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.