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.