BNUMBER: B-265708
DATE: December 19, 1995
TITLE: Hagler Bailly Consulting, Inc.
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Matter of:Hagler Bailly Consulting, Inc.
File: B-265708
Date: December 19, 1995
Judd L. Kessler, Esq., and Ronald S. Perlman, Esq., Porter, Wright,
Morris & Arthur, for the protester.
Joel R. Feidelman, Esq., Anne B. Perry, Esq., and C. Anthony Trambley,
Esq., Fried, Frank, Harris, Shriver & Jacobson, for Resource
Management International, Inc., an interested party.
Rosemary T. Rakas, Esq., United States Agency for International
Development, for the agency.
Linda S. Lebowitz, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Contracting officer reasonably selected higher technically rated,
higher-cost proposal for award where he reasonably determined that
proposal's technical advantages were worth the additional cost, and
evaluation scheme provided that technical evaluation factors were more
important than cost in determining the best value to the government.
DECISION
Hagler Bailly Consulting, Inc. (HBC) protests the award of a contract
to Resource Management International, Inc. (RMI) under request for
proposals (RFP)
No. 492-95-07, issued by the United States Agency for International
Development to provide technical assistance on an Energy Demand Side
Management (DSM) project to the Government of the Philippines. HBC
basically alleges that the evaluation was biased against the firm, and
also challenges the cost/technical tradeoff.[1]
We deny the protest.
In response to severe power shortages during the 1990s, the government
of the Philippines is undertaking a program to improve the overall
operation of the country's energy sector, particularly focusing on
supply-side, or end-use, aspects for providing electricity. DSM
principles and measures allow electric utilities and their customers
to modify their electricity consumption patterns with respect to both
the timing and level of electricity demand. According to the RFP, the
objective of DSM activities is "to reduce utility capacity
requirements with a corresponding decrease in total generation so that
electricity services can be offered efficiently, effectively and at
least cost." This DSM project will be funded using a portion of the
agency's funding commitment to support the World Bank's Global
Environment Facility.
The RFP contemplated the award of a cost-plus-award-fee,
completion-type contract for a 3-year period. Under the RFP, the
contractor will (1) validate DSM activity by assessing the potential
of DSM activities in the Philippines; (2) provide technical assistance
to establish DSM regulatory frameworks; and (3) establish a pilot
program in the industrial sector to test findings, demonstrate
tangible benefits, and establish proven and replicable models. The
RFP described seven tasks, including the National DSM Assessment,
requiring the contractor to describe electricity use by primary
end-users (commercial, residential, and industrial) in order to
provide load forecasting data based on customer consumption, and the
Industrial DSM Assessment, requiring the contractor to develop a
comprehensive database from which the design of an industrial sector
program will be developed. The RFP explained that portions of some of
the specific tasks have already been initiated or even partially
completed, but emphasized that "[t]he intent of this contract is that
there will not be a duplication of effort." Accordingly, the RFP
stated that it would be the contractor's responsibility to review,
incorporate, and/or utilize all ongoing or completed DSM task-related
activities.
The RFP stated that the award would be made to the offeror whose
proposal was deemed to represent the best value to the government,
technical evaluation factors and cost considered. The RFP included
the following four technical evaluation factors (and weights, on a
100-point scale): (1) technical approach (35 points); (2) team
personnel qualifications (25 points); (3) corporate experience (25
points); and (4) management structure and approach (15 points). Cost
was worth 20 points.[2] The RFP provided that the agency would not
necessarily award a contract to the offeror proposing the lowest cost
or to the offeror with the highest total combined evaluation score.
Four firms, including HBC and RMI, submitted initial technical and
cost proposals. Technical proposals were evaluated by the agency's
technical evaluation committee (TEC), while cost proposals were
reviewed by the contracting officer. The contracting officer included
the proposals of HBC, RMI, and one other firm in the competitive range
and subsequently conducted written discussions with each competitive
range offeror. Following discussions, each competitive range offeror
submitted a best and final offer (BAFO). The final scores for HBC and
RMI were as follows:
Technical Cost Total
HBC 83 20 103
RMI 94 15.2 109.2
The scores for the technical evaluation factors were supported by
narratives of the strengths and weaknesses in each offeror's technical
proposal.
In addition to RMI having the highest total combined evaluation score,
the contracting officer concluded that RMI's proposal was clearly
technically superior and worth its higher cost. Accordingly, the
contracting officer awarded a contract to RMI.
HBC complains that because an initial technical evaluator had a prior,
limited business relationship with RMI, the evaluation was biased
against HBC.
Where a protester alleges bias on the part of a contracting official,
the record must establish that the official intended to harm the
protester, since contracting officials are presumed to act in good
faith. Docusort, Inc., B-254852.2, Feb. 22, 1995, 95-1 CPD 107.
Moreover, even where there is evidence of bias, this does not provide
a basis for sustaining a protest unless the protester also
demonstrates that the bias translated into action which harmed the
protester's competitive position. Id.
There is no evidence of bias here. The record shows that one member
of the initial three-member TEC simultaneously headed the Energy
Efficiency Division of the Philippine Department of Energy. Pursuant
to Philippine law, this office performs routine energy audit services
(approximately 60 audits per year) for any industrial or commercial
entity at standard, predetermined rates when private sources for such
audits are not available or otherwise qualified. Several months prior
to submission of its initial proposal under this RFP, RMI used this
office's routine audit services in performing another contract.
However, the head of the office receives no extra compensation when
his office performs such routine services, and there is no evidence
that the individual otherwise benefitted personally from the office's
business relationship with RMI.
Further, the record shows that, while the individual in question
evaluated initial proposals, he was not a member of the final TEC, due
to a leave of absence because of a family medical emergency. The
individual did not evaluate BAFOs and there is no evidence in the
record which suggests that, after leaving the initial TEC, he played
any further role in evaluating proposals or in making an award
recommendation to the contracting officer. Moreover, the record shows
that, in evaluating HBC's initial proposal, of the three members of
the initial TEC, the individual in question assigned the highest
technical score to HBC's proposal. It thus appears that HBC actually
benefitted from this individual's participation on the initial TEC.
We conclude that there is no basis for a finding of bias on the
agency's part. See, e.g., Suncoast Scientific Inc., B-240689, Dec.
10, 1990, 90-2 CPD 468.[3]
HBC also challenges the contracting officer's cost/technical tradeoff
decision which resulted in the award to RMI. HBC contends that the
contracting officer had no reasonable basis for concluding that RMI's
proposal was superior to HBC's proposal and therefore worth the cost
premium.
In a negotiated procurement, an agency has the discretion to select a
highly-rated, higher-cost proposal if doing so is reasonable and
consistent with the evaluation scheme set forth in the RFP. Pacific
Architects & Eng'rs, Inc., B-257431.7, Dec. 8, 1994, 95-1 CPD 202.
We have upheld awards to higher-rated offerors with significantly
higher proposed costs where it was determined that the cost premium
was justified considering the significant technical superiority of the
selected offeror's proposal. Id.
The record shows that in determining the proposal representing the
best value to the government, the contracting officer not only
considered RMI's highest total combined technical and cost score, but
also explained why he believed the technical superiority of RMI's
proposal justified the payment of a cost premium to RMI. In this
respect, the contracting officer referenced in the negotiation
memorandum the conclusion of the technical evaluators that RMI's
proposal was
"clear, concise, and demonstrated a thorough understanding of the
requirements of the project and of the DSM technical/financing
problems/solutions in the Philippine context. RMI's technical
proposal was found to be of higher quality than the other
proposals, and is both innovative and practical. The proposal
quality reflects RMI's clear perception of implementing an
industrial sector DSM program in the Philippines."[4]
The contracting officer concluded that RMI's proposal was "the clearly
technically significantly innovative and superior proposal [and] [was]
worth the higher [cost] by delivering a higher quality end product."
In the agency report, the contracting officer furnished a declaration
in which he elaborated upon the statement in the negotiation
memorandum.[5] Specifically, the contracting officer believed that
RMI's demonstration program was designed for expeditious
implementation, including accelerated development of energy end-use
data through a customized model and complete and immediate use of
existing Philippine models and databases. The contracting officer
also believed that RMI's demonstration program could be used as the
basis for implementing a successful industrial pilot program. In
addition, the contracting officer was impressed with RMI's plan to
establish a fund to finance future DSM projects and a public/private
sector group to research and track consumer end-use and load issues.
In contrast, while recognizing HBC's DSM experience, the contracting
officer concluded that HBC's proposal was "generic," that is, did not
address a DSM approach tailored to the Philippines but, rather, an
approach which generally could be used in any developing country. The
contracting officer further believed that although all proposals,
including HBC's and RMI's, had shown an understanding that duplication
of effort was not expected, RMI proposed a more effective and
innovative approach than HBC for eliminating duplication of work and
for incorporating previously completed assessments. Finally, the
contracting officer determined that RMI's proposed subcontractor had
strong DSM experience in the Philippines and would play a significant
role in satisfying the project's objectives. On the other hand, the
contracting officer had some concerns with HBC's team's understanding
of DSM in the Philippine context. We point out that the contracting
officer's discussion reflects many of the narrative evaluation
findings of the TEC which unanimously recommended RMI for award.
Although RMI's proposed cost was higher than HBC's (by approximately
24 percent),[6] given the RFP's evaluation scheme, under which
technical considerations were more important than cost, the
contracting officer's specific determination that RMI's proposal was
sufficiently technically superior to HBC's to warrant its higher cost
provided a reasonable basis for the award to RMI.
The protest is denied.
Comptroller General
of the United States
1. We previously dismissed HBC's initial "information and belief"
allegations challenging the evaluation, including the agency's alleged
use of unstated evaluation factors, and HBC's supplemental allegations
in this regard, since these allegations were not raised in a timely
manner; they were raised in the firm's comments filed more than 10
working days after receipt of the agency's administrative report. See
4 C.F.R. 21.2(a)(2) (1995).
2. The proposal of the lowest cost offeror would receive 20 points and
the proposals of the other higher cost offerors would receive a
proportionate share of 20 points.
3. In any case, since there has been no showing that HBC's proposal
was negatively affected by any alleged bias--HBC has not shown that
the evaluation conclusions were unreasonable--there would be no basis
for sustaining the protest even if bias were evident. Docusort, Inc.,
supra.
4. The RFP clearly contemplated consideration of an offeror's proposed
approach to DSM in the context of the Philippines. In this regard,
each of the seven tasks specifically described in the RFP expressly
referenced the Philippines. Moreover, the most important evaluation
factor--technical approach--required an offeror to demonstrate its
"[g]eneral understanding of the services to be performed as indicated
by proposal content, task discussions, and proposed approach to
contract requirements [i.e., specific tasks]," and its "understanding
of DSM technical and financial problems/solutions in the Philippine
context."
5. Contrary to HBC's assertion, while we generally give more weight to
contemporaneous records than to those prepared after the fact, here,
we conclude that the contracting officer's declaration is consistent
with the contemporaneous evaluation and selection records; thus, there
is no basis for according this declaration less weight than other
documents in the agency report. Engineered Air Sys., Inc.,
B-254032.2, Nov. 23, 1993, 93-2 CPD 298.
6. Offerors were required to use two "plug" numbers (for training and
commodities) in calculating their proposed costs. Even if the "plug"
numbers are subcontracted from each offeror's proposed cost and cost
scores are adjusted, RMI's total combined score remains higher than
HBC's total combined score.
In the negotiation memorandum, the contracting officer also explains
that RMI's proposed cost was determined reasonable vis-a-vis the
government estimate, the proposed cost of the other competitive range
offeror, and costs for the same or similar goods or services. In
addition, the contracting officer noted several reasons (i.e., HBC's
proposal was not tailored to the Philippines and most of its line
items, such as proposed travel and per diem and other direct costs
were "too conservative") why HBC's proposed cost was considered
unrealistically low in comparison to RMI's proposed cost.