BNUMBER: B-278126; B-278126.2
DATE: December 31, 1997
TITLE: Oceaneering International, Inc., B-278126; B-278126.2,
December 31, 1997
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DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective
Order. This redacted version has been approved for public release.
Matter of:Oceaneering International, Inc.
File: B-278126; B-278126.2
Date:December 31, 1997
Daniel J. Riley, Esq., and Stan Hinton, Esq., Baker & Botts, for the
protester.
Buel White, Esq., and Brian Cohen, Esq., Bell, Boyd & Lloyd, for
Phoenix Marine, Inc., an intervenor.
Veronica Murtha, Esq., and James Menapace, Esq., Department of the
Navy, for the agency.
Jacqueline Maeder, Esq., Glenn G. Wolcott, Esq., and Paul Lieberman,
Esq., Office of the General Counsel, GAO, participated in the
preparation of the decision.
DIGEST
1. Protest that agency improperly evaluated technical proposals is
denied where the record shows that the evaluation was reasonable and
consistent with the stated evaluation factors; protester's mere
disagreement with the agency's conclusion does not render the
evaluation unreasonable.
2. Allegation that awardee should have been disqualified as
nonresponsible for failure to demonstrate possession of a specific
line of credit is dismissed where the requirement for financial
capability at issue is not set forth in the form of a definitive
responsibility criterion.
DECISION
Oceaneering International, Inc. protests the award of a contract to
Phoenix Marine, Inc. under request for proposals (RFP) No.
N00024-97-R-4025(Q) issued by the Department of the Navy's Naval Sea
Systems Command (NAVSEA) for world-wide diving and diving-related
services. Oceaneering challenges the agency's evaluation of technical
proposals and argues that Phoenix Marine did not comply with a
definitive responsibility criterion.[1]
We deny the protest.
The RFP, issued via the Internet on October 18, 1996, contemplated the
award of a combination cost and fixed-price/indefinite quantity,
indefinite delivery contract for various diving-related services,
including underwater maintenance on ships' hulls and structures, dry-
and wet-welding, and salvage assistance. All services will be
performed in response to task orders issued on a per-diem cost plus
award fee basis (for operational services, including emergency or
field operations) or a firm, fixed-price basis (for non-operational
services not requiring field deployment).
The RFP called for the submission of separate technical and cost
proposals and advised that technical considerations were more
important than cost. The RFP provided that award would be made,
without discussions, to the offeror whose proposal, conforming to the
solicitation, was determined to be most advantageous to the
government. The evaluation factors and subfactors and the weight of
each factor or subfactor are listed below:
1. Personnel 33 percent
2. Quality Assurance Plan and Procedures27 percent
a. Quality Assurance Plan 8 percent
b. Welding and NDT Procedures[2]7 percent
c. Welding Certification Plan6 percent
d. NDT Personnel Certification6 percent
3. Corporate: Past Performance, Organization,
Management 27 percent
a. Past Performance 17 percent
b. Organization 6 percent
c. Management 4 percent
4. Equipment and Facilities 13 percent
a. Equipment 9 percent
b. Shore-based Support Facilities 4 percent
Two proposals, Oceaneering's and Phoenix Marine's, were received by
the January 24 closing date.[3] The proposals were reviewed
individually by each of the three members of the technical evaluation
review panel (TERP).[4] The evaluators rated each factor and
subfactor using adjectival ratings and corresponding point values on a
scale of 0 to 10 (9.5 to 10 for "outstanding"; 8.5 to 9.4 for
"excellent"; 7.5 to 8.4 for "good"; 6.5 to 7.4 for "acceptable"; 3.5
to 6.4 for "marginal"; and, 0 to 3.4 for "unsatisfactory").[5] The
individual scores assigned were averaged to arrive at a composite
numerical score for each of the subfactors. The numerical rating was
multiplied by the weight for the subfactor and the scores for each
subfactor were totaled. A proposal that received all outstanding
ratings would receive a maximum weighted point score of 10. The TERP
awarded the following scores for the proposals:
Maximum Oceaneering Phoenix Marine
Personnel 3.3 2.89 3.09
Quality Assurance2.7 2.44 2.34
Corporate
Experience 2.7 2.31 2.27
Equipment &
Facilities 1.3 1.18 1.11
TOTAL 10 8.82 8.81
The offerors proposed scheduled and non-scheduled cost factors from
which the agency generated a total evaluated cost factor. The agency
reports that Phoenix Marine's normalized cost is [DELETED] percent
lower than Oceaneering's normalized cost. The protester states that
the differential is only [DELETED] percent. In any event, the record
confirms that the awardee's cost is significantly lower than the
protester's cost. Because the total technical scores of the two
offerors were virtually identical and Phoenix Marine offered the lower
price, the Navy determined that Phoenix Marine offered the best value
to the government and awarded the contract on September 9.
Oceaneering challenges the evaluation of each offeror's past
performance, the evaluation of Oceaneering's proposed project manager,
and the evaluation of Phoenix Marine's facilities and equipment.
Oceaneering also protests that one member of the TERP failed to follow
the evaluation scheme outlined in the RFP and argues that Phoenix
Marine did not comply with an alleged definitive responsibility
criterion.[6]
TECHNICAL EVALUATION
Past Performance
The RFP instructs offerors to identify all public and private
contracts that they have performed within the past 3 years that are
similar in nature to this solicitation. The criteria for evaluating
past performance set forth in the RFP include the offeror's record of
conforming to contract requirements and to standards of good
workmanship; the offeror's record of forecasting and controlling
costs; the offeror's adherence to contract schedules; the offeror's
history of reasonable and cooperative behavior and commitment to
customer satisfaction; and, generally, the offeror's concern for the
interest of the customer.
In evaluating Oceaneering's past performance, the Navy reviewed
Oceaneering's proposal and examined Oceaneering's award fee scores as
the incumbent,[7] after determining that the award fee criteria used
by the Navy under the past contract were essentially equivalent to
this solicitation's criteria for assessing past performance. The TERP
concluded that Oceaneering's performance under the prior contract was
neither exceptional nor deficient, and that its performance
demonstrated neither strengths nor weaknesses. As noted above, the
rating scheme employed by the agency prescribed a rating of "good" to
reflect a proposal that was "adequately sufficient" with "no
indications of exceptional features . . . or contrarily, weaknesses."
Thus, under the Navy's rating plan, Oceaneering's past performance
was given a score of 8.4, which was the highest possible score under a
"good" rating.[8]
On the other hand, Phoenix Marine, a new corporation, had no corporate
experience. The Federal Acquisition Streamlining Act of 1994, 41
U.S.C. sec. 405(j)(2) (1994), states: "In the case of an offeror with
respect to which there is no information on past contract performance
. . . the offeror may not be evaluated favorably or unfavorably on the
factor of past contract performance." Similarly, the Federal
Acquisition Regulations (FAR) sec. 15.608(a)(2)(iii) (June 1997) provides
that firms "lacking relevant past performance history shall receive a
neutral evaluation for past performance." Based on the narrative
descriptions defining the adjectival ratings, the Navy assigned
Phoenix Marine a score of 8, which was the midpoint score for an
adjectival rating of "good." The Navy explains that the description
supporting a "good" rating--that is one that was "adequately
sufficient" with neither strengths or weaknesses--most closely
conformed to a neutral rating.
Oceaneering argues that both of these past performance evaluations are
improper. First, as to its own proposal evaluation, Oceaneering
argues that its past performance merited a higher adjectival rating
than that of a company with no past performance. Oceaneering also
argues that the award fee criteria under the prior contract differ
from the past performance evaluation criteria described in the
solicitation, and that the formula for calculating the award fee makes
the translation of the award fee factor to the RFP evaluation's scheme
impossible.
As for Phoenix Marine's past performance evaluation, Oceaneering
asserts that the Navy's evaluation lacks a rational basis.
Oceaneering acknowledges that, because Phoenix Marine has no corporate
history, it was entitled to a "neutral" score; however, Oceaneering
questions the Navy's determination that a neutral score equates to a
"good" rating, arguing that such an evaluation "flies in the face of
the ordinary meanings of the terms 'good' and 'neutral.'"
The evaluation of technical proposals is a matter within the
discretion of the contracting agency since that agency is responsible
for defining its needs and the best method of accommodating them.
Mesa, Inc., B-254730, Jan. 10, 1994, 94-1 CPD para. 62 at 5. In reviewing
an agency's technical evaluation, we will not reevaluate the
proposals; rather, we will examine the record to ensure that the
evaluation was reasonable and consistent with the RFP evaluation
criteria. Id. A protester's disagreement with the agency's judgment,
standing alone, is not sufficient to establish that the agency acted
unreasonably. Ionsep Corp., Inc., B-255122, Feb. 10, 1994, 94-1 CPD para.
97 at 3.
Here, we find no merit in Oceaneering's contention that the evaluation
of its past performance was improper. Oceaneering has not shown that
the agency unreasonably determined that its past performance
demonstrated neither strengths nor weaknesses. Regarding the criteria
on which the Navy relied, our review of the record shows that the
RFP's past performance criteria and the award fee criteria under the
prior contract are basically identical. As the Navy points out,
quality of performance under the award fee criteria encompasses the
offeror's record of conforming to contract requirements and the
standards of good workmanship; cost performance under the award fee
equates to the offeror's record of controlling costs; and, timeliness
equates to adherence to contract schedules. The past performance
criterion of reasonable and cooperative behavior and customer
satisfaction and concern for the customer are not, as the protester
suggests, isolated criteria, but can be reasonably viewed as being
part of all the other criteria concerning performance and quality.
As to the use of the award fee scores, we note that award fee
determinations are one indicator of successful performance and, thus,
it was reasonable for the agency to consider award fee determinations
in its evaluation of past performance.[9] In any event, as noted
above, the agency evaluators reviewed the protester's past performance
information and independently determined that Oceaneering's past
performance reflected neither strengths nor weaknesses. Under these
circumstances, we see nothing unreasonable in the agency's evaluation
of Oceaneering's past performance.
We also see no basis to question the agency's evaluation of Phoenix
Marine's proposal with regard to past performance. As discussed
above, the agency concluded that the narrative description of a "good"
rating--that is, "adequately sufficient" with no strengths or
weaknesses--most accurately reflected the regulatory requirement for a
"neutral" rating. We find that the agency reasonably equated a lack
of past performance history with a past performance history that was
neutral, in the sense that it was neither positive nor negative. It
is reasonable for an agency, as the Navy did here, to treat an offeror
without past performance information as equivalent to one with past
performance that was marked neither by strengths nor by
weaknesses.[10] In concluding that this is what the Navy did here, we
rely on the underlying substantive definition of the ratings, rather
than the connotation of the label attached to the definition (since
the underlying definition is, we agree, at odds with the "good"
label). In sum, we find that the Navy reasonably evaluated Phoenix
Marine's past performance.
Project Manager
Oceaneering next complains that the agency improperly evaluated the
skills and experience of its proposed project manager and alleges that
the evaluation was biased. We have reviewed the evaluation record and
Oceaneering's proposal, including the resume submitted by
Oceaneering's proposed project manager, and we conclude that the
evaluation was reasonable and consistent with the RFP.
The solicitation listed two desired qualifications for the project
manager: (1) undergraduate degree in science, engineering, or
business and (2) 8 years of experience with responsibility for the
management of marine-related operations.
Oceaneering alleges that the agency improperly treated desired
qualifications in education and experiences as if they were mandatory
and therefore downgraded its proposed project manager for failing to
meet them. Oceaneering also notes that the experience at issue was to
be in "the management of marine-related operations," complaining that
the agency interpreted this management more narrowly to mean only
"project manager" experience. The protester claims that its proposed
project manager served as the project manager for Oceaneering's
current contract since July 1995 and as project manager for a
Department of Transportation and Coast Guard contract in 1994 and
1995. Additionally, Oceaneering asserts that its proposed project
manager managed two 12-person inspection teams from 1991 through 1993
and directed diving crews for another firm from 1988 to 1991. The
protester contends that this experience totals more than the desired 8
years of "management of marine-related operations."
Because its proposed manager was rated "marginal," Oceaneering also
argues that the evaluation was biased. Oceaneering maintains that one
of the evaluators retaliated against the firm in his evaluation of
Oceaneering's proposed project manager because the evaluator was
allegedly removed from working on Oceaneering's prior contract at the
request of the proposed manager.
As noted above, the RFP listed desired qualifications without stating
that these qualifications were mandatory; thus, the RFP clearly
advised offerors of the specific skills and experience the Navy
sought. While a candidate who did not possess the desired
qualifications was acceptable, offerors were clearly on notice that
such a candidate could be scored lower than a candidate with the
desired credentials.
Here, the agency did not reject Oceaneering's proposed project manager
as "unacceptable," but rather rated him "marginal," primarily because
he did not demonstrate that he had 8 years experience in the
management of marine-related operations. Specifically, based on the
resume submitted, the agency found that Oceaneering's proposed program
manager had 2 years management experience on Oceaneering's current
contract. However, rather than the claimed 2 years of management
experience for work with the Department of Transportation and the
Coast Guard, the proposed project manager's resume, in fact, indicated
that his work was sporadic and amounted to only 9 months of actual
management experience. Similarly, the proposed program manager's
management of 12-person inspection teams reflected a 7-month effort,
rather than the 2 years claimed by the protester. As to Oceaneering's
assertion that its proposed manager "directed diving crews" for
another firm from 1988 to 1991, the proposed project manager's resume
stated that he was an "Ocean Engineer/Diver" providing "engineering
and program management support." In sum, the Navy determined that
Oceaneering's proposed project manager had a maximum of 6 years and 8
months of management experience. Based on our review of the record,
we see no basis to question the Navy's determinations.
Regarding the allegation of bias, the protester must provide credible
evidence showing bias and demonstrate that agency bias unfairly
affected the protester's competitive position. ASI Personnel Serv.,
Inc., B-258537.7, June 14, 1995, 95-2 CPD para. 44 at 7. Our Office will
not attribute unfair or prejudicial motives to procurement officials
on the basis of inference or supposition. Id. Here, as noted above,
the agency reasonably downgraded the proposed project manager for lack
of the desired experience. Accordingly, Oceaneering's allegation of
bias is without merit.
Equipment and Facilities
Oceaneering next argues that the evaluation of Phoenix Marine's
equipment and facilities was flawed. Because Phoenix Marine does not
own as much of its own equipment and facilities as does Oceaneering,
the protester argues that Phoenix Marine should not have been as
highly rated under this factor as Oceaneering.
The RFP required that the contractor provide (1) the equipment and
facilities to perform the qualification welding required under the
solicitation; (2) 1,000 square feet of enclosed warehouse controlled
access storage for government-furnished equipment; (3) an open tank
for conducting wet welding trials in seawater; and, (4) a hyperbaric
chamber suitable for conducting dry-chamber welds. Additionally,
Schedule D of the RFP listed minimum requirements for diving
equipment.
In its proposal, Phoenix Marine stated that it would purchase or
subcontract for the required equipment and provide facilities through
leasing arrangements. Specifically, Phoenix Marine proposed to meet
the open tank requirement by either constructing a tank [DELETED] or
subcontracting [DELETED]. Phoenix Marine also provided that it would
subcontract for [DELETED], lease facilities [DELETED], and purchase
much of the diving equipment listed on Schedule D. With its proposal
Phoenix Marine provided letters of commitment to subcontract for
existing equipment. Accordingly, the TERP determined that Phoenix
Marine's proposal had no weaknesses and assigned the proposal an
"excellent" rating.
The agency acknowledged in Oceaneering's debriefing that current
ownership of the equipment and facilities by the prime contractor was
beneficial to the agency and, noted that it had awarded Oceaneering
higher numerical scores than Phoenix Marine because the protester owns
the required equipment and facilities. However, the RFP did not
require ownership of the equipment and facilities, and Phoenix
Marine's proposal to purchase, lease, or subcontract for the required
equipment and facilities was permissible. The protester points to
nothing but general disagreement with the agency's assessment to
support its position. On this record, we have no basis to question
the agency's determination.
Failure to Follow Evaluation Scheme
Oceaneering also alleges that one of the three members of the TERP
failed to follow the evaluation scheme outlined in the RFP. The
protester bases this allegation on a memo written by this evaluator,
and the fact that this evaluator's scores were generally lower than
the scores of the other evaluators. The memo, which was part of the
member's evaluation sheets, states, in relevant part, that the rating
adjectives "are weighted far too heavily on the 'good' side" since a
subfactor which merely meets the criterion but does not exceed the
criteria must be rated as "good" and, even if weaknesses are apparent,
must be rated as "acceptable."
The protester argues that this evaluator "clearly scored according to
his own evaluation scheme." We disagree. Individual evaluators may
not agree on all aspects of an evaluation, and an expression of
disagreement with some aspects of an evaluation does not mean that the
evaluator failed to follow the evaluation scheme outlined in the
solicitation. Roy F. Weston, Inc., B-274945 et al.,
Jan. 15, 1997, 97-1 CPD para. 92 at 4 n.7; Stat-a-Matrix, Inc. et al.,
B-234141 et al.,
May 17, 1989, 89-1 CPD para. 472 at 6.
Here, while the memo on which the protester relies suggests that the
evaluator believed the adjectival ratings were overly generous, the
memo does not support the protester's contention that the evaluator
refused to follow the RFP evaluation scheme. Rather, the memo
outlines how the evaluator evaluated the proposals within the
parameters of the RFP's evaluation criteria. Specifically, the first
paragraph of the memo explains that the evaluator evaluated "the
specific qualifications of the individual person or item being
reviewed and compares the qualifications against the requirements put
forth in the RFP." We have reviewed the scores and do not find them
unreasonable. More importantly, it is clear that the evaluator
applied the same standards to both Oceaneering's and Phoenix Marine's
proposals. On this record, we find no merit in this portion of the
protest.
Definitive Responsibility Criteria
Finally, Oceaneering protests that Phoenix Marine is ineligible for
award because it failed to meet what Oceaneering asserts was a
definitive responsibility criterion. In this regard, section L of the
solicitation provides as follows:
The offeror will need the financial capability to simultaneously
conduct two or more underwater operations. It is estimated that
a single operation can cost as little as $20,000 or as much as
$2,000,000. The offeror will need the financial resources or
credit line to absorb these costs for a reasonable period after
initiation of the operation. Accordingly, upon written notice
from the Contracting Officer, the Offeror shall furnish all
information necessary for the Contracting Officer to determine
the financial responsibility of the Offeror.
Oceaneering alleges that this RFP provision required offerors to
demonstrate current funds or a credit line totaling $2,000,000, and
that Phoenix Marine provided documentation showing only an approved
line of credit of [DELETED] and commitments for funds by two Phoenix
Marine officers totaling [DELETED]. Oceaneering argues that, because
Phoenix Marine did not demonstrates an ability to produce $2,000,000,
it should have been eliminated from award consideration.
A definitive responsibility criterion is a specific and objective
standard established by an agency for use in a particular procurement
to measure a offeror's ability to perform the contract. See M&M
Welding & Fabricators, Inc.--Recon., B-271750.2, Mar. 26, 1997, 97-1
CPD para. 124 at 2. These special standards of responsibility limit the
class of offerors to those meeting specified qualitative and
quantitative qualifications necessary for adequate contract
performance. Id. Here, the requirement that offerors have the
financial capability to fund operations for a limited time period does
not set out a specific, objective standard measuring the offeror's
ability to perform; rather, the provision expresses in general terms a
factor which is encompassed by the contracting officer's subjective
responsibility determination. Our Bid Protest Regulations preclude us
from reviewing a contracting officer's affirmative responsibility
determination absent a showing of
possible bad faith on the part of government officials or that a
definitive responsibility criterion was not met. 4 C.F.R. sec. 21.5(c)
(1997). Since these circumstances are not present here, we will not
consider Oceaneering's allegations.[11]
The protest is denied.
Comptroller General
of the United States
1. Oceaneering also alleges that Phoenix Marine is ineligible for
award because it improperly obtained Oceaneering's proposal
information before the award of the contract in violation of the
Procurement Integrity Act, 41 U.S.C. sec. 423 (1994). Specifically,
Oceaneering protests that several of its key employees who played
significant roles in the development of Oceaneering's proposal were
also involved, without Oceaneering's knowledge, in the preparation of
Phoenix Marine's proposal. Thus, Oceaneering maintains that Phoenix
Marine improperly obtained proprietary information concerning
Oceaneering's proposal and used that information to Oceaneering's
detriment in the competition.
In response to these allegations, the Navy conducted an investigation
and concluded that the allegations were unsupported by Oceaneering.
However, the Navy advises that, because of the severity of the charges
and the conflicting testimony offered, the agency requested that the
Navy's Inspector General investigate further. We have contacted the
Navy's Office of Inspector General and confirmed that it is actively
investigating the allegations. In view of the Inspector General's
ongoing investigation, we are dismissing the protest issues under
investigation, pending completion of the Inspector General's
investigation. See Hazeltine Corp., B-235239, June 22, 1989, 89-1 CPD para.
592 at 3; Usatrex Int'l, Inc., B-231815.4, Oct. 31, 1988, 88-2 CPD para.
413 at 2. Upon completion of the investigation, the protester may
reinstate its protest regarding these issues.
2."NDT" refers to Nondestructive Testing.
3. Oceaneering, the incumbent, has been the prime contractor for these
services for most of the past 20 years; Phoenix Marine is a newly
incorporated company.
4. An initial TERP evaluation was completed in April. However, this
panel had difficulty confirming the scores assigned and, while it was
in the process of reaching consensus and preparing a final report, two
members became unavailable for continued service. Thus, two new
members were assigned to the TERP. New members were not shown the
draft report of the initial TERP. The newly-constituted TERP
completed a reevaluation of the proposals on July 1, which is the
evaluation at issue in the protest.
5. The adjectival ratings were defined in detail. For example, an
adjectival rating of "good" was described as follows:
The offeror's proposal is adequately sufficient with no
major weaknesses . . . . [A]ny weaknesses noted are of a
minor
nature . . . . A rating within GOOD is used when there
are no indications of exceptional features that could
prove beneficial,
or contrarily, weaknesses which may diminish the quality
of
the Offeror's performance . . . .
An "acceptable" rating was described as:
The offeror's proposal is minimally sufficient . . . .
[T]here are many areas for improvement . . . .
[I]ndicated weaknesses would diminish the quality of the
Offeror's performance . . . .
6. In its initial protest, Oceaneering also challenged the evaluation
of other personnel and the agency's cost analysis. The Navy fully
responded to these issues in its report, but the protester failed to
rebut the agency's response in its comments. Therefore, we consider
these issues to have been abandoned by the protester and we will not
consider them. Analex Space Sys., Inc., PAI Corp., B-259024,
B-259024.2, Feb. 21, 1995, 95-1 CPD para. 106 at 8-9.
7. While Oceaneering submitted information on a number of past
contracts, both the Navy and Oceaneering considered Oceaneering's
performance as the incumbent to be its most relevant experience.
8. In assessing a score of 8.4, the Navy also considered Oceaneering's
award fee scores for delivery orders completed by Oceaneering during
the prior 3 years. Oceaneering's average award fee score for the past
3 years was 8.4.
9. Oceaneering, in its proposal, used its final award fee score to
support its past performance.
10. It would seem preferable to advise offerors in the solicitation,
in more detail than was done here, regarding the way in which the
agency would implement the mandate for a neutral rating for offerors
lacking past performance information.
11. In any event, the protester misreads the requirement. The RFP
does not require, as Oceaneering alleges, that an offeror must be able
to obtain $2,000,000. While the RFP does state that an operation may
cost as much as $2,000,000, the solicitation specifically states that
an offeror needs only the financial resources to absorb the cost of
two or more operations for a reasonable period after initiation of the
operation. According to the agency, a reasonable period that an
offeror would be required to finance would be approximately two
months, not the entire period of the largest single operation.