BNUMBER: B-272748; B-272748.2; B-272748.3; B-272748.4
DATE: October 25, 1996
TITLE: Matter of:Science & Technology, Inc.; Madison Services, 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:Science & Technology, Inc.; Madison Services, Inc.
File: B-272748; B-272748.2; B-272748.3; B-272748.4
Date:October 25, 1996
E. Manning Seltzer, Esq., and Mark E. Davis, Esq., Seltzer & Rosen,
for Science & Technology, Inc., and Lynn Hawkins Patton, Esq., Ott &
Purdy, for Madison Services, Inc., the protesters.
Nancy O. Dix, Esq., Gray Cary Ware Freidenrich, for Steinhoff &
Sadler, Inc., an intervenor.
Major Michael J. O'Farrell and Gregory A. Lund, Esq., Department of
the Army, for the agency.
Behn Miller, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protest that contracting officials misrepresented protester's past
performance record is denied where past performance conclusions are
reasonably supported by the record, and there is no evidence that
contracting officials were biased against the protester or otherwise
acted in bad faith.
2. Protest that awardee was improperly permitted to rely on
subcontractors' experience under various technical evaluation factors
is denied where the solicitation did not restrict offerors from
proposing subcontractors or relying on their experience.
3. Protest that contracting agency improperly relied on an unstated
evaluation factor concerning offeror's phase-out approach is denied
where the solicitation proposal preparation instructions clearly put
offerors on notice that a detailed phase-out plan was required and
would be evaluated under the general management evaluation factor.
4. Protest that agency arbitrarily deducted points from second-ranked
offeror's general management score is denied where the lower point
score does not reflect deductions, but rather reflects what the agency
reasonably determined was the level of quality indicated in this area
of the offeror's proposal.
5. Protest that awardee proposed a key employee which it was not
authorized to propose and did not intend to hire is denied where
record as a whole indicates that awardee reasonably believed the
individual consented to being proposed and that the employee would go
to work for the awardee in the event it received the contract.
6. Protest that contracting agency performed improper price realism
analysis is denied where: (1) adequate price competition was
received; (2) the agency compared offerors' proposed prices with the
government's price estimate; and (3) awardee's proposed pricing was
consistent with the number of employees it had proposed.
DECISION
Science & Technologies, Inc. (Scitek) and Madison Services, Inc.
protest the award of a contract to Steinhoff & Sadler, Inc. (SSI)
under request for proposals (RFP) No. DABT63-95-R-0004, issued by the
Department of the Army for all engineering and maintenance services at
the Directorate of Engineering and Housing (DEH) at Fort Huachuca,
Arizona. Scitek, the incumbent--which has been performing these
services since 1991 under a cost-plus-award-fee (CPAF) type
contract--contends that the Army misrepresented its past performance
history in bad faith, leading to a misevaluation of its proposal.
Madison also contends that the agency misevaluated both the awardee's
and its own proposal, and further alleges that SSI engaged in an
improper "bait and switch" by proposing a key employee without proper
authorization to use that individual's resume.
We deny the protests.
BACKGROUND
The RFP was issued as a total small business set-aside on August 18,
1995, and contemplated the award of a fixed price contract with some
indefinite quantity line items for a base year and 4 option years.
Collectively, the range of DEH services being procured is analogous to
those required to "run a small city"; under the RFP, the successful
contractor is responsible for performing various tasks in 22 areas
encompassing road work, construction work, facilities maintenance,
environmental work, and supply/storage. The RFP required price and
technical proposals, and provided that award would be made on a "best
value" basis. Price was slightly less important than technical
factors, which were identified in the RFP as: General Management (25
percent); Past Performance (25 percent); Technical Approach (20
percent); Quality Control (15 percent); and Price Realism (15
percent).[1] Under the General Management, Technical Approach, and
Quality Control factors, proposals were numerically scored; under the
Past Performance and Price Realism factors, proposals were evaluated
using high, moderate, or low risk ratings.
By the October 27 closing date, 11 proposals were received--including
those submitted by Scitek, Madison, and SSI. The source selection
evaluation board (SSEB) that conducted the technical and price
proposal evaluations was divided into five committees, corresponding
to the five evaluation factors specified above. Although each
evaluation factor was evaluated separately, the record shows that
several committees were comprised of identical staff. Of significance
to this protest, the General Management Committee (GMC) and Past
Performance Committee (PPC) were comprised of the same personnel.[2]
The initial proposal evaluations (discussed in more detail below) were
completed in early March; on April 4, the Army issued written
discussion letters to each offeror. After best and final offers
(BAFO) were submitted and evaluated, the SSEB's final evaluation
identified the top three offers as:
Offeror: SSI Madison Scitek
General Management Score
(Maximum 250 points) 199 170 169
Technical Approach Score
(Maximum 200 points) 108 109 116
Quality Control Score
(Maximum 150 points) 86 90 90
Total 393 369 375
Offeror: SSI Madison Scitek
Past Performance Assessment
(Low, Moderate or High Risk)Low RiskLow Risk Low Risk
Price Realism Assessment
(Low, Moderate or High Risk)Low RiskHigh RiskLow Risk
Proposed Price $34,081,561$36,096,190$39,571,006
On June 17, 1996, after reviewing each offeror's proposal and all the
evaluation documentation, the source selection authority (SSA)
selected SSI for contract award since it had the highest cumulative
technical point score (393 points); a low risk assessment for both its
past performance and price proposal; and the lowest total price
($34,081,561). After attending separate debriefings, Scitek and
Madison filed these protests.
DISCUSSION
Scitek's Allegation of Bad Faith
In the first week of November 1995, the Fort Huachuca contracting
officer asked the Fort Huachuca contract administrator who had
monitored Scitek's incumbent performance to complete the RFP's past
performance questionnaire for Scitek.
Of significance to this protest, the contract administrator included
the following information on the past performance survey form. For
question No. 8, regarding "the contractor's ability to solve business
management problems without extensive guidance from the procuring
activity," the contract administrator assigned Scitek a score of
"between 2 [and] 3" (on a scale of 1 to 5), and under the "comments"
portion of this question wrote:
"[o]ld problem of paying their subcontractors/vendors; has
improved this rating period."
For question No. 9, which asked if there "[w]ere any changes due to
contractor's inability to meet requirements," the contract
administrator responded "yes" and wrote:
"[g]overnment brought supply function back under [government]
control; contractor failing until [contracting officer] change[d]
award fee plan."
For question No. 10 of the survey, which asked whether unsatisfactory
performance reports, cure notices, show cause notices, or terminations
for defaults had ever been issued, the contract administrator
indicated "yes" and wrote:
"UIRs [Unsatisfactory Inspection Reports] & CDRs [Contractor
Deficiency Reports] mostly about timeliness of work (response
time)."
For question No. 12, which asked whether the contractor had any
financial problems, the contract administrator indicated "yes" and
wrote:
"[t]here have been several complaints from vendor/subcontractors
of nonpayment. Condition improved over last 3 months."
Finally, in response to question No. 16, which asked for a description
of "[c]ontractor's strengths and weaknesses," the contract
administrator indicated that Scitek's weakness was "[v]oucher
preparation; finances."
The survey form also contained a blank wherein the contract
administrator was asked to record the award fee percentages "earned
for [the] last four quarters"; in response, the contract administrator
listed the four quarter award fees earned by Scitek from July 1994
through June 1995.[3]
In its protest, Scitek contends that the five questionnaire responses
discussed above are false and misleading. Scitek maintains that it
only had difficulty paying its subcontractors and suppliers in the
early phases of contract performance--and that these difficulties
arose only because the Army delayed reimbursing Scitek for the
subcontractor vouchers and invoices it submitted. Scitek also
contends that the contract administrator's statement about the
government's taking over the supply function is misleading because the
transfer of this function did not result from any poor performance on
Scitek's part, but rather was the result of an independent efficiency
audit by the Army. Scitek also maintains that contrary to the
contract administrator's survey response, the firm has never received
any UIRs or CDRs. Finally, Scitek contends that the bad faith of the
contract administrator is apparent because the administrator did not
list Scitek's most recent quarter fee (July 1995 to September 1995) in
the survey, which reflected superior performance by Scitek.
Although the record shows that Scitek received the highest rating
possible under the past performance factor ("low risk"), Scitek
maintains that the contract administrator's misleading past
performance survey nevertheless prejudiced the firm's competitive
position and evaluation since the PPC personnel also served on the
GMC. Scitek maintains that the contract administrator's negative past
performance survey responses caused the GMC to improperly downgrade
Scitek under the General Management factor; in making this argument,
Scitek maintains that as the successfully performing incumbent, it
should have received the highest score possible for the General
Management factor.
Because government officials are presumed to act in good faith, we do
not attribute unfair or prejudicial motives to them on the basis of
mere inference or supposition. See Lancaster & Co., B-254418, Dec.
14, 1993, 93-2 CPD para. 319. Where, as here, a protester alleges bias or
bad faith on the part of a procurement official, a protester must
present virtually irrefutable evidence that the official directed his
actions with the intent to injure the protester. Information
Resources, Inc., B-271767 et al., July 24, 1996, 96-2 CPD para. 38; Prose,
Inc., B-259016, Feb. 28, 1995, 95-1 CPD para. 123.
To resolve the protester's allegations of bad faith, we held a hearing
on the protest. Based on testimony obtained at the hearing, as well
as additional documents introduced by the agency during that
proceeding, we see no basis to conclude that the contract
administrator--or any other Army official--misrepresented Scitek's
past performance or otherwise acted in bad faith.
First, although Scitek claims that the contract administrator
misrepresented the firm's ability to pay subcontractors and suppliers,
the record supports the contract administrator's remarks. While
Scitek maintains that any difficulties in reimbursing its
subcontractors and suppliers resulted solely from Fort Huachuca's
delay in reimbursing the contractor for submitted invoices and
vouchers, the record shows that such delay resulted from the fact that
Scitek submitted incorrect and incomplete reimbursement data. The
contract administrator and contracting officer testified that when
Scitek began contract performance, the firm did not know how to
prepare vouchers properly; the record also shows that Scitek's
invoicing/accounting software proved to be incompatible with the
Army's computer system, and caused several years of accounting and
invoicing difficulties.
The contract administrator stated that Scitek continually submitted
vouchers and invoices for unallowable costs such as dining expenses.
Other sources corroborate the contract administrator's statements.
For example, the record provided by an "independent" consultant--the
SCORE Team[4]--confirms the contract administrator's and contracting
officer's contentions. According to the SCORE Team's contemporaneous
notes, Scitek's first 2 years of contract performance were hampered by
weak management, unqualified staff, and "inattention to detail and
incompleteness of documentation." The contract administrator's
remarks also are confirmed by an April 1992 Defense Contract Audit
Agency (DCAA) audit of Scitek's accounting practices, which details
various areas of vouchering deficiencies, including an accounting
system which did not support voucher requests, billing for costs
before incurring them, and duplicate billings.
Moreover, the record shows that as late as March 1995, subcontractors
were calling the Fort Huachuca contract administrator and contracting
officer to complain about non-payment by Scitek. If the Army was
unfairly delaying reimbursement as alleged by the protester, Scitek
never advised the Army of this problem; in fact, the record indicates
that the Army consistently reimbursed the firm within 8 days of
receiving Scitek's invoices. Under these circumstances, we think the
evidence in the record overwhelmingly contradicts Scitek's current
contention that vendor/subcontractor payment problems were limited to
the contract start-up time period or should be construed solely as the
Army's fault; consequently, we find the contract administrator's
survey response on this topic to be unobjectionable.
The record also supports the contract administrator's representations
regarding the transfer of the supply function. Originally, Scitek was
responsible for monitoring and purchasing all required supply
inventory. However, as noted above, due to vouchering and invoicing
difficulties, Scitek began to fall behind in this function. While the
protester correctly notes that an Army audit report recommended
transferring the supply function back to the agency so that the Army
could realize significant administrative savings and take advantage of
Arizona state tax exemptions, we think the record indicates that
Scitek's performance difficulties provided the impetus for the timing
of the supply function transfer.
In this regard, although Scitek contends that a September 21, 1993,
contract modification proves that defective performance work
specifications caused Scitek's performance difficulties by omitting
inherited backlog estimates, this contention is not supported by the
record. First, despite Scitek's claim, the SCORE team's March 4,
1992, status report concluded that:
"Although inheritance of a previous contractor's backlogs . . .
caused start-up problems, lack of qualified management and delays
in rectifying automation problems[5] were the main contributors
to the cited deficiencies."
Next, the contemporaneous documentation surrounding the 1993
modification indicates that the contract's performance work
specifications were modified (reducing the supply/service order
workload by 25 percent) because the Army recognized that based on
Scitek's past performance, "the contractor [was] unable to meet the
full requirements of the Performance Work Statement (PWS) within the
remaining contract funds." The contracting officer testified that in
executing the modification, the Army was attempting to show its good
faith towards Scitek by changing the contract document to reflect a
requirement which the firm could successfully perform.
Scitek's contention that it never received negative performance
reports is similarly unsupported by the record. Despite sworn
statements by the Scitek contract administrator (CA) and program
manager that particular UIRs or CDRs were never received by the firm,
at the hearing the Army produced a plethora of these documents--each
of which was signed and dated by the Scitek CA and acknowledged with a
"N[o]/C[omment]" notation.
Further, while Scitek contends that the Fort Huachuca contract
administrator's failure to include the September 1995 quarter award
fee in the past performance survey indicates bad faith, we are
convinced by the contract administrator's testimony that the reason
this information did not appear on the form is because it was not
available. The record shows that after an award fee board meets and
evaluates a contractor's performance, the award fee recommendation is
then forwarded to the base commander for review and ratification as a
contract modification. The hearing testimony indicated that the award
fee review process is often delayed by such factors as trying to
accommodate each award fee panel member's schedule, paperwork
processing, and obtaining the base commander's concurrence.
In any event, we think that any positive impression which the
September 1995 quarter award fee data would have conveyed about
Scitek's past performance was otherwise evident from the contract
administrator's survey form; that is, we disagree with Scitek's basic
premise that the past performance questionnaire conveys a negative
impression of Scitek's capabilities. For the majority of numerical
ratings, the contract administrator awarded Scitek a "3"
(satisfactory) rating; for question No. 4--which required the surveyor
to rate the "contractor's effort to provide a high quality product
versus just meeting government minimum needs"--the contract
administrator gave Scitek a "4" rating (good). Next, although the
contract administrator identified paying subcontractors as a problem,
she also gave credit for Scitek's improvement by noting that the
condition "has improved this rating period" and "over the last 3
months." The survey also conveyed other positive aspects of Scitek's
performance. For example, despite the above-referenced responses to
question Nos. 8, 9, 10, 12, and 16, in the survey, the contract
administrator indicated that Fort Huachuca was aware of several
letters of commendation and awards "from individuals," and that Scitek
was not an "administrative burden."[6] Additionally, the contract
administrator wrote that Scitek's "strengths" included a staff of
"worker bees" and the firm's quick "response to special
requests/emergencies." Finally, at question No. 15, the contract
administrator indicated that Fort Huachuca would "choose" to do
business with Scitek "[i]f the contract was exactly like [it] is now."
In sum, reading each of the contract administrator's responses in the
context of the whole questionnaire, we do not think that they convey a
negative impression of Scitek's performance.[7]
Our conclusion is borne out by the PPC's actual scoring and evaluation
of Scitek's past performance.[8] In this regard, the record shows
that in order to assess each offeror's past performance risk, the PPC
converted each response to the past performance questionnaire to a
numerical score. For survey question Nos. 1 through 8--which required
responses in the range of 1 (unsatisfactory) to 5 (excellent)--the PPC
adopted the survey respondents' numerical ratings; for the remaining
survey questions, which required "yes" or "no" responses, the PPC
scored all positive responses as a 5 and all negative responses as a
1. The point scores for all 15[9] responses were then totaled and
averaged into a representative "composite" point score.
In Scitek's case, because the contract administrator entered a
negative response for question Nos. 9, 10, and 12 (which required a
"yes" or "no" response), the PPC scored Scitek with a 1 for these
three questions. The PPC also recorded the "between 2 [and] 3"
response to question No. 8 as a 2.5. However, these four "low scores"
did not alter the generally positive tone of the contract
administrator's survey; that is, despite the presence of three 1-point
ratings and a 2.5-point rating, Scitek nevertheless received an
overall score of 47.5 points for the 15 questions and an average
"composite" rating of 3.17--which was translated by the PPC into a
"low risk" assessment, the highest rating possible for the past
performance factor. Under these circumstances, the negative responses
did not adversely affect Scitek's rating.
In making its allegations of bad faith, Scitek provided this Office
with several supporting statements written by the firm's assigned
Small Business Administration procurement center representative (SBA
PCR) and the Scitek CA. At the hearing, the Army proved that these
witnesses' statements were unreliable.
For example, although the SBA PCR had proffered a letter in Scitek's
behalf, at the hearing he admitted that he was not aware of the exact
details of the case, and that he could not offer an opinion on
"fault." Additionally, when the Army showed that the Scitek CA had in
fact signed the numerous IURs and CDRs which he maintained were never
received, the Scitek CA acted surprised, and agreed that he had been
mistaken in his testimony to the contrary. Given the number of UIRs
and CDRs which the record showed the Scitek CA had received and
acknowledged (by affixing his signature and a "No/Comment" remark), we
find the Scitek CA's subsequent claim of mistake to be disingenuous at
best.
The credibility of the Scitek CA's written and oral testimony was
further impeached by several "supporter" witnesses who denied the
Scitek CA's version of events. For example, although the Scitek CA
claimed in one of his written statements that a DCAA auditor advised
him that "the [Army] really gave SCITEK a hard time" and that DEH
wanted Scitek to "have a hard time," the DCAA auditor submitted an
affidavit in which he denied making these statements, and declared
that "I am half quoted and misquoted in such a way that the [Scitek
CA's] memorandum becomes deceptive." The DCAA auditor further advised
this Office that "Scitek's performance (accounting) was so bad that
all the government action was justified and even required" and that
"[e]ven if the government didn't do things so perfectly, Scitek's
performance was so poor that, all by Scitek's self, they were creating
huge problems of inadequacy."
Further, although the Scitek CA had purported to quote the Small and
Disadvantaged Business Utilization Specialist (SADBUS), the SADBUS
advised this Office by affidavit that his remarks had been grossly
quoted out of context. For example, although the Scitek CA stated
that the SADBUS described a Fort Huachuca procurement official as
being "appalled" and having a pained expression on her face during a
discussion of Scitek, the SADBUS explained that he told the Scitek CA
that "the reason [she] had the unusual look was due to her illness"
and that he "didn't use the word appalled or any other word like
appalled because it's not a word I would normally use."
We think it clear from this record that no bad faith or ill will
influenced the evaluation of Scitek's proposal. In fact, we think the
record demonstrates tenacity by the Army in its support of Scitek's
performance. The contract administrator testified that she taught
Scitek how to prepare vouchers and invoices properly, and that she
believed she had a "great relationship" with the firm. The
contracting officer also testified that the Army wanted to help Scitek
become competitive, and that she had a "very good working
relationship" with the firm. Both the contract administrator and
contracting officer stated that there was no institutional bias or
animosity against the firm, and that despite continuing performance
difficulties, they ensured that the firm's contract was annually
renewed for each option year.
Both individuals testified that they did not discuss Scitek with any
evaluation member or procurement official; moreover, the contract
administrator testified that she would have preferred Scitek to
receive this contract award--since the firm had mastered the
accounting/invoicing system, and had been working so diligently and
successfully in recent months. In fact, the record shows that when
the Scitek CA approached the contract administrator with concerns
about how the firm's start-up performance could negatively impact its
evaluation, the contract administrator executed a performance survey
addendum--dated May 14, 1996--in which she pointed out the "excellent"
recent performance by Scitek, and stated that she was "proud of
SCITEK's improvement this past year and the way they continue to
respond to all crisis/perceived crisis situations."
Although Scitek maintains that the GMC must have been negatively
influenced by the contract administrator's past performance survey,
there is not one scintilla of evidence in this record to support this
contention. At the hearing, the GMC chairman denied that any Fort
Huachuca official tried to influence either the PPC's or GMC's
evaluation; the chairman also testified that the contract
administrator's survey played no role in the GMC evaluation. In fact,
the record suggests that positive impressions of Scitek--its prompt
response time and its diligence--assisted the firm; at the hearing,
the GMC chairman confirmed his earlier debriefing remarks wherein he
stated:
"I advised in all candor that an evaluator may be influenced to a
small degree by their actual experience with the company's
capabilities in making an evaluation judgment. As I stated at
the debriefing, when Scitek's current program manager was
proposed as the follow-on manager, the words did ring true."
(Emphasis added.)
Since the General Management evaluation was conducted before the past
performance evaluation, and since there is no evidence that the
contract administrator or contracting officer in any way tried to
influence the GMC, Scitek's allegations of bad faith are without
merit.[10]
General Management Evaluation
The record shows that each offeror's proposal was evaluated under the
General Management factor (worth 25 percent of the total score)
pursuant to the following four "functional areas" or subfactors:
General Management Principles & Applications; Related Management
Experience; Phase-In Plan; and Phase-Out Plan.
Both Scitek and Madison protest that the General Management evaluation
was unreasonable. First, both protesters assert that the awardee was
improperly credited with the experience of its proposed subcontractor
under the Related Management Experience subfactor. Next, both
protesters assert that the agency improperly relied on an unstated
evaluation subfactor--Phase-Out Plan. Finally, both protesters
challenge their proposals' General Management point scores as
unreasonable; Scitek contends that its incumbent status should have
resulted in a higher point rating while Madison maintains that its
point score reflects an arbitrary downgrading.
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 reasonably based on
the factors set forth in the solicitation. FAR sec. 15.605(d) (FAC
90-31). In reviewing protests concerning the evaluation of proposals,
we will examine the agency's evaluation to ensure that it had a
reasonable basis and was consistent with the RFP criteria. See
Diversified Int'l Sciences Corp., B-259925, May 10, 1995, 95-1 CPD para.
238.
Although the protesters contend that the Army improperly considered
the experience of SSI's proposed subcontractor (Brown and Associates
Management Services, Inc.) in evaluating SSI's proposal under the
Related Management Experience subfactor, a proposed subcontractor's
experience may be considered in evaluating an offeror's experience
unless the RFP's evaluation plan expressly prohibits such
consideration. Commercial Bldg. Serv., Inc., B-237865.2; B-237865.3,
May 16, 1990, 90-1 CPD para. 473. In this case, the RFP did not prohibit
consideration of subcontractor experience and in fact specifically
directed offerors to discuss, as part of their management proposals,
the extent to which subcontracting would be "used to satisfy
requirements in the solicitation." Moreover, the record shows that
like SSI, Madison also proposed a subcontractor for a significant
portion of the work, and relied on it for its experience.[11]
To the extent the protesters maintain that the Phase-Out Plan
subfactor was not enunciated in the solicitation, we are similarly
unpersuaded. Section L of the RFP clearly stated that "[t]he
management proposal will be evaluated against the following
subfactors" including "Phase-Out." The solicitation also defined this
subfactor as being comprised of: "(1) Plan for Phase-out period"; and
"(2) Approach for assistance to Government and incoming Contractor on
Phase-out procedures." Finally, section L explained that for the
Phase-Out Plan subfactor, the General Management proposal was to
include "[a] discussion of those actions, plans, and procedures
necessary to ensure a smooth transition from one Contractor to
another." While "Phase-Out Plan" was inadvertently left off the list
of subfactors in section M, we do not think offerors could reasonably
ignore the proposal instructions regarding this subfactor in section
L. In reaching our conclusion, we note that both Scitek and Madison
included a phase-out discussion in their General Management proposals.
Under these circumstances, we think offerors were fairly apprised of
the Phase-Out Plan subfactor.
Finally, although both protesters challenge their proposal scores as
unreasonable, we think the record supports the GMC's analysis.
Scitek's key complaint about its evaluation is the GMC's apparent
failure to acknowledge the firm's incumbent status; Scitek contends
that as the successfully performing incumbent, it should have received
a higher related past experience score than did SSI. However, at the
hearing, the GMC chairman testified that the GMC did not award Scitek
any extra credit for its incumbency because other competitors held the
same advantage by proposing incumbent personnel. The GMC testified
that SSI received a higher point score than Scitek because it included
more detail in its proposal. We think the record supports the GMC
chairman's testimony and the GMC's contemporaneous evaluation
documentation.
While Scitek's General Management proposal contained statements such
as "[o]ur managers who are incumbent personnel understand Fort
Huachuca's mission" and made several general references to incumbency
advantages, the SSI proposal included more description and detail as
to how the various General Management goals and tasks would be
accomplished by its proposed staff. Moreover, while Scitek's proposal
generally stated that it would use personnel "with a proven track
record"; indicated policies of "strict work accountability"; and
listed incumbent staff as "seasoned professionals," the SSI General
Management Proposal included more detail and analysis. For example,
SSI presented a more detailed and itemized work breakdown structure
and included a more detailed explanation and flowchart of how various
individuals would process work product results and track response time
and output. Another superior aspect of SSI's proposal was a risk
assessment/mitigation chart which listed areas of perceived work
"risks" along with detailed explanations of how SSI's general
management approach mitigated each noted risk. In sum, the record
substantiates the GMC's conclusions regarding the superiority of SSI's
proposal.
Madison's only basis for challenging its General Management proposal
score is the agency's failure--at the debriefing--to articulate any
"disadvantages" in its proposal. While Madison contends that the lack
of articulated disadvantages demonstrates an "arbitrary" grading
system, we think the evaluation record confirms the agency's position
that Madison's point score under this factor--170--merely reflected
the quality of its submission. Our comparison of SSI's and Madison's
General Management proposals confirms the agency's assessment that SSI
submitted a superior management approach, for the reasons discussed
above. Under these circumstances, we need not consider this aspect of
Madison's protest further.[12]
As a final matter, Madison and Scitek challenge the SSI evaluation on
the grounds that SSI has engaged in a "bait and switch" tactic with
regard to one of its proposed key employees. The protesters contend
that despite the proffer of a resume and an "oral" commitment to the
Army in its proposal, SSI never intended to provide its proposed
deputy project manager candidate.
"Bait and switch," as the term is used here, refers to an offeror's
misrepresentation in its proposal of the personnel that it expects to
use during contract performance. BMAR & Assocs., B-252273, June 16,
1993, 93-1 CPD para. 465. Where such a misrepresentation materially
influences an agency's evaluation of an offeror's proposal, it
undermines the integrity of the competitive procurement system and
generally provides a basis for proposal rejection or termination of
the contract award based upon the proposal. Mantech Advanced Sys.
Int'l, Inc., B-255719.2, May 11, 1994, 94-1 CPD para. 326.
We have reviewed the testimony by the proposed key employee and the
SSI employee who determined that the proposed employee consented to
SSI employment in the event of award. We are convinced that while
there might have been a miscommunication between the proposed employee
and SSI, SSI was not aware that it had misinterpreted the proposed
employee's actions or words, and when it proposed this person in its
proposal, it did so fully intending to hire and employ this
individual.
Offerors were not required by the RFP to provide letters of
commitment; moreover, in its proposal, SSI indicated that its basis
for proposing the individual was a verbal commitment and further
listed the individual's telephone number for direct contact by the
agency.[13] Under these circumstances, we conclude that SSI proposed
the employee in good faith, and that no intent to "bait and switch"
existed. See Diversified Int'l Sciences Corp., B-259925, May 10,
1995, 95-1 CPD para. 238.
Price Realism Analysis
As noted above, the RFP provided that prices would be evaluated for
reasonableness and realism. In this regard, the RFP specified that:
"Price analysis will be conducted to determine the reasonableness
of the proposed prices in the context of the management and
technical approach to the work. Compliance with any applicable
wage rate determinations will be determined."
Madison challenges the agency's price realism evaluation on the ground
that it unreasonably determined SSI's price to be a "low risk."
Madison contends that SSI understated its pricing to such a degree
that it cannot perform in accordance with the solicitation's wage rate
determinations, and consequently should be rated "high risk" for price
realism.
Since the risk of poor performance when a contractor is forced to
provide services at little or no profit is a legitimate concern in
evaluating proposals, an agency in its discretion may, as it did here,
provide for a price realism analysis in the solicitation of
fixed-price proposals. The FAR provides a number of price analysis
techniques that may be used to determine whether prices are reasonable
and realistic, including comparison of prices received with each
other, FAR sec. 15.805-2(a) (FAC 90-39), and comparison of proposed
prices with an independent government estimate. FAR sec. 15.805-2(e).
The depth of an agency's price realism analysis is a matter within the
sound exercise of the agency's discretion. Cardinal Scientific, Inc.,
B-270309, Feb. 12, 1996, 96-1 CPD para. 70.
In this case, the record shows that in order to assess price realism
and reasonableness, the price evaluation committee (PEC) performed the
following analysis. First, the PEC forwarded each of the offeror's
price proposals to the DCAA for review; the agency responded that each
offeror's overhead, general and administrative cost, and profit rates
were unobjectionable.
Next, the PEC compared each of the nine offerors'[14] contract line
item number (CLIN) prices to those of the independent government
estimate (IGE); the PEC also asked the technical panel to list the
number of proposed employees so it could verify each offeror's wage
rate compliance and price realism for the number of staff proposed.
In response, the technical panel advised the PEC whether the
distribution of offerors' employees per function area was realistic.
Because SSI had proposed the lowest total price, and because its total
number of employees was reasonably close to the IGE and verified as
reasonable by the DCAA and realistic by the technical panel, the PEC
determined SSI's price was realistic and reasonable.
In view of the agency's use of FAR-authorized price analysis
techniques, and given the number of proposals submitted and the
proximity of SSI's proposed number of employees to the IGE (as well as
the number of employees proposed by other offerors), we have no basis
to question the Army's determination that SSI's proposed prices were
realistic and reasonable.[15] See Volmar Constr., Inc., B-272188.2,
Sept 18, 1996, 96-2 CPD para. 119; Northern Virginia Serv. Corp.,
B-258036.2; B-258036.3, Jan. 23, 1995, 95-1 CPD para. 36.
CONCLUSION
The RFP provided that the agency would select the best value offer
based on a consideration of technical and price factors. Since we
conclude that SSI's proposal was properly ranked as the best technical
proposal, and since SSI offered the lowest price, we conclude that the
agency's award to SSI as the best value offeror is unobjectionable.
The protests are denied.
Comptroller General
of the United States
1. The evaluation percentage weights for each evaluation factor were
not disclosed in the RFP but are included above for ease of reference;
in this regard, the RFP apprised offerors of each factor's relative
weight by stating:
"Management and past performance are of equal importance.
Technical is slightly less important than management and
past performance. Quality control and price realism are
of equal importance and slightly less important than
technical."
2. The Technical Approach and Quality Control committees were also
comprised of the same personnel.
3. A CPAF contract is a cost-reimbursement contract that provides for
payment of an "award fee" to the contractor at stated intervals (in
Scitek's case, every 3 months). The amount of award fee corresponds
to and is based on how well the contracting agency believes the
contractor is successfully performing. Federal Acquisition
Regulation (FAR) sec. 16.404-2(a).
4. In late 1991, at Scitek's request, the Army agreed to fund a
consultant--the Scitek Contract Operations Review and Evaluation
(SCORE) Team--to determine the basis of Scitek's performance problems.
At the hearing, the Army and SSI maintained that the SCORE team should
not be classified as an "independent" consultant because it was hired
by Scitek; recorded its findings on Scitek stationery; and the SCORE
Team leader came to work as Scitek's project manager. Scitek
disagreed, and maintained that because the Army funded the SCORE
Team's evaluation, the team should be viewed as a neutral source of
information for this protest.
5. The automation problems arose because Scitek's proposed accounting
software did not work with the Army's computer system. In its 1992
report, the SCORE team recommended that a consultant assist Scitek in
resolving its software malfunctions.
6. The PPC awarded Scitek a "5" for both of these responses.
7. During this procurement, the record shows that Scitek lost an Air
Force contract award for similar services based in part on a September
25, 1995, past performance survey completed by the contract
administrator. Although Scitek contends that the September 25 survey
establishes a pattern of bad faith, because the September 25 survey is
essentially identical to the questionnaire at issue in this protest,
we will not consider this contention further.
8. In its protest, Scitek contends that the agency should have given
it the opportunity to address the contract administrator's negative
remarks on the past performance survey. However, the record shows
that these remarks had no impact on the evaluation, as Scitek received
a "low risk" rating for this factor.
9. Question No. 16 on the past performance survey form merely asked
for the reviewer's remarks; consequently, the PPC did not convert this
question to a numerical rating.
10. Scitek alleges that the PPC acted in bad faith because it only
requested one performance survey regarding Scitek--whereas several
sources were contacted for most other contractors. The PPC chairman
testified that because the Fort Huachuca incumbent contract was the
most directly relevant experience, and because the PPC awarded Scitek
a "low risk" rating, it was not necessary to obtain past performance
surveys from other firms. We find this determination to be
reasonable.
11. Relying on statements made and prepared by the Scitek CA, Madison
also contends that its proposal was downgraded because the Army was
biased against its proposed subcontractor--Morrison Knudsen (MK); in
this regard, Scitek contended that a Fort Huachuca attorney had
vehemently advised the Army not to contract with M-K. We find this
contention without merit. First, as noted above, we do not believe
the Scitek CA to be a credible witness. Moreover, despite Madison's
allegations of bias, the record contains evidence that the Army
thought highly of M-K--the company that performed this contract prior
to Scitek. In this regard, by affidavit, the Fort Huachuca attorney
states that he never offered any opinions about M-K, which is
corroborated by sworn affidavits proffered by the contracting officer,
the SSEB chairperson, and the source selection advisory council (SSAC)
chairperson.
12. Madison also contends that the agency improperly downgraded its
proposal under the Technical Approach evaluation factor for failing to
provide letters of commitment. We see no evidence in the evaluation
documentation to support this position; moreover, the RFP did not
require letters of commitment. Since the agency denies downgrading
Madison on this basis, and since the record otherwise supports the
technical approach evaluation and shows that Madison's proposal
received a higher score than SSI's for this factor, we will not
consider this contention further.
13. In any event, the GMC committee chairman and the SSA have both
advised this Office that the availability of this individual would not
change SSI's score since this was but one of six key employees.
14. Nine of the 11 proposals received were included in the competitive
range for discussions.
15. Madison also contends that its own price proposal was improperly
evaluated as a high risk. We see no reason to consider Madison's
challenge against its own price evaluation because even if Madison's
price was realistic and "low risk," in light of our conclusions above,
SSI would still receive contract award--since it received the highest
technical score, and offered the lowest price. As such, Madison is
not an interested party to raise this challenge. See 4 C.F.R. sec.
21.0(a) (1996); ECS Composites, Inc., B-235849.2, Jan. 3, 1990, 90-1
CPD para. 7.