BNUMBER: B-278904; B-278904.5
DATE: April 2, 1998
TITLE: KRA Corporation, B-278904; B-278904.5, April 2, 1998
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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:KRA Corporation
File: B-278904; B-278904.5
Date:April 2, 1998
John E. Jensen, Esq., Daryle A. Jordan, Esq., and Thomas A.
Duckenfield, Esq., Shaw, Pittman, Potts & Trowbridge, for the
protester.
Paralee White, Esq., Michael A. Hordell, Esq., and Laura L. Hoffman,
Esq., Gadsby & Hannah, for Walcoff & Associates, an intervenor.
Gena E. Cadieux, Esq., Patricia D. Graham, Esq., and Joseph A.
Lenhard, Esq., Department of Energy, for the agency.
Jacqueline Maeder, Esq., and Paul Lieberman, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Agency evaluation of technical proposals is unobjectionable where
the record establishes that the evaluation was reasonable and
consistent with the stated evaluation factors; protester's mere
disagreement with the agency's conclusions does not render the
evaluation unreasonable.
2. Protest that agency failed to perform proper cost/technical
tradeoff is denied where source selection official considered
technical evaluations, past performance ratings, and cost in his award
determination and reasonably determined that the evaluated technical
superiority of the six highest technically-rated proposals warranted
payment of the cost premium associated with certain of these proposals
vis-�-vis other lower technically-rated, lower cost proposals.
DECISION
KRA Corporation protests the Department of Energy's (DOE) decision not
to award KRA a contract under request for proposals (RFP) No.
DE-RP01-97EI30000, issued by DOE for technical services for the Energy
Information Administration (EIA).[1] KRA primarily challenges the
agency's evaluation of KRA's technical proposal and the source
selection determination.
We deny the protest.
DOE issued the RFP, referred to as the EIA Omnibus Procurement (EOP),
via the Internet on July 7, 1997. This solicitation, which combined
technical support services that were currently being performed for EIA
under 11 separate support services contracts, sought separate
proposals for 3 functional areas/contract line items (CLIN),
consisting of information management and product production (IM&PP)
support services (CLIN 001); energy analysis and forecasting support
services (CLIN 002); and information technology support services (CLIN
003). For each CLIN, the RFP listed a maximum number of direct
productive labor hours (DPLH), consisting of 528,984 DPLH for CLIN
001, 183,000 DPLH for CLIN 002, and 412,920 DPLH for CLIN 003. The
RFP provided for multiple indefinite-quantity awards with awardees
becoming eligible for post-award competition for task orders for a
3-year base period with one 2-year option. Since each contract will
have cost reimbursement and fixed-price provisions, the RFP provided
that task orders will be issued on both a cost-plus-fixed-fee and a
fixed-price basis.
Section L.15 of the RFP stated that DOE would "award contracts
resulting from this solicitation to the responsible offerors whose
offer conforming to the solicitation will be the most advantageous to
the Government, cost or price and other factors, specified elsewhere
in the solicitation, considered" and advised that DOE intended to
award on the basis of initial offers without discussions. Section
M-1(B) reiterated that award would be made to the offerors whose
conforming proposals were determined to be most advantageous to the
government. At section M-3, the RFP identified the following weighted
evaluation factors and subfactors:
1. Business management, technical and organizational approach50
1.1 Business management plan 20
1.2 Technical plan 20
1.3 Organizational approach 10
2. Past and present experience 20
3. Corporate resource management 20
3.1 Retain labor categories 5
3.2 Additional resources 5
3.3 Staff training and development 5
3.4 Provide automated data processing (ADP)
hardware, software, facilities 5
4. Videotape response/presentation 10
5. Past performance
Offerors were advised that past performance would be adjectivally
rated, and that the technical proposal was significantly more
important than past performance or cost, and that past performance was
also more important than cost.
In submitting a total estimated price, offerors were advised at
section L.34(2) to include a fixed-price quotation for 50 percent of
the maximum amount of level of effort (LOE) or DPLH for the total
5-year contract term. Section M.4 of the RFP advised offerors that
the proposed fixed price for a particular functional area would be
doubled and that amount would be used as a task order ceiling amount,
indicating that this amount would provide the basis for the price
comparisons of the proposals.
KRA was 1 of 12 offerors that submitted proposals on CLIN 001, IM&PP
support services, which consists of data operations, including, among
other things, survey data collection, survey and data systems
operations, sampling and estimation, and data integration and
analysis; data integration, including, among other things, acquiring
and developing data, maintaining integrated databases, performing
system and quality lists, and calculating summary statistics; and,
product production, including, among other things, production,
publication, and dissemination and automated systems support for the
dissemination of energy data.
Members of the technical evaluation committee (TEC)[2] individually
evaluated each proposal and, in internal discussions, reached a
consensus on the strengths and weaknesses of each proposal and
assigned each a point score of 0, 2, 5, 8, or 10 under each evaluation
criterion.[3] Numerical ratings were multiplied by the weight for
each factor and these scores were totaled. A proposal that received
scores of 10 on each evaluation factor would receive a maximum point
score of 1,000. Past performance was assigned an adjectival rating of
"excellent," "good," "fair" or "neutral," "poor," or "unsatisfactory."
The TEC briefed the source selection official (SSO) and, based on the
SSO's review of the evaluations and recommendations, the SSO
determined to make awards to the six companies which submitted the
highest technically-rated proposals. KRA, whose proposal was ninth
ranked technically, was not awarded a contract. In his selection
statement, the SSO noted: "past performance information was received
and evaluated, and price proposals were evaluated. These evaluations
were considered."
KRA's proposal received a total technical score of 470 consisting of
the following point scores and weighted scores for each factor and
subfactor:
Score Weighted Score
1. Business management, technical, and organizational
approach
1.1. Business management plan 8 160
1.2. Technical plan 5 100
1.3. Organizational approach 5 50
subtotal 310
2. Past and present experience 2 40
3. Corporate resource management
3.1. Retain labor categories 2 10
3.2. Additional resources 2 10
3.3. Staff training and development 5 25
3.4. Provide ADP hardware, software,
facilities 5 25
subtotal 70
4. Video presentation 5 50
TOTAL 470
KRA's past performance was rated "excellent" and its proposed price
was fifth low of the 12 offers. The relevant technical scores,
adjectival ratings for past performance and evaluated ceiling prices
for the awardees', the seventh-ranked offeror's, and the protester's
proposal were as follows:
Offeror Technical/Business Past Performance Proposed Ceiling
Management Score Rating Price and Rank
Orkand Corp 725 good $27,271,220 (1)
SAIC 710 excellent $30,220,500 (2)
Westat 695 excellent $47,680,494 (10)
Abacus 590 excellent $43,406,470 (7)
Z, Inc. 575 excellent $37,296,764 (4)
Walcoff 515 excellent $50,420,798 (11)
[Offeror A] [deleted] excellent [deleted]
KRA 470 excellent $41,325,514 (5)
DOE notified KRA that it had not been selected for award and, after a
December 22 debriefing, KRA filed a protest with our Office.
KRA protests the evaluation of its proposal under factor 2, past and
present experience, alleging that its proposal was improperly
evaluated vis-�-vis the proposals of two awardees, Walcoff and Z, Inc.
KRA also contends that the evaluations of its proposal under
subfactors 3.1, "retain labor categories" and 3.2, "additional
resources" were improper and challenges the propriety of the
cost/technical tradeoff that resulted in the award selection of the
proposals of the six highest technically-rated offerors.
TECHNICAL EVALUATION
Past and Present Experience
Section M.3 of the RFP advised offerors that their past and present
experience would be evaluated:
based on the relevance and quality of the corporate past
experience, as demonstrated by the Offeror's submitted
contracts . . . to perform the types and complexity of
work described in the Statement of Work for each
functional area . . . .
To facilitate the evaluation, section L.31(b) required offerors to
identify four recently completed (within the past 5 years) or existing
contracts and to identify two recently completed or active contracts
for each subcontractor proposed. For each contract listed, the
offeror was to describe, among other things, the contract's scope of
work/requirements/responsibilities and show how these efforts are
similar to the statement of work's (SOW) functional area for which the
offer was being made.
The SOW for CLIN 001, IM&PP support services, consisted of
approximately 10 pages and, as noted above, outlined three major types
of work required under IM&PP, including data operations, data
integration, and product production. As relevant here, data
operations included survey data collection (the distribution and
collection of various survey forms for EIA) and survey and data
systems operations. The SOW listed 17 tasks under survey data and
systems operations, including such things as performing data
requirements studies, developing, maintaining and updating survey and
data systems operations, contacting respondents to obtain survey data,
distributing materials to respondents, developing survey forms and
instructions, performing data capture, problem resolution, data
correction, updating databases, reporting survey performance
statistics, and designing, developing and pretesting survey
instruments and preparing reports. The SOW also listed
accounting/auditing/systems assessment and evaluation services as the
last of 10 tasks under the data operations category. The
accounting/auditing requirement stated that the offeror was to provide
approximately 3,000 hours per year of professional accounting and
auditing services for reviewing the accuracy of data, preparing a
financial analysis report, and accounting and financial reporting
problem research. The SOW also called for the "analysis of deferred
taxation issues, and research in connection with reporting practices
in energy industries and financial reporting consequences of energy
company mergers and acquisitions" and the preparation of annual
reports and other research projects involving the application of
professional petroleum engineering and auditing skills.
Data integration work calls for the offeror to acquire and develop
data, including such tasks as obtaining, analyzing, and incorporating
domestic and international data from EIA offices, verifying data;
maintain integrated databases; perform consistency and quality tests;
calculate summary statistics; develop and maintain records; and
provide comparative reports.
Under product production, the SOW stated that, while publication was
primarily an EIA staff responsibility, the offeror would be required
to prepare forms, edit and update publications, and help in the review
process. The SOW listed requirements for the National Energy
Information Center (NEIC), including such tasks as responding to
inquiries and disseminating paper and automated products.
In its 17-page subsection on past and present experience, KRA provided
an overview of its experience and an in-depth discussion of four
contracts. Walcoff's 9-page past and present experience subsection
provided an abbreviated discussion of four of its past and current
contracts and 12 contracts of its 7 proposed subcontractors. Z,
Inc.'s 27-page past and present experience subsection highlighted
certain current work and provided an in-depth discussion of four
contracts.
The TEC assigned KRA's proposal a score of 2 under the past and
present experience factor, based on the evaluators' finding that KRA's
proposal demonstrated a lack of experience in accounting and
auditing--regarded as a minor weakness--and a lack of experience in
data collection and survey processing--regarded as a significant
weakness, and no recognized strengths under this factor. The TEC
assigned Walcoff's proposal a score of 5 on this factor, noting that
the firm proposed a large team which had experience in all activities
in the SOW. Similarly, the TEC assigned a score of 5 to the Z, Inc.
proposal because it, too, demonstrated that the firm had performed
almost every aspect of the SOW.
KRA contends that Walcoff did not provide adequate information about
its past and present experience to satisfy the proposal preparation
instructions and provide a sufficient basis for an evaluation superior
to that received by KRA. Specifically, KRA argues that Walcoff simply
provided "bullet summaries" of its contracts which did not include
information sufficient for DOE to intelligently assess the "relevance
and quality" of Walcoff's prior experience. KRA contrasts the detail
which it provided in its proposal, pointing out that KRA's proposal
listed experience in survey/data systems operations, including data
collection and statistical analysis; acquiring/developing data,
including the acquisition and development of data and the
identification of the sources and types, of data to be collected and
the content of the data collection; survey response, including
nonrespondent and data validation telephone calls, production of
progress reports and final reports on the methodology for program
evaluation; and data collection and processing systems assessment,
including collecting survey data and processing and the comparison of
data.
KRA points out that Walcoff's proposal states only that Walcoff had
designed, implemented and provided training for a menu-driven
automated personal computer-based data collection; conducted surveys
of U.S. Postal Service employees; and, performed the National School
Radon Survey to assess concentrations of radon in public schools
across the country. Based on this comparison, KRA argues that its
proposal was misevaluated.
The evaluation of technical proposals is a matter within the
contracting agency's discretion since the agency is responsible for
defining its needs and the best method of accommodating them. Loral
Sys. Co., B-270755, Apr. 17, 1996, 96-1 CPD para. 241 at 5. In reviewing
an agency's technical evaluation, we will not reevaluate the proposal,
but will examine the record of the evaluation to ensure that it was
reasonable and in accordance with stated evaluation criteria, and not
in violation of procurement laws and regulations. Id.
We see no basis to conclude that the agency improperly evaluated KRA's
(or Walcoff's) proposal concerning past and present experience. While
Walcoff did provide only short "bullet summaries" of its contracts in
the past and present experience subsection of its proposal, Walcoff
also discussed its past contracts and their relevance to the SOW in
detail in its technical plan. For example, as to data collection and
survey processing, Walcoff's proposal indicates that it has developed
surveys and survey methods for 20 years, and as one example of its
work, Walcoff indicated that it has managed the U.S. Postal Service
Customer Satisfaction Measurement Survey for 5 years and explained:
The survey encompasses nearly one million mailings and more
than 200,000 voluntary responses per quarter . . . . We process
incoming surveys at a rate of up to 10,000 each day, and we
sample non-respondents periodically to control non-response
bias. The data are summarized in more than 240 management
reports for dissemination to postal managers. We look
continuously for ways to improve the process; we recently
reduced reporting intervals from every quarter to every month
with the potential to transmit data weekly.
Walcoff also pointed to its survey support to the Reformulated
Gasoline Survey Association, a petroleum industry consortium formed to
manage reformulated gasoline compliance surveys mandated by the U.S.
Environmental Protection Agency. In this regard, Walcoff's proposal
stated:
We draw 135 separate samples in 32 markets throughout the year,
sending them to the field collection agency within 24 hours. For
instance, we constructed a survey master database of retail
gasoline stations with a sample frame consisting of 31,806
stations in 32 market areas. It is updated every year for new
stations.
Walcoff's proposal also indicated that it improved the traditional
door-to-door sampling approach for the Consumer Product Safety
Commission by using a multistage design in determining what proportion
of smoke detectors installed in homes were operable.
In contrast, KRA states in its proposal that it has provided survey
data collection services and systems operations for EIA for 4 years.
In describing its EIA tasks, KRA discusses data collection, data
entry, data analysis and statistical analysis. For example, KRA
states that it has provided "survey data collection services and
systems operations for EIA" and goes on to say that "[s]urvey data
collection involves receipt of EIA forms, data entry of energy data,
data analysis, and statistical analysis." In its work with the
Department of Health and Human Services on a survey of the
effectiveness of a short-term training program for minority students,
KRA states that "[d]ata were collected, analyzed, and integrated into
reports that detailed the program results." KRA also states that it
conducted survey data collection and processing assessments by
gathering data on program participants in such areas as
demographic characteristics, fields of study, and income.
Results were evaluated, reviewed and revised.
In short, KRA's comparison of the contents of its proposal to
Walcoff's to try to establish that, relative to KRA's proposal,
Walcoff failed to detail its past experience or show the relevance of
that past experience to the work required here simply does not support
that assertion. On the contrary, the record shows that, while KRA has
some experience in data collection and survey processing, its
experience is more limited than Walcoff's. For example, KRA's
proposal indicates that it has had less experience than Walcoff in the
early stages of data collection and survey processing work,
specifically, the design and development of the survey and the process
of data collection. Moreover, KRA's proposal is general and lacks
specificity; the protester never details what type of support it has
provided. As noted above, KRA explains that it collected data but
provides no discussion of how the data collection was accomplished or
what specific tasks KRA performed.
Additionally, KRA's proposal does not discuss frame development,
sampling or estimation procedures, or quality assurance and control
activities. Finally, KRA's contracts are smaller in dollar value than
the task orders anticipated here and smaller than the contracts
Walcoff listed in its discussion of its past and present experience.
Indeed, KRA's contract with EIA is its only contract that exceeds $1
million and the total value of all four of KRA's contracts is
approximately equal to that of Walcoff's smaller referenced contracts.
In short, notwithstanding KRA's disagreement, we find no reason to
object to the agency's determination that KRA lacked significant
experience in data collection and survey processing and that its
experience was not comparable in type or complexity to that required
under the RFP.
KRA also alleges that Walcoff's past and present experience does not
demonstrate accounting or auditing work, arguing that Walcoff is as
weak as, or weaker than, KRA in this area. The protester argues that,
while KRA's proposal discussed certain accounting experiences and
linked these experiences to the SOW, Walcoff's proposal "did not even
mention 'accounting.'" According to KRA, the only description of
financial work that Walcoff referenced was a general statement that
Walcoff had "[r]eviewed all audited annual financial statements for
all [Housing and Urban Development] HUD-held and HUD-insured loans
collateralized by multi-family properties."
In this regard, the evaluators found no particular strengths in
Walcoff's experience concerning accounting or auditing. Walcoff
specifically noted accounting tasks for only one contract discussed in
its proposal. However, Walcoff proposed to use [deleted]
subcontractors for auditing and accounting services. The references
for [deleted] of these proposed subcontractors indicated that the
subcontractors had performed accounting and auditing work. The
[deleted] subcontractor is a public accounting firm which obviously
has had accounting and auditing experience.
KRA's discussion of its past and present accounting/auditing
experience states only that KRA uses [delete]. Neither of these
statements suggests the types of professional accounting or auditing
work contemplated under the solicitation. Unlike Walcoff's
references, none of KRA's references suggests that accounting or
auditing work was involved in their contracts. Moreover, despite the
fact that the RFP notified offerors that, among other labor
categories, a certified public accountant (CPA) would likely be
required to perform some tasks in the SOW, KRA did not indicate that
it had a CPA available or on-staff. Rather, KRA suggested that it
would use an unnamed CPA firm to perform auditing tasks. Accordingly,
the agency reasonably determined that KRA's past and present
experience was weak with respect to accounting and auditing
experience.
KRA next asserts that its proposal should have received the same score
as the
Z, Inc. proposal under the past and present experience factor because
the evaluators' individual worksheets "are virtually
indistinguishable" as to the identification of strengths and
weaknesses of the two offerors. As noted above, the evaluators
regarded KRA's limited data collection and survey processing as a
significant weakness and its limited auditing and accounting
experience as a minor weakness. The evaluators found that Z, Inc. had
experience with every function listed in the SOW except
auditing/accounting--a minor weakness--and data dissemination for
NEIC--a minor weakness.
KRA argues that DOE improperly concluded that KRA's proposal did not
demonstrate the complexity of accounting and auditing experience
required, when contrasted with DOE's failure to assess Z, Inc.'s
proposal as not demonstrating any accounting experience. KRA also
argues that its second alleged weakness--a lack of data collection and
survey processing experience--is not as serious a shortcoming as Z,
Inc.'s second alleged weakness--the lack of NEIC experience--since
data collection and survey processing comprise only 2 of the 10 tasks
under data operations, while lack of NEIC experience permeates an
entire third of the SOW--the product production operation.
In fact, the KRA and Z, Inc. proposals were treated identically with
respect to their lack of accounting/auditing experience. Essentially,
DOE found that neither offeror demonstrated relevant accounting
experience. We see nothing objectionable in this assessment since, as
noted above, and contrary to KRA's position, the accounting/auditing
work cited by KRA was not the kind of professional accounting work
outlined in the SOW.
We also find without merit KRA's assertion that its lack of data
collection and survey processing experience is not as significant as
Z, Inc.'s lack of NEIC experience. In this regard, KRA too narrowly
interprets its data collection and survey processing weakness. KRA
argues that data collection is one task and survey processing
experience is a second task under data operations in the SOW.
However, there are no tasks in the SOW specifically titled "data
collection" or "survey processing." There is one task called "Survey
Data Collection" but it describes only the distribution and collection
of various survey forms for EIA, and thus is a more narrow application
than what the agency intended when using the phrase "data collection."
Our review of the SOW shows that the broad terms "data collection" and
"survey processing" refer to tasks under both data operations and data
integration, which involve the offerors' experience in the design,
development, and analysis of surveys, as well as the maintenance and
updating of data, data systems, and databases. For example, one task,
sampling and estimation under data operations, requires the offeror to
develop optimal sample designs, which clearly relates to "data
collection." Similarly, the task "acquire and develop data" under
data integration requires the offeror to obtain, analyze and
incorporate domestic and international data from EIA offices--a
responsibility that relates both to data collection and survey
processing. Thus, two-thirds of the work under CLIN 001 relates to
the area of weakness identified by DOE in KRA's proposal. Product
production comprises the remainder of the work under this line item.
Accordingly, Z, Inc.'s lack of experience in NEIC requirements was
reasonably assessed by the agency as having less significance than
KRA's lack of significant experience in data collection and survey
processing.
Further, KRA is mistaken in its assertion that NEIC experience
"permeates" product production tasks. Only two tasks are listed under
product production, including specific requirements, which require,
for example, producing graphical interpretations of data, producing
text for reports, and preparing reports for publication. NEIC work,
which includes providing telephone and written responses to inquiries,
logging inquiries, maintaining shelf and reserve stock of EIA
publications, maintaining and updating the EIA electronic publishing
system, and supporting the preparation and maintaining the quality of
EIA publications simply does not "permeate" the other tasks under
product production.
Retain Labor Categories
As noted above, section L.31(b) of the RFP provided instructions
regarding proposal preparation. For criterion 3, corporate resource
management, the RFP asked offerors, among other things, to describe
personnel resource management capabilities and procedures used to
acquire and allocate personnel. Offerors were also asked to describe
corporate resources available to respond to unanticipated/nonrecurring
situations which may be tasked during the contract period and to
provide a description and demonstrate the effectiveness of their
current employee training development program.
In outlining the criteria for award at section M.3, the RFP reiterated
that offerors would be evaluated on their ability to provide and
retain by labor category the required personnel resources,[4] their
ability to provide additional resources for unanticipated/nonrecurring
situations, and the demonstrated commitment to and accomplishment of
staff training and development.
In its proposal, KRA stated that it employed only the best qualified
employees and that it did "everything we can to ensure the employees
stay with KRA." The protester provided a chart in its proposal that
outlined its benefits package, including three main categories:
health and welfare, retirement and savings, and rewards and bonus. In
relevant part, under rewards and bonus, KRA listed [deleted]. DOE
evaluated KRA's proposal as having "no employee incentive," citing
this as a weakness in the proposal.
KRA argues that DOE improperly assessed KRA's incentive program. KRA
argues that the information it provided in this area was more detailed
than the information concerning employee incentives provided by any of
the awardees. For example, KRA alleges that Walcoff stated only that
"we maintain a bonus program that recognizes and rewards outstanding
performance." DOE states that the three incentives listed by KRA, the
[deleted], are vaguely worded and do not evidence any particular
relationship to employee retention or improved performance.
While KRA disagrees with the agency's assessment of this aspect of its
proposal, we see no basis to question it. As the agency argues, KRA
provided little detail on its incentive program, and the types of
incentives offered, for example, the [deleted], are unrelated to
employee retention. Also, KRA provides no indication of what
performance incentive--cash awards, certificates of achievement, or
some other device--is awarded to an employee who achieves at work or
in the community. Finally, contrary to KRA's assertion, Walcoff's
proposal identified competitive salaries, a complete benefits package,
and diversity in work assignments in addition to its bonus program as
management practices it employs to retain personnel. In sum, we see
no reason to conclude that the evaluation of proposals under this
criterion was unreasonable.
Additional Resources
As noted above, the RFP also provided for the evaluation of offerors
on their ability to provide additional resources in special
situations. In its proposal, KRA listed several alternatives to
respond to the need for additional resources, including the
protester's continuous search for employees, extended or overtime
opportunities for current employees, [deleted]." DOE determined that
KRA's response was inadequate, noted this as a weakness in its
evaluation, and assigned KRA a score of 2 on this subfactor.
Again, KRA complains that DOE evaluated offerors unequally on this
subfactor. KRA argues that its four alternatives to manage or augment
its staff to address EIA's emergencies adequately address the issue,
and that Walcoff, for example, did not offer "to approach these
emergencies in any more detailed a manner than KRA," yet Walcoff's
proposal was scored higher than KRA on this subfactor.
DOE reasonably rated Walcoff's proposal higher because Walcoff's
proposal set forth the need for additional support not [deleted].
Walcoff stated that such support may be [deleted]. Walcoff indicated
that [deleted]. Walcoff provided a more complete response than KRA,
discussing level of support, required skills, and the identification
of resources. Thus, KRA's objection provides no basis to question the
evaluation of either KRA or Walcoff in this respect.
SOURCE SELECTION DECISION
KRA also argues that DOE did not perform any cost/technical tradeoff,
noting that the agency's report on the protest does not present a
tradeoff analysis or explicitly state that the SSO made a tradeoff.
KRA further argues that the SSO did not understand the differences
between the proposals, pointing out that, during a telephonic hearing
conducted by our Office, the SSO, when asked to discuss his
understanding of the differences between the proposals in specific
evaluation areas, did not have any specific knowledge of the different
aspects of the proposals. KRA also alleges that, although the SSO
stated that he was aware that KRA had scored higher than Walcoff under
the most highly weighted criterion, the SSO failed to consider this
fact in the award determination, instead improperly relying
exclusively on total technical point scores. The protester objects
that DOE has presented a supplemental source selection statement and
mathematical calculations, both prepared only in response to the
protest, to support its award decision. Because the protester
proposed a lower cost than Walcoff, the lowest technically-ranked
offeror to receive an award, the protester believes that KRA should
have been awarded a contract under a proper cost/technical tradeoff.
The agency's position is that the SSO did perform an appropriate
cost/technical tradeoff and that the resulting award determinations
were substantiated. The agency points out that the appropriate cost
information, consisting primarily of the proposed ceiling prices for
each offeror, was given to the SSO and the source selection statement
expressly states that all factors, including past performance and
price, were evaluated and considered. The SSO prepared a supplemental
source selection statement explaining his selection decision, which
stated that Walcoff's "overall evaluated technical score was higher
than KRA's, and this figured significantly in [his] decision," and
that in selecting Walcoff for award, he "was fully aware of its cost
in comparison to the other offerors that were not selected, including
KRA." The SSO continued by explaining that, while KRA's cost proposal
was competitive, "KRA did not demonstrate sufficient technical
expertise and experience in the areas of EIA's [SOW]."
Source selection officials in negotiated procurements have broad
discretion in determining the manner and extent to which they will
make use of technical and cost evaluation results. Grey Advertising,
Inc., 55 Comp. Gen. 1111, 1120 (1976),
76-1 CPD para. 325 at 12; Mevatec Corp., B-260419, May 26, 1995, 95-2 CPD para.
33 at 3. In exercising that discretion, they are subject only to the
tests of rationality and consistency with the established evaluation
criteria. Id. As a general rule, however, agencies are required by
the Competition in Contracting Act of 1984 (CICA) to include cost or
price as a significant factor in the evaluation of proposals. 41
U.S.C. sec. 253a(b)(1)(A) (1994); see Federal Acquisition Regulation sec.
15.605(b)(1)(I) (June 1997).
First, to the extent that the protester's argument is premised on its
position that KRA was entitled to a more favorable technical
evaluation, the argument is unfounded because, as explained above,
KRA's technical evaluation was unobjectionable. Next, despite the
brevity of the source selection statement, it is clear from the record
that cost/technical tradeoffs were performed in making the award
determinations, and the record establishes that the cost/technical
tradeoffs were reasonable and substantiated.
The SSO expressly states in his source selection statement that DOE
considered past performance and price in making its award
determination. While the protester complains that the precise
technical advantages were not quantified in determining that any of
the proposals warranted the payment of a particular cost premium, in
performing a cost/technical tradeoff there is no requirement that a
selection official dollarize the process by making a precise
mathematical calculation that an additional dollar will be paid only
if there is a corresponding discrete technical advantage. Marion
Composites, B-274621, Dec. 20, 1996, 96-2 CPD para. 236 at 8 n.5. Here,
during the telephonic hearing, the SSO explained that he received
extensive oral and written reports from the TEC presenting and
explaining the evaluation and the award recommendations and that he
questioned the evaluation team members concerning the evaluation. He
focused on the technical ranking form, which ranked offerors by
technical scores and listed their size status, past performance
ratings, and proposed costs. The SSO stated that he compared the
offerors' technical scores and costs and balanced the major factors in
making his decision. Specifically, he first looked for logical "break
points" in technical scores and examined ceiling prices to ensure that
awards would be made to firms which provide a technical advantage at a
reasonable cost. The SSO stated that, while he would have preferred
to be able to select the lower cost proposals, cost was not the
predominant evaluation factor and he found that in balancing the
factors, cost did not change the technical rankings.
In this regard, the SSO explained that his primary focus was on
whether or not to make an award to [Offeror A], the technically
seventh-ranked offeror with a technical score of [deleted] at a
relatively low cost of $[deleted]. The SSO explained that he and the
evaluators had closely reviewed and analyzed the differences between
the Walcoff and the [Offeror A] proposals because of the possibility
that [Offeror A], whose technical evaluation was only [deleted] points
lower than Walcoff's and whose price was $[deleted] million less than
Walcoff's, should have been awarded a contract. However, in balancing
the technical and cost factors, the SSO was deeply concerned that
[Offeror A's] proposal had received a score of 2, or "poor," on one
subfactor. The SSO believed that an offeror with such a low score on
any criterion presented a real risk of unacceptable technical
performance. In contrast, Walcoff's proposal was evaluated as a 5 or
better on all evaluation factors and subfactors. Taking this
performance risk potential into consideration, the agency concluded
that award to [Offeror A] was not warranted, notwithstanding [Offeror
A's] relatively low cost.
The SSO similarly considered the KRA proposal, but concluded that
KRA's proposal was not as attractive as [Offeror A] because [Offeror
A] was higher ranked technically than KRA and [Offeror A's] cost was
$[deleted] million lower than KRA's. Additionally, although KRA had a
higher technical score than Walcoff on criterion 1, KRA, like [Offeror
A], had received scores of 2 ("poor")--in KRA's case under one factor
and two subfactors. The SSO determined that KRA's higher score on
business management did not adequately compensate for the "poor"
scores under the second and third evaluation factors. Further, the
SSO viewed as a significant strength Walcoff's approach of highly
qualified subcontracting for those areas in which it did not have
extensive experience or qualified staff in-house. The SSO determined
that this more costly approach was significantly superior to KRA's
proposal to use its own staff, even for areas in which KRA's staff
lacked strong relevant experience or qualifications.
In addition, the record does not support the protester's position that
the SSO did not understand the differences between the proposals.
During the hearing, the SSO explained that, while he did not read the
actual proposals, he reviewed and discussed the summary information
presented to him in which the strengths and weaknesses of each
proposal were explained and was aware that KRA's technical expertise
and experience in tasks listed in the SOW were weak. He was also
aware that KRA's proposal demonstrated a more limited scope of
experience and less complex work than required by the SOW. In short,
the SSO had before him an accurate and thorough evaluation of the
competing proposals which provided a reasonable basis for adopting the
evaluators' award recommendations.[5] Moreover, in view of the
respective costs and technical evaluations of the [Offeror A] and KRA
proposals, it is questionable whether KRA is a sufficiently interested
party to even raise this protest issue. Under our Bid Protest
Regulations, only a party whose direct economic interest would be
affected by the award of a contract or by the failure to award a
contract may protest. 4 C.F.R. sec. 21.0(a) (1997). To the extent that
KRA's argument is that another award should be made or that a firm
other than Walcoff should be awarded a contract, [Offeror A] (whose
proposal evaluation KRA has not questioned), not KRA, would be that
firm. Therefore, KRA would not be affected by the agency's decision
to award another contract or to replace Walcoff with another offeror.
Under the circumstances described above, we see nothing improper in
this selection decision. It reflects an appropriate comparison of the
competing proposals and a reasoned determination to select certain
higher-cost proposals. Particularly here, where the RFP provided that
technical factors were significantly more important than cost, we have
no basis to object to the award decision.
The protest is denied.
Comptroller General
of the United States
1. EIA is an independent statistical and analytical agency within DOE.
2. Three separate TECs, one for each CLIN or functional area,
evaluated the proposals.
3. As relevant here, a score of 2 reflected a proposal which omitted
major details and/or evidenced a lack of understanding of stated
requirements. Such a response would normally have very few
significant strengths but would evidence significant weaknesses. A
score of 5 reflected a proposal which appeared capable of meeting the
RFP requirements and had few significant strengths or significant
weaknesses. A score of 8 reflected a proposal evidencing very good
responses showing a high probability of meeting the RFP's requirements
and had significant strengths and few significant weaknesses.
4. KRA also alleges that under subfactor 3.1, ability to provide and
retain required personnel, Walcoff's proposal, which received a score
of 8, "was no better than the other awardees," all of whom received a
score of 5. We dismiss this grounds of protest because KRA is
essentially contending that these other offerors should have received
higher scores, and KRA is not an interested party to assert on behalf
of
another that the other's proposal was improperly scored. See Recon
Optical Inc. et al., B-272239, B-272239.2, July 17, 1996, 96-2 CPD para.
21 at 3-4.
5. Source selection officials may reasonably rely upon the expert
advice and evaluation recommendations of the evaluation committee and
need not actually read the proposals to make an integrated assessment
of the proposals and a reasonable award selection. Pan Am World
Servs., Inc. et al., B-231840 et al., Nov. 7, 1988, 88-2 CPD para. 446 at
22.