BNUMBER: B-270161.2
DATE: April 10, 1996
TITLE: Rockville Mailing Service, Inc.
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Matter of:Rockville Mailing Service, Inc.
File: B-270161.2
Date:April 10, 1996
Jeffrey A. Lovitky, Esq., for the protester.
Louis J. Kozlakowski, Jr., Esq., Blum, Yumkas, Mailman, Gutman &
Denick, P.A., for Jet Sort, Inc., an intervenor.
Lyman Goon, Esq., Social Security Administration, for the agency.
Katherine I. Riback, Esq., and Paul Lieberman, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Where agency ascertained that it had made award based on
misevaluation of awardee's technical proposal which had resulted from
an unclear solicitation provision, agency reasonably determined to
take corrective action.
2. Where awardee's price has been disclosed, reopening negotiations
after disclosure of all competitor's prices, does not constitute an
improper auction where an improper award had been made.
DECISION
Rockville Mailing Service, Inc. protests the agency's decision to
reopen discussions and reevaluate proposals as corrective action after
an award had been made to Rockville under request for proposals (RFP)
No. SSA-RFP-95-2255, issued by the Social Security Administration
(SSA), for mail sorting services. Rockville argues that the
corrective action is unwarranted and will result in an improper
auction.
We deny the protest.
The RFP sought proposals for all services necessary to prepare
first-class metered mail to qualify for rate discounts under the
United States Postal Service (USPS) barcoded and presorted first-class
discount programs. First-class mail that is presorted may qualify for
discount rates when specified minimum volumes are met. In this
regard, the RFP contemplates that the contractor will commingle the
SSA's mail with its own sorted first-class mail to qualify for better
volume rate discounts. Under the contract, the contractor will pick
up SSA's first-class mail from its Woodlawn, Maryland facility on a
daily basis, sort the SSA's mail, add it to the contractor's other
sorted first-class mail, and then deposit it at the Post Office for
delivery. In order to permit SSA to evaluate the estimated volume of
first-class mail that each offeror could commingle with SSA's
first-class mail during sorting to qualify for rate discounts, the RFP
required offerors to include average daily volume of current National
Distribution Mail (NDM) as part of the technical proposal.
The RFP provided that award would be made on a best value basis, with
technical factors more important than price. The solicitation
contained the following technical evaluation factors and points (with
a possible total of 100 points): (1) understanding of the
requirements of the statement of work (SOW) (10 points); (2) offeror's
technical approach (20 points); (3) experience of offeror's proposed
technical staff (15 points); (4) experience of offeror's proposed
management staff (15 points); (5) offeror's experience in barcoding
and presort operations to include volumes of mail handled, amount of
experience and qualification rates achieved in the
barcoding/presorting of national distribution mail (25 points); and
(6) facilities and equipment (15 points).
The agency received five proposals in response to the solicitation,
all of which were included in the competitive range. The agency
received four best and final offers (BAFO), including those submitted
by Rockville and Jet Sort, Inc. Jet Sort's BAFO received a total
technical score of 100 points at an evaluated price of $2,470,195.
Rockville's BAFO received a total technical score of 91 points at an
evaluated price of $1,121,088.50. Under the experience criteria, the
agency evaluated each offeror's current volume of NDM on the following
basis:
First-Class NDM Volumes Technical points
below 250,000 3.5
250,000-350,000 6.5
over 350,000-450,000 9.5
over 450,000 12.5
In its proposal, Rockville had identified its NDM volume as ranging
from 100,000 to 150,000 pieces daily, to as much as 300,000 to 500,000
pieces daily. The technical evaluation panel (TEP) treated
Rockville's volume as falling in the 350,000 to 450,000 range, and
gave Rockville's proposal 9.5 points, out of a possible 12.5, under
the NDM volume evaluation subfactor. The source selection official
(SSO) determined that the technical proposals of Jet Sort, Rockville,
and another offeror were technically equivalent and recommended award
to Rockville based on its low price. Award was made to Rockville.
During an on-site inspection of Rockville's facilities after award,
the TEP noted that Rockville's volume of first-class mail appeared to
be below the level which Rockville represented in its proposal. The
TEP asked Rockville to clarify the amount of first-class mail that it
processes on a daily basis. Rockville responded that it currently
processed a daily average of 52,000 pieces of first-class mail, but
that at the time that it submitted its proposal, its daily average was
118,508. The TEP ascertained that Rockville had interpreted the term
"national distribution mail" to include both first-class and
third-class mail. The agency intended the term "national distribution
mail" to apply only to first class mail, which is all that is relevant
to this procurement. Therefore, the agency determined that
Rockville's proposal was incorrectly scored and should have received
3.5 points for its NDM volume, instead of the 9.5 points that it did
receive. The TEP also concluded that at least one other competitive
range offeror might have a similarly misinterpreted the intended
meaning of the term "national distribution mail." The agency
determined that reopening discussions and reevaluating was necessary,
and this protest followed.
Rockville argues that the agency's determination that the evaluation
was flawed, and its resulting decision to reopen negotiations, was
based on the incorrect premise that NDM volume was a technical
evaluation factor. The protester argues that the volume of NDM
handled by each offeror impacts on each offeror's price, and was not
properly encompassed by the solicitation's technical evaluation
criteria. Rockville contends that the technical evaluation criteria
primarily dealt with offerors' technical experience, and that nothing
in the criteria reasonably apprised an offeror that the agency would
evaluate mail volume. We disagree.
The pertinent section of the evaluation criterion states as follows:
"Offeror's experience in barcoding and mail presort operations to
include volumes of mail handled, amount of experience and
qualification rates achieved in the bar-coding/presorting of
national distribution mail."
The agency explains that NDM volume was considered only in the
technical evaluation, in order "to avoid the possibility of an overly
optimistic offeror overstating projected discount qualifying rates in
order to gain an apparent price advantage over offerors with perhaps
more realistic projections of discount qualification rates." The fact
that NDM volume impacts price does not prohibit the agency from
considering this matter under the technical evaluation, as long as the
evaluation criteria provide for such evaluation. Contrary to the
protester's contention, this technical criterion reasonably indicates
that in evaluating each offeror's experience, the agency would
consider each offeror's "volumes of mail handled." Accordingly, the
agency reasonably assessed each offeror's NDM volume, as part of its
evaluation of the offeror's experience. Rockville's argument simply
misconstrues the plain language of the quoted section.
Next, Rockville argues that the SSA's action in reopening negotiations
was unreasonable because the agency's evaluation error had no impact
on the award decision. Rockville argues that the distribution of a
particular offeror's mail to various zip codes is far more important
than its total volume in assessing the likelihood of obtaining mailing
discounts. In this regard, Rockville argues that the critical factor
is each offeror's qualification rates, which is the percentage of a
particular offeror's mail that qualifies for a USPS discount. The
protester argues that the TEP assigned it a qualification rate of 89
percent that has never been challenged.
Contracting officials in negotiated procurements have broad discretion
to take corrective action where the agency determines that such action
is necessary to ensure fair and impartial competition. Oshkosh Truck
Corp.; Idaho Norland Corp., B-237058.2; B-237058.3, Feb. 14, 1990,
90-1 CPD para. 274. An agency may conduct a new evaluation where the
record shows that the agency made the decision in good faith, without
the specific intent of changing a particular offeror's technical
ranking or avoiding an award to a particular offeror. PRC, Inc., 72
Comp. Gen. 530 (1992), 92-2 CPD para. 215; Burns & Roe Servs. Corp.,
B-248394, Aug. 25, 1992, 92-2 CPD para. 124. We will not object to
proposed corrective action where the agency concludes that award was
not necessarily made on a basis most advantageous to the government,
so long as the corrective action taken is appropriate to remedy the
impropriety. See Oshkosh Truck Corp.; Idaho Norland Corp., supra.
Here, we find nothing objectionable in the agency's decision to take
corrective action. Notwithstanding Rockville's view as to the greater
relative importance of the qualification rate subfactor, the record
makes clear that the incorrect evaluation of Rockville's NDM had a
significant impact on the award decision.[1] Because Rockville
interpreted NDM to include first- and third-class mail, Rockville's
proposal received 9.5 points for its NDM volume, when in fact
Rockville's proposal should have received 3.5 points for its
first-class mail volume. This adjustment would result in a reduction
of Rockville's overall technical score from the 91 points, on the
basis of which it was considered technically equal to two other
slightly higher-scored proposals, to 85 points. The contracting
officer states that she would not consider Rockville's proposal, with
this lower score, to be technically equivalent to the two
higher-scored proposals. Under these circumstances, the agency
reasonably questioned whether the original award determination
resulted in the best value to the government. In view of the fact
that the awardee and another offeror misconstrued a material
solicitation clause in a manner which significantly affected the
evaluation of their proposals and the award determination, the agency
properly determined that reopening discussions and reevaluating was
necessary to ensure a fair and impartial competition. See Oshkosh
Truck Corp., Idaho Norland Corp., supra.
Rockville also challenges SSA's proposed action on the ground that,
since prices have been disclosed, reopening discussions will result in
a prohibited auction. While Federal Acquisition Regulation sec.
15.610(e)(2) proscribes the use of auction techniques, this applies to
the negotiation tactic of indicating one offeror's price to another
offeror during negotiations; where reopening of negotiations is
properly required notwithstanding the disclosure of an offeror's
proposal, this does not constitute an improper action. Sperry Corp.,
65 Comp. Gen. 715 (1986), 86-2 CPD para. 48.
In addition, there is nothing inherently illegal in the conduct of an
auction in a negotiated procurement. Rather, the possibility that a
contract may not be awarded based on true competition on an equal
basis has a more harmful effect on the integrity of the competitive
procurement system than the fear of an auction. Honeywell Information
Sys., Inc., 56 Comp. Gen. 505 (1977), 77-1 CPD para. 256. The
statutory requirements for competition take primacy over the
regulatory prohibitions of auction techniques. See The Faxon Co., 67
Comp. Gen. 39 (1987), 87-2 CPD para. 425.
The protest is denied.
Comptroller General
of the United States
1. Regarding Rockville's contention that its qualification rate is
unchallenged, while the agency did not recalculate Rockville's
qualification rate based on its actual (reduced) volume of first-class
mail, the contracting officer did note that since Rockville actually
had less than the indicated volume of its own first-class mail to
commingle with SSA's mail, it would therefore probably qualify less
first-class mail for discounts than the other higher-ranking offerors.
The contracting officer's conclusion that Rockville's qualification
rate would decrease because of a lower volume of first-class mail is
consistent with the RFP provision that the qualification rate is based
on an offeror's technical capabilities and the volume of its
first-class mail from other customers that would be mixed with the
agency's mail.