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.