BNUMBER: B-277917; B-277917.2; B-277917.4
DATE: December 8, 1997
TITLE: Magnum Products, Inc.; Amida Industries, Inc., B-277917; B-
277917.2; B-277917.4, December 8, 1997
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DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective
Order. It has been approved for public release.
Matter of:Magnum Products, Inc.; Amida Industries, Inc.
File: B-277917; B-277917.2; B-277917.4
Date:December 8, 1997
William E. Hughes III, Esq., Whyte Hirschboeck Dudek S.C., for Magnum
Products, Inc., and Irvin V. Plowden, Jr., for Amida Industries, Inc.,
the protesters.
Alexander J. Brittin, Esq., and Suzanne L. Karbarz, Esq., McKenna &
Cuneo, L.L.P., for T & J Manufacturing, Inc., an intervenor.
Joseph Summerill, Esq., U.S. Department of Justice, Federal Prison
Industries, for the agency.
Susan K. McAuliffe, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Agency's determination that protester's revised proposal remained
technically unacceptable after discussions, and that the proposal
should be eliminated from further consideration for award, was proper
where the agency reasonably concluded that the proposal would require
major revision in order to become acceptable and the record shows
that, in light of overall technical inferiority and higher price of
its proposal, protester did not have a reasonable chance of receiving
award.
2. Protest that awardee fails to comply with solicitation's
experience requirements is denied where solicitation did not expressly
prohibit offerors from relying on proposed subcontractors to meet the
requirements and awardee's proposal shows that proposed major
subcontractor has required experience.
DECISION
Magnum Products, Inc. and Amida Industries, Inc. protest the award of
a contract to T & J Manufacturing, Inc. under request for proposals
(RFP) No. 1PI-R-0613-97, issued by the Department of Justice, Federal
Prison Industries (FPI) for portable floodlight systems and related
support services. Magnum protests that the agency's exclusion of its
proposal from the competitive range was unreasonable; both Magnum and
Amida challenge the award to T & J.
We deny the protests.
The RFP contemplated the award of a 5-year fixed-price
requirements-type contract for the manufacturing and some assembling
of portable floodlight systems, and related support services--the
systems are to be delivered to FPI as kits to be assembled by inmates
and supplied by FPI to other federal agencies.
Section M of the RFP advised offerors of the following evaluation
factors for award, listed in descending order of importance:
technical quality (including subfactors for reliability and market
acceptance, technical conformance and performance, certifications,
maintenance and availability of replacement parts, safety features,
and quality assurance, reliability, and maintainability programs);
management (including previous performance experience and key
personnel); and price. Alternate proposals, as separate submissions
accompanying a fully compliant basic offer, were permitted. Award was
to be made to the responsible offeror submitting the offer determined
to be most advantageous to the government.
Magnum, Amida, and T & J were among those offerors whose initial
proposals were included in the competitive range for discussions.
Each offeror was told of the agency's concerns regarding
weaknesses/deficiencies in its proposal. After reviewing the revised
proposals, the agency concluded that Magnum's proposal was technically
unacceptable and excluded it from the competitive range. Amida's and
T & J's proposals remained in the competitive range; further
discussions were held with these firms on August 11, and best and
final offers (BAFO) were submitted and evaluated. T & J's BAFO (at a
unit price of $9,259) received a slightly higher technical/management
evaluation score and offered a considerably lower price than Amida's
BAFOs. Award was made to T & J on August 28. These protests
followed.
Magnum's protest
Magnum protests the agency's decision to exclude its proposal from the
competitive range, which was based primarily on a perceived deficiency
regarding the proposed engine. As explained below, the record here
shows that the agency reasonably excluded Magnum's proposal from the
competitive range.
The evaluation of proposals and resulting determination as to whether
a particular offer is in the competitive range are matters within the
discretion of the contracting agency since it is responsible for
defining its needs and determining the best method of accommodating
them. Network Sys. Solutions, Inc., B-249733, Dec. 14, 1992, 92-2 CPD para.
410 at 4. Generally, offers that are technically unacceptable as
submitted and that would require major revision to become acceptable
may be excluded from the competitive range. Id. Further, a proposal
may be excluded from the competitive range if, based upon the array of
technical ratings actually obtained by the offerors and consideration
of proposed prices, the proposal does not stand a real chance of being
selected for award. Intown Properties., Inc., B-272524, Oct. 21,
1996, 96-2 CPD para. 149 at 4. In reviewing an agency's evaluation and
competitive range determination, we will not independently reevaluate
proposals but instead will examine the evaluation to ensure that it
was reasonable and in accordance with the stated evaluation criteria.
Id. at 2. Mere disagreement with the agency's technical judgment does
not show that the evaluation was unreasonable. Seair Transp. Servs.,
Inc., B-252266, June 14, 1993, 93-1 CPD para. 458 at 4.
As part of the technical evaluation here, offerors were to show
compliance with the solicitation's statement of work requirements,
including a performance purchase description (PPD) for the item, which
set out minimum requirements for acceptability. See RFP sec. L.B.1. The
PPD required that the engine-generator set have a proven reliability
record (PPD sec. 3.1.6.1) and be designed for "long life" (PPD sec. 3.1.4
and A.3.2.4.1) in harsh environments with "minimum maintenance and
little or no downtime." PPD sec. A.3.2.4.1. The PPD, at sec. 3.1, also
specifically required, as one of the "minimum essential criteria,"
that the engine be "capable of using [m]ulti [f]uels and . . . comply
with the requirements in Appendix B" (PPD sec. 3.1.4.2); in relevant
part, Appendix B (at PPD sec. B.3.5.1) specified "JP-5" and "JP-8" jet
fuel as "standard operating fuel" for the engine.
Magnum's initial proposal advised that when using JP-5 and JP-8 jet
fuels, its proposed Isuzu engine is "[n]ot meant for continuous, high
accumulation of operating hours." The agency viewed this as an
unacceptable restriction on fuel use and engine duration. Since the
protester's proposed engine/jet fuel restriction was viewed as
inconsistent with the solicitation's long life and multi-fuel use
requirements, the agency pointed out the following deficiency to
Magnum during discussions: "The proposed engine has a restriction of
long hours using [JP-8] or other jet fuels."
The protester's revised proposal did not remove the Isuzu engine
restriction; rather, in its revised proposal, Magnum stated that it
was "convinced [Isuzu is] not concerned about the use of jet fuels in
this application." To support this contention, Magnum submitted with
its revised proposal a copy of a letter from Isuzu which stated that,
although Isuzu has not experienced problems with its engine due to the
use of low lubricity jet fuels such as JP-5 and JP-8, it continues "to
issue [its] standard jet fuel statement [including the challenged JP-5
and JP-8 fuel restriction] to engine users, indicating that there is
at least the theoretical potential for decreased injection system
component life." The agency evaluators found that Magnum's revised
proposal remained technically unacceptable for failure to correct,
among other things, this engine-related deficiency. Magnum was
notified that its proposal was excluded from the competitive range
because it failed to meet RFP minimum requirements; the major
deficiency cited was Magnum's proposed engine's failure to satisfy the
RFP's multi-fuel use requirement because of the stated restriction
associated with the use of certain required jet fuels. The agency
determined that the deficiency could not be cured without major
revision to the proposal.
Magnum states that the agency unreasonably concluded that its proposal
was unacceptable and required major revision to become acceptable.
Magnum first contends that the engine manufacturer which issued the
challenged restriction, Isuzu, states that the jet fuel problem is
theoretical only. Magnum contends that since Isuzu has not
experienced actual problems with the engine's use of jet fuel, the
restriction should not render the proposal unacceptable. Our review
of the record, however, confirms that the agency had a reasonable
basis to conclude that the Isuzu restriction clearly is at odds with
the RFP's requirements for a heavy-duty (in terms of both durability
and duration of use), reliable, multi-fuel unit. Although Isuzu says
the restriction results from theoretical concerns, the fact remains
that the restriction against the use of required fuels for any long
period of time, contrary to the agency's needs, has not been removed
from the protester's proposal. Additionally, despite the fact that
Magnum states generally that all engines are subject to certain
performance problems when using jet fuels, there is no persuasive
support in the record for this contention, and, moreover, no other
offeror expressly restricted the use of its engine with required fuels
as Magnum did. Further, in our view, the materiality of the
restriction is supported by the fact that acceptance of that
restriction would not only constitute a waiver of requirements for
Magnum, but would also affect the legal relationship between the
parties. For instance, the agency's position on future claims for
performance-related problems from the proposed engine's use of the
required jet fuels could be compromised by the agency's acceptance of
the restriction, since such acceptance could reasonably be viewed as a
waiver of contractor liability in this regard. See generally Bishop
Contractors, Inc., B-246526, Dec. 17, 1991, 91-2 CPD para. 555 at 3.
Magnum next contends that substitution of its proposed engine would
constitute only a minor revision to its proposal because different
engines are essentially interchangeable in the engine/generator set.
We see no basis to question the reasonableness of the agency's
determination to the contrary. The agency first points out that
substitution of the engine could require numerous modifications to the
engine-generator set; specifically, an Air Force engineer states that
"[e]ngine mounting, vibration isolators, air management for the engine
and for the generator, engine cooling system, exhaust system, control
system, fuel supply hoses, electrical wiring, etc. would all require
some engineering evaluation and modifications." The Air Force
engineer further explains that the engine is the most significant
sub-component from a technical standpoint and that changing the engine
would be relevant to the agency's evaluation of the proposal under all
of the technical evaluation criteria and would involve major revision
to the proposal. The protester does not refute this position or
provide detailed technical support for its general conclusion that
alternate engines are "easily interchangeable." Affidavit of Thomas
Joseph, submitted with Magnum Comments, Oct. 17, 1997.
In our view, the record supports the Air Force's position that a
substantial amount of technical information about any substituted
engine would have had to be provided by Magnum, since the engine would
have to be evaluated under all the subfactors--e.g., technical
conformance and performance--of the technical quality evaluation
factor. The protester's unsupported, general contention that other
engines are interchangeable in its system is simply insufficient to
show that the agency's determination that engine substitution would
entail major proposal revision was unreasonable, since even if certain
engines were physically interchangeable in the proposed system, a
major proposal revision--to include technical data on the substituted
engine for evaluation by the agency--would still be required.[1]
Finally, in addition to the deficiency related to its proposed
engine's restricted use, the record provides substantial support for
the significant downgrades in evaluation score assigned to Magnum's
technical proposal for a number of other deficiencies which the
protester does not challenge. For instance, Magnum was advised during
discussions of other material deficiencies in its proposal, which the
firm failed to cure in its revised proposal, regarding its failure to
provide sufficient reliability, performance, and delivery information
to meet the essential minimum criteria of the solicitation.[2]
Consequently, the Magnum proposal was assigned a substantially lower
overall evaluation score (including a substantially lower management
proposal score) than T & J's and Amida's proposals. Magnum's proposed
price was also substantially higher than these two offerors' prices.
Magnum concedes that a downgrade for the engine restriction might have
been reasonable (rather than a finding of technical unacceptability)
in terms of maintenance and life-cycle costs, and Magnum does not
challenge the agency's critical evaluation of (and substantial
downgrade for) other portions of its proposal. Magnum likewise does
not contend that substitution of the proposed engine (the subject of
its protest) would have either raised its proposal's technical score
to such an extent as to outweigh its comparatively low management
score, or that such substitution would have lowered its proposal's
substantially higher price. Accordingly, in light of the protester's
overall technically inferior proposal and substantially higher price,
the record clearly supports the agency's conclusion that the firm had
no reasonable chance for award; the proposal, therefore, properly was
excluded from the competitive range for further consideration for
award. See Intown Properties, Inc., supra, at 4-5.[3]
Amida's protest
Amida contends that the agency improperly considered the experience
and qualifications of T & J's major subcontractor, Allmand Brothers, a
floodlight manufacturer, in determining that T & J met the
solicitation's experience requirements. The RFP called for award to
an "experienced portable floodlight manufacturing firm" (RFP sec. C.4.1)
that has "5 years experience in . . . floodlight systems" (RFP sec.
C.4.2). Amida contends that consideration of a subcontractor's
experience to satisfy these requirements is not permitted by the RFP.
In support of this argument, Amida relies on section C.4.1. of the
RFP, which states that the agency "seeks to enter into a development
contract with an experienced portable floodlight system manufacturing
firm." Amida also points to the agency's response to a question
received during the pre-proposal question and answer period. One
offeror contended that the "commercial floodlight manufacturer"
requirement was unduly restrictive--the offeror suggested that the
"specification requirements can be met utilizing non-development item
major [subassemblies] without this provision." The agency responded
as follows:
The requirement for "commercial floodlight manufacturer" is not
unduly restrictive and serves a material purpose. The
solicitation is for a joint agreement with a commercial
floodlight manufacturer that has previous experience and
expertise to provide manufacturing data, unassembled parts,
subassemblies, technical direction, and prior knowledge for [the
agency] to assemble/manufacture reliable and durable floodlight
units. A company that has not manufactured floodlights
previously has less experience to provide services and materials
required.
As a general rule, the experience of a technically qualified
subcontractor may be used to satisfy experience requirements for a
prospective prime contractor. See Tutor-Saliba Corp., Perini Corp.,
Buckley & Co., Inc., and O & G Indus., Inc., A Joint Venture,
B-255756, Mar. 29, 1994, 94-1 CPD para. 223 at 4-5. If a solicitation by
its express language prohibits satisfying a particular experience
requirement through the experience of a prospective subcontractor,
however, such a provision limits a prime contractor from relying on a
subcontractor to comply with the experience criterion. Id. at 5.
Amida does not challenge the agency's determination that Allmand has
the requisite experience and qualifications, but rather states that
the terms of the RFP do not permit consideration of a subcontractor's
experience to meet the requirements. Although the RFP (including the
pre-proposal question and answer) emphasizes the importance of
floodlight manufacturing experience to better ensure reliability and
successful performance of the contract, and indicates that the agency
anticipated a joint agreement with a commercial floodlight
manufacturer, the RFP contains no express prohibition against a prime
contractor relying on a subcontractor or other third party to comply
with the solicitation requirements.[4] Given the lack of any
prohibition in the RFP on reliance on a subcontractor's experience, it
was proper for subcontractor experience to be attributed to the
offeror for purposes of assessing floodlight manufacturer/supplier
involvement and experience. Consequently, we see no basis to object
to the agency's consideration of Allmand's experience in determining
whether T & J satisfied the RFP's requirements.[5]
With regard to the agency's determination that T & J in fact did
satisfy the experience requirements, T & J's proposal contemplates a
significant role for Allmand in performance of the contract's
floodlight manufacturing requirements, and it is undisputed that
Allmand has the requisite floodlight manufacturing experience to
comply with the RFP requirements. Accordingly, we think the agency
reasonably found that T & J, through its major subcontractor,
satisfied the RFP's experience requirements.[6]
The protests are denied.
Comptroller General
of the United States
1. Magnum also contends that it offered an alternate engine in its
revised proposal that the agency failed to evaluate. The Magnum
proposal provided that:
Isuzu is the engine manufacturing and service organization we
recommend for your application. Kubota is another manufacturer
of diesel engines which could be used in this application. . . .
However, we believe Isuzu is the better engine . . . We submit
Kubota's documentation in order to support the general assertions
we present and to let you see the like nature between engine
manufacturers.
The agency states that, although the Magnum revised proposal mentions
Kubota, no Kubota engine was proposed by the firm. Our review of the
Magnum proposal confirms the reasonableness of the agency's
position--the reference to Kubota is clearly for comparison to
Magnum's proposed Isuzu engine; the Kubota engine was not priced by
Magnum in the proposal, requisite technical data for the Kubota engine
were not provided, and there was no separate proposal submission made
for that engine, as required by the RFP for agency consideration of
any alternate proposal.
2. Specifically, Magnum was told during discussions that the firm's
proposal, among other things, failed to "supply documentation of the
combined engine generator set performance history as a set" and that
the proposal failed to provide required past performance and contract
delivery schedule information. In its revised proposal, Magnum
explained that it did not provide the required documentation regarding
its proposed engine-generator set's reliability and performance
history since Magnum had no experience with or reliability data
regarding these two sub-components working as a set. The revised
proposal also did not include detailed past performance and delivery
schedule information, but rather, provided the protester's assurances
that it believed it could meet all of the contract requirements.
3. With respect to Magnum's challenge to the award to T & J, under our
Bid Protest Regulations, a party is not interested to maintain a
protest if it would not be in line for award if the protest were
sustained. See 4 C.F.R. sec. 21.0(a) (1997). Since the agency
reasonably excluded Magnum's proposal from the competitive range for
further consideration for award, and since another offeror's
acceptable proposal was placed in the competitive range, Magnum is not
an interested party to challenge the award to T & J. See The
Hines-Ike Co., B-270693, Mar. 15, 1996, 96-1 CPD para. 158 at 4-5.
4. Subcontracting was plainly contemplated under the
solicitation--subcontractor past performance and financial information
was specifically requested by the solicitation (RFP sec. L.C.1.a), and,
without differentiating between prime contractor and subcontractor
performance information, the RFP instructions (at sec. L.C.1.b) provided
in general terms that "[p]erformance information provided by the offer
and any additional data obtained by the Government will be used for
both responsibility determinations [and for evaluation purposes.]"
5. Similarly, the RFP's stated evaluation factors did not limit
consideration by the agency of a proposed subcontractor's experience
and technical expertise. Thus, we also do not find persuasive Amida's
general protest allegation that the evaluators should have assigned
greater risk to the awardee's proposal due to T & J's lack of its own
floodlight manufacturing experience. Our review of the record
confirms that the agency's risk assessment reasonably reflects the
overall merits of the proposal, including the strong technical and
management proposal submitted by T & J based upon its own substantial
government contract experience and the specialized floodlight
experience of its subcontractor.
6. In its supplemental report comments, Amida contends that even
though Allmand is a proposed subcontractor rather than the actual
offeror, since the agency considered Allmand's experience in
determining T & J's compliance with the RFP's qualification
requirements, the agency should have evaluated Allmand's business
information before awarding the contract. We have reviewed the
awardee's technical proposal and the agency's record of its evaluation
of that proposal in response to the protester's supplemental
allegations. Our review confirms that a substantial amount of Allmand
information--regarding Allmand's business (including current financial
data and evidence of the firm's 40 years of floodlight manufacturing
experience), products (including reliability and sales data), and
numerous outstanding past performance references--was provided in the
T & J proposal and was considered by the agency in its evaluation of
that proposal. Consequently, Amida's contention that the agency
failed to evaluate Allmand's business information and qualifications
is simply not supported by the record.