BNUMBER: B-279217; B-279217.2; B-279217.3; B-279217.4
DATE: May 20, 1998
TITLE: Quaker Valley Meats, Inc./Supreme Sales, GmbH, A Joint
Venture;, B-279217; B-279217.2; B-279217.3; B-279217.4, May 20, 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:Quaker Valley Meats, Inc./Supreme Sales, GmbH, A Joint
Venture; Upper Lakes Foods, Inc.
File:B-279217; B-279217.2; B-279217.3; B-279217.4
Date:May 20, 1998
Richard L. Moorehouse, Esq., and Frank K. Peterson, Esq., Holland &
Knight, for Quaker Valley Meats, Inc./Supreme Sales GmbH, A Joint
Venture; and Alan M. Grayson, Esq., and Laura J. Mann, Esq., Grayson &
Associates, for Upper Lakes Foods, Inc., the protesters.
Jerry L. Hester for Theodor Wille Intertrade, an intervenor.
Portia Bonavitacola, Esq., and Michael Trovarelli, Esq., Defense
Logistics Agency, for the agency.
Scott H. Riback, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protests challenging various aspects of agency's technical
evaluation of proposals are denied where record shows that evaluation
was reasonable and consistent with stated evaluation criteria.
2. Agency properly assessed realism of proposals based on offerors'
showing that prices for commercial items were based on actual, recent
invoices for products being acquired; agency rated proposals higher
(and lower risk) where proposed pricing was supported with invoices as
opposed to vendor quotations.
3. Protester is not an interested party to challenge eligibility of
awardees to receive contracts where record shows that, even if
protester were correct, intervening offerors, not protester, would be
next in line for award.
4. Agency's price/technical tradeoffs are reasonable where record
shows agency weighed technical merit against price in determining that
one offeror's technically superior, higher-priced proposal represented
best value for one award, and that another offeror's low-priced,
technically inferior proposal represented the best value for second
award.
DECISION
Quaker Valley Meats, Inc./Supreme Sales, GmbH, A Joint Venture, and
Upper Lakes Foods, Inc. protest the award of two contracts under
request for proposals (RFP) No. SP0300-97-R-4007, issued by the
Defense Logistics Agency (DLA) for full line food distribution for all
military bases, hospitals and United States Navy Ships throughout
Europe and the Middle East. The protesters raise numerous objections
to the agency's evaluation of proposals and source selection
decisions.
We deny the protests.
BACKGROUND
The RFP contemplated the award of two indefinite-delivery,
indefinite-quantity contracts, each for a base year with four 1-year
options, to provide full line food distribution for all military
personnel and their dependents. The RFP divided the requirement
between a northern zone (comprised of northern and central European
countries) and a southern zone (comprised of southern European and
Middle Eastern countries), and advised offerors that firms were
eligible for award of a contract for one, but not both, zones. The
RFP further provided that the contractor in each zone would be
required to serve as a back-up contractor for the other zone where,
due to unforeseen events, such as a large-scale military mobilization,
there might be a sudden surge in the requirement for the other zone.
Offerors were required to submit detailed technical proposals showing
how they intended to accomplish contract performance on a day-to-day
basis, how they could meet the agency's surge and mobilization
requirements should an unforeseen event within the zone for which they
were awarded a contract occur, and how they intended to meet their
obligation to act as a back-up contractor for the other zone. For
evaluation purposes, the RFP specified the following eight criteria,
in descending order of importance: Distribution; Experience/Past
Performance; Quality; Contingencies; Back-Up Zone Plan;
Procurement/Pricing; Socioeconomic Considerations; and DLA Mentoring
Business Agreement. (Each of these criteria had several subelements,
discussed below.) Offers were evaluated by assigning an adjectival
rating of either excellent, good, fair, or poor to each subelement,
each criterion and the proposal overall. (Adjectival ratings were not
assigned under the DLA Mentoring Business Agreement
criterion--proposals were simply ranked numerically, from first to
last.)
Offerors were to submit prices for a selected "market basket" of 120
core items being procured. The price of each item was to be comprised
of two elements, the "delivered price" and the "distribution fee."
The delivered price represents the amount that the offeror, as prime
vendor, pays to its supplier for the item. The distribution fee
represents the contractor's fee, including profit, for transportation,
storage and delivery of the food item to its ultimate destination.
(Thus, for example, an offeror could propose to provide potatoes for
$1 per pound, with the price reflecting a delivered price of $.75 per
pound and a distribution fee of $.25 per pound.) The RFP advised
that, during the life of the contract, delivered prices would be
adjusted every 2 weeks to account for market fluctuations. For
purposes of substantiating their pricing, firms were asked to provide
recent invoices that actually reflected the delivered prices being
proposed; where the firm did not provide an invoice, a vendor quote
was required. The distribution fee, on the other hand, was
essentially a fixed element of the offeror's price, and would only
change based on the terms of the offer (for example, where a firm's
price was raised by a stated percentage during an option year). Award
was to be made on a best value basis, with technical considerations
carrying greater weight than price.
The agency received several initial offers for each zone. After
evaluating the offers (and eliminating one from further
consideration), conducting discussions, performing site visits and
obtaining best and final offers (BAFO), DLA made award to Theodor
Wille Intertrade for the northern zone and Ebrex Food Services for the
southern zone. In both zones, the agency found particularly important
the fact that the awardees' proposals had received excellent scores
for the most important evaluation criterion, Distribution. For the
northern zone, the agency found that Theodor Wille's excellent
Distribution rating was sufficiently important that it was willing to
pay the firm's price premium. In the southern zone, the agency found
that Ebrex's excellent Distribution rating, in combination with its
low price, outweighed its poor ratings elsewhere in the evaluation (in
particular, its poor ratings in the Contingencies area).
UPPER LAKES' PROTEST
Upper Lakes raises numerous arguments regarding the agency's technical
evaluation of its and the awardees' proposals. We have examined Upper
Lakes' contentions and find them to be without merit. We discuss the
most significant arguments below.[1]
Distribution Criterion
Upper Lakes argues that the agency improperly evaluated proposals
under the Distribution evaluation criterion for the northern zone,
specifically, that it misevaluated proposals under the product
availability and location subelements. Under those subelements, Upper
Lakes received ratings of good and fair, respectively, while the
awardee (Theodor Wille) received ratings of excellent under both.[2]
The focus of Upper Lakes' allegation is the solicitation's requirement
for deliveries to all points within 48 hours of when an order is
placed; Upper Lakes contends that it was unreasonable for the agency
to require deliveries to Bosnia within 48 hours because Bosnia should
have been considered a "remote" point of delivery within the meaning
of the RFP, which exempted such areas from the 48-hour
requirement.
The RFP requires deliveries to be made to all points within 48 hours
unless the delivery point is deemed "remote." RFP at 204. The
solicitation further specifies numerous remote delivery points
(primarily located in southern Europe and the Middle East) but does
not include Bosnia among the remote locations. Id. The agency
explains that Bosnia was not designated as a remote area because the
RFP as written did not require delivery to numerous points in Bosnia,
but only to a single staging area delivery point in Croatia. The RFP
does provide, however, that although the current requirement is for
delivery to this single point, in the future the requirement could be
expanded to 15 delivery points. RFP at 83. Upper Lakes' concern
arises from the possibility that the agency may elect to expand the
requirement to include the 15 delivery points.
To the extent that Upper Lakes' argument amounts to a challenge
regarding the RFP's designation of remote points, it is untimely. The
delivery requirement for Bosnia--as well as the possible expansion of
the requirement to include an additional 15 delivery points--was
clearly spelled out in the RFP, and it also was c/lear from the RFP
that Bosnia was not designated a remote area. If Upper Lakes was
concerned that the 48-hour delivery requirement was infeasible for
Bosnia, it should have raised its objection prior to the deadline for
submitting initial offers; protests of alleged solicitation
improprieties such as this must be filed no later than the closing
time for receipt of proposals. 4 C.F.R. sec. 21.2(a)(1) (1998). Since
Upper Lakes did not raise the argument until after award, its protest
in this regard is untimely and will not be considered.
We also find that DLA had a reasonable basis for distinguishing
between Upper Lakes' and the awardee's proposals in the identified
areas. (As noted, Upper Lakes received a fair and good rating under
the two subelements, while the awardee received excellent ratings.)
Our Office reviews agency evaluations only to ensure that they are
reasonable and consistent with the RFP's evaluation criteria. Magnum
Prods., Inc.; Amida Indus., Inc., B-277917 et al., Dec. 8, 1997, 97-2
CPD para. 160 at 2-3. The record shows that Upper Lakes, even after
discussions relating to the matter, was unwilling to commit to meeting
the 48-hour delivery requirement for Bosnia. The firm stated instead
that, while it would endeavor to meet the requirement, it was
nonetheless a goal rather than a firm commitment, especially in view
of the possibility that hostilities in the area might impede its
delivery efforts. In contrast, the awardee committed to meeting the
48-hour delivery requirement, even for Bosnia, stating that it would
use a continuously circulating fleet of satellite-controlled vehicles
that would be dedicated exclusively to the Bosnia route. Given the
RFP's current requirement for delivery to only one location in Croatia
for deliveries to Bosnia, as well as the awardee's proposal of an
innovative method for meeting the 48-hour requirement (the use of
satellite-controlled vehicles), we conclude that the agency had a
reasonable basis for rating the awardee's proposal superior to Upper
Lakes' in this area.[3]
Experience/Past Performance
Upper Lakes argues that the agency misevaluated its and the awardees'
proposals under the Experience/Past Performance criterion. In the
southern zone, Ebrex received an overall criterion rating of good,
with ratings of fair for the experience subelement and excellent for
the past performance subelement; Upper Lakes also received an overall
rating of good, with a good rating for experience and an excellent
rating for past performance. In the northern zone, Theodor Wille
received an overall criterion rating of good, with a rating of good
for experience and excellent for past performance, while Upper Lakes
received an overall rating of good, with good ratings for both
subelements. Upper Lakes maintains that it should have received
excellent ratings in both zones because it has the greatest amount of
relevant experience in performing contracts similar to this
requirement.
Even if Upper Lakes is correct regarding the evaluation in this area,
any error did not result in competitive prejudice to Upper Lakes.
Prejudice is an essential element of every viable protest, and our
Office will not sustain a protest unless the protester demonstrates a
reasonable possibility that it was prejudiced by the agency's actions,
that is, unless the protester demonstrates that, but for the agency's
actions, it would have had a substantial chance of receiving the
award. McDonald-Bradley, B-270126, Feb. 8, 1996, 96-1 CPD para. 54 at 3;
see Statistica, Inc., v. Christopher, 102 F. 3d 1577, 1581 (Fed. Cir.
1996).
For the southern zone, the record shows that Interdyne was ranked
first technically, Upper Lakes second and Ebrex third. (Ebrex was
ultimately ranked first for award purposes because of its
significantly lower price--approximately [deleted] less than
Interdyne's.[4]) Interdyne's proposal received excellent ratings
under three of the eight major criteria, with an excellent rating
under the most important criterion, Distribution. Upper Lakes does
not challenge the agency's rating of Interdyne's proposal. In
comparison, Upper Lakes' proposal received an excellent rating only
for the least important Socioeconomic Considerations criterion, with
good or fair ratings for the remaining criteria; significantly, and as
discussed above, Upper Lakes' proposal properly received only a good
rating under the Distribution criterion. Accordingly, even if Upper
Lakes' arguments regarding the evaluation of proposals under the
Experience/Past Performance rating were correct (and this resulted
both in Upper Lakes' proposal's rating being raised to excellent and
Ebrex's proposal being displaced for award purposes because of a
reduction in its rating in this area), Interdyne's proposal would
remain technically superior overall, and under the Distribution
criterion. Since Interdyne's proposed price also was [deleted] lower
(approximately [deleted] less) than Upper Lakes', there is no
reasonable possibility that DLA would have made award to Upper Lakes
based solely on a change in its rating under this criterion. This is
confirmed by the agency's overall ranking of the proposals in the
southern zone, which shows that Upper Lakes was ranked last in the
agency's best value determination.
Similarly, in the northern zone, Upper Lakes' proposal was ranked
third technically, behind Theodor Wille's and Ebrex's. As discussed
above, the Theodor Wille and Ebrex proposals received excellent
ratings under the Distribution criterion, while Upper Lakes' received
only a good rating. The record further shows that Theodor Wille
received excellent ratings under two other criteria (Contingencies and
Socioeconomic Considerations), for a total of three excellent ratings,
while Upper Lakes received only one excellent rating. In comparison,
even if Upper Lakes' proposal were rated excellent under the
Experience/Past Performance criterion, it still would have only two
excellent ratings, and only a good rating under the Distribution
criterion.[5] Since Upper Lakes' proposal was also ranked last
overall because of its [deleted] higher evaluated price (slightly more
than [deleted] higher than Theodor Wille's price), it is clear any
error in the Experience/Past Performance ratings did not competitively
prejudice Upper Lakes.[6] Moreover, even if this were not the case
(and Theodor Wille were not in line for award because of the
evaluation in the Experience/Past Performance area), Upper Lakes does
not challenge the agency's ultimate conclusion that Quaker Valley's
would have been next in line for award based on its technically
comparable proposal and [deleted] lower (approximately [deleted] lower
than Upper Lakes) evaluated price. We conclude that any possible
error on the part of the agency in evaluating Experience/Past
Performance was not prejudicial to Upper Lakes.
Realism
Upper Lakes argues that the awardees' prices are unreasonably low and
that, if the agency had conducted a realism evaluation of the business
proposals, it would have discovered this fact. According to Upper
Lakes, both awardees' delivered prices (that is, the invoice-based
prices for the products being procured) and distribution prices were
low as compared to both its offer and the government estimate for the
acquisition.
The agency adequately evaluated the proposed prices. The RFP provided
that proposals that were unrealistic as to technical approach,
scheduling or pricing would be found to reflect a lack of
understanding of the requirement, and that business (price) proposals
had to be complete, realistic and reasonable. RFP at 152.
The RFP further advised that proposals that contained major technical
or business omissions, or that were out of line as to price, would be
eliminated from further consideration if the agency determined that
the deficiencies could not be remedied through discussions. RFP at
184. The solicitation also stated that more consideration would be
given to proposals based on actual invoice-based prices as compared to
proposals based on industry quotes. RFP at 208. Invoice-based prices
were deemed more realistic since, unlike industry quotes, they formed
the basis for a company's prior actual transactions.
The record shows that, in evaluating proposals, the agency did
precisely what it represented; it assessed realism as reflected by the
number of invoice-based prices submitted by the offerors. Under the
Procurement/Pricing criterion, the agency based its adjectival ratings
in part on the number of invoice-based prices submitted by the
offerors. Thus, Ebrex's proposal was assigned a good rating under the
pricing plan subelement for the southern zone because it based a
majority of its prices on invoices. For the northern zone, Theodor
Wille's proposal was assigned an excellent rating under this
subelement because it based its prices for 115 of the 120 core items
on actual invoice prices. The record further shows (as discussed in
more detail below) that the agency assigned an overall moderate risk
rating to the Quaker Valley proposal precisely because it had
submitted so few invoice-based prices. This was a reasonable means of
assessing realism.[7]
"Bait and Switch" Prices
Upper Lakes also contends that the awardees have offered a "bait and
switch" to the agency in the form of unreasonably low delivered
prices. According to the protester, the firms will escalate their
prices immediately after award to avoid losses based on the low
pricing offered in their proposals. The protester also contends that
both awardees' proposals show that the firms intend to violate the
Berry Amendment, 10 U.S.C. sec. 2241 note (1994) and the Buy American
Act, 41 U.S.C.A. sec. 10a-10d (West Supp. 1998), in performing
the contract because they will be furnishing foreign products; Upper
Lakes further contends that the agency improperly failed to apply the
50-percent price evaluation factor called for under the Buy American
Act to the awardees' offers before making its award decisions.
We dismiss these allegations because Upper Lakes is not an interested
party to maintain them. The record shows that the agency ranked Upper
Lakes' proposal last overall in both zones, and that in each zone
there were two lower-priced proposals ranked ahead of Upper Lakes' for
award purposes. (For the northern zone, Quaker Valley and MDV/Nash
Finch were ranked ahead of Upper Lakes. In the southern zone,
Interdyne, Inc. and Doughties Foods were ranked ahead.) Upper Lakes
does not allege that these firms engaged in a "bait and switch" and,
in each zone, either of the two interceding firms would be in line for
award ahead of Upper Lakes, according to the agency's evaluation
materials. Upper Lakes also does not allege that any of the
interceding firms' offers violate either the Berry Amendment or the
Buy American Act. Consequently, even if the awardees were eliminated
from award consideration (either because they were deemed ineligible
for award by virtue of their failure to abide by the terms of the
Berry Amendment, or because their offers were not found to be the best
overall value after application of the Buy American Act 50-percent
evaluation factor), one of the interceding firms, not Upper Lakes,
would be in line for award. Upper Lakes therefore lacks the direct
economic interest necessary to maintain these bases for protest. 4
C.F.R. sec. 21.0(a) (1998); Continental Serv. Co., B-274531, Dec. 17,
1996, 97-1 CPD para. 9 at 8.[8]
Improper Discussions
Upper Lakes argues that the agency engaged in improper post-award
discussions with Quaker Valley. In this connection, the agency and
Quaker Valley discovered during the course of the firm's debriefing
that the Quaker Valley offer contained a clerical error that resulted
in the agency's miscalculating Quaker Valley's offered distribution
cost for one item; specifically, the firm had misplaced a decimal
point in one of its prices that resulted in the price being
miscalculated as higher than it actually was. Upper Lakes alleges
that the agency improperly accepted the submission of Quaker Valley's
price preparation spreadsheet to support its claim of a clerical
error, and that this amounted to improper post-award discussions.
This contention is without merit. The record shows that the pricing
sheet in question was included with Quaker Valley's BAFO submission.
Consequently, the firm did not submit any materials after discovery of
the clerical mistake; the agency reviewed the question based on
materials presented with Quaker Valley's BAFO, and thus did not afford
Quaker Valley an opportunity to revise or modify its proposal, a
requirement for discussions to have occurred. FAR sec. 15.601.
QUAKER VALLEY'S PROTEST[9]
Distribution Criterion
Quaker Valley argues that the agency's evaluation under the
Distribution criterion was erroneous under two subelements, product
availability and location. Regarding product availability, Quaker
Valley maintains that DLA improperly assigned an excellent rating to
Theodor Wille's proposal while assigning its proposal only a good
rating. According to the protester, the basis for the agency's
distinguishing between the firms' proposals was their proposed "fill
rates" (a percentage measurement of the number of cases of items
ordered versus the number of cases delivered) and the location of
their warehouses. As for fill rate, Quaker Valley maintains that
Theodor Wille's proposal only indicated a rate of 98 percent in Europe
(that is, outside the continental United States, or OCONUS), and a
99.5 percent rate for its facilities in the continental United States
(CONUS). According to Quaker Valley, a firm's CONUS fill rate is
irrelevant for purposes of performance in OCONUS (the primary
performance location), and Quaker Valley's proposed fill rate in
OCONUS was also 98 percent. Quaker Valley concludes that there thus
was no reasonable basis to distinguish between the proposals. As for
warehouse location, Quaker Valley maintains that the agency improperly
failed to credit its proposal under this subelement after discussions,
during which Quaker Valley proposed a new warehouse in Mainz, Germany
as a substitute for the warehouse it initially proposed. Quaker
Valley notes that Theodor Wille also proposed a warehouse in Mainz,
for which it received an excellent rating; it concludes that its
proposal thus should have received the same rating.
These arguments are without merit. Contrary to Quaker Valley's
assertion, Theodor Wille's offer in fact unequivocally stated a 99.5
percent fill rate for CONUS, and 99.8 percent for OCONUS. The record
also shows that the awardee proposed to have on hand 60 days worth of
stock in its inventory, whereas Quaker Valley offered only 45 to 60
days worth of stock. In this connection, Theodor Wille offered to
keep inventory at a level approximating 200 percent of the contract
requirements, with a view toward totally eliminating possible
"not-in-stock" situations. In contrast, Quaker Valley offered a fill
rate of only 98 percent and stated it would resolve "not-in-stock"
situations by monitoring product flow with an automated system that
would flag "not-in-stock" items and advise ordering activities of such
circumstances the same day an order is placed. While the protester
characterizes these distinctions as relatively minor, the magnitude of
goods being furnished under the contract is such that the agency could
reasonably discriminate between the proposals on this basis,
especially in view of the fact that these considerations were
specifically identified in the RFP as the basis for evaluating
proposals under the product availability subelement.
The warehouse evaluation also was unobjectionable. While the revised
price negotiation memorandum apparently does erroneously refer to
Quaker Valley's initially-offered facility under the product
availability subelement, its Mainz warehouse is correctly discussed
under the location subelement. The record shows that the agency
identified several qualitative differences between the protester's and
Theodor Wille's facilities, which led to the different ratings. The
warehouse proposed by Theodor Wille has a larger number of pallet
slots (it can accommodate 3,000 pallets of dry or chilled goods and
2,000 pallets of frozen goods, compared to Quaker Valley's, which can
accommodate only 1,356 pallets of frozen goods and 1,989 pallets of
dry or chilled goods); has more loading ramps (16 versus 6); and can
accommodate up to 10 times the required inventory in the event of a
surge requirement (Quaker Valley's proposed solution in the event of a
surge would be to increase turnover at the warehouse which would be
used during normal operations at approximately its capacity). The
record also shows that, although both facilities needed modification
in order to make them acceptable, Theodor Wille did not indicate that
it required any significant amount of time to effect the
modifications, whereas Quaker Valley stated that it needed 75 days to
complete its refurbishment, which included, among other things,
installation of additional refrigeration equipment. We conclude that
the agency did consider Quaker Valley's Mainz facility, and that there
was a reasonable basis for rating Theodor Wille superior under this
subelement.
Experience/Past Performance
Quaker Valley also takes issue with the agency's evaluation under the
Experience/Past Performance criterion, under which the agency assigned
its and Theodor Wille's proposals overall ratings of good; Quaker
Valley's was rated good under both subelements, while Theodor Wille's
was rated good under the experience subelement and excellent under the
past performance subelement. The protester maintains that (1) Theodor
Wille and its primary CONUS subcontractor, Joseph Foodservice, Inc.,
lack experience with contracts similar in magnitude and nature to the
current requirement, and also lack adequate financial capacity, and
thus should have received only fair ratings; and (2) in light of
Quaker Valley's own experience and past performance--it allegedly is
the only firm that has experience of a similar nature to the present
requirement because it is a prime vendor contractor to the British
military under a similar requirement--it should have received
excellent ratings under both subelements.
The evaluation in this area was unobjectionable. Regarding the
experience subelement, the record shows that Theodor Wille performs
approximately $10 million worth of food distribution per year,
and its proposal team (including its subcontractors) performs an
estimated $168 million worth of food distribution per year. Theodor
Wille's CONUS subcontractor, Joseph Foodservice, has experience
similar to the present requirement as the leading prime vendor
supplier under the Department of Defense's MWR (morale, welfare and
recreation) program for Europe, the Middle East and the Caribbean; the
firm has been performing this contract since 1991 which, although
somewhat smaller in dollar value than the current requirement, is
deemed to be more complicated from a logistics standpoint, since it
involves approximately 100 program orders per week (compared to the
approximately 20 program orders per week anticipated here). Theodor
Wille and its OCONUS subcontractors also have numerous prime vendor
contracts which reflect similar experience. For example, Theodor
Wille's German subcontractor, Pinguin Group, performs food
distribution for the United States Army, delivering food to 67
delivery points in Germany and several neighboring countries.
Further, the record shows that, while the evaluators initially
questioned the financial capacity of Theodor Wille and its CONUS
subcontractor, Joseph Foodservice, under the experience subelement,
their concern was alleviated during the course of the acquisition
because Joseph Foodservice was purchased by The Institutional Jobbers
Company, a $250 million food distribution concern. The evaluators
found that this injected sufficient economic strength into the overall
relationship. We conclude that the agency reasonably assigned both
Theodor Wille's and the protester's proposals good ratings under this
subelement.
As for the past performance subelement of the Experience/Past
Performance criterion, Quaker Valley raises no specific objections
beyond asserting that its proposal should have received a higher
rating and Theodor Wille's a lower rating. This amounts to no more
than disagreement with the agency's evaluation conclusions, which is
inadequate to show that the agency's evaluation was unreasonable.
Pickering Firm, Inc., B-277396, Oct. 9, 1997, 97-2 CPD para. 99 at 4. In
any case, even if Quaker Valley's rating for past performance were
raised to excellent, this would not have affected the ratings for this
criterion overall; its proposal still would be only technically equal
to the awardee's (both would be good/excellent under the subelements
and good overall) under this criterion. Therefore, there is no basis
for questioning the firms' ratings under the Experience/Past
Performance criterion.
Inspection/Sanitation
Quaker Valley argues that the agency improperly assigned its proposal
only fair ratings for the inspection/sanitation subelement under both
the Quality and Back-Up Zone criteria. The record shows that the
primary basis for these ratings was the firm's failure to provide
current sanitary ratings for its warehouse and distribution
facilities. The protester maintains that the RFP did not call for it
to provide such ratings, and notes that it advised the agency of its
internal inspection procedures and the "ratings" assigned by its
quality inspectors of either "o.k.," "needs attention" or "critical."
The protester further asserts that, in any event, its facility is
approved by the United States Department of Agriculture (USDA), and
that the USDA does not assign ratings, but merely passes or fails a
facility. The protester states that facilities that fail are closed
until deficiencies are cured, and that its facility has never been
closed, as it explained to the agency during a site visit.
There simply is no reasonable basis for the protester's assertion that
the RFP did not call for sanitary ratings. The RFP specifically
called for offerors to indicate the dates of the last sanitary
inspections and the ratings assigned for all distribution facilities
to be used during contract performance. RFP at 189, 192. In
addition, the record shows that, although the protester was
specifically advised during discussions that its proposal did not
include sanitary ratings, Quaker Valley did not furnish the
information. Further, there was no basis for the agency simply to
infer from the fact that its United States facility had not been
closed by the USDA (or from the firm's proposal) that all of its
proposed distribution facilities were necessarily satisfactory in the
area of sanitation. The requirement here--as reflected in Quaker
Valley's proposal--includes distribution facilities in both the United
States, where the USDA has authority to inspect facilities, and
Europe, where it does not; indeed, the RFP specifically called for the
information for both United States and overseas facilities. RFP at
192. There thus is no basis to question the agency's assignment of
fair ratings under these two subelements.
Invoice Prices
Quaker Valley takes issue with the evaluation concerning the number of
invoices the firm presented to support its proposed delivered prices;
Quaker Valley submitted invoices for only 14 of the 120 core items
and, on that basis, the agency assigned its proposal a moderate risk
rating.[10] Specifically, Quaker Valley contends that it was unaware
from its reading of the RFP that it could furnish invoices from its
subcontractors--it believed it could provide invoices only from one of
its joint venturers--and that, had the RFP been clear in this regard,
it would have submitted invoices from its subcontractors. In support
of its position, Quaker Valley has submitted a letter from one of its
subcontractors which states that the firm could have produced invoices
for 55 of the core items.
The RFP at 208 provided:
The Government will evaluate the number of top 120 core item
delivered prices that are based on actual current invoice prices
of the offeror against the number of prices that are based on
industry quotes. More consideration will be given to offers
indicating a high number of delivered prices are based on actual
invoice prices of the offeror. The Government reserves the right
to validate any or all delivered prices.
Quaker Valley's reading of the RFP is simply unreasonable. Nothing in
the quoted language describing the invoice-based pricing requirement
limits offerors to submitting invoices only from the prime contractor
and, in light of the purpose of the requirement (to establish the
validity of proposed prices), it is not clear why an offeror would
have read the RFP in this manner. Quaker Valley's argument places
great emphasis on the fact that the instruction provision referred to
"the offeror," but this term also appeared in virtually every other
instruction provision, and Quaker Valley read those provisions as
encompassing subcontractor information (for example, in describing how
it would meet the CONUS warehousing requirement, Quaker Valley
referred to both its own and a major subcontractor's
responsibilities). On a more practical level, moreover, the agency
represents that even the additional subcontractor invoices Quaker
Valley has presented here would not have made a material difference in
the firm's rating. This is confirmed by the source selection plan,
which provides that 55 invoices warrant only a fair rating. (We note
that, according to the source selection plan, Quaker Valley's proposal
actually should have received a poor, instead of a fair, rating in
this evaluation area for including 47 or fewer invoice-based prices.)
Quaker Valley maintains that the agency improperly assigned its
proposal a moderate risk rating based solely on the small number of
invoice prices it submitted. Quaker Valley concludes that this sole
deficiency did not provide a reasonable basis to assign its proposal a
moderate risk while assigning a low risk to Theodor Wille's proposal,
since Theodor Wille will be able to seek adjustments to its delivered
prices soon after contract award.
This argument is without merit. As discussed above, Theodor Wille
supported 115 of its 120 core item prices with invoices showing the
actual purchase price of the items. The agency used the level of
invoice-based pricing, among other things, to assess the realism of
the proposals. Central to the assigning of Quaker Valley's moderate
risk rating was the agency's conclusion that, because of the lack of
invoice-based prices, Quaker Valley's proposed pricing, which was
based primarily only on quoted prices, might not be nearly as
advantageous as it appeared. In contrast, the agency rated Theodor
Wille's proposal as low risk because it supported the realism of its
proposed pricing with evidence that it had actually obtained the
prices being offered on a vast majority of the core items. This was a
reasonable basis upon which to distinguish between the proposals.
Price/Technical Tradeoff
Quaker Valley challenges the agency's source selection decision,
maintaining that since both its and Theodor Wille's proposals received
overall good ratings, the award to Theodor Wille at a price premium of
approximately [deleted] dollars was unreasonable. The protester
contends that the differences in the ratings of the proposals (such as
Theodor Wille's higher fill rate) were minor and thus did not warrant
this price premium.
Agencies enjoy a relatively broad discretion in making best value
tradeoffs; such tradeoffs are governed only by the test of rationality
and consistency with the stated evaluation factors. GTE Hawaiian Tel.
Co., Inc., B-276487.2, June 30, 1997, 97-2 CPD para. 21 at 16-17.
The source selection was reasonable and consistent with the terms of
the solicitation. The record shows that the source selection official
based his decision on the integrated cost and technical evaluation
that ranked Theodor Wille's proposal first in terms of technical
merit. As noted earlier, Theodor Wille's was the only eligible[11]
competitive range offer in the northern zone to receive an excellent
rating under the Distribution criterion, the most important evaluation
area. The record further shows that the agency gave weight to the
other technical areas where Theodor Wille received excellent ratings;
in all, the firm's proposal was awarded 15 excellent and 15 good
ratings, whereas Quaker Valley scored only 8 excellent, 20 good
and 2 fair ratings. (The agency also considered it significant that
Theodor Wille's proposal had not been assigned any ratings below good
whereas Quaker Valley's proposal had received fair ratings under the
inspection/sanitation subelements.) The agency specifically
determined that these technical advantages were worth the price
premium associated with Theodor Wille's
proposal. Given that technical considerations were more important
than price, and the fact that Quaker Valley's price advantage was
somewhat mitigated by its moderate risk rating, this determination was
reasonable.[12]
The protests are denied.
Comptroller General
of the United States
1. Among the contentions we will not discuss, for example, is Upper
Lakes' assertion that the agency misevaluated Ebrex's proposal under
the mobilization subelement of the Contingencies criterion,
maintaining that it should not have received an excellent rating for
this subelement, or a good for the Contingencies criterion. The
record shows, however, that Upper Lakes is simply incorrect from a
factual standpoint; Ebrex's proposal was rated poor under the
mobilization subelement and poor for the Contingencies criterion in
the southern zone, where it received award.
2. Upper Lakes asserts that its rating under the Distribution
evaluation criterion was changed from good to excellent during the
agency's evaluation of revised proposals, but that this rating change
was not "implemented." A review of the consensus evaluation report
for the firm, however, shows that the rating was not changed. Rather,
it is clear that the narrative portion of the price negotiation
memorandum that discusses the Upper Lakes proposal erroneously notes
that Upper Lakes' rating under the criterion was changed from good to
excellent. The lower, correct, ratings are reflected in the portion
of the price negotiation memorandum that contains the agency's
comparative analysis of the proposals, and also in the consensus
evaluation report.
3. Upper Lakes also argues that Ebrex (the southern zone awardee)
refused in its northern zone proposal to commit to deliveries to
Bosnia within 48 hours. According to the protester, this should have
negatively affected its proposal rating for the southern zone under
the Back-Up Zone Plan evaluation criterion because, if Ebrex were
required to act as the back-up contractor for the northern zone, it
would not be bound to meet the 48-hour requirement for deliveries to
Bosnia. The record shows, however, that Ebrex, in its southern zone
proposal, committed unequivocally to perform as the back-up contractor
for the northern zone within the time frames specified in the RFP.
4. We arrived at this diffference after correction of a mathematical
error in the agency's calculations of Interdyne's evaluated BAFO
price; we also use the corrected figure for Interdyne's BAFO below in
arriving at the difference between its evaluated BAFO price and Upper
Lakes' evaluated BAFO price.
5. Upper Lakes argues elsewhere that its proposal should have received
an excellent rating under the rebates/discounts subelement of the
Procurement/Pricing criterion. Even if the rating in this area were
raised, however, Upper Lakes' proposal still would receive only an
overall good rating under the criterion, the same rating Theodor
Wille's proposal received. This would leave Upper Lakes' proposal
with only two excellent ratings as compared to Theodor Wille's three
excellent ratings.
6. We note, in any case (as we point out in our discussion of the
Quaker Valley protest below), that the agency had a reasonable basis
for the Experience/Past performance ratings that it assigned to the
Theodor Wille proposal.
7. We note as well that the agency concluded, based on a comparison of
the offerors' delivered prices to one another, and to the government
estimate, that the delivered prices offered were reasonable. This was
all DLA was required to do in its price realism analysis, and our
review of the record indicates that DLA's analysis, and its
conclusion, were reasonable. Federal Acquisition Regulation (FAR) sec.
15.805-2 (June 1997); see Ameriko, Inc., B-277068, Aug. 29, 1997, 97-2
CPD para. 76 at 3. As for the distribution fee element, no realism
assessment was necessary since the prices for that aspect of the
contract were fixed-price in nature.
8. For the same reason, Upper Lakes in not interested to pursue its
argument that the agency improperly failed to adhere to the terms of
the RFP in making award to lower-priced offerors despite the fact that
the solicitation provided that price would be less important than
technical merit.
9. Quaker Valley contended in its original protest that the evaluation
was improper under the Quality criterion's supplier selection
subelement, the Contingencies criterion's operational deployment
subelement, the Back-Up Zone Plan criterion's operational deployment
subelement and the Procurement Pricing criterion's rebates/discounts
subelement. In addition, Quaker Valley argued that the agency engaged
in improper discussions with Theodor Wille. In its comments, Quaker
Valley makes no mention of these contentions. We deem them abandoned.
TMI Servs., Inc., B-276624.2, July 9, 1997, 97-2 CPD para. 24 at 4 n. 3.
10. The parties dispute whether Quaker Valley included invoice-based
prices for 6 or 14 items. We use the higher figure--14--alleged by
Quaker Valley.
11. Ebrex was ineligible because it received award in the southern
zone.
12. Quaker Valley also challenges the award decision on the ground
that the percentage difference between the firms' distribution prices,
which was even greater than the percentage difference between the
firms' prices overall, should have been more significant in the price
evaluation, since the delivered prices were unreliable because they
could change after award. However, the RFP did not provide for
according the distribution prices any greater weight. Moreover, the
invoice-based pricing requirement operated to ensure that proposed
delivered prices in fact were reliable. It was Quaker Valley's
failure to provide invoice-based prices that led the agency to assign
the firm's proposal a moderate risk.