BNUMBER: B-271686
DATE: July 24, 1996
TITLE: Smith of Galeton Gloves, Inc.
**********************************************************************
Matter of:Smith of Galeton Gloves, Inc.
File: B-271686
Date:July 24, 1996
Lola Dickerman, Esq., for the protester.
Maria C. Santucci, Esq., Defense Logistics Agency, for the agency.
Behn Miller, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, participated in the preparation of the decision.
DIGEST
1. Agency's evaluation of protester's past performance as marginally
acceptable was reasonable where the record shows that the protester
was delinquent on two contracts, and did not--in response to direct
discussion questions--submit any evidence to explain these
delinquencies.
2. Protester's deficient past performance rating was not required to
be referred to the Small Business Administration for review as a
responsibility matter under certificate of competency proceedings
since past performance was a technical evaluation factor that was
evaluated on a comparative basis, and therefore did not constitute a
finding pertaining to the protester's responsibility.
3. Where the solicitation stated that technical quality was more
important than price, an award to a higher-priced offeror was
reasonable where the source selection authority reasonably concluded
that the awardee's proposal was technically superior to the
protester's proposal and was worth its 10-percent higher price.
DECISION
Smith of Galeton Gloves, Inc. protests the award of a contract to
Nationwide Glove Company under request for proposals (RFP) No.
SPO100-95-R-0244, issued by the Defense Personnel Support Center
(DPSC), Defense Logistics Agency (DLA), for the manufacture and
delivery of chemical protective glove inserts. Smith challenges the
award on the ground that the agency improperly downgraded its proposal
under the past performance evaluation factor; had this downgrading not
occurred, Smith contends, it would have been equally ranked with
Nationwide in technical merit, and would have received contract award
as the lowest-priced offeror.
We deny the protest.
The RFP was issued as a total small business set-aside on August 11,
1995, and contemplated the award of an indefinite quantity contract
for a base year with 2 option years; the RFP set forth minimum/maximum
estimates of 144,440/222,600 glove insert pairs per year.
Offerors were to provide a product demonstration model (PDM) which
would be evaluated by the agency for compliance with each of the
technical criteria set forth in the solicitation's "PURCHASE
DESCRIPTION," as well as a past performance "descri[ption] of their
experience with producing the same or items of similar complexity,
within the past two (2) years." The RFP further advised offerors that
the past performance information "should demonstrate the ability to
successfully produce the item identified in the solicitation without
significant quality or schedule problems" and requested telephone
numbers and contact personnel for all contracts referenced in the
offerors' technical proposals. With regard to technical evaluations,
the RFP provided that an adjectival rating scheme of highly
acceptable; acceptable; marginally acceptable; and unacceptable would
be used to score each offeror's proposal under the solicitation's two
technical evaluation factors--PDM and Past Performance--which were
listed in descending order of importance.
For their price proposals, offerors were directed to complete and
submit the solicitation's Section B "SUPPLIES/SERVICES" pricing
schedule. In this regard, the RFP provided that contract award would
be made to the offeror submitting the most advantageous offer, and
emphasized that "technical quality is more important than price."
By the September 25 closing time, three proposals--including one
submitted by Nationwide and one submitted by the protester--were
received. The results of the technical evaluation were as follows:
Offeror PDM
Factor Past Performance
Factor Overall Rating
Nationwide Acceptable Acceptable Acceptable
Smith Acceptable Marginally AcceptableMarginally
Acceptable
Offeror C Unacceptable Marginally AcceptableMarginally
Acceptable
Both Nationwide and Smith submitted glove inserts that lacked an
identification/size label; Smith's PDM also lacked a required bar-code
label. Because the agency viewed these deficiencies as easily
correctable, it gave both Nationwide and Smith an "acceptable" rating
under the PDM technical evaluation factor. In this regard, the RFP
specified that an "acceptable" rating for the PDM factor meant that:
"The PDM meets the stated requirements of the
specification/commercial product description, but exhibits
deficiencies that are easily correctable during production."
(Emphasis added.)
Under the past performance evaluation factor, the agency gave
Nationwide's proposal an "acceptable" rating, which according to the
RFP's definition meant that the "offeror's record of past performance
demonstrates an . . . overall record of timely delivery." Although
Nationwide completed 1 of the referenced contracts 1 month late, the
remaining 11 had been completed on time or ahead of schedule. The
agency's investigation also showed that the sole incident of
delinquent contract performance occurred because, in compliance with
the contract's warranty provision, Nationwide had been required to
replace a small number of delivered gloves because of product defects.
Because three other contracts for the same heavy duty glove had been
successfully and timely performed without any quality or delinquency
problem, the agency evaluators determined that, on balance,
Nationwide's past performance record was acceptable.
In contrast, the agency rated Smith's proposal as "marginally
acceptable" under the past performance factor. In its proposal, Smith
had listed two contracts--neither of which could be considered by the
agency since they did not fall within the prior 2 contract years, as
required by the RFP. Nevertheless, the agency researched its own
files and discovered two glove contracts Smith had performed for
DPSC.[1] Smith completed one of the contracts 2 years late. The
agency evaluators also noted that minor quality problems occurred
throughout Smith's performance of this contract. The second contract
was completed 11 weeks late; although 5 of these weeks were deemed
partially excusable as a result of a defective specification, the
remaining 6 weeks were deemed inexcusable by DPSC since once the
proper supplies to manufacture the gloves in accordance with the new
specifications were delivered to Smith, it nonetheless delayed
commencing production. As a result of these two delinquencies, and
because no other contract references were provided, the agency
determined--in accordance with the "marginally acceptable" rating
definition set forth in the RFP--that Smith's "record of past
performance demonstrate[d] a less than acceptable commitment to
customer satisfaction and timely delivery."
On February 5, 1996, the contracting officer issued discussion letters
to each offeror. Of significance to this protest, the contracting
officer advised Smith that it had received a PDM rating of
"acceptable" and that the missing identification and bar-code labels
were deemed deficiencies in its offer. In the letter, the contracting
officer advised Smith that to correct the label deficiencies, Smith
could either submit a new PDM or certify that the firm would correct
the deficiencies; the letter further apprised Smith that
"by submitting a new PDM, your rating . . . for this factor may
be upgraded or downgraded as necessary. By certifying that the
above defects will be corrected, your present evaluation will not
change."
Smith also was informed that it had received a "marginally acceptable"
rating under the past performance technical factor; to remedy this
deficiency, Smith was asked to "address the delinquency and quality
problems experienced" on the two DPSC contracts, and to provide "past
performance information for your commercial customers." Smith also
was advised that the two contracts listed as references in its
technical proposal could not be evaluated as they fell outside the
RFP's 2-year time frame.
Nationwide received a discussion letter similar to Smith's; as in the
case of the protester, Nationwide was apprised of its PDM rating and
advised that submitting a new PDM with corrected deficiencies could
raise or lower its "acceptable" rating, while certifying correction of
the label deficiency would not change the evaluation rating.
Both Nationwide and Smith submitted best and final offers (BAFO) by
the February 8 BAFO due date. For its BAFO, Nationwide submitted a
new PDM--with all the required labels; since Nationwide's PDM complied
with every technical requirement, its PDM score was raised to highly
acceptable, in accordance with the terms of the RFP. Nationwide's
past performance rating remained unchanged--acceptable. Overall,
Nationwide's proposal was rated acceptable.
Smith did not submit a new PDM; instead, as permitted by the agency's
instructions, Smith provided a certification that the label
deficiencies would be corrected during production. Consequently, its
PDM rating of acceptable was not changed. Although the agency had
invited Smith to address the identified contract delinquencies and/or
submit additional reference information from commercial customers,
Smith did not provide any additional information regarding the past
performance factor in its BAFO. Therefore, Smith's proposal's past
performance rating remained unchanged as marginally acceptable.
Overall, Smith's proposal was rated marginally acceptable.
On March 20, the contracting officer issued an amendment to the RFP
which incorporated several new contract clauses; each offeror was
advised to submit its acknowledgment of the amendment along with a
BAFO by March 22.
The results of the final BAFO evaluation were as follows:
Offeror Overall Technical RatingPrice
Nationwide Acceptable $794,896.20
Smith Marginally Acceptable$721,418.40
After reviewing the technical evaluation results, by memorandum dated
March 28, the source selection authority determined that Nationwide's
technical superiority warranted paying the approximately 10-percent
price premium. Consequently, on March 29, DLA awarded the contract to
Nationwide as the offeror proposing the most advantageous offer.
PROTESTER'S CONTENTIONS
Smith contends that its proposal was improperly downgraded under the
past performance evaluation factor, and that but for this downgrading,
it would have been equally ranked with Nationwide in technical merit,
and would have received contract award because of its lower price.
Smith concedes that it was 2 years delinquent on one of the identified
DPSC contracts; however, with regard to the second DPSC contract,
Smith contends that its delinquent performance should have been
classified by the agency as excusable since all production delays
resulted from the agency's use of a defective specification. Smith
also maintains that the agency's evaluation of its past performance is
unreasonable since DLA recently awarded Smith a small purchase
contract to provide the same glove item required here. Additionally,
Smith contends that it cannot be downgraded under the past performance
factor without referral of the matter to the Small Business
Administration (SBA) for review under certificate of competency (COC)
proceedings as a responsibility matter. Finally, Smith maintains that
its submission of a certification that all label deficiencies would be
corrected should have caused the agency to raise its proposal's rating
from acceptable to highly acceptable under the PDM factor.
DISCUSSION
The evaluation of technical proposals is primarily the responsibility
of the contracting agency since the agency is responsible for defining
its needs and the best method of accommodating them, and it must bear
the burden of any difficulties resulting from a defective evaluation.
Litton Sys., Inc., B-237596.3, Aug. 8, 1990, 90-2 CPD para. 115. It is
not a function of our Office to reevaluate proposals; rather, we
review the agency's evaluation of proposals only to ensure that it was
fair, reasonable, and consistent with the evaluation criteria stated
in the solicitation. VSE Corp., B-247610.2, Aug. 6, 1992, 92-2 CPD para.
81. Where a solicitation requires the evaluation of offerors' past
performance, an agency has discretion to determine the scope of the
offerors' performance histories to be considered, provided all
proposals are evaluated on the same basis and consistent with the
solicitation requirements. Wind Gap Knitwear, Inc., B-261045, June
20, 1995, 95-2 CPD para. 124. From our review of the record, there is no
basis to object to the agency's evaluation of Smith's past
performance.
First, while the RFP limited offerors to submitting past performance
references for the preceding 2 years, the record shows that Smith
disregarded these instructions and submitted two references for
contracts performed prior to the 2-year time limit set forth in the
RFP. Next, although the agency identified and asked Smith to address
its delinquent contract performance on the two DPSC contracts, Smith
failed to provide any additional discussion or alternate contract
references to alleviate the agency's concerns. In this regard,
although Smith now maintains that its delinquent performance under one
of the DPSC contracts should be classified as excusable, and that the
agency should have realized this by virtue of the fact that an
equitable adjustment claim was pending regarding that contract during
the agency's evaluation on this contract, Smith never apprised the
agency of this fact in its BAFO. Further, while Smith contends that
its receipt of a DPSC contract for the same glove item 10 days prior
to the award of this contract demonstrates its ability to successfully
perform this requirement, the agency reports that the contract award
to which Smith refers was made as an urgent small purchase in response
to a request for quotations which did not require a past performance
evaluation, and which solicited a much smaller number of glove
inserts--30,000 pairs--than the number required here.
Given the agency's discussion letter, which clearly placed Smith on
notice that the firm needed to furnish additional evidence to improve
its past performance rating, and Smith's failure to respond--in any
fashion--to the agency's past performance concerns, we think the
agency reasonably found Smith's proposal marginally acceptable under
the past performance factor.
Smith contends that it cannot be downgraded under the past performance
factor without referral of the matter to the SBA for consideration
under that agency's COC proceedings. Referral to the SBA is not
required here. It is true that where an agency finds that a small
business is nonresponsible, the agency is required to refer the matter
to the SBA for consideration under the COC procedures. Flight Int'l
Group, Inc., 69 Comp. Gen. 741 (1990), 90-2 CPD para. 257. In a
negotiated procurement, SBA referral is mandatory where the
solicitation includes, as a matter to be evaluated on a pass/fail
basis, a criterion that is traditionally a responsibility-type factor,
and the contracting agency has determined that a small business's
proposal should be rejected for failure to "pass" that criterion; this
is so because the agency is viewed as having made a nonresponsibility
determination notwithstanding its use of and reliance on a technical
evaluation criterion. Docusort, Inc., B-254852, Jan. 25, 1994, 94-1
CPD para. 38.
The requirement for referral does not apply here. While the past
performance criterion is a responsibility-type factor, it was not
applied on a pass/fail basis. Rather, each proposal--including
Smith's--was comparatively evaluated under this factor, and assigned a
comparative adjectival rating. That means that the agency did not in
essence make a responsibility determination, but simply integrated its
relative assessment of past performance into its overall determination
of which proposal was most advantageous to the government. In such
circumstances, there was no need for referral to the SBA. Tri-Servs.,
Inc., B-256196.4, Sept. 30, 1994, 94-2 CPD para. 121.
As a final matter, to the extent Smith argues that the agency should
have raised its PDM rating to highly acceptable as a result of its
certification (promising that all label deficiencies would be
corrected during production), its protest is untimely. As noted
above, the contracting officer's February 5 discussion letter advised
Smith that certifying correction of the label defects would not change
its initial PDM evaluation rating. If Smith objected to this
evaluation scheme, it was required to challenge this factor prior to
the next solicitation closing time. Since it did not raise this issue
until after award, this aspect of its protest is untimely. See 4
C.F.R. sec. 21.2(a)(1) (1996); NASCO Aircraft Brake, Inc., B-237860, Mar.
26, 1990, 90-1 CPD para. 330.
In sum, we conclude that the agency's evaluation of Smith's proposal
as marginally acceptable under the past performance factor, and
acceptable under the PDM factor, is unobjectionable. Further, we see
no basis to question the agency's evaluation of Nationwide's proposal.
Both Nationwide and Smith were given the same choice for remedying
virtually identical PDM label defects. Nationwide--as a result of its
decision to submit a new, fully compliant PDM--reasonably earned a
highly acceptable rating, and fully demonstrated its commitment to
providing a quality glove insert. In contrast, Smith, instead of
producing a new PDM, chose to certify that the label deficiencies
would be remedied in the production stage--resulting in no change to
its acceptable rating. With regard to past performance, Nationwide
also demonstrated its technical superiority; a detailed list of 12
contracts was provided, demonstrating timely--and even
expedited--compliance with all quality and delivery terms for 11 of
the references. [2] Smith, on the other hand, made no attempt to
alleviate the agency's reasonable concerns about its performance under
its two prior contracts .
Where, as here, a solicitation emphasizes that technical quality is
more important than price, an agency may reasonably decide to award to
a technically superior awardee for a slightly higher price premium.
See Macon Apparel Corp., B-253008, Aug. 11, 1993, 93-2 CPD para. 93.
Given that the record supports the agency's conclusion that
Nationwide's offer represented a superior demonstration of product
quality and commitment to timely delivery, we see no basis to object
to the agency's decision that Nationwide's offer represented the best
value to the government and warranted payment of a 10-percent price
premium.
The protest is denied.
Comptroller General
of the United States
1. The RFP provided that in evaluating each offeror's past
performance, the agency would consider--in addition to what was stated
in the offeror's technical proposal--"information available at DPSC."
2. Smith objects to the agency's decision not to rate Nationwide's
performance marginally acceptable based on the twelfth contract
reference--which, as noted above, was completed 1 month late. We
think the agency reasonably concluded that Nationwide's proposal
warranted a rating of acceptable rather than marginally acceptable
given that the sole instance of delinquency occurred on the earliest
contract for the production of the glove item, and since that one
delinquency, three additional contracts for the same item were
successfully and timely performed without incident. Smith's mere
disagreement with the agency's evaluation rating does not render the
evaluation unreasonable. Wind Gap Knitwear, Inc., supra.