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.