BNUMBER: B-278352
DATE: December 15, 1997
TITLE: For Your Information, Inc., B-278352, December 15, 1997
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Matter of:For Your Information, Inc.
File: B-278352
Date:December 15, 1997
Edward V. Gregorowicz, Jr., Esq., and Frederick P. Hink, Esq., for the
protester.
James K. Kearney, Esq., Scott D. Chaplin, Esq., and Theodore W.
Atkinson, Esq., Reed Smith Shaw & McClay, for RGII Technologies, Inc.,
an intervenor.
Kimberly A. Kegowicz, Esq., U.S. Coast Guard, for the agency.
Henry J. Gorczycki, Esq., and Guy R. Pietrovito, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
In a negotiated procurement for services, a proposal that offers
personnel that do not satisfy the solicitation's personnel
qualification requirements is unacceptable and may not properly form
the basis for award.
DECISION
For Your Information, Inc. (FYI) protests the award of a contract to
RGII Technologies, Inc. under request for proposals (RFP) No.
DTCG23-97-R-HRM001, issued by the U.S. Coast Guard for information
technology support services. FYI contends that RGII's proposal did
not satisfy the RFP's personnel qualification requirements and was
unacceptable.
We sustain the protest.
The RFP provided for the award of an indefinite delivery/indefinite
quantity contract with fixed-price, hourly labor rates on a best value
basis. Offerors were informed that the procurement would be conducted
as a two-phased competition, restricted to small business concerns
certified under the Small Business Administration's section 8(a)
program. Phase I was stated to be less important than phase II.
Under phase I, the agency would evaluate "mini-proposals" and past
performance, and advise offerors of their chances of receiving award.
Under phase II, proposals would be evaluated under the following
factors, listed in descending order of importance: oral
presentation/slides,[1] personnel data forms (PDF), and cost/price.
The phase II technical evaluation factors together were stated to be
significantly more important than cost/price.
The RFP identified 10 labor categories, all designated as key
personnel positions. Minimum personnel qualification requirements for
personnel proposed in each labor category were listed in the statement
of work. Section M of the RFP informed offerors that "[t]he quality
and quantity of all proposed personnel must meet the stated minimum
qualification in Section C."
Offerors were required to submit PDFs for 50 percent of the personnel
proposed for each labor category. For each PDF, offerors were to
include the individual's qualifications, education, and employment
history to demonstrate compliance with the qualification requirements.
Phase I proposals were received from 51 firms; only those firms whose
proposals were evaluated to be blue/superior in phase I were asked to
continue, although all firms were permitted to do so.[2] RGII and
FYI, the incumbent contractor, were not asked to continue because
their proposals were evaluated to be green/satisfactory. Phase II
proposals were received from 5 firms, including RGII and FYI. RGII's
and FYI's proposals (and all but one of the remaining proposals) were
evaluated by the technical evaluation team (TET) to be
green/satisfactory overall. The other proposal was rated
yellow/marginal overall. The TET assessed all phase II proposals as
red/unsatisfactory under the PDF factor. Discussions were conducted
with all offerors on cost/price and PDFs, and best and final offers
(BAFO) requested.
All offerors submitted BAFOs, all of which the TET found to be
green/satisfactory overall. Only FYI's BAFO, however, was found to
satisfy the stated personnel qualification requirements. RGII's BAFO
was assessed to be yellow/marginal under the PDF factor because
personnel identified under 5 of the 10 labor categories did not
satisfy the qualification requirements. All of the BAFOs were
determined to have reasonable and realistic prices. RGII's BAFO was
the lowest priced, and FYI's BAFO was the third lowest priced. The
TET recommended award either to the offeror proposing the highest
price or to FYI.[3]
The source selection official (SSO), noting that all proposals were
rated green overall, requested that the TET justify its recommendation
for making award on a basis other than lowest price. The TET informed
the SSO of its concern with RGII's low-priced proposal and that it
doubted RGII's ability to obtain qualified personnel, particularly
because RGII failed to propose qualified personnel even after
discussions.
The SSO then requested that the TET and contracting officer verify
RGII's past performance. The contracting officer informed the SSO
that RGII's past performance was superior. The SSO determined that
RGII's offer was the best value to the government, finding:
The risk associated with PDFs is minimized since the Coast Guard
must approve all PDFs prior to employees coming on board. The
cost differential between FYI and RGII did not justify [an award
to FYI].
Specifically, the SSO concluded that RGII's failure to propose
qualified employees "will be dealt with under the applicable clauses
as a contract administration issue" and that any risk arising from
these proposal deficiencies were mitigated by RGII's strong past
performance references. Award was made to RGII, and this protest
followed. Based upon the written determination of the head of the
contracting activity that proceeding with performance was in the best
interests of the government, contract performance has not been stayed.
FYI contends that award to RGII was improper, because RGII's proposal
is technically unacceptable. We agree, as explained below. FYI also
challenges a number of other aspects of the procurement, including the
SSO's determination the BAFOs were technically equivalent,[4] the
conduct of discussions with FYI, the cost/price evaluation, and RGII's
substitution of personnel after award of the contract. We need not
resolve these other protest challenges, because our decision and
recommendation render the remaining protest issues academic.
In a negotiated procurement, a proposal that fails to conform to the
material terms and conditions of the solicitation should be considered
unacceptable and may not form the basis for an award. National
Medical Staffing, Inc.; PRS Consultants, Inc., 69 Comp. Gen. 500, 502
(1990), 90-1 CPD para. 530 at 3.
There is no question here that the personnel qualification
requirements are material terms of the solicitation. As indicated
above, the RFP informed offerors that all proposed personnel must meet
the stated minimum qualifications. Throughout the evaluation of
proposals, the TET recognized the importance of the personnel
qualification requirements in ensuring a staff capable of performing
the contract requirements. Moreover, the TET recounted that in its
prior contract experience the retention of qualified personnel was
necessary for satisfactory performance and the amount of labor costs
incurred by a contractor was directly related to the level of
personnel qualifications. In this regard, the costs incurred in
performing a services contract, such as here, are almost entirely
personnel costs, and it can be expected that hiring and retaining
qualified personnel is more costly than hiring and retaining less
qualified personnel.
There is also no question that RGII's proposal did not satisfy the
qualification requirements in 5 of the 10 labor categories. Indeed,
the SSO recognized RGII's failure to meet these requirements, although
he apparently believed that RGII's failure to propose minimally
qualified personnel could be "dealt with" during the agency's issuance
of task orders and administration of the contract. However, RFP
sections H.9(c) and I.12, the provisions upon which he presumably
relied in this regard, cover substitution of individuals different
from those identified in the proposal. As to the persons named in the
proposal, RFP section H.9(a) provides that "[t]he contractor agrees to
assign to the contract those persons whose [PDFs] were submitted with
the proposal." Thus, whatever post-award approval rights the
substitution clauses may provide the agency as to individuals
different from those named in the proposal, the agency's only
opportunity to approve (or disapprove) the individuals named in the
proposal was during the evaluation process. Accordingly, by making
award to RGII, the agency accepted the individuals proposed, and this
acceptance was not subject to further review under the substitution
clauses.
Since the individuals proposed in RGII's proposal did not satisfy the
qualification requirements, acceptance of its proposal meant that the
agency waived the personnel qualification requirements for RGII, which
resulted in an unfair and unequal evaluation. See Martin Marietta
Corp., 69 Comp. Gen. 214, 219, 90-1 CPD para. 132 at 7. It is a
fundamental principle of federal procurement that offerors be treated
equally; that is, offerors must be provided with a common basis for
the preparation of proposals, and award based upon the requirements
stated in the solicitation, unless the offerors are notified of
changes in (or relaxation of) the agency's stated requirements.
Meridian Management Corp.; Consolidated Eng'g Servs., Inc., B-271557
et al., July 29, 1996, 96-2 CPD para. 64 at 5. Here, the agency's action
prejudiced the protester because FYI was not notified of the waiver,
and it proposed personnel that fully met the qualification
requirements.
In sum, we find that award to RGII on the basis of its unacceptable
proposal was improper.
We recommend that, if otherwise appropriate, the Coast Guard terminate
the award to RGII and make award to FYI, since it appears to be the
only offeror that submitted a technically acceptable proposal.[5] As
the head of the contracting activity determined to continue
performance in the best interests of the United States, our
recommendation is made "without regard to any cost or disruption from
terminating, recompeting, or reawarding the contract." 31 U.S.C. sec.
3554(b)(2) (1994). We also recommend that the protester be reimbursed
the reasonable costs of filing and pursuing its protest, including
attorneys' fees. 4 C.F.R. sec. 21.8(d)(1) (1997). The protester should
submit its certified claim, detailing the time expended and costs
incurred, directly to the contracting agency within 60 days of
receiving this decision. 4 C.F.R. sec. 21.8(f)(1).
The protest is sustained.
Comptroller General
of the United States
1. A number of evaluation subcriteria were identified under the oral
presentation factor.
2. The RFP stated a color/adjectival evaluation scheme: blue/superior,
green/satisfactory, yellow/marginal, and red/unsatisfactory.
Green/satisfactory was defined by the RFP as meeting all minimum
requirements and having no deficiencies; yellow/marginal was defined
as failing to meet all minimum requirements and having one or more
correctable deficiencies.
3. The record is unclear as to why the TET recommended selection of
the highest-priced proposal.
4. Although we do not consider the merits of the alleged unreasonable
determination that proposals are technically equal, we note that the
record on this determination provides little explanation beyond
stating that the proposals received the same adjectival rating and
were thus technically equal. We have long held that evaluation scores
and adjectival ratings are only guides for use by source selection
officials in comparing the merits of competing proposals; any
selection decision must rest upon a rational basis for the decision
and be adequately documented to permit a reasoned review of that
basis. Grey Advertising, Inc., 55 Comp. Gen. 1111, 1118 (1976), 76-1
CPD para. 325 at 9; Matrix Int'l Logistics, Inc., B-272388.2, Dec. 9,
1996, 97-2 CPD para. 89 at 9-10.
5. We note that FYI's proposal also had evaluated deficiencies under
other factors not addressed here. The record is unclear as to whether
any of these deficiencies would render FYI's proposal unacceptable,
and the agency has made no assertion to that effect. The agency
should review FYI's evaluated deficiencies to determine whether FYI's
proposal satisfies all the material terms and conditions of the RFP
and is technically acceptable. In addition, as alleged by FYI, it
appears that the protester was not informed of these deficiencies
during discussions. Therefore, if FYI's proposal is determined to be
technically unacceptable, we recommend that the Coast Guard reopen
discussions, request a new round of BAFOs, make a new source selection
decision, and terminate the existing contract, if an offeror other
than RGII is selected.