BNUMBER:  B-272248; B-272248.2
DATE:  September 13, 1996
TITLE:  PW Construction, 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:PW Construction, Inc.

File:     B-272248; B-272248.2

Date:September 13, 1996

Timothy A. Sullivan, Esq., Starfield & Payne, for the protester.
James G. Ehlers, Esq., Hillyer & Irwin, for C.E. Wylie Construction 
Company, an intervenor.
Christopher M. Bellomy, Esq., Edward B. Hanel, Esq., and George N. 
Brezna, Esq., Department of the Navy, for the agency.
Peter A. Iannicelli, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Protest that the agency gave preferential treatment to the awardee 
in its evaluation of proposals is denied where the record shows that 
the evaluation was reasonable and consistent with the request for 
proposals's evaluation scheme, and the agency fairly evaluated both 
the protester's and the awardee's proposals. 

2.  Award of a contract to the offeror of the higher technically 
rated, higher-priced proposal was proper where the agency reasonably 
determined that the awardee's slightly higher-priced proposal was 
worth the additional cost.

DECISION

PW Construction, Inc. protests the Navy's award of a fixed-price 
construction contract to C.E. Wylie Construction Company pursuant to 
request for proposals (RFP) No. N62474-94-R-7479.  The protester 
contends that the Navy gave preferential treatment to Wylie when 
evaluating proposals and that the Navy's evaluation of proposals was 
not consistent with the RFP's evaluation scheme.  The protester also 
contends that it should have been awarded the contract because its 
proposed total price was lower than Wylie's.[1]  We deny the protest.

Issued on March 4, 1996, the RFP solicited proposals for demolition of 
existing structures and construction of three dormitories and two 
mechanical buildings at Travis Air Force Base[2] and contained 
detailed drawings and specifications concerning the buildings to be 
constructed.  The RFP stated that the contract would be awarded to the 
offeror whose conforming offer was determined to be most advantageous 
to the government after consideration of price and other factors.  

Eight proposals were received by the April 10 closing date for 
submission of initial proposals.  After evaluation, seven proposals 
were included in the competitive range.  Because all offers were 
priced at more than the available funding, the Navy took several 
actions aimed at ensuring that the project would be completed within 
available funding constraints.  The Navy had its project 
architect/engineer review the project to determine whether any 
potential savings could be identified.  The Navy also asked the Air 
Force to provide additional funding; the Air Force complied.  In 
addition, during discussions, competitive range offerors were asked 
for their recommendations for deleting requirements in order to lessen 
the overall cost.  After considering potential cost-saving measures 
from all sources, the Navy issued amendment 0004 requesting best and 
final offers (BAFO), deleting a large number of requirements, 
modifying others, and generally reducing the scope of the project.  

BAFOs were received by  May 10 and were evaluated by the source 
selection board (SSB).  The SSB gave Wylie's BAFO an overall rating of 
[deleted] and PW's BAFO an overall rating of [deleted].  Wylie's total 
proposed price ($16,217,472) was the second lowest-priced proposal and 
PW's total proposed price of [deleted] was the lowest.[3]  Based on 
Wylie's BAFO's superior technical rating, the SSB recommended that 
Wylie be awarded the contract.  The source selection authority (SSA) 
concurred, and the contract was awarded to Wylie on June 4.  After a 
debriefing by the agency, PW filed its initial protest in our 
Office.[4] 

Essentially, PW contends that the Navy's evaluation of proposals and 
award decision were flawed.  The protester alleges that Wylie's 
proposal received higher ratings as the result of preferential 
treatment by the SSB.  The protester also asserts that the Navy gave 
greater weight to technical evaluation factors than to price and that 
the SSA failed to conduct a cost/technical tradeoff analysis.  
According to PW, a proper cost/technical tradeoff analysis would have 
resulted in award of the contract to PW on the basis of its 
lower-priced proposal.[5]   

The evaluation of proposals is primarily within the discretion of the 
procuring agency, not our Office; the agency is responsible for 
defining its needs and the best means of accommodating them and must 
bear the consequences of a defective evaluation.  HospitalKlean, Inc., 
B-245158 et al., Dec. 17, 1991, 91-2 CPD  para.  550.  Consequently, our 
Office will question an agency's evaluation of proposals only if the 
evaluation lacks a reasonable basis or is inconsistent with the RFP's 
evaluation criteria.  SRS Technologies, B-270341.2, Mar. 1, 1996, 96-1 
CPD  para.  120.  A protester's mere disagreement with the agency over its 
technical evaluation does not establish that the evaluation was 
unreasonable.  Id.  Here, the record shows that the evaluation was 
reasonable and consistent with the evaluation criteria, and that the 
agency fairly evaluated PW's and Wylie's proposals. 

The RFP stated that technical factors and price were approximately 
equal in importance.  The technical evaluation factors, in descending 
order of importance, were experience, work schedule, past performance, 
and proposed utilization of small disadvantaged businesses (SDB) and 
women-owned, small businesses (WOSB).  The experience factor was 
further divided into two subfactors:  (a) corporate experience of 
prime and subcontractors; and (b) prime and subcontractor key 
personnel experience.  Price proposals were to be evaluated to ensure 
award at a fair and reasonable price. 

The protester contends that the SSB inexplicably and arbitrarily rated 
Wylie's proposal higher on several evaluation factors/subfactors even 
though the relevant portions of PW's proposal were equal to Wylie's on 
those factors/subfactors.  For example, PW asserts that its proposed 
subcontractors had more construction experience than the 
subcontractors proposed by Wylie but the SSB rated Wylie's proposal as 
better than PW's in evaluating corporate experience and the experience 
of prime and subcontractor key personnel.  As a second example, PW 
alleges that the SSB gave Wylie's proposal a better rating on the past 
performance factor even though PW and Wylie had [deleted] calculated 
change order rates on prior contracts.[6]  

The record does not support PW's claim of unfair treatment and, in 
fact, fully supports Wylie's better ratings on the above-cited 
factors/subfactors.

Regarding the evaluation of experience, the RFP emphasized the 
importance of experience in constructing multi-family housing, 
institutional dormitories or bachelor housing and that the agency was 
looking for experience with projects of similar scope and magnitude.  
Against this background, the RFP stated that key personnel of the 
prime and proposed subcontractors would be evaluated on their 
capability to manage the work and meet all contract requirements.

In evaluating Wylie's proposal on experience, the SSB noted that 
Wylie's proposal listed [deleted] recent contracts for new 
construction of military dormitories and commented that all [deleted] 
contracts closely matched the type of construction and the scope of 
the proposed project.  The SSB was favorably impressed because most of 
Wylie's proposed key personnel--both prime and subcontractor--had 
worked together on the previous construction contracts.  The SSB noted 
that all of Wylie's proposed prime and subcontractor key personnel had 
lengthy experience in relevant construction work and that Wylie's 
[deleted] prime contractor key personnel had been employed by Wylie 
for an average period of more than [deleted] years.  Therefore, the 
SSB gave Wylie's proposal excellent ratings on both the corporate 
experience and key personnel experience subfactors of the experience 
factor, praising the proposal as "showing a very strong experienced 
team and increasing the potential of successfully completing future 
projects." 

In evaluating PW's proposal on experience, the SSB noted that PW 
listed [deleted] prior contracts that were relevant multi-housing 
projects.  The SSB stated that [deleted] similar to the proposed 
project (i.e, new construction of a dormitory); the others were for 
modernization or revitalization of existing housing (including 
single-family housing).  The SSB also noted that, while many of PW's 
proposed prime and subcontractor key personnel had lengthy experience 
in general construction work, many had [deleted] in new construction 
of buildings of the type required under this RFP.[7]  Additionally, 
the SSB commented that it was unclear from PW's proposal whether the 
experience of the proposed project manager and superintendent and many 
of the subcontractors' key personnel was derived from relevant new 
construction projects.  The agency reports that, unlike in Wylie's 
proposal, there was no indication in PW's proposal whether the 
proposed subcontractors had worked with PW on the projects PW listed 
for evaluation of experience.  Therefore, the SSB gave PW's proposal 
acceptable ratings on both the corporate experience and key personnel 
experience subfactors of the experience factor, stating that "PW was 
[deleted] of projects of similar scope and magnitude but their general 
construction experience indicates that they have a reasonable 
probability of success."  

In our view, there was nothing objectionable in the SSB's giving 
Wylie's proposal better ratings than PW's proposal on the experience 
factor/subfactors.  Wylie proposed a team of prime and subcontractors 
that had a plethora of experience in construction of new 
dormitory-type buildings--the exact type of work that will be required 
under the contract--while PW proposed a team of prime and 
subcontractors that had lengthy experience in renovation work and 
other general construction but not new dormitory construction.  Also, 
Wylie's proposal showed that the prime/subcontractor team had worked 
together on new dormitory construction on several previous projects 
whereas PW's proposal did not.  Moreover, the Wylie proposal showed 
that most of its proposed key personnel had worked for their present 
firms for long periods of time while PW's key personnel had worked for 
their present firms for relatively much shorter periods.  Thus, there 
clearly was a reasonable basis for the SSB to conclude that Wylie's 
proposal merited a better rating on experience. 

Regarding past performance, the RFP stated that the agency would 
evaluate an offeror's capability to successfully complete projects of 
similar scope and complexity with an emphasis on timeliness of 
performance, quality of work, cost controls, and cooperation.  The RFP 
also stated that the Navy might verify past performance through 
various performance data bases.  While PW contends that the SSB 
incorrectly gave Wylie's proposal a better rating on past performance 
even though PW and Wylie had virtually identical calculated change 
order rates on prior contracts, the record shows that the SSB 
considered more than just the offerors' calculated change order rates 
and that it was the other factors that led the SSB to decide to give 
Wylie's proposal a better rating on this factor.

The Navy considered the calculated change order rates experienced by 
offerors in prior contracts as one measure of an offeror's ability to 
control cost growth.  In reporting to the SSA, the SSB noted that both 
Wylie's and PW's calculated change order rates ([deleted], 
respectively) were below the [deleted] rate typically experienced by 
the agency.  Thus, both offerors were given credit for having low cost 
growth rates.  However, the SSB also considered information on 
previous contracts contained in a performance data base maintained by 
the agency and discussed offerors's previous performance history with 
cognizant government contracting personnel.  The SSB noted that Wylie, 
using most of the same subcontractors proposed here, had received an 
outstanding rating on a recent project of comparable cost magnitude as 
well as a satisfactory rating on an earlier contract.  The SSB 
concluded that Wylie and its  subcontractors had "a strong track 
record for timeliness, high quality of work, and cooperation" and, 
therefore, rated Wylie's proposal good on past performance.  On the 
other hand, the SSB reported that the agency's performance data base 
showed that PW had received ratings of just satisfactory on two 
previous contracts that were much smaller in dollar amount and, after 
discussions with government personnel familiar with projects that PW 
had worked on, the SSB rated PW's proposal acceptable on past 
performance.  

Thus, even though the offerors's previous change order rates were 
[deleted], Wylie's better rating for past performance was based on the 
agency's performance data base which showed that Wylie had received an 
outstanding rating on a recent project of comparable cost and size 
while PW had not received any outstanding ratings and, in fact, had 
received only two satisfactory ratings on contracts that were lower in 
cost and different in scope and complexity.  In addition, the agency 
reports that PW had experienced [deleted] that were most similar to 
the present requirement.  In short, the past performance ratings are 
reasonably supported by the record.

The protester contends that the Navy gave greater weight to technical 
factors than to price even though the RFP stated that technical 
factors and price were equal in importance.  The protester also 
alleges that the SSA failed to conduct a cost/technical tradeoff 
analysis which would have shown that PW's lowest-priced proposal 
represented the best value to the government.

In a negotiated procurement, a procuring agency has the discretion to 
select a more highly rated technical proposal if doing so is 
reasonable and is consistent with the RFP's evaluation scheme.  See 
Pacific Architects & Eng'rs, Inc., B-257431.7, Dec. 8, 1994, 95-1 CPD  para.  
202.  We have upheld awards to higher-rated offerors with 
significantly higher proposed prices where the contracting agency 
reasonably determined that the cost premium was justified considering 
the significant technical superiority of the selected offeror's 
proposal.  AAA Painting and Janitorial Contractors, Inc., B-270168, 
Feb. 13, 1996, 96-1 CPD  para.  72; see also Medical Serv. Corp. Int'l, 
B-255205.2, Apr. 4, 1994, 94-1 CPD  para.  305.

Contrary to PW's allegation, the record shows that the SSA did, in 
fact, conduct a cost/technical tradeoff analysis before concluding 
that the relatively small premium the agency would have to pay Wylie 
to perform the contract was outweighed by the extra technical merit of 
Wylie's proposal.  The SSA considered the SSB's recommendation that 
the contract be awarded to Wylie, as well as the underlying rationale 
behind the SSB's recommendation.  The SSA recognized that Wylie's 
proposed price was [deleted] percent higher[8] than PW's but stated 
his belief that Wylie's proposal with an overall good rating was a 
greater value than PW's proposal with an overall acceptable rating.  
The SSA pointed out that Wylie's proposal was rated as exceptional 
under experience--the most important evaluation factor.  Moreover, the 
SSA cited Wylie's proven success in completing [deleted] construction 
projects that were similar in scope and magnitude, the stability of 
Wylie's proposed key personnel, Wylie's long-term relationships with 
its subcontractors, and Wylie's low change order rate for [deleted] 
recent similar projects as factors favoring the selection of Wylie.  
The SSA also noted that PW's expertise was in [deleted] rather than 
[deleted], and that PW had [deleted] on projects equal in magnitude to 
the proposed project.

Where, as here, the RFP stated that technical factors and price were 
equal in importance, the SSA properly weighed the advantages of 
Wylie's technically superior proposal against the price advantage of 
PW's lowest-priced proposal.  See Herley Indus. Inc., B-251792.2, Apr. 
16, 1993, 93-1 CPD  para.  327.  While the agency recognized that both 
offerors were fully capable of performing the work, the SSA decided to 
select Wylie because of Wylie's long-term relationships with its 
proposed subcontractors, because Wylie's corporate team had worked 
together before on a number of projects involving very similar work, 
and because of the stability of Wylie's proposed key personnel.  
Moreover, while not specifically cited as a reason by the SSA, we note 
that Wylie's proposal generally received better ratings across the 
board from the evaluators.  In this regard, Wylie's proposal received 
ratings of exceptional for experience, good for work schedules, good 
for past performance, and acceptable for utilization of SBDs and 
WOSBs, while PW's proposal received acceptable ratings for each 
evaluation factor.  We see nothing unreasonable with the SSA's 
decision.

The protest is denied.

Comptroller General
of the United States

1. The protester submitted a number of arguments in support of its 
general protest grounds; the Navy responded to each argument, 
justifying its actions.  We have reviewed the entire record, 
considered all of the arguments, and find no basis for sustaining the 
protest.  However, we will discuss only the more significant arguments 
in this decision.

2. The Navy conducted this procurement for the Air Force.

3. We will discuss only the evaluations of the protester's and Wylie's 
proposals in this decision since the protester raised no issues 
regarding other offerors' proposals or the agency's evaluation of 
them.

4. After receiving the agency's report on its initial protest 
(reference No. B-272248), PW filed a supplemental protest (reference 
No. B-272248.2) in our Office.  Both protests are resolved in this 
decision.

5. Initially, PW also protested that the Navy should not have 
considered risk in evaluating proposals because risk was not 
specifically set forth as an evaluation factor.  The Navy addressed 
this argument in its report, but PW did not address this issue in its 
comments on the agency's report.  Accordingly, we consider the protest 
ground to be abandoned.  See Heimann Sys. Co., B-238882, June 1, 1990, 
90-1 CPD  para.  520.  

6. In its supplemental protest, PW alleged that a third example of 
disparate treatment was the rating of  both PW's and Wylie's proposals 
as acceptable on the proposed utilization of SDBs and WOSBs evaluation 
factor even though PW had proposed to use such firms for a higher 
percentage of the work.  The Navy rebutted this allegation in its 
report on the supplemental protest; PW abandoned this protest ground 
when it did not address the issue in commenting on the agency's 
report.  See Heimann Sys. Co., supra.

7. We note that, unlike Wylie's proposal which showed that prime 
contractor key personnel had been employed by Wylie for an average of 
more than [deleted] years, PW's proposal showed that [deleted] of its 
prime contractor key personnel had been employed by PW for more than 
[deleted] years.

8. In actuality, the record shows that Wylie's total price was only 
[deleted] percent more than PW's.