BNUMBER: B-274531
DATE: December 17, 1996
TITLE: Continental Service Company
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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:Continental Service Company
File: B-274531
Date:December 17, 1996
Ronald H. Uscher, Esq., and Lori Ann Lange, Esq., Bastianelli, Brown,
Touhey & Kelley, for the protester.
Pamela J. Mazza, Esq., Antonio R. Franco, Esq., and Philip M.
Dearborn, III, Esq., Piliero, Mazza & Pargament, for Akima
Corporation, an intervenor.
Kim N. Haris, Esq., Defense Logistics Agency, for the agency.
Susan K. McAuliffe, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest of agency's evaluation of protester's past performance is
denied where evaluation was reasonably based on past performance
reference surveys received by agency.
DECISION
Continental Service Company protests the award of a contract to Akima
Corporation under request for proposals (RFP) No. SP0600-96-R-0046,
issued by the Defense Fuel Supply Center, Defense Logistics Agency,
for operation, maintenance, security, and protection services for the
government-owned/contractor-operated petroleum storage terminal at the
Defense Fuel Support Point (DFSP), Searsport, Maine. Continental, the
low-priced offeror, principally challenges the agency's evaluation of
its firm's and the awardee's past performance; the protester contends
that the agency improperly rated its firm's past performance low and
unreasonably rated Akima's past performance high, and that the agency
is paying a disproportionate price premium in violation of RFP
provisions.
We deny the protest of the evaluation of Continental's past
performance and dismiss the protest of the evaluation of Akima's
proposal.
Clause L201(c) of the RFP required all offerors to provide past
performance data for the "three most recent contracts and subcontracts
held, to include those in progress, that are related to the proposed
contract." Clause M100 of the RFP provided that:
"[o]ffers that meet the minimum qualifications will . . . be
evaluated based on price and past performance. . . . Past
performance will be evaluated using reference data provided by
the contractor under Clause L201(c). The Government reserves the
right to consider any additional information on the offeror
obtained through other means. . . . The
Government is more interested in obtaining superior performance
than lowest price. However, the Government will not pay a price
premium that it considers disproportionate to the benefits
associated with the superior performance. . . . Award will be
made to the offeror who represents the best value combination of
performance and price."
The agency received eight proposals by the May 28, 1996, closing date,
including Continental's and Akima's. A past performance survey was
distributed to each of the references provided by each offeror in its
proposal. The 20-question survey was divided into two parts. The
first part of the past performance survey included 12 questions
regarding the contractor's compliance, responsiveness, ability,
willingness, training, technical expertise, safety, pollution
prevention, provision and treatment of equipment, cooperation, as well
as overall performance, in meeting the contract's requirements; each
question in this first part of the survey was to be answered with a
numerical score of 1 through 3 to represent a rating of
unsatisfactory, satisfactory, or good, respectively.[1] The second
part of the survey included eight questions, requiring a yes/no
response, regarding any statutory violations, issuance of corrective
action requests or cure notices, failure to correct, termination for
default, equitable price adjustment requests, financial problems, and
whether the reference would award similar contracts to the
contractor.[2]
Continental, the incumbent contractor of the services to be provided
under the RFP, provided as its past performance references the firm's
incumbent (then current) contract at DFSP Searsport, Maine, its
current contract at DFSP Cincinnati, Ohio, and a previous contract at
DFSP Charleston, South Carolina. Akima provided past performance
references regarding an Air Force fuels management contract at Reese
Air Force Base, a commercial plane refueling contract at Prudhoe Bay,
Alaska, and a construction contract in Anchorage, Alaska. In
evaluating Akima's past performance, the agency also independently
obtained and considered past performance information regarding
contracts held by Akima at three other DFSP locations under which
Akima had recently started performing similar petroleum storage
services.
During discussions, each offeror was given the opportunity to respond
to the reference survey responses, and best and final offers were
received and evaluated.[3] In rating past performance, the contracting
officer reviewed the surveys, the relevant contract files, and the
offerors' explanations of the perceived performance deficiencies.
Continental's proposal, which offered the lowest monthly price (at
$39,375), was rated [deleted] out of the eight proposals--for past
performance; Akima's proposal, which offered the [deleted] monthly
price (at $42,662), was rated [deleted] for past performance. Finding
that the combination of past performance and price of the Akima
proposal offered the best value to the government, the contracting
officer awarded a contract under the RFP to that firm on August 30.
Subsequent to a debriefing held with the protester on September 6,
Continental filed this protest with our Office on September 9.
Continental protests the agency's evaluation of its past performance
as unreasonable and based upon erroneous information.
The evaluation of technical proposals, including the evaluation of
past performance, is primarily the responsibility of the contracting
agency since the agency is responsible for defining its needs and the
best method of accommodating them, and it must bear the burden of any
difficulties resulting from a defective evaluation. Federal Envtl.
Servs., Inc., B-260289; B-260490, May 24, 1995, 95-1 CPD para. 261. In
reviewing protests challenging an agency's evaluation of proposals, we
will not substitute our judgment for that of the agency regarding the
merits of proposals; rather, we will examine the agency's evaluation
to ensure that it was reasonable and consistent with the
solicitation's evaluation criteria and applicable statutes and
regulations. Honolulu Marine, Inc., B-245329, Dec. 27, 1991, 91-2 CPD para.
586. A protester's mere disagreement with the agency's evaluation
does not render it unreasonable. CORVAC, Inc., B-244766, Nov. 13,
1991, 91-2 CPD para. 454.
Continental specifically challenges its past performance ratings
received from the DFSP Searsport reference. This individual rated the
protester's past performance as [deleted] under nine survey questions,
but [deleted] under three survey questions (awarding [deleted] point
for each of the three questions).[4] First, the Searsport reference
rated the firm [deleted] for the contractor's compliance with contract
terms. The contracting officer subsequently reviewed the Searsport
past performance survey and confirmed the rating. The contracting
officer found that the Searsport contract file included documentation
regarding several instances in which the firm failed to meet stated
contract requirements. For instance, the firm had been reported for
[deleted] minimum of 15 days, and for failing to ensure [deleted] by
the Quality Surveillance Representative (QSR) of [deleted] as required
under the contract.
The contracting officer states that she considered the protester's
explanations (for example, the protester contended that previous
agency personnel had allowed a shorter [deleted] contrary to contract
requirements, and that the QSR mistakenly had been omitted from the
[deleted] reports) and also recognized that the contractor eventually
corrected its performance deficiencies but did so only after the
failures to comply were pointed out by the agency, and, in several
instances, only after repeated communications on the deficiency
matters. The contracting officer also found that after the Searsport
past performance survey was completed, but prior to award, the
protester was reported for its failure to [deleted] or less, as
contractually required. Again, the contracting officer considered
Continental's explanation for the deficiency, i.e., Continental
contended that 4 months earlier the agency had prohibited the use of
[deleted] and the [deleted] to be maintained was difficult [deleted]
and found that although the protester did eventually propose a
reasonable [deleted] method to correct the deficiency, the
documentation showed that there had been a clear failure to comply
with the contract's [deleted] requirement. The contracting officer
consequently accepted the score of [deleted] (i.e., defined in the
past performance survey as performance which [deleted] for the survey
question regarding the contractor's compliance with contract terms.
We find from our review that the documentation supports the
contracting officer's finding that in a number of significant
instances--e.g., [deleted], submission of [deleted] reports and
[deleted]--the protester failed to comply, at least initially, with
clear contract requirements. Accordingly, we have no reason to
question the contracting officer's decision to accept the unfavorable
rating.
Second, the Searsport evaluator rated Continental's performance
[deleted] for contractor preparation and training of personnel. The
contracting officer reviewed the Searsport contract file and found
documentation supporting the [deleted] training rating--for example,
the file included correspondence regarding the contractor's failure to
show that the terminal superintendent had successfully completed
required environmental protection/hazardous waste management training
in a timely manner. The QSR had reported the deficiency to
Continental after the contract's required training deadline had passed
and requested compliance or a waiver request. After a review of the
individual's training certificates, which were determined to fall
short of regulatory requirements, the protester's waiver request was
denied. Although the contracting officer considered the contractor's
explanation (i.e., that it intended to seek a waiver), the contracting
officer concluded that the contract's required time period for
compliance clearly had not been met. Noting the agency's interest in
safety and the contractor's delay in meeting the mandatory training
requirement, the contracting officer accepted as reasonable the
[deleted] rating for this survey question. Our review of the full
evaluation record confirms that since the contract's time requirements
for completion of the training were not met, the challenged rating
assigned by the Searsport past performance reference and adopted by
the contracting officer is reasonably supported; accordingly, we have
no reason to object to the propriety of the past performance
evaluation on this basis.
Third, the Searsport reference also rated the firm's performance as
[deleted] for contractor compliance with required contractor-furnished
equipment. The contracting officer, in evaluating the reasonableness
of this reference response, found that the contract file
contained--among reports of other equipment provision deficiencies
that were resolved over time after the issuance of a series of
communications with the contractor--documentation that the contractor
failed to provide computer equipment required under the contract. The
contracting officer states that she considered the contract file
documentation and the contractor's explanations regarding each
reported deficiency for failure to furnish required equipment.
Regarding the QSR's deficiency report for Continental's failure to
provide the required computer equipment (which report was prepared
because the computer equipment still had not been provided more than 1
year after the start of contract performance), the protester
explained, among other things, that the contract's computer
specifications were obsolete, that the contract was modified to
upgrade the specifications, and that Continental did provide the
computer equipment shortly thereafter. The contracting officer,
noting the contractor's unwarranted delay (more than 1 year from
contract start) in satisfying the contract requirement, accepted the
reasonableness of the Searsport reference score of [deleted] for the
contractor equipment requirement. Given the contractor's inadequately
explained delay, we find nothing unreasonable with the contracting
officer's decision.[5]
In sum, while the record contains Continental's explanations and
interpretations of events that provide a more favorable view of the
protester's past performance and possible mitigating circumstances for
certain of Continental's shortcomings, there are legitimate bases for
the contracting officer's acceptance of the Searsport past performance
ratings. An agency's evaluation of past performance may be based upon
the procuring agency's reasonable perception of inadequate prior
performance, regardless of the contractor's disagreement with the
agency's interpretation of the facts. Executive Closers, Inc.,
B-259848, Apr. 6, 1995, 95-1 CPD para. 184.
The protester also challenges the contracting officer's acceptance of
the past performance scores received from the firm's two other DFSP
references on the basis that individuals at those reference sites
months earlier had rated the protester's past performance higher on
reference surveys completed for another procurement. Regarding the
DFSP Cincinnati reference survey, the protester contends that the
survey should have been completed by the on-site QSR and not his
supervisor who is stationed at a distant location. The record shows
that for a prior DFSP procurement, the QSR at DFSP Cincinnati rated
Continental's overall performance higher than his supervisor did here.
The record also shows, however, that in her distribution of the
current reference surveys, the contracting officer attempted to
contact the QSR at DFSP Cincinnati, but that she was told he was to be
away from his office for several weeks. Consequently, the contracting
officer requested that his supervisor--who was the individual
ultimately responsible for quality matters on the contract and to whom
the QSR reported, who traveled to the DFSP Cincinnati site several
times each year and who was a knowledgeable and appropriate
reference--complete the survey in the QSR's absence. Continental was
rated by the QSR's supervisor as [deleted] for each of the survey
questions in the first part of the survey.
We see nothing objectionable here; each procurement is a separate
transaction and the prior past performance evaluation data need not
govern the current evaluation process where the current evaluation
information was obtained from a reasonable and appropriate source.
See Town Dev., Inc., B-257585, Oct. 21, 1994, 94-2 CPD para. 155. The
fact that there is a disparity in scores given by the two reasonably
knowledgeable evaluators at issue here is not a basis to object to the
propriety of the more recent evaluation; completion of the reference
survey clearly involves some degree of subjectivity which logically
could produce a difference in point scores.[6] See Integrated
Microcomputer Sys., Inc., B-239126.4, Sept. 11, 1990, 90-2 CPD para. 195.
(The protester also provides no basis for us to question the slight
disparity in its current past performance score from the DFSP
Charleston site compared to that received during the prior
procurement.)[7]
Continental next protests that the agency's evaluation of Akima's past
performance was unreasonable, that Akima failed to meet certain
alleged definitive responsibility criteria in the RFP, and that the
award is improper because the agency is paying a disproportionate
price premium on the basis of an improper evaluation. Continental is
not an interested party entitled to raise these issues.
Under the bid protest provisions of the Competition in Contracting Act
of 1984, 31 U.S.C. sec. 3551-3556 (1994), as amended by Pub. L. No.
104-106, sec. 4321(d), 5501, 5603, 110 Stat. 186, 674, 698, 700 (1996),
only an "interested party" may protest a federal procurement. That
is, a protester must be an actual or prospective offeror whose direct
economic interest would be affected by the award of a contract or the
failure to award a contract. Bid Protest Regulations, section
21.0(a), 61 Fed. Reg. 39,042 (July 26, 1996) (to be codified at 4
C.F.R. sec. 21.0(a)). Determining whether a party is interested involves
consideration of a variety of factors, including the nature of issues
raised, the benefit of relief sought by the protester, and the party's
status in relation to the procurement. Black Hills Refuse Serv., 67
Comp. Gen. 261 (1988), 88-1 CPD para. 151. A protester is not an
interested party where it would not be in line for contract award were
its protest to be sustained. ECS Composites, Inc., B-235849.2, Jan.
3, 1990, 90-1 CPD para. 7. Here, the agency's written source selection
decision clearly states that even if Akima were not considered for
award, the contract would not have been awarded to Continental because
another firm's proposal [deleted] and was ranked next in line for
award. Since there has been no challenge to the eligibility for award
of the intervening offeror that would precede the protester in
eligibility under this solicitation, the protester lacks the direct
economic interest required to maintain a protest of the evaluation of
Akima's proposal and the award which was based on that evaluation;
accordingly, these protest contentions are dismissed.
Comptroller General
of the United States
1. The survey requested completion "by the person most knowledgeable
of the contractor's day-to-day operations and overall quality of the
provided services" and noted that "additional information may be
obtained from others within your organization possessing further
knowledge about the contractor." The following descriptions were
provided in the survey instructions as guidance in providing element
ratings: "good" (3 points) was defined as performance which exceeds
some contractual requirements, while meeting other contractual
requirements; "satisfactory" (2 points) was defined as performance
which meets all contractual requirements; "unsatisfactory" (1 point)
was defined as performance which meets some contractual requirements
but does not meet other contractual requirements.
2. For the questions in the second part of the survey, 2 points were
to be added for every "no" response and 2 points were to be subtracted
for every "yes" response, except that 4 points were to be either added
or subtracted for the last question, regarding whether the reference
would award a similar contract to the contractor.
3. The protester contends that the agency failed to hold meaningful
discussions with Continental regarding the past performance
evaluation. The record shows, however, that Continental was given an
opportunity in discussions to meaningfully address its past
performance ratings and, as discussed in this decision, that its
responses were appropriately considered by the contracting officer in
her evaluation of the protester's past performance.
4. The agency refutes the protester's contention that the contracting
officer agreed to increase the Searsport reference ratings, but states
that even if the DFSP Searsport [deleted] scores for Continental were
increased to [deleted], the agency still would not have awarded the
contract to Continental since its overall past performance ranking
would not have improved.
5. The other [deleted] past performance ratings by the Searsport
reference involve a [deleted] answer ([deleted] to the question of
whether there had been [deleted]). The protester challenges the
reasonableness, and the consideration by the contracting officer, of
the latter survey response. The record provides no reason, however,
to question the contracting officer's consideration of this
evaluator's response--as the contracting officer had told Continental
during the procurement, this survey question requires a subjective
response to be made within the reference's discretion and the
reasonableness of the reference's opinion was to be assessed in terms
of the information in the contract file. In light of the reasonably
supported adverse information in that file, including the need for
repeated communications in some instances to resolve contract
compliance issues, we cannot find that the reference's subjective
opinion in this matter is not reasonably based, and we believe the
contracting officer acted properly in considering it. Contrary to the
protester's allegations, there is no showing of intentional bias by
the Searsport evaluator against Continental's interests. Further,
although the protester contends that the Searsport reference has
unreasonably exaggerated "trivial" noncompliances, as we stated above,
the record contains support for the challenged ratings, and we do not
agree with Continental that each referenced requirement was trivial.
In its legitimate interests of safety and the proper, efficient
operation of the terminal, the agency included those requirements in
the contract--Continental fell short of some of those requirements and
was rated accordingly.
6. Although the protester correctly contends that an additional
[deleted] points should be added to its DFSP Cincinnati past
performance score for that reference's failure to answer a question
regarding any equitable adjustment requests (which should have been
answered in the negative warranting an addition of [deleted] points),
the addition of the [deleted] points does not materially affect the
protester's overall past performance evaluation score or ranking.
Further, the agency states that even if each of the higher DFSP
Cincinnati past performance scores from the prior procurement were
considered here, it would not have affected the protester's past
performance ranking among the offerors.
7. The protester contends that the agency's evaluation of its past
performance effectively constitutes a nonresponsibility determination
which should have been referred to the Small Business Administration
(SBA) for review. The record does not support this contention.
Rather, the record shows that the agency conducted a comparative
evaluation of past performance which is different from determining
responsibility and which is not a matter subject to SBA referral and
which also, contrary to the protester's characterization of it, did
not constitute a de facto debarment of the firm. See JCI Envtl.
Servs., B-250752.3, Apr. 7, 1993, 93-1 CPD para. 299.