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
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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: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.