BNUMBER: B-275299.2
DATE: June 23, 1997
TITLE: IGIT, Inc., B-275299.2, June 23, 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:IGIT, Inc.
File: B-275299.2
Date:June 23, 1997
Darcy V. Hennessy, Esq., Moore, Brower, Hennessy & Freeman, P.C., for
the protester.
Lynn Hawkins Patton, Esq., and Christopher Solop, Esq., Ott & Purdy,
for Penn Enterprises, Inc., an intervenor.
Col. Nicholas P. Retson and Maj. Michael J. O'Farrell, Jr., Department
of the Army, for the agency.
Ralph O. White, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protester's contention that agency conducted an unreasonable
evaluation of past performance is denied where the record shows that
the agency evaluation was fair, comprehensive and generally in
accordance with the solicitation's stated evaluation criteria. In
instance where evaluation appeared to deviate from the stated
criteria, the result of the deviation was minimal and protester was
not prejudiced.
2. Protester's claim that agency failed to advise it during
discussions of perceived problems with its past performance is denied
where the record shows that the protester was clearly aware of the
agency's concerns and shows that the agency expressly asked about
protester's alleged poor performance of the earlier contract during
written discussions.
DECISION
IGIT, Inc. protests the decision of the Department of the Army to
award a contract to Penn Enterprises, Inc., pursuant to request for
proposals (RFP) No. DABT31-95-R-0017, for laundry and dry cleaning
services at Fort Leonard Wood, Missouri. IGIT argues that the Army's
decision to award to Penn is based on bias against IGIT, which
translated to an unreasonable evaluation of the past performance
portion of each offeror's proposal. IGIT also claims that the Army
failed to hold meaningful discussions with it regarding its proposal.
We deny the protest.
BACKGROUND
This protest is the third challenge by IGIT to the Army's procurement
of laundry and dry cleaning services at Fort Leonard Wood. A brief
history of the procurement is set forth below.
IGIT was the incumbent contractor performing these services under a
contract awarded January 31, 1995, pursuant to sealed bidding
procedures. Although IGIT's initial contract was awarded for a period
of 1 year with four 1-year options, the Army decided shortly after
award to refrain from exercising the options. Instead, the Army
issued an RFP for the services on December 10, 1995.
IGIT concluded that the decision not to continue its contract after
the base year period was based on improper racial bias and sought to
bring the matter to the attention of its congressional representative.
When the Fort Leonard Wood contracting officials became aware that
IGIT had furnished its congressman an entry from the facility's
internal solicitation register--showing a lump-sum government estimate
for the cost of the laundry and dry cleaning services--the Army
concluded that IGIT had an unfair competitive advantage over other
offerors and barred the company's proposal from further consideration.
IGIT protested the Army's exclusion of its proposal and claimed that
the exclusion was in retaliation for IGIT's efforts to pursue its
discrimination claim. While our Office did not reach the issue of
racial bias, we concluded that, under the circumstances, excluding
IGIT from the competition was unreasonable. We recommended that the
lump-sum estimate be provided to all offerors and that IGIT be
permitted to compete. IGIT, Inc., B-271823, Aug. 1, 1996, 96-2 CPD para.
51.
After reinstating IGIT to the competition, the Army held written and
oral discussions with the company, and permitted it to submit a best
and final offer (BAFO). The competition to which IGIT was reinstated
was conducted in accordance with the terms of the RFP issued on
December 10, 1995. Section M of the RFP, as modified by amendment
0006, advised offerors that proposals would be evaluated for past
performance, technical merit, and price. The RFP explained that the
past performance evaluation factor would be significantly more
important than the technical and price factors, which would be
weighted equally. At the conclusion of the evaluation, both IGIT's
and Penn's proposals--the only two in the competitive range--received
very favorable technical scores and were viewed as essentially equal
with respect to technical and price, but Penn's proposal was evaluated
significantly higher under the past performance factor.[1] On October
18, 1996, Penn received award of the contract after the source
selection official at Fort Leonard Wood determined that Penn's
proposal offered the best value to the government.
On October 28, IGIT again protested to our Office, arguing that the
Army failed to conduct adequate discussions regarding certain areas of
its past performance and failed to permit it to submit a revised
proposal after allowing it an opportunity to comment on other areas.
The protest also renewed IGIT's claim that Fort Leonard Wood
contracting officials were biased against the company. In response,
the Army agreed to conduct a new round of discussions concerning past
performance only, and agreed to transfer responsibility for evaluating
the past performance of IGIT and Penn to another facility--i.e., Fort
Knox, Kentucky. Since the Army's corrective action rendered the
protest academic, our Office dismissed the case. IGIT, Inc.,
B-275299, Dec. 3, 1996.
By identical letters dated January 23, 1997, Fort Knox contracting
officials invited IGIT and Penn to submit new past performance
packages for review. The letters explained that the offerors could
include any information previously submitted, plus any additional
information the offerors might want to submit, including any further
response to discussion questions asked by the Fort Leonard Wood
evaluators. The letters also advised that the technical and price
evaluations performed by Fort Leonard Wood--wherein the offers were
viewed as essentially equal--would not be revisited.
After conducting discussions with both offerors, and permitting each
offeror to submit additional information in response to evaluator
concerns, the Fort Knox evaluators assigned IGIT a past performance
score of [deleted] points, out of 50 possible points, and assigned
Penn a score of [deleted]. The past performance scores together with
the technical ratings were used to calculate a risk assessment. Penn
received a risk assessment of [deleted], with 1.00 being the maximum
possible score.[2] IGIT received a risk assessment of [deleted].
Using the past performance score and the numerical risk assessment,
the Fort Knox selection official decided that Penn's proposal
represented the best value to the government, given the relative
equality between Penn and IGIT in technical scores and prices. By
letters dated February 26, both offerors were advised of the agency's
findings, and this protest followed.
ANALYSIS
IGIT's primary criticism of this procurement is that the Army is
biased against it. Essentially, IGIT argues that the Army's ongoing
bias in this case resulted in an unreasonable evaluation of proposals
and in a failure to hold meaningful discussions with it regarding its
proposal. IGIT also complains that our two prior decisions failed to
reach the issue of bias, and it resubmits the claims of bias presented
in those two earlier cases--one of which was sustained on other
grounds, one of which was dismissed as academic after the Army took
corrective action.
As a preliminary matter, we note that, at this juncture, the issues
before our Office related to bias are limited. First, in response to
IGIT's second protest--most of which focused on the evaluation of past
performance--the Army elected to permit IGIT and Penn to submit new
past performance packages which would be evaluated afresh by
contracting officials from another Army installation. For the portion
of the review related to the other two evaluation factors--i.e.,
technical merit and price--the Army's letters of January 23, 1997,
expressly advised both offerors that the existing evaluation would
remain intact. If IGIT disagreed with that decision, it was required
to protest within 10 days of its receipt of the Army's letter. Any
complaint related to the evaluation of technical merit or price is now
untimely.[3] 4 C.F.R. sec. 21.2(a)(2) (1997).
In addition, we note that IGIT's remaining claim of bias has been
largely addressed by the Army's decision to move the evaluation of
past performance from Fort Leonard Wood to Fort Knox. Since IGIT
expressly states that it is not accusing the Fort Knox evaluators of
bad faith or racial bias, IGIT Comments on the Agency Report, Apr. 30,
1997, at 1, its only remaining concern is that the Fort Knox
evaluators relied on allegedly tainted information when they solicited
the views of Fort Leonard Wood officials familiar with IGIT's
performance of the contract there. We will discuss this issue after
reviewing the specific challenges to the Army's reevaluation.
Although IGIT challenges nearly every facet of the Army's past
performance review, its complaints generally raise the following
issues: (1) the Army unfairly performed a more detailed review of its
past performance than it did of Penn's, including placing undue
reliance on problems in IGIT's past performance; (2) the evaluators
unreasonably concluded that IGIT lacked financial stability, and
wrongly made several negative evaluation comments about staffing
changes despite IGIT's high ratings for proposed staff; and (3) the
Fort Knox evaluators deviated from the stated evaluation weight of
certain elements of the past performance evaluation plan enunciated in
the solicitation as issued by Fort Leonard Wood.[4]
We review an agency's evaluation of proposals to ensure that it is
fair, reasonable, and consistent with the evaluation criteria stated
in the solicitation. Wind Gap Knitwear, Inc., B-261045, June 20,
1995, 95-2 CPD para. 124 at 3. Where a solicitation requires the
evaluation of offerors' past performance, an agency has discretion to
determine the scope of the offerors' performance histories to be
considered, provided all proposals are evaluated on the same basis and
consistent with the solicitation requirements. Federal Envtl. Servs.,
Inc., B-250135.4, May 24, 1993, 93-1 CPD para. 398 at 12.
IGIT's first general complaint is that the Fort Knox evaluators used
different levels of scrutiny in reviewing the two proposals. In this
regard, IGIT claims that the Army inappropriately contacted its
creditors and suppliers, in addition to its prior customers, but
performed a more limited review of Penn, focusing just on that
company's named references. IGIT also claims that the Army failed to
contact more than 50 IGIT references who would have provided favorable
reports, although IGIT concedes that none of those references are
associated with contracts of the size and magnitude of the prior Fort
Leonard Wood contract. In response, the Army concedes that its review
of IGIT's past performance led it to contact more sources of
information than it did in its review of Penn, but explains that
IGIT's submission, on its face, required a more thorough review
because of the significant negative information included therein. The
Army also argues that it appropriately focused on IGIT's prior
performance of the Fort Leonard Wood contract and on its subcontract
with ITT Federal Services Corporation because those contracts were
most analogous to the contract here.
The record shows that in their new past performance submissions, both
offerors provided references and in the case of IGIT, the package
included a substantial amount of negative financial information. Upon
receipt of the submissions, the Fort Knox evaluators began a new and
independent review of each offeror's past performance. To implement
the evaluation, the evaluators prepared their own past performance
questionnaire and contacted references with respect to each
contractor's performance of its prior contract, payment of suppliers,
and any general problems or difficulties encountered. For Penn, the
references contacted provided the kind of information sufficient to
support a conclusion that Penn's past performance had been relatively
smooth and without incident. For IGIT, even its own submission showed
otherwise. Specifically, IGIT's own submission included financial
statements showing substantial losses, and revealed that there had
been difficulties meeting payroll obligations, late supplier payments,
and a failure to pay utility bills.
With respect to IGIT's claim that the agency's review of its past
performance was more thorough than its review of Penn's, we see
nothing unreasonable in the Army's approach to investigating the past
performance history of these two offerors. First, although agencies
are required to evaluate the past performance of all offerors on the
same basis, Federal Envtl. Servs., Inc., supra, there is no
requirement that an agency contact all of an offeror's references,
Dragon Servs., Inc., B-255354, Feb. 25, 1994, 94-1 CPD para. 151 at 8, and
we are aware of no requirement that an agency contact the same number
of references for each offeror. In fact, given that the performance
controversies at Fort Leonard Wood involve the same facility and the
same services, we fail to see how the Army could have reasonably
overlooked the matter. International Bus. Sys., Inc., B-275554, Mar.
3, 1997, 97-1 CPD para. 114 at 5.
With respect to IGIT's claims that the agency overlooked numerous
other past contracts in order to investigate controversies that arose
during IGIT's performance of the previous Fort Leonard Wood contract
and a major subcontract IGIT performed for ITT, IGIT itself concedes
that its other contract references did not involve contracts as large
as this one, and that the Fort Leonard Wood and ITT contracts were the
ones most similar to the contract at issue here. It is hard to
imagine information more relevant than IGIT's previous performance of
these same services for the same installation. See Questech, Inc.,
B-236028, Nov. 1, 1989, 89-2 CPD para. 407 at 3-4. In addition, we see no
basis for IGIT's complaint that the agency placed undue reliance on
problems that arose during performance of these two contracts. While
IGIT might dispute the cause for the performance problems, it does not
deny that the problems arose, or that they should be part of a valid
past performance assessment. Id.
IGIT's second general complaint is that the agency wrongly concluded
the company lacked financial stability and wrongly made several
negative comments about its staffing changes even though the proposal
received high marks for proposed staff.
As stated above, IGIT's own submission highlighted numerous problems,
including unfavorable profit and loss statements, and difficulties in
meeting ongoing financial commitments. Consideration of these issues
as set forth by IGIT, together with the responses generated from those
contacted by the Fort Knox evaluators, were clearly sufficient to
support the Army's conclusions about IGIT's financial stability. In
addition, during the course of this protest, the record shows that
IGIT had received a tax levy from the Internal Revenue Service (IRS)
for payroll taxes unpaid since March 1996, a levy from the Department
of Labor for unpaid unemployment insurance, and additional written
complaints from union employees regarding bounced paychecks. Further,
in its final submission, IGIT itself advised our Office that it had
filed for chapter 7 bankruptcy, and that the future of the company was
uncertain.[5] Under these circumstances, we see no basis to conclude
that the agency unreasonably expressed concerns about IGIT's financial
stability.
IGIT's next contention--that the evaluators wrongly made several
negative comments about IGIT's staffing changes even though the
proposal received high marks for proposed staff--confuses the
technical review with the review of its past performance. Under the
technical review, IGIT's proposed staff received the highest possible
rating; however, in the review of past performance, references stated
that IGIT had, in some instances, not provided the personnel proposed,
and had substituted less qualified individuals. Since the technical
assessment focused on the proposal as written, while the past
performance assessment focused on IGIT's actions during performance,
there is nothing about the Army's criticism on this point that is
inconsistent with the technical review.
IGIT's third contention is that the Fort Knox evaluation of past
performance deviated in two ways from the evaluation set forth in the
solicitation. For the reasons below, we agree with IGIT that there
may have been some small differences between Fort Knox's approach and
the solicitation's approach, but we conclude that any deviation was de
minimis, and that the company was not prejudiced by the agency's
actions. As an example, we discuss below the stronger of IGIT's two
arguments in this area.
IGIT correctly points out that the solicitation as issued by Fort
Leonard Wood provided that the agency would consider the offeror's
financial statements in its past performance assessment, but the Fort
Knox evaluation worksheets instead contain a category titled
"financial history." While we are aware that the Fort Knox evaluators
reviewed IGIT's financial statements--for example, the conclusions on
financial stability discussed above included a review of the financial
statements--there is no specific place on the evaluation worksheets to
consider financial statements, and the record shows that the financial
history evaluation element entailed a slightly broader review than
consideration of financial statements alone. Nonetheless, even if we
assume that this represents a slight deviation from the stated
solicitation criteria, we cannot see how IGIT was prejudiced by the
deviation, nor does IGIT attempt to establish any prejudice. Instead,
IGIT claims that it is impossible to calculate the harm springing from
either this or the other alleged deviation. IGIT Comments on the
Agency Report, Apr. 30, 1997, at 5.
Despite IGIT's claim that the Army failed to follow the solicitation's
evaluation criteria, our Office will not sustain a protest unless the
protester demonstrates a reasonable possibility that it was prejudiced
by the agency's actions, that is, unless the protester demonstrates
that, but for the agency's actions, it would have a substantial chance
of receiving the award. McDonald-Bradley, B-270126, Feb. 8, 1996,
96-1 CPD para. 54 at 3; see Statistica, Inc. v. Christopher, 102 F.3d
1577, 1581 (Fed. Cir. 1996). Nothing in the record here suggests that
the evaluation results would have been different had the agency
limited its past performance review to financial statements rather
than financial history.
In addition to its challenge to the evaluation itself, IGIT argues
that the Army held inadequate discussions with it regarding its prior
contract with ITT. In this regard, IGIT disputes the Army's
conclusion that its contract with ITT was terminated for poor
performance, claims instead that the contract was terminated for
convenience, and argues that it would have addressed this issue if the
agency had properly identified its concerns during discussions.
Our review of the record shows that IGIT's own submission to Fort Knox
included a substantial amount of material exchanged with Fort Leonard
Wood officials on the subject of whether IGIT's contract with ITT was
terminated for poor performance. IGIT Past Performance Submission,
January 31, 1997, at 7, 14, 31-34, 83-84, 87-88. Presumably this
information was presented because IGIT knew that there was an issue
about its performance of that contract. After reviewing the
submission, the Fort Knox evaluators forwarded the following question
to IGIT by letter dated February 11, 1997:
"Notwithstanding your letter from ITT dated 5 Oct 93, do you have
anything from ITT that specifically states that your subcontract
for alterations and repairs was not terminated for poor
performance?"
This question was clearly sufficient to put IGIT on notice that the
Army was considering a conclusion that IGIT's prior contract with ITT
was terminated for poor performance. See Rockwell Int'l Corp.,
B-261953.2; B-261953.6, Nov. 22, 1995, 96-1 CPD para. 34 at 12-13.
As a final matter, we turn to the question of whether the Army took
sufficient steps to eradicate the bias that IGIT says exists on the
part of Fort Leonard Wood contracting officials. As explained above,
given the steps already taken in response to IGIT's earlier protests,
the only remaining unaddressed allegation of bias is that the current
evaluation was tainted by the reliance on comments by Fort Leonard
Wood officials about IGIT's performance of the prior contract.
The current posture of this procurement reflects unusual and
extraordinary steps by the Army to address the protester's
earlier-stated concerns regarding its acrimonious relationship with
officials at Fort Leonard Wood. While we appreciate IGIT's remaining
concern, we conclude that the decision of the Fort Knox contracting
officials to review the performance issues that arose in the prior
Fort Leonard Wood contract was appropriate, and we agree that
obtaining the views of those officials was a requisite part of that
process. In this regard, even if we assume the protester could
present credible evidence of bias on the part of Fort Leonard Wood
officials, our review of the past performance evaluation performed by
the Fort Knox contracting officials must focus on whether the limited
input of Fort Leonard Wood officials unfairly affected the protester's
competitive position. Executive Sec. & Eng'g Tech., Inc., B-270518 et
al., Mar. 15, 1996, 96-1 CPD para. 156 at 4.
The record here shows that after receiving the views of the Fort
Leonard Wood officials, and after performing their own evaluation, the
Fort Knox contracting officials gave IGIT significantly lower scores
for past performance than they gave Penn, and concluded that Penn had
submitted the proposal offering the greatest benefit to the
government. All of the materials that formed the basis of this
decision--including the remarks of the Fort Leonard Wood
officials--were provided to IGIT's counsel, under a protective order
issued by our Office, and IGIT was given every opportunity to point
out inaccuracies or errors in those materials. While IGIT may
disagree with many of the conclusions in the record, it has not shown
that statements provided there were inaccurate or false. Since we
generally presume that contracting officials act in good faith, Indian
Affiliates, Inc., B-243420, Aug. 1, 1991, 91-2 CPD para. 109 at 5, and
since IGIT has been given every reasonable opportunity to demonstrate
that it was harmed by unfair or improper bias--and has failed to make
that showing--we conclude that the protester was treated fairly by the
Army in this procurement. Telestar Int'l Corp., B-247557.2, June 18,
1992, 92-1 CPD para. 530 at 3.
The protest is denied.
Comptroller General
of the United States
1. The Army's conclusion that the two offers were essentially equal
with respect to technical merit and price is based on the fact that
IGIT received [deleted] of 25 available points under the technical
factor, while Penn received [deleted] points. With respect to price,
IGIT's total price of [deleted] million was slightly lower than Penn's
total price of $5.589 million, a difference of approximately
[deleted].
2. The Fort Knox evaluators explain that a risk assessment of 1.00 is
equal to a 100 percent certainty that the contract will be performed
as stated without problems.
3. For the record, it is difficult to see how IGIT was treated
unfairly under the technical evaluation factor, given the evaluators'
conclusion that IGIT should receive the maximum number of available
points for its technical proposal.
4. In addition to these general challenges, IGIT alleges--in its final
protest filing dated May 21, 1997--that Penn's BAFO was not received
by the closing time for receipt of BAFOs--i.e., by 12:30 p.m. on
September 12, 1996. IGIT's allegation is based on an affidavit from a
contract specialist at Fort Leonard Wood who states that there is no
entry in the Bid/Proposal Logbook maintained by a receptionist at the
facility. Although there are serious questions about the timeliness
of this allegation--for example, IGIT does not explain why it first
raises this question some 8 months after the incident, when the
information was known to the affiant at closing time, and the record
shows that the affiant and IGIT are sufficiently close that the
affiant has disqualified himself from any matter involving IGIT
because of a conflict of interest--we have nonetheless reviewed this
allegation. The record includes statements from Penn and other
contracting officials explaining that Penn's BAFO was hand-delivered
directly to the contracting shop and was not received by the
receptionist. In addition, the record includes a copy of the cover of
the BAFO wherein the contracting officer has handwritten the date and
time of receipt. Under these circumstances, we have no basis to
conclude that Penn's BAFO was received late.
5. On the subject of the IRS lien, the final submission from IGIT's
counsel states that "IGIT informs me that the IRS has removed the tax
lien imposed by IRS upon IGIT's contract payments, according to what
Mr. Reeves understands from a meeting held with IRS representatives
last week." IGIT's Final Reply, May 21, 1997, at 3.