BNUMBER: B-271629.3
DATE: July 22, 1996
TITLE: Triple P Services, Inc.
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Matter of:Triple P Services, Inc.
File: B-271629.3
Date: July 22, 1996
F. D. Bowden for the protester.
Col. Nicholas P. Retson and Capt. Philip T. McCaffrey, Department of
the Army, for the agency.
Aldo A. Benejam, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Provision announcing agency's intent to perform a "cost realism"
analysis in a request for proposals (RFP) for a fixed-price contract
is unobjectionable where the RFP states that the analysis is for the
limited purpose of aiding the agency in measuring the offerors'
understanding of the RFP's technical requirements, and RFP includes as
part of the evaluation of technical proposals an assessment of the
offerors' understanding of the RFP's technical requirements.
2. Protest that solicitation is ambiguous with respect to the
agency's intent to conduct discussions with offerors is denied where
protester's interpretation of solicitation is unreasonable and
contrary to applicable Federal Acquisition Regulation provision
relating to the award of contracts without discussions.
3. Protest that solicitation requires information in unnecessary
detail and provides the incumbent with an unfair competitive advantage
is denied where required information is reasonably available to
non-incumbent offerors.
DECISION
Triple P Services, Inc. protests the terms of request for proposals
(RFP) No. DABT10-95-R-0010, issued by the Department of the Army for
operation of 23 dining facilities located at Fort Benning and Camp
Merril, Georgia, and Camp Rudder, Florida. The protester contends
that the RFP's price evaluation provision is defective, and that the
RFP is ambiguous with respect to the agency's intent to conduct
discussions. Triple P also maintains that the information the RFP
requires offerors to include in their proposals gives the incumbent an
unfair competitive advantage.
We deny the protest.
The RFP, issued September 29, 1995, contemplates the award of a firm,
fixed-price-plus-award-fee contract for a base year, with up to four
1-year option periods. Award is to be made to the offeror whose
proposal is technically acceptable and lowest in total price. Section
M of the RFP states that proposals will be evaluated for technical
acceptability under the following factors: (1) comprehension of the
RFP requirements; (2) general management; and (3) past performance.
The RFP has been amended several times, and as discussed in greater
detail below, Triple P takes issue with several of the resulting
changes.
Price Evaluation
Section M of the RFP states as follows:
"PRICE EVALUATION. Cost realism will be used as an aid to
determine the offeror's comprehension of the requirements of the
RFP as well as to assess the validity of the offeror's approach.
Proposals will be evaluated to assess the degree to which
proposed price accurately reflect[s] proposed performance. A
price which is found to be either unreasonably high or
unrealistically low in relation to the proposed work will result
in the overall proposal being considered unacceptable, and
further evaluation will be discontinued."
The protester argues that this provision is inconsistent with the
"BASIS FOR AWARD" announced in the RFP, i.e., technically acceptable,
low price. Triple P maintains that the effect of this provision is to
improperly permit the agency to conclude that a low price is an
indication that an otherwise technically acceptable proposal should be
rejected solely by virtue of its price being too low, regardless of
the technical merit of the proposal.
As the protester correctly points out, a determination that an
offeror's price on a fixed-price contract is too low generally
concerns the offeror's responsibility (i.e., the offeror's ability and
capacity to successfully perform the contract at its offered price),
not technical acceptability. See Coastal Science and Eng'g, Inc., 69
Comp. Gen. 66 (1989), 89-2 CPD para. 436 (a low fixed-price offer cannot
be downgraded by virtue of its low price absent a finding of
nonresponsibility); Monopole S.A., Inc., B-254137, Nov. 4, 1993, 93-2
CPD para. 268; Video Ventures, Inc., B-240016, Oct. 19, 1990, 90-2 CPD para.
317; Ball Technical Prods. Group, B-224394, Oct. 17, 1986, 86-2 CPD para.
465. In other words, the fact that a firm's offer may be an attempted
buy-in does not render the firm ineligible for award. This is so
because below-cost pricing is not prohibited and the government cannot
withhold an award from a responsible offeror merely because its low
offer is below cost. Norden Sys., Inc., B-227106.9, Aug. 11, 1988,
88-2 CPD para. 131.
This does not mean, however, that an agency may never assess price
reasonableness within the context of evaluating technical proposals
under a solicitation that contemplates awarding a fixed-price
contract. In this regard, as part of the technical evaluation, an
agency may properly assess the reasonableness of a low price to
evaluate an offeror's understanding of the solicitation requirements,
so long as the RFP provides for evaluation of the offerors'
understanding of the requirements as part of the technical evaluation.
See PHP Healthcare Corp., B-251933, May 13, 1993, 93-1 CPD para. 381;
Family Realty, B-247772, July 6, 1992, 92-2 CPD para. 6; Binghamton
Simulator Co., Inc., B-244839, Nov. 5, 1991, 91-2 CPD para. 429.
Here, section M of the solicitation clearly includes as part of the
evaluation of the technical acceptability of proposals an assessment
of the offerors' "comprehension of the RFP requirements."
Accordingly, we see nothing improper with the agency providing, as it
does here, for the use of "cost realism" analysis.[1] See Simmonds
Precision Prods., Inc., B-244559.3, June 23, 1993, 93-1 CPD para. 483.
Discussions
As originally issued, the RFP contained inconsistent language
concerning the agency's intent to hold discussions. The RFP stated
that the agency intended to request best and final offers (BAFO), but
also incorporated by reference the Federal Acquisition Regulation
(FAR) clause found at sec. 52.215-16, Alternate II, which states in part
that the government intends to award a contract without discussions.
The agency states that since it intends to conduct discussions, it
decided to clarify its intent by deleting the inconsistent language
from the RFP. Accordingly, on April 24, soon after this protest was
filed in our Office, the agency issued amendment No. 0009, which,
among other things, substituted the basic contract award clause at FAR sec.
52.215-16, for Alternate II.
Regarding discussions, FAR sec. 52.215-16(c), which is now incorporated
into the RFP, states:
"The [g]overnment intends to evaluate proposals and award a
contract after conducting written or oral discussions with all
responsible offerors whose proposals have been determined to be
within the competitive range. However, each initial offer should
contain the offeror's best terms from a cost or price and
technical standpoint."
In addition, section M of the RFP contains the following provision:
"d. DISCUSSION OR NEGOTIATIONS. Discussions may be held with
all offerors within the competitive range for the purpose of
identifying deficiencies in proposals and obtaining
clarification. Should discussions be held, [BAFOs] may be
requested at which time the offerors may submit revisions to
their proposals by an established cut-off date. [BAFOs] will be
evaluated against the same factors as were the initial offers.
All revisions must assess the impact on all elements of cost."
According to Triple P, it is unclear from this provision whether the
agency intends to conduct discussions. The protester argues that the
agency is apparently attempting to reserve the right to make award
based on initial proposals without conducting discussions. Triple P
argues that the agency's approach is improper because the solicitation
fails to notify offerors that it intends to make award without
discussions in contravention of FAR sec. 15.610. The protester maintains
that since amendment No. 0009 deleted the applicable notice to
offerors contained in sec. 52.215-16, Alternate II, the agency does not
have the discretion it seeks to award a contract based on initial
proposals.
Where a dispute exists as to the actual meaning of a solicitation, we
will resolve the matter by reading the solicitation as a whole and in
a manner that gives effect to all provisions of the solicitation.
Honeywell Regelsysteme GmbH, B-237248, Feb. 2, 1990, 90-1 CPD para. 149.
To be reasonable, an interpretation must be consistent with the
solicitation when read as a whole and in a reasonable manner. Aerojet
Ordnance Co., B-235178, July 19, 1989, 89-2 CPD para. 62. The mere
allegation that a solicitation is ambiguous does not make it so. RMS
Indus., B-247465; B-247467, June 10, 1992, 92-1 CPD para. 506. Here, we
conclude that Triple P's interpretation of the RFP, with respect to
the agency's intent to conduct discussions, is unreasonable.
As the protester correctly points out, FAR sec. 15.610(a) requires that
the solicitation notify all offerors where the agency intends to award
a contract without discussions. Since the RFP does not specifically
advise offerors that the agency intends to award a contract on the
basis of initial proposals without discussions, the agency could not
properly award a contract on the basis of initial proposals. Although
section M of the RFP quoted above states that "[d]iscussions may be
held with all offerors . . . ," the gist of this provision is clearly
to describe the purpose of the discussions (i.e., "for the purpose of
identifying deficiencies in proposals and obtaining clarification");
to explain that offerors would be permitted to "submit revisions to
their proposals . . . "; and to describe how BAFOs will be evaluated.
The protester's contention that the agency improperly intends to award
a contract without conducting discussions is not only an unreasonable
reading of the RFP, but is contrary to the applicable FAR provisions
relating to the award of contracts on the basis of initial proposals;
we will not assume that the agency will act in contravention to the
applicable regulation.[2]
RFP Requirements
Triple P argues that the solicitation calls for information that only
the incumbent can provide, thus giving that firm an unfair competitive
advantage in the procurement. We have considered all of the
protester's allegations in this regard and, based on our review of the
record, including the agency's explanations, conclude that Triple P
has failed to show that the information requested by the RFP is
unreasonable or gives the incumbent an unfair competitive advantage.
Attachment E to the RFP contains specific instructions to offerors on
proposal format and content. One section of that attachment with
which Triple P takes issue is paragraph No. 5.1.3, which states as
follows:
"The offeror's proposal must show that the offeror recognizes the
scope of services required under the proposed contract. The
offeror shall explain work control methods and intent to meet all
requirements in the solicitation while satisfying the quality
control requirements. The offeror shall specifically address any
unique approaches toward meeting staffing and solicitation
requirements and shall address the benefits of both to the
offeror in terms of contract compliance and to the [g]overnment
for benefits received. The offeror shall discuss the percentage
of the incumbent's workforce (excluding managers) to be hired,
projected turnover ratio, and whether a learning curve is
utilized (if so, explain learning curve percentage and how it was
derived) in preparation of proposal. Since it is common practice
to retain a large percentage of incumbent service contract
employees, the offeror shall explain if their proposed workforce
would be particularly more skilled or efficient than another
offeror's workforce. General statements (such as, past
experience) will not be accepted without supporting rationale.
Supporting rationale may include completed training courses,
exceptional personnel resumes and recognized performance awards."
The protester generally questions the need for the level of detail of
the information required by this provision. In addition, according to
Triple P, no offeror can provide this type of information except the
incumbent. In particular, the protester objects that only the
incumbent can meaningfully discuss the percentage of the incumbent's
work force to be hired; accurately project personnel turnover ratio;
or provide information concerning the use of a learning curve to
predict contract performance. The protester also argues that only the
incumbent can provide detailed information concerning employee
training.
Attachment E contains specific instructions on the level of
information required so as to allow the agency to evaluate offerors'
understanding of the RFP's technical requirements. To this end,
offerors must propose appropriate staffing levels, adequate personnel
mix, and methodology to be used in performing the required tasks.
Given the nature of the services required (operation and support of 23
different military dining facilities), we see nothing improper in
requiring all offerors, particularly non-incumbents, to indicate in
their proposals whether they intend to hire incumbent personnel; to
provide an estimated or expected personnel turnover ratio; and to
provide some explanation of the expected learning curve for
inexperienced personnel. Regarding personnel experience and training,
the protester's arguments overlook the fact that the proposed key
employees themselves should be able to provide the required
information concerning their backgrounds, training, and experience.
We fail to see why other offerors, besides the incumbent, could not
obtain this type of information from their proposed employees and
include it in their proposals.
In short, we see nothing improper with the requirement for the
requested information and no basis for concluding that the requirement
unfairly favors the incumbent. We think that the information required
by the quoted provision is neither unusual nor burdensome and is
reasonably available to non-incumbents.
The protest is denied.
Comptroller General
of the United States
1. To the extent that Triple P contends that the agency will apply the
RFP's price evaluation provision improperly or in a manner
inconsistent with the basis for award, these allegations, which merely
anticipate improper agency action, are premature and, therefore, too
speculative for our consideration at this time. See General Elec.
Canada, Inc., B-230584, June 1, 1988, 88-1 CPD para. 512.
2. Triple P also contends that the agency failed to adequately respond
to its pre-proposal question concerning extended meal services. We
have reviewed the protester's question and the agency's response
thereto and conclude that the solicitation provides offerors with
sufficient detail to enable them to compete intelligently and on an
equal basis. In any event, there is no requirement that an agency
draft solicitations in such detail as to eliminate any risk or remove
every uncertainty from the mind of every prospective offeror. A&C
Bldg. and Indus. Maintenance Corp., B-230270, May 12, 1988, 88-1 CPD para.
451.