BNUMBER: B-278579
DATE: January 9, 1998
TITLE: Possehn Consulting, B-278579, January 9, 1998
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Matter of:Possehn Consulting
File: B-278579
Date:January 9, 1998
Dennis Possehn for the protester.
Daniel N. Hylton, Esq., and Richard Salazar, Department of
Agriculture, for the agency.
Ralph O. White, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protester's contention that agency improperly rejected its price
as unrealistically low is sustained because--absent technical
evaluation criteria related to the concern about the protester's
price--questions about a small business offeror's ability to perform
at its proposed price in a fixed-price environment are matters of
responsibility, the negative determination of which must be referred
to the Small Business Administration.
2. Protest challenging the agency's evaluation of the relative
strengths and weaknesses of the protester's proposal is denied where
the evaluation was consistent with the stated evaluation criteria and
reasonable.
DECISION
Possehn Consulting protests the award of two contracts--one to Steve
Holmes Forestry and one to Shasta Land Management Consultants--by the
Forest Service, Department of Agriculture, pursuant to request for
proposals (RFP) No. R5-06-97-33, issued for the location and
installation of permanent forest inventory plots in the Lassen,
Plumas, and Tahoe National Forests.[1] Possehn argues that the agency
improperly rejected its proposal on the basis that its prices were too
low, and unreasonably rated the proposal slightly below those of the
two awardees in the area of technical merit.
We sustain the protest.
BACKGROUND
The Forest Service issued the RFP here on August 22, 1997, seeking
fixed-price proposals for approximately 300 forest health inventory
plots. The plots were aggregated into nine groups and offerors were
to include a unit price for the plots in each group. The RFP
anticipated award to the offeror whose proposal offered the best value
to the government, based on the evaluation of price and technical
factors, which were equally important. While the RFP included no
criteria for the evaluation of price, it identified four technical
criteria in descending order of importance: (1) experience
establishing permanent forest and/or vegetation inventory plots; (2)
past performance on similar contracts during the previous 3 years; (3)
experience of key management personnel; and (4) qualifications of
offered field personnel. RFP, Amend. 01, sec. M-1. The RFP also
anticipated the possibility that the agency might make multiple
awards. RFP sec. M-2.
After receiving 13 proposals, the agency evaluated each offer using a
scale of A, B, or C, with A being the highest ranking. The agency
also used pluses and minuses in some cases to indicate greater or
lesser merit. The following table shows the ratings given to the
proposals submitted by Possehn and the two awardees for each of the
four technical evaluation factors:[2]
OFFEROR Firm
Experience Past
Performance Management
Experience Field
Personnel
Steve Holmes B+ B A A
Shasta B+ B A A
Possehn B B B+ A
The contracting officer also performed a price analysis by comparing
the proposed prices of each offeror with a government estimate. Using
this approach, the contracting officer rejected the proposals
submitted by Possehn and one other offeror on the basis that the
prices were unrealistically low. Contracting Officer's Statement,
Nov. 25, 1997, at 8.
After excluding the two lowest-priced proposals (including Possehn's),
the contracting officer decided that the two proposals with the next
lowest prices--the proposals of Shasta Land Management for items 1
through 3, and Steve Holmes Forestry for items 4 through 9--presented
the best value to the government. Although there were other
higher-rated offerors with higher prices, the award decision stated
that "[n]o significant advantages could be gained by paying a higher
price." Contracting Officer's Award Statement, Oct. 14, 1997. Awards
were made on October 16.
After Possehn received notice of the award decision, it filed an
agency-level protest, which was denied, and received a debriefing.
During this process, Possehn learned that its price was lower than the
award price for every item but one. The table below shows Possehn's
price and the award price (in bold) for each item:
ITEM
NUMBER Possehn
Consulting Steve Holmes
Forestry Shasta Land
Management
1 $97.50/plot $180/plot
2 $135.20/plot $180/plot
3 $89.50/plot $180/plot
4 $183.60/plot[3] $169/plot
5 $144.33/plot $179/plot
6 $150.00/plot $179/plot
7 $144.33/plot $189/plot
8 $125.67/plot $169/plot
9 $103.71/plot $169/plot
Within 10 days of its debriefing, Possehn filed a protest with our
Office and requested consideration of its protest under the express
option procedures in our Bid Protest Regulations, 4 C.F.R. sec. 21.10
(1997). We granted Possehn's request.
DECISION
Possehn first argues that the agency could not properly reject its
proposal on the basis that its prices were too low. We agree.
A determination that an offeror's price on a fixed-price contract is
too low generally concerns the offeror's responsibility, i.e., the
offeror's ability and capacity to successfully perform the contract at
its offered price. Cromartie Constr. Co., B-271788, July 30, 1996,
96-2 CPD para. 48 at 5; Envirosol, Inc., B-254223, Dec. 2, 1993, 93-2 CPD para.
295 at 5; Ball Technical Products Group, B-224394, Oct. 17, 1986, 86-2
CPD para. 465 at 2. As part of the technical evaluation, an agency may
assess the reasonableness of a low price to evaluate an offeror's
understanding of the solicitation requirements, so long as the RFP
provides for evaluation of offeror understanding as part of the
technical evaluation. Cromartie Constr. Co., supra; Envirosol, Inc.,
supra.
In this case, however, there was no technical evaluation criterion or
proposal requirement addressing an offeror's understanding of
requirements. Instead, the RFP examined only experience, past
performance, and personnel qualifications. This being so, the
agency's concern about the reasonableness of Possehn's low prices
could not be considered other than as a responsibility matter.
Cromartie Constr. Co., supra; Envirosol, supra, at 6. Since Possehn
is a small business, the agency was required to refer any finding of
nonresponsibility to the Small Business Administration (SBA) for
review. 15 U.S.C. sec. 637(b)(7) (1994); Federal Acquisition Regulation sec.
19.602-1(a); Cromartie Constr. Co., supra; Envirosol, supra.
Accordingly, we sustain Possehn's challenge in this area.
Possehn also argues that the agency's evaluation of its proposal
lacked a rational basis. For example, Possehn argues that the agency
could not reasonably give its proposal a rating of B under the most
important technical evaluation criteria--experience establishing
permanent forest and/or vegetation plots--while awarding a B+ to the
proposals submitted by Shasta and Steve Holmes. In this regard,
Possehn complains that it has the same experience as Shasta, although
it concedes that it was possible Shasta's description of its
experience in the proposal was more detailed than Possehn's
description.
In this procurement, the Forest Service was required to distinguish
among 13 proposals, all of which--including the proposal submitted by
Possehn--appeared to have significant merit. Our review of an
evaluation conclusion like the one here is to ensure that it is
reasonable and consistent with the stated evaluation criteria and
applicable statutes and regulations. ESCO, Inc., 66 Comp. Gen. 404,
410 (1987), 87-1 CPD para. 450 at 7. Based on our review of the proposals
submitted by Possehn and the two awardees, we see no basis for
concluding that the evaluation was unreasonable.
Specifically, the Shasta proposal does, in fact, offer more detail on
past projects of that firm than does Possehn's proposal. While
Possehn may be correct when it claims there is little actual
difference in the experience of the two firms, the agency was required
to make its judgments about the relative merits of the two proposals
(in this case, the relatively small distinction between a B+ and a B)
based on the descriptive material in the proposals themselves. In our
view, there was nothing unreasonable in the agency's reliance on the
written proposals for this information, and there was nothing
unreasonable about the distinctions that were made. See De La Rue
Giori, SA--Recon., B-225447.3, June 15, 1987, 87-1 CPD para. 594 at 3
(regardless of how capable an offeror may be, technical evaluations
are based on the information included in its written proposal, which,
if less comprehensive than other proposals, may not be selected for
award).
In addition, the RFP expressly advised offerors that experience with
permanent forest inventories would be ranked higher than experience
with non-permanent forest inventories; and that forest inventory
experience would be ranked higher than timber cruising experience.
RFP sec. M-1. Since two of Possehn's previous projects were expressly
described as timber cruising--the lowest-valued past experience
according to the solicitation's evaluation scheme--and the other two
involved forest inventory--but were unclear on whether the inventories
were permanent or non-permanent--it appears that the slight
distinction made in favor of the Shasta proposal clearly follows the
evaluation scheme in the RFP, given the greater level of detail
regarding past forest inventory efforts in that proposal.
As a second example, Possehn complains that certain details were
omitted from the narrative description of its field personnel
qualifications. Despite any omissions, however, the evaluation
materials show that both it and the awardees received a rating of A in
this area. Thus, our review shows that Possehn was not harmed by any
such omission. Also, the ratings appear to have been consistently
awarded since the proposals of the two awardees received an A rating
for offering field personnel with qualifications similar to the
qualifications of the personnel proposed by Possehn. In summary, our
review shows nothing unreasonable about the evaluation of the relative
strengths and weaknesses of these proposals.
RECOMMENDATION
Since the contracting officer's rejection of Possehn's proposal on the
basis of its low price is a matter concerning an offeror's
responsibility, and since the SBA has conclusive authority to
determine the responsibility of small business concerns, we recommend
that the agency refer the matter to the SBA for a final determination
under the certificate of competency (COC) procedures. Alternatively,
the contracting officer could, based on review of this decision,
decide on his own to reverse the decision to reject Possehn's proposal
based on its low price, which would obviate the need for a referral to
the SBA. If the SBA issues a COC (or if the contracting officer on
his own reverses the decision to reject Possehn's proposal), the
agency should reinstate the proposal to the competition and perform a
new cost/technical tradeoff, based on the RFP evaluation criteria,
among the offerors. At the end of that process, if the contracting
officer determines that Possehn's proposal offers the best value to
the government, we recommend that the agency terminate the current
awards and make award to Possehn.
We also recommend that the protester be reimbursed the reasonable
costs of filing and pursuing its protest, including attorneys fees, if
any. 4 C.F.R. sec. 21.8(d)(1) (1997). In accordance with 4 C.F.R. sec.
21.8(f)(1), Possehn's certified claim for such costs detailing the
time expended and the costs incurred, must be submitted directly to
the agency within 60 days after receipt of this decision.
The protest is sustained.
Comptroller General
of the United States
1. The forest inventory plots anticipated here are widely-spaced,
systematically located, large, fixed-size plots, permanently marked to
permit the long-term observations necessary to monitor trends and
changes in forest health and growth.
2. The other 10 offerors also received relatively high ratings.
3. As the table shows, Possehn's price for item 4 was higher than the
award price. The remainder of this decision will
address whether Possehn should have been considered
for award of items 1 through 3, and 5 through 9.