BNUMBER:  B-279168 
DATE:  May 12, 1998
TITLE: PCT Services, Inc, B-279168, May 12, 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:PCT Services, Inc

File:B-279168
        
Date:May 12, 1998

Thomas E. Abernathy IV, Esq., Smith, Currie & Hancock, for the 
protester.
Marian E. Sullivan, Esq., and Patrick F. Corbin, Esq., Department of 
the Air Force, for the agency.
Paula A. Williams, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest challenging agency's past performance risk assessment is 
denied where the protester's performance risk rating was reasonably 
based on the agency's experience with the protester under prior 
contracts and performance questionnaire responses from other 
government sources, which reflected the protester's poor performance 
on other relevant contracts.
 
DECISION

PCT Services, Inc. protests the award of three contracts to Riteway, 
Inc. under requests for proposals (RFP) Nos. F41622-97-0030, 
F41622-97-R-0032, and F41622-97-R-0036, issued by the Department of 
the Air Force for commercial hospital aseptic management system (HAMS) 
services at three Air Force Bases (AFB).  PCT contends that the 
agency's evaluation of its past performance risk was improper.  

We deny the protest.

The RFPs, issued on November 18, 1997, provided for the award of 
fixed-price contracts for a base period and four 1-year options.[1]  
The RFPs stated that the awardee would be selected on a best value 
basis considering technical, past performance and price factors; the 
technical factor was considered most important, while past performance 
and price were considered equal in importance.  The RFPs required 
offerors to submit present and past performance information for 
relevant contracts performed within the past 2 years and advised that 
the agency would conduct a risk assessment based on the offeror's past 
performance, rating them on a scale of not applicable, high, moderate, 
or low risk.[2]  In assessing past performance risk, the RFPs stated 
that the evaluators would review the present and past performance 
information required by the RFPs, seek present and past performance 
information through the use of simplified performance 
questionnaires,[3] and use data independently obtained from other 
government and commercial sources.  Under the performance risk/price 
tradeoff set forth in the RFPs, award would be made to the lowest 
evaluated price, technically acceptable offeror if it received a low 
performance risk rating, but award could be made to other than the 
lowest priced offeror if that offeror received other than a low 
performance risk rating. 

By the December 9 closing date, the Air Force received several 
proposals in response to each RFP.  PCT was the lowest evaluated price 
offeror under each solicitation, but it received a moderate 
performance risk rating based upon the performance questionnaire 
responses and the evaluators' own knowledge of PCT's prior 
performance.  PCT has five HAMS contracts with the Air Force, at 
Altus, Columbus, Dover, Patrick, and Kirtland AFBs.  In assessing 
PCT's performance risk, the agency considered the responses received 
from Altus, Columbus, Dover, and Patrick AFBs; and from Brooke Army 
Medical Center (BAMC) and Fort Knox Army Hospital (both facilities 
were listed in PCT's past performance proposals).  Altus AFB, Dover 
AFB, and Fort Knox Army Hospital each rated PCT's performance 
satisfactory overall.  While Columbus AFB reported PCT's performance 
excellent in many areas, the firm's management performance was rated 
marginal because of its failure to meet payroll, to furnish and 
maintain the supplies necessary to perform, and failure to maintain a 
certified executive housekeeper at Columbus AFB from 1995 through 
1997.  Patrick AFB rated the firm's performance unacceptable in 
training, quality, and work scheduling; in the areas of management, 
housekeeping, and the medical facility plan it rated the firm 
marginal.  At BAMC, PCT's performance was rated marginal in the areas 
of management, quality, work scheduling, and infection control 
requirements; other areas were rated satisfactory.  The facility 
managers at Patrick AFB and BAMC stated, that given what they know now 
about PCT's performance, they definitely would not award to PCT if 
they had a choice.  The Columbus AFB facility manager stated that he 
probably would not award to PCT again.  In addition, the agency's 
contracting office reported problems in negotiating contract changes 
with PCT because PCT failed to submit timely and complete change 
proposals.  

PCT was informed, during discussions, that it was assigned a moderate 
performance risk rating because of these reported deficiencies and the 
firm was given an opportunity to submit a response.  In its January 
13, 1998 response, PCT questioned some of the assessments and provided 
some additional information.  For example, the protester questioned 
the comment made by the Dover AFB facility manager--that he would 
probably not award another contract to PCT--given his reported rating 
that PCT's performance was satisfactory in all areas.  As to its 
performance at BAMC, PCT provided information regarding a recent 
successful inspection performed by the Joint Commission for the 
Accreditation of Health Care Organizations (JCAHCO) to refute the 
marginal ratings it received from the facility manager at BAMC.  The 
agency analyzed PCT's response and concluded that the firm's 
submission provided no basis to disregard the facility managers' 
ratings.  For example, the evaluators noted that JCAHCO inspections 
are conducted over a   1 week period every 3 years and concluded that 
the JCAHCO ratings did not necessarily represent PCT's daily 
performance at BAMC.  The evaluators did disregard some negative past 
performance information after reviewing PCT's response.  For instance, 
the evaluators disregarded the Dover AFB facility manager's comment 
that he would not make award to PCT again because it was not supported 
by his overall satisfactory rating of PCT's performance.  However, 
since PCT did not rebut the major deficiencies identified in the 
performance questionnaire responses from Columbus AFB, Patrick AFB and 
BAMC, its performance risk rating remained unchanged.  

The Riteway proposals were the next lowest-priced technically 
acceptable proposals.  The agency evaluated the performance 
questionnaire responses submitted for the eight HAMS contracts Riteway 
has with the Air Force and assigned a low performance risk rating, 
given Riteway's reported overall performance.  The contracting 
officer, who was also the source selection official, reviewed the 
evaluation findings and the performance information from the facility 
managers and concluded that Riteway's proposals represented the best 
value to the agency.  His decision was based on his finding that 
Riteway's past performance indicated that Riteway was more likely to 
satisfactorily perform the required services as compared to PCT, whose 
past performance history created doubt as to its ability to perform 
the proposed services in a satisfactory manner.  The contracts were 
awarded to Riteway on January 21, 1998; this protest followed.

PCT protests that the agency's past performance risk evaluation was 
flawed, arguing that the agency failed to evaluate its present 
performance under three current contracts identified in PCT's past 
performance proposals.  By failing to evaluate its present performance 
at Kirtland AFB, Altus AFB and BAMC, PCT claims, the agency violated 
the allegedly express representations in the RFPs that the agency 
would evaluate an offeror's performance under its past and present 
contracts.

In reviewing an evaluation of an offeror's performance risk, we will 
examine it to ensure that it was reasonable and consistent with the 
stated evaluation factors, since the relative merit of competing 
proposals is primarily a matter of agency discretion.  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 on its reasonable 
perception of inadequate prior performance, even where the protester 
disputes the agency's interpretation of the facts.  Pannesma Co. Ltd., 
B-251688, Apr. 19, 1993, 93-1 CPD  para.  333 at 6.  Here, we have reviewed 
the record in light of the protester's arguments and find that it 
reasonably supports the agency's evaluation of PCT's performance risk.

First, the protester maintains that the agency failed to obtain 
performance information from Patrick AFB regarding a custodial 
contract at that base, or from  Kirtland AFB or Fort Knox Army 
Hospital regarding HAMS contracts at those locations, all of which 
were listed in its proposals; thus, the evaluators allegedly did not 
evaluate its proposals in accordance with the solicitation provision 
which required offerors to submit information on contracts considered 
relevant to demonstrate its ability to perform the proposed services.  
The agency was not required to check all references listed in each 
offeror's proposal.  Questech, Inc., 
B-236028, Nov. 1, 1989, 89-2 CPD  para.  407 at 3.  The record shows that 
Kirtland AFB did not return the performance questionnaire that was 
sent to all AFBs, including Kirtland, in February 1997; and on three 
occasions, the contracting officer attempted to contact the facility 
manager at Kirtland by telephone but was unsuccessful in doing so.  
Thus, the agency did not ignore the Kirtland AFB reference; rather, 
the reference simply did not respond to the questionnaire.  The record 
shows that of the five HAMS contracts PCT has with the Air Force, four 
facility managers provided responses which were considered by the 
agency, and there is nothing in the record to suggest that PCT's 
performance risk rating would have improved based on the Kirtland AFB 
reference.[4]

Next, PCT contends that the Air Force failed to evaluate PCT's past 
performance in accordance with the RFPs' requirements and the 
applicable regulations.  The protester asserts that the agency should 
have requested updated performance information after the December 9, 
1997 receipt of proposals.  Had it done so, the protester states, the 
positive aspects of its present performance would have been reported, 
resulting in a past performance rating of low risk and the selection 
of PCT's proposals for award.  The Air Force's position is that the 
performance information obtained from early 1997 was reliable, 
considering the facility managers' ongoing knowledge of, and 
experience with, the contractors' performance. 

The RFPs stated that offerors' present and past performance of 
relevant contracts performed within the last 2 years would be 
evaluated by the agency to assess past performance risk.  Our review 
of the evaluation documents show that the agency relied on performance 
information obtained in the 1997 survey of contractor performance at 
all AFBs.  Since the RFPs specifically required the agency to evaluate 
past performance within the last 2 years to make an appropriate 
assessment, we find the agency's use of such data was consistent with 
the stated evaluation scheme and reasonable.  Nothing in the RFPs 
required the agency to conduct a new survey, rather than rely on the 
past performance information already in hand. 

While the protester argues that updated performance information would 
show that PCT's performance has improved, we do not think the agency's 
reliance on the 1997 questionnaire responses--the most current 
information available at the time of evaluation--was unreasonable.  
Moreover, as noted above, despite being apprised of the reported 
performance deficiencies during discussions, PCT did not demonstrate 
that the facility managers' ratings were inaccurate or address any 
actions taken to correct these reported deficiencies.  PCT's response 
essentially disagreed with the facility managers' judgment of its 
performance.  The agency based its performance risk rating on 
unrebutted information showing a marginal management rating at 
Columbus AFB, several marginal and unacceptable ratings at Patrick 
AFB, several marginal ratings at BAMC, and the statements of two of 
the facility managers that  they definitely would not award to PCT if 
given the choice.  Thus, the record reasonably supports the agency's 
decision that PCT's past performance posed a moderate performance 
risk.[5]  Accordingly, we have no basis to question the agency's 
source selection decision, since the contracting officer reasonably 
determined that, despite its lower prices, PCT's proposals did not 
represent the best value to the agency under the RFPs' performance 
risk/price tradeoff scheme.  

The protest is denied.

Comptroller General 
of the United States  

1. The RFPs were issued to obtain HAMS services at MacDill, Hill, and 
Luke AFBs; the Hill AFB and Luke AFB solicitations were issued as 
total small business set-asides.  The three RFPs have identical 
provisions regarding the preparation of proposals, the evaluation of 
proposals, and basis for award. 

2. The definitions of the performance risk ratings were contained in 
Air Force Federal Acquisition Regulation Supplement, Appendix BB-305 
(Jan. 15, 1995).  A high risk rating means that "[s]ignificant doubt 
exists, based on the offeror's performance record, that the offeror 
can perform the proposed effort"; a moderate risk rating means that 
"[s]ome doubt exists, based on the offeror's performance record, that 
the offeror can perform the proposed effort"; a low risk rating means 
that "[l]ittle doubt exists, based on the offeror's performance 
record, that the offeror can perform the proposed effort"; and a not 
applicable rating means that "[n]o significant performance record is 
identifiable."

3. The performance questionnaires, which measure customer 
satisfaction, are sent each year to AFBs where the HAMS services are 
being provided; they address numerous areas of contractor performance 
including, management, personnel, training, work scheduling, and 
infection control requirements.  

4. Regarding PCT's performance at Fort Knox Hospital, the evaluation 
record contradicts the protester's allegation that this reference had 
not been contacted. As indicated by the earlier discussion, the 
responses received from the Fort Knox contracting officer rated PCT's 
performance under its housekeeping services contract satisfactory.  On 
the other hand, the agency reports that it did not request  
information from Patrick AFB regarding PCT's performance under its 
custodial contract because PCT's performance under its HAMS contract 
at Patrick AFB was considered more relevant than its performance under 
the custodial contract at the AFB.  The protester has provided no 
basis for us to find the agency's decision in this regard 
unreasonable.  Overall, then, PCT's satisfactory performance on 
relevant contracts at Altus and Fort Knox simply did not outweigh the 
negative performance information from the other military facilities.  

5. As to PCT's contention that the favorable JCAHCO inspection at BAMC 
should have been considered, we believe the Air Force was reasonable 
in concluding that  JCAHCO ratings based on a 1 week performance 
period may not be representative of the contractor's ongoing 
performance.  Those ratings thus do not provide a basis for our Office 
to conclude that the major deficiencies identified in the performance 
questionnaire responses were inaccurate and should not have been 
relied on by the Air Force.