BNUMBER:  B-274285.2; B-274285.3 
DATE:  May 19, 1997
TITLE: Suddath Van Lines, Inc.; The Pasha Group, B-274285.2; B-
274285.3, May 19, 1997
**********************************************************************

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:Suddath Van Lines, Inc.; The Pasha Group

File:     B-274285.2; B-274285.3

Date:May 19, 1997

Alan F. Wohlstetter, Esq., and Stanley I. Goldman, Esq., Denning & 
Wohlstetter, for the protesters.
G. Jerry Shaw, Esq., and Susan E. Shaw, Esq., Shaw, Bransford & 
O'Rourke, for PHH Relocation, an intervenor.
Edward L. Williamson, Esq., Department of the Army, for the agency.
Linda S. Lebowitz, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Agency reasonably selected the awardee's technically superior, 
higher-priced proposal for award where it was reasonably determined 
that the proposal's technical advantages justified the payment of a 
price premium and the stated evaluation methodology provided that the 
technical evaluation factors were significantly more important than 
price in selecting the proposal most advantageous to the government.

DECISION

Suddath Van Lines, Inc. and The Pasha Group protest the award of a 
contract to PHH Relocation under request for proposals (RFP) No. 
DASW01-96-R-0091, issued by the Defense Supply Service-Washington, 
Department of the Army, for the Army's transportation services "pilot" 
program for the acquisition of transportation and relocation 
management services for domestic and international personal household 
goods shipments from Hunter Army Airfield, Georgia.  The protesters 
basically challenge the agency's evaluation of their proposals and the 
award to PHH, a higher technically rated, higher-priced offeror.

We deny the protests.

The Army's transportation and relocation management pilot program will 
test whether commercial business practices can be successfully applied 
during the military relocation process.  The objectives of the pilot 
program are to improve the quality of life for Army personnel and 
their families during the relocation process and to provide a single 
transportation and relocation management point of contact to the 
military member and his/her family who have received permanent change 
of station orders.

The RFP was issued on June 14, 1996, on an unrestricted basis for 
commercial transportation and relocation management services under 
Federal Acquisition Regulation (FAR) Part 12[1] and contemplated the 
award of a firm, fixed-price requirements-type contract for the base 
year and two 1-year option periods.  Under the RFP, the contractor is 
required to furnish all services necessary to accomplish the 
management and movement of outbound (domestic and international) 
household goods, mobile homes, and boats.  The contractor will be 
compensated for providing transportation management services.  In 
providing standard commercial relocation management services, e.g., 
homefinding assistance and other referral relocation services, the 
contractor will receive no compensation from either the Army or the 
military member.  The member, however, will be responsible for paying 
for services resulting from the contractor's referral.

The RFP stated that the award would be made to the offeror whose 
proposal was most advantageous to the government, technical evaluation 
factors and price considered.  The RFP contained an evaluation scheme 
in which the relative importance of the five technical evaluation 
factors (worth a total of 100 points) and their respective subfactors 
was listed as follows:

Factor 1--Operations (total 30 points)
     A.  Overall plan for providing the specific tasks listed in the 
statement of work (8)
     B.  Plan for accommodating fluctuating workload and short notice 
response (5)
     C.  Implementation and transition plan (2)
     D.  Ancillary relocation services (10)
     E.  Customer support; intransit visibility; automation capability 
(5)

Factor 2--Quality and service (total 30 points)
     A.  Plan for measuring customer satisfaction (10)
     B.  Quality control program for carrier performance and selection 
(10)
     C.  Evidence of claims experience in 1995 (10)

Factor 3--Experience and past performance (total 20 points)
     A.  Experience with Federal government clients and the JFTR/JTR 
(Joint Federal Travel              Regulation--Army military 
entitlements/Joint Travel Regulation--Army civilian                         
entitlements) (5)
     B.  National and international transportation management services 
experience (5)
     C.  National and international relocation management services 
experience (10)

Factor 4--Staffing and organization (total 10 points)
     A.  Staffing plan for performing the services identified in the 
statement of work (10)

Factor 5--Small and disadvantaged business (total 10 points)
     A. Plan that describes the use of small businesses and small 
disadvantaged businesses (10)

The RFP stated that an offeror's price, which would be evaluated in 
accordance with the price evaluation model described in the RFP, would 
not receive a point score, and that the technical evaluation factors 
were significantly more important than an offeror's price.

Eleven firms, including Suddath and Pasha, both carriers, and PHH, 
which would subcontract for carrier services,[2] submitted initial 
proposals by the closing time on August 21.  The proposals of five 
firms, including the protesters and PHH, were included in the 
competitive range.  Following two rounds of written discussions, each 
offeror submitted a best and final offer (BAFO).  For the protesters 
and PHH, the technical portions of their BAFOs were assigned the 
following points:

                       PHH           Suddath         Pasha

    Factor 1        28 points       21 points      21 points

    Factor 2        24 points       25 points      22 points

    Factor 3        20 points       18 points      12 points

    Factor 4        10 points       9 points       8 points

    Factor 5        10 points       7 points       9 points

      Total         92 points       80 points      72 points
For each technical evaluation factor and subfactor, the points 
assigned were supported by narratives of the strengths and 
weaknesses/deficiencies in each offeror's technical proposal.

PHH's total evaluated price was approximately 18 percent higher than 
Suddath's total evaluated price and approximately 31 percent higher 
than Pasha's total evaluated price.

Considering the points assigned to each offeror's proposal, the 
evaluators' narratives of the strengths and weaknesses/deficiencies in 
each offeror's proposal, and each offeror's price, the contracting 
officer, who served as the source selection authority, determined that 
the proposal of PHH was technically superior to the proposals of 
Suddath and Pasha and represented the most advantageous proposal to 
the government.  In this regard, the contracting officer believed that 
PHH, as compared to Suddath and Pasha, demonstrated in its proposal a 
greater understanding of the RFP requirements and a greater commitment 
to satisfying the objectives of the pilot program, that is, improving 
the quality of life for Army personnel and their families during the 
relocation process and providing a single transportation and 
relocation management point of contact to the military member and 
his/her family.  Accordingly, the contracting officer awarded a 
contract to PHH, a higher technically rated, higher-priced offeror.

Technical Evaluations

Suddath and Pasha challenge the evaluation of their proposals, 
basically contending that the evaluators unreasonably downgraded their 
proposals by failing to assign the maximum number of points to their 
proposals for various technical evaluation factors and subfactors.  
The protesters object that the evaluators assigned the maximum number 
of points to PHH's proposal for many of the same evaluation factors 
and subfactors.  Simply stated, the protesters argue that their 
proposals should have been considered essentially technically equal to 
PHH's proposal.

In reviewing an agency's evaluation of proposals, we will only 
question the agency's evaluation where it lacks a reasonable basis or 
is inconsistent with the stated evaluation criteria for award.  
Conrex, Inc., B-266060.2, Feb. 7, 1996, 96-1 CPD  para.  46 at 2.  Here, our 
review of the record, including the technical evaluations and the 
protesters' and PHH's proposals, shows that the evaluations of the 
protesters' and PHH's proposals were reasonable.  In other words, we 
think the evaluators reasonably determined that the proposals of 
Suddath and Pasha were not technically equal to PHH's proposal.  In 
this regard, it is clear from the record that the protesters' 
proposals were reasonably downgraded because their proposals generally 
contained limited, less detailed discussions of the RFP requirements, 
while PHH demonstrated its understanding of the RFP requirements 
through its more detailed and specific discussions of these 
requirements.  In fact, in their comments on the agency's 
administrative report filed in response to these protests, Suddath and 
Pasha concede that "PHH's proposal is stated in greater detail."  The 
protesters also did not demonstrate the degree of commitment to 
satisfying the objectives of the pilot program as did PHH.  To 
illustrate these points, we will discuss three technical evaluation 
subfactors--ancillary relocation services, quality control program, 
and past experience--for which the protesters object to the 
downgrading of their proposals in comparison to PHH's proposal.

Ancillary Relocation Services

Under technical evaluation subfactor 1D for ancillary relocation 
services, the RFP required an offeror to describe the standard 
commercial relocation and referral relocation services that it would 
offer to the military member at no additional charge to either the 
Army or the member.  The RFP required an offeror to provide a plan for 
offering ancillary relocation services, to provide the number of years 
it has offered each of the services, and to indicate whether these 
services would be geographically limited.  Suddath and Pasha each 
received 6 out of a possible 10 points for this subfactor, while PHH 
received the maximum score of 10 points.[3]

The evaluators considered as a strength of Suddath's proposal its 
no-cost destination package to help the military member and his/her 
family get better acquainted with their new living area.  Among other 
things, the package would include information about the area's 
geography, climate, local government, taxes, economy, housing, 
schools, medical facilities, banks, cultural and recreational 
activities, shopping, and mass transit systems.  The evaluators 
believed that Suddath's destination package indicated the firm's 
eagerness and willingness to educate the military member about the new 
geographic area, thereby facilitating a smooth relocation.  Suddath 
offered to provide a utility connection service whereby it would 
arrange for new utility connections, including the payment of required 
deposits for which it would be reimbursed by the military member.  
Suddath also offered to provide no-cost home finding assistance, 
mortgage counseling, rental assistance, and job search assistance.  
Suddath has offered these services for more than 30 years and would 
impose no geographic restrictions.  

The evaluators, however, downgraded Suddath's proposal for this 
subfactor because Suddath's plan for providing ancillary relocation 
services lacked specific details and structure.  In this regard, 
Suddath basically described its destination package in a few 
sentences, listing general categories for which information would be 
furnished, but without providing elaboration, such as defining the 
specific services and indicating how and when a particular service 
would be offered.  In addition, Suddath indicated for the services 
involving home-finding assistance, mortgage counseling, rental 
assistance, and job search assistance that it would provide the 
military member with a list of contact names and phone numbers when 
requested, but the member, as opposed to Suddath, would be responsible 
for making the direct contact to arrange for the particular service.  
The evaluators believed that such an approach failed to meet the 
objective of the pilot program to improve the quality of life for the 
military member and his/her family by reducing the number of 
activities for which the member would be responsible during the 
relocation process.

The evaluators considered as a strength of Pasha's proposal the 
variety of no-cost ancillary relocation services it would provide, 
e.g., closing services, destination services, home marketing and sales 
services, mortgage services, rental finding and management services, 
and temporary housing services.  Pasha would impose no geographic 
restrictions.  The evaluators, however, downgraded Pasha's proposal 
because its plan, basically written in "bullet" format, lacked details 
addressing how the services would be offered and the extent of each 
service.  It also appeared to the evaluators that Pasha would be more 
reactive in addressing problems than proactive in anticipating 
potential problems and taking actions to avoid such problems.

The evaluators were impressed with the thoroughness and level of 
detail of PHH's  plan for providing five relocation management 
services--marketing assistance, property management, home finding for 
renters, home finding for buyers, and mortgage assistance.  For each 
of these services, PHH provided detailed descriptions of the services, 
including specific elements of the various services and the 
requirements and expectations associated with using these services.  
PHH stated that while it would offer these services at no additional 
cost to either the Army or the military member, if the service 
providers imposed a service charge, the member would be responsible 
for payment to the extent PHH was unable to get the charge waived or 
reduced.  Under PHH's plan, the move consultant would make the initial 
contact with the military member and explain the service.  PHH would 
offer these services in [deleted] geographic areas.  Any services 
provided would be evaluated by the military member, with PHH using the 
evaluation as a basis for determining compensation and performance 
ratings for the move consultant.  The evaluators also favorably viewed 
PHH's commitment to ensuring a greater number of direct deliveries of 
household goods by extensively coordinating with family housing 
offices.  Taken together, the evaluators believed that through its 
relocation management services plan, PHH showed its commitment to 
reducing costs for the military member and to improving the overall 
quality of life for the member.

While the protesters' proposals for providing ancillary relocation 
services can reasonably be characterized as acceptable, these 
proposals contained some weaknesses based on a lack of sufficient 
supporting details.  More specifically, Suddath's and Pasha's 
proposals failed to provide specifics about the services the firms 
would provide and how they would successfully provide these services.  
In contrast, PHH's proposal was significantly more thorough and 
detailed and demonstrated the firm's strong commitment to improving 
the relocation process for the military member.

Quality Control Program

Under technical evaluation subfactor 2B, an offeror was required to 
describe its quality control program for carrier performance and 
selection.  Out of 10 possible points, Suddath received 7 points, 
Pasha received 9 points, and PHH received the maximum score of 10 
points.

In its proposal, Suddath generally described its quality control 
program as one based on the requirement that its carriers submit past 
performance information showing their ability to satisfy the 
government's quality standards.  Suddath also would evaluate, on a 
semi-annual basis, its carrier network to review the level and quality 
of performance of its carriers and their agents.  As part of this 
evaluation process, Suddath would survey military members about their 
relocation experiences, with the member's level of satisfaction being 
the primary indicator of the level and quality of a carrier's 
performance.  The evaluators believed that Suddath's quality control 
program would result in the firm's use of only quality service 
providers.

In its proposal, Pasha generally described its quality control program 
as one based on the monitoring of a carrier's performance through, for 
example, the relocated members' completion of customer satisfaction 
surveys for which results would be tracked and presented to the 
carrier on a quarterly basis.  Pasha stated that problems would be 
addressed immediately and that carriers would be suspended after two 
warnings due to poor service.  The carrier would not be eligible for 
reinstatement until areas of concern had been suitably addressed and 
altered.  Pasha also described a domestic carrier procedures guide and 
a guide for international shipping requirements.  The evaluators 
favorably viewed Pasha's formal quality control program.

In its proposal, PHH described in detail its quality control program 
which was based on strict carrier service and quality guidelines.  For 
example, PHH stated that to even be considered for subcontracting 
opportunities, a carrier must maintain a minimum service satisfaction 
rating of [deleted] percent.  PHH also stated that when service issues 
are identified with a specific carrier, a face-to-face meeting will be 
scheduled to discuss the issue and remedial actions.  The carrier will 
be subject to a formal probation plan and schedule, and during this 
period, the carrier's limited performance will be closely monitored.  
If the carrier successfully meets or exceeds the service requirements, 
it will be reinstated, and its performance will continue to be 
monitored to ensure no further lapse in service.  Carriers which do 
not improve will no longer be considered eligible to subcontract with 
PHH.  PHH also will review the historical performance of its carriers, 
with the objective of rewarding those carriers which show continuous 
quality service improvement and growth.  The evaluators believed that 
PHH demonstrated that it had a solid quality control program and was 
committed to considering the military member's views concerning the 
quality of service provided.

While the evaluators did not note any weaknesses in any of the 
offerors' quality control programs, we think the evaluators reasonably 
assigned a higher score to PHH's proposal than to Suddath's or Pasha's 
proposal because PHH provided more details concerning its quality 
control program and procedures than did either of the protesters.  
Based on the additional information furnished by PHH, including its 
emphasis on more proactive oversight of its carriers, the evaluators 
were more confident that PHH would subcontract with carriers who were 
capable of providing quality service, thus facilitating a smooth 
relocation process and minimizing the potential problems associated 
with a move.

Past Experience

Under technical evaluation subfactor 3A, an offeror was required to 
describe its past experience with federal government clients to 
demonstrate the firm's ability to interpret and apply military 
transportation entitlements based on the JFTR.  Out of 5 possible 
points, Suddath received 3 points, Pasha received 2 points, and PHH 
received the maximum score of 5 points.

The evaluators considered Suddath's 35 years of experience in 
providing move management services to military and civilian agencies 
as a strength.  The evaluators, however, were concerned that Suddath 
did not have sufficient experience in interpreting and applying JFTR 
entitlements.  In this regard, Suddath stated that its personnel 
"understand the application of [military and civilian] transportation 
entitlements as addressed in the JFTR.  Additionally, [Suddath's] 
staff will participate in continuing education to keep pace with new 
amendments and to ensure total compliance with the requirements of the 
JFTR."  While Suddath also noted that it "currently employs a former 
Army Transportation Officer who has a thorough knowledge of the JFTR 
and its entitlements," Suddath did not detail in its proposal the 
actual role this individual would play in performing the contract.  
Suddath also stated, without elaboration, that it planned to use an 
on-site representative to ensure complete entitlement counseling of 
the military member.  As evidence of its understanding of and ability 
to counsel on JFTR entitlements, Suddath cited its recently awarded 
(less than 1 year) move management contract with a civilian agency 
under which it is required "to counsel relocating . . . personnel as 
to their JFTR entitlements."  The evaluators, however, were not 
convinced that less than 1 year of experience demonstrated Suddath's 
ability to interpret and apply JFTR entitlements.

The evaluators considered Pasha's 38 years of experience in providing 
transportation services as a strength.  However, in its proposal, 
Pasha admitted that it had "not previously been required to interpret 
and apply the JFTR transportation entitlements."  Pasha stated that it 
had "become familiar with the entitlements through [its] local moving 
and storage operations" in a domestic and an international location.  
Pasha also stated that it had "read various portions [of the JFTR] 
related to personal property entitlements."  Pasha stated that it 
would seek outside assistance to understand the JFTR.  Based on the 
proposal information, the evaluators could not conclude that Pasha had 
demonstrated its ability to interpret and apply JFTR entitlements.

In contrast, although PHH stated that it had "no direct organizational 
experience in interpreting or applying JFTR allowances" since as a 
relocation management company, as opposed to a carrier, it was not 
eligible to participate in the prior military transportation personal 
property program, it had "more than 12 years experience interpreting 
and applying the Federal Travel Regulations (FTR) and Joint Travel 
Regulations (JTR)."  PHH listed 14 federal government clients for 
which it has provided relocation and/or transportation management 
services.  PHH also gave specific examples of relocation services 
provided to these clients which required it to have extensive 
knowledge of the FTRs and JTRs.  PHH stated that to develop expertise 
in the JFTRs, it planned to recruit and hire experienced personnel and 
to conduct in-depth training using experienced outside resources.  The 
evaluators concluded that the JFTRs and the JTRs were similar since 
both involved transportation entitlements.  As a result of this 
similarity and in light of PHH's past experience, the evaluators were 
confident that PHH could satisfactorily interpret and apply military 
transportation entitlements based on the JFTRs.

Based on the information provided in each proposal, we think the 
evaluators reasonably concluded that PHH, as compared to Suddath 
(which provided only a vague description of its limited travel 
regulation experience and its plan) and Pasha (which conceded that it 
had no experience with the JFTRs), demonstrated a greater ability to 
interpret and apply military transportation entitlements in light of 
its previous experience in interpreting and applying other travel 
regulations and its plan to employ and train personnel.  

Technical/Price Tradeoff

Suddath and Pasha alternatively challenge the contracting officer's 
price/technical tradeoff which resulted in the award to PHH at a price 
premium.  The protesters contend that in making the tradeoff decision, 
the contracting officer failed to quantify the value of the technical 
advantages in PHH's proposal in light of the price premium being paid 
to PHH.

In a negotiated procurement, where the solicitation does not provide 
for award on the basis of the lowest-priced, technically acceptable 
proposal, an agency has the discretion to make an award to an offeror 
with a higher technical score and a higher price where it reasonably 
determines that the price premium is justified and the result is 
consistent with the evaluation criteria.  Systems Integration & Dev., 
Inc., B-271050, June 7, 1996, 96-1 CPD  para.  273 at 6.  In making the 
tradeoff decision resulting in an award to an offeror with a higher 
technically rated, higher-priced proposal, there is no requirement 
that the source selection authority provide an exact quantification of 
the dollar value to the agency of the proposal's technical 
superiority.  Kay and Assocs., Inc., B-258243.7, Sept. 7, 1995, 96-1 
CPD  para.  266 at 6.

While PHH's evaluated price was approximately 18 percent and 31 
percent higher than the evaluated prices of Suddath and Pasha, 
respectively, we conclude that PHH's proposal was reasonably 
determined by the contracting officer to be technically superior to 
the protesters' proposals.  More specifically, the contracting officer 
concluded that PHH provided a solid overall plan for performing the 
requirements of the RFP, with the plan demonstrating PHH's 
organizational skills, thoroughness, and attention to detail.  Among 
other things, the contracting officer favorably considered PHH's 
detailed transition plan, its excellent relocation plan with 
incentives for military members, its outstanding quality control 
program for selecting carriers, its extensive knowledge and experience 
in interpreting and applying entitlement regulations, its significant 
experience in providing transportation management services, and its 
outstanding staffing plan.  The contracting officer concluded that PHH 
had demonstrated in its proposal the strongest commitment to 
satisfying the objectives of the pilot program, that is, improving the 
quality of life for the military member and his/her family when 
permanent change of station orders are received and providing a single 
transportation and relocation management point of contact to the 
member.  Under the circumstances, where the RFP provided that the 
technical evaluation factors were significantly more important than 
price in determining the offeror whose proposal was most advantageous 
to the government, we have no basis to question the contracting 
officer's decision to award to PHH, a higher technically rated, 
higher-priced offeror than either Suddath or Pasha.[4]

The protests are denied.

Comptroller General
of the United States

1. The Army conducted a market survey in accordance with the policy 
statement at FAR  sec.  12.101(a) to determine if commercial relocation 
services were available and the standard commercial practices 
associated with such services.  PHH was one of several private firms 
contacted during the Army's market survey to provide such information.  
One individual participating in the market survey was the eventual 
chair of the five-member technical evaluation panel (TEP).  At the 
time of the market survey, the RFP had not been issued and no source 
selection documents were in existence.  We denied the protesters' 
request for a limited hearing to "interrogat[e]" the TEP chair since 
there was no evidence in the record to support the protesters' 
allegations that the chair's "ex parte contacts [during the market 
survey] may well have influenced the decision of the [c]hairperson of 
the TEP, may have 'poisoned the well[,]' and may have influenced other 
members of the TEP."  Market research is encouraged under the FAR, and 
there is nothing inherently wrong with contracting officials, who will 
participate in the subsequent procurement, conducting such research.  
FAR  sec.  12.202(a); FAR Part 10.  

2. To the extent the protesters object that PHH was not a carrier, we 
point out that there was no requirement in the RFP that an offeror be 
a carrier in order to be eligible for award.  In fact, the RFP defined 
a "carrier" as "those household goods movers with which the prime 
[c]ontractor has established a subcontractor relationship."  PHH, as 
the prime contractor, will subcontract with carriers, an approach 
which is in accordance with the terms of the RFP.

3. While the protesters question the authority of the Army to provide 
military members and their families with no-cost ancillary relocation 
services, the protesters do not point to any statute or regulation 
which prohibits the solicitation of such services.  In our view, these 
no-cost ancillary relocation services are reasonably related to 
transportation and relocation services, the costs of which the 
government is authorized to pay.  We note that even if technical 
evaluation factor 1D were not part of the RFP's evaluation scheme, PHH 
still would have been higher technically rated than either of the 
protesters.

4. Suddath and Pasha argue that PHH's proposal is materially 
unbalanced, contending that PHH has overstated its prices for the 
international move line items and has understated its prices for the 
management line items.  In making this argument, the protesters 
compare PHH's prices to the government estimate and to their own 
prices for the same line items.

The concept of unbalancing generally applies where bids are solicited 
and concerns whether an award to the bidder offering the lowest price 
to the government will in fact result in the lowest price to the 
government.  Human Resource Sys., Inc.; Health Staffers, Inc., 
B-262254.3 et al., Dec. 21, 1995, 96-1 CPD  para.  35 at 7.  Since the 
government's primary concern in a negotiated procurement, such as this 
one, is not with obtaining a contract at the lowest overall price, we 
will apply the concept of unbalancing only where price is the primary 
basis for the source selection decision.  Id.

Here, the award decision was not based primarily on price, but rather 
on the technical evaluation factors being considered significantly 
more important than price in determining the offeror whose proposal 
was most advantageous and represented the best value to the 
government.  Accordingly, the concept of unbalancing does not apply 
under the circumstances of this case.  As discussed, the contracting 
officer determined that PHH's technical proposal was superior to the 
technical proposals of Suddath and Pasha and that this technical 
superiority justified the payment of a price premium to PHH.