BNUMBER: B-262088.3; B-262088.4
DATE: January 29, 1996
TITLE: Jacobs Service Company; International Technology Corporation,
B-262088.3; B-262088.4, January 29, 1996
**********************************************************************
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:Jacobs Service Company; International Technology Corporation
File: B-262088.3; B-262088.4
Date:January 29, 1996
Brian J. Donovan, Esq., Jones & Donovan, for Jacobs Service Company;
Dorn C.
McGrath, Esq., Richard L. Moorhouse, Esq., and Mark D. Colley, Esq.,
Holland &
Knight, for International Technology Corporation, the protesters.
Kevin P. Connelly, Esq., Bruce Lathrop, Esq., David J. Kuckelman,
Esq., and Steven Kmieciak, Esq., Seyfarth, Shaw, Fairweather &
Geraldson, for Tetra Tech, Inc., an interested party.
Robert L. Ballenger, Esq., and Marcia J. Bachman, Esq., Department of
the Air Force, for the agency.
Scott H. Riback, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protests of various aspects of agency's technical evaluation are
denied where the record shows that the agency evaluated proposals
consistently with the terms of the solicitation.
2. Protests against agency's cost evaluation are denied where record
shows that agency performed an adequate cost realism evaluation,
considering the potential cost impact of various offerors' proposed
approaches.
3. Agency's discussions with protesters were meaningful and not
misleading where agency advised firms of areas where their proposals
needed clarification, revision or amplification; agency's cautionary
advice to one firm regarding risk associated with submitting technical
proposal revisions with best and final offer should not reasonably
have misled firm into concluding that it could not make such
revisions.
DECISION
Jacobs Service Company (JSC) and International Technology Corporation
(IT) protest the award of a contract to Tetra Tech, Inc. under request
for proposals (RFP) No. F04684-94-R-0024, issued by the Department of
the Air Force for comprehensive environmental services at Vandenberg
Air Force Base, California. Both protesters make numerous arguments
regarding the propriety of the Air Force's technical and cost
evaluations as well as the agency's source selection decision.
We deny the protests.
BACKGROUND
The RFP contemplated the award of a cost reimbursement contract to
perform comprehensive environmental services for a base year with 4
option years. Award was to be made on a best value basis. For
evaluation and award purposes, the RFP stated that the Air Force would
conduct an integrated assessment of technical, management and cost
considerations, with technical deemed most important, management
second in importance and cost third; offerors were cautioned that cost
would still be a significant consideration for award purposes.
Under the technical factor, proposals were to be reviewed for
understanding/proposed approach and relevant experience in four
substantive areas--air, water quality, hazardous material/solid
waste/hazardous waste, and natural/cultural resources. This resulted
in eight equally weighted sub-elements, each of which was to be
assigned a color/adjectival rating--red/unacceptable, yellow/marginal,
green/acceptable, or blue/exceptional. The sub-element evaluation
results were then consolidated into a single overall color/adjectival
rating. Under the management factor, the ratings for
understanding/proposed approach and relevant experience were combined
into a single management rating. The proposals also were assigned
performance risk and proposal risk ratings of high, medium or low.
Cost proposals were to be evaluated for realism, reasonableness,
completeness, and cost risk.
The Air Force received five initial proposals. Four of the initial
proposals--those submitted by Tetra Tech, JSC, IT, and Foster Wheeler
Environmental Corporation-- were found to be within the competitive
range. Following discussions and the evaluation of best and final
offers (BAFO), the Air Force found that all four offerors were
essentially equal. There were slight differences between the offers
in the eight technical sub-elements, with two firms receiving
blue/exceptional ratings in two sub-elements each, but the Air force
concluded that these ratings did not merit the assignment of an
overall technical rating of blue for these offers. The evaluation
results were as follows:
RATINGS (Approach/Experience)
Technical AreaAir Water Hazmat Nat/Cul ResourcesMGMT
Foster Blue/Blue Green/ GreenGreen/
Green Green/
Green Green/
Green
IT Blue/Green Green/
Green Blue/Green Green/
Green Green/
Green
Tetra Tech Green/
Green Green/
Green Green/
Green Green/
Green Green/
Green
Jacobs ServicesGreen/
Green Green/
Green Green/
Green Green/
Green Green/
Green
All four offerors also received low proposal and performance risk
ratings in the technical and management areas.
In the cost evaluation, the Air Force made only minor realism
adjustments, finding that for the most part the proposals reflected
realistic costs, given each firm's technical approach. All proposals
received low cost risk ratings, except IT's, which was assigned a
moderate cost risk rating. The evaluated costs were as follows:
Tetra Tech: $20,445,710
Foster Wheeler: $25,079,047
JSC: $25,284,460
IT: $25,346,519
The Air Force made award to Tetra Tech, finding principally that,
since all four proposals were essentially equal from a technical and
management standpoint, award to Tetra Tech, based on its low evaluated
cost, offered the best overall value to the government. The record
also shows that the agency considered the relative ranking of the
remaining offerors, finding Foster Wheeler next in line, followed by
IT and JSC respectively.
The protesters protest the evaluation of their proposals and that
their discussions were not meaningful, and, as discussed below, we
deny these protests. The protesters also challenge the evaluation of
Tetra Tech's proposal as well as Foster Wheeler's proposal. Since we
find that the Air Force reasonably ranked Foster Wheeler next in line
for award after Tetra Tech, we do not consider the protests
concerning Tetra Tech's evaluation because the protesters are not
interested parties.
EVALUATION OF THE PROTESTERS' PROPOSALS
The protesters contend that the evaluation was erroneous in several
respects. For example, both firms maintain that the evaluators
improperly failed to assign blue/exceptional ratings for sub-elements
where their proposals were found to be especially strong.[1]
Where a protester challenges the propriety of a technical evaluation,
we will review the matter to ensure that the evaluation was reasonable
and consistent with the RFP's stated evaluation criteria and
applicable statutes and regulations. Laidlaw Envtl. Servs., Inc.,
B-256346, June 14, 1994, 94-1 CPD para. 365.
The RFP provided that blue/exceptional ratings would be assigned where
the proposal was found to exceed the specified performance or
capability in a beneficial way to the Air Force. In implementing this
standard, the agency evaluators assigned blue/exceptional ratings only
where they found that a proposal
offered at least one feature determined to be of "outstanding" merit;
on the other hand, where a feature reflected only "significant" or
"important" merit, they did not
assign a blue/exceptional rating. There is nothing inherently
improper in such a scheme, see Laidlaw Envtl. Servs. Inc., supra
(agency's assignment of adjectival ratings is unobjectionable where
based on uniform application of descriptive standards), and the record
shows that (with one exception discussed below) the evaluators adhered
to this scheme in evaluating all proposals.
While both protesters contend that the ratings assigned failed to
reflect the relative superiority of their proposals (as found by the
evaluators), in virtually every
instance, the protesters point only to examples where the evaluators
identified a "significant" or "important" feature of their
proposals--features which under the
agency's evaluation method did not warrant blue/exceptional ratings.
For example, IT contends that it should have received a
blue/exceptional rating under the Water Quality sub-element because
the evaluators found that its proposal "demonstrated a significant
understanding of the [industrial wastewater treatment plant
operations] IWTP. . ." and that "IT offered the best understanding in
Water because of its
understanding of the IWTP. . . ." However, while the evaluators found
that the firm's proposal demonstrated "significant" understanding,
they did not find that the proposal offered any "outstanding" features
of benefit to the Air Force that would merit a blue/exceptional
rating. IT does not take issue with the narrative conclusions of the
evaluators concerning the appropriate adjective (i.e. outstanding
versus significant) used to describe the features of its proposal, and
we find no evidence that the evaluators did not properly employ the
terms as described above in evaluating all proposals. That IT's
proposal may have demonstrated "the best" understanding of the Water
Quality area is irrelevant; the ratings were dependent, not upon a
proposal's relative quality as compared to the other competing
offerors, but upon whether the firm's proposal included "outstanding"
features.
Similarly, JCS contends, for example, that its proposal should have
received a blue/exceptional rating under the management factor because
of numerous strengths identified by the evaluators. Like IT's
evaluation in the Water Quality area, however, the agency did not
identify any "outstanding" features of the JSC management proposal,
finding that the proposal demonstrated "significant understanding" by
[DELETE] and showed "merit" in other management areas. Like IT, JSC
was deemed to have offered "the best" understanding in the management
area but, as already discussed, this conclusion--without a finding of
outstanding features--did not warrant a blue/exceptional rating for
this area.
We do find that, based on the evaluation scheme used, JSC's proposal
should have been rated blue/exceptional under the Hazardous
Materials/Solid Waste/Hazardous Waste area, since the evaluators found
that the proposal demonstrated "outstanding knowledge" of certain
aspects of the contract requirement. However, increasing JSC's rating
in this area would not have affected the source selection decision,
since this would give JSC only one blue/exceptional sub-element rating
compared to Foster Wheeler's two blue/exceptional ratings and its
lower evaluated cost. That is, Foster Wheeler's proposal would still
be second in line for award even if this rating were corrected. (We
discuss the evaluation of Foster Wheeler's proposal in more
detail below.)
EVALUATION ALLEGEDLY IGNORED QUALITY DISTINCTIONS
IT and JSC both contend generally that the assignment of
green/acceptable overall technical and management ratings to all four
proposals (reflecting the conclusion that the proposals were
essentially equal) was unreasonable because it ignored important
differences among the offers and failed to give adequate credit for
the particular relative strengths of each firm's offer.
While an agency's scores or adjectival ratings provide source
selection officials some information for purposes of making an award
decision, they generally
represent no more than guides to intelligent decision-making.
Porter/Novelli,
B-258831, Feb. 21, 1995, 95-1 CPD para. 101. Source selection officials
may give these ratings little or great weight, depending upon the
other information available for assessing the relative merits of the
proposals. It is for this reason that our Office
reviews the entire record--not just the numerical, adjectival or color
ratings-- including narrative materials and materials prepared during
the course of a protest, in determining the reasonableness of an
evaluation and source selection decision. PCL/Am. Bridge, B-254511.2,
Feb. 24, 1994, 94-1 CPD para. 142.
The record shows that the evaluators were aware of and considered the
relative strengths of the four proposals and conveyed their views to
the source selection authority (SSA) in narrative form, along with the
color/adjectival ratings, even where the proposals received the same
green/acceptable rating. For example, under
the Air sub-element, the evaluators found numerous strengths in the IT
proposal and assigned the firm a blue/exceptional rating in this area.
Even though the firm was ultimately assigned an overall technical
rating of only green/acceptable, these strengths were nonetheless
conveyed in the narrative materials presented to the SSA. The
evaluators noted, for example, that IT's proposal reflected "an
outstanding understanding of pollution prevention relating to air," as
well as "an outstanding knowledge of Vandenberg Air Force Base's
permitted equipment,
environmental history and agreements . . . with [the cognizant] Air
Pollution Control District. . . ." The evaluators also provided the
SSA with their views of the relative merits of the four offers,
stating, for example, that "F[oster] W[heeler] and IT both offered
more benefits in Air because of each company's extensive knowledge,
histories and capabilities." We conclude that there is no basis for
the protesters'
assertion that the evaluation was performed in a manner that did not
inform the SSA of the proposals' relative merits.
DISCUSSIONS
Both protesters contend that the agency engaged in inadequate or
misleading discussions. JSC contends that the agency improperly
failed to advise it that its [DELETE] were too high compared to the
independent government estimate. However, an agency is not required
to inform an offeror that its price is too high unless the government
considers the price unreasonably high. State
Management Servs., Inc.; Madison Servs., Inc., B-255528.6 et al., Jan.
18, 1995, 95-1 CPD para. 25. There is nothing in the record showing that
the Air Force considered JSC's price unreasonably high. We note,
moreover, that the agency actually did advise JSC generally that its
proposed costs were higher than the government estimate; in response
to this advice, JSC lowered its proposed cost [DELETE] in its BAFO.
IT contends that the Air Force misled it into believing that it should
not make changes to its staffing allocations when submitting its BAFO.
In this regard, IT states that during both written and oral
discussions, the contracting officer emphasized that any changes to
IT's staffing that were submitted with its BAFO could result in the
agency's finding the firm's offer unacceptable, and that IT would not
be afforded an opportunity to make corrections after the submission of
its BAFO. IT took this cautionary statement as indicating that it
should not make
staffing revisions to its offer, even though (according to IT) it
could have reduced its cost significantly by making such changes.
We find nothing misleading here. The Air Force was doing no more than
providing IT a cautionary reminder that making technical changes in
its BAFO could render its proposal unacceptable, and that this was a
risk because the firm would not be afforded a subsequent opportunity
to clarify its changes. (The record shows that all firms were
provided the same cautionary advice in the agency's request for
BAFOs.)
Such cautionary reminders are not improper and are often used by an
agency in advising offerors to prepare their BAFOs in strict
compliance with the requirements of the solicitation.
Champion-Alliance, Inc., B-249504, Dec. 1, 1992, 92-2 CPD para. 386;
see Federal Elec. Corp., B-232704, Jan. 9, 1989, 89-1 CPD para. 18. IT
was free to take the risk identified by the agency, and make any
changes in its BAFO that it thought would improve its competitive
standing. The fact that it did not do so reflects the
firm's business judgment, not improper action by the agency.
EVALUATION OF FOSTER WHEELER'S PROPOSAL
As noted, the agency found Foster Wheeler in line for award after
Tetra Tech, followed by IT and JSC, respectively. As discussed above,
IT's and JSC's proposals were properly evaluated. Thus, in order to
be interested parties for purposes of challenging the award to Tetra
Tech, the protesters must first demonstrate some impropriety in the
evaluation of Foster Wheeler's proposal, since that firm, not IT or
JSC, would be in line for award based on the evaluation results as
they stand.
Whittaker Servs. Corp., B-260951, July 26, 1995, 95-2 CPD para. 102.
Foster Wheeler's proposed staffing was [DELETE] man-years; the
government estimate was [DELETE]; IT's was [DELETE]; and JSC's was
[DELETE].[2] The protesters argue that nothing in the contemporaneous
evaluation record establishes that the agency ever considered the
potential impact, from either a technical risk or cost risk
standpoint, of these allegedly low staffing estimates.
This contention is without merit. The agency evaluated the
sufficiency of each firm's proposed staffing within the context of its
technical and management evaluation in each of the substantive
performance areas. To accomplish this
review, the cost evaluators presented the technical/management
evaluators with extracts showing each firm's proposed staffing and
labor mix for each substantive area (but excluding cost data).
Further, after reviewing the initial proposals, the
technical/management evaluators prepared detailed discussion questions
relating to the adequacy or excessive nature of each firm's proposed
staffing and labor mix for each substantive area where they were not
satisfied by the terms of the proposals as written. After obtaining
the firms' responses to the discussion questions, the evaluators again
reviewed the adequacy of each firm's staffing and were satisfied that
their concerns had been addressed. While the record does not include
specific findings as to the adequacy of the offerors' proposed
staffing, it is apparent that
staffing was reviewed and considered acceptable for all four offerors.
As the evaluators found Foster Wheeler's proposal--and correspondingly
its staffing--at least acceptable in each of the substantive areas,
they assigned it a proposal risk rating of low. Since proposed
staffing below the levels of a government estimate do not
automatically mean that the proposed staffing is inadequate, see KCA
Corp., B-255115, Feb. 9, 1994, 94-1 CPD para. 94, and since the protesters
have not shown that
Foster Wheeler's staffing is insufficient, we have no basis to
question this rating.[3]
In a related allegation, IT contends that the agency improperly failed
to make upward adjustments to Foster Wheeler's cost proposal, and
should not have assigned a low cost risk rating, because of the
alleged inadequacy of its proposed staffing.[4] However, since the
technical/management evaluators had considered the proposed staffing
and found it acceptable for all offerors, the cost evaluators simply
had no basis for raising Foster Wheeler's proposed cost or changing
its cost risk rating.[5]
JSC contends that the agency's cost realism evaluation is also flawed
because it failed to consider that Foster Wheeler did not include
various non-labor costs in its proposal, such as the cost of fuel for
numerous vehicles to be operated during performance, and the cost of
performing lab analysis of waste product samples.
As explained by the agency, JSC's allegation is based on an erroneous
assumption regarding the way in which different offerors accounted for
these non-labor costs. JSC included [DELETE] in its cost proposal,
while the other three firms included these costs [DELETE]. The cost
evaluators analyzed the offerors' costs both in terms of direct labor,
and indirect costs, and found the proposals acceptable as submitted
with only minor changes not relevant here.
Of particular significance for our purposes is the fact that Foster
Wheeler's indirect
costs were significantly higher than JSC's. For the operations and
maintenance portion of the base year of the contract, for example, the
record shows that Foster Wheeler's indirect rate was [DELETE] percent
of direct labor; in contrast, JSC's indirect rate was only [DELETE]
percent. The cost evaluators concluded that the higher rate being
proposed by Foster Wheeler was attributable to the fact that it uses a
different accounting method than JSC. Foster Wheeler included various
non-labor costs in [DELETE] as compared to JSC, which allocated these
non-labor costs to [DELETE]. JSC has offered no evidence that refutes
the agency's explanation, and we find no basis to question the
reasonableness of the agency's conclusion in this regard.
Based on our review, we find that the agency's evaluation of Foster
Wheeler, from both a cost and technical standpoint, was reasonable and
consistent with the terms of the RFP. We also find that the SSA
reasonably considered Foster Wheeler next in line for award after
Tetra Tech. In this connection, the SSA submitted an affidavit with
the agency report in which he explains the relative ranking of the
offerors.[6] He explains that he would have chosen Foster Wheeler for
award after Tetra Tech because Foster Wheeler submitted the best rated
proposal among the remaining three competitive range offerors. In
this regard, we note that Foster Wheeler's proposal received two
blue/exceptional ratings; one protester had two blue/exceptional
ratings and the other should have had one, and all offerors had low
risk ratings. In addition, Foster Wheeler had the lowest evaluated
cost among the remaining three firms. Based on our review, and given
that the evaluation and
relative ranking of the protester's proposal was proper, we have no
basis to question the SSA's conclusion that Foster Wheeler was second
in line for award.
EVALUATION OF TETRA TECH's PROPOSAL
The protesters raise numerous allegations concerning the evaluation of
Tetra Tech's proposal. We dismiss these allegations because Foster
Wheeler, not one of the protesters, is next in line for award, and the
protesters are therefore not interested
parties eligible to protest Tetra Tech's evaluation. 4 C.F.R. sec.
21.0(a).[7]
The protests are denied in part and dismissed in part.
Comptroller General
of the United States
1. IT contends that the agency failed to assign blue/exceptional
ratings to its proposal in four of the eight substantive technical
evaluation sub-elements, and JSC contends
that the agency improperly failed to assign blue/exceptional ratings
in two of the substantive technical evaluation areas and also in the
management/business area.
2. IT also contends that the agency erred in not providing the
staffing estimate used to prepare the government estimate in the RFP.
This contention constitutes a challenge to the terms of the RFP. As
it was not raised prior to the deadline for submitting proposals, the
matter is untimely. 4 C.F.R. sec. 21.2(a)(1) (1995). We therefore
dismiss this aspect of IT's protest.
3. There is no basis to conclude simply from the difference between
the manning levels proposed by Foster Wheeler and the government
estimate that it was offering inadequate staffing or that it should
therefore have received a lower proposal risk rating. All of the
competitive range offerors proposed staffing lower than the
government's estimated [DELETE] man-years.
4. IT contends as well that the Air Force failed to compare proposals
on the basis of each firm's proposed "effective cost-per-man-year."
The agency was not required to perform a cost-per-man-year comparison.
See Porter/Novelli, supra (an agency need not verify each and every
cost element of every proposal or employ any particular evaluation
methodology in conducting its cost realism evaluation).
5. We note that the agency submitted all of Foster Wheeler's direct
and indirect cost rates (as well as cost rate information for its
major subcontractors) to the Defense Contract Audit Agency (DCAA) for
review. DCAA took no exception to any of the
rates it reviewed in connection with the Foster Wheeler proposal.
6. Both protesters contest the agency's conclusion that Foster Wheeler
was next in line for award since this finding was not expressed by the
SSA until after award, in connection with the protest. Our Office
considers the entire record, including materials prepared in
connection with the protest, in reviewing the propriety of an agency's
conduct of a procurement. PCL/Am. Bridge, supra.
7. IT also argues that the agency improperly assigned a "moderate"
risk rating to its cost proposal because it essentially misread the
firm's offer. IT concludes that, absent this and the other alleged
errors, it would have been in line for award. As discussed, we find
nothing improper in IT's technical/management rating. Thus, even if
IT's proposal were given a low cost risk rating, it still would not be
in line for award, since Foster Wheeler's technical/management and
risk ratings would be identical to IT's, and its cost was lower.
Foster Wheeler, not IT, thus would be in line for award even if IT's
cost risk rating were raised. Whittaker Servs. Corp., supra.