BNUMBER: B-275756
DATE: March 25, 1997
TITLE: Matter of:Theisinger und Probst Bauunternehmung GmbH
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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:Theisinger und Probst Bauunternehmung GmbH
File: B-275756
Date:March 25, 1997
Daniel F. Crowley, Esq., and Leodis C. Matthews, Esq., for the
protester.
John E. Lariccia, Esq., Department of the Air Force, for the agency.
Jacqueline Maeder, Esq., and Paul Lieberman, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Award of a fixed-price contract to a higher-priced, technically
superior offeror is unobjectionable where it is consistent with the
solicitation evaluation criteria, the agency reasonably determined
that the difference in technical merit was sufficiently significant to
justify the marginal cost difference, and the record does not support
the protester's theory that the agency's source selection authority
must have confused proposals in making his selection.
DECISION
Theisinger und Probst Bauunternehmung GmbH protests the award of a
contract to SKE/Klee under request for proposals (RFP) No.
F61521-96-R2101, issued by the Department of the Air Force as a
Simplified Acquisition of Base Engineering Requirements (SABER)
procurement for alteration, maintenance, repair and minor construction
work at various facilities in the Kaiserslautern Military Community,
Germany. Theisinger contends that the award to a higher-priced
offeror was improper because the agency's technical and past
performance evaluations were flawed and the agency did not make a
proper best value determination.
We deny the protest.
The solicitation, issued April 23, 1996, contemplated the award of an
indefinite quantity, indefinite delivery, firm fixed-price 12-month
contract with three 1-year options and a total ceiling of $25 million.
The RFP provided for award to the responsible offeror whose offer was
found most advantageous to the government considering, in descending
order of importance, technical factors, past performance and cost.
The solicitation set forth four technical evaluation factors, in
descending order of importance: (1) project management; (2) project
execution; (3) subcontracting support; and (4) experience. Under each
of these four factors, proposals were evaluated against the following
assessment criteria, also in descending order of importance:
soundness of management approach, understanding the technical
requirement, and identification and use of resources. The RFP
provided that past performance would be measured using four evaluation
factors in descending order of importance, including: (1) quality of
service; (2) cost control; (3) timeliness of performance; and (4)
customer satisfaction. Each of these past performance factors was to
be measured using two assessment criteria, in descending order of
importance: compliance with technical requirements and management
approach. Cost was to be evaluated for completeness, realism and
reasonableness, using weighted coefficients for various jobs within
the construction industry and as identified by the RFP.
The RFP instructed offerors to submit with their proposals information
on relevant contracts. The solicitation provided that the agency
"shall place emphasis on the relevance of the prior performance in
relation to this requirement, rather than on the number of contracts
performed." Offerors were also instructed to "explain clearly why the
identified contracts [were] deemed to be relevant to the SABER
[c]ontract."
The Air Force received six offers by the RFP's June 6, 1996, closing
date. Proposals were assessed under each evaluation factor using four
color/adjectival ratings: (1) blue/exceptional (exceeds specified
performance or capability in a beneficial way and has no significant
weaknesses); (2) green/acceptable (meets evaluation standards and any
weaknesses can be corrected); (3) yellow/marginal (fails to meet
evaluation standards, but any significant deficiencies are
correctable); and (4) red/unacceptable (fails to meet a minimum
requirement of the RFP and the deficiency is uncorrectable without a
major revision of the proposal). The technical evaluation team also
assigned a proposal risk rating according to the following risk
definitions: (1) high (likely to cause significant serious disruption
of schedule, increase in cost, or degradation of performance even with
special contractor emphasis and close government monitoring); (2)
moderate (can potentially cause some disruption of schedule, increase
in cost, or degradation of performance; special contractor emphasis
and close government monitoring will probably be able to overcome
difficulties); and (3) low (has little potential to cause disruption
of schedule, increase in cost, or degradation of performance; normal
contractor emphasis and normal government monitoring will probably be
able to overcome difficulties).
The Air Force issued clarification and deficiency reports on August
13; offerors submitted responses to these reports by August 27. On
October 9, the agency requested best and final offers (BAFO), and five
were received. Based on BAFOs, three firms were determined eligible
for award, including Theisinger, SKE, and the incumbent Bilfinger and
Berger (B&B). Theisinger offered the lowest evaluated price
coefficient of [deleted];[1] SKE submitted the second lowest
coefficient of [deleted], and B&B submitted the highest evaluated
coefficient. In the technical area, all three proposals were rated
green/acceptable overall with low risk. However, SKE's proposal
received blue/exceptional ratings in two technical assessment criteria
(soundness of management approach and understanding the technical
requirement) under subcontracting support, resulting in a
blue/exceptional rating for this technical factor. B&B's proposal
received blue/exceptional ratings on three technical assessment
criteria, including soundness of management approach and understanding
the technical requirement, resulting in one blue/exceptional rating
under the subcontracting support factor, and a blue/exceptional rating
on the project management assessment criterion under project
execution. Theisinger's proposal received only one blue/exceptional
rating on one technical assessment criterion (understanding the
technical requirement) under subcontracting support, and its overall
rating on the subcontracting factor was green/acceptable. SKE's
proposal was rated as moderate risk under experience. A summary of
the ratings for all three offerors is given below.
Theisinger
Management
Ability Project
Execution Subcontract Experience
Project
Management green/low green/low green/low green/low
Understand
Technical
Requirement green/low green/low blue/low green/low
Use of
Resources green/low green/low green/low green/low
Overall green/low green/low green/low green/low
SKE
Management
Ability Project
Execution Subcontract Experience
Project
Management green/low green/low blue/low green/
moderate
Understand
Technical
Requirement green/low green/low blue/low green/low
Use of
Resources green/low green/low green/low green/low
Overall green/low green/low blue/low green/
moderate
B&B
Management
Ability Project
Execution Subcontract Experience
Project
Management green/low blue/low blue/low green/low
Understand
Technical
Requirement green/low green/low blue/low green/low
Use of
Resources green/low green/low green/low green/low
Overall green/low green/low blue/low green/low
All three proposals were rated essentially equal under past
performance, each receiving a green/acceptable rating. However, SKE
and B&B were recognized as having had previous SABER contracts;
Theisinger was not.
After a review of the each proposal's strengths and weaknesses, costs,
and risks, the source selection authority (SSA) determined that SKE's
proposal provided the best value to the government. The agency
awarded the contract to SKE on December 9, and this protest followed.
The protester alleges that the SSA's decision is irrational and
contains errors of fact and logic. Specifically, Theisinger contends
that, because the SSA decision states that the SKE proposal "exceeds
government requirements in two separate criteria," the SSA has
confused SKE's proposal with B&B's proposal, which Theisinger alleges
"was the only [proposal] to exceed two criteria." Theisinger then
argues that the SSA used "this ostensibly superior SKE proposal to
outweigh [Theisinger's] proposal. . . ." The protester argues that
because Theisinger's proposal and SKE's were actually evaluated as
essentially technically equal, cost should have been determinative and
Theisinger should have been awarded the contract.
Theisinger bases its allegation that the SSA confused the SKE and B&B
proposals on one sentence in the SSA decision, which reads "Within the
technical area, SKE/KLEE offers a proposal which exceeds government
requirements in two separate criteria." The Air Force explains,
however, that the SSA inadvertently omitted the word "assessment," and
that the sentence therefore should actually read, "[w]ithin the
technical area, SKE/KLEE offers a proposal which exceeds government
requirements in two separate assessment criteria." This explanation
is reasonable and, indeed, reflects the fact, noted above, that SKE's
proposal was evaluated as exceeding the government's requirements on
two "assessment criteria" under the subcontracting evaluation factor.
Theisinger, in its submissions to our Office, concedes that both the
SKE and the B&B proposals were rated blue/exceptional on two
assessment criteria under the subcontracting factor and therefore
rated blue/exceptional on this subcontracting factor, and that B&B was
rated blue/exceptional on one additional assessment criterion. The
protester nevertheless continues to argue that the SSA confused the
two proposals, because "B&B's proposal with three blues, not
SKE/Klee's with only two, was the only one to exceed two criteria. . .
."
We believe that the protester misconstrues the SSA's decision. As
noted above, the SSA correctly indicates that SKE's proposal exceeds
government requirements--meaning it earned better than acceptable
ratings--on two assessment criteria. If the SSA had, in fact,
confused SKE's and B&B's proposals, as the protester alleges, his
decision would have stated that SKE exceeded government requirements
under three criteria. The SSA decision goes on to state that although
B&B's proposal "had one criterion judged technically superior to
SKE/KLEE; their proposal was significantly more expensive than that
submitted by SKE/KLEE." This clearly shows that the SSA was aware
that B&B's proposal was judged blue/exceptional on three assessment
criteria while SKE's proposal was judged blue/exceptional on only two
assessment criteria. Contrary to the protester's allegation, there is
no evidence in the record which suggests that the SSA confused the two
proposals.
Theisinger next argues that the agency improperly evaluated its and
the awardee's past performance, stating that although it and SKE were
rated essentially equal on past performance, the SSA put too great a
weight on SKE's SABER experience while discounting Theisinger's
SABER-like experience under a contract with the city of Pirmasens.[2]
Also, Theisinger argues that the SSA's decision does not reflect an
integrated assessment of the proposals and fails to provide a clear
rationale for the selection decision.
Source selection officials in negotiated procurements have broad
discretion in determining the manner and extent to which they will
make use of technical and cost evaluation results. Grey Advertising,
Inc., 55 Comp. Gen. 1111, 1120 (1976), 76-1 CPD para. 325; Mevatec Corp.,
B-260419, May 26, 1995, 95-2 CPD para. 33. Agencies may make
cost/technical tradeoffs in deciding between competing proposals and
the propriety of such tradeoffs turns not on the difference in
technical scores or ratings per se, but on whether the selection
official's judgment concerning the significance of that difference was
reasonable and adequately justified in light of the RFP evaluation
scheme. See Wyle Labs., Inc.; Latecoere Int'l, Inc., 69 Comp. Gen.
648 (1990), 90-2 CPD para. 107.
Here, the SSA report states that the past performance proposals of all
three offerors were determined to be essentially equal, with all three
receiving green/acceptable ratings. The report also states that both
SKE and B&B had previous SABER contracts in the Kaiserslautern
Military Community, while Theisinger had no prior SABER experience.
We disagree with the protester that the SSA put too great an emphasis
on SKE's SABER experience. While the record indicates that the SSA
did recognize that SKE had SABER experience, comparable to the $25
million anticipated cost of this procurement, and in the same
geographical area and administered by the same contracting activity,
it is also clear that the SSA understood that the past performance
evaluations for all three offerors were essentially equal. To the
extent SKE's SABER experience gave SKE a slight edge over the
protester, it was because the experience was directly relevant to the
work to be performed under this solicitation. Moreover, the record
shows that the Air Force did consider Theisinger's contract with the
city of Pirmasens. However, contrary to the protester's assertions
that this contract was primarily a design and construction
requirements contracts, the agency points out that it was limited to
road construction. In contrast, the SABER contract here will require
up to 30 design and construction disciplines. Moreover, Theisinger's
Pirmasens's contract is valued at approximately [deleted],
significantly less than the contract at issue or SKE's SABER contract.
Under these circumstances, we find nothing improper in the SSA's
slight emphasis on SKE's SABER experience.
Contrary to the protester's allegation, the record shows that the
source selection official reviewed the full technical evaluation
record (including strengths, weaknesses, and concerns cited for the
proposals), as well as the resulting adjectival ratings and cost
evaluation results. The award determination statement describes the
differences in the evaluations of the three proposals and concludes
that SKE offered the most advantageous proposal to the government
pointing out, for example, that SKE's proposal exceeded the
government's requirements in subcontracting, that SKE has a solid past
performance record, including SABER experience, and that SKE's
proposed costs are only marginally higher than the lowest-cost
proposal. The award determination also notes that this marginally
higher cost is outweighed by the superior technical proposal offered
by SKE.[3] Moreover, the protester does not question the technical
ratings for its own or for SKE's proposal.[4] In our view, the SSA
report reflects an appropriate comparison of the competing proposals
and includes a reasoned determination for selection of the second
lowest cost offer. The crux of Theisinger's argument regarding the
allegedly improper tradeoff determination stems from its view that
SKE's evaluation reflects the agency's confusion of SKE's proposal
with that of B&B. However, as explained above, that assertion is
contradicted by the record. Under these circumstances, and given that
technical factors were more important than price, we have no basis to
object to the selection decision.[5]
The protest is denied.
Comptroller General
of the United States
1. Under a SABER contract, services are accomplished by the use of
individual delivery orders. The cost of an individual project is
computed by using prices from a unit price book (UPB), which lists
25,000 line items of pre-priced construction tasks. The appropriate
line items required for completing the project are added together and
multiplied by a coefficient that represents the contractor's overhead
and profit. Offerors competing for a SABER contract submit their
prices as coefficients, which are percentage factors representing an
increase or a decrease to the UPB prices. For example, a coefficient
of 1.0 would represent a price that matches the UPB price; a
coefficient of 1.2 represents a price that is 20 percent more than the
UPB's unit prices.
2. The protester also alleges that the Air Force improperly evaluated
SKE's past performance by crediting SKE for SABER experience.
Theisinger contends that the awardee's SABER experience was in a joint
venture, that the other joint venture firm was the lead partner, and
that the experience of the joint venture properly belongs only to the
lead partner. The protester argues that since SKE should not be
credited with SABER experience, the past experiences of SKE and
Theisinger are essentially equal. The agency responded to this issue
in its January 15, 1997 report, but Theisinger, in its comments filed
on that report, did not rebut the agency's position. Therefore, we
regard this issue as abandoned. Marquette Elecs., Inc., B-262016.2;
B-262016.3, Feb. 15, 1996, 96-1 CPD para. 98.
3. The SKE offer is approximately only [deleted] percent higher than
Theisinger's lowest-cost proposal.
4. Theisinger first protested on December 16, 1996, alleging that the
agency's technical evaluation of proposals was flawed. The only
specific allegation raised in this regard concerned the SSA's alleged
confusion of the SKE and B&B proposals, discussed above. On January
15, 1997, counsel for the protester received the agency's report on
the protest, which included the awardee's proposal and the agency's
evaluations. Theisinger requested and was granted three extensions
of time in which to file its comments, and did so on February 5. In
those comments, for the first time, Theisinger argued that the
agency's evaluation of SKE's proposal under the experience factor was
improper. We decline to consider this issue because it is untimely.
Under our Bid Protest Regulations, protests based on other than
apparent solicitation improprieties must be filed within 10 days of
when the protester knew or should have known the basis for protest.
Bid Protest Regulations, sec. 21.2(a)(2), 61 Fed. Reg. 39039, 39043
(1996) (to be codified at 4 C.F.R. sec. 21.2(a)(2)). Theisinger had been
provided the information that should have put it on notice of this
protest ground on January 15, upon receipt of the agency report, but
did not raise the issue until its comments were filed 21 days later.
In this respect, Theisinger argues that its initial protest
encompassed this issue because it alleged generally that the agency
failed to follow specified evaluation criteria and misevaluated
proposals. We do not agree. Those allegations were broad in nature
and the initial protest otherwise lacked any reference whatsoever to
the evaluation of SKE's experience. See Ralph G. Moore &
Assocs.--Recon., B-270686.3, Jan. 5, 1996, 96-1 CPD para. 268.
5. In its comments on the agency report, Theisinger protests, for the
first time, that since the solicitation stated that offerors' past
performance would be evaluated based on contracts awarded within the
past 3 years, SKE's SABER contract, awarded in 1992 (outside the
3-year period), should not be considered by the agency. The protester
also argues for the first time that the agency applied a new, unstated
evaluation criterion regarding geographic location in evaluating past
performance, and that the agency erred in evaluating costs. As noted
above, our Bid Protest Regulations require that protests based on
other than apparent solicitation improprieties be filed within 10 days
of when the protester knew or should have known the protest basis.
Here, Theisinger had been provided the information that should have
put it on notice of these protest grounds on January 15, yet did not
raise them until its comments were filed 21 days later. Thus, these
issues are untimely and not for our consideration. Bid Protest
Regulations, supra.