BNUMBER: B-277250.2
DATE: September 18, 1997
TITLE: Pearl Properties, Inc., B-277250.2, September 18, 1997
**********************************************************************
Matter of:Pearl Properties, Inc.
File: B-277250.2
Date:September 18, 1997
Felita A. Phillips for the protester.
Richard A. Marchese, Esq., Department of Housing and Urban
Development, for the agency.
Christina Sklarew, Esq., and Paul Lieberman, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest of elimination of protester's proposal from the competitive
range based on disagreement with agency's evaluation is denied where
the evaluation was conducted in accordance with the criteria announced
in the solicitation, and the record supports the evaluators'
conclusions.
DECISION
Pearl Properties, Inc. protests the exclusion of its proposal from the
competitive range under request for proposals (RFP) No.
H03R96015600000, issued by the Department of Housing and Urban
Development (HUD) for real estate asset management (REAM) services for
single-family properties owned by HUD in its District of Columbia
Office jurisdiction. Pearl alleges that its proposal was improperly
evaluated because HUD improperly disregarded corporate experience by a
predecessor firm and because HUD considered an allegedly erroneous
negative past performance report.
We deny the protest.
The RFP was issued on July 24, 1996, as a total small business
set-aside for the acquisition of management and other related
services. The RFP listed the following evaluation factors, with their
relative weights, to be scored on a 100-point scale: prior management
experience (30 points); past performance (25 points); office
location(s) (20 points); and management capability (25 points). Award
was to be made to the offeror submitting "the proposal that best
conforms to the solicitation and is most advantageous to the
Government (that proposal which represents the best value.)"
The agency received 17 timely submitted proposals, including the
protester's. After the proposals had been scored by individual
technical evaluation panel (TEP) members, the TEP developed a
consensus score for each proposal. Five offers were rated as
technically acceptable, and seven offers, including Pearl's, were
deemed technically unacceptable in their current form but capable of
being made acceptable through clarifications/discussions. These 12
proposals were included in the competitive range.
On February 3, the contracting officer notified Pearl by letter that
its proposal was considered to be within the competitive range for
further negotiations, and identified areas in the proposal that
required additional information and/or clarification. The letter
requested further detail or specific information regarding the method
of performance Pearl was proposing, negative past performance
information received from one of HUD's offices, and certain aspects of
Pearl's proposed management of the contract. The letter also
transmitted an amendment to the RFP. HUD instructed Pearl to submit
an amended proposal and to complete a pricing schedule that was
included in the solicitation amendment.
Pearl submitted an amended proposal, which was evaluated with the
result that the protester's overall score improved by a total of 3
points. Nonetheless, the TEP continued to have concerns regarding the
firm's lack of experience in managing a large inventory of properties
and concluded that Pearl had not provided information to adequately
refute the reference reports of Pearl's poor past performance.
Nine amended technical proposals were considered superior to Pearl's,
of which seven offered a lower price. Based on its relative standing,
the contracting officer concluded that Pearl's proposal did not have a
reasonable chance of being selected for award and excluded it from the
competitive range. Pearl was notified of its exclusion on June 2, and
requested a pre-award debriefing. HUD provided a written debriefing
on June 5, and this protest followed. The contract award has been
stayed pending resolution of the protest.
Pearl alleges that its proposal was excluded from the competitive
range as the result of an improper evaluation. First, Pearl argues
that it has 15 years of experience in the management of government
properties and that this "more than qualifies it to receive the full
30 points for Factor (1)." Pearl asserts that its low score in this
area must be the result of HUD's failure to consider the experience of
its predecessor, Pearl Properties, Ltd.
The RFP lists "prior management experience" as the most
heavily-weighted single technical evaluation factor, and states:
The offeror shall provide evidence of the offeror's experience in
the management of single family properties similar to the type of
inventory covered by this solicitation. Prior management
experience must demonstrate the offeror's ability to perform the
duties required under this RFP. If the offeror's property
management experience is in areas other than single family
property management, the offeror's proposal must demonstrate, to
the satisfaction of HUD, that the experience relates to the
duties required by this RFP. Include a description of work
currently in progress and/or completed within the last three to
five years that is relevant to this procurement. Include names,
addresses, and telephone numbers of contact points for these
clients. The Government reserves the right to request
information from any source so named. The Government also
reserves the right to obtain information from sources not named
in the proposal.
Pearl's initial proposal listed current and past property management
contracts, indicating the length of the contract and the cumulative
number of properties managed under each contract. For example, for a
contract performed between 1984 and 1987, which was the highest-volume
contract listed, Pearl's proposal showed that it had managed a total
of 2,500 properties over the course of 3 years. However, Pearl
provided no indication of the length of time an average property was
managed, and there was no way for the agency to determine what Pearl's
typical inventory of properties was at any given time. Pearl's more
recent, and therefore more relevant, contracts show a lower volume;
the current inventory is listed in the proposal as 75 to 100 homes.
In contrast, the RFP stated that HUD anticipated an inventory on the
effective date of award to include approximately 850 to 900
properties, with an average of approximately 100 properties to be
added each month and an average sale of 84 properties to be closed
each month.[1]
In its letter requesting additional information, HUD acknowledged in
connection with this factor that Pearl listed more than 14 years of
property management experience but pointed out that the volume did not
appear to be as high as the inventory covered under this solicitation.
Pearl did not address this concern in its amended proposal.
Because Pearl provided some additional information in its amended
proposal regarding the manner in which it proposed to perform the
work, the TEP increased its score by 1 point under this factor.
However, because the evaluators concluded from the information
provided by Pearl that the volume of properties the firm had managed
in the past did not compare with the inventory covered under this
solicitation, Pearl's score remained relatively low under this factor.
The evaluation of proposals is primarily a matter within the agency's
discretion since it is responsible for defining its needs and for
deciding on the best methods for accommodating them. Seair Transport
Servs., Inc., B-252266, June 14, 1993, 93-1 CPD para. 458 at 4. Thus, we
question the evaluation only if the record demonstrates that it was
unreasonable or inconsistent with the RFP's evaluation criteria. Id.
Here, the record establishes that HUD's evaluation was reasonable and
consistent with the RFP's terms. The RFP instructed offerors to
provide evidence of their experience in the management of single
family properties "similar to the type of inventory covered by this
solicitation." (Emphasis added.) Contrary to Pearl's speculation,
the record shows that the relatively low score given to Pearl's
proposal under this factor was based on the TEP's conclusion that
Pearl had not managed a similar type of inventory, and that score was
therefore consistent with the evaluation factors established in the
RFP; the record contains no evidence that the TEP had any concerns
regarding the length of Pearl's experience or the applicability of
corporate experience gained by its predecessor company.
Pearl also objects to its low score under the "past performance"
evaluation factor, arguing that it is based on erroneous information
and reflects retaliatory and vindictive motivation on HUD's part.
In order to evaluate this factor, HUD contacted the references
identified in Pearl's initial proposal for the property management
contracts that were listed as experience, as permitted under the RFP.
HUD received a negative performance report from its Ohio office, which
was listed as a reference; the report included a list of specific
performance issues and the statement that HUD had decided not to
exercise any options under that contract because of poor contractor
performance. The TEP awarded Pearl's initial proposal 9 points (out
of a possible 25 points) under this factor. HUD identified the source
of the negative report to Pearl, asking the firm to address the issue
in its amended proposal and to provide additional reference
information.
In its amended proposal, Pearl acknowledged that it had received
negative performance evaluations from the Ohio HUD office, but
asserted that the evaluations were made "prematurely and wrongly."
The protester explained that HUD found deficiencies in Pearl's
performance toward the end of a contract's term and, rather than
asking Pearl to correct these deficiencies, requested that the
subsequent contractor correct them and sought to deduct the cost of
the corrections from Pearl's final contract payment. When Pearl
appealed the matter to the HUD Board of Contract Appeals (BCA), the
BCA found that under the specific terms of the contract, HUD had to
first allow Pearl a chance to reperform the work found to be
deficient; not having done that, it had forfeited its right to other
remedies by the express terms of the contract. Pearl Properties, 96-1
BCA para. 28,219. Pearl cited this case outcome to support its claim that
its performance under the contract was acceptable and in its protest
it alleges that HUD's evaluation of this factor is colored by a
retaliatory and vindictive motive arising from Pearl's pursuit of this
matter.
Among the undisputed material facts that the BCA decision cites as
permitting summary judgment is the fact that Pearl's performance was
deficient and required correction. The fact that the contract
required HUD to pay Pearl for the corrections that Pearl did not
perform does not alter that result, and nothing in the record
contradicts the negative performance evaluation. Further, there is no
evidence in the record of bias or retaliatory motive on HUD's part.
Pearl did not provide any additional references or show why its past
deficient performance should not affect its score under this factor.
Government officials are presumed to act in good faith; we will not
attribute unfair or prejudicial motives to procurement officials on
the basis of inference or supposition. Triton Marine Constr. Corp.,
B-250856, Feb. 23, 1993, 93-1 CPD para. 171 at 6. In addition to
producing credible evidence showing bias, the protester must
demonstrate that the agency bias translated into action that unfairly
affected the protester's competitive position. Id. Pearl has
furnished no credible evidence to support its allegation; moreover,
since the record supports HUD's evaluation of Pearl's proposal (and
its consequent exclusion from the competitive range), it provides no
basis upon which to question the motives of the evaluators.
The protest is denied.
Comptroller General
of the United States
1. For comparison purposes, we note that under a 3-year contract,
beginning with an inventory of 850 properties and adding 100
properties per month, the cumulative inventory managed would be 4,450
properties.