BNUMBER:  B-271306; B-271306.2 
DATE:  June 13, 1996
TITLE:  Madison Services, Inc.

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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:Madison Services, Inc.

File:     B-271306; B-271306.2 

Date:June 13, 1996

Christopher Solop, Esq., and Lynn Hawkins Patton, Esq., Ott & Purdy, 
for the protester.
Daniel J. Riley, Esq., and Jeffrey A. Stonerock, Esq., Baker & Botts, 
L.L.P., for Baker Support Services, Inc., an intervenor.
Clarence D. Long III, Esq., and Martin F. McAlwee, Esq., Department of 
the Air Force, for the agency.
Susan K. McAuliffe, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Protester's contention that agency improperly evaluated proposals 
is denied where the record shows that the agency evaluated proposals 
in accordance with the criteria announced in the solicitation, and the 
record reasonably supports the evaluators' conclusions.

2.  Agency properly made award to offeror that submitted 
higher-priced, lower-risk proposal where agency reasonably determined 
that award to protester based upon its proposed limited manning 
presented a moderate risk of performance, and that the awardee's 
higher-priced, lower-risk proposal, which was reasonably evaluated as 
having additional comparative strengths, was worth the cost premium 
involved.

DECISION

Madison Services, Inc. protests the award of a contract to Baker 
Support Services, Inc. under request for proposals (RFP) No. 
FO8650-94-R-0032, issued by the Department of the Air Force for 
military family housing maintenance services at Patrick Air Force 
Base, Florida.  Madison contends that the agency improperly evaluated 
proposals and awarded the contract to Baker at a higher price than 
proposed by Madison.

We deny the protest.

The RFP, issued on May 2, 1995, sought proposals for military family 
housing maintenance services, including maintenance management, 
service calls, change-of-occupancy management, pest management, 
recurring equipment maintenance, and facility maintenance.  The RFP's 
performance work statement reflects an increase in service 
requirements from those required under previous contracts to service 
the more than 1,600 housing units and facilities at three 
geographically separated housing units.  The RFP contemplated the 
award of a fixed-price-award-fee contract for a base period plus 4 
option years.  Section M of the RFP provided that award was to be made 
to the offeror which the government determined can best satisfy the 
objectives and requirements set forth in the solicitation, in a manner 
most advantageous to the government.  The three equally weighted 
factors for evaluation were cost, technical/management, and 
performance.  Each technical/management proposal, which included the 
offeror's proposed manning, was to be assigned a color rating (blue, 
green, yellow, or red) for evaluation purposes as well as an 
independent "proposal risk" rating (high, moderate, or low) reflecting 
"how likely the proposed approach will actually be achieved" 
considering "the probability of success, the impact of failure, and 
the alternatives available to meet the requirement."  Each proposal 
was to be assigned a separate "performance risk" rating (high, 
moderate, or low) under the RFP's performance evaluation factor (which 
included subfactors for availability of or ability to obtain financial 
resources to perform the contract, and performance history.)

Eleven firms submitted initial proposals in response to the RFP, the 
proposals were evaluated, one proposal was rejected for its numerous 
deficiencies, and discussions were conducted with the remaining 10 
offerors.  Best and final offers (BAFO) were received and evaluated.  
Several firms, including the incumbent contractor, submitted proposals 
that were higher rated technically, but which were considerably higher 
priced, than the Baker and Madison proposals.  The Baker and Madison 
proposals received the same performance risk rating of low, and the 
same color rating (green, indicating a rating of acceptable) under the 
technical/ management factor.  Madison's proposal received a moderate 
proposal risk rating due to its limited proposed manning of [deleted] 
employees; Baker's proposal received a low proposal risk rating--Baker 
proposed a manning level of [deleted] employees.  Madison submitted 
the lowest cost proposal (at $[deleted]) of the 
10 BAFOs received under the RFP.  Baker's cost proposal (at 
$15,842,812) was 
the fourth lowest priced of the BAFOs received (i.e., six BAFOs were 
higher 
priced) and Baker's proposed cost was lower than the agency's cost 
estimate 
(of $[deleted]).  The findings of the source selection evaluation 
team, as well as a proposal analysis report, were submitted to the 
source selection authority (SSA) who, after a comparative review of 
proposal strengths and weaknesses, costs, and risks involved with each 
proposal, selected Baker's proposal for award.  Following an agency 
debriefing with the protester regarding the evaluation of its 
proposal, Madison filed this protest.

PROTESTER'S CONTENTIONS

Madison protests that the agency's evaluation of the Baker and Madison 
proposals was improper regarding the assessment of proposal risk and 
performance risk, and that this misevaluation renders erroneous the 
source selection decision based on these factors.  Madison also argues 
that the agency's technical/cost decision to award to Baker at a 
$[deleted] million cost premium was unreasonable.

ANALYSIS

Evaluation of Proposals

In reviewing a protest challenging an agency's technical evaluation, 
we examine the record to ensure that the agency's evaluation was 
reasonable and consistent with the stated evaluation criteria.  See 
Lloyd-Lamont Design, Inc., B-270090.3, Feb. 13, 1996, 96-1 CPD  para.  71.  
With respect to the protester's challenges to the evaluation of 
proposals, we have reviewed the proposals, and the full evaluation 
record (including the evaluator work sheets, the team evaluation 
narratives, and the proposal analysis report), and find no basis for 
questioning the evaluation.

Proposal Risk Assessment

Madison's proposal earned an "acceptable" (green) rating for the 
technical/ management factor, which included manning as a subfactor, 
but the protester's proposed limited manning caused the evaluators to 
assign a moderate "proposal risk" to the protester's proposal.  The 
protester asserts that the agency unreasonably assigned a moderate 
"proposal risk" to its proposal since its manning level was acceptable 
and insufficient weight was given to the protester's successful 
performance history.

Madison's initial proposal offered a manning level of [deleted] 
full-time employees.  During discussions, the protester was told that 
its manning was too low.  In its BAFO, Madison increased its manning 
to [deleted] employees (including subcontractor employees).  The 
government manning estimate for the RFP's requirements is [deleted] 
employees--this estimate was derived from the agency's consideration 
of the manning level of the predecessor contract ([deleted] employees) 
and the increase in performance requirements under the current RFP 
compared to the prior contract (e.g., the addition of carpet cleaning, 
sprinkler system maintenance, and pest control services for the 
approximate 1,600 housing units and facilities).

The evaluators were concerned that Madison's limited staffing, in the 
absence of an adequate explanation in the proposal regarding its 
proposed approach, had the potential to cause performance problems and 
degradation of services.  Although a noted strength of the protester's 
proposal was Madison's intended [deleted] of employees (which the 
agency recognized as a generally favorable approach in performing this 
type of contract), the evaluators found that [deleted] alone was 
insufficient to ensure successful performance in light of the proposed 
manning.

There is nothing unreasonable in these conclusions.[1]  Using fewer 
employees to perform a contract is a legitimate strategy that will 
reduce the cost of performance.  However, such an approach also 
reasonably can be expected to result in more situations where an 
employee may not be available immediately when a task arises, 
especially where, as here, the RFP contains numerous distinct services 
to be performed on a large number of housing units in three separate 
geographical areas.  Our review of the protester's proposal and the 
government's manning estimate shows that Madison's proposed staffing 
(which is [deleted] percent lower than the agency estimate) is 
substantially lower than the agency's estimate in several material 
areas (e.g., regarding U-Fix-It store, plumber, electrician, and 
general maintenance work). 

Madison argues that, notwithstanding the agency's risk concern 
regarding the staffing level, in light of the protester's successful 
past performance of substantially similar contracts, a low proposal 
risk rating would have been justified.  The protester essentially 
contends that since the agency found that its proposal reflected low 
performance risk (under the performance factor), the agency must also 
find that the proposal offers low proposal risk as well.

The record is clear, however, that separate and independent risk 
assessments under the technical/management and performance evaluation 
factors were to be conducted, and that under the terms of the RFP, 
performance history was not a significant factor in the proposal risk 
analysis.  Thus, while [deleted] staff may have been acceptable from a 
technical evaluation standpoint, the agency was not precluded from 
evaluating potential risks of performance resulting from the proposed 
staffing level.  We agree with the agency that it need not accept 
Madison's general promise of successful performance in evaluating 
proposal risk under the terms of the RFP; the RFP simply did not 
contemplate substantial reliance on past performance in making the 
independent proposal risk assessment.[2]  We think the moderate 
proposal risk rating reasonably reflects the evaluators' legitimate 
concerns in its independent assessment of the probability of success 
of the proposed approach in accordance with the stated RFP evaluation 
scheme.  Proteus Corp.; United Int'l Eng'g, Inc., B-270094; 
B-270094.2, Feb. 8, 1996, 96-1 CPD  para.  165; JB Indus., B-251118.2, Apr. 
6, 1993, 93-1 CPD  para.  297.[3]

The Cost/Technical Tradeoff

Agencies have the discretion, in making their source selection 
decisions, to trade cost savings for technical benefits, with that 
discretion constrained only by the requirement that the agency's 
determination be rational and consistent with the solicitation's 
evaluation criteria.  Picker Int'l, Inc., supra; Grey Advertising, 
Inc., 
55 Comp. Gen. 1111 (1976), 76-1 CPD  para.  169.  Here, focusing on the low 
proposal risk and performance risk ratings of the Baker proposal, and 
his determination that no lower cost proposal was found to have as 
many "meaningful qualitative additions," the SSA determined that 
Baker's proposal was worth the $[deleted] million cost premium over 
Madison's lowest cost proposal and selected Baker for award.[4]

We see nothing inappropriate with the SSA's determination.  As 
discussed above, the moderate proposal risk rating assigned to 
Madison's proposal is reasonable and provides a meaningful 
discriminator between the Baker and Madison proposals.  As to 
Madison's allegations of unequal or unfair treatment in the technical 
evaluation of its proposal and the listing of noted strengths among 
the proposals, we have reviewed in detail the evaluators' lists of 
strengths and weaknesses, as well as the Madison and Baker proposals, 
and we see no impropriety that justifies disturbing the award.  
Although, as Madison points out, there are a few instances where 
Baker's proposal was noted as having a particular strength for a 
proposed approach and Madison's proposal was not similarly noted as 
providing a strength, these evaluation discrepancies are minor when 
viewed in relationship to the many other additional material strengths 
found in the Baker proposal (e.g., regarding Baker's [deleted]) which 
the SSA reasonably believed enhanced the value of Baker's proposal 
and, in conjunction with the lower risk of the proposal, justified the 
cost premium involved.  In short, the source selection decision is 
reasonably supported by the record.  

The protest is denied.

Comptroller General
of the United States

1. Contrary to Madison's generally stated objections to the accuracy 
of the government's manning estimate, the record, in our view, 
supports the reasonableness of the estimate in light of the 
performance requirements of the RFP.  Although Madison notes that 
there has been some recent housing renovations at the base, the agency 
reasonably points out that these renovated properties will not be 
maintenance free and that the high corrosion of properties in this 
geographical region requires constant maintenance as provided in the 
RFP.  The record also shows that the agency did not mechanically apply 
its manning estimate to proposals for evaluation purposes, but 
properly considered the proposed manning in terms of the RFP 
requirements and each offeror's proposed approach to meeting those 
requirements.

2. The evaluation subfactor for manning was included in the RFP to 
assess the sufficiency of proposed personnel to accomplish the 
contract requirements.  In this regard, we see nothing improper in the 
evaluators having noted that Baker's manning exceeds the agency 
estimate, without assessing a weakness, as the protester contends was 
required, to the awardee's proposed approach.  Baker, in the exercise 
of its own business judgment, proposed a larger number of personnel 
and, in doing so, accepted the possibility that such approach might 
render its proposal noncompetitive as to cost.

3. Madison objects to the agency's having rated Baker's and Madison's 
proposals the same for performance risk on the basis that Baker has 
not performed the same number or type of similar contracts that 
Madison has performed.  The record shows that Madison's proposal was 
favorably evaluated and credited for the firm's performance of its 
prior contracts.  Although Baker's housing maintenance experience 
appears as part of a larger scope of work under that firm's prior 
contracts, the experience cited by the awardee in its proposal, for 
which the firm received excellent reference reports, is substantial, 
relevant, and, we believe, reasonably warranted a low risk performance 
rating.  Madison also challenges the agency's evaluation of Baker's 
financial resources, another subfactor of the performance risk 
assessment, since Baker's proposal offers the substantial financial 
resources of its parent corporation without documentation of a binding 
commitment from the parent corporation.  The RFP requested "evidence" 
of such resources.  In comparison, Madison's proposal contains the 
following "evidence" of financial resources: numerous self-serving 
statements that the protester has adequate financial resources to 
perform the contract; a letter from its bank stating that the bank 
would "look favorably" upon a credit request (which letter cannot be 
considered to be a binding commitment from the bank); and a letter 
from Madison's accountant stating that, in his opinion (but without 
providing any balance sheet or current financial data), Madison has 
adequate financial resources to perform the contract.  In our opinion, 
the protester itself failed to include in its proposal the kind of 
specific documentation or more probative proof of financial resources 
that it contends is required of Baker.  Prejudice is a viable element 
of any protest challenge, and since, in our opinion, Madison similarly 
benefited from the agency's relatively relaxed evaluation of financial 
position, we deny this protest ground.  See Picker Int'l, Inc., 
B-249699.3, Mar. 30, 1993, 93-1 CPD  para.  275.

4. To the extent Madison challenges that "meaningful qualitative 
additions" or "added value services" were not evaluation RFP factors 
and should not have been considered in the evaluation and source 
selection, Madison's contention is misplaced.  The record clearly 
shows that the additions referred to in the source selection decision 
apply to the various strengths noted in each proposal and were 
appropriately used by the SSA as discriminating characteristics in his 
comparative evaluation of the relative merits of the proposals, and in 
making his determination of which proposal offered the best overall 
value to the government.