BNUMBER:  B-279561 
DATE:  June 29, 1998
TITLE: Trifax Corporation, B-279561, June 29, 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:Trifax Corporation

File:     B-279561

Date:June 29, 1998

Peter A. Greene, Esq., Norman J. Philion, Esq., and Christopher D. 
Perry, Esq., Thompson Hine & Flory, for the protester.
Col. Nicholas P. Retson, Maj. Michael J. O'Farrell, Jr., and Robert D. 
Hamel, Esq., Department of the Army, for the agency.
Henry J. Gorczycki, Esq., and James A. Spangenberg, Esq., Office of 
the General Counsel, GAO, participated in the preparation of the 
decision.

DIGEST

Protest against elimination of a proposal from competitive range is 
sustained where the record evidences that the score assigned the 
protester's past/present performance was unreasonably low, considering 
the information included in the proposal, the evaluation 
documentation, and the scores assigned the competitive range 
proposals, and the score of the proposal, if properly evaluated, would 
have been among the range of scores assigned the competitive range 
proposals.

DECISION

Trifax Corporation protests the elimination of its proposal from the 
competitive range under request for proposals (RFP) No. 
DADA10-98-R-0003, issued by the Department of the Army for nonpersonal 
occupational health care services for federal employees at existing 
and future Federal Occupational Health (FOH) provision sites in 
several states.[1]

We sustain the protest.

The RFP, issued on September 30, 1997 as an 8(a) set-aside, 
contemplated an award of a fixed-price, indefinite-quantity contract 
for a base period and 4 option years.  The RFP, at sections M.2.5 and 
M.2.5.2, stated a best value evaluation scheme, considering the 
following four factors:  (1) past and present performance; (2) 
contractor quality control plan; (3) technical quality (oral 
presentation); and (4) price/cost.  The RFP stated the relative 
weights of these factors as follows:

     Factors 1 and 2 are equal and, individually, are less important 
     than factor 3, and factors 1, 2, and 3 are more important than 
     factor 4.  The government is interested in proposals that offer 
     value in meeting the requirements - performance and technical 
     quality with acceptable risk at a fair and reasonable price.  
     Factor 4, however, could become the determinative selection 
     factor if technical quality proposals are determined to be 
     substantially equal, or if a proposal deemed superior in 
     technical quality is determined not to be worth the high cost 
     premium.

Section M.2.1 stated that, in accordance with the clause at Federal 
Acquisition Regulation (FAR)  sec.  52.215-16 (June 1997), Alternate II, 
award of a contract based on initial proposals without discussions was 
intended, although the government reserved the right to conduct 
discussions if the contracting officer later determined it was 
necessary.

[DELETED] offerors submitted initial proposals by the October 30 
closing date.  The agency evaluated proposals and determined that 
discussions would be necessary.  A competitive range of [DELETED] 
proposals was established based on the respective technical rankings 
and prices.  The overall technical scores of these proposals ranged 
from a low of [DELETED] to a high of [DELETED] points.[2]  The overall 
evaluated prices, including option years and proposed escalation, 
ranged from a low of $[DELETED] million[3] to a high of $[DELETED] 
million.  The point score and evaluated price of Trifax's 
proposal--[DELETED] and $[DELETED] million--fell outside of the 
competitive range and the Army eliminated it from further 
consideration.  

Trifax's low score largely resulted from low scores under two 
evaluation factors:  past/present performance and quality control 
plan.[4]  Under the past/present performance factor, the four 
documented reasons that Trifax's proposal was downgraded were (1) 
concerns about unidentified problems with Trifax's payment of employee 
benefits, (2) reports that the firm issued checks to employees with 
insufficient funds, (3) Trifax's alleged difficulty in recruiting 
wellness/fitness providers on one contract, and (4) Trifax's alleged 
submission of two contract references instead of three as required by 
the RFP.  Under the quality control plan factor, all three evaluators 
stated a concern regarding the selection of sites for site visits, and 
the frequency of site visits and performance reviews.

By letter of January 7, 1998, the Army notified Trifax that its 
proposal had been eliminated from the competitive range.  No reasons 
for this elimination were provided in this letter.  

On January 9, prior to receiving the agency's elimination letter, 
Trifax sent a letter to the agency in response to a newspaper report 
concerning Trifax's administration of the two contracts with the 
District of Columbia, which Trifax had listed as references in its 
proposal.  Trifax stated that the report contained "seriously 
inaccurate information," including the statement that Trifax had not 
paid its employees the full benefits to which they were entitled.  
Trifax explained that, although payroll checks for incorrect amounts 
were issued for one payroll period due to errors resulting from a 
computer crash, Trifax had immediately identified the errors and 
corrected the underpayments in the very next payroll.  Trifax stated 
that the reports of poor contract administration by Trifax had all 
been generated without verification or comment by Trifax, and 
requested that its performance be evaluated based on the actual 
performance of its firm, not on such misinformation.  In this letter, 
Trifax also referenced a contract for providing occupational health 
services at several FOH sites in the Army's Central West region, which 
was one of the three contract references included in Trifax's proposal 
that Trifax stated should be considered in addition to the two 
District of Columbia contracts in evaluating past/present performance.

In response to Trifax's January 9 letter, the contracting officer, 
with the concurrence of the chairperson of the technical evaluation 
board, revised Trifax's past/present performance score.  The 
contracting officer accepted Trifax's explanation concerning the 
validity of the reported problems with paying employee benefits, and 
discovered that the Army had overlooked Trifax's reference for the FOH 
contract with the Army (and that Trifax's proposal had therefore 
provided the required three references).  Trifax's past/present 
performance evaluation was increased from a rating of [DELETED] and a 
score of [DELETED], to a rating of [DELETED] and a score of [DELETED].  
This increased Trifax's overall score to [DELETED], which was not 
enough, in the agency's view, to move Trifax's proposal into the 
competitive range, given the higher ratings of the competitive range 
proposals.

On January 13, Trifax received the notice that the Army had eliminated 
its proposal from the competitive range.  By letter of January 20, 
Trifax requested a debriefing.  By letter of February 9, the Army 
provided Trifax with a written debriefing, which identified evaluated 
weaknesses and deficiencies in Trifax's proposal.  On February 18, 
Trifax protested to the Army the elimination of its proposal from the 
competitive range.  By letter of March 3, the Army denied the protest.  
Trifax received the Army's protest decision on March 9, and protested 
to our Office on March 19.  The Army awarded the contract to OMV 
Medical, Inc. on March 16.  Contract performance has been suspended.

The Army first asserts that the protest was untimely filed under our 
Bid Protest Regulations because Trifax's agency-level protest was 
filed on February 18, more than 10 days after receiving notice on 
January 13 of the elimination of its proposal from the competitive 
range.  The Army contends that, since Trifax did not request the 
debriefing within 3 days of learning of the elimination of its 
proposal, and thus the agency was not required to conduct a 
debriefing, the 10-day period for filing a protest should be 
considered to start on January 13, instead of the date of the 
debriefing.  We disagree.

Under our Bid Protest Regulations, protests based on matters other 
than alleged improprieties apparent on the face of a solicitation must 
be filed not later than 10 days after the basis of protest is known or 
should have been known, whichever is earlier.  4 C.F.R.  sec.  21.2(a)(2) 
(1998).  A matter initially protested to the contracting agency will 
be considered timely, if filed within 10 days of actual or 
constructive knowledge of adverse agency action on the agency-level 
protest, provided that the agency-level protest was filed within the 
time limits for filing a protest with our Office, unless the 
contracting agency imposes a more stringent time for filing, in which 
case the agency's time for filing will control.  4 C.F.R.  sec.  
21.2(a)(3).

Here, the Army did not impose a more stringent time period for filing 
agency-level protests than the 10-day period.  The basis for Trifax's 
protest to the Army, and subsequently to our Office, arose from the 
evaluation of Trifax's proposal upon which the elimination decision 
was based.  However, the agency's notice of elimination did not 
provide any information about the evaluation.  Trifax first received 
information about the evaluation of its proposal from the agency's 
letter of February 9, i.e., the written debriefing, which Trifax 
received on February 10.  Since Trifax requested a debriefing within 
days of learning of its proposal's elimination from the competitive 
range (so that it cannot be faulted for failing to pursue potential 
protest grounds), and since Trifax's agency-level protest was filed 
within 10 days of its learning the basis of protest through the 
debriefing, that protest was timely.  Moreover, its protest to our 
Office was timely filed 10 days after it received notice of adverse 
agency action on the agency-level protest.

Trifax's failure to meet the requirements to invoke a "required 
debriefing" did not modify the timeliness rules applicable to the 
filing of its protest.  The only effect a required debriefing has on 
our timeliness regulations is the tolling of the filing period in 
limited circumstances.  See 4 C.F.R.  sec.  21.2(a)(2).  Non-required 
debriefings are permitted, see FAR  sec.  15.1006(a) (June 1997), and a 
protest based on information first revealed in a non-required 
debriefing, as here, may be filed under the generally applicable 
regulations for filing timely protests.  See Minotaur Eng'g, B-276843, 
May 22, 1997, 97-1 CPD  para.  194 at 4 n.2.

As to the merits of the protest, Trifax essentially alleges that its 
evaluation rating/score is arbitrary and unreasonably low under the 
past/present performance factor, even considering the Army's 
re-evaluation and upgrading of Trifax's past/present performance 
evaluation.  Trifax also alleges that its rating/score under the 
quality control plan factor is unreasonable.  Trifax asserts that a 
reasonable evaluation would increase its overall score sufficiently to 
place its proposal in the competitive range.

We find that the record supports Trifax's allegation concerning the 
reasonableness of the initial and revised rating/score for Trifax 
under the past/present performance factor.  Based on the evaluation 
errors made in the initial evaluation of Trifax's proposal under this 
factor and the ratings/scores under this factor for offerors with 
comparable past performance records, the record before us shows that a 
reasonable rating/score under this factor would have put Trifax's 
proposal in the competitive range.  We sustain the protest on this 
basis.

A competitive range shall be determined on the basis of cost or price 
and other factors that were stated in the solicitation and shall 
include all proposals that have a reasonable chance of being selected 
for award.  FAR  sec.  15.609 (June 1997).[5]  When there is doubt as to 
whether a proposal is in the competitive range, the proposal should be 
included.  Id.  The evaluation of proposals and the determination of 
what proposals are in the competitive range are largely matters of 
agency judgment and discretion; this judgment and discretion is not 
unfettered, however, as evaluations and competitive range 
determinations must be reasonable and bear a rational relationship to 
the stated evaluation criteria.  Safeguard Maintenance Corp., 
B-260983.3, Oct. 13, 1995, 96-2 CPD  para.  116 at 4; S&M Property 
Management, B-243051, June 28, 1991, 91-1 CPD  para.  615 at 3.  In 
reviewing an agency's decision to exclude a proposal from the 
competitive range, we look first to the agency's evaluation of 
proposals to determine whether the evaluation had a reasonable basis.  
Safeguard Maintenance Corp., supra.

Here, while it was conducting discussions with the competitive range 
offerors, the Army realized that its initial past performance 
evaluation of Trifax was unreasonable.  The agency promptly conducted 
a reevaluation, which accepted Trifax's explanation concerning the 
payment of benefits to its employees and which assertedly included an 
agency survey of Trifax's third contract reference, a reference that 
the agency had previously erroneously stated had not been 
submitted.[6]

In its initial evaluation, the agency identified an alleged problem 
with Trifax's payment of employee benefits, although it did not know 
the nature of the problem and had not yet received the January 9 
letter.  One evaluator's comment stated that the nature of the 
suspected problem was unidentified and that more information was 
needed.  The reference survey covering these contracts, which 
otherwise rated Trifax's performance as "excellent," identified the 
issue only as a question that was being investigated by the surveyed 
contracting agency, the District of Columbia.  Also, although the 
evaluators in the initial evaluation indicated that there were reports 
of "bounced" checks, as a second reason for downgrading Trifax's 
proposal, Trifax states that no such checks were issued.  The agency 
has provided no evidence of checks issued with insufficient funds, nor 
does the record otherwise establish that such reports were anything 
more than rumor.  Since the record evidences that there was no problem 
with Trifax paying its employees, its point score for this factor 
should have been higher than as initially evaluated.

The remaining two areas of concern initially expressed by the 
evaluators, i.e., Trifax's alleged problems recruiting 
wellness/fitness providers and allegedly providing only two of the 
required three contract references, are related.  The recruiting issue 
arose under Trifax's incumbent FOH contract with the Army for sites in 
several states, which was the same contract that the agency apparently 
otherwise did not initially evaluate because it erroneously concluded 
that this reference was not submitted in Trifax's proposal.  The 
record shows that but for the delayed recruitment of 2 of 61 or more 
positions under that contract, Trifax's performance was ultimately 
considered "favorable."

Moreover, Trifax's protest letter provided a detailed explanation of 
why the delay in filling the wellness/fitness provider positions was 
the agency's fault, and why resolution of the underlying problems was 
solely within the agency's control.  The agency report in response to 
the protest did not refute the protester's explanation.  The 
protester's comments continue to assert the agency's responsibility 
for delay in the filling of those two positions.  The belated 
reference survey for the contract corroborates that the agency had 
some responsibility for this delay.  

In light of the above analysis, there appears to be little, if any, 
support in the record for any of the four reasons relied on by the 
agency to downgrade Trifax's proposal.  While the agency's January 
1998 reevaluation upward of the proposal's rating recognized the 
tenuousness of the initial evaluation, we conclude that the record 
supports Trifax's argument that even the increased score of [DELETED] 
points fails to correct the errors in the evaluation.  While our 
Office does not evaluate proposals de novo, here a review of the 
scores of other proposals shows that there is no reasonable basis for 
a score as low as [DELETED] for a proposal referencing three relevant 
contracts with favorable references, one of which was an incumbent 
contract for FOH services.  In this regard, the record shows that 
offerors with similar past performance histories consistently received 
scores [DELETED].  For example, one of the competitive range proposals 
that was scored at [DELETED] points had three contracts of similar 
size and scope to Trifax's contracts, including a FOH services 
contract of a much smaller scale than Trifax's and a contract with the 
Army for which it, too, had staffing problems that were apparently 
considered to be beyond the contractor's control.[7]  Based on this 
similar contract history, it would seem reasonable that Trifax's score 
should be similar to that offeror's.  Instead, Trifax's score of 
[DELETED] points is the same score given to another offeror whose 
proposal referenced only one contract for evaluation purposes (albeit 
an incumbent FOH contract).  

On this record, given the range of scores of the other proposals, it 
would appear that Trifax's past/present performance score should have 
been much higher than [DELETED] points, perhaps as high as [DELETED].  
When this correction is weighted in the overall evaluation scheme, it 
alone would raise Trifax's overall score sufficiently--to [DELETED] 
points--to place Trifax's proposal within the range of scores of the 
proposals included in the competitive range.  Since Trifax's evaluated 
price was also extremely close to most of the evaluated prices of the 
competitive range proposals, and [DELETED] than the highest-priced 
competitive range proposal, we think that Trifax's proposal had a 
reasonable chance of being selected for award after discussions and 
resulting proposal revisions.  Thus, Trifax's proposal should have 
been included in the competitive range as it was established.  See 
Safeguard Maintenance Corp., supra, at 4-14.

We recommend that the Army make a new competitive range determination 
consistent with this decision, conduct discussions, and make a new 
source selection decision based upon the resulting proposal revisions.  
If an offeror other than OMV is selected for award, we recommend that 
the Army terminate OMV's contract and make award to that other 
offeror.  We also recommend that the protester be reimbursed the 
reasonable costs of filing and pursuing its protest, including 
attorneys' fees.  4 C.F.R.  sec.  21.8(d)(1) (1998).  The protester's 
certified claim for costs, detailing the time spent and costs 
incurred, must be submitted to the agency within 60 days of receiving 
this decision.  4 C.F.R.  sec.  21.8(f)(1).

The protest is sustained.

Comptroller General
of the United States

1. The agency's prior contracts for FOH services were issued for 
smaller service areas.  Several of the offerors responding to this 
RFP, including Trifax, were incumbent contractors on these smaller 
contracts.

2. The rating\point scale was as follows:

            Excellent      -    [DELETED] 
            Good           -    [DELETED] 
            Poor           -    [DELETED] 
            Unsatisfactory -    [DELETED] 

3. The lowest-priced proposal did not indicate a price for one item, 
and thus this price was incomplete.

4. These were the only two factors under which Trifax's proposal 
varied significantly from the proposals in the competitive range.  
Under the technical quality (oral presentation) factor, Trifax's 
proposal was evaluated higher than [DELETED] competitive range 
proposals.  Comparing evaluated prices, Trifax's price was within 
[DELETED] percent of the highest-priced competitive range proposal, 
and was within [DELETED] percent of the prices of [DELETED] 
competitive range proposals.

5. To the extent the agency alleges that the FAR Part 15 revision (FAC 
97-02) is applicable to this solicitation, we note that this RFP was 
issued on September 30, 1997, more than 2 weeks before October 10, the 
earliest date on which solicitations issued could be subject to the 
rewritten regulation.  Moreover, if an agency wanted to begin applying 
the revised regulation to solicitations issued earlier than January 1, 
1998, it was required to state on the cover page of the solicitation 
that the revised regulation applied.  See FAC 90-02, Sept. 30, 1997, 
cover page.  This RFP had no such notice.

6. We note that, although the contracting officer states that she 
conducted her reevaluation on January 14 and that she considered the 
omitted reference survey in the reevaluation, the actual reference 
survey was dated February 6, more than 3 weeks after the reevaluation.

7. The record contains no evidence of particular strengths that would 
account for the point differential between that offeror's and Trifax's 
past\present performance.