BNUMBER:  B-271903
DATE:  August 6, 1996
TITLE:  Laidlaw Environmental Services (GS), 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:Laidlaw Environmental Services (GS), Inc.

File:     B-271903

Date:August 6, 1996

William E. Hughes III, Esq., Whyte Hirschboeck Dudek S.C., for the 
protester.
Amy M. Steed, Esq., Diane D. Hayden, Esq., and George N. Brezna, Esq., 
Department of the Navy, for the agency.
Aldo A. Benejam, Esq., and Ralph O. White, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST
 
1.  Protester's contention that in selecting the awardee's proposal 
for disposing of hazardous and nonhazardous waste the source selection 
board applied an unannounced evaluation criterion--proximity of 
proposed disposal facilities to sites covered by the solicitation--is 
denied where proximity of proposed disposal facilities was reasonably 
encompassed by the stated evaluation factors concerning technical 
approach and method of operation.

 2.  Protester's contention that the technical evaluation board (TEB) 
improperly evaluated proposals is denied where the record shows that 
the TEB evaluated in accordance with the criteria announced in the 
solicitation, and the record reasonably supports the evaluators' 
conclusions.

3.  Award to offeror submitting a higher-rated, slightly higher-cost 
proposal is unobjectionable where the evaluation scheme announced in 
the solicitation gave more weight to the technical area than to cost, 
and the source selection board reasonably concluded that the awardee's 
superior proposal was worth the premium.

DECISION

Laidlaw Environmental Services (GS), Inc., the incumbent, protests the 
award of a contract to Philip Environmental National Services, Inc. 
under request for proposals (RFP) No. N44255-95-R-6173, issued by the 
Engineering Field Activity, Northwest, Naval Facilities Engineering 
Command, for hazardous and nonhazardous waste disposal from the Puget 
Sound Naval Shipyard in Washington State.  The protester contends that 
the agency deviated from the announced evaluation scheme and 
improperly evaluated the competing proposals.

We deny the protest.

BACKGROUND

The RFP, issued December 8, 1995, contemplated award of a requirements 
contract for a base period, with up two 1-year option periods.  
Section I of the RFP stated that the services would consist of 
inventory, analysis, removal, transporting, treatment, storage and 
disposal/recycling of hazardous and nonhazardous industrial wastes 
from the Puget Sound Naval Shipyard and several off-station sites.  
Section M of the RFP listed quality (technical management and 
capability) and price as the only two evaluation factors, with quality 
considered more important than price.  Within the quality factor, the 
RFP listed the following subfactors:  (1) experience and past 
performance; (2) technical approach; (3) method of operation; and (4) 
proposed organization.  The experience and past performance subfactor 
was equal in weight to the other three quality subfactors combined.  
The RFP stated that price would be evaluated for fairness and 
reasonableness and to determine the offeror's understanding of the 
work required by the RFP.  Award was to be made to the responsible 
offeror whose proposal was deemed to be most advantageous to the 
government.

The agency received four proposals by the time set on January 8, 1996, 
for receipt of initial proposals.  A technical evaluation board (TEB) 
evaluated proposals by rating each subfactor as either highly 
acceptable (HA); acceptable (A); unacceptable, but susceptible of 
being made acceptable (UB); or unacceptable (U), and assigning an 
overall proposal rating.  Price was evaluated separately.

Following the initial evaluation, one of the four proposals was 
rejected as unacceptable; the other three proposals, including the 
protester's and the awardee's, were each rated "UB."  The agency then 
conducted discussions with the three firms whose proposals remained in 
the competition, and requested and received best and final offers 
(BAFO).  The TEB reevaluated and ranked the proposals as follows:

         Offeror    Rating    Rank        Price

         Philip       HA       1       $10,285,048

           B          HA       2         12,669,669

         Laidlaw      A        3         10,024,647
A source selection board (SSB) reviewed these results and concluded 
that Philip's higher-rated proposal was worth its slightly higher 
price and recommended award to that firm.  The contracting officer 
awarded the contract to Philip on April 18.  This protest to our 
Office followed a debriefing by the agency.

PROTESTER'S CONTENTIONS

Laidlaw generally contends that the agency deviated from the 
evaluation scheme announced in the RFP in two respects.  First, it 
maintains that in selecting Philip for award, the SSB improperly used 
an unannounced evaluation factor--proximity--when it emphasized the 
geographic location of Philip's proposed facilities.  Second, the 
protester argues that the agency improperly evaluated the proposals 
under the experience and past performance subfactor.  Laidlaw also 
maintains that selection of Philip's higher-priced proposal was 
improper.

DISCUSSION

Laidlaw argues that the SSB applied an unannounced evaluation 
criterion--proximity--in evaluating Philip's proposal.  In this 
regard, the record shows that Philip owns the four treatment, storage, 
and disposal facilities (TSDF) it proposed to use, all of which are 
located in Washington State, where the contract is to be performed.  
The TEB noted that Philip's ownership of the facilities it proposed 
meant that the contractor could be expected to exert tight control 
over scheduling transporters, as well as prevent problems associated 
with temporary storage of waste in the local area.  In addition, the 
TEB noted that the proximity of the proposed TSDFs meant an enhanced 
ability for Philip to effectively meet the government's needs, 
particularly with respect to timely pick-ups and delivery, and 
facilitate quality assurance by the agency.  The TEB also found that 
local facilities would facilitate the agency's oversight of the 
contractor's compliance with the regulatory and statutory requirements 
announced in the RFP.

Solicitations must identify all significant factors and any 
significant subfactors that will be considered in awarding the 
contract, and the evaluation of proposals must be based on the factors 
set forth in the solicitation.  Federal Acquisition Regulation  sec.  
15.406-5, 15.605(d).  We see no violation of that rule here.  

The RFP specifically required offerors to explain the expected 
timeframes for processing waste samples at the proposed laboratories.  
In this connection, offerors were also required to describe the 
laboratory testing facilities to be used, including the location of 
the facilities and the method of delivering samples, as well as the 
timeframes required for completing and validating laboratory analyses.  
The RFP also reflected the agency's concern for timely contract 
performance.  In this regard, under the method of operation subfactor, 
offerors were specifically required to describe their response times 
during normal operation as well as during emergencies, and to describe 
procedures for ensuring timely and effective responses to meet the 
government's needs, including the contractor's ability to respond to 
emergency situations.  The RFP also required offerors to describe 
their proposed methods of treatment, storage, and disposal of waste, 
and to provide a description of the proposed disposal facilities, 
including their location and capacity, in order to permit the agency 
to evaluate the offerors' capability to meet contract requirements.  
These provisions clearly reflected the agency's concern with 
contractor performance, including response times during both normal 
operation and in emergencies.  Such a concern is encompassed by both 
the technical approach and the method of operation subfactors under 
which the features, advantages, and disadvantages of the proposed 
facilities logically were to be evaluated.  In this regard, we point 
out that not every evaluation consideration has to be set forth in an 
RFP--agencies properly may consider evaluation elements that logically 
are encompassed by the evaluation factors and subfactors contained in 
the RFP.  See generally Akal Sec., Inc., B-271385.3, July 10, 1996, 
96-2 CPD  para.      .  Accordingly, we find nothing improper in the TEB's 
consideration of proximity of the proposed facilities in the 
evaluation of proposals.

Next, the protester argues that the agency improperly evaluated the 
proposals under the experience and past performance subfactor.  
Specifically, Laidlaw complains that its proposal was rated acceptable 
under the experience and past performance evaluation subfactor, while 
Philip's proposal was rated highly acceptable.  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 Abt Assocs., Inc., B-237060.2, 
Feb. 26, 1990, 90-1 CPD  para.  223.  Based on our review of the record, we 
find no basis to object to the evaluation under this subfactor.

The TEB concluded that Laidlaw's proposal demonstrated an extensive 
range of prior experience, including the current contract; a similar 
contract for the Public Works Center, San Francisco; and numerous 
other contracts with the Defense Marketing and Reutilization Service.  
The TEB noted, however, that Laidlaw had experienced performance 
problems in its current contract, particularly with respect to 
returning manifests within the times required by the contract; 
modifying manifests after shipment; and receiving wastes without 
signing the required manifest.  The TEB not only concluded that these 
were weaknesses in Laidlaw's past performance, but that these 
practices violated applicable regulations controlling waste disposal.

In addition, the TEB found that Laidlaw had experienced high turnover 
among its key personnel, resulting in substandard work quality and 
affecting "the timeliness of profile approvals and the identification 
of treatment, storage, and disposal methods."  The record shows that 
while the evaluators concluded that the firm had taken some steps to 
address these performance problems, the TEB was not convinced that the 
proposed solutions would be effective in the long run.  The protester 
does not argue that the agency erred in identifying any of these 
weaknesses which resulted in a rating of acceptable instead of highly 
acceptable.  Accordingly, we see nothing unreasonable in the TEB's 
decision to rate Laidlaw's proposal as acceptable under this 
subfactor.

As for the awardee's proposal, the record shows that Philip's highly 
acceptable rating was based in part on its 26 years of waste 
management experience, including a similar contract covering the Puget 
Sound Naval Shipyard.  Also, the TEB found that the firm proposed 
qualified personnel at "efficient staffing levels," with extensive 
experience with similar contracts.  Based on customer interviews, the 
evaluators found that Philip's performance had earned "high marks" for 
the firm's commitment to customer service and "extremely timely 
processing and returning of profiles and manifests."  In addition, the 
TEB found Philip's use of experienced, qualified personnel another 
strength in its proposal.  Based on our review, we conclude that the 
record reasonably supports the highly acceptable rating assigned 
Philip's proposal under this subfactor.[1]

As a final matter, Laidlaw contends that the selection of Philip's 
higher-priced proposal was improper.  In a negotiated procurement, 
there is no requirement that award be made on the basis of lowest 
price unless the RFP so specifies.  Henry H. Hackett & Sons, B-237181, 
Feb. 1, 1990, 90-1 CPD  para.  136.  Price/technical tradeoffs may be made, 
and the extent to which one may be sacrificed for the other is 
governed only by the tests of rationality and consistency with the 
established evaluation factors.  Grey Advertising, Inc., 55 Comp. Gen. 
1111 (1976), 76-1 CPD  para.  325.  Awards to offerors with higher technical 
scores and higher prices are proper so long as the result is 
consistent with the evaluation criteria and the procuring agency 
reasonably determines that the technical difference is worth the cost 
premium.  Bendix Field Eng'g Corp., B-241156, Jan. 16, 1991, 91-1 CPD  para.  
44.  

Here, we conclude that the agency had a reasonable basis to award to 
Philip at its higher price.  As stated above, the SSB documented its 
recommendation for award in a detailed statement.  After examining the 
strengths and weaknesses of the protester's and the awardee's 
proposal, the SSB concluded that the most apparent distinction between 
the two was in the area of experience and past performance where 
Philip's proposal was rated highly acceptable, while Laidlaw's 
proposal was rated acceptable.  As discussed above, the record 
reasonably supports these ratings.  On the other hand, the SSB noted 
that the TEB remained concerned over the protester's past performance; 
the high turnover rate among Laidlaw's key personnel; the failure of 
the protester's responses to discussion questions to convince the TEB 
that Laidlaw adequately appreciated agency concerns; and Laidlaw's 
recurrent instances of regulatory noncompliance.  Under these 
circumstances, the SSB's conclusion that Philip's proposal was most 
advantageous to the government is unobjectionable.  See Reflectone 
Training Sys., Inc.; Hernandez Eng'g, Inc., B-261224; B-261224.2, Aug. 
30, 1995, 95-2 CPD  para.  95.

The protest is denied.

Comptroller General
of the United States

1. Laidlaw also argues that the TEB improperly evaluated Philip's 
proposal by crediting the company for the favorable past performance 
of a predecessor firm to Philip.  In this regard, our cases hold that 
an agency may properly consider the experience of a predecessor firm.  
See, e.g., Kunkel-Wiese, Inc., B-233133, Jan. 31, 1989, 89-1 CPD  para.  98.  
Except for its general statements that the predecessor firm performed 
under different conditions than contemplated under the RFP, Laidlaw 
does not explain why the agency should ignore the predecessor firm's 
performance on similar contracts.