BNUMBER: B-261044.4
DATE: December 14, 1995
TITLE: Caltech Service Corporation
**********************************************************************
REDACTED DECISION
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:Caltech Service Corporation
File: B-261044.4
Date: December 14, 1995
Alan Dickson, Esq., Jeffrey H. Schneider, Esq., and Jos� Otero, Esq.,
Epstein Becker & Green, for the protester.
Gregory H. Petkoff, Esq., and Peter M. Ditalia, Esq., Department of
the Air Force, for the agency.
Adam Vodraska, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Agency reasonably evaluated and considered the relative strengths of
the proposals under a best value evaluation scheme in concluding that
no proposal was significantly superior to the awardee's low-priced
proposal, and thus reasonably found that proposal to represent the
best value to the government.
DECISION
Caltech Service Corporation protests the award of a contract to
Cabaco, Inc., by the Department of the Air Force under request for
proposals (RFP) No. F33657-93-R-0028, for the operation and
maintenance of the common area at Air Force Plant 42, Palmdale,
California.[1]
We deny the protest.
The RFP, issued on a small disadvantaged business set-aside basis,
sought operation and maintenance services, including security,
airfield maintenance, fire protection/crash rescue, and industrial
facilities maintenance and engineering services to be performed in
accordance with the standards in the RFP's performance work statement
(PWS) for a base year with 4 option years. Firm, fixed prices were
solicited for the bulk of the work, and not-to-exceed cost ceilings
were specified for the several cost reimbursement line items.
The RFP stated that award would be made to the responsible offeror
whose conforming offer was determined, based on an integrated
assessment of the evaluation criteria and other considerations, to be
most advantageous to the government. The following factors were
listed in descending order of importance, with the subfactors within
each area being of equal importance:
(1) Technical
(a) fire protection and crash rescue
(b) security
(c) maintenance/supply
(d) engineering
(2) Management
(a) organization and management
(b) government furnished property
(c) safety
(3) Cost
The RFP also set forth various elements corresponding to the
requirements in the PWS that would be evaluated under each subfactor.
For example, with regard to the fire protection and crash rescue
subfactor, the only element was
"The position descriptions for the Fire Chief, Assistant Chief for
Training, Assistant Chief for Operations and Emergency Medical
Technicians will be evaluated for compliance with the PWS."
Each subfactor was to be evaluated under a color/adjectival rating
scheme considering the designated elements of the subfactor.[2] Each
subfactor was also to be evaluated for proposal risk--to assess the
risk associated with an offeror's proposed approach--and for
performance risk--to assess the probability of successful performance
based on the "offeror's relevant past and present performance."[3]
The color/adjectival rating, proposal risk, and performance risk were
to be weighted equally for each evaluation factor except cost. For
cost, the Air Force determined each offeror's most probable cost
(MPC),[4] which was to be evaluated for reasonableness, realism, and
completeness. The RFP specifically stated that the MPC would be a
significant factor in the source selection decision and would be
evaluated equally with the performance risk rating for each offeror's
cost. The RFP also noted that the subjective judgment of the
government evaluators is implicit in the evaluation process.
A source selection evaluation team (SSET) evaluated each subfactor
element for soundness of approach and understanding/compliance with
the minimum requirements of the RFP utilizing a plus (exceeds
standard)/check (meets standard)/ minus (does not meet standard)
rating system. Evaluators assessed each proposal's technical
strengths, weaknesses, deficiencies, and risks (i.e., proposal risk),
and then assigned a color/adjectival and risk rating for each
subfactor.
In addition, a performance risk analysis group (PRAG) conducted a
performance risk assessment of the relevant present and past
performance of each offeror and their major subcontractor(s) for each
subfactor. The PRAG evaluated information submitted by offerors,
responses to questionnaires sent to references, and pre-award surveys,
and assigned performance risk ratings for all the subfactors (the PRAG
inadvertently overlooked evaluating the government-furnished property
subfactor for performance risk).
The SSET presented the source selection authority (SSA) with its
findings at an initial evaluation briefing and, based on this
evaluation, the SSA established a competitive range of eight
proposals, including Caltech's and Cabaco's. Discussions were
conducted, and best and final offers (BAFO) submitted and evaluated.
Both Caltech's and Cabaco's BAFOs were rated green/acceptable with
low performance risk and low proposal risk for each subfactor (except
security, for which both offerors received N/A for performance risk).
Caltech's MPC was $56,306,018 while Cabaco's was $51,808,250.
Based on its evaluation of the BAFOs, the SSET and PRAG presented the
SSA with a final evaluation briefing and a proposal analysis report
summarizing the strengths, weaknesses, and risks of each proposal for
the technical evaluation subfactors as well as the performance risks
and costs. Based on an integrated assessment of the findings of the
SSET, the SSA determined that Cabaco's proposal contained a variety of
strengths, which he detailed in a source selection statement, and a
significantly low MPC, such that Cabaco's proposal represented the
best overall value. The Air Force thus made award to Cabaco.
Caltech argues that its proposal was technically superior to Cabaco's
under the technical and management factors, and that the fact that it
received the same green/acceptable rating for each subfactor as
Cabaco's proposal indicates that award was actually made solely on the
basis of low price, without regard to relative technical merit. In
support of its protest, Caltech has attacked the reasonableness of
virtually every aspect of the technical, proposal risk, performance
risk, and cost evaluations.
While procuring agencies have broad discretion in determining the
evaluation plan they use, they do not have the discretion to announce
in the solicitation that one plan will be used, and then follow
another in the actual evaluation. Trijicon, Inc., 71 Comp. Gen. 41
(1991), 91-2 CPD 375. Specifically, agencies may not specify that
technical superiority will be more important than cost, and then make
award as though the RFP provided for award to the lowest-cost,
technically acceptable offeror. Id. In our review of an agency's
evaluation of proposals, we confine our analysis to a determination of
whether the evaluation was reasonable and consistent with the
solicitation evaluation criteria. SDA Inc., B-248528.2, Apr. 14,
1993, 93-1 CPD 320.
The protester's and awardee's proposals were reasonably rated as
green/acceptable with low proposal risk and low performance risk for
each subfactor, with both found to contain various strengths and
weaknesses.[5] While it may be that Caltech's proposal contained more
strengths than Cabaco's, Caltech has not shown that it deserved a
higher rating, or that Cabaco deserved a lower rating, for any
subfactor, or that the identified strengths in Caltech's proposal
would offset Cabaco's $4.6 million cost advantage. Moreover, the
record does not evidence that the Air Force abandoned the best value
evaluation scheme to simply make award to the low-cost technically
acceptable offeror. Instead, as indicated in the source selection
statement, the SSA found that no proposal was significantly superior
to Cabaco's proposal--which had a variety of documented strengths--so
as to justify the payment of the associated substantial cost premium.
The major area where Caltech asserts that the superiority of its
proposal was not recognized is the fire protection/crash rescue
subfactor, where both Caltech's and Cabaco's proposal received
green/acceptable ratings. Caltech asserts that since the evaluators'
worksheets show that Caltech's proposal received more "plus" ratings
than Cabaco's for this subfactor, the SSET erred in not awarding
Caltech a higher score. Caltech specifically notes that one
evaluator's worksheets reveal that Caltech's rating for fire
protection/crash rescue was provisionally upgraded from an initial
rating of green/acceptable[6] to blue/exceptional, but was finally
rated green/acceptable, a rating which Caltech asserts was
unjustifiably low.
The Air Force explains that in order to be rated blue for any element,
a proposal had to exceed the specified performance or capability
standard in a beneficial way to the Air Force and have no significant
weaknesses, and that the source selection plan for this procurement
charged evaluation team leaders with ensuring that ratings were
consistently applied. For the subfactor in issue here, the team
leader did not concur with the evaluator's provisional blue rating,
even though Caltech's position descriptions for the fire
protection/crash rescue personnel exceeded the PWS standards. This
was because Caltech did not respond to the agency's request during
discussions to incorporate into the draft contract all of the enhanced
education, experience, and certification standards indicated in its
position descriptions. Given Caltech's failure to completely respond
to the discussion request, we see nothing unreasonable in the team
leader's and SSET's ultimate finding that Caltech's proposal was not
sufficiently exceptional for this subfactor to warrant a blue rating;
while the protester disagrees with the rating, it has not shown it was
unreasonable. Moreover, although Cabaco's proposal initially was
given a provisional yellow/marginal rating for fire protection/crash
rescue, Cabaco remedied the weaknesses/deficiencies in its proposal
during discussions and improved its initial minus ratings to checks;
nothing in the record suggests that Cabaco's green/acceptable rating
for this subfactor was unwarranted. Thus, while it is true that
Caltech's proposal contained more strengths for this subfactor than
Cabaco's, even though they received the same rating, the record does
not indicate that Caltech's proposal was underrated or Cabaco's
proposal was overrated.[7]
Caltech contends that the Air Force's evaluation was affected by
Cabaco's alleged misrepresentations concerning the current employment
status of several of its proposed personnel, specifically, Cabaco's
proposal's misrepresentation that these individuals were currently, or
were recently, employed by the incumbent contractor, Pacifica.
However, the Air Force did not consider the qualifications and
experience of specific individuals in the evaluation, even though
Caltech tendered these individuals' resumes in its proposal. Rather,
consistent with the RFP, the agency only evaluated the offerors'
position descriptions, as stated in the proposals, for the designated
key management and supervisory personnel, including those for fire
protection/crash rescue, which it found at least compliant with the
standards set forth in the PWS.
Caltech also contends that Cabaco's BAFO should have been downgraded
because it replaced employees of its subcontractor, Day & Zimmerman,
which is experienced in structural fire protection, with Cabaco
employees, to operate the Plant 42 alarm room.[8] Caltech alleges
that, even though Cabaco itself had no experience in this area, the
Air Force did not downgrade Cabaco's BAFO based on this change. The
Air Force responds that since the alarm room operation only needs one
operator per shift, and this individual's duties are not particularly
complicated, the change in personnel was not important enough to
adjust the risk factor or lower the technical rating. We note that
the alarm room requirement was but one of many listed in the PWS under
fire protection/crash rescue and was never separately evaluated.
Given that Cabaco's proposal evidences that alarm room operators would
be qualified to monitor the plant's fire protection systems and to
dispatch appropriate equipment, and detailed the requirements
associated with alarm room operation, the Air Force had no reason to
lower Cabaco's technical rating or to increase the proposal risk
factor because of Cabaco's substitution of personnel in its BAFO.
Caltech argues that because the incumbent contractor, Pacifica, will
be Caltech's subcontractor for fire protection/crash rescue, the
performance risk of its proposal should have been rated superior to
Cabaco's for the security subfactor and the airfield maintenance
element of the maintenance/supply subfactor. Caltech concludes that
the Air Force therefore should not have found that Caltech's proposal
did not demonstrate past performance in the security area, and
improperly rated it N/A for that subfactor. We disagree.
Consistent with the RFP, the Air Force evaluated the experience of the
offeror itself for performance risk. The Air Force could not assign
performance risk to Caltech for the security subfactor because Caltech
itself had no previous experience in this regard and did not propose
Pacifica as a subcontractor for security, but merely proposed to hire
Pacifica employees and integrate them into Caltech's security
operation. According to the Air Force, all offerors proposed hiring
portions of incumbent Pacifica's work force, and none was given past
performance credit for this aspect of their proposal. Since Pacifica
is Caltech's subcontractor only for fire protection/crash rescue, the
agency reasonably determined that Caltech's proposal should not
receive an enhanced or low performance risk rating for other areas.[9]
Caltech also contends that the questionnaires received by the PRAG for
Cabaco show that Cabaco should have received a significantly less
favorable past performance risk rating than Caltech. However, while
Caltech received more outstanding ratings for past performance, this
is not a basis for concluding that Cabaco, which had satisfactory
ratings, should have received anything other than a low performance
risk assessment. It is true that [DELETED] respondents to the past
performance questionnaire rated Cabaco [DELETED] for custodial
services, but this respondent also noted that Cabaco's services had
improved in this area--which was the only performance element out of
nine evaluated by that respondent that [DELETED]--and that Cabaco's
overall performance was satisfactory. Further, the other [DELETED]
respondents gave Cabaco [DELETED] and [DELETED] ratings for all the
performance elements of their contracts with Cabaco. We conclude that
the performance risk ratings were reasonable.[10]
Finally, Caltech complains that the Air Force could not find Cabaco's
proposed cost realistic because it had to add $4 million to Cabaco's
BAFO costs to calculate its MPC. However, this adjustment to MPC in
no way reflected agency concern with the realism of the elements
included in Cabaco's proposed cost. Rather, the adjustment was made
only because Cabaco was found to have omitted from its cost proposal
the not-to-exceed estimates for the cost reimbursement line items that
were designated by the agency in the RFP for all offerors. Since
offerors did not separately propose these pre-designated costs, the
agency appropriately considered Cabaco's proposal's omission of these
costs when it calculated Cabaco's MPC. While Caltech also complains
that Cabaco's offer was unrealistically low, the agency specifically
found that Cabaco's wage rates were consistent with the applicable
wage determinations, that its manning levels were acceptable, and that
Cabaco had the financial capability to successfully perform the
contract at its proposed prices. Caltech has not shown that the
agency's judgment in this regard was unreasonable.[11]
In sum, the Air Force reasonably determined that Cabaco's proposal's
technical strengths and low MPC represented the best value to the
government.
The protest is denied.
Comptroller General
of the United States
1. Plant 42 is a government-owned, contractor-operated facility for
government agencies and contractors performing research, development
and production work on various aircraft and other programs. The
common areas of Plant 42 include an airfield, access gates, and other
areas not exclusively or solely occupied by a contractor or agency.
2. The color/adjectival ratings were blue/exceptional,
green/acceptable, yellow/marginal, and red/unacceptable.
3. The evaluation ratings for proposal risk and performance risk were
high, moderate, and low. If no past performance had been
demonstrated, a rating of "Not Applicable" (N/A) was given for
performance risk.
4. The MPC was the sum of the estimated cost for operations and
maintenance support (which was offered on a firm, fixed-price basis,
including wages), other government costs (not-to-exceed estimates
established by the Air Force for the cost reimbursement line items),
and any necessary adjustments to wage rates made by the agency in the
cost evaluation to ensure compliance with the Service Contract Act and
collective bargaining agreements.
5. For example, Cabaco's proposal had a designated strength with
regard to the demonstrating understanding of as-built drawings element
under the engineering subfactor, which was not found in Caltech's
proposal; on the other hand, Caltech's proposal contained identified
strengths in the fire protection/crash rescue subfactor not found in
Cabaco's proposal.
6. Caltech's initial proposal received a number of "minus" ratings for
the fire protection/crash rescue subfactor. Thus, Caltech's assertion
that it was and should have been rated blue from the offset has no
merit.
7. Further, the record shows that the SSA was fully aware of the
strengths of Caltech's proposal when he made the source selection. He
was informed in the SSET briefing of Caltech's relative strengths in
the fire protection/crash rescue area, i.e., that the educational
attainment and experience requirements for firefighter position
descriptions included in Caltech's proposal exceeded the PWS
standards, and was also advised that Cabaco had no significant
strengths in this area. In addition, for performance risk, the SSA
was briefed that Caltech's subcontractor for fire protection/crash
rescue, Pacifica, had performed well as the incumbent contractor,
whereas the experience of Cabaco's subcontractor, Day & Zimmerman, was
limited to structural fires, with no crash rescue experience.
8. The PWS required that the contractor man the alarm room with one
person continuously 24 hours per day, 7 days a week. Unlike other
firefighter positions which required specified training and
experience, the PWS was silent on the qualifications and training for
alarm room operators.
9. Caltech asserts that, had the Air Force conducted adequate
discussions, Caltech could have avoided receiving the N/A rating for
past performance for security, presumably by proposing Pacifica as a
subcontractor for security. However, although the N/A rating meant
that Caltech had not itself demonstrated relevant past performance in
the security area, the N/A rating was intended as a neutral rating
rather than as a sign of a deficiency or weakness. The Air Force
notes that nearly every other offeror had at least one area without
demonstrated performance and the PRAG did not request from any of them
any additional data in this regard since the RFP had requested
offerors to include all relevant data concerning past performance in
their proposals. Where, as here, a proposal is considered to be
acceptable and in the competitive range, the agency is not obligated
to discuss every aspect of the proposal that receives less than the
maximum possible rating. John Brown U.S. Servs., Inc., B-258158 et
al., Dec. 21, 1994, 95-1 CPD 35.
10. Also, the Air Force's inadvertent failure to assign performance
risk for the government-furnished property subfactor during the
original evaluation did not prejudice Caltech because both offerors
were ultimately evaluated as having low performance risk for
government-furnished property. While Caltech asserts that its rating
should be superior because its subcontractor had responsibility for
government-furnished property as the incumbent, Cabaco had also
handled government-furnished property satisfactorily on previous
government contracts; there thus is no basis to find that either
offeror's low risk rating was unwarranted.
11. Caltech asserts that performance risk improperly was not evaluated
with regard to Cabaco's cost as contemplated by the RFP; however, the
record confirms that Cabaco's proposal reasonably received a low
performance risk rating for this factor based on the responses to the
past performance questionnaires.