror’s responsibility to deliver its proposal to the proper place at the proper time, and late delivery generally requires rejection of the proposal. A proposal delivered to an agency by FedEx or other commercial carrier is considered to be hand-carried and, if it arrives late, can be considered if it is shown that some government impropriety during or after receipt at the government installation was the sole or paramount cause of the late arrival at the designated place. Improper government action in this context is affirmative action that makes it impossible for the offeror to deliver the proposal on time. To establish that government mishandling was the sole or paramount cause of the late receipt of a proposal, an offeror must first establish that it did not significantly contribute to the late delivery by not allowing enough time to permit a timely submission. Even in cases where the late receipt may have been caused, in part, by erroneous government action, a late proposal should not be considered if the offeror significantly contributed to the late receipt by not doing all it could or should have done to fulfill its responsibility to deliver a hand-carried proposal to the specified place by the specified time. Offerors are responsible for allowing a reasonable time for proposals to be delivered from the point of receipt to the location designated for receipt of offers; failure to do so, resulting in late arrival at the designated location, cannot be attributed to governmental mishandling. Furthermore, delays in gaining access to a government building are not unusual and should be expected.

The record provides several significant facts demonstrating that CCSC was, in large part, responsible for its proposal arriving late. First, the protester did not bring its proposal to FedEx until after 6 p.m. on the day before it was due, and CCSC has not shown that it was impossible for it to have sent its proposal earlier to allow for potential security screening. Second, CCSC placed no identification on the packaging identifying that a proposal was inside, and there is no evidence that the FedEx representative identified to the agency that the company was attempting to deliver a proposal when the representative called the contracting officer on the morning of delivery. Third, the protester should have expected delays due to security screening, particularly considering that the proposal was being submitted to DHS, an agency involved in national security that would be expected to have tight security. Finally, the RFP did not warrant that delivery by FedEx or any other express courier would actually reach the contracting officer on the day of delivery. On these facts, GAO cannot conclude that the agency’s conduct was the paramount cause of the late receipt of CCSC’s proposal. The protester failed to take reasonable steps to ensure timely delivery and therefore, the protest is denied.

2. Eagle Creek Marina, B-405220, September 16, 2011

Link: GAO Opinion

Agency: General Services Administration

Disposition: Protest denied.

Keywords: Negotiation; GSA Lease

General Counsel P.C. Highlight: Negotiations which change the SFO should be well documented in the final proposal, an offeror can’t assume that the agency knows what is included in the proposal unless it is detailed with specificity.

GAO denies the protest of Eagle Creek Marina where the General Services Administration (GSA) awarded a lease to another offeror under a solicitation for offers (SFO), for office space, with reserved and secured parking spaces, in the Rochester, New York, area.

Eagle Creek asserts that GSA misinterpreted the SFO as requiring boat dockage, and that the agency “had actual or constructive knowledge” that Eagle Creek’s offer included costs for this feature. Eagle Creek argues that the agency was therefore required to advise the company during negotiations that the SFO did not require offerors to include costs for boat dockage. GAO has repeatedly held that oral advice that would have the effect of altering the written terms of a solicitation, even from the contracting officer, does not operate to amend a solicitation or otherwise legally bind the agency.

Therefore, GAO, as an initial matter, first notes that, although the initial version of the SFO posted on October 10, 2010, stated that GSA was seeking “to lease office space . . . and two boat slips,” the SFO, as amended and posted on January 11, 2011, and under which this lease was awarded, did not. That is, there was no mention in the SFO under which this lease was awarded of any requirement that boat slips or boat dockage be provided as part of the lease. Given the clarity of the solicitation, the protester’s asserted reliance on the views expressed by the DHS representatives in November 2010, as somehow adding a requirement for boat dockage or boat slips to the SFO, issued in January 2011, was misplaced.

Eagle Creek also asserts that section 1.4 of the SFO, which provides that “[t]he right to use appurtenant areas and facilities is included” in the offered lease, required that the protester make its facility’s boat slips and dockage available for use by the agency. The SFO does not include a definition of “appurtenant,” and none has been cited to by the parties. GAO accords that term its plain meaning. That is, “[t]he term “appurtenant in a lease is defined to include ‘everything which is necessary and essential to the beneficial use and enjoyment of the thing leased or granted.’” To construe this clause, as the protester asserts it did, that is, to essentially include in its offer of office space the entirety of its facility and all of its facility’s amenities at no cost to the government is simply unreasonable.

Lastly, GAO finds the protester’s position that the agency knew or should have known that Eagle Creek had allegedly included the costs for boat dockage and slips in its offer to be without merit. As for actual knowledge, the agency states that it was unaware during the course of this acquisition that Eagle Creek’s offer included such costs. There was nothing in Eagle Creek’s offer indicating or otherwise providing for boat dockage, and the protester does not assert that it advised agency representatives during the competition that boat dockage was included in Eagle Creek’s offer. The protest is denied.

3. Six3 Systems, Inc., B-404885.2, October 20, 2011

Link: GAO Opinion

Agency: Department of the Army

Disposition: Protest denied.

Keywords: Small business set-aside; Sources sought notice; Capability of performing

General Counsel P.C. Highlight: Before making a small business set aside the FAR only requires the Contracting Officer to determine that it is reasonable that two or more small businesses capable of performing may make offers, not that two or more offers will actually be received.

GAO denies the protest of Six3 Systems, Inc. of the decision by the Department of the Army Intelligence and Security Command (INSCOM) to set aside for small business competition a request for proposals (RFP), for identity intelligence (I2) biometrics services.

Six3 protests the contracting officer’s determination that the solicitation would remain a small business set-aside. GAO states that under Federal Acquisition Regulation (FAR) sect. 19.502-2(b), a procurement with an anticipated dollar value of more than $150,000, such as the one here, must be set aside for exclusive small business participation when there is a reasonable expectation that offers will be received from at least two responsible small business concerns and that award will be made at fair market prices. The use of any particular method of assessing the availability of small businesses is not required so long as the agency undertakes reasonable efforts to locate responsible small business competitors. The decision whether to set aside a procurement may be based on an analysis of factors such as the prior procurement history, the recommendations of appropriate small business specialists, and market surveys that include responses to sources sought announcements. Because a decision whether to set aside a procurement is a matter of business judgment within the contracting officer’s discretion, our review generally is limited to ascertaining whether that official abused his or her discretion. GAO will not question a small business set-aside determination where the record demonstrates a reasonable basis for the contracting officer’s conclusion that small business competition may be expected.

GAO first notes that the protester incorrectly asserts that before making a small business set-aside determination, a contracting officer must determine that offers will be received from two or more responsible small businesses. The FAR does not require a determination that offers will be received from two or more responsible small businesses–it requires only a determination that offers from two or more responsible small businesses may reasonably be expected. Moreover, in making set-aside decisions, agencies need not make either actual determinations of responsibility or decisions tantamount to determinations of responsibility with regard to prospective offerors; they need only make an informed business judgment that there are small businesses expected to submit offers that are capable of performing.

The record demonstrates a reasonable basis for the contracting officer’s conclusion that both businesses are capable of performing. In their responses to the sources sought notice, prospective offerors were asked to self assess their teams’ skill level in each of ten biometric functional areas on a scale of 1-5, with 1 representing little or no experience and 5 representing a high level of experience. One business represented that its team had a skill level of 4 or 5 in eight of the required functional areas, and a skill level of 3 in a ninth area, whereas the other business represented that its team had a skill level of 4 or 5 in nine of the required functional areas, and a skill level of 3 in the tenth area. The contracting officer found that both companies had grown significantly in the past year, demonstrating, in her view, that they were capable of taking on a sizeable workload increase and enlarging their operations to meet the requirements of the RFP. The contracting officer also found that both had good past performance ratings, both had provided fair and reasonable pricing on other government contracts, and neither had delinquent federal debt. The protest is denied.

4. Medical Development International, Inc., B-402198.2, March 29, 2010

Link: GAO Opinion

Agency: Department of Justice

Disposition: Protest sustained.

Keywords: Terms of solicitation; Life-cycle price evaluation

General Counsel P.C. Highlight: An agency can’t accept an expired proposal that required agency action prior to the proposal’s expiration and an agency must also consider a proposal’s option year pricing and not only base year pricing.

GAO sustains the protest of Medical Development International, Inc. (MDI) where another offeror was awarded a contract, under a request for proposals (RFP), issued by the Federal Bureau of Prisons (BOP), Department of Justice, for comprehensive medical services for a federal correctional complex in Terra Haute, Indiana.

MDI first argues that the agency’s evaluation of proposals and selection of the awardee’s proposal were inconsistent with the terms of the solicitation and not reasonably based. Specifically, the protester argues that the agency’s evaluation of the awardee’s proposal under the technical factor as offering the enhancement of “a firm commitment to [DELETED]” was in error because the evaluation did not recognize that the awardee had qualified its offer by including in its proposal a condition to trigger the [DELETED] that had not been met. Secondly, MDI argues that the agency failed to properly consider price in its source selection, contending that the agency only considered the base period pricing, and not the option period pricing, in determining which proposal represented the best value to the agency. GAO states that the evaluation of proposals is a matter within the discretion of the contracting agency, and in reviewing protests against allegedly improper evaluations, it is not GAO’s role to reevaluate proposals. Rather, GAO examines the record to determine whether an agency’s judgment is reasonable and consistent with the evaluation factors set forth in the solicitation.

GAO agrees with the agency that whether an offeror actually delivers a product or service during the performance of a contract as set forth in their proposal is a matter of contract administration, but GAO fails to see the applicability of this proposition to this protest. Here, the protest challenges the agency’s evaluation of the merits of the awardee’s proposal, and specifically, whether the agency, during its reevaluation of proposals in early December 2009 properly determined that the awardee’s proposal provided “a firm commitment to [DELETED].” Given the agency’s consideration of this enhancement during its reevaluation of proposals, and the prominent mention of this enhancement in its revised source selection decision of December 17 this matter concerns the propriety of the agency’s evaluation and source selection, and therefore is properly for consideration by GAO.

Additionally, as a general matter, and as noted by the agency, it is not improper for an agency to accept an expired offer without reopening negotiations where acceptance is not prejudicial to the competitive system. However, the awardee’s proposal, as submitted, expressly required with regard to the [DELETED], that the agency provide written notification of its desire for this [DELETED] by October 2009. The agency did not provide this “requisite written confirmation” by October 2009, and therefore, its acceptance in December 2009 of the awardee’s proposal could not also include the awardee’s offer to [DELETED] because that aspect of the proposal had expired by the proposal’s own terms in October 2009. GAO does note that while a proposal’s expiration date may be waived, the agency has not pointed to any authority, and GAO is unaware of one, for the agency’s apparent proposition that an agency may also allow a specific term or condition within a proposal that requires agency action to also be waived. In sum, GAO finds that the agency unreasonably determined during its December 2009 reevaluation of proposals that the awardee’s proposal provided “a firm commitment to [DELETED],” because the agency was aware that it had not provided “the requisite written confirmation to [the awardee]” by October 2009.

The protester also argues that the agency’s consideration of price in the source selection decision, and the determination that an award to the awardee was in the best interest of the government, were inconsistent with the terms of the solicitation. GAO states that although the source selection decision provides considerable detail with regard to the base year pricing of the evaluated proposals, and some quantification of the value of the awardee’s evaluated enhancement of an [DELETED], GAO agrees with the protester that the source selection decision reflects a consideration of the proposals’ base period pricing only. That is, the source selection decision does not provide any discussion of the proposals’ option year pricing, including any recognition that the price advantages of MDI’s proposal appears to increase over each of the proposed option periods. Furthermore, the agency has not provided any documentation or statement from, for example, the source selection authority evidencing the consideration of the proposals’ option year pricing contemporaneous with the source selection. Given this, and based on a review of the record, GAO cannot find the agency’s source selection to be consistent with the terms of the solicitation. The protest is sustained.

5. Luke & Associates, Inc., B-405348, October 13, 2011

Link: GAO Opinion

Agency: Department of the Air Force

Disposition: Protest denied.

Keywords: Competitive Range

General Counsel P.C. Highlight: The agency is required to follow its announced evaluation methodology and an offeror can’t read additional requirements into the RFP regarding realism of price.

GAO denies the protest of Luke & Associates, Inc., where its proposal was excluded from the competitive range under a request for proposals (RFP), issued by the Department of the Air Force for various advisory and assistance support services.

Luke asserts that the agency failed to evaluate the realism of offerors’ proposed prices under step one of the RFP’s evaluation methodology. Specifically, Luke contends that the RFP required that the agency’s ranking of offers under step one be based upon an “initial assessment of [the] offerors’ total overall evaluated prices.” GAO states that in reviewing protests against allegedly improper evaluations, GAO examines the record to determine whether the agency’s evaluation was, in fact, in accord with the stated evaluation factors.

Here, the record establishes that the Air Force evaluated proposals in accordance with the RFP’s announced methodology for evaluating proposals. With respect to Luke’s complaint that the Air Force did not assess the realism of offerors’ proposed prices in step one of its evaluation methodology, the RFP simply did not provide for such an assessment in this step. Rather, offerors were informed that the agency would assess price realism under step four. Although Luke argues that RFP indicated that the “initial assessment” of the offerors’ prices would include a price realism analysis, this interpretation of the solicitation is inconsistent with the announced evaluation methodology. The protest is denied.


Bid Protest Weekly – October 27, 2011

November 1, 2011

1. CMJR, LLC d/b/a Mokatron, B-405170, September 7, 2011

Link: GAO Opinion

Agency: Department of the Air Force

Disposition: Protest denied.

Keywords: Past Performance Evaluation

General Counsel P.C. Highlight: An agency’s past performance evaluation may be based on a reasonable perception of a contractor’s prior performance, regardless of whether that contractor, or another offeror, disputes the agency’s interpretation of the underlying facts, the significance of those facts, or the significance of corrective actions.

CMJR, LLC d/b/a Mokatron (Mokatron) protests the award of a contract under a request for proposals (RFP), issued by the Department of the Air Force for the operation and maintenance of the March Air Reserve Base telecommunication system.

The RFP, which was set aside for service-disabled veteran-owned small businesses, provided for the award of a fixed-price indefinite-delivery/indefinite-quantity (ID/IQ) contract for a five-month base period and up to five years of performance, including options. The RFP established three evaluation factors: technical, present/past performance, and price. For those proposals that were technically acceptable, the source selection decision would be based on a tradeoff between present/past performance and price, with those two factors being of approximately equal importance. With respect to the present/past performance factor, the RFP required offerors to provide past performance information on up to 10 recent contracts (those that were currently being performed or had been performed within three years of the date the solicitation was issued) that demonstrated the offeror’s ability to perform under the proposed contract. The RFP also provided that a new corporate entity could submit data on prior contracts involving its officers, employees, and key personnel who have relevant experience. The RFP provided that each present/past performance proposal would receive an integrated performance confidence assessment, which reflected the degree of confidence the agency had in the offeror’s ability to perform the required services to meet the agency’s needs.

In its proposal, Mokatron stated that it was founded in November 2009, and that it consisted of three members: the president of a company called Newcom Telephone Company (NTC); the owner of another company, Definitive Voice and Data, Inc. (Definitive); and the president of a construction firm, Harris and Associates. Mokatron identified seven contracts for review, three performed by NTC and four performed by Definitive. With regard to one of the NTC contracts, Mokatron’s proposal noted that NTC had received a contract discrepancy report for failing to complete a project on time. A performance confidence assessment group (PCAG) reviewed the seven contracts submitted by Mokatron and determined that only two of the NTC contracts and two of the Definitive contracts were recent. Of those four, the agency concluded that neither of the Definitive contracts were relevant, that only one of the NTC contracts was relevant, and that the other NTC contract was somewhat relevant.

Next, the PCAG assessed Mokatron’s quality of performance by reviewing the CPARs for the two recent, relevant/somewhat relevant NTC contracts. In performing this review, the PCAG concluded that the specific narrative description of NTC’s past performance in the CPARs reflected greater risk, and lower adjectival ratings than was reflected in the ratings assigned by the initial assessing official. The PCAG also reviewed the contract discrepancy report NTC received in connection with its failure to complete work on time on the relevant contract. The PCAG further reviewed the pre-award surveys that had been performed for Mokatron, NTC, and Definitive as part of its confidence assessment. The surveys focused on the technical and financial aspects of the firms. Mokatron’s pre-award survey noted that the overall viability of the firm was high risk because it was a “‘start-up’ company, with no historical financial statements, no performance history, and no production activity.” The pre-award survey nevertheless recommended award to Mokatron because NTC provided a corporate guarantee agreement on behalf of Mokatron. Based on the evaluation, the PCAG rated Mokatron’s proposal as limited confidence under the present/past performance factor.

The source selection authority (SSA), who was also the contracting officer, reviewed each offeror’s performance information, including the past performance proposals, the CPARs, the pre-award surveys, and the PCAG assessment. With regard to Mokatron, the SSA reviewed the CPARs from the two NTC contracts, specifically noting the initial assessing official’s ratings, the recommendations for performance improvement, NTC’s failure to timely complete a prior project leading to a contract discrepancy report, and the corrective actions NTC had undertaken.

With regard to the awardee, the SSA assigned its present/past performance proposal a substantial confidence rating. The SSA conducted a performance/price tradeoff and selected the awardee’s higher-rated, higher-priced proposal for award.

The protester challenges the agency’s evaluation under the present/past performance factor. More specifically, Mokatron contends that the Air Force unfairly discounted its status as a new corporate entity, failed to properly evaluate its CPARs, and failed to consider the corrective action it had undertaken. An agency’s past performance evaluation may be based on a reasonable perception of a contractor’s prior performance, regardless of whether that contractor, or another offeror, disputes the agency’s interpretation of the underlying facts, the significance of those facts, or the significance of corrective actions. A protester’s mere disagreement with the agency’s judgment is not sufficient to establish that the agency acted unreasonably.

Mokatron first contends that it was unreasonable for the Air Force to assign its proposal a limited confidence rating under the present/past performance factor “based on the sole fact” that Mokatron is a newly formed entity. Mokatron further complains that the agency “entirely discounted” the performance history of its key personnel. Here, contrary to Mokatron’s assertion that the rating was “based on the sole fact” that Mokatron is a newly formed entity, the record shows the agency based its final assessment on multiple sources of information, including the offeror’s present/past performance proposal, the CPARs, the PCAG evaluation, and the pre-award surveys.

Based on GAO’s review of the record, GAO rejects the protester’s assertion that the Air Force based Mokatron’s past performance rating on the “sole fact” that Mokatron was a newly formed entity, or that it “entirely discounted” the performance history of its key personnel. To the contrary, the bulk of Mokatron’s evaluation related to NTC’s prior contracts, showing that the agency gave Mokatron credit for its members’ performance despite being a new corporate entity. Similarly, the record shows that in reaching the limited confidence rating decision, the SSA considered multiple sources of information. Mokatron’s assertions in this regard are without merit.

Finally, Mokatron argues that the PCAG’s present/past performance evaluation was improper for failing to accept the adjectival ratings contained in the CPARS that were reviewed. Mokatron further contends that the PCAG’s evaluation unfairly emphasized negative past performance, did not reflect an “independent investigation,” and was otherwise “arbitrary and capricious.” GAO states that an evaluating official may properly look behind an adjectival rating to determine the relative strengths or weaknesses that the rating reflects. Further, an agency has broad discretion to determine the manner and extent to which it will rely on summary ratings and the written narratives underlying such ratings.

As noted above, the PCAG concluded that the CPARs’ narrative descriptions of NTC’s past performance properly reflected greater risk and lower adjectival ratings than the ratings assigned by the initial assessing official. In this regard, the PCAG relied on specifically identified aspects of NTC’s prior performance that were discussed in the CPARs. Based on GAO’s review of the record, GAO finds no basis to question the reasonableness of the PCAG’s evaluation. The protest is denied.

2. United Terex, Inc. – Protest B-405070.3; B-405070.4, September 27, 2011

Link: GAO Opinion

Agency: Department of the Navy

Disposition: Protest denied.

Keywords: Cost-Technical Trade-Off

General Counsel P.C. Highlight: Even where price is the least important evaluation factor, an agency properly may award a contract to even a lower technically rated firm where it reasonably concludes that the price premium involved in selecting the higher-rated quotation is not justified in light of the acceptable level of technical competence available at a lower price.

United Terex, Inc. protests the issuance of a purchase order under a request for quotations (RFQ), issued by the Department of the Navy for aircraft tow bars.

The RFQ, a set-aside procurement for small businesses, requested quotations for a fixed-price purchase order for 20 “ALBAR” aircraft tow bars. The RFQ, which provided for simplified acquisition procedures set out in Federal Acquisition Regulation (FAR) Part 13, did not require the submission of technical quotations or first article testing samples. The RFQ also provided that where the vendor had not previously manufactured the required tow bar, inspection and acceptance would be conducted by the Defense Contract Management Agency. As to the evaluation of quotations for selection, the RFQ anticipated the use of two evaluation factors, price and past performance (with past performance being significantly more important than price). For the purpose of evaluating past performance, vendors were instructed to submit references from a minimum of three government/state/local agencies where the vendor had provided “same/similar equipment.”

After consideration of the relative merits of the quotations, the source selection authority determined that, although United Terex had more directly relevant past performance experience, as it had previously manufactured the required ALBAR tow bars, given the level of the awardee’s technical competence shown by its favorable past performance evaluation, the approximate 50% price premium associated with the selection of United Terex for a purchase order under the RFQ was not warranted. The agency, having determined that GAI’s quotation presented the best value, selected GAI as the successful vendor and issued a purchase order for the current ALBAR tow bar requirement to the firm.

United Terex challenges the agency’s past performance evaluation, contending that, since the awardee has not yet manufactured the precise item required here, or other aircraft tow bars for use aboard aircraft carriers, it was unreasonable for the agency to determine that the awardee had “favorable” past performance.

As an initial matter, to the extent United Terex suggests that the RFQ required only ALBAR or other aircraft carrier tow bar experience, GAO disagrees. The solicitation merely provided that the agency would consider vendors’ prior contracts for the provision of the same or similar equipment. The RFQ did not state how similarity would be determined or measured nor did it state that a firm’s experience with the same equipment would be considered materially more important than a firm’s experience with similar equipment. Given the general wording of the RFQ’s past performance evaluation criterion, there is no basis for the type of stringent evaluation advanced by the protester.

The record reflects, as noted above, that the agency gave United Terex credit for the firm’s successful performance of recent orders for the same ALBAR tow bars required under the solicitation and, based on this review, assigned United Terex a favorable past performance rating. Unlike United Terex, the awardee had not manufactured the ALBAR tow bars; thus, the agency reviewed past performance information it obtained for the awardee regarding past and current contracts, which the agency deemed to be for similar equipment. In assessing the similarity of the awardee’s references, the record reflects that the agency reviewed the type of work performed to determine if the end items were manufactured in a manner similar to the solicited tow bars, including build-to-print projects and those using similar skills and materials. More specifically, GAO’s review of the record confirms that the agency obtained and considered performance information for the awardee concerning 14 prior projects, including projects providing various aircraft ground support equipment, including other large metal stress and load-bearing equipment which, in the agency’s judgment, involved the firm’s extensive machine shop experience with the same or similar manufacturing processes needed to perform the requirements of this solicitation.

The protester also challenges the reasonableness of the agency’s tradeoff determination in which the source selection authority concluded that, despite the protester’s more directly relevant experience manufacturing the precise item required here, given the level of the awardee’s technical competence to manufacture the item, as demonstrated by the information revealed and considered during the firm’s past performance evaluation, the payment of the substantial price premium associated with the selection of United Terex is not warranted. GAO states that it is well-settled that, even where price is the least important evaluation factor, an agency properly may award a contract to even a lower technically rated firm where it reasonably concludes that the price premium involved in selecting the higher-rated quotation is not justified in light of the acceptable level of technical competence available at a lower price.

Here, the record shows that the source selection authority reviewed the past performance evaluation record, recognized past performance was more important an evaluation factor than price, and that United Terex’s quotation demonstrated more directly relevant past performance experience (with the same equipment) as compared with the awardee’s quotation (which showed experience with similar equipment). The source selection authority, however, concluded that the payment of a 50% price premium for United Terex to do the work was not justified. GAO sees no basis to object to this determination.

3. Science Applications International Corporation, B-405155.3, October 3, 2011

Link: GAO Opinion

Agency: Department of the Air Force

Disposition: Request granted.

Keywords: Bid Protest Costs

General Counsel P.C. Highlight: If GAO determines that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, GAO will recommend payment of protest costs.

Science Applications International Corporation (SAIC) requests that GAO recommend that it be reimbursed the costs of filing and pursuing its protest challenging a determination by the Department of the Air Force to eliminate SAIC’s proposal–based on an alleged organizational conflict of interest (OCI)–from the competition under a request for proposals, for the Air and Space Operations Center weapon system modernization program.

SAIC protested that the agency unreasonably determined that the protester had an unequal access to information OCI which disqualified it from participating in the competition; that it failed to treat all offerors equally in this regard; and that it failed to follow the requirements of the Federal Acquisition Regulation (FAR). In response to SAIC’s protest, the agency submitted a report to which SAIC filed comments and a supplemental protest. After the agency submitted a supplemental report and SAIC submitted its comments, the GAO attorney held an alternative dispute resolution (ADR) conference, in which he engaged in outcome prediction. He advised the parties that it was not clear from the record that the agency’s determination to exclude SAIC was reasonable or that the agency had followed applicable regulations in excluding SAIC. The GAO attorney did not recommend that SAIC be included in the competition, but suggested that the agency follow the requirements of FAR sect. 9.506 and document the process and, either revise its determination and findings (D&F) to ensure its clarity, or provide SAIC an opportunity to respond to the agency’s concerns in the D&F, clearly documenting whatever approach it ultimately adopts.

Subsequently, the agency advised GAO that it was electing to take corrective action. Specifically, the agency intends to document its compliance with FAR sect. 9.506; amend the RFP as necessary; prepare a new D&F document for SAIC’s review and comment; a new final D&F if required; and take other corrective action as deemed appropriate. The protest was dismissed. GAO states that when a procuring agency takes corrective action in response to a protest, it may recommend reimbursement of protest costs, including reasonable attorneys’ fees, if, based on the circumstances of the case, GAO determines that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend necessary time and resources to make further use of the protest process in order to obtain relief. GAO’s willingness to inform the parties through outcome prediction ADR that a protest is likely to be sustained, as GAO did, is generally an indication that the protest is viewed as clearly meritorious, and satisfies the “clearly meritorious” requirement for purposes of recommending reimbursement of protest costs. Additionally, while GAO considers corrective action to be prompt if it is taken before the due date for the agency report responding to the protest, it generally do not consider it to be prompt where it is taken after that date.

Here, the agency acknowledges that it took corrective action in response to the ADR conference and states that it will consider a timely claim from SAIC for its reasonable costs, based upon a recommendation from GAO. Based on the clearly meritorious nature of the issues, and the agency’s undue delay in taking corrective action, GAO recommends that SAIC be reimbursed the costs associated with filing and pursuing its protest, including reasonable attorneys’ fees. SAIC should submit its certified claim, detailing the time spent and costs incurred, directly to the agency within 60 days of its receipt of this decision. The request is granted.

4. Kingdomware Technologies, B-405242, September 30, 2011

Link: GAO Opinion

Agency: Department of Veterans Affairs

Disposition: Protests denied.

Keywords: Responsiveness

General Counsel P.C. Highlight: The offeror has the burden of unequivocally demonstrating its compliance with the terms of the RFQ.

Kingdomware Technologies protests the decision by the Department of Veterans Affairs (VA) not to award the firm a purchase order under a request for quotations (RFQ), to provide emergency notification services for the VA’s Palo Alto Health Care System (VAPAHCS).

The RFQ sought quotations from vendors holding contracts under the General Services Administration Federal Supply Schedule for information technology software services. The RFQ was posted on FedBid.com, an on-line reverse auction procurement system. Vendors were advised that quotations would be evaluated for technical acceptability and price. A fixed-price purchase order would be issued to the lowest-priced vendor whose quotation conforms to the terms of the RFQ. Prospective vendors were advised that questions concerning this procurement should be submitted at the earliest possible time to allow the agency to respond. Vendors were also advised that questions not received within a reasonable time prior to close of the solicitation might not be considered.

As part of its quotation, Kingdomware included an attachment in which the protester stated, among other things, that it had sent questions concerning this procurement through FedBid and had also left a voicemail message for the contracting officer. Since its questions were not answered, the protester stated that it made certain “assumptions in connection with our GSA Schedule bid.” The relevant assumptions were that, “Because Blackberrys support SMS delivery just as other smartphone devices that this is allowable; and we are also assuming that SMS delivery to the provider is allowable because this capability is much faster than using SMTP text messages.” After reviewing Kingdomware’s quotation, the VA concluded, based on the protester’s “assumptions,” that the firm offered “SMS delivery” of text messages rather than the required SMTP text messages, and the quote was therefore viewed as unacceptable.

Kingdomware takes issue with the agency’s evaluation of its quotation, arguing that its quotation was in fact based on providing SMTP messaging. Specifically, the protester asserts that, consistent with the bidding requirements for FedBid, the firm expressly acknowledged “compliance with all of the terms of the buy,” which implicitly included providing SMTP messaging.

Here, the quoted portion of the attachment included in Kingdomware’s quotation identified a text messaging capability other than that specified in the RFQ which the protester assumed was “allowable” for this procurement. At a minimum, the Kingdomware quotation is unclear as to whether, as the protester claims, it could be read to indicate that the firm would provide the SMTP message capability, SMS messaging, or both. Since Kingdomware had the burden of unequivocally demonstrating its compliance with the terms of the RFQ, yet failed to do so, GAO has no basis to question the reasonableness of the agency’s evaluation. A quotation which fails to conform to a material solicitation term and condition should be considered unacceptable and may not form the basis for an award. The protest is denied.

5. JRS Management, B-405361; B-405361.2; B-405361.3, October 3, 2011

Link: GAO Opinion

Agency: Department of Justice

Disposition: Protests denied.

Keywords: Technical Acceptability

General Counsel P.C. Highlight: A quotation that fails to conform to a material solicitation requirement is technically unacceptable and cannot form the basis for award.

JRS Management protests the Federal Bureau of Prisons’ (BOP) determination that the firm’s quotation in response to a request for quotations (RFQ) was technically unacceptable.

The BOP issued the RFQ to provide the services of a computer aided drafting vocational trades instructor at the Federal Correctional Institution in Miami, Florida. The RFQ required that the vendor’s instructor candidate possess the following experience and qualifications: (1) one year of teaching experience with demonstrated competencies, skills, and knowledge levels on which the instructor will be expected to teach; (2) State of Florida Teaching Certificate or non-degree Vocational Teaching Certificate; and (3) one year Computer Aided Drafting teaching experience. The RFQ also required that the vendor include in its quotation “supporting documentation” showing that its instructor candidate meets the above qualification and experience requirements. The RFQ stated that a vendor’s failure to provide this information “may cause your quote to be considered unacceptable.”

JRS was the only vendor to submit a quotation. However, the quotation did not identify where the candidate worked, provide any references for the agency to verify the candidate’s experience, or include any supporting documentation to substantiate JRS’ summary description of the candidate’s teaching experience. The contracting officer contacted JRS requesting that JRS provide reference information for the instructor candidate so that the agency could verify the candidate’s experience. The contracting officer explained that “I need the requested information . . . or you will not be consider[ed] for award.”

JRS did not provide the requested information, and instead protested that requirement to GAO. Thereafter, the agency advised that JRS’ quotation was technically unacceptable for failing to include supporting documentation evidencing the instructor’s qualifications and experience. JRS then supplemented its protest, challenging the finding of technical unacceptability on the grounds that the solicitation did not require the submission of resumes or employment references. GAO states that in reviewing an agency’s technical evaluation, it will examine the record to ensure that the evaluation was reasonable and consistent with the evaluation criteria and with procurement statutes and regulations. A quotation that fails to conform to a material solicitation requirement is technically unacceptable and cannot form the basis for award.

GAO finds that JRS’s quotation was properly found unacceptable. The RFQ’s plain language required vendors to submit supporting documentation to show that the instructor candidate possessed the required qualifications and experience. Although the protester’s quotation generally described the candidate’s experience, the quotation did not include sufficient details (such as where the individual worked) for the agency to verify the experience. Furthermore, JRS failed to provide the information when repeatedly requested by the agency. Since the quotation did not contain any supporting documentation showing that the instructor candidate possessed the requisite experience, and JRS failed to provide the documentation when requested by the agency, GAO finds reasonable the agency’s determination that JRS’ quotation was technically unobjectionable. The protest is denied.


Bid Protest Weekly – October 19, 2011

October 25, 2011

1. ECC-Insight, JV, B-404959; B-404959.3, July 12, 2011

Link: GAO Opinion

Agency: Department of the Navy

Disposition: Protests denied.

Keywords: Technical Evaluation

General Counsel P.C. Highlight: A solicitation must inform offerors of the basis for proposal evaluation, and the evaluation must be based on the factors and significant subfactors identified in the solicitation.

ECC-Insight, JV protests the rejection of its proposal and the award of contracts to six other firms under a request for proposals (RFP), issued by the Department of the Navy, for environmental remediation services.

The RFP provided for the award of multiple, fixed-price indefinite-delivery/indefinite-quantity (ID/IQ) contracts for environmental restoration services at contaminated sites located at Navy, U.S. Marine Corps, and other government agency installations, and would include sites on the Superfund National Priority List.

With respect to the technical approach factor, the RFP identified a number of areas that the agency would evaluate to assess the viability of an offeror’s proposed approach to performing the task order, including the proposal’s “technical approach breakdown.” The RFP required proposals to include an Excel Spreadsheet, at a level of detail sufficient to validate the contractor’s understanding of this technical requirement.

ECC-Insight’s technical proposal was evaluated as having a deficiency under the technical approach factor that caused the firm’s proposal to be assessed as marginal overall. Specifically, the agency found under this factor that ECC-Insight had proposed too few labor hours to accomplish the approach described in its proposal for TO 0001. Because, as provided for by the RFP, the agency decided to make awards without conducting discussions, the protester’s proposal was rejected as unacceptable.

ECC-Insight asserts that the Navy did not evaluate its proposal in accordance with the stated evaluation criteria. Specifically, the protester argues the RFP did not provide for the evaluation of the firm’s proposed level of effort under the technical approach factor. GAO states that in reviewing protests challenging the evaluation of proposals, GAO does not conduct a new evaluation or substitute our judgment for that of the agency but examine the record to determine whether the agency’s judgment was reasonable and in accord with the RFP evaluation criteria. In this regard, a solicitation must inform offerors of the basis for proposal evaluation, and the evaluation must be based on the factors and significant subfactors identified in the solicitation.

Here, the solicitation specifically informed offerors that the agency would evaluate their technical approach breakdown under the technical approach factor. The solicitation also specifically informed offerors that the information submitted under section L of the solicitation would be used to evaluate the offeror’s technical approach under the evaluation factor. Although the RFP did not further define technical approach breakdown under the section M evaluation factors, offerors were instructed under section L to provide their level of effort under this factor and that the offerors’ submissions should be sufficiently detailed to validate their understanding of the technical requirements. Furthermore, the RFP specifically stated that the information would be evaluated. In sum, GAO finds that the agency’s consideration of ECC-Insight’s level of effort under the technical approach factor was in accord with the solicitation’s stated criteria. The protest is denied.

2. CASE LLC, B-404954, July 7, 2011

Link: GAO Opinion

Agency: Department of Defense

Disposition: Protest denied.

Keywords: Discussions

General Counsel P.C. Highlight: The fact that an agency labels its discussion questions as “discussions items” or “items for negotiation” does not mean that the agency is not identifying deficiencies or weaknesses in an offeror’s proposal.

CASE, LLC protests the elimination of its proposal from the competitive range under a request for proposals (RFP), issued by the Defense Information Technology Contracting Organization (DITCO) on behalf of the Defense Information Systems Agency (DISA) for information technology (IT) support services in support of the integrated information management system.

The RFP, issued to all contract holders under the General Services Administration’s multiple award, Alliant small business government-wide contract, contemplates the issuance of a cost reimbursement and labor hours task order for a base year and six one-year options to perform various IT support services. Technical proposal were to be limited to 25 pages. Firms were advised that award would be made on a “best value” basis, considering past performance, technical/management considerations and cost, with the non-cost considerations together being significantly more important than cost.

After evaluating the protester’s proposal, the agency sent CASE a total of 14 discussion questions, one relating to its cost proposal and 13 relating to its technical proposal. CASE responded to the discussion questions by submitting a revised proposal. The agency evaluated CASE’s revised proposal and found that it was acceptable under the first subfactor, but found its proposal unacceptable under a second subfactor. On the basis of these evaluation findings, the agency eliminated CASE’s proposal from the competitive range.

CASE asserts that the agency failed to engage in meaningful discussions with it. According to the protester, it was never apprised by the agency’s discussion questions that the agency viewed CASE’s proposal as including deficiencies or weaknesses, and CASE was advised only that the discussion questions contained “items for negotiation.” GAO states that when an agency affords a firm discussions, it must, at a minimum, advise the offeror of deficiencies, significant weaknesses and adverse past performance information to which the offeror has not yet had an opportunity to respond.

The fact that the agency may have labeled its discussion questions as “discussions items” or “items for negotiation” does not mean that the agency was not identifying deficiencies or weaknesses in CASE’s proposal, and a reading of the discussion questions themselves demonstrates that the agency was, in fact, identifying deficiencies or weaknesses in the CASE proposal. In the final analysis, CASE does not take issue with the substance of the discussion questions, but only with the fact that the agency did not expressly advise it that it was identifying weaknesses or deficiencies in its proposal. This, without more, provides no basis for GAO to find that the agency failed to engage in meaningful discussions with CASE. The protest is denied.

3. Newsun, Inc., B-405245, September 28, 2011

Link: GAO Opinion

Agency: General Services Administration

Disposition: Protest denied.

Keywords: Simplified Acquisition Procedures

General Counsel P.C. Highlight: Simplified acquisition procedures are designed, among other things, to reduce administrative expenses, promote efficiency and economy in contracting, and avoid unnecessary burdens for agencies and contractors. When using these procedures, an agency must conduct the procurement consistent with a concern for fair and equitable competition and must evaluate quotations in accordance with the terms of the solicitation.

Newsun, Inc., doing business as Internal Computer Services (ICS), a small business, protests the issuance of a purchase order by the General Services Administration (GSA), under a request for quotations (RFQ), for replacement of the voice telephone system.

The GSA posted the RFQ on FedBizOpps.gov, seeking quotations from service-disabled veteran-owned small business (SDVOSB) firms, for placement of a single commercial item purchase order. The RFQ Statement of Work (SOW) specified the quantities and types of telephone equipment needed for each location. As relevant to the protest issues, for the Wilmington, Delaware VA Medical Center, the SOW used a table, which specified several types of telephones, and corresponding quantities for each. For “Digital Multi-Line Telephones” the table specified a total quantity of 1067, while a separate line requested “VoIP [Voice over Internet Protocol] Telephones” and a total quantity of 358. In response to vendor questions, the GSA posted on FedBizOpps.gov a set of vendors’ questions and the agency’s answers. Among them was a question about the acceptability of offering VOIP phones (sometimes referred to simply as “IP” phones) in place of the multi-line digital phones.

The GSA evaluation report explains that ICS’s quotation proposed a solution that used VOIP technology, contrary to the SOW specification of TDM technology, for the required 1067 digital multi-line telephones. The evaluation also stated that one of ICS’s two past performance reference projects was not similar in size and scope to this requirement. The evaluation rated ICS’s proposal as “Does Not Meet [requirements]” for both its telecommunications solution and its past performance, and rated the proposal “Does Not Meet” overall.

ICS protests that the GSA unreasonably evaluated the firm’s quotation as unacceptable for both its technical solution and the firm’s past performance. GAO states that the procurement was conducted under the simplified procedures for evaluation of commercial items. Simplified acquisition procedures are designed, among other things, to reduce administrative expenses, promote efficiency and economy in contracting, and avoid unnecessary burdens for agencies and contractors. When using these procedures, an agency must conduct the procurement consistent with a concern for fair and equitable competition and must evaluate quotations in accordance with the terms of the solicitation. In reviewing protests of an allegedly improper simplified acquisition evaluation and award selection, GAO examines the record to determine whether the agency met this standard and exercised its discretion reasonably.

ICS argues that its proposed technical solution will provide a superior result within the constraints of the VA’s existing telecommunications infrastructure. ICS argues that although purchasers such as the GSA often believe that existing wiring is only suitable for TDM telephones, through the use of the “adapter” technology proposed by ICS, VOIP telephones can operate over an existing voice network. Thus, ICS argues that the GSA’s underlying concerns regarding the limits of the site’s current data network may not be valid. The GSA responds that the agency made clear through its response to Question 4 that an acceptable technical solution was required to propose “Multi-line digital phones using TDM technology,” and that the current data network “cannot support a full VOIP implementation.” Since ICS’s quotation clearly proposed VOIP telephones for the 1067 multi-line digital phones, regardless of how it did so, the quotation did not comply with this clearly-expressed requirement, and was therefore properly evaluated as technically unacceptable. The GSA’s evaluation was reasonable and consistent with the express terms of the RFQ. The protest is denied.

4. JRS Management, B-405355, September 28, 2011

Link: GAO Opinion

Agency: Department of Justice

Disposition: Protest dismissed.

Keywords: Minimum Requirements

General Counsel P.C. Highlight: Where minimum requirements of a proposal are not met, the Agency is free to reject the offer for failing to meet the minimum requirements.

JRS Management protests the rejection of its quotation under a request for quotations (RFQ), issued by the Department of Justice, Federal Bureau of Prisons (BOP) for the provision of pharmacy technician services to the inmate population at the Federal Correctional Institution in Ohio.

The RFQ, issued as a total small business set-aside, provided that award would be made “to contractor whose quote, conforming to the solicitation, represents the lowest price to the Government, in accordance with FAR [Federal Acquisition Regulation] 52.212-1(g).” The RFQ listed several minimum requirements for a pharmacy technician required by the state of Ohio. To conform to the solicitation, the RFQ required as follows, “Contractors must provide copies of all documents evidencing compliance with the criteria referenced under ‘MINIMUM REQUIREMENTS’, to include copies of all diplomas, certificates, licenses, etc. In addition, the Contractor must provide evidence of insurability, in accordance with FAR Clause 52.237-7.” The RFQ further required that information specific to individuals who may provide services must be submitted to demonstrate prior experience working: with electronic medical record system; with computers in past jobs; and as a pharmacy technician in a correctional environment.

JRS submitted an initial quotation and subsequently submitted a revised quotation replacing the initial quotation. The protester’s quotation was rejected by the agency for the protester’s failure to provide the required information evidencing compliance with the minimum requirements.

JRS contends that the agency should not have rejected its quotation on this basis because qualification requirements were not a stated evaluation criteria; rather, the only stated evaluation criteria was price. GAO states that by decision dated April 25, 2011, it dismissed a protest filed by JRS against another BOP procurement for medical services with similar documentation requirements. GAO rejected the protester’s argument that the qualification requirements concerned a matter of responsibility. GAO noted that the RFQ was clear that qualification requirements had to be included with the quotation, and that a quotation could be eliminated from consideration for award if they were not included. GAO found that the agency properly rejected the protester’s quotation because the protester failed to include required information, not because the protester was not capable to perform. Since the issues raised and the arguments made by JRS are essentially the same as in the earlier protest which was resolved by decision of April 25, GAO will give no further consideration to this protest. The protest is dismissed.

5. Terex Government Programs, B-404946.3, September 7, 2011

Link: GAO Opinion

Agency: Department of the Army

Disposition: Protest denied.

Keywords: Source Selection Decision

General Counsel P.C. Highlight: Source selection decisions must be documented, and include the rationale and any business judgments and tradeoffs made or relied upon by the SSA.

Terex Government Programs protests the award of a contract to Kalmar RT Center LLC, by the Department of the Army, under a request for proposals (RFP) for light capability rough terrain forklifts (LCRTF).

The RFP provided for the award of a fixed-price, five-year requirements contract for LCRTF production and related services, and data. The RFP specified that award would be made to the offeror whose proposal was determined to represent the best value to the government considering the following evaluation factors: technical, price, and small business participation. The technical factor was further divided into the following three equally-weighted subfactors: (1) beach operations; (2) helicopter lift; and (3) pallet handling operations.

With regard to the technical factor, the RFP required offerors to detail their proposed approach to meeting the requirements of the purchase description and to provide substantiating information in this regard. More specifically, offerors were instructed to provide complete and specific technical data documentation and supporting rationale showing how the offered LCRTF would meet the requirements of the purchase description. Concerning substantiating data, the RFP stated that “validated test and inspection data, which establishes the conformance of the offered configuration to required performance levels, represents the most credible form of substantiating data.”

Four offerors, including Terex and Kalmar, were determined to be within the competitive range. Terex was notified that Kalmar’s proposal had been selected for the award and, on the same date, Terex received a post-award debriefing. Terex then filed a protest with GAO. In response, the Army agreed to take corrective action consisting of reevaluating the proposals and making a new best-value decision. GAO therefore dismissed the protest. Following the reevaluation, Terex was notified that its proposal had not been selected for award and that Kalmar remained the awardee. Terex learned that its proposal had received the same source selection evaluation board (SSEB) ratings as Kalmar’s proposal, and that Kalmar had offered a higher price. Notwithstanding the adjectival ratings, the source selection authority (SSA) concluded in the SSDD that Kalmar’s proposal had presented the most credible substantiating data concerning its design and, in the SSA’s judgment, presented less risk than all other offerors. The SSA further explained that despite the appearance of identical technical and small business ratings between the Terex and Kalmar proposals, there were meaningful distinctions between the proposals. Specifically, the SSA found that Kalmar had designed and built a LCRTF specifically to meet the purchase description requirements of the RFP, and was therefore able to provide the most credible substantiating data based on that configuration. According to the SSA, this distinction was worth the $6,299,740 price premium of Kalmar’s proposal, rendering Kalmar the best value to the government.

Terex alleges that the SSDD does not support the Army’s award decision to Kalmar, that the SSA could not have reasonably justified the $6.3 million price premium of Kalmar’s proposal, and that Kalmar’s proposal failed to meet several material requirements of the purchase description of the RFP. GAO states that 15.308 of the Federal Acquisition Regulations (FAR) requires, in the context of a negotiated procurement, that a source selection decision be based on a comparative assessment of proposals against all of the solicitation’s source selection criteria. The FAR further requires that while the SSA “may use reports and analyses prepared by others, the source selection decision shall represent the SSA’s independent judgment.” Source selection decisions must be documented, and include the rationale and any business judgments and tradeoffs made or relied upon by the SSA. However, there is no need for extensive documentation of every consideration factored into a tradeoff decision, nor is there a requirement to quantify the specific cost or price value difference when selecting a lower- or higher-priced proposal for award. Rather, the documentation need only be sufficient to establish that the agency was aware of the relative merits and costs of the competing proposals and that the source selection was reasonably based. In reviewing an agency’s source selection decision, GAO examines the supporting record to determine whether the decision was reasonable, consistent with the stated evaluation criteria, and adequately documented.

Here, the SSA explained that Kalmar’s proposal provided “the most credible data,” and that the data is “clear, concise, relevant and accurate because it was developed directly from the proposed configuration.” GAO sees nothing insufficient in the SSA’s documentation of his award decision. The SSA’s review of the proposals’ equal adjectival evaluation ratings, independent reasoning concerning distinctions between the proposals despite their equal ratings, and decision that certain distinctions in Kalmar’s proposal warranted the payment of a price premium, are clearly documented and thoroughly explained.

Terex next alleges that the SSA’s award decision was unreasonable because the underlying record does not support the SSA’s contention that Kalmar’s proposal presented the most credible substantiating data, and therefore presented less risk than Terex’s proposal. In this regard, the SSA, throughout the SSDD, emphasized the fact that Kalmar had tested a fully-integrated prototype of its proposed LCRTF, built in direct response to the solicitation’s purchase description. Testing on the actual configuration of the proposed LCRTF allowed Kalmar to present the most credible substantiating data, in the SSA’s view. Kalmar’s approach in this regard stood in contrast to that employed by Terex, which proposed to meet the purchase description by modifying an existing commercial forklift, but did not undertake the modifications prior to testing. Thus, Terex’s substantiating data was developed from testing of its base commercial forklift, rather than its proposed final configuration.

Terex argues that it was not reasonable for the SSA to conclude that Terex’s proposed LCRTF, based on a proven commercial design, presented more risk than Kalmar’s “prototype” design. Terex asserts both its own proposal and Kalmar’s proposal presented validated test and inspection data based on their proposed “configurations” and should both have been credited with providing “the most credible form of substantiating data” as required by the RFP. Further, Terex contends that the SSA mistakenly believed that Kalmar’s data had been developed from direct testing of its prototype, rather than equivalency testing. Terex argues that the performance data for Kalmar’s proposed LCRTF was, like Terex’s data, based on equivalency testing and mathematical calculations, and therefore did not present an advantage in this regard.

More specifically, Terex asserts that the SSA mistakenly concluded that Kalmar’s data was more credible in the two areas of the evaluation in which the SSA identified specific risk in Terex’s proposal: the “longitudinal gradeability” and “fording” requirements of the beach operations subfactor of the technical factor.

Based on GAO’s review of the record, GAO sees no error in the SSA’s understanding of the substantiating data provided by the offerors. While both offerors relied on equivalency testing methods in developing their substantiating data, Kalmar performed this testing on a version of its LCRTF that fully integrated all of the major systems proposed for its final production vehicle. In contrast, Terex performed its testing on a base model commercial forklift that did not incorporate up to 44 proposed changes required to modify the commercial vehicle to meet the purchase description requirements, including modifications of major systems such as the replacement of the engine, transmission, and axles. This distinction weighed heavily in the SSA’s consideration of the two offerors’ substantiating data and risk, especially in the “longitudinal gradeability,” and “fording” areas. The protest is denied.

6. Systems Technologies, Inc., B-404985; B-404985.2, July 20, 2011

Link: GAO Opinion

Agency: Department of the Army

Disposition: Protest denied.

Keywords: Post-protest Revaluations

General Counsel P.C. Highlight: GAO generally gives little weight to reevaluations prepared in the heat of the adversarial process. But, post-protest explanations that provide a detailed rationale for contemporaneous conclusions and simply fill in previously unrecorded details will generally be considered, so long as those explanations are credible and consistent with the contemporaneous record.

Systems Technologies, Inc. (Systek) protests awards of contracts, under a request for proposals (RFP), issued by the U.S. Army Communications-Electronics Life Cycle Command, Army Contracting Command, Fort Huachuca, Arizona, for information systems engineering and technology support services.

The RFP sought proposals to support the “Total Engineering and Integration Services” (TEIS) III program, which provides information systems engineering and information technology support services to the U.S. Army Information Systems Command (ISEC) and its customers worldwide. The RFP contemplated up to five awards (including two small businesses) of indefinite-delivery/indefinite-quantity (ID/IQ) contracts, under which the awardees would compete for fixed-price, cost-reimbursement, and time and materials task orders. Award was to be made on a best-value basis considering four evaluation factors: (1) technical; (2) performance risk; (3) small business participation; and (4) cost/price. Under the technical factor, the RFP listed two subfactors: (1) sample tasks (which included three sample tasks of equal importance); and (2) management and staffing. The RFP explained that both the sample tasks and management and staffing subfactors would be evaluated for understanding of the problem, adequacy of response, and feasibility of approach.

The RFP stated that the sample tasks were designed “to test an offeror’s expertise and innovation capabilities to respond to the types of situations that may be encountered in performance of the contracts,” and consequently “[o]fferors will not be given an opportunity to correct or revise a Sample Task response.”

The cost/price factor considered the realism of the offeror’s proposed costs in sample tasks 1, 2, and 3 in relation to the offeror’s specific technical approach. This was used in determining the most probable cost to the government. The total evaluated sample costs were the sum of the most probable costs and proposed fee amounts for the three sample tasks. This sum would then be multiplied by a cost multiplication factor of 64.1363 to derive the total evaluated amount for cost reimbursable contract work. To this figure, the total evaluated price for the time and materials work would be added to determine the total evaluated cost of each proposal.

Based on the evaluation, the Source Selection Authority (SSA) noted that Systek received a rating of acceptable for the technical factor, the most heavily-weighted evaluation factor, as compared to the good ratings of the three selected offerors. The SSA further noted that Systek had a significantly higher evaluated cost/price than any of the selected offerors. The SSA consequently determined that Systek’s proposal was not among the most highly-rated proposals and excluded it from the competition.

The record shows that the Army found that Systek proposed too few labor hours to perform sample tasks 1 and 2. The Army evaluators thus made several significant adjustments to Systek’s proposed labor hours, which the cost evaluation team utilized to calculate the most probable cost of Systek’s proposal. Systek questions the propriety of these labor hour adjustments and the resulting most probable cost adjustments. GAO states that when an agency evaluates proposals for the award of a cost-reimbursement contract, an offeror’s proposed estimated cost of contract performance is not considered controlling since, regardless of the costs proposed by the offeror, the government is bound to pay the contractor its actual and allowable costs. Consequently, a cost realism analysis must be performed by the agency to determine the extent to which an offeror’s proposed costs represent what the contract costs are likely to be under the offeror’s technical approach, assuming reasonable economy and efficiency. A cost realism analysis is the process of independently reviewing and evaluating specific elements of each offeror’s cost estimate to determine whether the estimated proposed cost elements are realistic for the work to be performed, reflect a clear understanding of the requirements, and are consistent with the unique methods of performance and materials described in the offeror’s proposal. An offeror’s proposed costs should be adjusted when appropriate based on the results of the cost realism analysis. GAO’s review of an agency’s cost realism evaluation is limited to determining whether the cost analysis is reasonably based and not arbitrary.

Here, because the agency report, including contemporaneous evaluation documentation, did not completely explain the agency’s rationale for making significant adjustments to Systek’s proposed labor hours, GAO conducted a hearing in this matter. GAO generally gives little weight to reevaluations prepared in the heat of the adversarial process. But, post-protest explanations that provide a detailed rationale for contemporaneous conclusions and simply fill in previously unrecorded details will generally be considered in our review of the rationality of selection decisions, so long as those explanations are credible and consistent with the contemporaneous record.

To explain the process that the Army utilized to evaluate the realism of the offerors’ proposed labor hours, including Systek’s, the Army produced five witnesses at the hearing: the contracting officer, a member of the source selection advisory council (SSAC), the chair of the sample task evaluation team, a member of the sample task evaluation team, and a member of the cost team. The record evidences that the agency witnesses, particularly those who were responsible for developing the sample tasks and IGCE and for evaluating the proposals’ labor mixes and labor hours, possessed extensive knowledge and experience with estimating hours to perform the work required by the sample task. In evaluating Systek’s proposal, including the specific labor hour adjustments made to its proposal, the Army considered Systek’s narrative technical approach, BOE, WBS, project schedule, and skill mix. The witnesses attributed the significant labor hour adjustments that were made to Systek’s proposal primarily to the lack of detail that the evaluators found in Systek’s responses to these two sample tasks. The agency witnesses testified that while Systek’s proposal focused more on what it would do to meet the sample task requirements, the agency also sought information about how the offeror would perform the agency’s sample tasks. The witnesses testified that this lack of detail increased the Army’s reliance on the IGCE, and that adjustments to Systek’s proposal based on the hours in the IGCE were only made when there was a lack of sufficient detail in the sample task responses, such that there was no basis to conclude that an offer was inconsistent with the approach encompassed in the “government solution,” as set forth in the IGCE.

The Army explains that contrary to the protester’s arguments, these adjustments did not introduce any new labor categories or significantly alter the distribution of hours per labor category, and therefore the agency did not change fundamentally Systek’s technical approach or labor mix. By contrast, the chair explained that the other offerors’ approaches were more detailed, and gave the evaluators more confidence that these offerors knew with greater precision what might be involved in sending a team to Afghanistan to perform the tasks. Further, the contracting officer testified that the evaluators found that the details in these proposals indicated greater efficiencies and a higher level of understanding, which gave the agency greater confidence that the work could be performed with fewer labor hours than the IGCE.

GAO reviewed the totality of the agency record, including contemporaneous documents supporting the labor hour adjustments, and the testimony of the Army explaining the contemporaneous evaluation of the proposals, for each labor hour adjustment made to Systek’s proposal. GAO finds that the Army has reasonably explained the basis for the adjustments made to Systek’s proposed labor hours consistent with the contemporaneous record. As noted in the testimony above, GAO’s review supports the agency’s view that Systek’s proposal did not provide as sufficient a level of detail in response to the sample tasks as the other offerors, which resulted in a weakness and a significant weakness being assigned to Systek’s proposal, and the significant adjustments to its proposed labor hours. The record also shows that the agency, when it made its most probable cost adjustments, considered Systek’s labor mix and reasonably distributed the added hours across labor categories included in the task order response. Thus, GAO sees no basis to find unreasonable the agency’s upward adjustments to determine Systek’s most probable cost or the agency’s failure to make similar adjustments to the awardees’ proposed costs.

For the record, however, there is one error in the agency’s most probable cost evaluation. In this regard, the agency noted that Systek had proposed 5,504 labor hours for core backbone network installation, which was part of task order 2, and that this work was not within the scope of the requirement. No downward adjustments were made to Sytek’s proposed costs to reflect this error, but the evaluators assigned a weakness because they viewed this error as evidence that Systek did not fully understand the scope of the sample task. The assignment of a weakness in this case was clearly warranted. However, we think the agency erred in not eliminating these costs from Systek’s proposal in determining its most probable cost.

As noted above, the purpose of a cost realism analysis is to determine the extent to which an offeror’s proposed costs represent what the contract costs are likely to be under the offeror’s technical approach. The end product of an agency’s cost realism analysis should be a total evaluated cost of what the government realistically expects to pay for the offeror’s proposal effort, as it is the agency’s evaluated cost and not the offeror’s proposed cost that must be the basis of the source selection determination. Thus, it was improper for the Army to include the costs of work that the government would not receive as part of the task requirement.

Nevertheless, this error provides no basis to sustain the protest. In this regard, the protester states the total impact of this error accounted for an additional evaluated cost of $21,510,737 to its proposal. Thus, even taking into account this error, Systek’s lower-rated proposal would still have the highest evaluated cost of the four competitive range offerors. Under the circumstances, GAO does not think Systek was prejudiced by this error and it will not disturb the award decision. The protest is denied.


Bid Protest Weekly – October 6, 2011

October 11, 2011

1. eTouch Federal Systems, LLC, B-404894.3, August 15, 2011

Link: GAO Opinion

Agency: Internal Revenue Service

Disposition: Protest denied.

Keywords: Discussions

General Counsel P.C. Highlight: once an agency has received final offers, it is not legally required to reopen discussions to permit a single offeror to demonstrate the merits of its proposal.

eTouch Federal Systems, LLC (EFS) protests the award of a contract, under a request for proposals (RFP), issued by the Internal Revenue Service (IRS), for the Enterprise Managed Web Portals Program.

The IRS issued the RFP, contemplating the award of an indefinite-delivery/indefinite-quantity (ID/IQ) contract with a five-year base period, plus five one‑year options, and a total contract ceiling of $320 million, for the redesign, development, implementation and management of three IRS web portals. According to the RFP, award was to be made to the offeror representing the best value as determined by an integrated assessment and tradeoff between technical and price.

Small business participation was one of four non-price, technical evaluation factors. If the offeror classified itself as a small business, it was exempt from this requirement, and this factor was evaluated as “not applicable.” For the purpose of evaluating the small business participation factor, the RFP instructed large business offerors to include a small business subcontracting plan at Tab A, Volume IV of their proposals. As established by the RFP, the submitted plan was to include the following: small business subcontracting goals for each type of small business, expressed as a percentage of total proposed subcontracting dollars; goals for small business subcontracting dollars, again broken out by type of small business; and a description of the method used to identify the percentage goals. The RFP stated that “[t]he Government will not award a contract to any Offeror with an Unacceptable rating in any factor or subfactor.”

EFS identified itself as a small business and did not include a small business subcontracting plan in its proposal. Ultimately, after conducting discussions with the offerors, receiving revised proposals, and completing its evaluation, the agency made award to EFS. Upon learning of the award to EFS, another offeror filed a size protest with the Small Business Administration (SBA) challenging the size status of EFS; the offeror also filed a protest with GAO. The SBA made a formal size status determination that EFS was “other than small.” Based on the SBA’s size decision, the IRS notified the GAO that it would take corrective action.

The IRS’s corrective action included canceling the award to EFS and reevaluating EFS’s proposal under the small business participation factor, knowing that SBA had found EFS to be other than a small business. Based on this reevaluation, the agency rated EFS unacceptable under the small business participation factor since EFS had not submitted a small business subcontracting plan. The agency conducted a new best-value determination and made contract award to another offeror.

EFS argues that the agency improperly evaluated its proposal as unacceptable under the small business participation factor for failure to submit the required small business subcontracting plan. According to EFS, the agency should have reopened discussions and allowed EFS to revise its proposal to submit a small business contracting plan. In the alternative, EFS asserts that its proposal, as initially awarded, included the relevant subcontracting information, and that the agency unreasonably evaluated its proposal as unacceptable under the small business participation factor. GAO first states that it is well-settled that once an agency has received final offers, it is not legally required to reopen discussions to permit a single offeror to demonstrate the merits of its proposal. In addition, EFS’s contention that its proposal included the relevant subcontracting information is without merit. GAO states that the evaluation of technical proposals is generally a matter within the agency’s discretion, and GAO will not disturb an agency’s judgments regarding the relative merits of competing proposals absent a showing those judgments are unreasonable or inconsistent with the RFP’s evaluation criteria.

EFS represented itself as a small business in its proposal and to the extent this representation ultimately proved to be legally incorrect, as determined by SBA, EFS bore the risk associated with the error, not the agency. As a consequence, the IRS was under no obligation to reopen discussions in order to provide EFS with an opportunity to revise its proposal in accordance with the SBA’s size status ruling.

The record is clear that EFS’ proposal did not include a small business subcontracting plan at Tab A, Volume IV of its proposal, as required. Having failed to submit the small business subcontracting plan, the protester cannot reasonably require the agency to assemble the plan itself from various disparate portions of the proposal. The record simply does not support the protester’s assertion that the required information could have been found in its proposal, if the agency had undertaken the search. The protest is denied.

2. STG, Inc., B-405082; B-405082.2, July 27, 2011

Link: GAO Opinion

Agency: Department of Veterans Affairs

Disposition: Protest denied.

Keywords: Federal Supply Schedule Contract; Competition

General Counsel P.C. Highlight: FAR§ 8.405-6 exempts orders placed under the Federal Supply Schedule Contract program from the full and open competition requirements, but requires that an ordering activity justify its action when restricting consideration of schedule contractors to fewer than three competitors.

STG, Inc. protests the Department of Veterans Affairs (VA) issuance of a four-month task order for maintenance and support services for the VA’s Electronic Contract Management System (eCMS).

This protest follows an earlier protest by STG, objecting to the issuance of a task order the incumbent, for services to develop, support, and maintain the eCMS under a request for quotations (RFQ). GAO dismissed that protest as academic after the agency notified us that it was terminating the original awardee’s task order, reassessing the agency’s requirements, and resoliciting the procurement. The next day the agency issued a four‑month task order to the original awardee to provide maintenance and support services for the eCMS while the agency was undertaking corrective action.

STG argues that the agency improperly issued the short-term task order to the original awardee on a sole-source basis without allowing STG an opportunity to compete for the task order. GAO states that the four-month task order was placed against the original awardee’s Federal Supply Schedule (FSS) contract. FAR sect. 8.405-6 exempts orders placed under the FSS from the competition requirements of FAR Part 6, but requires that an ordering activity “justify its action when restricting consideration of . . . schedule contractors to fewer than required in [FAR sections] 8.405-1 or 8.405-2.” Circumstances justifying such a restriction include where an urgent and compelling need exists and following the ordering procedures would result in unacceptable delays. Where an ordering activity restricts competition on the basis of an urgent and compelling need, the contracting officer is required to document the circumstances in writing. Where the proposed order is over $550,000 but not over $11.5 million, the justification must be approved by the competition advocate of the activity placing the order.

The agency determined that it was critical that maintenance and support services for the eCMS remain uninterrupted and seamless during the time period in which the agency reviews its requirements and resolicits the procurement. In support of this determination, the agency explained that interrupted service would have a “deleterious effect on the health and well being of Veterans” who receive “vital” services from procurement activities impacted by eCMS. To this end, the agency executed a justification and approval (J&A) for a limited source award under the FSS on an urgent and compelling basis. The agency recognized that there were other sources available for this requirement, including STG, but the agency concluded that only the original awardee, the incumbent, possessed the specialized experience specific to eCMS and the VA’s needs necessary to continue to provide the critical maintenance and support without a break in service. The agency stated that any new contractor would most likely need to hire and train new employees, as well as obtain the required security credentials. The agency also estimated that it would take a new contractor at least one month to begin learning the processes and the organization, a minimum of two weeks to provide new employees with access to the VA network, and another two weeks to train the new employees on eCMS and the various subsystems. The protest is denied.

3. Business Management Associates, B-403315; B-403315.2, October 19, 2010

Link: GAO Opinion

Agency: Federal Emergency Management Agency

Disposition: Protest denied.

Keywords: Technical Evaluation

General Counsel P.C. Highlight: In reviewing protests of alleged improper evaluations and source selections, GAO examines the record to determine whether the agency’s judgment was reasonable and in accord with the stated evaluation criteria and applicable procurement laws

Business Management Associates protests the award of a contract, under a request for proposals (RFP), issued by the Federal Emergency Management Agency (FEMA) for hazard mitigation training assistance.

The RFP, issued as a competitive section 8(a) set-aside, provided for the award of an indefinite-delivery, indefinite-quantity (ID/IQ) contract for a base year and four option years, under which the agency would issue either fixed-price or cost-plus-fixed-fee task orders. Offerors were informed that the contractor would provide technical assistance to the agency in the development of training materials and instruction and with respect to modernizing and streamlining its training activities. In this regard, four objectives were stated, including training development and maintenance of multi-day courses, training instruction on a variety of technical and non-technical subjects, development of presentations to effectively communicate technical and non-technical information, and technical advisement. The RFP provided that award would be made on a best-value basis, considering the following four equally-weighted technical evaluation factors: technical approach, qualifications of key personnel, past performance, and oral presentation.

Proposals were evaluated by the agency’s source evaluation board (SEB), which assigned adjectival ratings and identified underlying strengths, weaknesses, deficiencies, and risks. BMA’s overall good technical rating was supported by a narrative discussion that identified a number of strengths and only a few weaknesses in the protester’s proposal. Under the qualifications of key personnel factor, for which BMA was rated good, the SEB noted as a weakness that BMA had not provided information on the experience, education, and certifications of the staff that it would provide for training material and presentation development and for web-based training development. With respect to the oral presentation, for which BMA was also rated good, the SEB noted a number of strengths and that a slow internet connection stalled BMA’s presentation, which affected the firm’s ability to effectively communicate; the SEB expressed concern about BMA’s lack of a backup plan for its oral presentation.

BMA’s business proposal was evaluated as unacceptable, because the SEB noted as a deficiency that BMA had not estimated a level of effort to perform RFP objective four (technical advisement). The SEB also noted one minor weakness and no strengths. Because BMA’s business proposal was rated as unacceptable, the SEB reduced BMA’s overall good technical rating to an acceptable rating. The SEB ultimately recommended award to another offeror based upon that firm’s overall excellent technical rating and good business proposal rating.

BMA complains that its proposal should have been rated as excellent (instead of good) under the qualifications of key personnel and oral presentation factors; that its business (cost/price) proposal should not have been rated as unacceptable; and that the awardee’s proposal should not have been rated as excellent under the past performance factor, because the awardee’s identified projects were smaller than the contract work here. GAO states that in reviewing protests of alleged improper evaluations and source selections, GAO examines the record to determine whether the agency’s judgment was reasonable and in accord with the stated evaluation criteria and applicable procurement laws. It is an offeror’s responsibility to submit a well-written proposal, with adequately detailed information which clearly demonstrates compliance with the solicitation and allows a meaningful review by the procuring agency. In this regard, an offeror must affirmatively demonstrate the merits of its proposal, and risks the rejection of its proposal if it fails to do so. A protester’s mere disagreement with the agency’s evaluation provides no basis to question the reasonableness of the evaluators’ judgments.

With respect to BMA’s challenge to the weakness assessed against its proposal under the qualification of key personnel evaluation factor, the record shows that the agency viewed favorably the people BMA designated as key, but was concerned that, since there were no key personnel identified on the training teams, there was no information on the experience, education, and certifications of team members for the agency to assess. As a result, BMA’s proposal did not get the highest possible rating. GAO thinks that the agency could reasonably consider under this factor whether an offeror had proposed sufficient key personnel to perform the contract work. Here, the RFP did not specify how many, or which, positions were to be considered key, but expected offerors to make this determination themselves. Determining whether an offeror has proposed sufficient key personnel in the right labor categories is reasonably encompassed within a factor that provides for assessing the quality of proposed key personnel. Here, BMA’s proposal relied upon a very general description of its “teams,” but did not provide the specific qualifications and experience information required for key personnel. GAO finds no basis to object to FEMA’s assignment of a weakness, and a good rating, for BMA’s proposal under the qualifications of key personnel factor.

BMA also objects to the SEB’s rating of BMA’s oral presentation as good, based upon the SEB’s finding that BMA’s presentation was stalled by a slow internet connection, which the evaluators found diminished the firm’s ability to communicate effectively. The evaluators also noted that BMA had no apparent backup plan for this contingency. The RFP cautioned offerors that each firm was responsible for ensuring that any equipment required for the oral presentation was available and working properly for their presentation. BMA apparently planned its oral presentation based on the assumption that it would have a fast internet connection available. As the agency notes in its report, the oral presentation was intended to create a mock classroom situation. Since any of the various nationwide locations where the contractor would provide training could also lack a fast internet connection, GAO thinks it was reasonable for the agency to consider BMA’s performance under these circumstances to represent a weakness, and to rate the firm’s proposal accordingly.

BMA also protests FEMA’s evaluation of the awardee’s proposal as excellent under the past performance factor. The RFP informed offerors that the agency would assess under this factor “how well the offeror did on work for the government and private sector clients,” and that the evaluation would “include assessments of the offeror’s resilience to adversity, resourcefulness, and management determination to see that the organization lived up to commitments and standards.” In this regard, offerors were instructed to provide contact information for three businesses or agencies for which the offeror “performed similar work to the requirements of the RFP.” The RFP did not define what work would be similar to the contract requirements, nor did the solicitation require that projects identified by an offeror be similar in size, complexity and scope to the contract requirements. GAO states that where a solicitation calls for the evaluation of past performance, GAO will examine the record to ensure that the evaluation was reasonable and consistent with the solicitation’s evaluation criteria and procurement statutes and regulations. The evaluation of past performance, by its very nature, is subjective; an offeror’s mere disagreement with the agency’s evaluation judgments does not demonstrate that those judgments are unreasonable.

Although it is true that offeror’s identified projects are relatively smaller than the contract work here, the projects the offeror identified for its past performance appear to involve the same work performed for the same agency. In these circumstances, GAO thinks it is within the contracting agency’s discretion to conclude that substantially similar work, performed for the same agency but under smaller contracts, need not be disregarded based on size alone, where the solicitation does not emphasize the importance of magnitude of prior projects in the evaluation of past performance. The protest is denied.

4. Orion Technology, Inc., B-405077, August 12, 2011

Link: GAO Opinion

Agency: Department of the Army

Disposition: Protest denied.

Keywords: Cost Realism

General Counsel P.C. Highlight: Cost realism analysis is the process of independently reviewing and evaluating specific elements of each offeror’s proposed cost estimate to determine whether the estimated proposed cost elements are realistic for the work to be performed; reflect a clear understanding of the requirements; and are consistent with the unique methods of performance and materials described in the offeror’s technical proposal

Orion Technology, Inc. protests the elimination of its proposal from consideration for award by the Department of the Army, Mission and Installation Contracting Command, under a request for proposals (RFP), for support services at various Army installations.

The agency issued the solicitation as a total small business set-aside for garrison augmentation support services at various Army installations located in the United States. The solicitation contemplated the award of multiple indefinite-delivery/indefinite-quantity (ID/IQ) contracts, each with a 12-month base period and four one-year options. Awards were to be made without discussions, although the agency reserved the right to conduct discussions if necessary. The solicitation described the basis for award as “the best value to the Government,” considering the following three evaluation factors: mission capability, past performance, and cost/price.

Offerors were to submit a cost/price proposal specific to the task order scenario. The task order scenario cost/price proposal was to include costs and pricing for numerous contract line item numbers (CLINs) listed in a pricing schedule that accompanied the solicitation. For the base period and the final option period individually, the pricing schedule included three fixed-price CLINs and 15 cost-type CLINs. For the second and third option periods individually, the pricing schedule included two fixed-price CLINs and 15 cost-type CLINs. For the base period and all of the option periods, one of the cost-type CLINs was for other direct costs (ODCs). Offerors’ task order scenario cost/price proposals also were to include detailed supporting information for the proposed costs and pricing. With respect to ODCs, offerors were to provide ODC amounts “in total and as separate proposed amounts, and annotated as to the PWS paragraph the cost element supports.” The solicitation provided that offerors’ task order scenario cost/price proposals would be evaluated for cost realism. The solicitation further provided that offerors’ proposed costs and prices would be evaluated for reasonableness using cost and price analysis techniques.

In connection with preparing a proposal in response to the solicitation, Orion teamed with eleven firms with the understanding that if Orion were awarded a contract, those firms would perform portions of the contract as subcontractors to Orion. With respect to the task order scenario, Orion’s proposal indicated that eight of Orion’s team members would perform tasks required by the task order scenario PWS. As required by the solicitation, Orion’s task order scenario cost/pricing proposal included a table that listed the number of hours that Orion and Orion team member personnel were to work in connection with the various PWS paragraphs. The table also listed the total cost, with fee, for the work. For Orion personnel, the table disclosed the direct labor, fringe benefit, and G&A rates for each labor category. For Orion team member personnel, however, the table included no direct labor, fringe benefit, or G&A rate information. The agency received cost/price proposals from three Orion team members that were to perform tasks under the task order scenario PWS. All three cost/price proposals provided detailed supporting information, including direct labor, fringe benefit, and G&A rate information. The agency then received Orion’s proposal. Orion sent two other proposal packages, but because the packages arrived after the time set for receipt of proposals, the contracting officer returned the unopened packages to Orion as late.

Based on an initial review of Orion’s proposal, the agency determined that the proposal did not include required cost/pricing information for five Orion team members that were to perform tasks under the task order scenario PWS. From the initial review, the agency also determined that Orion’s proposal did not include an allocation of ODCs to the task order scenario PWS CLINs, as required by the solicitation. Orion filed a protest with the agency challenging the elimination of the firm’s proposal from the competition.

Orion asserts that its proposal included sufficient information for the agency’s evaluation, and, therefore, the agency’s determination to eliminate the proposal from consideration for award was unreasonable. GAO states that in reviewing protests challenging allegedly improper evaluations, or, as here, the rejection of a proposal based on the agency’s evaluation, it is not GAO’s role to reevaluate proposals; rather, GAO examines the record to determine whether the agency’s judgment was reasonable, and in accordance with the solicitation criteria and applicable procurement statutes and regulations. A protester’s mere disagreement with the agency’s judgment does not establish that an evaluation, or rejection, was unreasonable. Additionally, it is an offeror’s responsibility to submit a well-written proposal, with adequately detailed information which clearly demonstrates compliance with the solicitation and allows a meaningful review by the procuring agency. Any proposal that fails to conform to material terms of the solicitation may be considered unacceptable and not form the basis for an award. Even where individual deficiencies may be susceptible to correction through discussions, the aggregate of many such deficiencies may preclude an agency from making an intelligent evaluation, and the agency is not required to give the offeror an opportunity to rewrite its proposal. Further, communications with offerors before the establishment of the competitive range “shall not be used to cure proposal deficiencies or material omissions, or materially alter the technical or cost elements of the proposal.”

The solicitation here provided that offerors’ task order scenario cost/price proposals would be evaluated for cost realism and that proposed costs would be evaluated for reasonableness using cost analysis techniques. The FAR describes cost analysis as, “the review and evaluation of any separate cost elements and profit or fee in an offeror’s or contractor’s proposal, as needed to determine a fair and reasonable price or to determine cost realism, and the application of judgment to determine how well the proposed costs represent what the cost of the contract should be, assuming reasonable economy and efficiency.” With respect to cost realism analysis, the FAR provides that, “Cost realism analysis is the process of independently reviewing and evaluating specific elements of each offeror’s proposed cost estimate to determine whether the estimated proposed cost elements are realistic for the work to be performed; reflect a clear understanding of the requirements; and are consistent with the unique methods of performance and materials described in the offeror’s technical proposal.”

The FAR also provides that cost realism analyses “shall be performed on cost reimbursement contracts.”

Although application of the methodology advocated by Orion would have permitted the agency to derive the fully loaded labor rates of the Orion team members for which cost information was missing, such methodology would not have permitted the agency to review the specific elements of the team members’ costs to determine whether those elements were realistic or reasonable. For example, using Orion’s methodology, the agency could not have derived the team members’ direct labor rates or indirect costs, such as fringe benefit or G&A costs. Accordingly, application of Orion’s methodology would not have permitted the agency to evaluate Orion’s proposed costs as contemplated by the FAR. Further, the informational deficiencies in Orion’s proposal relate to specific and detailed cost evaluation criteria in the solicitation and the solicitation expressly cautioned offerors that failure to submit the information in question could result in the elimination of a proposal from consideration for award. GAO therefore concludes that the agency reasonably excluded Orion’s proposal from the competition. The protest is denied.

5. DSS Healthcare Solutions, LLC, B-403713.3, June 22, 2011

Link: GAO Opinion

Agency: Department of Veterans Affairs

Disposition: Protest denied.

Keywords: Technical Evaluation

General Counsel P.C. Highlight: Where an agency’s evaluation is challenged, GAO will consider whether the evaluation was reasonable and consistent with the terms of the solicitation and applicable statutes and regulations.

DSS Healthcare Solutions, LLC protests the elimination from the competitive range of the proposal it submitted in response to the Department of Veterans Affairs (VA) request for proposals (RFP), for information technology equipment and services .

The solicitation provided for the award of up to 15 contracts on a “best value” basis considering the following factors: technical (with subfactors for management and sample task orders (STO)), past performance, veterans involvement, small business participation commitment, and price. The agency received more than 90 proposals, including from DSS. DSS’s proposal was rated acceptable for the technical and management factors, low risk for past performance, susceptible to being made acceptable for small business participation commitment, and was given full credit for veterans involvement. VA determined that DSS’s proposal was not one of the most highly rated, and on this basis did not include it in the competitive range. The solicitation included three sample task orders (STO 1, STO 2, and STO 3), the responses to which were to be evaluated. The offerors were not given an opportunity to correct or revise a sample task response. The evaluation of each sample task considered: (1) Understanding of Problems and (2) Feasibility of Approach.

DSS was rated acceptable for STO 1, unacceptable for STO 2, and good for STO 3. DSS asserts that the agency used unstated criteria in evaluating its responses to the STOs. Specifically, DSS notes that for each STO the agency compiled a list of task areas and subtasks that an offeror was required to address to receive evaluation credit. DSS also protests that the agency used undisclosed evaluation criteria, and otherwise unreasonably evaluated its proposal under the STOs and the management subfactor.

The solicitation required offerors under STO 2 (software development) to design, develop and field a single financial system to replace three current systems used by approximately 100,000 VA personnel. Offerors were required to describe their approach to how they would execute all tasks necessary for this effort, and list the labor categories required to perform each effort of the task. As part of its evaluation of offerors’ STO responses, the agency prepared a list of key focus areas and lower level focus areas that it believed an offeror would have to address to demonstrate that it understood the task and had a feasible approach to solving it. With respect to STO 2, the key focus areas and lower level focus areas were: project management (stakeholders, resources/labor categories, project schedule, and project management processes including change management, configuration management, risk management, quality assurance, communications, tools, and integrated product teams); policy understanding (compliance with government policy and standards for a technical reference model, VA Enterprise Architecture (EA), Office of the Management and Budget financial guidelines, and security policies); software solution (business process gap analysis, system architecture design, development process that takes into account system capacity requirements, and data warehouse/reporting capability); data migration (data migration planning, data requirements sessions with legacy system owners/users, data cleansing strategy, and migration process); training (training strategy and plan, developing training materials, training environment, and training delivery); testing (test planning, methods for test support, conducting tests, and providing test activities); and deployment/post go-live support (support planning, fielding strategy, help desk, and support teams). The agency asserts that the above considerations were related to the stated evaluation criteria and thus were properly considered.

GAO states that while solicitations must inform offerors of the basis for proposal evaluation, and the evaluation must be based on the factors set forth in the solicitation, Federal Acquisition Regulation sect. 15.304, agencies are not required to specifically list every area that may be taken into account, provided such areas are reasonably related to or encompassed by the stated criteria. Here, the key focus and lower level focus areas that the agency considered in evaluating STO 2 were reasonably related to or encompassed by the stated criteria, and thus were not improper unstated evaluation criteria. As noted, the solicitation provided that the offeror’s response to the sample task would be evaluated to determine whether the offeror understood the problem and had a feasible approach to solving it. Understanding and feasibility of approach, however, are not factors that can be evaluated on their own, without reference to the work to be accomplished. DSS has furnished no basis for GAO to conclude that such areas considered by the agency as project management, policy understanding, testing and training, and the elements that comprise these broader areas such as stakeholder involvement and compliance with government policies, were not reasonably related to performing the overall STO 2.

DSS further asserts that even apart from the issue of unstated criteria, the evaluation of its proposal was unreasonable. GAO states that where an agency’s evaluation is challenged, it will consider whether the evaluation was reasonable and consistent with the terms of the solicitation and applicable statutes and regulations.

DSS asserts that the agency overlooked information in its proposal. The agency explains that a statement in DSS’s proposal addressed only financial policies and requirements, and then only minimally. According to the agency, the evaluated weakness was based on, among other things, its determination that DSS’s proposal did not indicate an understanding of compliance with the applicable information technology policies and standards. More specifically, the agency determined that DSS’s proposal did not demonstrate a full understanding of, or capability to comply with, VA Directive 6051, which is required as part of establishing and implementing VA’s integrated One‑VA EA. In sum, according to the agency, the proposal provided only minimal detail with respect to the One‑VA EA.

In response, the protester asserts that the agency should have recognized that DSS, with its substantial expertise with One-VA EA, would comply with mandatory standards and practices required for VA development initiatives. However, the fact that DSS has experience with One-VA EA is not sufficient since DSS did not address the policies and standards in its proposal. In this regard, GAO states that it is incumbent on a protester to prepare an adequate proposal; the protester cannot use its experience as a substitute for meeting this obligation. Accordingly, the agency reasonably assigned the proposal a weakness on account of an inadequate discussion of DSS’s approach to performing the STO 2 software design and development effort in a VA environment.

The protester also contends that the agency criticized its proposal with respect to One‑VA and enterprise architecture because it did not contain required buzzwords, specifically, references to the technical reference model and enterprise architecture. According to DSS, since it is an expert in these areas it was able to propose elements drawn from them, without explaining their origins. The agency explains that DSS’s proposal was downgraded because it did not sufficiently demonstrate that DSS understood applicable policy because it did not discuss VA standards as applied to the DSS solution. According to the agency, without an explanation of the application of the VA standards, it was not clear that DSS was capable of implementing the required integrated One-VA EA. DSS does not respond to the agency’s explanation of how DSS’s proposal was rated, and GAO has no basis to question the evaluation in this regard as unreasonable.

The VA also assigned DSS’s proposal a significant weakness under STO 2 for data migration, finding the proposal lacked an overall approach and strategy. The agency maintains that DSS did not provide details regarding an overall strategy for accomplishing the data migration effort. Among other things, according to the agency, DSS did not identify the different types of data to be migrated or specific data objects, and did not discuss government review and approval of generated data migration plans, establishing/maintaining a staging environment for migration processing, and executing mock or trial migration loads. Again, DSS does not address the agency’s explanation; the protester neither refutes the agency’s determination that its proposal lacked this information regarding a data migration approach, nor explains why the missing information was not relevant to whether data migration would be successful. In these circumstances, GAO has no basis to question the evaluation. The protest is denied.


Bid Protest Weekly – September 14, 2011

September 19, 2011

1. The GEO Group, Inc., B-405012, July 26, 2011

Link: GAO Opinion

Agency: Department of Justice

Disposition: Protest denied in part, dismissed in part.

Keywords: Procurement Integrity Violations

General Counsel P.C. Highlight: A contracting officer who receives or obtains information of a possible violation of the PIA must determine if the possible violation has any impact on the pending award or selection of the contractor.

The GEO Group, Inc. protests the award of a contract to Community First Services, Inc. (CFS), by the Department of Justice, Bureau of Prisons (BOP), under a request for proposals (RFP), for residential reentry center (RRC) services.

The RFP sought a contractor to provide community-based residential and non-residential correctional services. GEO, the incumbent contractor, and CFS submitted proposals. With the submission of its proposal, GEO included a letter to the agency alleging that its vice president for community corrections, who had directed its incumbent contract efforts, resigned suddenly after transmitting copies of confidential GEO information to his private email account. Apparently, unbeknownst to GEO group at the time, its former vice president was also the CEO and sole owner of CFS. Upon receiving the GEO letter, the contracting officer recognized that GEO’s former vice president was the CEO of CFS, and noted similarly drafted passages in the GEO and CFS proposals. Based on these facts, the contracting officer recommended to the contracting section chief that the procurement be put on hold and that the issues presented in the GEO letter be investigated as a potential violation of the Procurement Integrity Act (PIA).

Two special agents from the Department of Justice, Office of Inspector General (DOJ OIG), were assigned to conduct the investigation. At the conclusion of the investigation, the special agents reported to the BOP contracting staff that based on a review of the interviews and relevant records, the DOJ OIG “could not substantiate bid rigging or procurement integrity violations.” In this regard, the DOJ OIG did not find any evidence that elements of CFS’s proposal had been derived from any of GEO’s information. Based on these findings, the BOP directed the procurement to continue. After evaluation of proposals, the contracting officer found that CFS’s proposal represented the best value to the government. The contracting officer then completed a certification of procurement integrity stating that, to the best of his knowledge, he was not aware of any violation of the procurement integrity act. The contracting officer also documented his affirmative responsibility determination.

GEO alleges that CFS violated the PIA, asserting that it is implausible that CFS did not utilize confidential GEO information obtained by the CFS CEO in preparing its proposal, and that the agency erred in ignoring this PIA violation. GAO states that the PIA provides that “[a] person shall not, other than as provided by law, knowingly obtain contractor bid or proposal information or source selection information before the award of a Federal agency procurement contract to which the information relates.” A contracting officer who receives or obtains information of a possible violation of the PIA must determine if the possible violation has any impact on the pending award or selection of the contractor. If the contracting officer concludes that a violation may impact the procurement, the contracting officer is required to report the matter to the head of the contracting activity (HCA). The HCA must review the information and take appropriate action, which includes either: 1) advising the contracting officer to proceed with the procurement; 2) beginning an investigation; 3) referring information to appropriate criminal investigative agencies; 4) concluding that a violation occurred; or 5) recommend to the agency head that a violation has occurred and void or rescind the contract. In the case of the BOP, the Justice Acquisition Regulation (JAR) further directs the contracting officer to refer possible violations of the PIA to the DOJ OIG.

Here, the agency followed exactly the procedures set forth above in investigating the alleged violation. Upon receiving information concerning a potential PIA violation from GEO, the contracting officer referred the matter to the HCA and the DOJ OIG. The DOJ OIG then thoroughly investigated the record, conducted interviews, and analyzed GEO computers before concluding that there was no indication of theft of GEO property or proprietary information, and no information to substantiate a PIA violation. On the basis of the investigation results, the HCA directed the contracting officer to proceed with the procurement. On this record, GAO sees no basis to conclude that a PIA violation occurred, or that the agency’s actions were unreasonable.

GEO alleges that the DOJ OIG and BOP investigations failed to reasonably consider declarations of GEO’s business manager stating that the CFS CEO requested, and was provided with, a draft of GEO’s price proposal for this procurement prior to his resignation. The agency argues, and GAO agrees, that any protected pricing materials obtained by the CFS CEO in this manner are covered by the PIA’s “savings clause,” which provides in relevant part that “[t]his section does not . . . restrict a contractor from disclosing its own bid or proposal information or the recipient from receiving that information.”

GEO objects to the application of the PIA savings clause in this context. GAO states that it has repeatedly determined that the PIA’s savings provisions apply notwithstanding the fact that the voluntarily provided information is subsequently misused or not properly safeguarded. Here, GEO voluntarily provided its confidential information to the CFS CEO in the course of his employment with GEO. The CFS CEO’s alleged misuse of that information in transferring it to CFS, breach of his fiduciary duties to GEO, or breach of GEO’s corporate code of ethics, are matters of a private dispute not for resolution by GAO.

GEO also alleges that, based on the same facts underlying its PIA allegation, CFS has an improper, unmitigated, unequal access to information OCI. More specifically, GEO states that CFS obtained nonpublic, procurement-related information as a result of the CFS CEO’s participation in GEO’s management of the incumbent contract for these services. GAO states that an unequal access to information OCI exists where a firm has access to nonpublic information as part of its performance of a government contract and where that information may provide the firm a competitive advantage in a later competition. As the FAR makes clear, the concern regarding this category of OCI is that a firm may gain a competitive advantage based on its possession of “[p]roprietary information that was obtained from a Government official without proper authorization,” or “[s]ource selection information . . . that is relevant to the contract but is not available to all competitors, and such information would assist that contractor in obtaining the contract.”

As an initial matter, the agency reasonably found the protester’s allegations to be unsubstantiated. In this regard, the agency relied on the findings of the DOJ OIG investigation, which found that CFS’s proposal had been prepared by a third-party proposal writer, CFS’s CEO did not alter the proposal in any way, and there was no credible evidence of the CFS CEO of having obtained GEO’s pricing information. Moreover, as discussed in the context of the alleged PIA violation, above, the CFS CEO’s alleged misuse of GEO’s confidential information amounts to a private dispute not for resolution by GAO. The protest is denied.

2. 901 North Fifth Street, LLC, B-404997; B-404997.2, July 22, 2011

Link: GAO Opinion

Agency: General Services Administration

Disposition: Protest denied in part, dismissed in part.

Keywords: Executive Order Compliance

General Counsel P.C. Highlight: An agency’s compliance with an Executive Order is a matter concerning Executive Branch policy, which GAO does not review.

901 North Fifth Street, LLC (901 North) protests the award of a lease by the General Services Administration (GSA) pursuant to a solicitation for offers (SFO) for office space to house the Environmental Protection Agency (EPA) regional headquarters.

901 North is the owner and current lessor of a building specifically built for and used by the EPA’s regional office. GSA initiated informal discussions with a representative of the then current owner of the building and a representative of their real estate brokerage firm (which remained the same after the change of ownership) to explore the possibility for a 20-year, 10-year firm, fully-serviced succeeding lease. Among the considerations identified by GSA was the lessor’s ability to achieve Leadership in Energy and Environmental Design for Existing Buildings (LEED-EB) Platinum certification, renovation of various areas of the building, replacement of carpeting, interior painting, and upgrading the restrooms. Although negotiations between 901 North, its broker, and GSA continued for an extensive period of time, they were ultimately to no avail. GSA ultimately determined that award of a succeeding lease to 901 North would not be in the best interests of the government, due primarily to the protester’s failure to offer market rental rates. GSA therefore decided to conduct a competitive procurement for this requirement.

The SFO at issue was published to three building owners with buildings. The SFO sought offers for a maximum of 203,475 rentable square feet of office and related space yielding 182,554 usable square feet. The SFO also disclosed that the offered building must, at a minimum, meet the requirements of LEED for Existing Buildings Operations and Maintenance (LEED-EBO&M) Silver level; higher levels of LEED-EBO&M, such as Gold or Platinum, were preferred. The SFO required offerors to submit alternate offers: the first for a 10-year firm term, with two five-year renewal options; the second for a 20-year lease with a 10-year firm term. The agency reserved the right to evaluate each of the two offers and select the term deemed most advantageous to the government. The solicitation advised that award would be made to the firm whose offer was considered most advantageous to the government based on price and the following factors, listed in descending order of importance: (1) sustainability; (2) building and systems design; (3) development team experience; and (4) development team past performance. As relevant here, the sustainability evaluation factor consisted of the following equally-weighted subfactors: (a) LEED-NC [New Construction] or LEED-CS [Core and Shell] Silver, Gold or Platinum certification; (b) LEED-EBO&M gold or platinum certification; and (c) preferred features. With regard to price, the SFO stated that the agency would perform a present value price analysis to determine the annual ANSI/BOMA office area square foot price.

Offers were received from 901 North and another bidder by the closing date. Although, as noted above, the SFO required firms to submit two alternative offers, the protester submitted only one offer for a 10-year firm lease term with two five-year renewal options. The other offeror, on the other hand, submitted offers for a 10-year firm lease term with two five-year renewal options, and for a 20-year lease with a 10-year firm term, as required by the SFO. GSA held multiple rounds of discussions with the offerors during the evaluation. After each round of discussions, the source selection evaluation board (SSEB) evaluated offers, identifying “strengths,” “weaknesses,” and “deficiencies” in each offer. Based on the respective technical scores and prices of each offer, the contracting officer, as source selection authority (SSA), determined that the other offeror’s offer was most advantageous to the government and awarded it the lease for a 10-year firm term with two five-year renewal options.

In its protest, 901 North argues that GSA: (1) improperly and unreasonably calculated move-related costs associated with Lenexa’s offer; (2) failed to conduct meaningful discussions with the protester with regard to the first sustainability subfactor, LEED-NC or LEED-CS Silver, Gold, or Platinum certification requirement, Protester’s Initial Comments at 8-16; and (3) failed to comply with Executive Order 12072. GAO states that its standard in reviewing evaluation challenges is to examine the record to determine whether the agency’s judgment was reasonable and consistent with the stated evaluation criteria and applicable statutes and regulations. The protester’s mere disagreement with the agency’s judgment does not establish that an evaluation was unreasonable.

901 North complains that GSA incorrectly calculated the awardee’s present value cost (PVC). More specifically, 901 North argues that the awardee’s low PVC price of $21.40 per useable square foot resulted from GSA’s undervaluing significant move related costs associated with relocating to the awardee’s building. In this regard, the SFO provided that an offeror’s PVC would be calculated by adding, “if applicable,” “the cost of relocation of furniture, telecommunications, replication costs, and other move-related costs.” While the protester maintains that the agency will experience other significant costs in excess of the TIA (replication costs) associated with the awardee’s offer, it does not offer any support for, or explain, beyond merely citing the fact of the awardee’s “low” PVC, its conclusion in this regard. Given the lack of evidence in the record to support the protester’s contention that the costs associated with the awardee’s building will exceed the available funds in the TIA, GAO views the protester’s arguments as amounting to unsupported speculation and mere disagreement with the agency’s assessments; thus, GAO has no basis to conclude that the agency’s evaluation was unreasonable or otherwise inconsistent with the terms of the solicitation.

Next, 901 North contends that the discussions it received were misleading regarding the agency’s intended evaluation of the sustainability subfactor A, LEED-NC or LEED-CS certification. According to the protester, during the course of discussions, it advised GSA that it was “impossible” for it “to achieve LEED requirements under Subfactor A” and that it was led to believe that it “would only be rated on the technical factors which it could actually achieve.” The protester asserts that had it known Subfactor 1.A. accounted for 15% of the total possible technical points it could achieve, it “would not have chosen to compete in the Solicitation, as it was impossible for 901 North to obtain any points under Subfactor A.” GAO states that competitive prejudice must be established before it will sustain a protest; where the record does not demonstrate that the protester would have had a reasonable chance of receiving the award but for the agency’s actions, GAO will not sustain a protest, even if deficiencies in the procurement process are found.

Here, the alleged harm suffered by the protester as a result of the allegedly misleading nature of the agency’s discussions does not constitute competitive prejudice. In this regard, as articulated by the protester, the agency’s allegedly misleading discussions merely impacted the protester’s own business decision of whether to continue in the competition. Since this does not bear on the propriety of the ultimate award decision, we have no basis to further consider the protester’s allegations in this regard.

In a supplemental protest filed with GAO, the protester argued that the agency failed to comply with sections 1-102 and 1 203(c) of Executive Order 12072. GAO states that, as an initial matter, GSA’s compliance with the EO is a matter concerning Executive Branch policy, which GAO does not review. In this regard, Executive Order 12072 prescribes policies and directives regarding the planning, acquisition, utilization and management of federal facilities. The underlying policy objective of the Executive Order is to “strengthen the Nation’s cities” and “conserve existing urban resources and encourage the development and redevelopment of cities.” GAO does not review allegations of an agency’s failure to comply with Executive Branch policies under its Procedures, as a general matter. GAO will, however, review an agency’s compliance with, or implementation of, such policies when it is contended that such policies are contrary to applicable procurement statutes and regulations. GAO may also consider compliance with an executive order to the extent the provisions of the order have been expressly incorporated as requirements by the terms of a solicitation.

Here, 901 North’s protest merely challenges GSA’s failure to properly implement the policies established solely by Executive Order 12072, which were not expressly incorporated as requirements in the SFO; thus, the issues raised are not for GAO’s consideration. The protest is denied in part and dismissed in part.

3. Measurements International Inc., B-404981, July 15, 2011

Link: GAO Opinion

Agency: Department of the Air Force

Disposition: Protest denied.

Keywords: Technical Evaluation

General Counsel P.C. Highlight: In reviewing an agency’s evaluation, GAO will not reevaluate technical proposals; rather, it will examine the agency’s evaluation to ensure that it was reasonable and consistent with the solicitation’s stated evaluation criteria and procurement statutes and regulations.

Measurements International Inc. protests the award of a contract by the Department of the Air Force under a request for proposals (RFP), for the purchase of resistance measurement systems (RMS).

The RFP sought proposals to provide RMS to be used by the Air Force Metrology and Calibration Program facility. The RFP advised that a single fixed-price contract would be awarded to the offeror who submitted the lowest-priced, technically acceptable proposal. The RFP did not require contractors to submit past performance information and did not identify past performance as a factor to be considered in the agency’s award decision. With regard to technical acceptability, the RFP stated that each offeror’s technical proposal would be evaluated to determine if it provided a sound, compliant approach that met the requirements of the solicitation’s purchase description, and if it demonstrated a thorough knowledge and understanding of the requirements and their associated risks. Proposals were to identify risks associated with the proposed approach and actions the offeror would take to mitigate the identified risks. Offerors were permitted to submit proposals for new RMS or to upgrade the existing RMS.

The agency determined that both of Measurements’ proposals to provide new RMS presented a high level of risk. Among other things, the agency stated that Measurements proposed an unrealistic amount of time to rework software, and this increased the risk of errors, quality issues, and delayed delivery of the systems. However, despite the high level of risk associated with Measurements’ proposals, the agency found that the risk was not high enough to make Measurements’ proposals unacceptable. Measurements’ proposal was at a higher price and was rejected.

The protester argues that the awardee’s proposal to upgrade the existing RMS posed a high degree of risk, and therefore the agency’s determination that the proposal was technically acceptable was unreasonable. GAO states that in reviewing an agency’s evaluation, it will not reevaluate technical proposals; rather, it will examine the agency’s evaluation to ensure that it was reasonable and consistent with the solicitation’s stated evaluation criteria and procurement statutes and regulations.

The protester argues that the age and performance history of the current units pose risks that the agency ignored when evaluating the awardee’s proposal for technical acceptability. For example, the protester contends that the agency did not take into consideration that the units are more than 10 years old and are starting to fail. However, the record shows that the agency did consider whether the age and condition of the existing units would result in any risk associated with the proposal to upgrade the units. The record contains a memorandum to the file documenting a meeting of the evaluators to discuss the awardee’s proposal risk, including what effect upgrading the RMS would have on their lifecycle. The record also shows that, during discussions, the agency confirmed with the awardee that existing RMS with problems would be repaired prior to or in conjunction with being upgraded, at no cost to the agency. Finally, the evaluation shows that, in discussing the awardee’s upgraded approach, the agency concluded that “some risk” existed, but that the proposal was still considered technically acceptable. Although the protester disagrees with this assessment, it has not shown it to be unreasonable.

The protester next argues that the awardee’s proposal posed risk because repairs to existing RMS could potentially interfere with the awardee’s ability to meet the agency’s delivery schedule, and that the agency failed to consider this risk. The solicitation contains a detailed delivery schedule which specifies deadlines for the delivery of new or upgraded units. The awardee’s proposal did not take any exception to this requirement, and the protester has not cited any statement in the awardee’s proposal that it will not comply with the delivery deadlines. The statement in the awardee’s proposal requesting to upgrade repaired RMS in future years (as quoted by the protester above) is only a statement of preference and does not negate or take exception to the delivery schedule set forth in the RFP. GAO declines to find that the awardee’s statement of preference rendered its proposal unacceptable.

Finally, Measurements argues that the agency improperly failed to consider the fact that the awardee’s warranty would cover only the upgraded units, and would not cover the existing RMS prior to upgrade. What the protester seems to ignore, however, is that Measurements’ warranty would similarly not cover the risks associated with the existing units prior to upgrade, and all potential awardees would be held to the same delivery schedule. Therefore, if an existing unit were to malfunction prior to being replaced under the delivery schedule set forth in the solicitation, the unit would not be covered by the warranty offered by either offeror. Although the protester argues that upgrading RMS will take more time than replacing RMS, and therefore the agency will be forced to use the unrepaired existing units for a longer period of time under the awardee’s proposed approach, the protester has not shown that this risk is so high as to render the awardee’s proposal technically unacceptable. The protest is denied.

4. Birdstrike Control Program, B- 403967.2, August 3, 2011

Link: GAO Opinion

Agency: Department of the Air Force

Disposition: Protest denied.

Keywords: Technical Evaluation

General Counsel P.C. Highlight: Mere disagreement with the agency’s evaluation is not sufficient to call it into question.

Birdstrike Control Program (BCP) protests the issuance of a purchase order, by the Department of the Air Force, under a request for quotations (RFQ), for wildlife control services at RAF (Royal Air Force) Lakenheath and RAF Mildenhall, United Kingdom (UK).

The RFQ was issued for wildlife control services for Air Force units operating airfields at RAF Lakenheath and RAF Mildenhall, UK. Award was to be made on a lowest-priced, technically acceptable basis. With regard to the technical evaluation of quotations, the RFQ provided that the evaluators would assign ratings of acceptable or unacceptable with regard to six subfactors: (1) transition plan, (2) mission support plan, (3) qualification, (4) management procedures, (5) past experience, and (6) training. The RFQ further provided that if a quotation received a rating of unacceptable with regard to any one subfactor, the entire quotation would be rated unacceptable.

The RFQ included quotation preparation instructions that advised, as is pertinent here, that firms were required to include a list of all hazardous materials to be used during contract performance. With regard to technical acceptability, the RFQ provided that missing required documentation could form the basis for the assignment of an unacceptable rating. With regard to evaluation of technical subfactor 2, mission support plan, the RFQ provided that quotations had to be comprehensive and complete and “must fully address your comprehensive FOD [foreign object damage] control plan, Equipment/Facility management, Birdstrike response and training, HAZMAT materials and management of resources.”

Three quotations were received by the due date, including a quotation from BCP. The technical evaluation team (TET) found BCP technically unacceptable with regard to four evaluation subfactors: mission support team, qualification, management procedures, and training.

BCP challenges the TET’s finding of unacceptability with regard to each of the four technical evaluation subfactors identified in the TET Report. GAO states that in reviewing a protest challenging an agency’s technical evaluation, it will not reevaluate the quotations; rather, it will examine the record to determine whether the agency’s evaluation conclusions were reasonable and consistent with the terms of the solicitation and applicable procurement laws and regulations. Mere disagreement with the agency’s evaluation is not sufficient to call it into question.

The record shows that BCP was found technically unacceptable under the mission support plan subfactor for failing to discuss the firm’s handling of HAZMAT materials. According to the protester, this finding was unreasonable because it indicated in its quotation that it did not intend to use HAZMAT materials in performing the contract, and, therefore, it was not required to include information in its quotation relating to HAZMAT materials.

The record shows that the agency found inconsistencies in BCP’s quotation that gave rise to a concern that the firm had failed to meet the RFQ requirement for information relating to its potential use of HAZMAT materials. On the one hand, BCP’s quotation represented that it did not intend to use HAZMAT materials in performing the contract, and therefore it included no information relating to HAZMAT materials. However, the record shows that the agency evaluators were concerned because, although BCP had represented that it would not use HAZMAT materials, some of the techniques identified in its quotation clearly called for the use of such materials. The record thus shows that, because of this inconsistency in its quotation, the evaluators rated BCP’s quotation unacceptable under the mission support plan subfactor.

BCP asserts that the language in its quotation relied on by the TET concerning the methods BCP would employ did not indicate that BCP would actually use those methods, but rather was merely an indication that BCP was familiar with these methods. GAO finds that the quotation was unequivocal in representing that BCP “is familiar with and utilizes all forms of wildlife active and passive management techniques . . . .” The plain meaning of this language, as reasonably understood by the evaluators, is that BCP intended to utilize the techniques listed; including those that the evaluators found would involve HAZMAT materials. GAO therefore concludes that the agency’s evaluators acted reasonably in finding that BCP’s quotation was unacceptable for failing to include information relating to its handling of HAZMAT material in light of the plain language of the firm’s quotation.

BCP further asserts that the particular methods cited by the TET–pyrotechnics, scaring cartridges, and repellants–do not involve use of hazardous materials. BCP relies on Air Force guidelines, including AFI 32-7086, Hazardous Materials Management, listed in the RFQ, which provide that the definition of hazardous materials does not include munitions or hazardous waste. The agency, however, points out that the definition of hazardous materials in AFI 32-7086 is not controlling because the RFQ provided that, if compliance with the Air Force guidance conflicts with compliance with country-specific governing standards, the RFQ required compliance with the country-specific provisions. The agency notes that Clause 1.28.1 of the performance work statement (PWS), “Control and Handling of Hazardous Materials,” makes the contractor responsible for compliance with the UK Health and Safety at Work Act of 1974 and the UK Environmental Protection Act of 1990. BCP has not submitted any information to show that the agency’s evaluators are incorrect regarding what constitutes hazardous materials under the UK statutes and regulations, but only generally disagrees with the agency’s position. Such disagreement, without more, does not provide a basis for GAO to find the agency’s evaluation unreasonable. The protest is denied.


Frequently Asked Questions about Small Business Finance

September 12, 2011

SBA’s Office of Advocacy has published a useful document that, “sketches the ecosystem or life-cycle of small business financing.”  The document uses a FAQ format to allow readers to browse specific topics.  In its answers, the SBA uses data compiled from a number of industries to provide averages or totals that can be used for differing types of firms.

You can find the document here: http://www.sba.gov/sites/default/files/Finance%20FAQ%208-25-11%20FINAL%20for%20web.pdf


Bid Protest Weekly – August 31, 2011

September 7, 2011

1. American Physical Security Group, LLC, B-405059, July 25, 2011

Link: GAO Opinion

Agency: Department of State

Disposition: Protest denied.

Keywords: Technical Evaluation

General Counsel P.C. Highlight: An offeror is required to prepare its proposal in accordance with the terms of the solicitation and, where discussions occur, to address and supplement areas of weakness identified in discussions.

American Physical Security Group, LLC (APSG) protests the award of contract under a request for proposals (RFP), issued by the Department of State (DOS), for forced-entry/ballistic-resistant windows.

The RFP, issued as a small business set-aside, provided for the award of an indefinite-delivery/indefinite-quantity (ID/IQ) contract for the fabrication and installation of aluminum forced-entry/ballistic-resistant windows. Detailed performance specifications required that the windows achieve specific “security-related resistances, along with other indicated performances.” Offerors were informed that award would be made on the basis of low price and technical acceptability. The RFP identified a number of technical evaluation factors, including, that the agency would evaluate the offeror’s submission for compliance with the stated specifications, which could be shown by providing a certification letter from the agency’s Bureau of Diplomatic Security (DS). Additionally, this factor required that offerors provide sample shop drawings with each DS certification. The RFP also identified product compliance as another factor.

APSG’s proposal was found to contain numerous deficiencies and weaknesses. A number of the deficiencies reflected the evaluators’ judgment that APSG had failed to provide documentation establishing compliance with specification requirements, such as, for example, for air infiltration and water penetration. DOS conducted discussions with each of the offerors and informed APSG of each of the evaluated deficiencies and weaknesses in its proposal and requested the firm’s final proposal revisions. DOS received and evaluated revised proposals from the offerors, including APSG. The agency found that APSG’s proposal continued to be technically unacceptable.

The record supports the agency’s determination that APSG’s proposal was deficient in a number of regards and therefore technically unacceptable. For example, the evaluators found that APSG did not demonstrate that its proposed windows would satisfy the RFP’s air infiltration requirements. Specifically, the solicitation required offerors to demonstrate through laboratory test reports and other documentation that their proposed fixed windows would not have air infiltration exceeding a rate of 0.010 cubic feet per minute/square feet. In its initial proposal, APSG provided a one-page test result summary for an air infiltration test done on an “aluminum fixed window,” which stated that the tested window would satisfy the solicitation’s air infiltration requirements. APSG did not provide a more complete test report. In discussions, DOS informed the protester that it had failed, with respect to the air infiltration requirements, to provide “documentation of compliance with the specified testing.” In response, APSG merely informed the agency that it was “not correct” and resubmitted the same one-page summary that was provided in its initial proposal.

We find that the agency reasonably found APSG’s proposal deficient for failing to provide testing reports demonstrating the compliance of its proposed windows for the air infiltration requirements. The RFP specifically required offerors to provide documentation, including laboratory test reports, demonstrating such compliance. APSG failed to do so, despite being specifically informed of this deficiency in discussions and despite a more complete report being available. The protest is denied.

2. A1 Procurement, JVG, B-404618.3, July 26, 2011

Link: GAO Opinion

Agency: Department of Veterans Affairs

Disposition: Protest denied.

Keywords: Joint Venture; SDVO Set-Aside

General Counsel P.C. Highlight: Where the solicitation requires offerors to be SDVO small businesses and verified by the VA’s VetBiz program, a proposal from a joint venture, which itself is not listed in the VetBiz database, is not eligible for award, even though the SDVO member of the joint venture may be so listed.

A1 Procurement, JVG, a joint venture (A1) protests the rejection of its proposal and the award of a contract to another offeror, under a request for proposals (RFP), issued by the Department of Veterans Affairs (VA), as a service-disabled, veteran-owned small business (SDVOSB) set-aside for ground maintenance services.

With regard to the procurement at issue, the RFP was issued as an SDVOSB set‑aside for the award of a fixed-price contract for grounds maintenance services at the Golden Gate National Cemetery in California. Offerors were informed that award would be made on a best value basis, considering technical capability, past performance, and price.

A1 Procurement, LLC, and Green Carpet finalized a joint venture agreement forming A1 Procurement, JVG. The joint venture submitted its proposal to the VA on the due date. The VA rejected A1′s proposal because its proposed price was significantly below the government cost estimate and the prices of the other offerors. A1 protested. GAO sustained the protest because the record did not show that the agency’s price evaluation was reasonable. GAO recommended that the agency reevaluate the protester’s proposal, and as a part of this reevaluation, consider whether the joint venture was an eligible SDVOSB concern to receive award. Subsequent to our decision, the VA rejected A1′s proposal because the joint venture, which was stated to be a separate entity, was not listed in the VetBiz database. The VA also determined that A1′s joint venture agreement provided that the small-business partner in the joint venture would perform substantially all of the work required by the contract, which the VA found violated the subcontracting limitations in VAAR.

Al JVG protests that the VA’s rejection of its proposal was unreasonable because the contracting officer erroneously concluded that the joint venture was not listed in the VetBiz database. GAO agrees with the VA’s conclusion that A1 was not eligible to receive award under the VA’s regulations. Contrary to A1′s arguments, the VA’s regulations do not exempt a joint venture from the requirement that it must be listed in the VetBiz database to be eligible for award. The offeror here is A1 JVG, and A1 JVG, as opposed to A1 LLC, is not listed. In sum, given that the joint venture is not listed in the VetBiz database, which the VA has required in its implementation of this program, the contracting officer reasonably rejected A1′s proposal as ineligible for award. The protest is denied.

3. Rod Robertson Enterprises, Inc., B-404476, January 31, 2011

Link: GAO Opinion

Agency: Department of Justice

Disposition: Protest denied.

Keywords: Past Performance Evaluation

General Counsel P.C. Highlight: Unless there is a clear reason to question the validity of the past performance information, an agency is not required to communicate matters of adverse past performance where no discussions are conducted under an acquisition.

Rod Robertson Enterprises, Inc. protests the award of a contract, by the Department of Justice, Federal Prisons Industries, Inc. (UNICOR), under a request for proposals (RFP), for vehicle towing, storage, maintenance, and disposal services for the U.S. Marshals Service in the Southern District of Texas.

The RFP was issued as a small business set-aside. The RFP anticipated the award of a fixed-price contract for a base year with four one-year options. The solicitation stated that the award would be made to the offeror whose proposal provides the best value to the government considering past performance and price. The solicitation required contractors to provide information on contracts that it “worked on within the last three years” that were similar in scope and relevant to the instant procurement. The RFP also stated that the agency “may award” a contract based on initial offers received without discussions.

Two offerors were found to be in competitive range. The agency sent past performance surveys to each reference provided by the two offerors. The agency used the surveys to complete a past performance evaluation on each offeror.

Rod Robertson submitted three contracts on which it recently worked. The past performance references rated Rod Robertson’s performance as outstanding on one contract, unsatisfactory on another contract and satisfactory on the third contract. Rod Robertson received an overall satisfactory rating under the past performance factor. The agency made award to the other offeror without discussions.

Rod Robertson challenges the past performance evaluation. GAO states that, as a general matter, the evaluation of an offeror’s past performance is within the discretion of the contracting agency, and GAO will not substitute its judgment for reasonably based past performance ratings. A protester’s mere disagreement with the agency’s determinations as to the relative merit of competing proposals, and its judgments as to which proposal offers the best value to the agency, does not establish that the evaluation or source selection was unreasonable.

Rod Robertson contends that the agency’s evaluation applied unannounced evaluation criteria by dividing the past performance questionnaire information into what were essentially discrete subfactors, which were not disclosed in the solicitation. The solicitation stated offerors were required to provide information regarding “the level of performance, in terms of delivery and quality achieved . . . and should reflect the offeror’s record of performance in the areas of conforming to specifications, adherence to contract schedules, reputation for reasonable and cooperative behavior, commitment to customer satisfaction and business-like concern for the interest of the customer.” The past performance surveys sent to each reference provided by the offerors consisted of 12 questions that were broken down by the agency in the evaluation process into the following five past performance areas: quality of service, timeliness of performance, price/cost control, business relations, and customer satisfaction. The agency was not required to specifically identify these five areas in the solicitation as subfactors because they were reasonably related to the past performance factor as described in the solicitation. Agencies are not required to specifically identify subfactors comprising an evaluation criterion where the subfactors are reasonably related to the stated evaluation criterion, nor are they required to disclose the specific evaluation methodology that they intend to use in making evaluation judgments regarding firms’ proposals.

Rod Robertson argues that the agency’s evaluation of its past performance contract that received an unsatisfactory rating constituted “adverse information,” which the protester should have received an opportunity to address. However, where, as here, discussions are not conducted under an acquisition, an agency is not required to communicate with offerors regarding questions about adverse past performance, unless there is a clear reason to question the validity of the past performance information. The protest is denied.

4. KNAPP Logistics Automation, Inc.–Protest and Costs, B-404887.2; B-404887.3, July 27, 2011

Link: GAO Opinion

Agency: Department of Veterans Affairs

Disposition: Protest and request denied.

Keywords: RFP Cancellation

General Counsel P.C. Highlight: In a negotiated procurement, such as this one, a contracting agency has broad discretion in deciding whether to cancel a solicitation, and need only establish a reasonable basis for doing so.

KNAPP Logistics Automation protests the corrective action undertaken by the Department of Veterans Affairs (VA) in response to KNAPP’s protest of the award of a contract, under a request for proposals (RFP), for a tablet capsule automation (TCA) system. KNAPP also requests that GAO recommend that VA reimburse the protester’s costs of filing and pursuing its earlier protest concerning this procurement.

The solicitation sought proposals to replace VA’s TCA system in North Charleston, South Carolina. After the contract was awarded to another offeror, KNAPP filed a protest challenging the award. Prior to submitting a supplemental report responsive to the protest, VA advised GAO that it would take corrective action in response to the protest, based on the following determination, “Upon review of the record, VA has determined that corrective action is necessary. VA has determined that it will cancel the award to [the awardee] and that a new solicitation for the [TCA] system . . . will be issued in the near future.” GAO dismissed the protest.

KNAPP argues that VA should not have cancelled the solicitation, and should have instead awarded it the contract as the lowest-priced, technically acceptable offeror. GAO states that contracting officers in negotiated procurements have broad discretion to take corrective action where the agency determines that such action is necessary to ensure a fair and impartial competition. As a general matter, the details of corrective action taken in response to a protest are within the sound discretion and judgment of the contracting agency. GAO generally will not object to the specific corrective action, so long as it is appropriate to remedy the concern that caused the agency to take corrective action.

The agency stated that it would take corrective action by canceling the award to the awardee and issuing a new solicitation. In response to the instant protest and request for costs, VA has provided additional information concerning its rationale for opting to cancel and resolicit. First, the agency concluded that the awardee’s proposal had improperly taken exception to the solicitation with regard to the payment terms. For this reason, the agency contends that it properly took corrective action and terminated the awardee’s contract. Second, the agency states that it concluded that cancellation of the solicitation was necessary because the agency intends to add additional requirements to the TCA system. In this regard, VA states that the agency currently uses a manual mail packaging system, and it intends to add additional requirements to the TCA procurement.

GAO states that in a negotiated procurement, such as this one, a contracting agency has broad discretion in deciding whether to cancel a solicitation, and need only establish a reasonable basis for doing so. A reasonable basis to cancel exists when, for example, an agency determines that a solicitation does not accurately reflect its needs, or where there is a material increase in the services needed to satisfy the agency’s requirements; in such cases, cancellation of the solicitation and issuance of a revised solicitation is appropriate. GAO states that VA’s basis for canceling the solicitation was reasonable. In this regard, the corrective action addressed the protest argument that award to the awardee was improper. Furthermore, the corrective action was based on the agency’s determination that new requirements will require the agency to issue a revised solicitation and obtain new proposals, which precludes award to KNAPP based on its existing proposal. On this record, GAO concludes that VA’s corrective action was reasonable.

Next, KNAPP requests that GAO recommend that it be reimbursed the costs of filing and pursuing its initial protest. GAO states that when a procuring agency takes corrective action in response to a protest, it may recommend reimbursement of protest costs, including reasonable attorneys’ fees, if, based on the circumstances of the case, GAO determines that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. A protest is clearly meritorious where a reasonable agency inquiry into the protester’s allegations would reveal facts showing the absence of a defensible legal position. Additionally, while GAO considers corrective action to be prompt if it is taken before the due date for the agency report responding to the protest, it generally does not consider it to be prompt where it is taken after that date.

Rather than provide a supplemental report addressing this matter, VA took corrective action. As the agency acknowledges, the corrective action was based in part on KNAPP’s argument that the awardee’s proposal had improperly taken exception to the terms of the solicitation. GAO finds that the corrective action was prompt. As GAO has held, an agency’s corrective action is prompt when it is taken in response to a supplemental protest argument prior to providing the agency’s response to that newly-raised argument. GAO concludes that there is no basis to recommend reimbursement of the protester’s costs. The protest and request for costs are denied.

5. MediaNow, Inc., B-405067, June 28, 2011

Link: GAO Opinion

Agency: Department of the Navy

Disposition: Protest denied.

Keywords: Brand Name or Equal

General Counsel P.C. Highlight: With respect to the offer of an “equal” product, an offeror’s proposal must demonstrate that its product conforms to the salient characteristics listed in the solicitation.

MediaNow, Inc. protests the award of a contract under a request for quotations (RFQ), issued by the Department of the Navy, Naval Inventory Control Point-Mechanicsburg, for digital signage solutions and hardware at Navy shipyards.

The RFQ contemplated the award of an indefinite-delivery/indefinite-quantity (ID/IQ) contract for two years, for a guaranteed minimum of $400,000 and a maximum of $2 million over the life of the contract. The RFQ specified the use of Cisco Systems, Inc. or “equal” products, including digital media manager and video on demand appliances, outdoor billboards, LCD monitors, speakers, media players, and associated maintenance, technical support, installation and training. Award was to be made to the vendor with the lowest-priced, technically acceptable quotation.

MediaNow initially submitted quotations offering two alternate “equal” product solutions. The evaluators found each solution had numerous deficiencies. In discussions, the agency identified the deficiencies in MediaNow’s solutions and provided it an opportunity to revise its quotation. MediaNow’s final quotation offered VBrick products as a new “equal” solution. As with its prior solutions, the evaluators found that MediaNow’s new solution indicated noncompliance with some requirements and failed to provide information demonstrating that its products met various other salient characteristics. Although MediaNow’s quotation offered the lowest price, its quotation was evaluated as technically unacceptable.

MediaNow asserts that the agency misevaluated its proposal; according to the protester, its products meet or exceed all salient characteristics. GAO states that in reviewing a protest of an agency’s evaluation of proposals, its review is confined to a determination of whether the agency acted reasonably and consistent with the terms of the solicitation and applicable statutes and regulations. It is the offeror’s duty to include sufficiently detailed information in its proposal to establish that the equipment offered meets the solicitation requirements; blanket statements of compliance are insufficient to fulfill this duty. Further, with respect to the offer of an “equal” product, an offeror’s proposal must demonstrate that its product conforms to the salient characteristics listed in the solicitation.

In determining that MediaNow’s quotation was unacceptable, the evaluators found at least 19 instances where the vendor failed to demonstrate that each of its equal items satisfied all of the salient characteristics. For example, the RFQ required the digital media manager appliance to remotely control and manage digital display properties such as on/off, contrast, brightness, and volume; to archive content/assign metadata to assets; and to offer a minimum of six gigabytes RAM. However, apart from general statements that its VBrick product could “meet” these requirements, MediaNow’s quotation, including its attached product information sheets, provided no information that demonstrated these capabilities. Even in its protest submissions MediaNow fails to identify where in its quotation the required information may be found. On this record, GAO concludes that the agency reasonably found that MediaNow’s various blanket statements of compliance were inadequate to establish that its products met all salient characteristics. In these circumstances, MediaNow’s quotation was properly found to be unacceptable. The protest is denied.


Beware of SBA Affiliation Rules

August 25, 2011

When teaming, be careful of the Small Business Administration’s rules regarding “affiliation.”  The affiliation rules (including a related rule addressing limitations on subcontracting) are intended to discourage program abuses to ensure that small businesses, not large businesses, are benefiting from SBA’s contracting programs.   As an example,  if a small business joint ventures with a large business,  SBA will usually find that the joint venture partners are affiliated and will then proceed to combine the receipts/revenues of the two companies to determine whether the combined receipts of the affiliated entities exceed the permissible size standard for the procurement.   If the NAICS code assigned to the procurement has a $7 million size standard and the combined receipts of the joint venture partners exceed $7 million, then the joint venture will not ordinarily be eligible to participate in the competition.  However, if both joint venture partners are small under the assigned size standard, then an exception to the affiliation rule might be available.

The affiliation rules are not precise and there is no bright line test that can be relied upon in every situation.  There is, for example, the “ostensible subcontractor rule” which provides that SBA may find affiliation, in an otherwise acceptable subcontracting relationship, if the small business prime contractor is found to be unacceptably reliant or dependent on its subcontractor.  For example, if the large subcontractor has done the marketing and written the proposal, SBA will in almost all cases find this degree of dependence/reliance to be unacceptable and find affiliation.  Affiliation can also be found where there is common ownership or stock-sharing between the teaming partners or owners or where the officers and key staff of a newly organized small business were previously employed by the teaming partner.  Finally, there are exceptions to the rules — for Native American and Alaska Native corporations, for participants in the SBA 8(a) Program, and for SBA-approved Mentor-Protégé participants.


Bid Protest Weekly – August 17, 2011

August 23, 2011

1. SHG National, LLC, B-404613.3, July 20, 2011

Link: GAO Opinion

Agency: Department of the Army

Disposition: Protest denied.

Keywords: Technical Evaluation

General Counsel P.C. Highlight: In reviewing protests against allegedly improper evaluations, GAO examines the record to determine whether the agency’s judgment was reasonable and in accord with the evaluation factors set forth in the RFP.

SHG National, LLC, (SHG) protests the award of a contract under a request for proposals (RFP), issued by the Department of the Army, for lodging, meals, and transportation services.

The RFP provided for the award of a fixed-price requirements contract. A detailed performance work statement (PWS) was provided, describing the contract requirements. Offerors were informed that the agency estimated that an average of 53, and a maximum of 165, applicants would require daily meals, lodging and transportation services. In this regard, the PWS advised offerors that the actual number of applicants might exceed the agency’s estimates and that the contractor was responsible for ensuring that a sufficient number of rooms were available to fulfill the daily requirements of the contract. The RFP provided that award would be made on a best value basis considering the following factors: mission capability, past performance, and price. Offerors were advised that the agency would conduct an on-site evaluation, and that past performance would be separately evaluated and assessed a performance risk rating.

With regard to the mission capability factor, the RFP provided that the agency would assess the following elements: sanitation/cleanliness/condition/quality control; security and safety; meals; and facility location. Proposal preparation instructions were provided for each of these evaluation elements. For example, regarding sanitation- cleanliness-condition-quality control, the RFP advised offerors that the agency would evaluate all aspects of their proposed hotel and instructed offerors to provide the total number of rooms, describe their dining facilities, and make all areas available for inspection.

The awardee received a higher rating under the mission capability factor and reflected the SSEB’s assessment that the awardee’s proposal presented nine strengths, three of which were significant, and one weakness under that factor.

SHG complains that its proposal should have been rated excellent under the mission capability factor and contends that the agency used unstated evaluation criteria. The protester argues that its proposal met, or exceeded, the RFP’s minimum requirements for the number of hotel rooms, kitchens, security, lobby, and check-in areas. SHG also maintains that the agency evaluated proposals unequally by overvaluing features of the awardee’s proposed hotel but undervaluing similar features of SHG’s proposed hotel.

GAO states that in reviewing protests against allegedly improper evaluations, GAO examines the record to determine whether the agency’s judgment was reasonable and in accord with the evaluation factors set forth in the RFP, and whether the agency treated offerors equally in evaluating their respective proposals. While GAO has recognized that such judgments are often subjective by nature, the exercise of these judgments in the evaluation of proposals must be documented in sufficient detail to show that they are not arbitrary. Where a protester challenges the agency’s evaluation and source selection, GAO will review the evaluation and award decision to determine if they were reasonable, consistent with the solicitation’s evaluation scheme, as well as procurement statutes and regulations, and adequately documented.

GAO finds, based on a review of the record, that the agency’s well-documented evaluation of SHG’s proposal was reasonable and consistent with the RFP’s stated evaluation criteria. The record shows that the agency found, and extensively documented, numerous qualitative differences in this regard between the protester’s and the awardee’s proposed hotels. The record does not support the protester’s assertion that the agency evaluated proposal disparately or used undisclosed evaluation criteria. The protest is denied.

2. D’Andre Insurance Services, LLC, B-405046, July 21, 2011

Link: GAO Opinion

Agency: Department of the Interior

Disposition: Protest denied.

Keywords: Technical Evaluation

General Counsel P.C. Highlight: A vendor has the burden of submitting an adequately written quote, and it runs the risk that its quotation will be evaluated unfavorably when it fails to do so.

D’Andre Insurance Services, LLC (DIS) protests the issuance of a purchase order, under a request for quotations (RFQ), issued by the Department of the Interior, for professional services for the Risk Management Agency (RMA), U.S. Department of Agriculture.

The RFQ, issued as a combined synopsis/solicitation under the streamlined commercial item acquisition procedures of Federal Acquisition Regulation (FAR) Parts 12.6 and 13, provides for the issuance of a fixed-price purchase order for the evaluation of, and recommended improvements for, the Nursery Crop Insurance Program, which is administered by RMA, and recommendations for alternative designs for providing insurance for nursery crops. A detailed statement of work (SOW) was provided. Vendors were informed that the purchase order would be issued on a best value basis considering the following factors: technical approach, project management, past performance, and price.

The protester quote was found to be unacceptable under the technical approach factor. The evaluators determined that DIS failed to demonstrate knowledge of how the nursery crop insurance program currently works and that the protester’s quotation contained a deficiency and numerous weaknesses.

DIS broadly challenges its rating under each of the non-price factors, disagreeing with the agency’s technical judgments and asserting that the agency’s evaluation of its quotation reflected bias and bad faith. GAO states that in reviewing protests challenging an agency’s evaluation of quotations, it will not conduct a new evaluation or substitute our judgment for that of the agency; rather it will examine the record to determine whether the agency’s judgment was reasonable and consistent with the solicitation’s evaluation criteria, and with procurement statutes and regulations. A vendor has the burden of submitting an adequately written quote, and it runs the risk that its quotation will be evaluated unfavorably when it fails to do so. A protester’s mere disagreement with the agency’s evaluation does not establish that the evaluation was unreasonable.

Here, the protester’s arguments reflect nothing more than disagreement with the agency’s judgment as to the merits of the firm’s quotation. As noted above, the agency found that the protester’s quotation was deficient with respect to addressing how it would conduct the evaluation of the current program, because DIS only discussed alternatives to establishing maximum insurable prices for each insurable nursery plant. DIS disagrees with the assigned deficiency, arguing that developing alternatives can only be done after performing the program evaluation, and that, in any event, its quotation provided a preliminary discussion of developing alternatives. There is no merit to this argument. Vendors were instructed to discuss their approach to performing the SOW evaluation and recommendation requirements, which included, among other things, providing alternative methods for establishing liability on fluctuating nursery inventory, indemnifying nursery producers, and establishing the maximum insurable price.

Similarly, DIS disagrees with the agency’s assignment of weaknesses in the firm’s quotation. For example, with respect to the agency concern that DIS had proposed excessive effort to perform this work and failed to demonstrate knowledge of the current program, DIS argues that the “resources needed is a professional determination” and that it has experienced insurance professionals, and not “academics or economists.” With respect to the evaluators’ concern that providing three individuals for each listening session seemed excessive, DIS contends only that it sees this as a positive and not negative attribute of its quotation. Similarly, with respect to the agency’s concern that the firms’ plan to review underwriting after reviewing loss adjustment standards was not a logical sequence, DIS only states that there is an advantage to performing the work in the sequence it offered and that therefore it should not be penalized for its “superior business analysis.” As noted above, arguments such as these that only disagree with the agency’s judgment do not demonstrate that the agency unreasonably evaluated the firm’s quotation. GAO finds that the agency reasonably rejected the protester’s quotation, given that the record supports the agency’s determination that the quotation was deficient and contained a number of weaknesses. The protest is denied.

3. Intermarkets Global, B-400660.12; B-400660.13, May 6, 2011

Link: GAO Opinion

Agency: Department of Defense

Disposition: Protest denied.

Keywords: Legal Standing; Interested Party Status

General Counsel P.C. Highlight: In order for a protest to be considered, a protester must be an interested party, that is, an actual or prospective offeror whose direct economic interest would be affected by the award or failure to award a contract.

Intermarkets Global (IMG) protests the Department of Defense, Defense Logistics Agency’s (DLA) award of a contract to Anham FZCO, LLC, under a request for proposals (RFP), for the supply of a full service food line in Kuwait, Iraq, and Jordan. IMG challenges the conduct of discussions, evaluation of proposals, and award determination.

The RFP provided for award of an indefinite-delivery, indefinite‑quantity (ID/IQ), fixed-price contract, for a base period of 18 months with four option periods, to serve as a full line food distributor responsible for the supply and delivery of semi-perishable and perishable items to the military and other federally funded customers within Kuwait, Iraq, and Jordan. Award was to be made on a “best value” basis, with technical factors significantly more important than price. Prices–including prices for products and distribution–were to be evaluated for completeness, reasonableness, and balance. In addition, the RFP advised that proposals found unrealistically low in price could be viewed as lacking understanding of the RFP’s requirements.

After a number of amendments and three protests against the terms of the solicitation, IMG, Anham, and another protester submitted proposals. Based on Anham’s higher technical rating and lower price, DLA awarded the contract to Anham. IMG and the other protester protested the award, challenging the evaluation of proposals, conduct of discussions, and price realism analysis. DLA executed an override of the resulting stay of contract performance based on urgent and compelling circumstances significantly affecting the interests of the government. GAO conducted an outcome prediction alternative dispute resolution (ADR) conference in which the GAO attorney indicated that GAO likely would sustain the protests on the basis that the agency’s price realism determination was unreasonable. The GAO attorney also raised concerns about several aspects of the solicitation requirements and related technical evaluation–including the force protection requirements and evaluation of warehouse capacity–but indicated that these concerns would not serve as additional bases for sustaining the protests. Based on DLA’s determination to take corrective action–reopening limited discussions on specific issues, requesting revised proposals, and making a new source selection decision–the protest was dismissed. Both parties again protested the agency’s corrective action and IMG’s protest was denied. Eventually, upon learning of the resulting award to Anham, and after a debriefing, IMG filed this protest.

IMG protests the conduct of the procurement and award to Anham on numerous grounds, including challenges to the evaluation of Anham’s and IMG’s proposals, unequal discussions, and an alleged, improper change in Anham’s proposed team.

First, however, the agency requests dismissal of the protest, asserting that IMG withdrew or qualified its price proposal thereby rendering IMG’s proposal unacceptable. GAO states that in order for a protest to be considered, a protester must be an interested party, that is, an actual or prospective offeror whose direct economic interest would be affected by the award or failure to award a contract. A protester is an interested party to challenge the agency’s evaluation of proposals where there is a reasonable possibility that the protester’s proposal would be in line for award if its protest were sustained. The record shows that IMG is ineligible for award for failing to offer the required firm fixed-price proposal, and that there is another proposal besides the awardee’s eligible for award. Thus, IMG is not an interested party to challenge the award.

IMG’s final proposal revision (FPR) discussed at length how the agency’s clarification of pallet sizes would impact its storage capacity. IMG noted that such changes would likely impact its distribution pricing, but conceded that it had “not analyzed thoroughly the impact” of the changes on its previously submitted price and thus, could not predict whether its revised price would be higher or lower. IMG included the following statement in its FPR, “IMG considers that any award made on the cost proposal that IMG submitted in February/March 2010 is invalid as IMG price due to [deleted] changes will have to be revised to take into consideration those changes.” GAO agrees with DLA that IMG’s FPR statement effectively repudiated its prior price proposal and removed it from consideration. Thus, in the absence of a firm-fixed-price proposal, the agency reasonably determined that IMG’s proposal was unacceptable

4. Explo Systems, Inc., B-404952; B-404952.2, July 8, 2011

Link: GAO Opinion

Agency: Department of the Army

Disposition: Protest sustained in part, denied in part.

Keywords: HUBZone Price Preference

General Counsel P.C. Highlight: In a procurement not set aside for HUBZone companies, that procuring agency shall give offers from HUBZone small business concerns a price evaluation preference by adding a factor of 10 percent to all offers.

Explo Systems, Inc., a HUBZone small business contractor protests the award of a contract under a request for proposals (RFP), issued by the Department of the Army, for the demilitarization and disposal of eight families of conventional ammunition.

The RFP, which was issued on an unrestricted basis, contemplated the award of a fixed-price contract to the offeror whose proposal represented the best value to the government, on the basis of the following evaluation factors listed in descending order of importance: technical, past performance, price, and small business utilization.

The technical evaluation factor consisted of the following equally-weighted subfactors: program management plan, technical approach, safety approach, security approach and environmental approach. As is relevant here, with respect to the safety approach subfactor, the RFP stated that the agency would evaluate each offeror’s technical expertise to perform demilitarization operations, including the offeror’s safety program of demilitarization. With respect to the environmental approach subfactor, the RFP stated that the agency would evaluate each offeror’s compliance with all applicable environmental regulations, as well as the offeror’s approach for managing hazardous and non-hazardous waste streams during demilitarization operations.

With respect to the past performance factor, the RFP provided that the agency would evaluate each offeror’s recent and relevant experience for the offeror’s record of quality and on time delivery, based on the results of the past performance surveys.

With respect to the price factor, the RFP incorporated Federal Acquisition Regulation (FAR) clause 52.219-4, Notice of Price Evaluation Preference for HUBZone Small Business Concerns. Pursuant to this clause, the agency was required to “add a factor of 10 percent to the price of all offers,” except offers from HUBZone small business concerns that did not waive the evaluation preference, and otherwise successful offers from small business concerns.

Only two firms responded to the RFP, Explo and the eventual awardee. The source selection authority (SSA) conducted a best value tradeoff between proposals. In doing so, the SSA did not apply the HUBZone price evaluation preference, even though the awardee was a large business and Explo was a HUBZone concern, because Explo had submitted the lowest priced offer. The SSA determined that the advantages associated with the awardees’ superior technical proposal were worth the price premium, as compared to Explo’s lower technically rated and lower priced proposal.

Explo argues that the Army improperly failed to apply the HUBZone price evaluation preference provided for in 15 U.S.C. sect. 657a(b)(3)(A) (2006), as implemented in various regulations and incorporated into the RFP, in making its best value selection decision. To implement this statute, FAR sect. 19.1307 provides that agencies “shall give offers from HUBZone small business concerns a price evaluation preference by adding a factor of 10 percent to all offers,” except for offers from HUBZone small business concerns that have not waived the evaluation preference, or otherwise successful offers from small business concerns. Consistent with this FAR provision, and as required by FAR sect. 19.1309(b), the solicitation incorporated FAR clause 52.219-4, titled Notice of Price Evaluation Preference for HUBZone Small Business Concerns.

As noted above, the Army did not apply the price evaluation preference here. GAO states that it is well-settled that an agency must follow the ground rules of the competition set forth in the solicitation, and deviation from those stated ground rules is grounds to sustain the protest. Here, the unambiguous language of the solicitation required that the agency apply “a factor of 10 percent to the price of all offers” other than certain HUBZone or small business offers. The Army failed to do so here, and GAO sustains the protest on this ground.

The Army maintains that it properly did not apply the HUBZone price preference in making its best value selection decision because Explo already submitted the lowest priced offer. The Small Business Administration (SBA) agrees with the Army. Both agencies contend that the language of 15 U.S.C. sect. 657a(b)(3)(A), quoted above, only requires that a price evaluation preference be applied where the HUBZone offer is priced higher than the large business offer; the preference does not apply when a HUBZone offer is priced lower than the large business offer. GAO finds nothing in the plain language of the statute, or the legislative history of the statute, that expressly limits that application of a price preference in the manner argued by the agencies. Rather, the statute only identifies when a HUBZone offer must be considered lower in price–i.e., when the HUBZone offer is “not more than 10 percent higher” than the large business offer. In the context of a best value procurement where a cost/technical tradeoff is required, this statutory language can reasonably be interpreted to include HUBZone offers lower in price, since those offers are “not more than 10 percent higher” than the large business offer.

The Army also argues that the FAR provisions are not enforceable under the facts presented here. GAO notes that both FAR provisions have been in effect for many years, and its review of case law confirms that both FAR provisions have been routinely recognized, by the U.S. Court of Federal Claims and GAO, as implementing 15 U.S.C. sect. 657a(b)(3)(A), including in procurements where the solicitation contemplated the performance of a best value tradeoff. Neither the Army nor the SBA have cited, and GAO has not found, any case law or other authority to support the agencies’ position that the HUBZone price evaluation preference need not be applied in a best value procurement when the HUBZone offer is priced lower than the large business offer. In sum, GAO finds that the Army deviated from the solicitation requirement to apply the HUBZone price evaluation preference before performing its best value tradeoff, and GAO sustains the protest on this ground.

GAO sustains the protest because the Army deviated from the solicitation requirement to apply the HUBZone price evaluation preference during its evaluation and recommends that the agency apply the HUBZone price evaluation preference in accordance with the applicable FAR provisions and that it perform a new best value tradeoff decision. The protest is sustained in part and denied in part.

5. SafeGuard Services, LLC, B-404910, June 28, 2011

Link: GAO Opinion

Agency: Department of Health and Human Services

Disposition: Protest sustained.

Keywords: Late Proposal

General Counsel P.C. Highlight: A proposal that does not provide all items required by the solicitation may not be automatically rejected if the proposal information received by the deadline is sufficient to constitute an acceptable proposal.

SafeGuard Services, LLC (SGS) protests the rejection of its proposal as late by the Department of Health & Human Services, Centers for Medicaid and Medicare Services (CMS) under a request for proposals (RFP) for the award of a Zone Program Integrity Contract (ZPIC) to support CMS’s audit, oversight, and anti-fraud, waste and abuse efforts in geographic zone 6.

The RFP contemplated the award of a single indefinite-delivery/indefinite-quantity (ID/IQ) contract. Task orders under the contract could be issued on a cost reimbursement or fixed-price basis. Each offeror’s proposal was to consist of three volumes: a business proposal, technical proposal, and a conflict of interest and compliance program volume. The solicitation included detailed instructions regarding the preparation and submission of each of these volumes. As part of their business proposal submission, offerors and each of their subcontractors were required to submit a business proposal spreadsheet for two cost reimbursement task orders complete with the following categories of cost information: labor, travel, other direct costs, subcontracts, indirect rates, fee, and a summary rollup of all costs. The RFP provided that all volumes of each proposal had to be delivered in an electronic format on compact discs (CD) by 1 p.m., July 20, 2009, to the CMS Building in Baltimore, Maryland. The RFP also stated that “all proposed subcontractors shall submit a separate and complete business proposal spreadsheet in the same format as the Offeror’s business proposal spreadsheet no matter the dollar amount.” The solicitation stated that if a proposal was late, it would be deemed unacceptable.

SGS’s proposal was included in the competitive range and discussions were conducted. As part of the discussions with SGS, CMS raised some questions about the proposed costs of one of SGS’s proposed subcontractors. The agency sent SGS a request for final proposal revisions (FPR). The revised technical proposal, which was to include only the revised sections, was due via e-mail on February 24. Offerors were required to submit a “complete revised business proposal” in electronic format by February 28, and provided that “any subcontractor business proposals shall also be received by the February 28, 2011 deadline.” On March 4, offerors were to submit one hard copy and four CDs of their technical, business, and OCI submissions, as well as “subcontractor business proposal sealed packages as necessary.” SGS submitted its FPR by the stated deadlines. However, a minor subcontractor of SGS failed to submit its revised business proposal in electronic format by the February 28 deadline. As a result of the late delivery of the subcontractor’s revised business proposal, the contracting officer rejected SGS’s proposal as late.

SGS asserts that the agency’s rejection of its FPR due to the late submission of its subcontractor was improper because, according to SGS, even without the subcontractor’s proposal, SGS’s proposal was complete. GAO states that offerors are responsible for submitting proposals, and any modifications to them, so as to reach the government office designated in the solicitation by the time specified in the solicitation. Proposals, and modifications to them, that are received in the designated government office after the exact time specified are “late,” and will be considered only if received before award, and if the circumstances meet the specific requirements of the provision at FAR sect. 52.215-1. Portions of proposals that are submitted late may not be considered by the agency, and if the proposal is unacceptable as timely submitted, it should be rejected as late. On the other hand, a proposal which does not provide all items required by the solicitation may not be automatically rejected if the proposal information received by the deadline is sufficient to constitute an acceptable proposal.

Here, the record reflects that the agency did not consider whether SGS’s FPR was acceptable without the subcontractor’s revised business proposal spreadsheets. However, as discussed above, SGS asserts that its FPR was complete and acceptable because it contained all of necessary costs. GAO’s review confirms SGS’s assertion that the information included in its revised business spreadsheet was reflected in SGS’s business proposal. Thus, the subcontractor’s submission could appropriately be viewed as backup supporting material for SGS’s proposed costs. In circumstances like these, where an agency finds that an offeror’s proposed costs on a cost reimbursement contract are not reasonably supported, an agency, as part of the cost realism analysis, can adjust the proposed costs to account for this lack of supporting information. In sum, GAO concludes that the agency improperly rejected SGS’s entire FPR as late without considering whether the proposal was acceptable without the subcontractor’s revised business proposal, and the protest is sustained on this basis.

GAO recommends, consistent with this decision, that the agency consider whether SGS’s FPR was acceptable. If SGS’s FPR is determined to be acceptable, GAO recommends that it be reinstated in the competition.


General Counsel, P.C. — August 16, 2011 Corporate Counselor

August 16, 2011

Some Common Issues with Separation Pay Plans

Clients often ask us if there are any legal issues if their separation pay plans (often referred to as severance plans) extend payments beyond an employee’s termination date.  Such plans may raise potential ERISA (the Employee Retirement Income Security Act) and 409A (IRS regulations relating to non-qualified deferred compensation plans) issues to the extent that they give rise to an employee receiving a legally binding right to receive payments after the year in which the related services are performed.

ERISA

Any severance plan that requires ongoing administration for the payment of benefits (i.e., any plan that provides for more than a lump sum payment) is likely subject to ERISA (see Fort Halifax Packing Co., Inc. v. Coyne, 481 US 1 (1987)).  Even if a client does not intend for a severance plan to be an ERISA plan, it may become a “de facto plan” or an ERISA-governed plan.  For most of our smaller clients, we advise structuring severance plans to limit ERISA liability rather than adopt a formal ERISA plan and following burdensome ERISA requirements.  Suggested steps include:

  • Limit your severance plan so that it only applies to executive employees pursuant to written employment agreements.
  • To the extent that you offer severance payments to other employees (even if it is only a week or two of pay), do not alter the benefits you pay to various employees.  If you historically paid two weeks severance, don’t begin limiting those payments to newly terminated employees.  Also, you should treat all similarly situated employees the same, regardless of the reason for termination.
  • To the extent possible, limit severance to fixed dollar amounts paid automatically (make it as simple as possible).
  • Limit all severance payments to two times the final rate of annual pay.
  • Limit all severance periods to no more than 24 months from termination.
  • Make sure all employees receiving severance execute a global release, including a release from ERISA claims.

For clients with a large number of employees subject to a severance plan (particularly 100 or more), or for clients who plan on terminating a large number of employees, we advise that such clients put significant thought into adopting a formal plan that meets all applicable ERISA requirements.

409A

Treas. Reg. Sec. 1.409A-1(b)(9)(iii) specifically exempts, “A separation pay plan that […] provides for separation pay only upon an involuntary separation from service.”  So, if severance is payable only if the employee’s employment is terminated by the company (with or without cause) (an involuntary termination), it is exempt.

If severance is also payable if the employee terminates employment (a voluntary termination), then it is not exempt from 409A unless termination is pursuant to a window program meeting certain dollar limit and timing restrictions (think a voluntary early retirement plan) (see Treas. Reg. Sec. 1.409A-1(b)(9)(iii)), or if the voluntary termination is for “good reason” (see Treas. Reg. Sec. 1.409A-1(n)(2)).   “Good reason” must be defined to require actions taken by the company resulting in a “material negative change” to the employee, such as a change in, “the duties to be performed, the conditions under which such duties are to be performed, or the compensation to be received for performing such services.”  The payments should also be similar to the payment received upon an involuntary termination, and the employee should also be required to give the company notice of the good reasons (within 90 days of occurrence) and a reasonable opportunity to cure (at least 30 days).

Exception:  Pursuant to Treas. Reg. Sec. 1.409A-1(b)(9)(i), If the severance plan acts as a substitute for, or replacement of, amounts deferred by the company under a separate non-qualified deferred compensation plan, it will not be able to take advantage of these exemptions.  For example, if an employee loses his right to deferred compensation upon termination employment but instead severance payments, the severance payments may be construed as an acceleration of the deferred compensation.   This can easily be overcome if the severance payments stay in effect even after the deferred compensation vests on its own.

In summary, severance arrangements that are typically included in executive employment agreement can be drafted to meet the exemptions from 409A so long as they are carefully tailored to comply with the requirements set forth above.  Careful attention must be paid to agreements that provide for severance payments upon a termination of employment by the employee.  409A issues can still be mitigated if the exemptions are not met, but doing so will require more detailed expert analysis of the particular severance plan.


General Counsel, P.C. – August 9, 2011 Litigation Counselor

August 10, 2011
Federal Court dismisses unfair competition claim by Government Contractor

A Federal Judge has ruled that a government contractor cannot sue its competitors for agreeing to steer the contract work to another contractor.  An IT contractor sued its competitor for interference with contract relations, after a competitor steered work under certain work orders to a fellow competitor.

The Court considered the nature of the contracts involved, which were terminable “at will” and did not contain any non-solicitation protections, as well as the nature of the alleged wrongdoing by the defendants.  The allegations of wrongdoing by the Defendants was so non-specific and vague, the Court was compelled to dismiss the claims asserted by the contractor who lost the work.

Finally, the Court considered the allegations of defamation, and again, held that the assertions of wrongdoing were insufficient to state a claim under Virginia law.

Business tort cases such as this one can be difficult to maintain, but can be essential to a company’s survival.  Often, companies are well-advised to seek legal counsel as early as possible, in order to evaluate any potential claims and whether there is sufficient evidence to support those claims, before too much time lapses.  Prompt legal action can be essential to developing and pressing a successful case to defend your business interests.  Conversely, if you have been accused of wrongfully interfering with a competitor’s business interests, obtaining knowledgeable counsel can make the difference between prevailing in the case in a cost-effective manner, and paying a significant settlement despite having done nothing wrong.

 
Court upholds Freedom of Speech for “She Lies” comment

A Federal Court recently dismissed a Defamation case filed against a physician for comments he gave for an article published about the controversy over children’s’ vaccinations.  In the case, a physician advocate for childhood vaccinations described a prominent critic of vaccinations, by simply stating “she lies.”

The vaccine critic sued the physician, the author of the article, and the magazine which published the article, alleging that the statement constituted defamation and that she was entitled to damages.

The Judge decided that the comment was nothing more than legally-protected opinion, and dismissed the defamation lawsuit.  In particular, the Judge referenced the context of the comments, and the sensitive nature of the debate over vaccinations, as evidence for his ruling that the comments were clearly just the opinions of the physician, and not specific demonstrations of lies told by the plaintiff.  Indeed, the comments did not even include any specific statement which was asserted to be a lie.

Defamation is a difficult area of the law, and careful analysis of certain critical legal principles is essential to evaluating a potential claim, and whether certain comments are protected free speech, or injurious defamation.

At General Counsel, P.C., we have experience on both sides of defamation cases.  If you feel you have been affected by a defamatory statement, contact our firm today for a free telephone consultation.


Bid Protest Weekly – August 3, 2011

August 4, 2011

1. Re-Engineered Business Solutions, Inc.– Costs, B-404214.4, July 14, 2011

Link: GAO Opinion

Agency: U.S. Army Corps of Engineers

Disposition: Request denied.

Keywords: Payment of Attorney’s Fees

General Counsel P.C. Highlight: When a procuring agency takes corrective action in response to a protest, GAO may recommend reimbursement of protest costs, including reasonable attorneys’ fees, if GAO determines that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest

Re-Engineered Business Solutions, Inc. (RBS) requests that a recommendation that the U.S. Army Corps of Engineers reimburse its costs of filing and pursuing its protests of the award of a contract, under a request for proposals (RFP), for the operation, maintenance, and repair of flood control facilities at various locations in Mississippi.

The RFP, issued as a section 8(a) set-aside, provided for the award of a cost‑plus‑fixed-fee contract for the operation, maintenance, and repair of flood control facilities in Mississippi for a base year and four option years. Offerors were informed that award would be made on a best value basis, considering technical, past performance, and cost evaluation factors.

RBS protested to GAO after award was made to another offeror, arguing that the Corps departed from the evaluation scheme required by the RFP, conducted an improper cost/technical trade‑off, conducted a flawed cost realism analysis, and should have selected RBS’s higher-priced offer because it received higher ratings under the technical capability and past performance evaluation factors than the awardee. RBS also filed a supplemental protest arguing that the Corps improperly assigned it weaknesses for not providing cost information for small tools and providing an outdated letter of credit. The Corps notified GAO that it would take corrective action by reevaluating proposals and the protest was dismissed. After reevaluating proposals, the Corps again awarded the contract to the original awardee, and RBS again protested the agency’s evaluation of its proposal, basically raising the same arguments as it raised in its initial protest. The Corps again notified GAO that it was taking corrective action and the protest was dismissed.

RBS requests that GAO recommend that the agency reimburse its costs of filing and pursuing its protests. GAO states that when a procuring agency takes corrective action in response to a protest, GAO may recommend reimbursement of protest costs, including reasonable attorneys’ fees, if, based on the circumstances of the case, it determines that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. Thus, as a prerequisite to recommending the reimbursement of costs where a protest has been settled by corrective action, not only must the protest have been meritorious, but it also must have been clearly meritorious. A protest is clearly meritorious where a reasonable agency inquiry into the protester’s allegations would reveal facts showing the absence of a defensible legal position. GAO has recognized, however, that the mere promise of corrective action, without reasonably prompt implementation, has the obvious effect of circumventing the goal of the bid protest system for the economic and expeditious resolution of bid protests. Thus, where an agency fails to implement the promised corrective action, or implements corrective action that fails to address a clearly meritorious issue raised in an initial protest, such that the protester is put to the expense of subsequently protesting the very same procurement deficiency, the agency’s action has precluded the timely, economical resolution of the protest.

Here, there is no basis to conclude that the agency has unduly delayed taking corrective action in response to a clearly meritorious protest. In response to the first protest, the agency promptly indicated that it would take corrective action. To the extent that the protester maintains that it is entitled to reimbursement of its costs for filing the second protest because the Corps failed to implement its promised corrective action, the record does not establish that RBS’s protests were clearly meritorious. Even where a protester alleges that an agency failed to timely implement promised corrective action, GAO’s recommendation that an agency reimburse a protester its protest costs must be based upon a showing that a procurement statute or regulation has been violated. The mere fact that an agency decides to take corrective action does not establish that a statute or regulation clearly has been violated. The Corps took corrective action in response to the protests prior to submitting its reports, and thus GAO has not been provided with a record of the agency’s evaluation and selection decision. Further record development would be necessary to determine whether any of RBS’s protest grounds had merit. The request for entitlement to protest costs is denied.

2. Ahtna Facility Services, Inc., B-404913; B-404913.2, June 30, 2011

Link: GAO Opinion

Agency: Department of the Army

Disposition: Protest denied.

Keywords: Discussions

General Counsel P.C. Highlight: In order to satisfy its obligation to conduct meaningful discussions, an agency must lead offerors into the areas of their proposals that reflect deficiencies or significant weaknesses

Ahtna Facility Services, Inc. (AFSI) protests the Department of the Army’s exclusion of AFSI’s proposal from the competitive range under a request for proposals (RFP) to provide healthcare environmental services for the San Antonio Military Medical Center-North (SAMMC-N) and other medical facilities at or around Fort Sam Houston, Texas.

The solicitation contemplated award of an indefinite-delivery, indefinite-quantity (ID/IQ) contract under which fixed-price task orders will be issued to perform various services, including: housekeeping services; collection and distribution of linens; collection, consolidation, packaging, labeling, and preparation of regulated medical waste; collection of general solid waste; collection and transport of recyclable materials; and exterior building services, such as window cleaning and snow removal. The solicitation provided that the agency would use “the Lowest Price, Technically Acceptable (LPTA) source selection technique” and, consistent with this approach, established two evaluation factors: technical acceptability and price.

Proposals were submitted by several offerors, including AFSI. The agency subsequently evaluated AFSI’s initial proposal as technically unacceptable, identifying 19 deficiencies, 4 significant weaknesses, and 8 weaknesses. Despite the multiple flaws in AFSI’s initial proposal, the agency retained AFSI’s proposal in the competitive range and, by letter, opened discussions with AFSI, specifically outlining the various evaluated proposal deficiencies and significant weaknesses. Among other things, the agency’s letter expressly advised AFSI that its procedures manual was deficient in that it “did not include the seven (7) types of services [identified in the PWS],” “failed to include performance standards,” and “failed to include meaningful and measurable performance metrics.” Thereafter, the agency evaluated the revised proposal and concluded that AFSI had resolved some of the multiple proposal flaws, but that many remained. Based on the existence of the ongoing deficiencies in AFSI’s revised proposal, the agency determined that the proposal remained technically unacceptable and excluded it from the competitive range.

AFSI first asserts that its proposal “provided all of the information required by the [s]olicitation and the PWS” and that, “[h]ad the agency properly and fairly evaluated AFSI’s [revised proposal], the proposal would have been deemed acceptable.” GAO states that agencies are required to evaluate offers in accordance with a solicitation’s stated requirements and evaluation criteria. Where a dispute exists as to the actual requirements of a solicitation, GAO will first examine the plain language of the solicitation.

Under the heading “Technical Acceptability,” the solicitation expressly directed offerors to “[p]rovide a Procedures Manual or equivalent that includes all of the elements in the PWS.” Based on the record, GAO finds no merit in AFSI’s assertion that the agency’s assessment of a deficiency was improper because the solicitation “did not require” AFSI’s procedures manual to individually address the procedures to be employed for the seven types of required services. To the contrary, upon review of the solicitation provisions discussed GAO determined that AFSI’s obligations were clearly stated. Accordingly, AFSI’s assertion that the solicitation “did not require” AFSI to address each required PWS service is without merit.

AFSI asserts that the agency failed to conduct meaningful discussions with AFSI with regard to the solicitation requirements to provide performance standards and metrics. GAO states that when discussions are conducted, they must be meaningful. In order to satisfy its obligation to conduct meaningful discussions, an agency must lead offerors into the areas of their proposals that reflect deficiencies or significant weaknesses; that is, an agency must identify aspects of an offeror’s proposal that, unless further addressed, would prevent the offeror from having a reasonable chance for award.

Here, the record shows that the agency’s discussions specifically reminded AFSI that its proposal would be evaluated to determine whether the required services “will be consistently performed in a standardized method with established performance standards and performance metrics.” Further, the agency told AFSI that its initial proposal “failed to include performance standards aligned with Association for Healthcare Environment (AHE) and in compliance with SAMMC-N Pam[phlet] 40‑2, Infection Control Manual, to meet the PWS requirements.” Finally, the agency also specifically advised AFSI that its proposal “failed to include meaningful and measureable performance metrics that meet or exceed the AHE Practice Guidance for Healthcare Environmental Cleaningstandards as required in PWS 1.7.2.1.” On this record GAO finds no reasonable basis for AFSI to assert that it was confused and/or reasonably believed that its submission of quality control procedures was adequate to meet the solicitation’s requirements to submit performance standards and metrics to measure the acceptability of contract performance. AFSI’s assertion that it was reasonably misled by the agency’s discussions in this regard, or that the discussions were otherwise inadequate, is without merit. The protest is denied.

3. SHG National, LLC, B-404613.3, July 20, 2011

Link: GAO Opinion

Agency: Department of the Army

Disposition: Protest denied.

Keywords: Proposal Evaluation

General Counsel P.C. Highlight: While GAO has recognized that such judgments are often subjective by nature, the exercise of these judgments in the evaluation of proposals must be documented in sufficient detail to show that they are not arbitrary.

SHG National, LLC, (SHG) protests the award of a contract under a request for proposals (RFP) issued by the Department of the Army, for lodging, meals, and transportation services.

The RFP provided for the award of a fixed-price requirements contract. A detailed performance work statement (PWS) was provided, describing the contract requirements. Offerors were informed that the agency estimated that an average of 53, and a maximum of 165, applicants would require daily meals, lodging and transportation services. In this regard, the PWS advised offerors that the actual number of applicants might exceed the agency’s estimates and that the contractor was responsible for ensuring that a sufficient number of rooms were available to fulfill the daily requirements of the contract. The RFP provided that award would be made on a best value basis considering the following factors: mission capability, past performance, and price. Offerors were advised that the agency would conduct an on-site evaluation, and that past performance would be separately evaluated and assessed a performance risk rating.

The awardee received a higher rating under the mission capability factor and reflected the SSEB’s assessment that the awardee’s proposal presented nine strengths, three of which were significant, and one weakness under that factor. Specifically, the SSEB identified three significant strengths with regard to the organization and appearance of the awardee’s hotel kitchen, and the hotel’s security coverage, as well as five strengths with regard to the hotel’s lobby and décor; room furnishings, amenities, and public address system; check-in location; 100 security cameras; and close proximity to the processing station.

SHG complains that its proposal should have been rated excellent under the mission capability factor and contends that the agency used unstated evaluation criteria. The protester argues that its proposal met, or exceeded, the RFP’s minimum requirements for the number of hotel rooms, kitchens, security, lobby, and check-in areas. SHG also maintains that the agency evaluated proposals unequally by overvaluing features of the awardee’s proposed hotel but undervaluing similar features of SHG’s proposed hotel. GAO states that in reviewing protests against allegedly improper evaluations, GAO examines the record to determine whether the agency’s judgment was reasonable and in accord with the evaluation factors set forth in the RFP, and whether the agency treated offerors equally in evaluating their respective proposals. While GAO has recognized that such judgments are often subjective by nature, the exercise of these judgments in the evaluation of proposals must be documented in sufficient detail to show that they are not arbitrary. Where a protester challenges the agency’s evaluation and source selection, GAO will review the evaluation and award decision to determine if they were reasonable, consistent with the solicitation’s evaluation scheme, as well as procurement statutes and regulations, and adequately documented.

GAO finds, based on a review of the record, that the agency’s well-documented evaluation of SHG’s proposal was reasonable and consistent with the RFP’s stated evaluation criteria. In this respect, the RFP identified several elements under the mission capability factor, including hotel sanitation; cleanliness; condition; quality control; maintenance, number of rooms; security features; check-in areas; dining capacity; and distance from the processing station and transportation centers. The record shows that the agency found, and extensively documented, numerous qualitative differences in this regard between the protester’s and the awardee’s proposed hotels. The record does not support the protester’s assertion that the agency evaluated proposal disparately or used undisclosed evaluation criteria.

Insofar as SHG suggests that the agency should not have considered the appearance of the awardee’s proposed hotel kitchen, or SHG’s atrium style hotel lobby, the RFP clearly advised offerors that the agency would evaluate all aspects of their proposed hotels. Moreover, GAO believes that the agency’s consideration of the appearance of the hotel kitchen’s or the lobby’s design are logically encompassed by, or related to, the consideration of the hotels’ condition, sanitation, cleanliness, maintenance, quality control, check-in area, and safety features. The record does not support SHG’s assertion that its kitchen should have been evaluated as a significant strength because it allegedly met the RFP’s only “measurable” health requirements. In contrast, the awardee’s kitchen was found to be “well organized” and “spotless,” indicating “a well managed immaculate operation.”

The protester also objects to the agency’s selection decision, arguing that price was the most important evaluation factor under the RFP, and points out that SHG proposed a lower price than the awardee. The RFP explicitly stated that the two non-price factors (mission capability and past performance), when combined, were significantly more important than price. Although SHG believes that it should have been awarded the contract based on its lower-priced offer, the record shows that the agency performed a reasonable price/technical trade-off. The protest is denied.

4. D’Andre Insurance Services, LLC, B-405046, July 21, 2011

Link: GAO Opinion

Agency: Department of the Interior

Disposition: Protest denied.

Keywords: Bias and Bad Faith in Evaluation

General Counsel P.C. Highlight: Government officials are presumed to act in good faith, and a protester’s contention that contracting officials are motivated by bias or bad faith must be supported by convincing proof. GAO will not attribute unfair or prejudicial motives to procurement officials on the basis of inference or supposition.

D’Andre Insurance Services, LLC (DIS) protests the issuance of a purchase order, under a request for quotations (RFQ), issued by the Department of the Interior, for professional services for the Risk Management Agency (RMA), U.S. Department of Agriculture.

The RFQ, issued as a combined synopsis/solicitation under the streamlined commercial item acquisition procedures of Federal Acquisition Regulation (FAR) Parts 12.6 and 13, provides for the issuance of a fixed-price purchase order for the evaluation of, and recommended improvements for, the Nursery Crop Insurance Program, which is administered by RMA, and recommendations for alternative designs for providing insurance for nursery crops. A detailed statement of work (SOW) was provided. Vendors were informed that the purchase order would be issued on a best value basis considering the following factors: technical approach, project management, past performance, and price.

The protester’s unacceptable rating under the technical approach factor reflected the evaluators’ judgment that DIS failed to demonstrate knowledge of how the nursery crop insurance program currently works and that the protester’s quotation contained a deficiency and numerous weaknesses. The agency found that the protester’s quotation was deficient with respect to addressing how it would conduct the evaluation of the current program, because DIS’s only discussion of developing alternatives was with respect to establishing maximum insurable prices for each insurable nursery plant. Among the weaknesses noted was that DIS’s approach reflected excessive effort in some regards; for example, DIS indicated it would conduct a week-long kickoff meeting with RMA, but that this was usually accomplished through a 1-2 hour teleconference. As another example, DIS indicated it would have three individuals prepare and attend each listening session, which the evaluators found excessive. Also, the evaluators expressed concern that DIS proposed conducting a review of underwriting after its review of loss adjustment standards, which the evaluators found was not a logical sequence.

DIS broadly challenges its rating under each of the non-price factors, disagreeing with the agency’s technical judgments and asserting that the agency’s evaluation of its quotation reflected bias and bad faith. GAO states that in reviewing protests challenging an agency’s evaluation of quotations, it will not conduct a new evaluation or substitute its judgment for that of the agency; rather it will examine the record to determine whether the agency’s judgment was reasonable and consistent with the solicitation’s evaluation criteria, and with procurement statutes and regulations. Government officials are presumed to act in good faith, and a protester’s contention that contracting officials are motivated by bias or bad faith must be supported by convincing proof. GAO will not attribute unfair or prejudicial motives to procurement officials on the basis of inference or supposition.

Here, the protester’s arguments reflect nothing more than disagreement with the agency’s judgment as to the merits of the firm’s quotation. As noted above, the agency found that the protester’s quotation was deficient with respect to addressing how it would conduct the evaluation of the current program, because DIS only discussed alternatives to establishing maximum insurable prices for each insurable nursery plant. DIS disagrees with the assigned deficiency, arguing that developing alternatives can only be done after performing the program evaluation, and that, in any event, its quotation provided a preliminary discussion of developing alternatives. There is no merit to this argument. Vendors were instructed to discuss their approach to performing the SOW evaluation and recommendation requirements, which included, among other things, providing alternative methods for establishing liability on fluctuating nursery inventory, indemnifying nursery producers, and establishing the maximum insurable price.

Similarly, DIS disagrees with the agency’s assignment of weaknesses in the firm’s quotation. For example, with respect to the agency concern that DIS had proposed excessive effort to perform this work and failed to demonstrate knowledge of the current program, DIS argues that the “resources needed is a professional determination” and that it has experienced insurance professionals, and not “academics or economists.” As noted above, arguments such as these that only disagree with the agency’s judgment do not demonstrate that the agency unreasonably evaluated the firm’s quotation. GAO finds that the agency reasonably rejected the protester’s quotation, given that the record supports the agency’s determination that the quotation was deficient and contained a number of weaknesses.

DIS also argues that the awardee’s quotation should not have been found technically acceptable, because the awardee is comprised of economists and not insurance professionals and horticulturalists. GAO finds no merit to the protester’s contention that the awardee’s quotation should have been found technically unacceptable. Here, the RFQ provided for the evaluation of the qualifications of vendors’ key personnel. The agency found, and in fact assessed as a strength, the qualifications of the awardee’s proposed key personnel, who the evaluators found had both a nursery and crop insurance background. DIS has provided nothing to show that the agency’s evaluation judgment was unreasonable. In this regard, although DIS argues that a firm must have actuarial credentials to perform the SOW work, it cites to no specific language in the RFQ or SOW to establish that this is so. The protest is denied.


Will Debt Deal Lead to More GovCon M&A?

August 3, 2011

So say the reporters at Bloomberg:  http://www.bgov.com/news_item/DfYSph_xdgO_txs3zlFR9g (available by subscription only).

The theory is that as government agencies have their budget cuts, they’ll demand that government contractors cut prices on the products and services they provide.  This price pressure will therefore encourage government contractors to combine and preserve their margins by reducing costs as a percentage of revenue.


Bid Protest Weekly – July 20, 2011

July 25, 2011

1. One Largo Metro LLC; Metroview Development Holdings, LLC; King Farm Associates, LLC, B-404896; B-404896.2; B-404896.3; B-404896.4; B-404896.5; B-404896.6; B-404896.7, June 20, 2011

Link: GAO Opinion

Agency: General Services Administration

Disposition: Protests sustained.

Keywords: Source Selection Decision

General Counsel P.C. Highlight: Source selection officials may reasonably disagree with the ratings and recommendations of evaluators, but they are nonetheless bound by the fundamental requirement that their independent judgments be reasonable, consistent with the stated evaluation scheme, and adequately documented.

One Largo Metro LLC; Metroview Development Holdings, LLC; and King Farm Associates, LLC, protest the selection of Fishers Lane/JBG Companies, as the apparent successful offeror under a solicitation for offers (SFO), issued by the General Services Administration (GSA) for office space for the Department of Health and Human Services (HHS).

The SFO sought offers for a 15-year lease of up to 935,401 rentable square feet of office space to collocate HHS operating divisions that are currently housed in four separate locations. Offerors were informed that award would be made on a “best value” basis, considering price and three technical factors: location (with subfactors: access to existing Metrorail and access to amenities); building characteristics (with subfactors: number of buildings; planning efficiency and flexibility; and quality of building architecture, building systems, and construction); and past performance and key personnel.

Under the location factor, the access to existing Metrorail subfactor was stated to be significantly more important than the access to amenities subfactor and more important than any other subfactor. With regard to access to an existing Metrorail station, offerors were required to calculate the distance from the main entrance of their proposed buildings to the entrance of the nearest Metrorail station. In addition, offerors were required to identify the walking route for distances less than 2,500 walkable linear feet (wlf). For distances greater than 2,500 wlf, offerors were required to propose a shuttle schedule. The SFO also stated that the highest evaluation credit would be provided based upon how close a proposed building was to an existing Metrorail station.

With regard to access to amenities, offerors were informed that “[o]ffers will be evaluated for amenities within the building or otherwise available” within one mile of the building’s main entrance, and that evaluations would consider “the quantity and variety of the following amenities: fitness facilities, postal facilities . . . restaurants, day care center, fast food establishments, dry cleaners, [banks and ATMs], convenience shops, card/gift shops, hair salons, automotive service stations, and drug stores.” The SFO further advised that the best rating would be given to offers that provide the greatest variety and quantity of amenities existing at the time of occupancy within the building or within 1,500 wlf of the building. The SFO stated that amenities must currently exist or the offeror must provide evidence that the amenities will be available near the time of occupancy, such as construction contracts, signed leases or service contracts, letters of intent, “or any other credible or verifiable evidence.”

The SFO also informed offerors that the agency was required to comply with the National Environmental Policy Act (NEPA) for each offered site. Offerors were required to provide a basis for GSA to determine–in accordance with the NEPA, as implemented by the GSA NEPA Desk Guide–that the proposed building site would receive either a categorical exclusion from the requirement to prepare an environmental assessment or a finding of no significant impact.

Offers were evaluated by the agency’s technical evaluation teams (TET), which assigned adjectival ratings under each non-price evaluation factor supported by a narrative discussion that identified the offerors’ respective strengths and weaknesses. The evaluation reports were provided to the agency’s source selection evaluation board (SSEB), which also evaluated the offerors’ revised proposals. The SSEB assigned adjectival ratings under each subfactor and for the proposals overall, but did not, at this juncture, provide an adjectival rating for the three top-level evaluation factors. The SSEB rated the proposals of Fishers Lane, One Largo, and Metroview as superior overall (the highest technical rating), while King Farm’s proposal was rated highly successful overall (the next highest rating). The SSEB’s adjectival ratings were also supported by narrative discussions of the offerors’ respective strengths and weaknesses under each of the evaluation subfactors. The SSEB’s evaluation report and award recommendation were provided to the agency’s source selection authority (SSA). The SSA was concerned with the SSEB’s rationale for its ratings of the offers and directed the SSEB to reevaluate and review its source selection recommendation. The SSA stated, among other things, that the SSEB’s report did not indicate that the evaluation board had recognized that the location and building characteristics factors were of equal weight and that price was significantly less important than the technical factors. The SSEB reviewed its evaluation ratings as directed and affirmed its subfactor ratings. The SSA reviewed the SSEB’s addendum evaluation report and agreed with the board’s subfactor ratings and its recommendation to make award to King Farm. The SSA, however, disagreed with the SSEB’s conclusion that the offers were technically equal.

The SSA’s selection decision was provided to GSA’s commissioner for the National Capital Region Public Buildings Service, who also serves as the Head of the Contracting Activity (HCA) for this region. The HCA reviewed the SFO, SSP, TET reports, SSEB reports, and the SSA’s decision, and disagreed with the SSA’s conclusion that King Farm’s proposal offered the best value to the government. In making her determination, the HCA stated that she relied upon the SSEB’s subfactor and overall ratings and on the narrative discussion in the board’s evaluation report (before the SSA required the SSEB to review its ratings and before the SSEB provided factor-level ratings). While the HCA relied on the SSEB’s earlier ratings, she did not accept the SSEB’s tradeoff analysis or its recommendation for award. The HCA ranked the offers, based on the percentage of superior ratings received, in the following order: One Largo, Metroview, Fishers Lane, and King Farm. The HCA stated that the Fishers Lane offer presented the best value to the government and selected Fishers Lane for award. With regard to One Largo’s higher-rated offer, the HCA acknowledged One Largo’s technical superiority–based on the adjectival ratings–but stated that One Largo offered no technical advantage to justify its higher per square foot price.

King Farm argues that GSA’s evaluation of proposals under the access to amenities subfactor was not in accordance with the SFO. Specifically, King Farm contends that offerors were advised that the agency would consider the quantity, variety, and proximity of amenities offered. Instead of considering the quantity and variety of amenities, King Farm argues that the agency only considered the number of amenity categories offered. GAO agrees with King Farm, and states that GSA’s approach to evaluating this SFO provision was inconsistent with the terms of the provision.

Specifically, the SFO provided that, “Offers will be evaluated for both the quantity and variety of the following amenities: fitness facilities, postal facilities . . . restaurants, day care center, fast food establishments, dry cleaners, [banks/ATMs], convenience shops, card/gift shops, hair salons, automotive service stations, and drug stores. . . . The final evaluation will consider all of the available amenities and the offers will be scored based on the quantity, variety, hours and proximity of such amenities. . . . The best rating will be given to offers that provide the greatest variety and quantity of amenities with good hours of operation existing at the time of occupancy within the building or within 1,500 walkable linear feet of the building.” The plain language of the SFO requires GSA to evaluate both the overall number of amenities offered as well as the number of amenity categories (i.e., the variety). In this regard, the SFO stressed the importance of having adequate eating facilities nearby, but GSA’s simple counting of categories, such as hair salons or automotive service stations, ignores the type of amenity being offered. For example, King Farm and Fishers Lane offered different quantities of amenities within a number of different categories. GSA’s counting of amenity categories disregarded King Farm’s identification of three restaurants and three fast food establishments within 1,500 wlf of its building, as compared to identification by Fishers Lane of only one restaurant and four fast food establishments within 1,500 wlf. Similarly, GSA’s evaluation does not account for the fact that 7 of 18 amenities offered by Fishers Lane were automotive service stations.

In short, GAO finds that GSA’s assignment of adjectival ratings based only upon how many amenity categories were offered was not reasonable. GAO also disagreed that the protesters were not prejudiced by the agency’s evaluation under this subfactor.

All three of the protesters raise challenges to the HCA’s selection decision. King Farm argues that the HCA failed to perform the required tradeoff analysis, and failed to articulate any rationale for paying the price premium for the Fishers Lane proposal. One Largo, the highest-rated offeror, argues that the HCA’s recitation of offerors’ scores and prices–without additional explanation weighing the strengths and weaknesses of each proposal–was insufficient to support the HCA’s determination that the Fishers Lane proposal represented the best value to the government. Finally, Metroview argues that the HCA failed to meaningfully consider whether Metroview’s proposal, which received a higher percentage of superior ratings than the Fishers Lane proposal, merited the cost premium.

GAO states that in reviewing an agency’s evaluation of proposals and source selection decision, it will examine the supporting record to determine whether the decision was reasonable, consistent with the stated evaluation criteria, and adequately documented. Although source selection officials may reasonably disagree with the ratings and recommendations of evaluators, they are nonetheless bound by the fundamental requirement that their independent judgments be reasonable, consistent with the stated evaluation scheme, and adequately documented. In this regard, ratings, whether numerical, color, or adjectival, are merely guides for intelligent decisionmaking. An agency’s source selection decision cannot be based on a mechanical comparison of the offerors’ technical scores or ratings per se, but must rest upon a qualitative assessment of the underlying technical differences among competing offers. GAO recognizes that while agency selection officials may rely on reports and analyses prepared by others, the ultimate selection decision reflects the selection official’s independent judgment. However, the independence granted selection officials does not equate to a grant of authority to ignore, without explanation, those who advise them on selection decisions.

Here the HCA did not concur with the recommendations of the lower-level evaluators. Although the HCA adopted the subfactor-level adjectival ratings assigned by the SSEB, she did not adopt either the SSEB’s or the SSA’s analyses concerning the relative merits of the proposals or selection recommendations. Rather, without explaining the basis for her disagreement with the conclusions of the lower-level evaluators, the HCA proceeded to make conclusory pronouncements concerning which proposal offered the best value to the government. Moreover, contrary to the agency’s contentions concerning the clarity of support for the HCA’s selection decision, the record shows considerable disagreement between the SSEB and the SSA concerning the relative merits of the proposals. GAO finds from its review of the record no evidence of any meaningful consideration by the HCA of the evaluated differences in the firms’ offers. Rather, the HCA’s tradeoff assessment was based upon a mechanical comparison of the percentage of superior and highly successful ratings assigned to each offer. Where, as here, a solicitation provides for award on a best value basis, the decision as to the relative technical merit of the offers must be based upon a comparative consideration of the technical differences of the proposals.

The SSEB documented a number of differences between the offerors’ proposals, which would appear to provide discriminators for a determination of the relative technical merit of the offers. For example, under the most important subfactor, access to existing Metrorail, the offerors’ proposed buildings were at differing distances from a Metrorail station. Also, King Farm, which offered a building at the greatest distance from a Metrorail station, proposed a shuttle service plan to mitigate that weakness. Similarly, under the planning efficiency and flexibility subfactor, the SSEB noted a number of differing strengths and weaknesses in the offerors’ proposed building layouts. In the absence of a documented, meaningful consideration of the technical differences between the offerors’ proposals, the HCA could not perform a reasonable tradeoff analysis. That is, the HCA had no basis to determine that the Fishers Lane higher-priced proposal outweighed the cost savings offered by the King Farm lower rated, but lower-priced offer. Similarly, the HCA had no basis to conclude that the Fishers Lane proposal was more advantageous than the proposals of One Largo and Metroview. Accordingly, GAO sustains the protesters’ challenge to GSA’s selection of the Fishers Lane offer as the best value to the government.

GAO recommends that GSA reevaluate offers under the access to amenities subfactor in accordance with the terms of the SFO and perform and document a new selection decision consistent with GAO’s decision. If the Fishers Lane proposal is not found to reflect the best value to the government, the agency should award the lease to the offeror whose proposal is determined to be the best value to the government. GAO also recommends that the protesters be reimbursed their reasonable costs of filing and pursuing the protest, including attorneys’ fees. The protests are sustained.

2. KGL Food Services, WLL; Intermarkets Global–Costs, B-400660.7; B-400660.8, June 20, 2011

Link: GAO Opinion

Agency: Department of Defense

Disposition: Request granted in part, denied in part.

Keywords: Award of Protest Costs and Attorney’s Fees

General Counsel P.C. Highlight: In appropriate cases, GAO will limit its recommendation for the award of protest costs and attorney’s fees where a part of those costs is allocable to an unsuccessful protest issue that is so clearly severable from the successful issues as to essentially constitute a separate protest.

KGL Food Services, WLL, and Intermarkets Global (IMG) request that GAO recommend that they be reimbursed the costs of filing and pursuing their initial and supplemental protests challenging the Department of Defense, Defense Logistics Agency’s (DLA) award of a contract under a request for proposals (RFP) for the supply of a full service food line in Kuwait, Iraq, and Jordan.

KGL and IMG filed several protests challenging DLA’s award of the food services contract on numerous grounds. In its initial protest, IMG asserted that the agency failed to perform a price realism evaluation; unreasonably evaluated technical proposals (focusing primarily on IMG’s own evaluation); failed to conduct a risk assessment; and made an unreasonable best value determination. KGL protested various aspects of the awardee’s technical evaluation; its own past performance evaluation; flaws in the risk evaluation; the lack of a price realism analysis; and the tradeoff analysis. After reviewing the agency report, both IMG and KGL submitted comments and filed supplemental protests. In its supplemental protest, IMG asserted flaws in the evaluation of the awardee’s responsibility; a lack of meaningful discussions; flaws in the awardee’s technical evaluation; and flaws in its own technical and past performance evaluations. In its supplemental protest, KGL challenged DLA’s evaluation of the awardee’s responsibility, past performance, and aspects of the awardee’s technical proposal. After receipt of the supplemental agency report and the protesters’ comments, GAO convened a hearing to further develop the issues of flaws in the price realism and technical evaluations.

GAO subsequently conducted an outcome prediction alternative dispute resolution (ADR) conference in which the GAO attorney indicated that GAO likely would sustain the protests on the basis that the agency’s price realism determination was unreasonable. The GAO attorney also raised concerns about several aspects of the solicitation requirements and related technical evaluation–including the force protection requirements and evaluation of warehouse capacity–but indicated that these concerns would not serve as additional bases for sustaining the protests. Based on DLA’s determination to take corrective action–reopening limited discussions, requesting revised proposals, and making a new source selection decision–GAO dismissed the protests as academic. KGL and IMG then filed requests for reimbursement of their protest costs.

GAO recommends that a successful protester be reimbursed its incurred costs with respect to all issues pursued, not merely those upon which it prevails. Limiting recovery of protest costs in all cases to only those issues on which the protester prevailed would be inconsistent with the broad, remedial congressional purpose behind the protest cost reimbursement provisions of the Competition in Contracting Act of 1984. Nevertheless, failing to limit the recovery of protest costs in all instances of partial or limited success by a protester may also result in an unjust cost recovery. Accordingly, in appropriate cases, GAO has limited its recommendation for the award of protest costs where a part of those costs is allocable to an unsuccessful protest issue that is so clearly severable from the successful issues as to essentially constitute a separate protest. In determining whether protest issues are so clearly severable as to essentially constitute separate protests, GAO will consider, among other things, the extent to which the issues are interrelated or intertwined–i.e., the extent to which successful and unsuccessful arguments share a common core set of facts, are based on related legal theories, or are otherwise not readily severable.

While DLA concedes that both protesters should be reimbursed their costs of pursuing the price realism issue identified by GAO as clearly meritorious during the ADR session, DLA asserts that the remaining issues were not clearly meritorious and are severable from the price realism issue. KGL and IMG maintain that their remaining issues were intertwined with the price realism issue and thus, should not be severed. Even though our outcome prediction ADR was based on the likely sustain of the price realism issue, in GAO’s view, the challenges to the awardee’s technical proposal evaluation were intertwined with and based on a related legal theory to the price realism issue. In this regard, where, as here, a solicitation expressly provides for evaluation of an offeror’s understanding of the requirements, based on the realism of proposed prices, the agency is obliged to conduct a price realism analysis. Typically, this analysis consists of an individualized approach to analyzing each proposal, including a review of each offeror’s cost elements and technical proposal. While price realism and technical issues are not always intertwined, here, the price realism and technical issues are interrelated and not readily severable. Thus, KGL’s and IMG’s protest costs related to these issues (including the risk evaluation) are reimbursable.

GAO reaches the opposite conclusion with regard to KGL’s and IMG’s protests of DLA’s evaluation of the awardee’s responsibility and past performance; the protesters’ own past performance and technical evaluations; the conduct of discussions; and the best value determination. These issues are neither clearly meritorious, nor are they clearly intertwined with the price realism/ technical evaluation issues. Rather, whether the agency’s evaluations in these areas were reasonable are based on different legal theories and underlying facts than were relevant to the successful price realism challenge. Thus, GAO does not recommend payment of protest costs associated with these issues. GAO recommends that KGL and IMG be reimbursed the costs associated with filing and pursuing their protests on the price realism and related issues as discussed above, including reasonable attorneys’ fees. KGL and IMG should submit their certified claims, detailing the time spent and costs incurred, directly to the agency within 60 days of its receipt of this decision. The request is granted.


Bid Protest Weekly – July 13, 2011

July 20, 2011

1. ALOPS, B-404811.4; B-404919, June 21, 2011

Link: GAO Opinion

Agency: Department of the Army

Disposition: Protest denied.

Keywords: Technical Acceptability

General Counsel P.C. Highlight: No matter how competent an offeror may be, the technical evaluation must be based on information included in the firm’s quotation.

ALOPS protests the award of a contract under a request for proposals (RFP) issued by the Department of the Army for the construction of residential concrete huts (“b-huts”).

The RFP contemplated the award of an indefinite‑delivery/indefinite-quantity (ID\IQ) contract to the offeror that submitted the lowest-priced, technically acceptable proposal in response to the RFP’s requirements. The RFP provided that technical proposals would be evaluated for technical approach, past performance and price. Under the technical approach factor, which was to be evaluated on a pass/fail basis, the RFP identified the following six subfactors: (1) mobilization and construction plans; (2) material delivery and installation plans; (3) quality control plans; (4) safety plans; (5) badging plans; and (6) design, drawings and specifications.

The RFP’s statement of work (SOW) required, among other things, a “Precast/Pre-stressed Concrete Institute (PCI) certified plant” and a quality control plan “which details the contractor’s plan to obtain PCI certification.” The SOW also required the contractor to provide “a design and calculations bearing the stamp of a registered professional [structural] engineer, registered [in] one of the United States.” Additionally, the SOW required that “[t]he finished b-hut shall be assembled from pre-cast units capable of being placed within an imaginary box which measures 10 feet by 10 feet by 37 feet for easy shipment to remote areas.”

The agency found ALOPS’s proposal to be technically unacceptable for failing to adequately demonstrate the offeror’s ability to meet the SOW requirements. ALOPS filed this protest. GAO states that in reviewing a protest against the propriety of an evaluation, it is not the agency’s role to independently evaluate proposals and substitute its judgment for that of the contracting activity. Rather, GAO will review an evaluation to ensure that it was reasonable and consistent with the evaluation criteria in the solicitation and applicable procurement statutes and regulations; a protester’s mere disagreement with the evaluation does not show it lacked a reasonable basis.

The RFP required each offeror to submit a sufficiently detailed technical proposal demonstrating how it would meet all of the SOW requirements, and cautioned that the failure to do so would be considered a technical deficiency (for which a rating of “fail” was to be assigned). The RFP’s SOW required a PCI-certified plant as well as a quality control plan detailing how the contractor would obtain the required PCI certification. The record reflects that the ALOPS’s proposal, at best, merely confirmed its intent to supply a PCI-certified plant–it did not provide any detail to explain how ALOPS planned to obtain the required certification, as required by the RFP. In this regard, the protester’s proposal merely states an intention to “submit all the documents needed” for PCI certification. Since ALOPS failed to provide any detail regarding its plan for obtaining PCI certification, as contemplated under the RFP’s quality control plans subfactor, the agency reasonably assigned ALOPS’s proposal a deficiency in this regard, and GAO has no basis to question the reasonableness of the rejection of the protester’s proposal as technically unacceptable.

Similarly, the record reflects that the agency reasonably identified a deficiency in the protester’s proposal for failing to identify a structural engineer registered in the United States. The SOW required the contractor to provide “a design and calculations bearing the stamp of a registered professional [structural] engineer, registered [in] one of the United States.” The only professional identified in the protester’s proposal was a civil engineer registered in Lebanon. Moreover, the technical drawings, which were included in the protester’s proposal, do not bear any professional seals or signature of any kind, much less those of an American-licensed structural engineer. Furthermore, the narrative information in the proposal submitted by ALOPS fails to provide any information as to how the firm planned to comply with the SOW requirement. GAO states that an offeror is responsible for demonstrating affirmatively the merits of its proposal and risks rejection if it fails to do so. No matter how competent an offeror may be, the technical evaluation must be based on information included in the firm’s quotation. The RFP here required the offerors to submit a technical approach demonstrating their ability to meet all of the SOW requirements. Since the protester’s proposal failed to do so, GAO has no basis to question the agency’s rejection of ALOPS’s proposal as technically unacceptable under the terms of the RFP. The protest is denied.

2. MPRI, Division of L-3 Services, Inc.; LINC Government Services, B-402548; B-402548.2; B-402548.3; B-402548.4; B-402548.5; B-402548.6, June 4, 2010

Link: GAO Opinion

Agency: Department of the Army

Disposition: Protest sustained.

Keywords: Evaluated Costs

General Counsel P.C. Highlight: An Agency must have a rational basis to make evaluation adjustments to an offerors proposed costs.

MPRI, Division of L-3 Services, Inc. and LINC Government Services (LGS) protest the award of a contract by the Department of the Army, U.S. Army Materiel Command, to DynCorp International, LLC under a request for proposals (RFP), for Combined Security Transition Command-Afghanistan (CSTC-A), Afghanistan Ministry of Defense (MoD), and Afghan National Army (ANA) mentoring and program support.

The solicitation contemplated the award of a cost-plus-fixed-fee contract, with a two month phase-in, a base period of two years, and one option year, for the services of qualified personnel to provide dedicated in-depth mentoring, training, subject matter expertise, and programmatic support to CSTC-A staff and the Afghan MoD for the purpose of assisting the MoD and associated Afghan National Army (ANA) forces in assuming full responsibility for their own security needs. In total, the SOW provided for the contractor to provide 275 staff in five skill levels or categories, including senior mentor (eight staff), mentor (128), subject matter expert (32), senior trainer (30), and trainer (77), each with specified minimum educational and experience qualifications. Award was to be made on a “best value basis” considering four evaluation factors: (1) capability (with subfactors for key personnel, management plan, technical approach, quality control and transition plan); (2) performance risk, under which the offeror’s past performance was to be evaluated; (3) small business participation; and (4) cost.

While MPRI’s proposal initially received an overall good rating under the capability factor, as well as good ratings under the key personnel and management plan subfactors, these ratings were ultimately downgraded to acceptable on the basis of agency concerns arising from MPRI’s proposal of a significant reduction in direct labor rates relative to those under its incumbent contract. Although MPRI in its proposal generally attributed its proposed reduction in compensation to “updating salaries based on the current market conditions,” the Army determined that MPRI had “grossly underestimated” its labor costs such that a “direct labor cost growth of approximately [REDACTED]% would occur” as MPRI was forced to increase its labor compensation to the current levels under its incumbent contract. The downgrading of MPRI’s proposal under the key personnel and management plan subfactors resulted in the overall reduction to acceptable under the overall capability factor. MPRI’s proposal otherwise received an excellent rating under the technical approach subfactor on account of its exhibiting a “clear understanding of the CSTC-A mission” and including a clear description of how MPRI would perform the SOW; a good rating under the quality control subfactor (notwithstanding the lack of a dedicated quality control manager) on account of such strengths as its tailored quality control process measuring individual and program performance, weekly activity reports to CSTC-A allowing rapid resolution of problem areas, and an annual work plan for each employee and section; and a good rating under the transition subfactor.

While LGS’s proposal received a good rating under the management plan subfactor on account of such strengths as the program manager being empowered to make decisions and commit corporate resources, it received only an acceptable rating under the technical approach subfactor as a result of an evaluated failure to adequately describe its process for mentoring Afghan personnel, substituting instead an over-reliance on prior military experience.

Although DynCorp’s evaluated cost ($249.1 million) was significantly higher than MPRI’s ($212.7 million), the source selection authority (SSA) determined that DynCorp’s proposal was “vastly superior” under the capability factor, noting in particular the “inherent risk” in MPRI’s proposed reduction in salaries and the fact that five of its eight senior mentors will serve only as team leaders and not also as mentors to Afghan officials. The SSA determined that these considerations outweighed MPRI’s lower cost. Likewise, the SSA determined that DynCorp’s superiority under the capability factor, including a strong corporate knowledge of and experience in similar mentoring, in contrast to LGS’s over-reliance on its leaders’ military background, and DynCorp’s existing relationship with its subcontractors, offset its higher cost. The agency thus made award to DynCorp, following which MPRI and LGS filed these protests challenging the evaluation.

MPRI challenges the agency’s cost realism analysis, which resulted in an upward adjustment in its proposed labor rates. GAO states that when an agency evaluates proposals for the award of a cost-reimbursement contract, an offeror’s proposed costs are not considered controlling because, regardless of the costs proposed the government is bound to pay all actual, allowable costs. Consequently, an agency must perform a cost realism analysis to determine the extent to which an offeror’s proposed costs represent what the contract should cost, assuming reasonable economy and efficiency. An agency’s cost realism analysis requires the exercise of informed judgment, and GAO will review this judgment only to see that it was reasonable. While a realism analysis need not achieve scientific certainty, the methodology employed must provide some measure of confidence that the agency’s conclusions about the most probable costs under an offeror’s proposal are reasonable and realistic.

The record shows that the agency initially reviewed offerors’ proposed labor rates for discrepant rates by comparing them to a range of rates for each position calculated based on one standard deviation (OSD) from the average of the five offerors’ proposed rates for the position. The agency then further reviewed the rates based on the circumstances of each offeror, adjusting some, but not all, of the rates outside the range, as well as some, but not all, of the rates within the range. As shown by the chart, MPRI’s proposed labor rates for the labor categories were lower than the OSD range the agency considered realistic. Based on its realism analysis, the agency determined that the reduction was not justified and adjusted MPRI’s rates for all five labor categories upward to the rates under MPRI’s current Afghanistan mentoring contract. This actually left three of the five resulting rates higher than the OSD range.

As an initial matter, GAO finds the agency’s rejection of MPRI’s proposed labor rates as unsupported to be reasonable. GAO states that an offeror has the burden of submitting an adequately written proposal, and it runs the risk that its proposal will be evaluated unfavorably when it fails to do so. MPRI’s proposal generally attributed the percentage reduction in its incumbent labor rates to “current market conditions,” but included no information regarding current market conditions. Further, MPRI’s proposed rates not only were significantly lower than its current rates for the same work, but also were significantly lower than the rates under DynCorp’s MSNTC-I contract. Finally, MPRI’s proposed rates were lower than the average of all offerors’ proposed rates for certain labor categories; lower than the OSD range for other labor categories; lower than all of the other proposed rates for the certain labor categories; and lower than some of the other proposed rates. While GAO finds that the agency reasonably rejected MPRI’s proposed labor rates as unrealistic, GAO does agree with MPRI that the extent of the resulting upward adjustment in the rates was unreasonable. In this regard, GAO reviews an agency’s conclusions about the most probable costs under an offeror’s proposal in view of the cost information reasonably available to the agency at the time of its evaluation. In increasing MPRI’s labor rates to the level under its current contract, thereby rejecting any reduction, the agency’s realism evaluation assumed rates for MPRI that were higher than the average proposed rate for each of the labor categories; higher than the OSD range for three of the five labor categories; higher than the rates proposed by any offeror for three of the labor categories; and higher than the rates proposed by three of the other offerors for the remaining two categories. The adjusted rates for MPRI also were higher than the rates for three of the five labor categories under DynCorp’s similar MSNTC-I contract, which rates DynCorp itself proposed to reduce for this procurement. In some instances, the adjustment left MPRI’s rates significantly higher than these other reference points.

The significance of these reference points in determining the realism of MPRI’s evaluated rates is highlighted by testimony at the hearing conducted by GAO in this matter. In this regard, when asked what the most probable labor rates would be for foreign nationals in Afghanistan, the cost analyst responded that “competition generally dictates what a reasonable price is,” that the “market rates” were determined by competition, and that the average of the rates proposed by the five offerors thus represented “a reasonable starting point.” The cost analyst then went on to state that MPRI’s current contract rates did not represent “the market rates.” GAO concludes that the record does not support the magnitude of the upward adjustments to MPRI’s proposed labor rates, and that the cost evaluation therefore was unreasonable.

MPRI also challenges the downgrading of its technical proposal under the capability factor based on the cost evaluation conclusions. Again, the Army determined that MPRI had “grossly underestimated” its labor costs as MPRI was forced to increase its labor compensation to the levels under its current contract, with the result that MPRI would experience “high turnover, a lack of qualified personnel, and/or be forced to work with personnel of lesser quality than those proposed.” GAO agrees that the technical evaluation was flawed. While it may be that any reduction in compensation would lead to some additional turnover, it is reasonable to assume that the degree to which MPRI’s rates were deemed inadequate determined the extent to which its proposal was downgraded under the capability factor. Thus, since GAO has found that the inadequacy of MPRI’s rates was unreasonably exaggerated in the evaluation–as reflected in the excessive increase in MPRI’s proposed rates–GAO also finds that the downgrading of MPRI’s technical proposal based on the same flawed cost evaluation results likewise was unreasonable. Accordingly, GAO concludes that MPRI was prejudiced by the agency’s actions and sustain the protest on this basis.

LGS and MPRI maintain that DynCorp’s proposal should have been evaluated less favorably under the performance risk factor. GAO states that it will review a past performance evaluation to ensure that it was reasonable and consistent with the solicitation’s stated evaluation criteria and applicable statutes and regulations. The evaluation of past performance, by its very nature, is subjective; a protester’s disagreement with the agency’s judgment does not demonstrate that those judgments are unreasonable.

The evaluation of DynCorp’s proposal as offering low performance risk was reasonable. In this regard, the solicitation provided for the agency to “conduct a Performance Risk assessment based on the quality of the offeror’s recent (within the past three years) and relevant past performance as well as proposed major subcontractors, as it relates to the probability of successful accomplishment of the required effort.” Offerors were required to identify a minimum of three and a maximum of five contracts; describe for each how the effort is “similar to the requirements of [the] solicitation,” the objectives achieved, the reasons for any shortcomings, and any corrective action taken to avoid reoccurrence; and furnish a past performance questionnaire (PPQ) “to the Government/commercial contracting activity and Government/commercial technical representative responsible for the past/current contract. DynCorp’s proposal cited five prior contracts and DynCorp’s MNSTC-I contract was viewed by the agency as most relevant to the requirement here; indeed, the contracting agency for the MNSTC-I contract described it as identical to the requirement here. DynCorp’s proposal cited its accomplishments under that contract, and also cited two letters of concern regarding a delay in the contract award, which had resulted DynCorp’s losing 90% of its job candidates and had caused initial problems in staffing the contract effort. Despite the staffing issues, the contracting agency’s PPQ response for this contract characterized DynCorp’s overall performance as excellent or very good under nearly all PPQ evaluation categories; stated that the contract had “low administrative issues” and that the agency was “[v]ery pleased with the management of this contract and its responsiveness to [the government's] changing needs”; and indicated that the agency would recommend DynCorp for other contracts. The Army assigned DynCorp a low performance risk rating based on its finding that DynCorp had performed contracts similar in size, scope and complexity to the requirement here; in particular, that it had trained senior leaders from 11 different ministries and agencies under its MNSTC-I contract; that it has had a “permanent presence in Afghanistan since 2003,” including five years mentoring and training the Afghan police; and that its performance had been rated as either exceptional or very good.

The protesters primarily assert that the agency failed to consider the problems under DynCorp’s contracts, and focus in particular on the agency’s failure to receive a PPQ for the CIVPOL-A contract. The evaluation was unobjectionable. As discussed, the agency was aware that DynCorp had encountered problems under its prior contracts. While DynCorp acknowledged shortcomings in its performance under certain contracts, it also explained the measures taken to address the problems. The PPQs received by the agency confirmed that DynCorp’s acknowledged shortcomings were not viewed as significant by the contracting activities in question, and that DynCorp instead was considered to be a very good or excellent contractor. GAO concludes that there is no basis for questioning DynCorp’s low performance risk rating.

GAO sustains MPRI’s protest on the grounds that the cost and technical evaluations were unreasonable and recommends that the agency reevaluate the proposals using a methodology that reasonably accounts for the likely cost for each offeror to staff its proposed capability approach. In addition, GAO recommends that MPRI be reimbursed the costs of filing and pursuing its protest, including reasonable attorneys’ fees. MPRI’s protest is sustained. LGS’s protest is denied.

3. DynCorp International, LLC, B-403065; B-403065.2, September 17, 2010

Link: GAO Opinion

Agency: Department of the Army

Disposition: Protest denied.

Keywords: Proposal Revisions

General Counsel P.C. Highlight: Offerors are responsible for following explicit proposal revision instructions.

DynCorp International, LLC protests the award of a contract, under a Department of the Army, Army Materiel Command, request for proposals (RFP), for life cycle support for C-12, RC‑12, and UC-35 aircraft.

The RFP contemplated the award of a primarily fixed-price contract, with a base year and four option years, for life cycle contract support (LCCS)–including maintenance, repair, servicing, modification, parts, material, tooling, equipment and management for 113 C-12, 49 RC-12 and 28 UC-35 aircraft. Award was to be made to the offeror that met the entry gate criterion of possession of, or an acceptable plan to obtain, requisite Federal Aviation Administration (FAA) Repair Station Certificates, and whose proposal represented the “best value” considering four evaluation factors: (1) technical-LCCS (with subfactors for technical approach, depot/propulsion/”over & above” work,[1] engineering approach, business relationships/certifications, and transition); (2) past performance; (3) management; and (4) price.

Based on the initial proposals, and the offerors’ responses to agency errors, omissions and clarifications (EOC) notices to offerors, the Army conducted discussions with DynCorp (the incumbent contractor) and the eventual awardee–culminating in a request for final proposal revisions (FPR).

Although DynCorp’s evaluated price was approximately 6.6% lower than the awardee’s, the agency evaluators reported to the SSA that they were unable to determine whether DynCorp’s price was fair, reasonable, complete, or realistic for the work to be performed as a result of uncertainties arising from: (1) a greater-than-expected reduction–approximately 15% rather than the expected 9%–in DynCorp’s FPR price relative to its initial price; (2) the fact that DynCorp’s pricing spreadsheets included “circular errors,” even after the agency’s concern in this regard was raised during discussions; and (3) a Defense Contract Audit Agency (DCAA) report identifying material weaknesses in DynCorp’s estimating system.

DynCorp challenges the evaluation of its FPR on the basis that several of the assessed disadvantages with respect to its technical-LCCS proposal resulted from the agency’s failure to take into account information that DynCorp furnished in responses to agency clarification or discussion requests, but did not include in its FPR. GAO states that where a protest challenges an agency’s evaluation of proposals, it will review the evaluation record to determine whether the agency’s judgments were reasonable and consistent with the stated evaluation criteria and applicable procurement statutes and regulations.

DynCorp’s initial technical proposal stated that: “Upon Government approval of the maintenance plan, the Site Supervisor/Lead Mechanic takes the actions necessary to arrange and provide facilities, tools, test equipment, parts/material and other support, as required, to execute the maintenance plan.” Since the solicitation did not provide for government approval of the maintenance plan, the Army viewed DynCorp’s approach as inconsistent with the contractor’s responsibility for the development and implementation of maintenance approaches for each aircraft. In response to the agency’s request that DynCorp clarify its intent with respect to the above language, DynCorp responded that its “intent is to ensure that the Government/COR is fully informed about the facilities, tools, test equipment, parts/material, and other support required for the upcoming scheduled and unscheduled maintenance tasks.”

DynCorp asserts that the Army unreasonably failed to consider its EOC response in the evaluation. This argument is without merit. The agency specifically instructed offerors, when it first issued items for negotiation [IFN] at the commencement of discussions, that “[i]t is imperative that your FPR incorporate all changes to the proposal made by responses to the EOCs and these IFNs.” Likewise, when the agency requested FPRs at the conclusion of discussions, it again instructed offerors that “[r]evisions to your proposal as a result of these discussions, and any EOCs or IFNs, shall be clearly marked in . . . changed pages . . . . It is imperative that your FPR incorporate all changes to the proposal made by responses to the EOCs and these IFNs.” Contrary to these explicit instructions, DynCorp failed to incorporate its EOC response into its FPR, with the result that its FPR included its proposal for government approval of the maintenance plan. The Army reasonably determined that this proposal was inconsistent with the PWS.

DynCorp asserts that the Army’s evaluation of its FPR unreasonably failed to consider the prior IFN response to C-2738-IFN and the response to C‑1032-EOC, wherein DynCorp stated that it would revise its proposal to indicate that the annual weight and balance records review would be performed in accordance with AR 95-1, as required by the PWS. This argument is without merit for the same reason as discussed above. That is, the Army repeatedly, explicitly instructed offerors that “[i]t is imperative that your FPR incorporate all changes to the proposal made by responses to the EOCs and these IFNs.” Although DynCorp did change section 1.1.3 of its FPR as proposed, it did not incorporate the proposed change to section 1.1.1 into its FPR. This failure created an inconsistency in the FPR as to DynCorp’s intention to comply with AR 95-1. In light of this inconsistency, the agency reasonably determined that DynCorp had not unequivocally committed itself to meet the AR 95-1 binding certification requirement, and reasonably downgraded the proposal on this basis. Based upon GAO’s review of all of DynCorp’s timely challenges evaluation, it finds no basis for questioning the evaluated superiority of the awardee’s proposal under the (most important) technical‑LCCS factor.

DynCorp challenges the overall evaluation of the awardee’s past performance as good/low risk. In this regard, the RFP required offerors to furnish a description of all relevant Government and/or commercial contracts including prime contracts and major subcontracts received or performed during the past five years. Offerors also were required to provide past performance questionnaires (PPQ) to references for the identified contracts. The RFP provided that the agency would “focus its inquiries on the offeror’s and any major subcontractor’s records of performance as it relates to the solicitation requirements,” including past and current performance records concerning aircraft maintenance and parts supply; compliance with FAA regulations, and safety and airworthiness requirements; ability to perform/develop FAA Supplemental Type Certificates; ability to select, retain, train, support and replace key personnel; timeliness of performance; quality of results; and customer satisfaction, cooperative behavior and Government interface.

The awardee’s proposal identified three relevant contracts, for all of which references provided PPQs. Only one of the three contracts was viewed as indicating a moderate (rather than very low) level of performance risk. In this regard, the past performance information received by the Army indicated that a subcontractor under the awardee’s contract with U.S. Customs & Border Protection (CBP) for maintenance, logistics management and engineering support for 17 different aircraft types, used an inexperienced workforce, resulting in delivery delays, unavailable P-3 aircraft, and cost overruns. However, while the awardee was faulted for its oversight of the subcontractor, and a telephone inquiry by the Army confirmed dissatisfaction with contractor performance, both PPQs received for the contract rated overall quality of performance and schedule performance good, performance management satisfactory, and management of key personnel good (one PPQ) or satisfactory (second PPQ). In addition, the agency received reports of exceptional/excellent or good performance under the awardee’s two other relevant contracts. While, as noted by DynCorp, the poor performance of the awardee’s subcontractor and poor supervision by the awardee under its CBP contract resulted in a moderate performance risk assessment for that contract, that rating did not preclude the agency from finding that the totality of the awardee’s past performance warranted a good/low risk rating. The protest is denied.

4. Northrop Grumman Technical Services, Inc., B-404636.11, June 15, 2011

Link: GAO Opinion

Agency: Department of the Army

Disposition: Protest denied.

Keywords: Corrective Action

General Counsel P.C. Highlight: Corrective Action following a prior protest must be reasonably related to the areas expressed by GAO as areas of concern, but will not necessarily require a reopening of the competition.

Northrop Grumman Technical Services, Inc. (NGTS) protests the corrective action taken by the Department of the Army, U.S. Army Materiel Command (AMC), in response to protests by NGTS, L-3 Communications Integrated Systems, and Lockheed Martin Corporation (LM), against the Army’s award of a contract to The Boeing Company, under a request for proposals (RFP), for the development and initial production of the Enhanced Medium Altitude Reconnaissance and Surveillance System (EMARSS).

The solicitation provided for award on a “best value” basis considering four evaluation factors: technical, including subfactors for integration approach and aircraft approach; cost/price; performance risk, reflecting an assessment of the offeror’s likelihood of success based on recent and relevant past performance by the offeror and its major subcontractors; and small business participation. Offerors were required to demonstrate in their proposals (with a “complete discussion and analysis”) that their proposed EMARSS systems will meet certain minimum, threshold performance requirements identified in the solicitation Performance Based Specification (PBS), as well as to identify where their proposed systems will exceed the threshold requirements and/or meet the objective requirements. Boeing, NGTS, L-3 and LM submitted proposals in response to the solicitation. After conducting extensive discussions and obtaining revised proposals, the Army determined that Boeing’s proposal and EMARSS system represented the best value. NGTS, L-3 and LM thereupon filed protests challenging the source selection.

The protesters raised numerous challenges to the evaluation of proposals under each of the evaluation criteria. Among the arguments raised were challenges to the agency’s evaluation of the performance of the offerors’ EO/IR sensors as part of their proposed EMARSS systems, including assertions that Boeing’s proposed EMARSS system improperly was determined to be compliant with a number of the PBS threshold requirements. After a hearing was held, GAO conducted an outcome prediction alternative dispute resolution conference in which the cognizant GAO attorney indicated that GAO likely would sustain L-3′s protest against the past performance evaluation. In this regard, the GAO attorney indicated that it appeared that the Army, in evaluating Boeing’s proposal under the performance risk factor, had improperly given Boeing credit for the past performance of a subcontractor that, although critical to Boeing’s proposed effort, nevertheless did not satisfy the prerequisite of being a major subcontractor for consideration in the past performance evaluation. In addition, the GAO attorney expressed concerns about the adequacy of the agency’s evaluation of the performance of the EO/IR sensors as part of the offerors’ proposed EMARSS systems.

In response, the agency advised the parties that, consistent with the provisions of the solicitation governing the scope of the performance risk evaluation, the Army would reevaluate the performance risk of Boeing, without consideration of the past performance of the cited critical, but not major, subcontractor. The agency further advised that the Army would also reexamine the performance validations for all offerors as to the performance of their EO/IR sensors. Finally, the agency advised that after performing the above, the Source Selection Authority would render a new source selection decision.

NGTS challenges the extent of the proposed corrective action. NGTS asserts that the corrective action is unduly limited, and that the agency instead should reopen discussions with all offerors followed by the opportunity to generally revise proposals. GAO states that contracting officers in negotiated procurements have broad discretion to take corrective action where the agency determines that such action is necessary to ensure a fair and impartial competition. As a general matter, the details of a corrective action are within the sound discretion and judgment of the contracting agency. In this regard, an agency’s discretion when taking corrective action extends to a decision on the scope of proposal revisions, and there are circumstances where an agency may reasonably decide to limit the revisions offerors may make to their proposals. GAO generally will not object to the specific corrective action, so long as it is appropriate to remedy the concern that caused the agency to take corrective action.

Here, the Army’s intended corrective action focused not only on the very procurement deficiency (an unreasonable past performance evaluation) that led to GAO’s ADR prediction that L‑3′s protest would be sustained, but also on the concerns expressed by GAO regarding the adequacy of the evaluation of the performance of the EO/IR sensors as part of the offerors’ proposed EMARSS systems. Since the agency’s corrective action responded to the areas of concern identified by GAO, and nothing in NGTS’s protest demonstrates that the agency’s approach was an abuse of discretion, GAO denies NGTS’s protest regarding the scope of the corrective action. The protest is denied.

5. Western State Design, B-404921, June 27, 2011

Link: GAO Opinion

Agency: Department of Veterans Affairs

Disposition: Protest denied.

Keywords: Technical Evaluation

General Counsel P.C. Highlight: it is not GAO’s role to independently evaluate proposals and substitute its judgment for that of the contracting activity.

Western State Design (WSD) protests the award of a contract under a request for proposals (RFP), issued by the Department of Veterans Affairs (VA), to furnish and install commercial laundry equipment at the VA Medical Center in Buffalo, New York.

The agency issued the solicitation contemplating the award of a fixed-price contract to deliver and install laundry equipment described as a “medium production folder cross folder with large piece stacker machine” within 14 days of contract award. Among other requirements, the offered equipment had to be compatible with the existing laundry equipment, had to be suitable for installation in the available space, and had to include lock-out and tag-out devices. Award was to be made to the offeror whose proposal was determined to be most advantageous to the government, considering four evaluation factors: (1) technical capability; (2) price; (3) quality/past performance; and (4) work plan.

The agency rated WSD’s proposal as marginal overall, with marginal ratings for the technical capability and work plan factors, as well as a very low performance risk rating for the past performance factor. The marginal ratings resulted from WSD’s failure to adequately address several solicitation requirements. As it relates to the protest, the agency found that WSD failed to establish how its equipment would be compatible with the existing Braun laundry equipment.

WSD’s challenge of the agency’s technical evaluation is without merit. GAO states that in reviewing a protest against the propriety of an evaluation, it is not GAO’s role to independently evaluate proposals and substitute its judgment for that of the contracting activity. Rather, it will review an evaluation to ensure that it was reasonable and consistent with the evaluation criteria in the solicitation and applicable procurement statutes and regulations; a protester’s mere disagreement with the evaluation does not show it lacked a reasonable basis.

Here, the underlying record supports the agency’s evaluation. In this regard, under the technical capability factor, the solicitation stated that each proposal would be evaluated as to whether the offered equipment was compatible with the existing Braun laundry equipment. Notwithstanding repeated requests during discussions asking the protester to explain “how [its] equipment is compatible with and will interface with the existing Braun equipment,” WSD failed to demonstrate that this was in fact the case, as determined by the agency’s evaluators. In its comments responding to the agency report on this issue, WSD does not meaningfully rebut the agency’s assessments regarding its failure to satisfy this requirement; rather, the protester simply repeats the general assurance it provided to the agency during discussions that its equipment “would be fully compliant.” GAO states that an offeror is responsible for demonstrating affirmatively the merits of its proposal and risks rejection if it fails to do so. No matter how competent an offeror may be, the technical evaluation must be based on information included in the firm’s quotation. Having failed to demonstrate that its equipment met the agency’s requirements, the agency properly downgraded WSD’s proposal on this basis. The protest is denied.

6. Torres International, LLC, B-404940, May 31, 2010

Link: GAO Opinion

Agency: Department of State

Disposition: Protest denied.

Keywords: Responsibility Determination

General Counsel P.C. Highlight: in making a negative responsibility determination, a contracting officer is vested with a wide degree of discretion and, of necessity, must rely upon his or her business judgment in exercising that discretion.

Torres International, LLC (TI JV), protests the Department of State’s (DOS) determination that TI JV was not responsible to perform the services required under a task order request for proposals (TORFP), issued by DOS for the provision of protective security services in Irbil, Iraq.

DOS awarded multiple indefinite-delivery/indefinite-quantity (ID/IQ) contracts in support of the Worldwide Protective Service (WPS) program. An IDIQ contract was awarded to TI JV, a joint venture consisting of Torres Advanced Enterprise Solutions, LLC (Torres AES), Sallyport Global (Sallyport), and Blue Hackle North America (BHNA). Under the WPS program, all ID/IQ contractors are required to hold top secret facility clearances. According to the agency, all three of the TI JV members would each have to have a top secret facility clearance in order for TI JV to be issued a top secret facility clearance. The award notification advised TI JV that it was responsible for obtaining an interim top secret facility clearance within 60 days of the ID/IQ contract award and a final clearance within 120 days of award. TI JV was also advised that until a top secret facility clearance was issued, it could not perform any work under the ID/IQ contract. DOS issued a cure notice to TI JV concerning its failure to obtain the required facility clearance. TI JV was specifically advised that, as a matter of responsibility, it was ineligible for award of any task orders until it received a final top secret facility clearance. Torres AES responded and advised the agency that it was the majority and senior joint venture member of TI JV and that each of the joint venture members had completed all required steps to obtain clearances. Torres AES indicated that it would “fully absorb” TI JV and immediately request that the Defense Security Service (DSS) provide a top secret facility clearance to TI JV based on Torres AES’ existing facility clearance. Torres AES further stated that Sallyport and BHNA would “remain on the sidelines” while awaiting their clearances and would “return to the [joint venture]” once their facility clearances were granted. DOS considered TI JV no longer to be a responsible party to perform task orders issued under the WPS contract.

The agency issued the subject TORFP for the provision of protective security services in Irbil, Iraq. The TORFP included two mandatory requirements. The first mandatory requirement was that offerors were required to submit evidence of current private security company licenses issued from both the Iraqi and Kurdistani Ministries of Interior. The second mandatory requirement was for offerors to provide evidence of their top secret facility clearances with their proposals. In this regard, the TORFP stated that DOS would not evaluate proposals from offerors that lacked current top secret facility clearances. TI JV filed a timely agency-level protest challenging as unduly restrictive the requirement that offerors possess a Kurdistani license. TI JV submitted a proposal in response to the TORFP and included evidence that it had a top secret facility clearance. DOS denied the agency-level protest and again advised TI JV that it remained ineligible for award of the task order because it did not possess a top secret facility clearance.

TI JV contends that the agency’s negative responsibility determination on the basis that TI JV lacked the required facility clearance was improper. GAO states that in making a negative responsibility determination, a contracting officer is vested with a wide degree of discretion and, of necessity, must rely upon his or her business judgment in exercising that discretion. Although the determination must be factually supported and made in good faith, the ultimate decision appropriately is left to the agency, since it must bear the effects of any difficulties experienced in obtaining the required performance. For these reasons, GAO generally will not question a negative determination of responsibility unless the protester can demonstrate bad faith on the part of the agency or a lack of any reasonable basis for the determination. GAO’s review is based on the information available to the contracting officer at the time the determination was made.

Here, GAO finds that the contracting officer’s negative determination of TI JV’s responsibility was reasonable. While TI JV submitted with its proposal a letter from DSS granting a top secret facility security clearance, TI JV recognizes that the clearance was based on a restructuring of the joint venture that in essence eliminated two of the joint venture members. The contemporaneous record shows that TI JV did not just change the ownership percentages of its joint venture members; it eliminated two of the three joint venture members. As the agency makes clear, it awarded the ID/IQ contract to a joint venture that consisted of three firms; it did not award the contract to an entity that consisted only of Torres AES. The record shows that DOS specifically advised the protester that it did not approve of Torres AES assuming 100% member interest in TI JV. Moreover, the record further shows, and the protester acknowledges, that two of the joint venture members did not have top secret facility clearances 120 days after award of the ID/IQ contract and still did not have top secret facility clearance when the protester supplemented its corrective action plan with the agency after filing this protest. Based on this record, GAO finds reasonable the contracting officer’s judgment that TI JV, as that entity was structured when it received the IDIQ contract, did not possess a top secret facility clearance. Since TI JV did not have the appropriate clearance required by the solicitation, the contracting officer reasonably determined that TI JV was ineligible for award of this task order. The protest is denied.

7. Ohana Industries, Ltd., B-404941, June 27, 2010

Link: GAO Opinion

Agency: Department of the Interior

Disposition: Protest denied.

Keywords: 8(a) sole source awards

General Counsel P.C. Highlight: SBA and contracting agencies have broad discretion in selecting procurements for the 8(a) program. GAO will not consider a protest challenging a decision to procure under the 8(a) program absent a showing of possible bad faith on the part of government officials, or that applicable regulations may have been violated

Ohana Industries, Ltd. protests the decision of the Department of the Interior, Fish and Wildlife Service (FWS) and the Small Business Administration (SBA), to place an FWS requirement for restoration/construction work on the historic Kilauea Lighthouse, Kilauea Point National Wildlife Refuge, Kauai, Hawaii, under SBA’s section 8(a) program for award of a sole-source contract

The requirement is for design/build services for Phase II restoration/construction work on the Kilauea Lighthouse structure, the lightkeepers’s quarters, an oil storage building and landing station. Ohana, a small business concern, competed successfully for the Phase I contract, which was limited to the repair and rehabilitation of the historic lantern of the Kilauea Lighthouse. To address the Phase II requirement, the agency initially planned to proceed with a competitive acquisition among existing design/build indefinite-delivery/indefinite-quantity (ID/IQ) multiple-award task order contract (MATOC) holders. FWS decided to pursue this requirement as a sole-source award under the 8(a) program. By letter to the SBA, FWS offered to contract with the awardee for the lighthouse restoration under the section 8(a) program. FWS considered the Phase I and Phase II work to be significantly different, such that the Phase II work constituted a “new” requirement. When FWS had not received SBA’s acceptance letter within several weeks, the agency decided to award the work as a task order under its MATOC to the same awardee. Ohana protested and FWS subsequently advised GAO that it would terminate the awardee’s task order and instead award a sole-source section 8(a) contract to the awardee for the required restoration work. FWS requested that SBA cancel its original request and submitted a revised letter to SBA, offering to contract with the awardee under the section 8(a) program. By e-mail SBA accepted the requirement into the 8(a) program. In connection with the protest, SBA has advised GAO that an adverse impact analysis was not required because the Phase II work constituted a new, separate and distinct restoration/construction requirement.

Ohana asserts that FWS failed to provide SBA with complete and accurate information as part of its section 8(a) program offering, and that FWS and SBA incorrectly determined that the Phase II work constituted a new requirement. GAO states that section 8(a) of the Small Business Act authorizes SBA to contract with other government agencies and to arrange for the performance of those contracts by awarding subcontracts to socially and economically disadvantaged small businesses. The Act affords SBA and contracting agencies broad discretion in selecting procurements for the 8(a) program; GAO will not consider a protest challenging a decision to procure under the 8(a) program absent a showing of possible bad faith on the part of government officials, or that applicable regulations may have been violated. Under the Act’s implementing regulations, SBA may not accept any procurement into the section 8(a) program if doing so would have an adverse impact on an individual small business, a group of small businesses in a specific geographical location, or other small business programs. However, SBA regulations explicitly provide that an adverse impact determination need not be performed where a “new” requirement is offered to the 8(a) program. As is pertinent here, the regulations specifically note that “[c]onstruction contracts, by their very nature (e.g. the building of a specific structure), are deemed new requirements.”

Here, SBA determined that the Phase II requirement constituted separate and distinct construction services, such that an adverse impact analysis was not required. SBA concluded that Ohana’s Phase I contract was limited to restoration/construction work on the lighthouse lantern, which is separate and distinct from the Phase II work, which involves work on the lighthouse, lightkeeper’s quarters, the oil storage building and the landing station. While Ohana disagrees, arguing that the Phase II work simply is the completion of the lighthouse restoration work currently in progress, its disagreement, without more, does not demonstrate that SBA’s determination was made in bad faith or was otherwise inconsistent with applicable regulations. To the contrary, SBA’s determination was consistent with applicable SBA regulations, inasmuch as those regulations specifically define construction work as “new” work. Consequently, GAO has no basis to object to SBA’s determination that there was no requirement to conduct an adverse impact analysis prior to accepting the new, Phase II requirement under the 8(a) program. The protest is denied.

8. Mission Essential Personnel, LLC, B-404218.2; B-404218.3, June 14, 2011

Link: GAO Opinion

Agency: Defense Intelligence Agency

Disposition: Protest sustained.

Keywords: GSA Schedule Contract Award

General Counsel P.C. Highlight: When an agency conducts a formal competition under the FSS program for award of a task order contract, it will review the agency’s actions to ensure that the evaluation was reasonable and consistent with the terms of the solicitation.

Mission Essential Personnel, LLC (MEP) protests the Defense Intelligence Agency’s (DIA) issuance of an order to Science Applications International Corp. (SAIC) under a request for quotations (RFQ), for translation and other linguistic services for the National Media Exploitation Center.

The RFQ contemplated issuance of an order for a fixed-price level-of-effort labor contract with a one-year base period and four one-year options to the FSS contract holder whose quotation represented the best value to the government. Best value was to be determined based on a consideration of price and several non-price factors, with the non-price factors being given greater importance. The non-price evaluation factors specified in the RFQ were: (1) management plan; (2) quality control plan; (3) transition plan; (4) resumes; (5) past performance risk; (6) small business subcontracting plan; and (7) facility clearance (which was to be rated on a pass/fail basis). The solicitation provided that under the management plan factor, the agency would consider the vendor’s reporting mechanisms; the relevant experience of its proposed management team “in relation to the scope and context of the Statement of Work [(SOW)]“; the proposed continuing education, professional development, and retraining opportunities for employees; and the vendor’s experience in hiring and retaining qualified personnel. Regarding the resumes factor, the RFQ required vendors to submit resumes for certain key personnel.

MEP takes issue with multiple aspects of the agency’s evaluation, arguing, among other things, that the agency failed to evaluate vendors’ quotations under the resumes factor as contemplated by the RFQ. GAO states that when an agency conducts a formal competition under the FSS program for award of a task order contract, it will review the agency’s actions to ensure that the evaluation was reasonable and consistent with the terms of the solicitation.

The solicitation required vendors to submit resumes for several key personnel and provided for evaluation of each resume against the SOW requirements. In addition, the RFQ provided that each resume would receive its own rating, that resumes failing to meet minimum requirements would be rated as unacceptable, and that the agency would determine an overall rating under the resume factor by averaging the rating of each panel member for each resume. The agency concedes that it did not evaluate the resumes in the manner described by the RFQ. Instead, the agency explains that due to an “administrative oversight,” the evaluators were given an incorrect evaluation standard for the resumes factor. That is, rather than being advised of the above standard, the evaluators were instructed simply to verify that the vendors had furnished resumes for the key personnel positions. Applying this instruction, the evaluators essentially reviewed the resumes factor on a pass/fail basis. The fact that the evaluators did not further evaluate vendors’ quotations with respect to the resumes factor is further confirmed by the fact each evaluator worksheet for this factor is completely blank, with no documentation of any evaluation or assignment of relative strengths or weaknesses.

Notwithstanding this clear deviation from the evaluation criteria established by the RFQ, the agency attempts to excuse its admitted error by suggesting that it effectively considered the qualifications of the vendors’ key personnel under the management plan factor, which provided for consideration of the relevant experience of the proposed management team in relation to the SOW. The agency’s analysis conflates two evaluation factors that the RFQ established as separate and distinct from one another, and, in so doing, undermines the significance of the resumes factor. By considering the resumes factor as subsumed under the management plan factor, rather than assigning it the separate adjectival rating and weight provided for in the RFQ, the agency conducted its evaluation in a manner that was contrary to the evaluation scheme expressly established by the RFQ.

Moreover, the single management plan factor standard upon which the agency relies was qualitatively different from the evaluation contemplated under the resumes factor. Specifically, the relevant management plan standard provided for a general assessment of the relevant experience of the vendors’ key personnel “in relation to the scope and context” of the SOW, whereas under the resumes factor, evaluators were specifically to rate resumes “against the requirements in the SOW.” In this regard, the SOW established specific minimum qualification requirements, as well as highly desired skills and proficiencies, which do not necessarily translate to an evaluation based solely on experience. Given the agency’s failure to evaluate vendors’ quotations according to the ground rules established by the RFQ, MEP’s protest of the agency’s evaluation under the resumes factor is sustained.


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