BNUMBER: B-278921.2
DATE: June 17, 1998
TITLE: Braswell Services Group, Inc., B-278921.2, June 17, 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:Braswell Services Group, Inc.
File:B-278921.2
Date:June 17, 1998
Patricia H. Wittie, Esq., and Karla J. Letsche, Esq., Wittie &
Letsche, for the protester.
Sharon Hershkowitz, Esq., Jannika E. Cannon, Esq., Lisa L. Hare, Esq.,
and Catherine A. D'Andrea, Esq., Department of the Navy, for the
agency.
Linda C. Glass, Esq., and Paul I. Lieberman, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Agency reasonably evaluated protester's past performance as
unsatisfactory where record shows that the protester's most relevant
contract performance was reasonably perceived as inadequate by the
agency, notwithstanding protester's allegations that the agency
overstated the scope and significance of the performance deficiencies.
2. Agency reasonably evaluated awardee's past performance record as
satisfactory, which was the rating closest to a neutral assessment,
where the agency did not have available on file past performance
rating information for the awardee which it viewed as sufficient to
permit a full evaluation; satisfactory rating did not overstate the
record, since agency had orally received a favorable overall
assessment of the awardee's relevant performance by a cognizant
contracting official.
3. Agency selection of slightly higher-priced proposal with a
satisfactory past performance rating instead of the lower-priced
proposal with an unsatisfactory rating was reasonable and consistent
with the solicitation's evaluation scheme, which weighted past
performance as slightly more important than price.
DECISION
Braswell Services Group, Inc. protests the award of a fixed-price
contract to Earl Industries under request for proposals (RFP) No.
N62670-98-R-0003, issued by the Department of the Navy for the
restricted availability (RAV)[1] of the USS DEWERT. Braswell argues
that the Navy's past performance evaluation was unreasonable and that
the agency failed to award the contract on the basis of the best value
to the government, as required by the RFP.
We deny the protest.
BACKGROUND
The RFP was issued on December 8, 1997 by the supervisor of
shipbuilding conversion and repair (SUPSHIP), U.S. Navy,
Jacksonville, Florida and consisted of approximately 40 work items.
The period of performance was March 23 through May 6, 1998. The RFP
was restricted to offerors possessing Master Ship Repair Agreements
(MSRA).[2] Award was to be made to the offeror whose proposal was
most advantageous to the government under two criteria: (1) past
performance and (2) price. Past performance was to be evaluated based
on the following factors: quality of product or service, timeliness
of performance, and contracting/business relations, with greater
consideration being given to contracts requiring the same or similar
type and complexity of work as that required by the RFP. Section
M-6(c)(1) of the RFP provided that for award determination, "[p]ast
performance is approximately equal to [p]rice, with [p]ast
[p]erformance being more important than [p]rice." The solicitation at
section L-2-8 permitted offerors to submit any information considered
relevant to the Navy's evaluation of their past performance and to
provide corrective action taken to prevent recurrence of past
performance problems. This section indicated that the Navy has
performance information readily available and sought primarily
"additional information," requiring offerors to submit a list of all
ship repair work performed for the government in the last 3 years that
exceeded $500,000, "to assist the [Navy] in performing the past
performance evaluation."
The Navy received proposals from six offerors by the January 14
closing date. One offeror withdrew prior to evaluation of proposals.
The past performance evaluation team (PPET) reviewed the past
performance file that it had for each of the five remaining offerors.
SUPSHIP Jacksonville had available past performance evaluations for
the last Chief of Naval Operations (CNO) scheduled availability
performed by three offerors, including Braswell. Braswell's
evaluation was primarily based on its performance in 1997 of repairs
to the USS MOOSBRUGGER, which was included in its past performance
file. Under the USS MOOSBRUGGER evaluation, Braswell received an
overall rating of unsatisfactory with a marginal rating for quality of
product or service and timeliness of performance and an unsatisfactory
rating for contracting business relations. Braswell's past
performance file also contained two lists of contracts it submitted
with its proposal and letters Braswell had written to rebut various
aspects of the USS MOOSBRUGGER evaluation. Earl had not previously
completed a CNO availability under SUPSHIP Jacksonville and
consequently it had no relevant past performance information on file.
After reviewing the past performance of the three offerors on file,
the PPET summarized these offerors' respective strengths, weaknesses,
and risks, and arrived at an overall adjectival past performance
rating. The PPET concluded that none of the documents in Braswell's
past performance file affected Braswell's overall unsatisfactory past
performance rating under the USS MOOSBRUGGER evaluation. The PPET did
change Braswell's risk assessment in the quality of product or service
subfactor from significant to moderate based on Braswell's proposed
corrective actions, primarily because of Braswell's stated commitment
to place its environmental coordinator on site and to improve
timeliness of quality deficiency reports (QDR) resolution. Since Earl
and another offeror did not have any past performance information on
file, [DELETED], they each received an overall rating of
"satisfactory."
On February 3, the best value evaluation board (BVEB) reviewed the
findings of the PPET and ranked the offerors based on their past
performance ratings as follows:
(1) Offeror A- Satisfactory, with overall risk deemed slight
(1) Offeror B- Satisfactory, with overall risk deemed slight
(2) Earl - Satisfactory, with overall risk deemed moderate
(2) Offeror C- Satisfactory, with overall risk deemed moderate
(3) Braswell- Unsatisfactory, with overall risk deemed
significant
The BVEB then considered the total price submitted by the offerors and
ranked them as follows:
Offeror B $ 776,735
Braswell $ 892,639
Earl $ 947,000
Offeror C $ 1,013,352
Offeror A $ 1,458,995
The BVEB then compared each offeror to each other and ranked the best
value to the government of offerors in descending order as follows:
(1) Offeror B; (2) Earl; (3) Braswell; (4) Offeror C; and (5) Offeror
A. The BVEB recommended award to Offeror B as representing the best
value and on February 9, the contracting officer agreed. On February
12, Offeror B withdrew its offer. On February 20, the contracting
officer awarded the contract to Earl as representing the best value to
the government.
On March 3, SUPSHIP Jacksonville provided a written debriefing to
Braswell and notified Braswell of its and Earl's past performance
ratings. On March 9, Braswell filed this protest with our Office. On
March 20, the head of the procuring agency determined that urgent and
compelling circumstances warranted continuation of contract
performance, notwithstanding the pendency of the protest. Performance
of the contract has been completed.
PAST PERFORMANCE
Braswell challenges the agency's evaluation of past performance and
maintains that the agency improperly relied on the USS MOOSBRUGGER
past performance evaluation on file to rate Braswell's performance as
unsatisfactory. Braswell argues that the USS MOOSBRUGGER evaluation
was arbitrary and irrational in that it excluded all positive aspects
of Braswell's performance and that the Navy ignored proposed and
implemented corrective action. Braswell also contends that the agency
failed to evaluate past performance in accordance with the terms of
the solicitation by ignoring the list of prior ship repair work that
Braswell submitted in its proposal.
As indicated above, the solicitation provided that the agency would
evaluate past performance based on the information contained in its
files but also allowed offerors to supplement the file with additional
information the offerors considered essential to the Navy's
evaluation. To assist in the past performance evaluation, offerors
were asked to provide a list of all ship repair work with a value over
$500,000 performed for the government in the last 3 years.
The agency's past performance file on Braswell consisted of the one
evaluation for the USS MOOSBRUGGER. Under that evaluation, Braswell
had been rated unsatisfactory overall with a significant risk of poor
performance. Braswell received a marginal rating for quality of
product or service and timeliness of performance and an unsatisfactory
rating for contracting/business relations. The risk of failure with
respect to timeliness and contracting/business relations was
considered significant while the risk of failure in the quality of
product or service was changed by the PPET from "significant" to
"moderate" based on the agency's review of Braswell's proposed
corrective actions. The USS MOOSBRUGGER evaluation listed several
strengths for Braswell: it noted that there were no major
discrepancies, that reports were generally accurate, that the firm
generally met contract milestones, that technical problems were
promptly identified, and that there was no major rework. However, it
also contained the following weaknesses: the time to satisfactorily
close QDRs/safety deficiency reports (SDRs) was excessive; management
assignments were ineffective; the firm was obstructive in contract
administration and unresponsive to contract changes; excessive time
was used to scope and negotiate changes; there was an inability to
accommodate change work; the firm's remote environmental management
was not effective; and the firm was unreasonable, uncooperative and
disputatious. The PPET concluded that most of Braswell's weaknesses
were connected to its management and its ability to price and
accommodate changes. Although the PPET found that Braswell did
generally meet contract milestones, the agency determined that this
was usually after significant growth work was removed from the
contract and that several bid items had to be completed independently
of the contract to allow those milestones to be met. The PPET also
concluded that Braswell had provided no information in its proposal
that would alter this past performance rating.
We will review an evaluation of an offeror's performance risk to
ensure that it was reasonable and consistent with the stated
evaluation criteria. Dragon Servs., Inc., B-255354, Feb. 25, 1994,
94-1 CPD para. 151 at 6. An agency's evaluation of past performance may
be based upon the procuring agency's reasonable perception of
inadequate prior performance, even where the contractor disputes the
agency's interpretation of the facts. Pannesma Co. Ltd., B-251688,
Apr. 19, 1993, 93-1 CPD para. 333 at 6. This record provides us no basis
upon which to object to the Navy's conclusion regarding Braswell's
past performance. In its proposal, Braswell provided a list of prior
ship repair work, much of it for relatively small dollar value
contracts (substantially less than $500,000) with no additional or
explanatory information. The protester's successful performance of
these listed contracts does not negate the agency's conclusion about
the firm's performance of the USS MOOSBRUGGER availability, a prior
SUPSHIP Jacksonville contract. While the solicitation allowed
offerors to submit information in addition to that which SUPSHIP
Jacksonville had readily available, it also placed offerors on notice
that SUPSHIP Jacksonville intended to rely primarily on its own
internal documentation regarding an offeror's performance history.
Moreover, the USS MOOSBRUGGER was the most recent example of
Braswell's work for SUPSHIP Jacksonville that involved repairs of a
type and complexity similar to that required by the USS DEWERT.
It is clear that there existed significant problems in the performance
of the ship repairs on the USS MOOSBRUGGER, the contract which the
agency reasonably viewed as most relevant in terms of the type and
complexity of work required. A significant percentage of the problems
involved responding to and negotiating growth work, which resulted in
delays in pricing and negotiating changes and disputes over contract
administration procedures. For example, Braswell disputed most QDRs
and SDRs before acknowledging that corrective action was necessary,
resulting in lengthy cycle time; Braswell assigned only one person to
perform the functions of material control manager, purchasing agent,
and government furnished material clerk, resulting in the need for the
government to expend additional resources with respect to these
functions; and Braswell used an off-site corporate safety director,
causing delayed responses to problems. Additionally, Braswell applied
a labor rate of $13.56 per hour with no overhead, no general and
administrative expense, and no profit factors for the USS MOOSBRUGGER
when work was deleted, while insisting on a labor rate of $24.68 for
work added to the contract by change order. Braswell's explanations
and disputes with respect to various specific incidents and aspects of
these problems do not call into question the reasonableness of the
agency's assessment that Braswell's performance was seriously flawed.
The record also does not support Braswell's contention that SUPSHIP
Jacksonville did not take into consideration its proposed corrective
action to alleviate some of the concerns in the USS MOOSBRUGGER
evaluation. On the contrary, the agency reviewed and considered
Braswell's proposed corrective action in assessing Braswell's risk of
successful performance and as a result changed its risk of failure
from significant to moderate with respect to quality of product or
service. Although Braswell offers explanations and interpretations
of the record that provide a more favorable picture of Braswell's
performance on the USS MOOSBRUGGER than the agency's, this does not
alter the fact that there was sufficient evidence for the agency to
conclude that the firm had a series of substantial performance
problems under the prior contract, which warranted a negative past
performance assessment.
With respect to Braswell's contention that its list of other contracts
was not properly considered in the past performance evaluation, there
is no legal requirement that all references listed in a proposal be
checked. Questech, Inc., B-236028, Nov. 1, 1989, 89-2 CPD para. 407 at 3.
Even presuming that Braswell's listed references would have reported
favorably on Braswell's performance, the agency was reasonably
entitled to rely on its file record of the USS MOOSBRUGGER evaluation
as providing the most relevant information for purposes of this
procurement.
Braswell also argues that the Navy's evaluation of Earl's past
performance was unreasonable and improper. Specifically, Braswell
objects that Earl's proposal failed to contain a list of prior ship
repair work that it had, in fact, performed and of which the agency
was aware.
Earl's failure to list prior work in its proposal does not in itself
call into question the propriety of the past performance evaluation,
since the purpose of that list was to merely assist the agency in
performing the past performance evaluation. The solicitation language
makes clear that a list provided by an offeror was intended only to
supplement the agency information of record, which the agency planned
to use as its primary source for past performance evaluation. In
fact, here, Earl's failure to provide past performance information
could only have had a negative impact on its past performance
evaluation. As noted above, Earl received a satisfactory/neutral
rating with a moderate risk of successful performance. The record
includes an affidavit from the Chief of the Contracts Office at
SUPSHIP Portsmouth stating that he told the contracting officer at
SUPSHIP Jacksonville that his office did not collect past performance
data on contracts awarded prior to February 1, 1998, and that he did
not have any written information other than miscellaneous quality
assurance documents but "that both contractors did good work and would
probably have received very good past performance ratings on completed
ship repair packages." Thus, had Earl identified that work in its
proposal and been formally evaluated on it, as the protester appears
to believe should have happened, Earl would apparently have received a
higher rating than the satisfactory/neutral that it received for past
performance.
For the same reason, the record does not support the protester's
contention that Earl should have received less than a satisfactory
rating. As explained above, SUPSHIP Jacksonville had no past
performance data on Earl in-house and Earl did not submit a list of
prior contracts. The Navy believed that, in accordance with Federal
Acquisition Regulation (FAR) sec. 15.608(a)(2)(iii) (June 1997), which
provides that firms "lacking relevant past performance history shall
receive a neutral evaluation for past performance," it was appropriate
to rate Earl satisfactory with an overall risk of moderate. The mere
fact that an offeror does not list any previous contracts does not, by
itself, warrant a neutral past performance evaluation where the agency
is aware of such contracts. Here, however, while the Navy was aware
of work Earl was performing for SUPSHIP Portsmouth, the agency did not
have past performance information on any completed contract of Earl's
(which it believed was needed for purposes of an evaluation), and had
only an oral statement regarding the ongoing work at SUPSHIP
Portsmouth. While having even limited past performance information
would normally preclude assigning a neutral rating, here, as explained
above, such a rating could only have been less advantageous to Earl
than would an assessment based on the oral information provided by
SUPSHIP Portsmouth. Under these circumstances, the Navy's evaluation
of Earl's past performance as satisfactory/neutral was not
unjustifiably favorable.
Braswell also argues that, even assuming that Earl was entitled to a
neutral rating, the agency improperly equated neutral with
satisfactory, thus giving Earl a substantive rating which encompassed
specific, positive attributes and no weaknesses. We see no basis to
question the agency's evaluation of Earl's proposal in this regard.
[DELETED]:
[DELETED]
Based on the agency's definition of a satisfactory rating, we cannot
say that it does not equate to a "neutral" rating. Here, the Navy's
definition of satisfactory generally reflects an average evaluation
with no major strengths or weaknesses, and was thus the rating closest
to a neutral assessment. The agency reasonably equated a lack of past
performance information with a past performance history that was
neutral, in the sense that it was neither positive nor negative. See
Oceaneering Int'l, Inc., B-278126, B-278126.2, Dec. 31, 1997, 98-1 CPD para.
133 at 7. Indeed, while the agency reasonably evaluated Earl's past
performance as essentially neutral because of a lack of enough
information for a full evaluation, the limited information that was
available for Earl may have warranted a more favorable evaluation. In
either instance, Braswell was not adversely impacted by the
evaluation.
SELECTION DECISION
In its initial protest, Braswell argued that the Navy's best value
determination was arbitrary and an abuse of discretion, and not in
accordance with the Navy's SSP, because even with an "unsatisfactory"
past performance rating, Braswell's price was so far below that of the
awardee that it was entitled to award. Braswell refined this argument
to the position that the best value decision was flawed because it is
based on an irrational and arbitrary past performance evaluation of
Braswell and the awardee. As explained above, we find unobjectionable
the agency's past performance evaluation of both offerors. In a best
value procurement, price is not necessarily controlling in determining
the offer that represents the best value to the government. Rather,
that determination is made on the basis of whatever evaluation factors
are set forth in the solicitation, with the source selection official
often required to make a price/technical tradeoff to determine if one
proposal's technical superiority is worth the higher cost that may be
associated with that proposal. In this regard, price/past performance
tradeoffs are permitted when such tradeoffs are consistent with the
solicitation's evaluation scheme. USA Elecs., B-275389, Feb. 14,
1997, 97-1 CPD para. 75 at 3. Where, as here, an RFP identifies past
performance and price as the evaluation criteria, proposals must be
evaluated on that basis, and ultimately the selection official may
have to decide whether a higher-priced proposal submitted by an
offeror with a better past performance rating represents the best
value to the government. Id.
Here, the Navy reasonably determined that the difference in price
between the two proposals was less significant than the concerns over
Braswell's unsatisfactory past performance record. See H.F.
Henderson Indus., B-275017, Jan. 17, 1997, 97-1 CPD para. 27 at 2-3.
Accordingly, we see nothing improper in the source selection decision.
The protest is denied.
Comptroller General
of the United States
1. A "RAV" is a short, labor-intensive repair effort or "availability"
for the accomplishment of specific items of work while the ship is in
its homeport and rendered incapable of performing its assigned mission
and tasks.
2. Braswell maintains an agreement for boat repair (ABR), not an MSRA,
but is permitted to compete for MSRA-restricted work based on a prior
settlement agreement with the agency.