BNUMBER: B-266339.2
DATE: April 16, 1996
TITLE: Optimum Technology, Inc.
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Matter of:Optimum Technology, Inc.
File: B-266339.2
Date:April 16, 1996
John R. Tolle, Esq., and William T. Welch, Esq., Barton, Mountain &
Tolle, for the protester.
Virginia G. Farrier, Esq., Defense Information Systems Agency, for the
agency.
Glenn G. Wolcott, Esq., and Paul Lieberman, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Prior performance of similar requirements by awardee's
subcontractor does not give rise to prohibited organizational conflict
of interest or provide an unfair competitive advantage where
subcontractor's prior work did not affect the requirements being
solicited and any advantage accruing is merely that of an incumbent
contractor.
2. Agency's equal weighting of certain evaluation factors under
solicitation which stated that lower-listed factors would be afforded
less weight does not provide basis to sustain protest where record
clearly establishes that protester was not prejudiced as a result.
3. Where solicitation stated that evaluation factors were listed in
descending order of importance, actual weighing of the factors applied
by the agency is unobjectionable where it reflected a reasonable
downward progression.
DECISION
Optimum Technology, Inc. protests the award of a contract to Excel
Management, Inc. under request for proposals (RFP) No.
DCA100-95-R-0051, issued by the Defense Information Systems Agency
(DISA). Optimum asserts that Excel should have been excluded from the
competition because the prior contract performance of one of its
proposed subcontractors created an impermissible organizational
conflict of interest, and that the award was otherwise improper
because the agency failed to follow the RFP's stated evaluation
scheme.
We deny the protest.
On April 5, 1995, the agency issued the RFP at issue (hereafter
referred to as "-0051") as a competitive set-aside under section 8(a)
of the Small Business Act, 15 U.S.C. sec. 637(a) (1994). The
solicitation contemplated the award of a firm,
fixed-price contract to design and install an Integrated Network
Management System (INMS) for the DISA Columbus Regional Control Center
(RCC). The system is intended to provide the capability to interface
with a variety of network element management systems and contains
options for the management of classified networks and maintenance.
The solicitation stated that award would be made on the basis of cost,
technical, and management factors, with technical and management
factors more important than cost.[1]
On April 24, the agency conducted a site visit to provide potential
offerors an opportunity to receive a detailed technical briefing
regarding the existing systems. On April 25 and 26, potential
offerors were given guided tours through the Columbus facility to see
the operational areas and physically review the systems.
On or before the June 19 closing date, proposals were submitted by
several offerors including Optimum and Excel. All of the offerors
proposed various subcontractors that offered some familiarity with the
INMS environment at the Columbus facility. Excel's proposal stated
that Excel intended to use I-Net, Inc. as a subcontractor; I-Net had
previously provided INMS services for several DISA sites including the
Columbus facility.
Upon evaluation of the proposals, the agency established a competitive
range which included the Optimum and Excel proposals and thereafter
conducted discussions and requested best and final offers (BAFOs),
which were submitted on September 5. Optimum's BAFO received a
technical/management rating of 9.38; Excel's BAFO received a
technical/management rating of 9.33.[2] Excel's and Optimum's BAFOs
were both rated "excellent" and were considered to be technically
equal. However, Excel's proposed price was approximately 20 percent
lower than Optimum's. Excel's proposal was selected for award on the
basis of its lower price, and this protest followed.
ALLEGED REQUIREMENT TO EXCLUDE EXCEL'S PROPOSAL
Conflict of Interest
Optimum asserts that performance of a prior contract for INMS services
by I-Net, Excel's proposed subcontractor, created a prohibited
organizational conflict of interest that required the agency to
exclude Excel's proposal from consideration. We disagree.
On February 26, 1993, I-Net was awarded contract No. DCA200-93-D-0024
(hereafter referred to as "-0024") under the 8(a) set-aside program.
That contract called for I-Net to provide network management and
related systems engineering services to support DISA throughout the
world; performance of individual tasking requirements under this
contract were generally authorized through issuance of delivery
orders.[3] Ten delivery orders were ultimately issued under the
contract, several of which reflected DISA's long range intent to
"operate and maintain a worldwide communication architecture to
support network management functions at all the DISA network
management centers." Specifically, under delivery orders 001 and 005,
I-Net provided INMS services at DISA Headquarters in Virginia; under
delivery orders 002 and 006, I-Net provided INMS services at the DISA
Europe RCC in Germany; and under delivery order 004, I-Net provided
INMS services at the DISA Pacific RCC in Hawaii.
Task order 009 was verbally issued on May 18, 1994, and contemplated
"the orderly implementation of integrated commercial-off-the-shelf
(COTS) hardware and software that will test . . . system and network
management at the Columbus System/Network Management Center."[4]
On July 11, 1994, another contractor filed an agency-level protest
challenging the issuance of task order 009.[5] That protest was based
on allegations that the task order was outside the scope of contract
No. -0024 and that I-Net had graduated from the 8(a) program prior to
the task order's issuance. By letter dated August 20, 1994, the
contracting officer denied the protest, but also stated that task
order 009 was being terminated for the convenience of the
government.[6] At the time task order 009 was terminated, I-Net had
conducted a site survey,[7] performed a requirements analysis,[8] and
prepared a cost proposal[9] pursuant to that order.
The agency subsequently issued RFP No. -0051, the solicitation at
issue here. The work statement included in RFP No. -0051 contained
requirements similar to those in task order 009. In this regard, the
agency states:
"The essential difference between the SOW for solicitation DCA
100-95-R-0051 and Task Order 009 . . . is the scope of work to be
performed at the Columbus RCC. Task Order 009 had a wider scope
and included in the functions of the then IS/NMS to manage
control of computer applications and communication devices on the
Defense Logistic[s] Agency (DLA) Base at Columbus in addition to
the management of DISA communication networks. The SOW for [RFP
No. -0051] focus[es] only on the capability of the INMS to manage
and control DISA communication networks."
Optimum protests that I-Net's partial performance of task order 009
"placed I-Net in a conflict of interest as defined by FAR [Federal
Acquisition Regulation] 9.505-2(b)(1)." That section of the FAR
states:
"If a contractor prepares, or assists in preparing, a work
statement to be used in competitively acquiring a system or
services--or provides material leading directly, predictably, and
without delay to such a work statement--that contractor may not
supply the system, major components of the system, or the
services unless [exceptions omitted]."[10]
The FAR provides that the responsibility for identifying and resolving
organizational conflicts of interest is that of the contracting
officer, who in doing so is admonished to exercise "common sense, good
judgment and sound discretion." FAR sec. 9.504, 9.505. Our Office will
not disturb a contracting officer's determination regarding an
organizational conflict of interest unless it is shown to be
unreasonable. ICF, Inc., B-241372, Feb. 6, 1991, 91-1 CPD para. 124.
In its response to Optimum's protest, the agency provided a detailed
chronology regarding the development of the work statement contained
in RFP No. -0051. Specifically, the record shows that, in March 1993,
personnel from the Columbus RCC and DISA Headquarters collaborated on
the development of an INMS requirement document that established
DISA's functional requirements for network management. This document,
referred to as the "functional requirements specification" or "FRS,"
was relied on by DISA for various INMS procurements and was ultimately
incorporated into RFP No. -0051, specifying the requirements the
awardee must perform.
The record contains multiple affidavits from various government
personnel who developed the work statement in RFP No. -0051; each of
the affidavits state that the government's requirements under RFP No.
-0051 were developed without input from any outside entity. The
individual primarily responsible for drafting the functional
requirements specification explicitly states: "no contractor help was
used in developing the specification," and, more specifically, "[t]he
FRS used in this solicitation [RFP No. -0051] was not developed using
information obtained from
I-Net." Along with the affidavits, the record contains multiple
documents tracking the development process, including preliminary
requirements specifications.[11]
While Optimum expresses disagreement with the agency's
representations, its conclusory allegation that I-Net's prior
performance "could not have been disregarded" when the solicitation
was drafted is not supported by the record. In fact, the record shows
that the requirements in RFP No. -0051 were substantially established
prior to I-Net's performance of task order 009 and were incorporated
in that task order--not that the requirements in RFP No. -0051 were
created as a result of I-Net's performance of task order 009. Optimum
effectively concedes this to be the case by stating in its protest
that: "[t]he RFP here [No. -0051] is a direct re-do of I-Net's
earlier contract [task order 009]." Further, the INMS requirements in
task order 009 were similar to the INMS requirements of the delivery
orders previously issued to I-Net. Again, Optimum's own statements
acknowledge this fact. Specifically, after reviewing I-Net's various
delivery orders under contract No. -0024, Optimum notes, "the I-Net
delivery orders . . . all bore a striking similarity to one another."
On this record, it is clear that the requirements contained in RFP
-0051 were substantially established by the government prior to
I-Net's performance of task order 009. Accordingly, since I-Net's
performance of task order 009 neither involved preparation of the work
statement in RFP No. -0051 nor led directly to the development of that
statement, Optimum's contention that the awardee should have been
excluded from the competition because of an organizational conflict of
interest proscribed by FAR sec. 9.505-2(b)(1) is without merit.
Unfair Competitive Advantage
Optimum also argues that Excel's proposal should have been excluded
from consideration on the basis that I-Net's prior activities under
contract No. -0024 provided it with an unfair competitive advantage.
Optimum complains that it was not provided with the same level of
information in order to prepare its proposal that I-Net was able to
provide Excel, and that Optimum was not given the same opportunity as
I-Net, through its prior contract, to familiarize itself with the
Columbus facility or "benefit from an open dialogue" with DISA
personnel.[12]
The agency responds that it did everything it could to provide
potential offerors with all relevant information that was not
proprietary. In this regard, the agency provided offerors with all of
the information from I-Net's performance of task order 009 which was
not considered proprietary to I-Net.[13]
The mere existence of a prior or current contractual relationship
between a contracting agency and firm does not create an unfair
competitive advantage, see ETEK, Inc., B-234709, July 11, 1989, 89-2
CPD para. 29, nor is an agency required to compensate for every
competitive advantage inherently gleaned by a potential offeror's
prior performance of a particular requirement. Versar, Inc.,
B-254464.3, Feb. 16, 1994, 94-1 CPD para. 230. For example, an incumbent
contractor's acquired technical expertise or firsthand knowledge of
the costs related to a requirement's complexity are not generally
considered to constitute unfair advantages the procuring agency must
eliminate. Id.; Delta Oaktree Prods., B-248903, Oct. 7, 1992, 92-2
CPD para. 230; Rolm Corp., B-214052, Sept. 11, 1984, 84-2 CPD para. 280.
Here, I-Net's status with regard to the protested procurement is
essentially that of an incumbent contractor. As discussed above,
Optimum acknowledges the similarity between the requirements of
contracts previously performed by I-Net, including task order 009, and
the requirements contained in RFP No. -0051. Optimum's allegation,
that it did not have access to the same type of information as I-Net
provided Excel, is essentially nothing more than a complaint that its
contract performance experience is not the same as I-Net's. There is
no basis to object to an offeror's advantage unless it is created by
improper preference or other unfair action by the procuring agency.
Versar, Inc., supra; Delta Oaktree Prods., supra; Rolm Corp., surpa.
On the contrary, incumbent contractors with good performance records
can offer real advantages to the government and proposal strengths
flowing from a firm's prior experience are proper considerations in
selecting an awardee. Sabreliner Corp., B-242023; B-242023.2, Mar.
25, 1991, 91-1 CPD para. 326; Benchmark Sec., Inc., B-247655.2, Feb. 4,
1993, 93-1 CPD para. 133. Here, the record provides no indication of
improper preference or other unfair action by the agency. Moreover,
the agency took reasonable measures to provide all potential offerors
with all of the legally disclosable relevant information flowing from
the terminated predecessor task order. Under these circumstances,
there is no basis to require the exclusion of Excel from the
competition because of its proposed use of I-Net as a subcontractor.
EVALUATION OF PROPOSALS
Optimum also protests that the agency failed to follow the evaluation
scheme established in the solicitation. In this regard, section M of
the RFP identified the following technical and management evaluation
factors, and stated that they were listed in descending order of
importance:
Technical
Engineering/Technical Approach
Understanding of the INMS Network Management Requirements
Clear Understanding of the Problem
System Performance
Security
Management
Relevance of Past Experience and Performance
Risk Management
Program Management, Organization Structure and Personnel
Management Services
After reviewing the agency's evaluation documents,[14] Optimum filed a
supplemental protest alleging that the agency failed to follow the
evaluation scheme established in the solicitation, first asserting
that "the agency weighed some subfactors that were listed after other
factors more than the preceding factors." This allegation is based on
Optimum's misunderstanding of the relationship between raw points and
weighted scores.
The record shows that the agency assigned the following weights to the
evaluation factors:
Technical Weight
Engineering/Technical Approach 20
Understanding of the
INMS Network Management Requirements 15
Clear Understanding of the Problem 10
System Performance 10
Security 5
Management Weight
Relevance of Past Experience/Performance20
Risk Management 10
Program Management,
Organization Structure and Personnel 5
Management Services 5
In evaluating proposals, the agency first assigned raw point scores
between 1 and 10 to each of several subfactors associated with the
various evaluation factors.[15] The number of subfactors varied from
factor to factor and the total raw point scores associated with each
evaluation factor did not reflect the total points available for each
factor under the RFP's weighing scheme. In order to achieve the
specified weighing, the agency properly divided the raw score for each
evaluation factor by the number of subfactors, then multiplied by the
appropriate weighing factor. In short, the record is clear that the
agency did not accord greater weight to a lower-listed evaluation
factor then it accorded to a higher-listed evaluation factor.
Next, Optimum complains that, although offerors were advised that the
evaluation factors were listed in descending order of importance, in
fact, two technical factors ("Clear Understanding of the Problem" and
"System Performance") and two management factors ("Program Management"
and "Management Services") were improperly accorded equal weight.
It is true that the agency failed to explicitly follow the stated
evaluation scheme; that is, the agency should have afforded somewhat
greater weight to the technical evaluation factor "Clear Understanding
of the Problem" than it afforded to "System Performance" and
similarly, should have afforded somewhat greater weight to the
management evaluation factor "Program Management" than it afforded to
"Management Services." However, it is manifestly clear that Optimum
was not prejudiced by the agency's failure to do so. Specifically,
Excel's score under the technical factor "Clear Understanding" was
higher than Optimum's; accordingly, giving greater weight to this
factor would have benefited Excel. Although Optimum's score under the
management factor "Program Management" was slightly higher than
Excel's, the RFP provided that technical factors were more important
than management factors. In short, the record shows that appropriate
application of somewhat greater weight to the higher-listed of the two
equally weighted pairs of factors would have benefited Excel rather
than Optimum.
Prejudice is an essential element of every viable protest, and we will
not disturb an agency's award decision even where the record reflects
some minor error in the evaluation of proposals, so long as the error
does not prejudicially affect the protester. See, e.g., Mesa, Inc.,
B-254730, Jan. 10, 1994, 94-1 CPD para. 62. Since the net effect of the
agency's action was a benefit to Optimum, the company was not
prejudiced by DISA's evaluation approach.
Finally, Optimum protests that, because the RFP stated that factors
would be scored in descending order of importance, "no single
subfactor should have been weighed much more than any other one."
Optimum maintains that the weighing scheme identified above was
improper because the difference between the first and last subfactors
was "significant," noting that "[t]he first [factor] is worth four
times the last."
The Competition in Contracting Act of 1984 (CICA) requires contracting
agencies to set forth in the solicitation all significant evaluation
factors that the agency expects to consider and their relative
importance. 10 U.S.C. sec. 2305(a)(2) (1994); H.J. Group Ventures, Inc.,
B-246139, Feb. 19, 1992, 92-1 CPD para. 203. A solicitation which lists
evaluation factors in descending order of importance generally meets
CICA's requirements unless one factor has a disproportionately high
value relative to the others. See, e.g., BDM Servs. Co., B-180245,
May 9, 1974, 74-1 CPD para. 237. In short, when a solicitation states
that evaluation factors are listed in descending order of importance,
offerors are on notice that the evaluation criteria listing reflects a
reasonable downward progression of relative weights. General
Exhibits, Inc.,
56 Comp. Gen. 882 (1977), 77-2 CPD para. 101.
Here, the evaluation scheme which the agency employed reflects a
reasonable downward progression of evaluation weights. No single
factor was unusually significant or unusually insignificant. See
Raytheon Support Servs. Co., B-219389; B-219389.2, Oct. 31, 1985, 85-2
CPD para. 495 (agency's evaluation was proper where solicitation stated
listed three factors in descending order of importance and employed a
scheme where first factor was worth 75 percent, second factor was
worth 15 percent, and third factor was worth 10 percent); cf. BDM
Servs. Co., supra (where solicitation listed 5 evaluation factors and
most important factor was 6 times the weight of the second
factor and 24 times the weight of the fifth factor, predominant value
accorded first factor should have been disclosed); Coastal Science and
Eng'g, Inc., 69 Comp. Gen. 66 (1989), 89-2 CPD para. 436 (where
solicitation stated that technical was more important than cost, the
fact that technical was 9 times more important than cost should have
been disclosed). Accordingly, the agency's evaluation scheme was not
unreasonable.
The protest is denied.
Comptroller General
of the United States
1. Section M also stated that, between technical and management,
technical was more important and that technical evaluation factors
would be valued at approximately
60 percent of the technical/management score, while management factors
would be valued at approximately 40 percent of the score.
2. The agency used an adjectival and numerical rating system.
Proposals were given scores ranging from 1 to 10 under each evaluation
factor and subfactor. Scores of 9-10 were considered "excellent,"
reflecting a proposal that was comprehensive and complete, met or
exceeded all requirements, and demonstrated in detail how to
accomplish the task with minimum risk. Scores of 7-8 were considered
"good," reflecting a proposal that generally met or exceeded
requirements, demonstrating a feasible approach with little risk.
Scores of 5-6 were considered "adequate," reflecting a proposal which
minimally met requirements and provided minimal detail regarding
feasibility of approach. Scores of 3-4 were considered "marginal,"
reflecting a proposal with correctable defects. Scores below 3 were
considered unacceptable with defects requiring major revision.
3. Each delivery order incorporated one or more task orders.
4. Task order 009 was confirmed in writing on June 7, 1994, through
the issuance of delivery order 007.
5. That protester is not a party to this matter.
6. The protest was denied on the basis that task order 009 was within
the scope of contract No. -0024 and that I-Net "exited the Small
Business Program effective
June 16, 1994."
7. I-Net's site survey report reflected technical information that
I-Net had gathered on the systems that were being managed by Columbus
along with information about the Columbus facility including space,
power, wiring, and other environmental factors, and
installation/deinstallation considerations.
8. I-Net's requirement analysis essentially reviewed the requirements
that were stated in the government's work statement, followed by
I-Net's proposed solution to meet those requirements.
9. I-Net's cost proposal consisted of various elements including the
hardware and software required to implement the system, support
service including maintenance and training, and other costs such as
labor and travel. More specifically, the cost proposal reflected
I-Net's vendor arrangements and labor costs.
10. This FAR provision is intended to avoid a situation in which a
contractor favors its own products or capabilities in preparing the
work statement. FAR sec. 9.505-2(b)(2). There is no basis to
distinguish such potential conflicts of interests involving prime
contractors from those involving subcontractors. See The Pragma
Corp., B-255236 et al., Feb. 18, 1994, 94-1 CPD para. 124; Medical Service
Corp. Int'l., B-255205.2, Apr. 4, 1994, 94-1 CPD para. 305.
11. Although Optimum initially requested a hearing in this matter,
after receipt of the agency record it expressly withdrew that request
on the basis that "the case can be decided based upon the written
filings the parties have made." Accordingly, our Office did not hold
a hearing in this matter.
12. To the extent Optimum's protest is now challenging the adequacy of
the information provided with the solicitation, the issue is not
timely raised. Bid Protest Regulations, sec. 21.2(a)(1), 60 Fed. Reg.
40,737, 40,740 (Aug. 10, 1995) (to be codified at 4 C.F.R. sec.
21.2(a)(1)).
13. Procuring agencies have an obligation to protect the proprietary
information of a contractor or offeror. See Information Ventures,
Inc., B-240925; B-240925.2, Jan. 15, 1991, 91-1 CPD para. 39 (withholding
of proprietary information proper due to the protections afforded
under the Trade Secrets Act, 18 U.S.C. sec. 1905); 49 Comp.
Gen. 28 (1969) (when government's use of proprietary or confidential
data or trade secrets in a solicitation violates a firm's proprietary
rights, our Office may recommend that the contracting agency either
make a sole source award to the entity whose data was compromised or,
if possible, cancel the solicitation and resolicit without using the
proprietary data).
14. In response to Optimum's initial protest, which included various
allegations regarding the agency's allegedly improper evaluation of
proposals, the agency provided Optimum's counsel with various
evaluation documents, subject to the terms and conditions of this
Office's protective order. By letter dated December 5, 1995, Optimum
withdrew its initial allegations except for the alleged conflict of
interest, discussed above.
15. The solicitation identified the various subfactors, but did not
indicate an order of importance for them. Accordingly, the agency
gave the subfactors equal weight.