BNUMBER: B-277505.2
DATE: October 31, 1997
TITLE: Crown Clothing Corporation, B-277505.2, October 31, 1997
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Matter of:Crown Clothing Corporation
File: B-277505.2
Date:October 31, 1997
Ruth E. Ganister, Esq., and Glenn L. Blackwell, Esq., Rosenthal and
Ganister, for the protester.
Timothy A. Sullivan, Esq., Starfield & Payne, for DeRossi & Son, Co.,
an intervenor.
Maria Ventresca, Esq., Defense Logistics Agency, for the agency.
Christina Sklarew, Esq., and Paul Lieberman, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protest challenging agency's evaluation of awardee's past
performance is denied where the record shows that the evaluation was
reasonable and consistent with the evaluation criteria set forth in
the solicitation.
2. Protest challenging source selection decision in best value
procurement is denied where agency reasonably concluded that the
protester's higher-priced proposal offered no advantages that
warranted paying the associated price premium.
DECISION
Crown Clothing Corporation protests the evaluation of proposals and
the source selection decision under request for proposals (RFP) No.
SPO100-96-R-0213, issued by the Defense Personnel Support Center
(DPSC), a field activity of the Defense Logistics Agency, for the
manufacture of Army dress coats for men.
We deny the protest.
The RFP was issued in December 1996, as a total small business
set-aside, to serve in part as a formal market survey to permit the
agency to decide whether the current market offered a better value
than could be obtained by exercising an option available under an
existing contract. It contemplated the award of an indefinite
quantity contract for the manufacture of Army dress coats, listing
maximum and minimum quantities for a base year with 1 option year.
The RFP, at section L, advised offerors that proposals would be
evaluated for both technical merit and price reasonableness, following
the evaluation procedures in section M of the RFP. The solicitation
stated that award would be made to the responsible offeror whose offer
conformed with this solicitation and was most advantageous to the
government. In that regard, the RFP stated that technical quality was
more important than cost or price, but that, the more proposals were
equal in their technical merit, the more important evaluated cost or
price would be.
The RFP stated that technical proposals would be used to assess the
efficiency of the offeror's production methods and the effectiveness
of their quality control procedures.
Offerors were instructed to submit a sample coat, referred to as a
"product demonstration model" (PDM), as part of their proposals. The
RFP identified the specification for the PDM as MIL-C-44211B and
stated that the failure of a model to conform to all requirements of
the specification could result in an unfavorable evaluation of the
offer.
The RFP listed the following technical evaluation factors, in
descending order of importance:
1. Product Demonstration Model
2. Past Performance
3. Electronic Data Interchange Capability
4. Manufacturing Plan [with four subfactors]
5. Quality Assurance Plan
6. Socio-Economic Program Support
The RFP provided some narrative guidance regarding the basis for
evaluating each of these factors. For example, it stated that the PDM
would be evaluated for conformance to visual and dimensional
requirements of the specification and standard. Regarding past
performance, it stated that the assessment of past performance would
be used in two ways: to evaluate the credibility of the offeror's
proposal, and to evaluate the relative capability of the offeror and
the other competitors to meet the performance requirements of the
proposed contract. Further, it stated that evaluation of past
performance would be a subjective assessment based on a consideration
of all relevant facts and circumstances and would not be based on
absolute standards of acceptable performance. Offerors were
instructed to describe their experience with producing the same or a
similar item within the last 2 years. The RFP required offerors to
describe both delivery and quality performance under government and
commercial contracts and advised offerors to furnish an explanation of
substandard quality and/or delinquent delivery, where applicable.
The RFP provided that after technical evaluation, technical proposals
would be given an adjectival rating of highly acceptable, acceptable,
marginally acceptable, or unacceptable. The RFP provided some
description of the adjectives' application to each of the evaluation
factors. For example, it stated that a highly acceptable PDM would
meet the stated requirements of the specification and have no
deficiencies, whereas an acceptable PDM would meet the stated
requirements of the specification but would exhibit deficiencies that
would be easily correctable during production.
Four firms, including Crown, submitted proposals with PDMs. Technical
proposals were evaluated and given adjectival ratings. After
reviewing the evaluations, the contracting officer assigned an overall
rating to each proposal. Crown's proposal and the proposal of one
other offeror, DeRossi and Son Co., were rated acceptable overall,
based on the following ratings:
Crown DeRossi
PDM Acceptable Highly Acceptable
Past
Performance
Acceptable
Acceptable
EDI Acceptable + Acceptable +
Mfg. Plan Acceptable Acceptable
Q/A Plan Acceptable Acceptable
Overall Acceptable Acceptable
The remaining two proposals received lower ratings. DeRossi's price
was the lowest submitted and was substantially lower than Crown's
price, which was the highest for both the base year and the option
year.
The contracting officer determined that DeRossi's proposal represented
the best value to the government, based on its technical superiority
and low price. The contracting officer also determined that it would
be more beneficial to award a contract under the solicitation at issue
than to exercise the available option. The contract was awarded to
DeRossi without discussions (as permitted by the terms of the
solicitation), and this protest followed.
Crown protests that it was unreasonable for DeRossi's proposal to
receive an acceptable rating for past performance, that Crown's PDM
should have been rated highly acceptable, and that the RFP award
provision required that the source selection decision be based solely
on technical factors without considering price.
In reviewing whether a proposal was properly evaluated, our Office
will not reevaluate the proposal, as the determination of whether a
proposal meets the contracting agency's needs is a matter within the
agency's discretion. We will examine the record to determine whether
the evaluators' judgments were reasonable and consistent with the
stated evaluation criteria. Triton Marine Constr. Corp., B-250856,
Feb. 23, 1993, 93-1 CPD para. 171 at 2. Here, the record supports the
agency's evaluation of DeRossi's and Crown's proposals.
At the core of the past performance evaluation issue is a dispute
regarding the performance of a prior DPSC contract under which DeRossi
was the prime contractor and Crown performed as subcontractor. This
contract,
No. 95-C-0311 (-0311), was awarded to DeRossi in 1995 for the
manufacture of approximately 177,000 Air Force dress coats. DeRossi
subcontracted for approximately 15,000 coats with Crown. During the
course of performance, slightly fewer than 4,000 coats that were
produced by Crown were found to be defective and were ultimately
repaired or replaced by DeRossi. Crown essentially argues that
responsibility for the deficiencies under that contract should be
assessed against DeRossi as the prime contractor. However, while
Crown and DeRossi vigorously dispute many aspects of the performance
of that contract, the record shows that Crown's President admitted
responsibility for the problem at the time it occurred, stating that
the defects were caused by a breakdown in Crown's sewing section.[1]
Although a prime contractor is responsible for the performance of its
subcontractor, Neal R. Gross & Co., Inc., B-275066, Jan. 17, 1997,
97-1 CPD para. 30 at 4, a protester will not be heard to challenge the
past performance of a competing offeror as a prime contractor based on
its deficient performance as that competing offeror's subcontractor.
Particularly in light of Crown's concession, the agency reasonably
viewed Crown as primarily responsible, since the defective articles
were produced by Crown and shipped directly by Crown to the agency,
whereas the coats that DeRossi produced were both acceptable and
delivered within the established schedule. Moreover, even if DeRossi
is considered responsible based on its obligation as the prime
contractor, the agency reasonably rated DeRossi's proposal acceptable
overall for past performance based on other information in the record
that is not disputed.
The RFP instructed offerors to describe their experience with
producing the same or a similar item within the last 2 years.
DeRossi's proposal listed contracts under which it was currently
performing and an additional 14 contracts for men's and women's coats
that had been awarded to the firm since 1994; for each of these,
delivery was made on or ahead of schedule. The evaluation sheet noted
that the standard for past performance is met when "[p]revious
performance demonstrates ability to meet contract delivery schedules
without significant quality problems." Under the evaluation scheme
established in the RFP, an acceptable rating for past performance is
given when an "[o]fferor's record of past performance demonstrates an
acceptable commitment to customer satisfaction and an overall record
of timely delivery of quality products/services." The evaluation
sheet for DeRossi's proposal includes the following summary narrative
justification of the rating given to DeRossi for this factor:
Highly experienced. Deliveries are always on time or ahead of
schedule. One quality problem noted but only on the portion
subcontracted to Crown. To DeRossi's credit, this portion they
quickly replaced/repaired. No negative impact on supply
position.
Regardless of whether DeRossi or Crown was ultimately responsible for
the defective coats under contract -0311, it is clear from the record
that these coats represent a small fraction of the coats delivered
under that contract, and an even smaller fraction of the total
deliveries made by DeRossi during the 2-year period being evaluated.
Further, the agency explicitly took into account the performance
problem that Crown insists should be attributed to DeRossi but also
recognized that DeRossi had repaired or replaced the defective coats
quickly enough to still meet its deadline under that contract. In
view of the fact that DeRossi had performed all of the other numerous
contracts listed in its proposal without any deficiencies and in a
timely manner, the agency had a reasonable basis for its determination
that DeRossi's overall past performance "demonstrates ability to meet
contract delivery schedules without significant quality problems." In
short, we conclude that the acceptable rating given to DeRossi's past
performance gives appropriate consideration to DeRossi's performance
under contract -0311 and was reasonable and consistent with the terms
of the RFP.
Crown also objects to its own evaluation under the past performance
factor, arguing that it should have been rated highly acceptable. The
record shows that Crown listed six contracts that it had performed,
including the subcontract with DeRossi. Although four of the five
contracts that Crown performed as the prime contractor were delivered
on or ahead of schedule, under one of its larger-volume contracts, the
firm's delivery was late by nearly 3 weeks and the delinquency was
considered inexcusable. In order to satisfy the standard established
in the RFP for a highly acceptable rating for this factor, an
offeror's record of past performance must demonstrate "an exceptional
commitment to customer satisfaction and a superior overall record of
timely delivery of quality products." Crown's inexcusable delinquency
under one of its large volume contracts by itself provides a
reasonable basis for the agency's conclusion that Crown's performance
record fell short of the highly acceptable standard, and instead fell
under the standard of demonstrating "an acceptable commitment to
customer satisfaction and an overall record of timely delivery of
quality products." In sum, the record simply does not support Crown's
contention that its past performance record should have been rated
higher than DeRossi's.
Crown also argues that the agency improperly considered price in its
source selection decision. Crown alleges that the agency's deletion
of a requirement in the RFP evaluation section for a "business
evaluation," which calls for pricing information and a cost realism
evaluation, "tells offerors distinctly that technical qualifications
will be the determining factors regardless of prices offered."
This argument is frivolous. The RFP stated that the award would be
made to the offer that was most advantageous to the government and it
clearly indicated that price was part of this assessment. Further,
the evaluation provision specifically stated that price would become
more important as technical proposals became more equal in technical
merit. Crown's reading of the solicitation is inconsistent with the
terms of the selection clause and would call for the legally
impermissible selection of the highest technically rated proposal
without consideration of cost. Such a result is inconsistent not only
with the RFP but with the requirement in the Competition in
Contracting Act of 1994 (CICA) that the government consider cost or
price as a significant factor in all its selection decisions. See 10
U.S.C. sec. 2305(a)(2)(A) (1994); Federal Acquisition Regulation sec.
15.605(b)(1)(i). An evaluation and source selection which fails to
give significant consideration to cost is inconsistent with CICA and
cannot serve as the basis for a reasonable source selection. See
Coastal Science and Eng'g, Inc., 69 Comp. Gen. 66, 67-68 (1989), 89-2
CPD para. 436 at 3.
DeRossi proposed the lowest price, and the total price difference
between DeRossi's proposal and Crown's proposal was more than a
million dollars in a procurement with a total value of approximately
$16 million. Even if Crown's overall technical rating were equal to
DeRossi's, which would be the case if the rating for its PDM were
changed to highly acceptable,[2] the price difference would justify
the selection of DeRossi as the best value offeror. As noted above,
RFP clause 52.215-9P19, "Evaluation Factors for Award," expressly
stated that "[a]s proposals become more equal in their technical
merit, the evaluated cost or price becomes more important." Thus,
even if we were to conclude that the two proposals should have been
considered technically equal, the price advantage offered by DeRossi
provides a reasonable basis for DPSC's selection of DeRossi's proposal
as representing the best value to the government.
The protest is denied.
Comptroller General
of the United States
1. Crown raises a number of allegations concerning that contract's
performance, such as whether additional defects were present in coats
manufactured by DeRossi that should have caused the rejection of
additional lots (but did not) and whether the agency held Crown
responsible for the deficient coats under the evaluation of Crown's
proposal under other solicitations, which are simply not relevant to
the issue of whether DPSC's evaluation of past performance under this
procurement was reasonable.
2. Crown also protests that its PDM was improperly evaluated. DPSC
gave the protester's PDM an acceptable rating, noting as the only
minor deficiency that "the second and third front buttonholes are
slightly crooked." Crown disputes this finding as incorrect and
argues that its PDM should have been rated highly acceptable. We will
not resolve this matter since Crown would not be entitled to the award
even if we agreed that the buttonholes on its PDM were not crooked and
that its PDM therefore should have been rated highly acceptable.