BNUMBER:  B-259328
DATE:  March 24, 1995
TITLE:  New Breed Leasing Corporation

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DOCUMENT FOR PUBLIC RELEASE
A protected decision was issued on the date below and was subject to a 
GAO Protective Order.  This version has been redacted or approved by 
the parties involved for public release.
Matter of:New Breed Leasing Corporation

File:     B-259328

Date:March 24, 1995

Donald P. Arnavas, Esq., and Phillip H. Harrington, Esq., Wiley, Rein 
& Fielding, for the protester., for the protester.
Cynthia S. Guill, Esq., and David J. Rowland, Esq., Department of the 
Navy, for the agency., for the agency.
Henry J. Gorczycki, Esq., John L. Formica, Esq., and James A. 
Spangenberg, Esq., Office of the General Counsel, GAO, participated in 
the preparation of the decision., Office of the General Counsel, GAO, 
participated in the preparation of the decision.

DIGEST

Agency's decision to award to a higher-priced, higher-rated offeror is 
unreasonable where the information concerning the cognizant technical 
evaluation board's conclusions regarding relative merits of the 
proposals provided to the source selection official on which he based 
his award decision was inaccurate and the discriminators used to 
differentiate proposals were not supported by the evaluation record.

DECISION

New Breed Leasing Corporation protests the award of a contract to LBM, 
Inc. under request for proposals (RFP) No. N68931-93-R-9618, issued by 
the Department of the Navy for transportation operations and 
maintenance services.  New Breed argues that the agency's award 
selection was unreasonable and not in accord with the evaluation 
criteria.

We sustain the protest.

The RFP, issued on April 15, 1994, provided for the award of a 
combination firm, fixed-price award fee/indefinite quantity contract 
for a 5-year period.  The awardee will provide, among other things, 
motor pool and dispatch services, bus and taxi service, fuel 
operations, vehicle maintenance and repair, towing services, road and 
runway sweeping, and related environmental and administrative support 
services at three Navy installations in the Jacksonville, Florida 
area.

The RFP stated that award would be made to the responsible offeror 
whose offer, conforming to the solicitation, was determined most 
advantageous to the government, price and other factors considered.  
The RFP listed the following evaluation factors:

     a.  Proposer's Past Performance in Transportation
         Operations and Maintenance;
     b.  Management and Administration;
     c.  Method of Operation
     d.  Price

The RFP stated that the three technical evaluation factors were 
"essentially equal in importance," and that "[t]he cumulative rating 
of the technical evaluation factors is of more importance than the 
price factor.  However, price becomes more significant as technical 
evaluations become similar."

The RFP provided detailed instructions for the preparation of 
proposals.  Among other things, technical proposals were limited to 
150 pages of text using 10 pitch type or larger.

The Navy received 14 proposals, including the proposals submitted by 
New Breed and LBM, by the RFP's closing date of May 25.  The proposals 
were evaluated by a technical evaluation board (TEB), which found that 
several proposals, including New Breed's and LBM's, did not comply 
with the page and/or type size restrictions.  However, the TEB 
evaluated all of the proposals submitted in their entirety, regardless 
of their length or the type size used, or whether they adhered to the 
required organizational structure.

The TEB recommended that the proposals of nine offerors, including 
those of New Breed and LBM which received overall "very good" ratings, 
be included in the competitive range.  The source selection board 
(SSB) reviewed the TEB report, and found it deficient because one of 
the four voting members of the TEB had not fully participated in the 
evaluation of proposals, and because the adjectival ratings assigned 
the various proposals were inconsistent with the evaluators' narrative 
comments.  The SSB reconvened the TEB and directed it to review its 
evaluation and develop technical discussion questions for all 
offerors, except those whose proposals were rated unacceptable.

On June 29, the TEB issued a revised report, which included the 
following statement:

     "The Board members reviewed their individual ratings and after 
     much discussion, it was determined that the narrative portion of 
     each individual's rating accurately described the contractor's 
     proposal.  Each evaluator reread his narrative rating and 
     compared that rating to the rating guide in the Source Selection 
     Plan [SSP].  Each evaluator adjusted the factor ratings by 
     marking their original sheets in green pen to align more closely 
     with the rating descriptions in the [SSP] guidance.  . . ."

With regard to LBM's proposal, the revised TEB report raised each 
factor and the overall rating from "very good" to "excellent."  
Although factor ratings were also raised for New Breed's proposal, New 
Breed's overall rating continued to be stated as "very good."  The TEB 
submitted its revised report to the SSB, recommending discussions with 
nine competitive range offerors.

After requiring revisions in the recommended discussion questions, the 
SSB and subsequently the source selection authority (SSA), accepted 
the TEB report.  The SSA authorized discussions on the condition that 
a tenth offer be included in the competitive range.

The Navy conducted telephonic discussions with the 10 offerors whose 
proposals were in the competitive range and sent each offeror written 
copies of the questions asked during discussions.  On August 15, the 
Navy requested best and final offers (BAFO) and received BAFOs from 
all competitive range offerors on August 29.  New Breed's BAFO offered 
the lowest price of $20,078,453, and LBM's BAFO offered the third 
lowest price of $20,370,430.

The TEB evaluated the offerors' discussion responses.  Two proposals 
were determined to be technically unacceptable and eliminated from 
further consideration.  Since no technical discussions had been 
conducted with regard to LBM's "excellent" proposal, no changes were 
made to its ratings.  The TEB found that New Breed's discussion 
responses addressed all of the agency's concerns, commenting that New 
Breed presented an "excellent rationale" and had "enhanced" its 
proposal; nevertheless, the TEB did not increase New Breed's ratings 
under any of the three technical evaluation factors.  Indeed, except 
for eliminating the proposals of two other offerors from further 
consideration for award, the TEB did not recommend changes to any of 
its initial consensus ratings.

The SSB reviewed and adopted the TEB report on the BAFOs, and 
documented its findings for the SSA in the Post-negotiation Business 
Clearance Memorandum dated September 20, wherein the relative benefits 
of the three lowest-priced proposals were discussed.[1]  The SSB 
stated that the second lowest-priced BAFO and New Breed's 
lowest-priced BAFO were both rated "very good."[2]  The SSB noted that 
LBM's price was $291,977 higher than New Breed's price, but stated 
that this price difference:

     "is insignificant when considering the excellent technical rating 
     given to [LBM].  [LBM] and their major subcontractor offered vast 
     experience in transportation services of similar size and 
     complexity, and had excellent past performance references.  
     Additionally, [LBM] provided detailed phase-in plans, fully 
     developed flow charts, and environmental expertise which  
     provides a  clear technical difference between [LBM] and [New 
     Breed]."

                    .     .     .     .     .

     "Based on the above analysis and comparisons, consensus was 
     reached that [LBM's] offer provides the government with the best 
     value when price and technical factors are considered."

On September 28, the SSA accepted the TEB's evaluation findings and 
the SSB's recommendation as submitted.  Award was made to LBM on 
November 1.  After being debriefed, New Breed filed this protest.  The 
agency has suspended contract performance pending resolution of the 
protest.

Where an agency chooses between a higher-priced, higher-rated proposal 
and a lower-priced, lower-rated proposal, we will review the agency's 
source selection decision to determine whether it is consistent with 
the stated evaluation criteria and whether the agency's 
price/technical tradeoff is reasonable.  Central Texas College, 71 
Comp. Gen. 164 (1992), 92-1 CPD  para.  121.  A source selection decision 
based on inconsistent or inaccurate information concerning the 
technical evaluation or the relative merits of the offerors' technical 
proposals is not reasonable.  SDA, Inc., B-248528.2, Apr. 14, 1993, 
93-1 CPD  para.  320.

Here, the source selection of LBM for award was flawed because the SSA 
was provided information that contained uncorrected errors concerning 
New Breed's ratings, failed to accurately represent LBM's past 
performance record, and provided conclusions about the two proposals' 
technical differences that were inconsistent with the evaluation 
record and the offerors' proposals.

First, the record shows that when compared to the evaluators' ratings, 
the final technical ratings for New Breed, as provided to the SSA, 
were understated with regard to both the Past Performance and 
Management and Administration evaluation factors.  Specifically, while 
both factors' ratings were reported to the SSA as "very good," the 
record shows that they should have been reported as "excellent."

With regard to the Past Performance evaluation factor, the TEB's 
revised report assigned New Breed's proposal a rating of "very good" 
and requested New Breed to clarify its maintenance experience.  
Notwithstanding New Breed's response, the TEB's concerns remained 
because a contract specialist was initially unsuccessful in contacting 
a reference cited by New Breed in its proposal to confirm New Breed's 
motor vehicle maintenance experience on a multi-million dollar 
contract with the United States Postal Service.  Subsequent to 
discussions, the contract specialist contacted references at the 
Postal Service who confirmed that New Breed's contract with the Postal 
Service covered motor vehicle maintenance and described New Breed's 
performance as "very good."  Although the contract specialist's 
memorandum to the file documenting these interviews was apparently 
unavailable to the TEB members during their consideration of New 
Breed's BAFO, the TEB chairman stated in the TEB's summary evaluation 
form that:

     "Had this information been available to the board members the 
     rating [of very good for past performance] would be raised to 
     excellent.  (Please see [contract specialist's] memo to file.)"

The record shows that the SSB accepted the TEB report as filed, that 
is, with New Breed's rating under the past performance factor 
remaining "very good," rather than "excellent" as it should have been, 
and did not otherwise discuss in its report the past performance of 
New Breed or any other offeror, with the exception of LBM.[3]

Similarly, the TEB's consensus rating for New Breed's BAFO under the 
Management and Administration factor was also incorrectly reported to 
the SSA as "very good," although the record indicates that it was 
actually considered "excellent" by the TEB.  As discussed above, the 
revised ratings were recorded on the original worksheets in green ink, 
and the consensus rating sheet for New Breed's proposal, as revised in 
green ink, shows that the TEB increased its consensus rating for New 
Breed's initial proposal on the Management and Administration 
evaluation factor from "very good" to "excellent."  However, the 
consensus rating sheet for New Breed that was submitted by the TEB to 
the SSB incorrectly showed the ratings for all three factors as "very 
good."[4]  That is, the revised consensus rating was inaccurate as it 
failed to show that the TEB had increased New Breed's rating under the 
Management and Administration factor to "excellent."[5]  There is no 
indication that TEB intended to lower New Breed's rating as a result 
of discussions; to the contrary, the record indicates that the TEB was 
generally satisfied by New Breed's responses.  Because of this, the 
SSB, and ultimately the SSA, were not informed that the TEB had rated 
New Breed's proposal under the Management and Administration 
evaluation factor as "excellent."

Thus, for two of the three technical evaluation factors, the SSB and 
SSA relied on an erroneous report that the TEB had rated New Breed's 
proposal as "very good," when in fact the record shows the proposal 
had been rated under these evaluation factors as "excellent."

Additionally, the award selection, as documented in the SSB report and 
accepted by the SSA, does not appear to otherwise accurately document 
any meaningful technical differences between LBM's and New Breed's 
proposals; to the contrary, the stated reasons for asserted technical 
superiority are not supported by the evaluation record.

For example, a major justification given for finding LBM's proposal 
technically superior to New Breed's with regard to past performance 
was LBM's reported experience on transportation contracts of "similar 
size and complexity" with "excellent" past performance references.  
However, while this RFP is valued at more than $20 million for 5 
years, LBM's prior contracts, as described in its BAFO (except for one 
valued at more than $1 million), are all valued at less than $1 
million per year.[6]  Also, except for a single reference on a small 
contract[7], all of LBM's contacted references described LBM's 
performance as "satisfactory."  Thus, contrary to the report received 
by the SSA, LBM had not performed any contracts of similar size to the 
proposed contract, and its references generally described LBM's past 
performance as satisfactory.[8]  In contrast, the record indicates 
that New Breed has performed several relevant multi-million dollar 
contracts, and all of New Breed's references described its performance 
as "very good" or "excellent."

The other qualitative differences between LBM and New Breed, as 
reported by the SSB, were LBM's "detailed phase-in plans, fully 
developed flow charts, and environmental expertise."  However, the 
evaluators' narratives do not show the superiority of LBM's proposal 
in these areas and there is no indication that the stated differences 
were the result of an independent evaluation by the SSB or SSA.

For example, regarding the detail of phase-in plans, the TEB 
evaluators who commented on the plans stated that New Breed had a 
"good" or "very good" phase-in plan, and that the proposal "clearly 
indicates time frame for phase-in procedures to be on-line by contract 
start date."  Similarly, LBM was found by several evaluators to have a 
"good" phase-in plan, and another evaluator commented that LBM's plan 
also was "in line with contract start date and appear[s] to cover all 
aspects of contract conversion."[9]

Likewise, the record shows that both proposals contained complete and 
understandable flow charts.  Again, the TEB evaluators' who commented 
on this area stated that New Breed "indicates clear line of 
management, control and accountability of all aspects of [the] RFP," 
and that LBM showed "a complete and sufficient manner in which support 
is to be provided, controlled and accounted for."

As for environmental expertise, New Breed was found to have "an 
extensive knowledge of storage, handling, accountability, and disposal 
relative to [the environmental area]," and also to have proposed a 
subcontractor which the Navy considered to have "excellent" 
environmental experience.  LBM was found to meet or exceed RFP 
requirements in this area and was credited with "a very good knowledge 
of regulations."

In sum, New Breed's actual ratings were not accurately communicated to 
the SSA, and the stated technical discriminators between LBM's and New 
Breed's proposals, as represented by the SSB, are not supported by the 
TEB evaluation.

Finally, the record suggests that the evaluation scheme stated in the 
RFP was not what was desired by the agency.  For example, LBM did not 
follow the detailed proposal information requirements of the RFP and 
New Breed did.  However, LBM received no evaluation penalty for 
ignoring the instructions, whereas New Breed received negative 
evaluator comments for providing repetitive information which the RFP 
proposal instructions apparently require.

We recommend that the Navy amend the solicitation to clarify the 
proposal preparation instructions.  The Navy should then reopen 
discussions and evaluate proposals in a manner consistent with the 
amended solicitation.  If an offeror other than LBM is found to offer 
the best value, the Navy should terminate the contract awarded to LBM 
and make award under the new source selection decision.  The protester 
is entitled to the costs of filing and pursuing this protest, 
including reasonable attorneys' fees.  4 C.F.R.  sec.  21.6(d)(1) (1995).  
The protester should file its claim for costs directly with the 
contracting agency within 60 days after receipt of this decision.  4 
C.F.R.  sec.  21.6(f)(1).

The protest is sustained.

Comptroller General
of the United States

1. There is no evidence that the SSB independently evaluated the 
proposals; rather the record indicates that it adopted what it 
understood to be the TEB's ratings and findings.

2. The SSB did not further reference the second lowest-priced BAFO.

3. SSB's report did include the TEB documentation in attachments to 
the report.

4. The TEB increased New Breed's rating under the Past Performance 
evaluation factor from "acceptable" to "very good" while the rating 
for the third factor remained "very good."

5. The record provides no evidence to suggest that this was anything 
other than a transcription error.  Indeed, the evaluators' rating 
sheets and narratives suggest that an "excellent" rating was what was 
intended.

6.[DELETED.]

7. This one reference described LBM's performance as "excellent" on a 
contract valued at more than $100,000.

8. Although LBM's large business subcontractor's past performance was 
reported as "excellent," the subcontractor's performance on only one 
contract was checked for reference and this contract was not for 
transportation services.

9. During the course of this protest, the Navy suggested that LBM's 
phase-in plan was better than New Breed's because it was based on a 
shorter time frame.  However, both offerors' plans met the time frames 
specified in the RFP, and the RFP did not indicate that a shorter 
phase-in time frame was an evaluation consideration.  Moreover, LBM 
proposed an unspecified "transition period" prior to the start of its 
phase-in plan, which does not permit determining the exact length of 
time for completion of the phase-in under LBM's proposal.  Finally, 
New Breed states that it could and would have reduced its phase-in 
time frame if the agency had indicated this was desirable.  In any 
event, the record does not show that the length of the phase-in was 
considered of any import to the TEB, the SSB, or the SSA during the 
evaluation and source selection process.