BNUMBER: B-278738; B-278738.2
DATE: March 11, 1998
TITLE: Xeno Technix, Inc., B-278738; B-278738.2, March 11, 1998
**********************************************************************
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:Xeno Technix, Inc.
File: B-278738; B-278738.2
Date:March 11, 1998
William F. Hanlon for the protester.
Michael J. Gardner, Esq., Clark & Stant, P.C., for George G. Sharp, an
intervenor.
David H. Turner, Esq., Department of the Navy, for the agency.
David A. Ashen, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protest against agency determination not to credit protester with
the experience and performance of its proposed subcontractor is denied
where protester's proposal indicated that subcontractor would perform
less than 1 percent of the expected effort; agency could reasonably
conclude that subcontractor's proposed contribution did not
significantly bear on the likelihood of successful performance by
protester such that attribution of subcontractor's record to protester
was appropriate.
2. Composition of technical evaluation panel is within the discretion
of the agency, and where protester has not shown actual bias on the
part of particular evaluators there is no basis to question the
composition of the panel.
DECISION
Xeno Technix, Inc. protests the Department of the Navy's award of a
contract to George G. Sharp, under request for proposals (RFP) No.
N00140-97-R-1754, for shipboard troubleshooting, repair, and
maintenance services in the vicinity of Norfolk, Virginia. Xeno
primarily challenges the evaluation of technical proposals.
We deny the protest.
The solicitation contemplated award of a time-and-materials contract
for a 1-year base period, with 4 option years, for troubleshooting,
repair, and maintenance services for main and auxiliary, hull,
mechanical and electrical (HM&E) systems aboard government vessels.
The majority of work to be performed involves shipboard HM&E systems.
Award was to be made to the responsible offeror whose conforming offer
was most advantageous to the government, with technical considerations
more important than price. The solicitation listed, in descending
order of importance, the following five technical factors: (1)
corporate experience and (2) past performance, which were of equal
weight; (3) technical approach and (4) management plan, which were of
equal weight; and (5) personnel resources.
The Navy received proposals from four offerors. Those submitted by
Sharp, Xeno, and a third offeror (not relevant here) were included in
the competitive range. At the conclusion of discussions, the Navy
requested best and final offers (BAFO). While Sharp's proposed price
($30,207,758) was approximately 5.1 percent greater than Xeno's
($28,666,119), the Navy determined that Sharp's proposal was
technically superior. Sharp's proposal received a highly acceptable
rating both overall and under each of the technical factors, while
Xeno's received only an acceptable rating under each technical factor
and overall. The agency found that Sharp, the incumbent contractor,
had "demonstrated extensive experience . . . directly related to all
aspects of the requirements set forth in the statement of work" (SOW),
including performing 1,096,000 hours of tasking which was identical in
magnitude and complexity to the work required under the SOW, and that
its work under the current contract was "consistently very good . . .
quality work and . . . on schedule." Selection Decision Memorandum at
2; Declaration of [DELETED] at 1-2. The Navy further determined that
Sharp's proposal demonstrated "a clear and [thorough] understanding of
the [SOW] as well as a [thorough] knowledge of the main and auxiliary
hull, mechanical and electrical systems," such that when considered
with Sharp's extensive, successful experience and performance, the
proposal indicated "a high probability of success," with "the
capability to satisfy all program areas immediately with no loss of
planning continuity nor loss of time because of learning curve."
Source Selection Decision Memorandum at 1-2. The Navy concluded that
the "significant technical superiority [of Sharp's proposal] far
outweighs the additional cost" such that Sharp's proposal was most
advantageous to the government. Id. at 4. Upon learning of the
resulting award to Sharp, Xeno filed this protest with our Office.
PAST PERFORMANCE
Xeno questions its past performance rating (acceptable), arguing that
the agency failed to take into account additional information
furnished during negotiations and Xeno's proposed use of Colonna
Shipyard, Inc. in performing the contract.
The evaluation of proposals is a matter within the discretion of the
contracting agency, since the agency is responsible for defining its
needs and the best method of accommodating them. Bannum, Inc.,
B-271075 et al., May 22, 1996, 96-1 CPD para. 248 at 3. Our Office will
question an evaluation only where it lacks a reasonable basis or
conflicts with the stated evaluation criteria. Id.
The Navy reasonably determined that Sharp's proposal was superior in
the technical area; there is no basis to question the agency's
determination that Sharp's proposal was superior under the experience
and performance factors, the two most important technical factors. As
noted above, Sharp's proposal was found to demonstrate extensive,
successful experience and performance; its proposal's highly
acceptable ratings for both experience and performance therefore
appear reasonable. In contrast, the agency found that, while Xeno had
successfully performed under several large Navy contracts, much of the
experience cited in Xeno's proposal was engineering, design and
technical support work, rather than the HM&E work that was the focus
of the requirement here. Further, with respect to the much more
limited relevant experience cited by Xeno, the agency determined that,
while Xeno generally had performed adequately on small jobs, it had
experienced difficulties with large task orders or with tight
performance schedules. Xeno's schedule difficulties were viewed as
particularly significant since much of the work under the contemplated
contract was expected to be "emergent repairs" with tight performance
schedules. Declaration of [DELETED] at 2.
As for the agency's alleged failure to consider the additional
information Xeno furnished during discussions, we note that Xeno's
performance rating actually increased from unacceptable based on its
initial proposal to acceptable after BAFOs; this indicates that the
agency did favorably consider the additional information. In any
case, Xeno has made no showing that it was entitled to a performance
rating equivalent to Sharp's rating. Rather, the record supports the
agency's determination that Xeno's performance record on relevant
contracts was mixed. For example, the agency was advised that: 1
month after Xeno replaced tubes in two boilers on the USS Grasp, both
boilers required complete retubing; equipment on the USS Grasp was
sandblasted without adequate containment measures; Xeno's inability to
quickly perform HM&E repairs on the USS Conolly necessitated
transferring the work to Sharp, which successfully completed the work;
and Xeno had performed unsatisfactory repairs on a beaching ramp on
the USS Saipan and other repairs reportedly were performed very
slowly.
Xeno also questions the Navy's determination not to credit it with the
experience and performance of its proposed subcontractor, Colonna
Shipyard. In this regard, however, Xeno's proposal indicated that
Colonna would perform less than 1 percent of the expected effort (.87
percent, or 1,040 of 120,224 hours per year). BAFO Schedule
Allocation of Hours. The agency could reasonably conclude from this
relatively minor commitment that Colonna's performance experience did
not significantly bear on the likelihood of successful performance by
Xeno such that attribution of Colonna's record to Xeno was
appropriate. ST Aerospace Engines Pte. Ltd., B-275725, Mar. 19, 1997,
97-1 CPD para. 161 at 3 (in determining whether one company's performance
should be attributed to another, the agency must consider whether the
work force, management, facilities, or other resources of one may
affect contract performance by the other). We conclude that the Navy
reasonably determined that Sharp's proposal was superior under the
experience and performance factors.[1]
SUBCONTRACTING
Xeno generally argues that Sharp lacks the skilled trades work force
and industrial facilities required by the solicitation and needed to
perform the contemplated work. However, the solicitation did not
preclude the use of a subcontractor's work force and facilities in
performing the contract. Indeed, the solicitation specifically
contemplated the use of "subcontracting capabilities, administration,
and management to accomplish repairs which may require highly
specialized skills beyond the contractor's internal workforce." SOW
section C.1.2(d). Sharp proposed to perform the contract with an
integrated team that included two primary subcontractors, and Xeno has
made no showing that Sharp, which had been successfully performing the
same requirements for the Navy as the incumbent contractor, lacked the
requisite work force and facilities when the resources of the proposed
subcontractors were considered.
Xeno argues that Sharp's reliance on subcontractors will violate the
provisions of Federal Acquisition Regulation (FAR) standard clause
52.219-14, entitled Limitations on Subcontracting (JAN 1991), which
the solicitation incorporated by reference. This clause provides, in
relevant part, as follows:
(b) By submission of an offer and execution of a contract, the
Offeror/Contractor agrees that in performance of the contract in
the case of a contract for--
(1) Services (except construction). At least 50 percent of
the cost of contract performance incurred for personnel shall
be expended for employees of the concern.
FAR sec. 52.219-14. The Navy responds that there was no basis for it to
reach this conclusion, since Sharp's proposal did not indicate that
Sharp would not or could not comply with the limitation on
subcontracting. Further, the agency reports that upon receiving
Xeno's protest in this regard, it contacted Sharp to investigate
Xeno's claim. According to the agency, Sharp advised that it would
primarily use its existing work force, but would supplement that work
force to meet surge requirements by hiring temporary personnel from
the large pool of specialized labor available for hire in the Norfolk
area. In this regard, the Navy reports that Sharp verified that under
the incumbent contract, [DELETED] percent of the labor had been
performed by Sharp personnel. Legal/Contracting Officer Statement of
December 23, 1997 at 31.
Xeno's argument is without merit. Sharp's proposal specifically
allocated the estimated labor hours for each labor category (as set
forth in the solicitation) among Sharp and its two subcontractors/team
members, specifying that Sharp would perform [DELETED] percent of the
total contract hours. Best and Final Price Proposal, Attachment 2.
Nothing else in the proposal indicated that Sharp did not intend to
meet the requirement. This being the case, by signing its offer,
Sharp agreed to comply with the limitation on subcontracting.
Whether Sharp can comply with the limitations on subcontracting is a
matter of responsibility, Corvac, Inc., B-254757, Jan. 11, 1994, 94-1
CPD para. 14 at 4; we will not review an affirmative determination of
responsibility absent a showing of possible bad faith on the part of
contracting officials or that definitive responsibility criteria in
the solicitation were not met. Bid Protest Regulations, sec. 21.5(c), 4
C.F.R. sec. 21.5(c) (1997). Definitive criteria are not in issue, and
the record provides no basis to conclude that the contracting
officer's determination in this regard was motivated by bad faith.
Xeno notes that its president advised an executive director at the
contracting activity--apparently in a meeting unrelated to this
procurement which occurred 2 months prior to the award to Sharp--that
it believed Sharp was circumventing the limitation on subcontracting
by directly employing personnel under its contracts that were also
employees of its subcontractor. This does not by itself evidence bad
faith on the part of agency officials for failing to investigate the
matter. The executive director states that Xeno's president
characterized the discussion as "off the record," and that, although
he advised the president to provide in writing any information
supporting its allegation, the president never submitted a written
statement detailing and supporting the allegation and otherwise failed
to pursue the matter. Declaration of [DELETED]. Under these
circumstances, there is no basis to question the Navy's affirmative
determination of responsibility.
Further, whether Sharp in fact complies with the subcontracting
limitation in performing the contract is a matter of contract
administration which is within the ambit of the contracting agency,
not our Office. 4 C.F.R. sec. 21.5(a); Lockheed Martin Fairchild Sys.,
B-275034, Jan. 17, 1997, 97-1 CPD para. 28 at 5.
TECHNICAL EVALUATION COMMITTEE
Xeno also challenges the composition of the technical evaluation
committee (TEC), arguing that the TEC lacked adequate technical
qualifications to evaluate proposals. In addition, Xeno claims that
the TEC's findings may have been biased in favor of Sharp as a result
of an alleged conflict of interest created by the fact that the TEC
was comprised of two subordinates of [DELETED] at the user activity,
whose wife works for Sharp [DELETED].
The composition of a technical evaluation panel is within the
discretion of the contracting agency. In the absence of evidence of
bad faith, conflict of interest, or actual bias, we have no reason to
question the composition of the panel. Alcan Envtl., Inc.,
B-275859.2, Apr. 11, 1997, 97-1 CPD para. 139 at 6; Delta Ventures,
B-238655, June 25, 1990, 90-1 CPD para. 588 at 3-4; Johns Hopkins Univ.,
B-233384, Mar. 6, 1989, 89-1 CPD para. 240 at 7. In particular, we note
that the opportunity for bias is not a sufficient basis to question an
award of a contract; where, as here, a protester infers that
evaluators are biased because of their past experiences or
relationships, we focus on whether the individuals involved exerted
improper influence in the procurement on behalf of the awardee, or
against the protester. Advanced Sys. Tech., Inc.; Engineering and
Professional Servs., Inc., B-241530,
B-241530.2, Feb. 12, 1991, 91-1 CPD para. 153 at 15.
We find no evidence of improper conduct. The record indicates that
[DELETED] was not a member of the TEC and, although he approved the
contract data requirements lists included in the solicitation, he did
not participate in the source selection process. In this regard, the
Navy reports that [DELETED] was not authorized to have access to
source selection information under the solicitation; his subordinates
on the TEC signed nondisclosure agreements that precluded them from
revealing source selection information to unauthorized persons,
including [DELETED]; and there is no evidence that [DELETED] in fact
was given access to source selection information. Supplemental Agency
Report of January 7, 1998, at 4. In support of its position, the
agency has submitted declarations from the individuals in question.
Further, our review of the evaluation record reveals no evidence of
bias; rather, as discussed, the record indicates that Sharp's proposal
was reasonably found to be technically superior to Xeno's.[2]
The protest is denied.
Comptroller General
of the United States
1. While Xeno also challenges the evaluation under the personnel
factor, asserting that its proposal should have received the same
rating (highly acceptable) as Sharp's proposal received, our review of
the record indicates that Sharp's proposal was reasonably found to be
somewhat more advantageous than Xeno's with respect to personnel.
Specifically, the record supports the agency's determination that
while the project managers proposed by both Sharp and Xeno exceeded
the minimum experience requirements in an advantageous manner, and
thus were both properly rated as highly acceptable, Sharp's project
manager possessed significantly more advantageous experience, having
15 more years of relevant experience (40 versus 25 years) than Xeno's
manager.
2. Although Xeno's challenge to the technical qualifications of the
evaluators provides no basis to question the evaluation, we note that
one of the two TEC members was the Supervisory Production Controller
(Ships) for the user activity, in which capacity he acted as the
contracting officer's representative on the incumbent contract.