BNUMBER: B-272388.2
DATE: December 9, 1996
TITLE: Matrix International Logistics, Inc., B-272388.2, December 9,
1996
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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:Matrix International Logistics, Inc.
File: B-272388.2
Date:December 9, 1996
Timothy Sullivan, Esq., Katherine S. Nucci, Esq., and Martin R.
Fischer, Esq., Adduci, Mastriani & Schaumberg, for the protester.
Raymond S.E. Pushkar, Esq., and Michael A. Hopkins, Esq., McKenna &
Cuneo, for Sea-Land Logistics, Inc., the Intervenor.
Charna J. Swedarsky, Esq., and William R. Buonaccorsi, Esq.,
Department of the Navy, for the agency.
John L. Formica, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. The agency's evaluation of the awardee's best and final offer and
its source selection decision cannot be determined reasonable where
they are unsupported by either the contemporaneous evaluation and
source selection documentation or the arguments, explanations, and
testimony in the record.
2. Agency failed to conduct meaningful discussions with the protester
where it determined during its evaluation of initial proposals that a
material element of the protester's price proposal was either
unreasonably priced or the result of a mistake, but did not raise the
matter during discussions.
3. Correction of mistake in awardee's price after receipt of best and
final offers where it is not clear from the proposal and solicitation
what price was intended constitutes discussions requiring discussions
with all offerors whose proposals are in the competitive range.
DECISION
Matrix International Logistics, Inc. protests the award of a contract
to Sea-Land Logistics, Inc. under request for proposals (RFP) No.
N62387-96-R-9602, issued by the Military Sealift Command, Department
of the Navy, for transportation services in support of the Cooperative
Threat Reduction (CTR) program.
We sustain the protest because the agency's determination that
Sea-Land's proposal was "excellent" and "essentially equal" to
Matrix's higher-priced "excellent" proposal is unsupported by the
record, and because the agency failed to conduct meaningful
discussions with Matrix and improperly conducted discussions with
Sea-Land after the submission of best and final offers (BAFO).
BACKGROUND
The CTR program assists the former Soviet Union (FSU) countries of
Russia, Belarus, Ukraine, and Kazahkstan in the elimination of their
nuclear and chemical weapons of mass destruction and of other weapons.
CTR program support includes, to the extent feasible, the use of
United States technology and technicians, and has resulted in the
provision of equipment and services to the FSU. The successful
contractor under the RFP will be required to provide multifaceted
transportation and shipping support services to the CTR program
including shipment planning, material handling, shipment, reporting,
and security. Essentially, the objective of the contract is to
provide the CTR program with door-to-door intermodal services for the
transportation of containerized and breakbulk cargoes from the United
States and Europe to certain points within the FSU.
The RFP provided for the award of a fixed-price, indefinite delivery,
indefinite quantity contract, for a base period of 1 year with one
1-year option. The RFP stated that award would be made to the offeror
submitting the proposal representing the best overall value to the
government, price and other factors considered, and listed the
following technical evaluation factors and subfactors:
1. Proposed Services for CTR Shipments
A. Procedures and Method for Shipment Planning
B. Shipment Execution
C. Reporting and In-Transit Visibility (ITV)
D. Security
E. Sample Problem Solution
2. Experience and Past Performance
A. Corporate Performance
(i) Resources
(ii) Program Management
(iii)ITV
(iv) Security
B. Government Assessment of Performance
3. Corporate Capabilities
A. Personnel experience/resumes
B. Program management
C. Facilities, transportation assets
D. Computer systems, databases, etc.
E. Financial Capability
4. Material Handling
A. Container and less-than-trailerload shipments
B. Breakbulk and Rolling Stock
C. Oversize Breakbulk
The RFP informed offerors that the evaluation factors and subfactors
were listed in descending order of importance, with certain
exceptions; within evaluation factor one, subfactors A, B, and C were
of equal importance, and subfactors D and E were of equal importance,
but were less important than subfactors A, B, and C; the subfactors of
evaluation factor four were of equal importance.
The RFP provided detailed instructions for the preparation of
proposals and requested that offerors organize their technical
proposals to respond to the evaluation factors and subfactors and
provide separate technical and price proposals. The RFP instructed
offerors that they were to prepare their price proposals by completing
pricing sheets contained in the RFP as an attachment, and that each
line item must be completed with a unit and extended price as
indicated, or marked "not separately priced" or "no service."
The agency received five proposals, including Matrix's and Sea-Land's,
by the RFP's closing date. An analysis of the price proposals was
conducted, and the technical proposals were evaluated by the
four-member source selection evaluation board (SSEB). The technical
proposals were evaluated under each of the subfactors and overall, as
either excellent, good, acceptable, marginal, or unacceptable.
Members of the SSEB each prepared narratives setting forth their views
as to each proposal under each of the evaluation subfactors, and
completed an evaluation matrix, on which the evaluator's individual
ratings for each proposal under each of the evaluation subfactors was
noted. As there were a total of 15 evaluation subfactors and four
evaluators, each proposal received a total of 60 evaluation ratings
(15 subfactors x 4 evaluators = 60 ratings), and an overall rating.
Matrix's initial proposal, which was evaluated as technically
"excellent" overall at a total price of $8,512,268, received a total
of 48 "excellent" ratings and 12 "good" ratings. Sea-Land's initial
proposal, which was evaluated as technically "good" overall at a price
of $6,395,557, received a total of 23 "excellent" ratings, 29 "good"
ratings, 1 "acceptable" rating, and 7 "marginal" ratings. The
proposals of Matrix, Sea-Land, and a third offeror, whose proposal was
evaluated as "good" at a price of $6,193,090, were included in the
competitive range.
Discussions were held, and BAFOs received and evaluated.[1] Matrix's
evaluated BAFO price was $7,086,280, and Sea-Land's BAFO price was
$5,829,674. Sea-Land's BAFO provided prices of "$0" for each of the
eight contract line items set forth on the pricing sheets for the
various ancillary services to be performed in the option year of the
contract; the agency determined that this was an apparent mistake in
Sea-Land's BAFO. The agency contacted Sea-Land and permitted the firm
to submit prices for each of these eight contract line items.
Sea-Land's evaluated BAFO price became $6,016,179.
Members of the SSEB evaluated BAFOs individually, but did not prepare
narratives supporting their views, even where ratings were revised.
According to the BAFO evaluation matrices, Matrix's BAFO ratings were
the same as its initial ratings, whereas Sea-Land's BAFO received 28
"excellent" ratings and 32 "good" ratings, and was rated as
"excellent" overall by three members of the SSEB, and "good" overall
by the remaining member of the SSEB. The SSEB drafted a summary of
its evaluation results, which stated that although both Matrix's and
Sea-Land's BAFOs were "excellent" overall, the SSEB believed that
"Matrix's proposal is still clearly SUPERIOR to the remaining
proposals." The SSEB's evaluation summary was forwarded to the
chairman of the SSEB and the contracting officer (CO).
The chairman of the SSEB drafted a Recommendation for Award memorandum
to the cognizant source selection authority (SSA) summarizing the
evaluation results, and the recommendations of the CO and chairman of
the SSEB. Hearing Transcript (Tr.) at 481. This memorandum provides
in part that "[a]lthough the [SSEB] assigned a technical ranking of 1
and 2 respectively to Matrix and Sea-Land Logistics (both rated as
[e]xcellent), the SSEB determined after detailed review that the
offers were essentially equal in overall technical merit." The
memorandum adds that "[a]fter careful review . . . the Chairman of the
SSEB concluded that the BAFOs submitted by Matrix and Sea-Land were
essentially equal." The memorandum recommends that award be made to
Sea-Land because it submitted the "lowest priced offer with a
technical rating of '[e]xcellent.'"
Meetings attended by the chairman of the SSEB, the CO, the contract
negotiator, and the SSA were held, at which the Recommendation for
Award memorandum and other aspects of the procurement were
discussed.[2] The SSA signed the Recommendation for Award memorandum
as "concur[ring]" with the recommendation of award to Sea-Land, and
award was made to that firm on the same day. This protest followed.
The agency has authorized performance of Sea-Land's contract,
notwithstanding the protest.
UNDOCUMENTED BAFO EVALUATION
Matrix argues that the agency's selection of Sea-Land's proposal for
award was unreasonable. Specifically, the protester contends that the
agency's evaluation record does not support the conclusion, set forth
in the Recommendation for Award memorandum, that Sea-Land's technical
proposal was "excellent" overall and "essentially equal" to Matrix's.
The protester argues that because the SSA's concurrence with the
recommendation that award be made to Sea-Land was based upon the
unsupported conclusion that the proposals of Sea-Land and Matrix were
"essentially equal," the SSA's concurrence with the recommendation,
and effective selection of Sea-Land for award, were unreasonable.
In reviewing an agency's evaluation of proposals and source selection
decision, our review is confined to a determination of whether the
agency acted reasonably and consistent with the stated evaluation
factors. Main Building Maintenance, Inc., B-260945.4, Sept. 29, 1995,
95-2 CPD para. 214. An agency's evaluation of proposals and source
selection decision should be documented in sufficient detail to allow
for the review of the merits of a protest. See Southwest Marine,
Inc.; American Sys. Eng'g Corp., B-265865.3; B-265865.4, Jan. 23,
1996, 96-1 CPD para. 56. An agency which fails to adequately document its
evaluation of proposals or source selection decision bears the risk
that its determinations will be considered unsupported, and absent
such support, our Office may be unable to determine whether the agency
had a reasonable basis for its determinations. Engineering and
Computation, Inc., B-261658, Oct. 16, 1995, 95-2 CPD para. 176; U.S.
Defense Sys., Inc., B-245563, Jan. 17, 1992, 92-1 CPD para. 89; American
President Lines, Ltd., B-236834.3, July 20, 1990, 90-2 CPD para. 53. That
is not to say that our Office, in determining the reasonableness of an
agency's evaluation and award decision, limits its review to the
contemporaneous evaluation and source selection documentation.
Rather, we will consider, in addition to the contemporaneous
documentation, all information provided to our Office for
consideration during the protest, including the parties' arguments and
explanations, and testimony elicited at a hearing. Southwest Marine,
Inc.; American Sys. Eng'g Corp., supra. In considering the entire
record, we accord greater weight to contemporaneous evaluation and
source selection material than to the parties' later explanations,
arguments, and testimony. DynCorp, 71 Comp. Gen. 129 (1991), 91-2 CPD para.
575; Southwest Marine, Inc.; American Sys. Eng'g Corp., supra.
As explained in detail below, we cannot conclude, based upon the
entire record, including the agency's later-raised arguments and
explanations as well as the testimony elicited at a hearing, that the
agency acted reasonably in evaluating Sea-Land's proposal as
"excellent" overall and "essentially equal" to Matrix's. Accordingly,
we cannot determine that the agency's selection of Sea-Land for award
was reasonably based.
As noted above, Sea-Land's initial proposal was evaluated as "good"
overall with regard to technical merit, while its BAFO was rated as
"excellent." While the record adequately supports the initial rating,
there is little in the evaluation record that documents or explains
why the agency rated Sea-Land's BAFO as "excellent." Although the
SSEB members prepared narratives explaining their respective views of
the technical merits of the offerors' initial proposals, they did not
prepare narratives explaining their evaluation of any of the BAFOs.
Tr. at 361-362. The SSEB members simply filled out the evaluation
matrix with the BAFO ratings for each subfactor with no narratives
explaining the changes.[3] Three of the members of the SSEB wrote
notations on the bottom of the evaluation matrices; however, these
notations consist only of comments such as "deficiencies were
adequately addressed" or "proposal identifies understanding of
requested services."
The SSEB's memorandum to the SSA and CO summarizing the BAFO
evaluation results contains the following paragraph concerning the
SSEB's evaluation of Sea-Land's BAFO:
"The Sea[-L]and offer is rated second with an overall EXCELLENT
rating. This rating is an improvement over the GOOD rating
received during initial technical evaluation. The revised
technical proposal from Sea-Land corrected and clarified all
deficiencies found in the initial offer. The revised proposal
convincingly addressed previous areas of concerns on program
management coordination, warehousing capabilities, customs
charges and FSU security requirements. The Sea-Land proposal in
its revised form demonstrates an excellent understanding of the
contract requirements. The capability to provide transportation
services to effectively manage the CTR program is confidently
demonstrated with minimal technical risk to the [g]overnment."
This explanation, however, is largely inconsistent with the initial
and BAFO evaluation matrices prepared by the SSEB.
For example, the paragraph states that Sea-Land's proposal's technical
rating was raised to "excellent" because it "convincingly addressed
previous areas of concern on program management coordination,
warehousing capabilities, customs charges and FSU security
requirements." Yet, according to the initial and BAFO evaluation
matrices prepared by the SSEB, Sea-Land's initial proposal had been
rated as "excellent" under the evaluation subfactors addressing its
program management coordination and warehousing capabilities,
notwithstanding the evaluators' concerns in these areas; accordingly,
its rating under these evaluation subfactors could not and did not
increase because of Sea-Land's BAFO.
Additionally, Sea-Land's initial proposal and BAFO were not rated very
differently under the evaluation subfactor addressing its
understanding of customs, with the initial proposal receiving four
"good" ratings, and the BAFO receiving three "good" ratings and one
"excellent" rating. Only in the area of FSU security requirements,
where under the evaluation subfactor "security" Sea-Land improved its
initial proposal rating of one "marginal" and three "acceptable"
ratings to one "excellent" and three "good" ratings for its BAFO, is
the above explanation supported by the record; however, it is not
evident why this one area of improvement in itself should result in an
overall upgrade of Sea-Land's BAFO to "excellent."
Thus, although it appears from the record that the agency reasonably
concluded
that Sea-Land's BAFO was an improvement over its initial proposal in
certain areas (e.g., its approach to the RFP's security requirements),
the contemporaneous documentation in the record does not adequately
explain why the SSEB considered Sea-Land's two and one-half page BAFO
to warrant the rating increase from "good" to "excellent" overall.[4]
The agency, after being afforded the opportunity to clarify the record
at a hearing, did not provide any further adequate support for
Sea-Land's overall "excellent" rating. For example, an SSEB member
testified that Sea-Land's BAFO was considered technically "excellent"
overall because many of the "good" ratings the BAFO received under the
evaluation subfactors "were borderline excellent," and many of the
excellent ratings "were extremely strong [excellents]." Tr. at
262-263. This SSEB member conceded, however, that although it would
have been possible for the SSEB to have documented its beliefs
regarding certain of the "good" ratings under the evaluation
subfactors as "borderline excellent," or certain of the "excellent"
ratings as "strong [excellents]," Tr. at 348-349, this was not done
and no documents exist to support this assertion. Tr. at 339, 348,
363, 365, 385. Finally, although this individual testified generally
as to his belief that Sea-Land's "good" ratings were "stronger good,"
he could only reference one specific example as to why this was the
case, and, with regard to the evaluation subfactor he chose to
discuss, he was unable to explain certain aspects of his evaluation of
Sea-Land's initial proposal, including what a particular documented
concern under this evaluation subfactor referred to and thus whether
it was addressed in Sea-Land's BAFO. Tr. at 373-379.
The SSEB member also testified that the SSEB had concluded that
Sea-Land's BAFO was technically "excellent" overall because Sea-Land's
BAFO received more "excellent" than "good" ratings under the most
important evaluation subfactors. Tr. at 257, 384. This individual
pointed out that under the most important evaluation factor, "Proposed
Services for CTR Shipment," Sea-Land's proposal received, under the
five subfactors rated by the four evaluators, a total of 11
"excellent" and 9 "good" ratings. Tr. at 257.
Again, while the testimony of the SSEB member indicates that the
agency reasonably concluded that Sea-Land's BAFO was an improvement
over its initial proposal, the testimony fails to adequately explain
why the SSEB raised Sea-Land's BAFO rating from "good" to "excellent."
There is no documentation nor specific testimony in the record
explaining which or why any of Sea-Land's 28 "excellent" and 32 "good"
ratings under the evaluation subfactors were considered "strong
excellent," "borderline excellent," or "strong good." Despite being
provided the opportunity to clarify the record at the hearing, the
agency was unable to reasonably explain any example supporting its
position in this regard. Thus, the fact that Sea-Land received
slightly more "excellent" than "good" ratings under the most important
evaluation factor does not here justify a rating of "excellent"
overall, given this record and the fact that overall the "good"
ratings exceeded the number of "excellent" ratings.
Notwithstanding the above discussion, even if we assume that
Sea-Land's proposal could reasonably be considered technically
"excellent" overall, the record does not support the agency's
conclusion that Sea-Land's BAFO is "essentially equal" in technical
merit to Matrix's BAFO. While the Recommendation for Award memorandum
states that "[a]lthough the [SSEB] assigned a technical ranking of 1
and 2 respectively to Matrix and Sea-Land Logistics (both rated as
Excellent), the SSEB determined after detailed review that the offers
were essentially equal in overall technical merit," there is no
documentation in the record regarding a "detailed review," or any
other review, performed by the SSEB after it prepared its memorandum
to the chairman of the SSEB, and no other support in the
contemporaneous evaluation documentation for the assertion that the
proposals of Matrix and Sea-Land were considered "essentially equal"
in technical merit by the SSEB.
In fact, the SSEB plainly states in its memorandum to the chairman of
the SSEB that "Matrix's proposal is still clearly SUPERIOR to the
remaining proposals." Further, the BAFO evaluation matrix, which was
forwarded to the chairman of the SSEB with the memorandum, supports
the SSEB's statement that Matrix's proposal was clearly superior to
Sea-Land's. For example, under the five subfactors of the most
important evaluation factor "Proposed Services for CTR Shipments,"
Matrix's proposal received one "good" and 19 "excellent" ratings,
whereas Sea-Land's proposal received 9 "good" and 11 "excellent"
ratings. Additionally, as mentioned above, Matrix's proposal received
50 "excellent" and 10 "good" ratings overall, whereas Sea-Land's
proposal received 29 "excellent" and 31 "good" ratings.
There is also nothing in the contemporaneous record showing that
either the chairman of the SSEB or the SSA performed an independent
evaluation of the proposals in support of the Recommendation for Award
memorandum's assertion that Sea-Land's proposal was technically
"excellent" and "essentially equal" to Matrix's. In this regard, the
memorandum provides as follows with regard to Sea-Land's proposal:
"As a result of discussions, Sea-Land's technical rating at BAFO
was upgraded from '[g]ood' to '[e]xcellent.' The SSEB identified
no weaknesses with Sea-Land's revised proposal. In their BAFO
offer Sea-Land corrected and clarified all deficiencies found in
initial offer and convincingly addressed all previous areas of
concern. The proposal demonstrates an excellent understanding of
the contract requirements, including a thorough methodology for
conducting shipment planning, which is reflected in their problem
solution. In summary the offer projects the carrier's capability
to provide required transportation services, and to effectively
manage the CTR program, with minimal technical risk to the
[g]overnment."
There is nothing in this statement which supports the conclusion that
Sea-Land's proposal was "essentially equal" to Matrix's proposal. It
specifically addresses only one evaluation area, that involving
problem solution. There is no comparison of the relative merits of
the competing proposals, and no explanation as to why the Sea-Land
proposal was technically equivalent to the Matrix proposal with its
greater number of "excellent" ratings.
Furthermore, the testimony of the SSEB chairman was provided in the
most general terms. For example, in explaining the SSEB's conclusion
that Sea-Land's BAFO was technically "excellent" overall and
"essentially equal" to Matrix's, the chairman testified that "we felt
like we had addressed the program management coordination issues, the
warehouse issues, the security as we've talked about and the customs
fee issues, so from our standpoint, now Sea-Land and Matrix . . . were
essentially equal." Tr. at 411. The chairman did not provide any
further explanation, such as how the issues were addressed (presumably
by Sea-Land), or why this led the chairman and the SSEB to conclude
that Sea-Land's BAFO was essentially equal to Matrix's.
The SSA, who signed the Recommendation of Award memorandum as
"concur[ring]" with the recommendation that the contract be awarded to
Sea-Land, testified that he was unaware of the details of the
proposals, Tr. at 157, had not read any of the initial proposals in
total, Tr. at 57, 109, and cannot recall whether he read any of the
BAFOs, including Sea-Land's, at all. Tr. at 47, 112. The SSA
testified that in making his award selection, he relied on the
determinations of the SSEB and the chairman of the SSEB that the
proposals submitted by Sea-Land and Matrix were "essentially equal,"
and had not gone into any significant detail as to the relative merits
of the competing proposals. Tr. at 14, 45, 49.
Thus, it is clear from the record that the SSEB viewed the Matrix
proposal as superior to Sea-Land's, that the SSEB chairman has not
documented or explained an adequate basis for any subsequent
conclusion that the two proposals were essentially equal, and that the
SSA made no meaningful independent assessment of the relative merits
of the proposals. Accordingly, on this record, we find that there is
no reasonable basis for the conclusion that Sea-Land's proposal was
essentially equal in technical merit to the Matrix proposal.
FAILURE TO CONDUCT MEANINGFUL DISCUSSIONS
Matrix contends that the agency failed to conduct meaningful
discussions with regard to its proposed prices submitted for the
contract line items set forth in the RFP's pricing sheets for cargo
repackaging and consolidation services. The protester points out here
that its initial proposal's unit and extended prices for the base and
option years of [DELETED] and [DELETED], respectively, far exceeded
Sea-Land's initial proposal's unit and extended prices of [DELETED]
and [DELETED], respectively, for the base year, and [DELETED] and
[DELETED], respectively, for the option year.
The protester noted, after receiving the agency report on the protest,
that the difference in pricing was apparently caused by Matrix's
failure to interpret the RFP's requirements concerning cargo
repackaging and consolidation services as did the agency and
presumably Sea-Land. In this regard, the section of the RFP's
statement of work corresponding to the cargo repackaging and
consolidation contract line items provides, in pertinent part, as
follows:
"Cargo Re-Packaging and Consolidating. If required, the
Contractor shall re-package and consolidate cargo into more
appropriate units. This service shall include vapor barrier
packaging, as required."
The protester explains that based upon its reading of this
solicitation provision and experience as an incumbent contractor, it
believed, apparently mistakenly, that the solicitation required that
offerors price the cargo repackaging contract line items on the basis
that vapor barrier packaging would be required for any repackaging
services ordered under the repackaging contract line items. The
protester states that it interpreted the RFP in this manner because
the predecessor contract for these services had not originally
included a contract line item under which the agency could order that
cargo be shipped with vapor barrier packaging, and had required
modification to include such a contract line item. The protester adds
that because this was the only contract line item in the RFP that
referenced vapor barrier packaging, it believed that all cargo
repackaging ordered under the cargo repackaging line items in this
contract would require vapor barrier packaging, and that other
repackaging and consolidating services would be ordered under certain
other contract line items.
The protester asserts that had the agency informed Matrix that its
prices for the cargo repackaging and consolidation contract line items
seemed to be unreasonably high or the product of a mistake, its
confusion concerning these contract line items would have come to
light and Matrix would have then priced these items in accordance with
the agency's view that only a certain amount of the repackaging
ordered under these contract line items need be accomplished with
vapor barrier packaging. (The matter was not brought up in
discussions, and in Matrix's BAFO the base year prices for these
services remained as initially proposed and the option year unit price
for these services rose to [DELETED], with a corresponding rise in
Matrix's extended price. The price difference between the initial
proposals of Matrix and Sea-Land for the cargo repackaging and
consolidation line items total [DELETED], and their BAFO prices for
these line items differed by a total of [DELETED]).
In negotiated procurements, agencies are required to conduct
meaningful discussions with competitive range offerors. Arthur
Andersen & Co., 71 Comp. Gen. 233 (1992), 92-1 CPD para. 168. In order
for discussions to be meaningful, an agency must point out
deficiencies, uncertainties, or suspected mistakes in a proposal,
unless doing so would result in either disclosure of one offeror's
approach to another or in technical leveling. Mikalix & Co., 70 Comp.
Gen. 545 (1991), 91-1 CPD para. 527. During discussions, agencies are
prohibited from advising an offeror of its cost or price standing
relative to other offerors. Federal Acquisition Regulation sec.
15.610(e)(2)(ii) (FAC 90-31). On the other hand, discussions cannot
be meaningful if an offeror is not apprised that its cost or price
exceeds what the agency believes to be reasonable, Mikalix & Co.,
supra; Price Waterhouse, 65 Comp. Gen. 205 (1986), 86-1 CPD para. 54,
aff'd, B-220049.2, Apr. 7, 1986, 86-1 CPD para. 333, or if an agency fails
to resolve a proposal error that it should have reasonably detected
and which materially prejudices the offeror. Centel Business Sys., 67
Comp. Gen. 156 (1987), 87-2 CPD para. 629.
The fact that Matrix's prices for the cargo repackaging contract line
items either should have been or were considered by the agency to be
unreasonably high or the result of a mistake, is readily apparent from
the agency's own contemporaneous price analysis documentation. In
this regard, the agency performed its price analysis in part by
comparing the prices proposed by the offerors submitting initial
proposals, and highlighting the prices under each of the base and
option year contract line items that were "high relative to others."
The documentation of this aspect of the price analysis shows that
Matrix's prices for the cargo repackaging contract line items were
specifically highlighted during this process as being "high relative
to others." Additionally, the agency's Pre-Negotiation Business
Clearance memorandum identified six areas of Matrix's price proposal
for discussion, with one of these being "Ancillary Services - Cargo
Re-packaging rates in the FIRM and OPTION periods."[5] The agency
offers no explanation as to why, after identifying this aspect of
Matrix's price proposal for discussions, it failed to mention the
matter.
Instead, the agency argues that by informing Matrix during discussions
"that its offer was too high and exceeded the government estimate," it
conducted meaningful discussions regarding Matrix's proposed
prices.[6] We disagree. While an agency generally need only lead an
offeror into the general areas of concern about its proposal, the
agency must impart during discussions sufficient information to afford
the offeror with a fair and reasonable opportunity to identify and
correct deficiencies, excesses or mistakes in its proposal. Advanced
Sciences, Inc., B-259569.3, July 3, 1995, 95-2 CPD para. 52; Aydin
Computer and Monitor Div., Aydin Corp., B-249539, Dec. 2, 1992, 93-1
CPD para. 135. Where, as here, the agency identifies a particular
material line item whose price is either grossly excessive or
mistaken, a general statement to the offeror that its overall price is
too high is insufficient to apprise the offeror of the agency's
particular concern; under such circumstances, the agency must identify
the specific area of concern to satisfy its obligation to conduct
meaningful discussions. FAR sec. 15.610(c); Price Waterhouse, supra;
Centel Business Sys., supra; Advanced Sciences, Inc., supra.
Accordingly, the agency did not conduct meaningful discussions
regarding Matrix's apparent excessive or mistaken pricing on the
repackaging contract line item, which accounted for more than half of
the difference between Matrix's and Sea-Land's prices.
IMPROPER POST-BAFO DISCUSSIONS
Matrix also protests that the agency conducted improper post-BAFO
discussions with Sea-Land. As indicated above, Sea-Land's BAFO, as
initially submitted, provided prices of "$0" for each of the eight
contract line items set forth on the pricing sheets for the various
ancillary services to be performed in the option year of the contract.
The agency determined that this was an apparent mistake in Sea-Land's
BAFO, and permitted Sea-Land to submit prices for each of these eight
contract line items.
The correction of such a mistake without conducting discussions is
appropriate only where the existence of the mistake and the proposal
actually intended can be clearly and convincingly established from the
RFP and the proposal itself. Stacor Corp., B-231095, July 5, 1988,
88-2 CPD para. 9. Although it may have been apparent from Sea-Land's
proposal and the RFP that the price of $0 for each of these contract
line items was a mistake, it was not clear from Sea-Land's BAFO or the
RFP what prices Sea-Land had intended to insert for each of these
contract line items. Specifically, there was no pattern of pricing or
other evidence from which Sea-Land's intended BAFO prices could be
determined. As such, Sea-Land's BAFO could only properly be corrected
through discussions. Contact Int'l Corp., B-237122.2, May 17, 1990,
90-1 CPD para. 481. Once an agency conducts discussions with one offeror,
as here, it is required to hold discussions with, and request BAFOs
from, all offerors with proposals in the competitive range. Id. The
agency therefore erred in not reopening discussions with all
competitive range offerors.
RECOMMENDATION
We recommend that the agency reopen discussions and request new BAFOs.
The agency should document its evaluation and its new selection
decision. If the agency concludes that Sea-Land is no longer in line
for award, the agency should terminate the contract awarded to
Sea-Land and award a contract to the appropriate offeror. We also
recommend that the protester recover the costs of filing and pursuing
its protest, including reasonable attorneys' fees. 4 C.F.R. sec.
21.8(d)(1) (1996). The protester should submit its certified claim
for costs directly to the agency within 90 days of receipt of this
decision. 4 C.F.R. sec. 21.8(f)(1).
The protest is sustained.
Comptroller General
of the United States
1. Because Matrix's initial technical proposal was evaluated as
technically "excellent," discussions with that firm were limited to
certain aspects of Matrix's price proposal and to certain of its
representations and certifications.
2. It is unclear from the record how many meetings were held and how
long they lasted. For example, the SSA testified that two meetings
were held, with the first being a relatively short "informal" or "ad
hoc" meeting and the second being a "formal meeting" lasting
"[s]omething on the order of a half hour." Tr. at 26-29, 39, 118,
130, 150. On the other hand, the chairman of the SSEB testified that
three meetings were held, Tr. at 434, with the first being "an
informal meeting" that lasted "for probably 10 or 15 minutes," the
second being an informal meeting lasting for approximately 1 or 1-1/2
hours, Tr. at 436, and the third "formal meeting" lasting "about two
hours." Tr. at 435, 445.
3. The record also contains evaluators notes regarding offeror
responses to specific questions asked during discussions. These notes
contain no substantive support for the subfactor or overall ratings.
4. The SSEB's memorandum also designates "key strengths" of Sea-Land's
(and Matrix's) proposal. However, these strengths mirror those stated
in the SSEB memorandum that reported the results of the initial
evaluation and concluded that Sea-Land's proposal was "good," and thus
do not support upgrading Sea-Land's proposal rating to "excellent."
5. The agency also identified six areas in Sea-Land's price proposal
for discussion.
6. The agency prepared an estimate only as to the total price for the
services, which the agency estimated at $7,500,000.