BNUMBER: B-271435
DATE: June 20, 1996
TITLE: Computer Technology Services, Inc.
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Matter of:Computer Technology Services, Inc.
File: B-271435
Date:June 20, 1996
Pamela J. Mazza, Esq., Andrew P. Hallowell, Esq., and Antonio R.
Franco, Esq., Piliero, Mazza & Pargament, for the protester.
George W. Griffith, Esq., Department of the Army, for the agency.
Ronald K. Henry, Esq., and Mark A. Riordan, Esq., Kaye, Scholer,
Fierman, Hays & Handler, for North American Telecommunications, Inc.,
an intervenor.
Aldo A. Benejam, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Award to technically slightly lower-rated, lower-priced offeror is
unobjectionable where (1) although solicitation stated that technical
superiority was more important than price, the solicitation did not
provide for award solely on the basis of the highest technical point
score, and clearly stated that price would be considered a substantial
factor in the evaluation; and (2) the source selection evaluation
panel (SSEP) considered the relative strengths and weaknesses in the
protester's and the awardee's proposal and, despite a specific request
from the source selection authority to do so, the SSEP could not
identify any strengths in the protester's proposal sufficient to
justify paying its higher price.
DECISION
Computer Technology Services, Inc. (CTSI) protests the award of a
contract to North American Telecommunications, Inc. (NATI) under
request for proposals (RFP) No. DASW01-95-R-0267, issued by the
Department of the Army, Defense Supply Service--Washington (DSSW), for
material handling, moving, and storage services, and warehouse
operations support. CTSI contends that the agency improperly awarded
the contract to an offeror with a technical proposal that was lower
rated than CTSI's.
We deny the protest.
BACKGROUND
The RFP, issued on June 30, 1995, contemplated the award of a
fixed-price requirements contract for a base period with up to four
1-year options.[1] Section M of the RFP explained that the government
would evaluate proposals by assigning numerical ratings to each
proposal in accordance with the following five factors worth a total
of 1,000 points (total number of points available for each factor is
shown in parenthesis): (1) technical approach (350 points); (2)
understanding the project (225 points); (3) personnel experience and
qualifications (125 points); (4) innovation (100 points); and (5)
corporate past performance record on projects of similar size and
scope (200 points). Within each factor, the RFP listed subfactors and
the maximum point value for each. The RFP stated that technical
superiority would be most important in the evaluation. Although price
would not be point-scored, the RFP stated that price would be
considered a substantial factor in the evaluation. Award was to be
made to the responsible offeror whose proposal was most advantageous
to the government considering price and technical factors.
Four offerors submitted proposals by the time set on August 21 for
receipt of initial proposals. A source selection evaluation panel
(SSEP) rated the initial technical proposals by assigning numerical
scores under each evaluation factor and subfactor in accordance with
section M of the RFP. The contracting officer, who served as the
source selection authority (SSA) for this procurement, reviewed the
results of the SSEP's initial evaluation and concluded that the
evaluators had provided insufficient information concerning the
strengths and weaknesses of the competing proposals to permit an
intelligent selection decision. The SSA requested that the SSEP
reconvene, clarify the evaluation results, and provide explanatory
details in support of the numerical ratings assigned the proposals.
In response to that request, the SSEP reconvened and reevaluated all
four proposals, and on September 22, submitted more detailed
evaluations to the SSA, with the following point-score results:
Offeror Tech. Score
CTSI 963
NATI 894
C 544
D 456
For each factor and subfactor rated, the SSEP identified strengths,
weaknesses, and deficiencies in the proposals, and provided a
narrative explanation in support of the numerical ratings assigned
each proposal. The SSEP also identified any areas requiring
discussions with the offerors. Subsequently, on September 29, the
SSEP submitted a "consolidated technical evaluation report summary" to
the SSA. In that document, the SSEP provided a brief narrative
reflecting a summary of the consensus findings of the SSEP addressing
each of the four proposals.
As relevant to this protest, the SSEP noted in its summary report that
CTSI had submitted an excellent proposal which had earned nearly a
perfect score in the evaluation. The SSEP pointed out that the
evaluators had identified more than 40 strengths in CTSI's proposal,
and had found only 4 weaknesses and no deficiencies. The SSEP found
that CTSI's proposal "far exceed[ed] the other offerors in the depth
of understanding, demonstrated experience, and overall responsiveness
. . . ," and recommended CTSI for award.
The SSEP's summary report noted that the evaluators had identified 27
strengths and 9 weaknesses in NATI's proposal. The report explained
that NATI had not submitted all of the information requested in the
RFP, and that these gaps in NATI's proposal had been specifically
identified in the evaluation documents submitted to the SSA as
"weaknesses" or "areas requiring discussions." The summary report
concluded that NATI was "an acceptable contractor," and was the SSEP's
second choice for award of the contract. The SSEP concluded that
offerors C and D had submitted poor proposals and recommended that
those two firms be eliminated from further consideration.
Based on these results, the agency excluded offeror C's and D's
proposals from further consideration. The agency then conducted
discussions with CTSI and NATI, and requested best and final offers
(BAFO) from those two firms. The SSEP reevaluated proposals based on
the BAFOs and the responses to the discussion questions, and
unanimously concluded that both CTSI and NATI had adequately addressed
all of the SSEP's concerns.
After reviewing the results of the SSEP's final evaluation, by letter
dated February 26, 1996, the SSA requested that the SSEP make an award
recommendation. In his letter, the SSA pointed out that NATI's
lower-rated proposal was $3.5 million lower in total price than the
protester's proposal. The SSA reminded the SSEP that under the terms
of the RFP, award was to be made to the offeror whose proposal was
considered most advantageous to the government, considering price and
technical factors. The SSA then requested that the SSEP specifically
identify advantages and disadvantages in the competing proposals that
would justify paying a premium for CTSI's higher-rated proposal.
In response to the SSA's request, the SSEP was unable to identify any
specific advantages in CTSI's proposal that would justify paying the
higher price. The SSEP stated that the slight point difference
between the protester's and the awardee's proposals--a difference of
only 69 out of 1,000 points--was insignificant given the technical
merit of both proposals. The SSEP specifically stated that both CTSI
and NATI had "made excellent presentations and that either firm could
adequately meet the needs of DSSW." The SSEP concluded that the
69-point difference in technical scores was not sufficient to justify
paying $3.5 million more for CTSI's proposal. Having failed to
identify any strengths or advantages in the protester's proposal worth
paying the premium, the SSEP unanimously recommended award to NATI.
In a memorandum dated February 29, the SSA documented his reasons for
concurring with the SSEP's recommendation. By letter dated March 6,
the agency informed CTSI that award had been made to NATI. This
protest followed.
PROTESTER'S CONTENTIONS
CTSI challenges the selection decision on several grounds. Central to
the protester's contentions is the argument that the SSEP improperly
reversed its position with respect to the technical superiority of
CTSI's proposal. The protester relies on the SSEP's September 29
"consolidated technical evaluation report summary," which described
the strengths and benefits of CTSI's proposal over NATI's and
recommended award to the protester. According to the protester, the
SSEP's change in position, in response to the SSA's request that the
SSEP make an award recommendation in light of the price difference
between CTSI and NATI, was unreasonable. The protester maintains that
given the solicitation's emphasis on technical considerations over
price, and in light of the SSEP's initial recommendation to award the
contract to CTSI, the selection of NATI's lower-rated proposal was
improper.[2]
DISCUSSION
As a preliminary matter, CTSI's allegation that selection of NATI's
lower-rated proposal was improper because the solicitation emphasized
technical considerations over price is without merit. Even where
price is the least important evaluation criterion, an agency may
properly award to a lower-rated, lower-priced offeror if the agency
reasonably determines that the premium involved in awarding to a
higher-rated, higher-priced offeror is not justified. Tracor Applied
Sciences, Inc., B-253732, Oct. 19, 1993, 93-2 CPD para. 238. As explained
below, the record shows that the SSA reasonably concluded that paying
a premium for CTSI's higher-rated technical proposal was not warranted
in light of NATI's meritorious proposal and lower price.
To the extent that CTSI argues that the SSEP "reversed" its
conclusions regarding the technical superiority of CTSI's proposal
over NATI's, the record does not support its position. Rather, in
response to the SSA's specific request, the SSEP concluded that based
on its review of the proposals and the responses to the discussion
items, there was no basis to justify award to CTSI at its higher
price, particularly in light of the technical merits of NATI's
lower-price proposal. The SSEP then unanimously recommended award to
NATI.
Specifically, the record shows that the SSEP initially identified nine
"weaknesses" in the awardee's proposal, which NATI fully addressed
following discussions, thus narrowing the gap that may have existed
between the proposals.[3] For instance, some of the concerns noted,
which the agency characterizes as relatively minor, included that NATI
had not referred to the use of pagers or cellular telephones in its
proposal; that an employee NATI proposed had limited records
management experience; and that although NATI made references to
clerical support, it had not listed any support staff. The record
shows that these weaknesses, along with the other six the SSEP
identified in NATI's proposal, were fully addressed in response to the
agency's discussion items. With respect to the use of communications
equipment, for example, NATI directed the agency to the relevant page
of its proposal where it stated that its "leader" personnel would be
immediately available to the contracting officer's representative by
telephone or pager. NATI also provided a list of its support staff
and replaced the records management employee with someone with more
experience in performing that function. Since NATI's responses to the
discussion items fully addressed all of the SSEP's concerns, the
differences due to the weaknesses that the SSEP had noted between
CTSI's and NATI's initial proposals either no longer existed or were
significantly reduced as a result of discussions.
In addition, the record shows that the SSA concluded that CTSI's
numerical scoring advantage over NATI was based primarily on the
firm's experience as the incumbent and the evaluators' familiarity
with CTSI, as evidenced by the narrative comments in the SSEP's
worksheets. The record supports this conclusion. For instance, one
evaluator noted as a strength in CTSI's proposal the fact that firm
"is currently working a DSS-W contract performing tasks 2, 3, 4, and
5," and awarded the firm the maximum number of points (200) under the
corporate past performance record factor. The evaluators also noted
as a strength in CTSI's proposal the fact that the firm is the
incumbent with "direct experience" and "knowledge" in the DSS-W
environment, and gave CTSI's proposal the maximum number of points
available under the applicable evaluation factor.
In a statement provided to our Office, the SSA explains that based on
his review of the SSEP's comments, it was clear to him that CTSI's
incumbency served to provide the SSEP with a level of assurance that
raised the evaluators' "comfort level," resulting in higher numerical
ratings assigned CTSI's proposal under several evaluation factors; the
SSA concluded, however, that the mere fact that CTSI was a "known
entity" to the evaluators should not serve as a discriminating factor
between the two firms. Source selection officials in appropriate
circumstances properly may conclude that a numerical scoring advantage
based primarily on incumbency does not indicate an actual technical
superiority that would warrant paying a higher price, Sparta, Inc.,
B-228216, Jan. 15, 1988, 88-1 CPD para. 37; see also Northern Virginia
Serv. Corp., B-258036.2; B-258036.3, Jan. 23, 1995, 95-1 CPD para. 36, n.
5 (citing NUS Corp.; The Austin Co.,B-221863; B-221863.2, June 20,
1986, 86-1 CPD para. 574), and we see nothing unreasonable about the SSA's
conclusion here. Accordingly, we think that the SSA's conclusion that
CTSI's numerical rating advantage did not reflect an actual technical
superiority that would warrant paying its higher price also was a
reasonable exercise of the SSA's discretion.
The protester further argues, however, that the SSA's price/technical
tradeoff decision was flawed because the SSA, rather than conducting
an analysis to determine whether NATI's lower-rated proposal
represented the best value to the government, simply improperly
concluded that CTSI's and NATI's proposals were essentially
technically equal, and selected NATI for award solely on the basis of
its lower price.
The protester's contention is without merit. Selection officials must
decide whether the point scores show technical superiority and what
that difference may mean in terms of contract performance. See Grey
Advertising, Inc., 55 Comp. Gen. 1111 (1976) 76-1 CPD para. 325. As
already explained, the SSEP was unable to attribute any meaningful
significance in terms of contract performance to the slight point
difference between CTSI's and NATI's proposals, and the SSA reasonably
concluded that CTSI's numerical point advantage was based primarily on
the firm's incumbency and the SSEP's familiarity with a "known
entity." Further, the SSA's request to the SSEP to identify specific
strengths in CTSI's proposal that would justify paying the higher
price was a reasonable attempt to ensure that proposals were evaluated
in accordance with the evaluation factors announced in the
solicitation, and that any cost/technical tradeoff decision was
reasonably based. See, e.g., Wyle Labs., Inc.; Latecoere Int'l, Inc.,
69 Comp. Gen. 648 (1990), 90-2 CPD para. 107; Latecoere Int'l.,
Inc.--Advisory Opinion, B-239113.3, Jan. 15, 1992, 92-1 CPD para. 70.
Thus, regardless of whether the SSA viewed the proposals as
essentially technically equal, making price the basis for selection,
or concluded that the point difference between the proposals did not
warrant paying the price premium associated with CTSI's proposal, we
find nothing improper in the SSA's selection decision. See Calspan
Corp., B-255268, Feb. 22, 1994, 94-1 CPD para. 136, recon. denied,
B-255268.2, July 5, 1994, 94-2 CPD para. 6.
The protest is denied.
Comptroller General
of the United States
1. The agency competed the requirement under section 8(a) of the Small
Business Act, 15 U.S.C. sec. 637(a) (1994), which authorizes the Small
Business Administration to contract with agencies and arrange
performance of such contracts by awarding subcontracts to socially and
economically disadvantaged small businesses.
2. The protester also contends that the SSA improperly revealed
pricing information to the SSEP during the evaluation and that the
SSEP failed to properly evaluate CTSI's responses to the discussion
items. Except for the protester's bare assertions in this regard,
there is no support in the record for these allegations.
3. As noted above, the SSEP identified four "weaknesses" in CTSI's
proposal, all of which were satisfactorily addressed during
discussions. Thus, after discussions, both offerors had resolved all
the weaknesses initially identified in their proposals.