BNUMBER: B-279637.2
DATE: July 20, 1998
TITLE: Hago-Cantu Joint Venture, B-279637.2, July 20, 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:Hago-Cantu Joint Venture
File: B-279637.2
Date:July 20, 1998
Pamela J. Mazza, Esq., Philip M. Dearborn, Esq., and Antonio R.
Franco, Esq., Piliero, Mazza & Pargament, for the protester.
Col. Nicholas P. Retson, and Capt. John C. Lavorato, Department of the
Army, for the agency.
Jacqueline Maeder, Esq., and Paul Lieberman, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Agency did not conduct misleading discussions where protester and
awardee both initially proposed similar number of staffing hours for
food services and the agency advised both offerors that these staffing
hours were understated; the fact that protester increased its proposed
staffing hours more than the awardee reflects protester's business
judgment.
2. Contracting agency reasonably evaluated awardee's experience and
past performance as acceptable based on the combination of proposed
subcontractor's strong past experience in food services and the
awardee's own lack of experience in that area.
3. Protest that agency should have found awardee's proposal
technically unacceptable because awardee may not comply with
requirement that at least 50 percent of the cost of personnel incurred
must be for employees of a small business concern is denied where
awardee stated in its proposal that it would comply with the
requirement and submitted a compliance certification to the Small
Business Administration (SBA), which found the awardee eligible for
award.
4. Agency's submittal of a request to SBA for an 8(a) eligibility
determination and the resulting communications between the agency,
SBA, and the 8(a) firm concerning SBA requirements for a teaming
agreement do not constitute improper discussions.
DECISION
Hago-Cantu Joint Venture protests the award of a contract to Heritage
Services, Inc. under request for proposals (RFP) No. DAHC77-97-R-0015,
issued by the Department of the Army as a competitive 8(a) set-aside
for full food and dining facility attendant services at various Army
installations on the island of Oahu, Hawaii. Hago-Cantu challenges
the agency's evaluation of technical proposals, the conduct of
discussions, and the agency's participation in the Small Business
Administration's (SBA) determination of the awardee's eligibility for
award.
We deny the protest.
The solicitation, issued October 7, 1997, contemplated the award of a
fixed-price contract for a base year with four 1-year options to
the offeror whose proposal was determined the best overall value to
the government. RFP sec. M.2. Section M.3 of the RFP identified the
following evaluation factors and subfactors, listed in descending
order of importance:
1. Technical
a. Staffing and Personnel Qualifications
b. Methodology
c. Mobilization/Phase-in Plan
2. Quality Control
a. Quality Control Plan
b. Safety
c. Training
d. Strike Contingency Plan
e. Key Control and Physical Security/Property Control
3. Experience and Past Performance
4. Supplies
a. Chemicals/Cleaning Supplies
b. Vehicles (for food transport)
In order to ensure that adequate staffing was provided, offerors were
required to submit staffing charts showing the number of staff-hours
proposed in each labor category. The staffing proposed in each chart
would become the minimum required during the contract performance
period unless the manning charts were modified by mutual agreement.
RFP sec. L.24.
The RFP also required that proposals include a list of all contracts
and subcontracts completed during the past 3 years and all contracts
and subcontracts currently in progress for the same or similar
services. This information was to be provided for the offeror and
proposed major subcontractors. The RFP specifically provided that
information regarding significant subcontractors and key personnel
would be considered. RFP sec. L.27.
Proposals were to be scored on the basis of adjectival ratings of
"exceptional," "acceptable," "marginal," and "unacceptable."
Evaluated price was based on the total price of all line items for the
base and option years.
The RFP also included by reference the "Limitations on Subcontracting"
clause set forth at Federal Acquisition Regulation (FAR) sec. 52.219-14,
as is statutorily required for all solicitations reserved for
exclusive small business participation.[1] 15 U.S.C. sec. 644(o)(1)(A)
(1994). The clause provides that:
(b) By submission of an offer and execution of a contract, the
Offeror/Contractor agrees that in performance of the contract
in the case of a contract for --
(1) Services (except construction). At least 50 percent of
the cost of contract performance incurred for personnel shall
be expended for employees of the concern.
After submission of initial offers, discussions, and submission of
revised proposals and best and final offers (BAFO), the Army concluded
that the Heritage proposal represented the best value to the
government.[2] The awardee's and the protester's BAFOs were found to
be technically equal, with both assigned "acceptable" ratings on each
evaluation factor and subfactor and both rated "acceptable" overall.
Heritage's total price was $17,337,532; Hago-Cantu's total price was
$19,311,979. After notifying Hago-Cantu of the selection decision on
March 24, 1998, the Army provided a debriefing to the company, which
was concluded on April 7. This protest followed.
MISLEADING DISCUSSIONS
Hago-Cantu first argues that the Army engaged in improper discussions
as a result of which the protestor was misled into raising its price.
Specifically, Hago-Cantu argues that in discussions after the
evaluation of initial proposals the agency improperly informed the
protester that "it had proposed insufficient man-hours for eight of
the nine facilities," yet "ultimately awarded the contract to an
offeror who proposed approximately the same number of man-hours that
the Army previously identified as deficient." Protester's Comments at
3. Hago-Cantu contends that these discussions caused it to increase
its proposed staff-hours (and therefore its price), and asserts that
had it not been directed to increase its staff-hours, the protester
"would have been the lowest priced offeror and almost certainly would
have received the award." Id. at 5.
It is a fundamental precept of negotiated procurement that
discussions, when conducted, must be meaningful and must not
prejudicially mislead offerors. Hughes Space and Communications Co.;
Lockheed Missiles & Space Co., Inc., B-266225.6 et al., Apr. 15, 1996,
96-1 CPD para. 199 at 11. Specifically, an agency may not, even
inadvertently, mislead an offeror--through the framing of a discussion
question or a response to a question--into responding in a manner that
does not address the agency's concerns; misinform the offeror
concerning a problem with its proposal; or misinform the offeror about
the government's requirements. Id. The record here provides no basis
for concluding that Hago-Cantu was misled.
By letters dated February 13, the Army conducted written discussions.
In the letter to Hago-Cantu, the Army stated, on page 1, that the
protester's "[m]anning chart does not include hours for manager,
assistant manager and mess attendant supervisor for the full food
service dining facilities"[3] and that "[m]anning hours of Cook II,
salad maker, DFA server, and DFA dishroom need corrections. Review
hours for facilities to ensure facilities are adequately manned." The
letter also stated, on page 2, that "[h]ours projected for NCO Academy
are slightly understated. Hours projected for Headquarters Company
Fort Shafter, Quads C, E, F, J, 65th Engineers Schofield Barracks, and
25th Aviation Battalion Wheeler Army Airfield are understated."
Similarly, in the letter to Heritage, the Army stated, on page 2, that
"[h]ours projected for Quad A Schofield Barracks are slightly
understated. Hours projected for Quads C, F, J, NCO Academy Schofield
Barracks, 25th Aviation Brigade Wheeler Army Airfield, and
Headquarters Company Fort Shafter are understated."
The chart below shows the staff-hours initially proposed by Heritage
and Hago-Cantu, separately for weekdays and weekends/holidays, for the
nine installations covered by the RFP. Staffing figures for buildings
identified by the agency during discussions as "slightly understated"
are in bold; staffing figures identified as "understated" are in bold
and underlined (because the agency did not distinguish, in its
discussion questions, between weekday and weekend/holiday figures, we
have marked them identically). The figures include management as well
as staff-hours for all locations for which management hours were
identified in the proposals. For Heritage, this was all buildings;
because Hago-Cantu's initial proposal failed to identify management
hours for the three full food service facilities, listed at the top of
the chart, the figures for the protester's proposal listed here do not
include management hours for those three buildings.[4]
Building Heritage Hago-Cantu
NCO Academy (6056)
weekdays 81.50 84.00
weekends/holidays 82.00 80.00
Headquarters (503)
weekdays 86.00 84.00
weekends/holidays 59.50 66.00
A Quad (133)
weekdays 129.80 145.50
weekends/holidays 88.50 101.50
C Quad (357)
weekdays 53.50 53.25
weekends/holidays 33.00 40.00
E Quad (550)
weekdays 47.75 50.25
weekends/holidays 29.75 36.50
F Quad (650)
weekdays 47.75 50.75
weekends/holidays 29.75 35.00
J Quad (844)
weekdays 63.00 72.00
weekends/holidays 31.50 58.50
65th Engineers (1492)
weekdays 35.50 32.00
weekends/holidays 23.50 28.00
25th Aviation (102)
weekdays 54.00 32.00
weekends/holidays 46.50 28.00
Because award was ultimately made on the basis of Heritage's lower
price (since the two proposals were found technically equal) and the
protester increased its price substantially at BAFO as a result of the
discussions, the protester challenges the reasonableness of the
agency's concern about Hago-Cantu's understaffing and contends that
the two offerors were not treated equally. While the record does not
include government estimates of the number of hours needed for each
facility, our review of the offerors' proposed hours and the
discussion questions generally supports the reasonableness of the
agency's evaluation and discussion questions (with two exceptions, as
detailed below).
For the most part, where the two offerors proposed similar numbers of
hours, they were treated similarly during discussions. For example,
the figures proposed for C Quad were virtually identical (53.50 and
53.25 hours for weekdays for the awardee and protester, respectively),
and both were advised that their figures appeared understated. The
same is true for F Quad, where there was a difference of only 3 hours
for weekdays between the two proposals.
In A Quad, where Heritage proposed considerably fewer hours than
Hago-Cantu, the agency reasonably advised Heritage that its hours were
slightly understated, but did not question Hago-Cantu's hours. While
the protester was advised that its weekday hours for 65th Engineers
were understated and the awardee was not, the protester had proposed
fewer hours (although not many fewer) than the awardee for that
location. While the two firms proposed very different levels of hours
for J Quad and 25th Aviation (with Heritage much lower for J Quad and
Hago-Cantu much lower for 25th Aviation), both firms were advised that
their hours for those two locations were understated, and the
protester has not pointed to any basis to question the reasonableness
of the agency's concern during evaluation of initial proposals.
The two instances where the agency's evaluation and discussion
question do not appear reasonable concern E Quad and weekend/holiday
hours for the 65th Engineers building. For E Quad, the protester was
advised that its figure was understated, while the awardee was not,
even though the awardee proposed somewhat fewer weekday hours (47.75)
than the protester (50.25). For the 65th Engineers building, the
protester was advised that its weekend/holiday hours were understated,
while the awardee was not, even though the protester's weekend/holiday
hours (28.00) were higher than the awardee's (23.50). (We discuss the
impact of these apparent errors below.)
The protester's failure to identify management hours for the full food
service dining facilities is relevant to the protester's challenge to
the reasonableness of the agency's concern regarding the initially
proposed staffing at the Fort Shafter Headquarters Company and NCO
Academy buildings. Thus, for the Headquarters building, where the
awardee and protester proposed 86 and 84 weekday hours, respectively,
they were both advised that their figures appeared understated. The
protester apparently believes that its hours for Headquarters should
not have been found understated because it intended to include a
significant number of management hours for that location. However,
those hours were not identified in the initial proposal, and we
therefore have no basis to question the reasonableness of the agency's
finding understated the protester's proposed hours. A similar issue
arises regarding the NCO Academy, where Heritage's proposed hours were
lower than Hago-Cantu's, and the agency advised Heritage that its
hours were understated, while advising Hago-Cantu that its hours were
(merely) slightly understated: the protester apparently believes
that, based on the management hours it intended to include for that
location, the agency should not have found the hours understated at
all. Again, because the protester had not identified those management
hours for the NCO Academy in its initial proposal, we do not find the
agency's evaluation unreasonable or the discussion question
misleading.
In response to the agency's discussion questions, both offerors
revised their proposed staffing. As noted above, the protester
increased its staffing so much that its BAFO price was considerably
higher than Heritage's; in effect, it priced itself out of the
competition. In addition, Hago-Cantu identified the number of
management hours it was offering for the three full food service
facilities; the price of those hours had apparently been included in
the initial proposal, even though the protester had not associated
those hours with particular buildings by identifying them in its
building-by-building staffing charts until its BAFO. Staff-hours,
including managerial hours, proposed by each offeror in their staffing
charts in their initial proposals and in their BAFOs are given in the
following chart:
Heritage Hago-Cantu
Building INITIAL BAFO INITIAL BAFO
NCO Academy (6056)
weekdays 81.50 92.50 84.00 120.75
weekends/holidays 82.00 92.00 80.00 116.75
Headquarters (503)
weekdays 86.00 94.50 84.00 117.75
weekends/holidays59.50 67.50 66.00 95.75
A Quad (133)
weekdays 129.80 137.80 145.50 153.50
weekends/holidays 88.50 97.50 101.50 121.00
C Quad (357)
weekdays 53.50 58.50 53.25 62.75
weekends/holidays 33.00 37.25 40.00 49.50
E Quad (550)
weekdays 47.75 46.38 50.25 59.75
weekends/holidays 29.75 28.75 36.50 45.00
F Quad (650)
weekdays 47.75 53.00 50.75 60.75
weekends/holidays 29.75 36.25 35.00 43.75
J Quad (844)
weekdays 63.00 69.50 72.00 81.50
weekends/holidays 31.50 38.00 58.50 67.00
65th Engineers (1492)
weekdays 35.50 33.75 32.00 40.50
weekends/holidays 23.50 23.50 28.00 35.50
25th Aviation (102)
weekdays 54.00 60.25 32.00 40.50
weekends/holidays 46.50 53.50 28.00 35.50
As can be gleaned from the chart, both offerors addressed the Army's
staffing concerns in revisions to their BAFOs. Indeed, both offerors
increased their proposed staffing for each of the facilities the
agency had identified as understaffed.
The protester's primary support for contending that the discussions
were misleading is the fact that the awardee's BAFO staffing was in
several instances lower than the staffing level that the agency had
advised the protester was understated. Specifically, while both
offerors were told that their hours for J Quad were understated,
Heritage's increased BAFO hours remained lower than Hago-Cantu's
initial number of proposed hours. Similarly, Heritage's increased
BAFO weekend/holiday hours for C Quad remained lower than Hago-Cantu's
initial proposed staffing for that facility (Heritage's BAFO weekday
hours for that facility, however, were greater than Hago-Cantu's
initial number).
Even when combined with the apparent errors in the discussion question
concerning E Quad and weekend/holiday hours for the 65th Engineers
building (explained above), we do not believe that the instances where
Heritage's increased staff-hours remained lower than Hago-Cantu's
initially proposed staff-hours call into question the reasonableness
of the agency's selection of Heritage. Even where we identify an
error in the conduct of a procurement, we 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).
The apparent errors identified above represent only a small percentage
of the total work to be performed and thus could have had only a minor
impact in terms of the protester's price. The record does not support
the claim in the protester's comments, at 3, that "Heritage was
awarded the contract despite proposing approximately the same or less
man-hours as [the protester] for almost all the facilities that the
Army had identified as being undermanned during discussions with [the
protester]." Instead, review of the chart will confirm that the
phenomenon was limited to the cases identified above.[5]
We note that in one instance Hago-Cantu's BAFO staffing was
substantially lower than the level that the agency had advised
Heritage was understated: for the 25th Aviation building,
Hago-Cantu's final proposed staffing for weekday and weekend/holiday
services for this facility remained lower (40.5 and 35.5 hours,
respectively) than Heritage's initial proposed staffing for this
facility (54 and 46.5 hours, respectively), even though Heritage had
been told that its staffing was understated. Accordingly, to the
extent that the protester questions the agency's accepting a staffing
level at BAFO that it considered understated in initial offers, the
protester itself benefited from that approach for the 25th Aviation
building.
For both offerors, however, we believe that it was reasonable for the
agency to raise concern that an offeror's initially proposed staffing
was understated but nonetheless ultimately consider acceptable a
proposal with staffing remaining at an understated level. Nothing in
the record supports the protester's claim in its comments, at 9, that
"it is reasonable to assume that the Army considered [the protester's]
proposed manning to be unacceptable prior to [the protester's]
increase in man-hours." Our review of the record does not indicate
that the agency ever viewed the understated hours as a basis for
finding either proposal unacceptable. Accordingly, the fact that in a
few instances Heritage's BAFO hours remained lower than the level that
the agency had identified to Hago-Canto as understated does not mean
that Heritage's BAFO should have been rejected as unacceptable.[6]
As explained above, the reason that the agency selected Heritage for
award was primarily its low price. While the protester is correct in
pointing out that it raised its hours, and therefore its price,
substantially as a result of discussions, we do not agree that that
increase was attributable to misleading discussions. Instead, the
protester increased its hours, and its price, more than Heritage
primarily for reasons within its business judgment. For example,
after being told that its initial staffing for the NCO Academy was
slightly understated, Hago-Cantu increased its proposed weekday hours
for this building from 84 to 120.75. While these 120.75 hours include
15 hours of management time, even for non-management time, the
protester increased its staffing by more than 20 hours, even though
the agency had advised Hago-Cantu that its hours for this facility
were only "slightly understated." In contrast, the awardee, who was
advised that its hours were "understated" increased its staffing for
the NCO Academy by only 11 hours. Similarly, after both offerors were
told that their staffing for the Headquarters building was
understated, Heritage increased its proposed weekday staff-hours 8.5
hours; Hago-Cantu increased its staffing by more than 18 hours (in
addition to 15.50 management hours). Since the greater increase in
its BAFO price was due to the protester's business judgment, rather
than the content of the discussion questions, we conclude,
notwithstanding the minor concerns we have pointed out regarding the
agency's action, that the discussion questions sent to the protester
were not misleading.
TECHNICAL EVALUATION
Hago-Cantu next argues that the Army's evaluation of Heritage's past
performance and experience was unreasonable. As noted above, the
agency evaluated the awardee's past performance and experience as
"acceptable." Hago-Cantu complains that this evaluation is
unreasonable because Heritage has no experience in food service.
While the protester recognizes that the Army may consider the past
performance of Heritage's subcontractor, Son's Quality Food Company,
the protester contends that the Army improperly relied solely on the
past experience of Son's. Hago-Cantu argues that total reliance on
Heritage's subcontractor's past experience is unreasonable, especially
where, as here, Heritage must perform 50 percent of the contract.
The evaluation of technical proposals is a matter within the
contracting agency's discretion, since the agency is responsible for
defining its needs and the best method of accommodating them. Loral
Sys. Co., B-270755, Apr. 17, 1996, 96-1 CPD para. 241 at 5. In reviewing
an agency's technical evaluation, we will not reevaluate the proposal,
but will examine the record of the evaluation to ensure that it was
reasonable and in accordance with stated evaluation criteria and not
in violation of procurement laws and regulations. Id.
Here, there is no basis to conclude that the agency improperly
evaluated Heritage's proposal concerning past experience/performance.
The record shows that the agency recognized Heritage's lack of
experience in food services as a weakness. However, the Army also
identified the awardee's subcontractor's past experience as a strength
because of its significant food service experience. Indeed, the
subcontractor lists 16 current contracts, ranging in value from
$200,500 to $13 million, numerous awards and commendations, and its
successful completion of at least two contracts where the original
awardees had been terminated for poor performance. The agency
balanced Heritage's weakness with its subcontractor's strength and
assigned an "acceptable" rating for this evaluation factor. Thus,
contrary to the protester's assertions, the "acceptable" rating was
not based solely on the subcontractor's past experience and
performance; rather, it reasonably reflected a blend of the experience
of both the prime and subcontractor. Seair Transport Servs., Inc.,
B-252266, June 14, 1993, 93-1 CPD para. 458 at 4-5; Premier Cleaning Sys.,
Inc., B-249179.2, Nov. 2, 1992, 92-2 CPD para. 298 at 4 (experience of a
large business subcontractor properly may be considered in evaluation
of offeror's proposal submitted in response to solicitation set-aside
for small business concerns).
Hago-Cantu also contends that the Army should have determined Heritage
to be technically unacceptable for failing to comply with the
mandatory limitation on subcontracting requirement. The protester
argues that Heritage's proposal does not sufficiently indicate an
intent to comply with this requirement. To support its position,
Hago-Cantu points to various parts of Heritage's proposal which the
protester argues indicate that Heritage's subcontractor will perform
work.
Hago-Cantu notes that "Heritage is hardly mentioned in the proposal,"
the initial narrative discussion addresses only the subcontractor's
experience and ability to perform the contract, the discussion of
personnel makes virtually no reference to Heritage and the staffing
charts carry the heading "Son's Quality Food Company." Protester's
Comments at 11. Under these circumstances, Hago-Cantu argues that the
Army should have determined that Heritage was technically unacceptable
because it did not intend to comply with the limitation on
subcontracting clause.
While the protester is correct that much of Heritage's proposal
discusses the experience and personnel of its subcontractor, the
protester ignores references to Heritage in the proposal that clearly
show Heritage's proposed involvement in the contract and Heritage's
intent to hire the necessary personnel to perform the contract. For
example, the offeror's proposal states that, as required by the
collective bargaining agreement, the offeror will, upon award, offer
to hire the incumbent senior or first cooks, storeroom clerks, second
cooks, short-order/grill cooks, bakers and dining facility attendants.
Additionally, of the 20 proposed managers, only 5 are currently
employed by Heritage's subcontractor; the others named in the proposal
will be hired upon award. The proposal also includes financial
information on both Heritage and its subcontractor. In addition, in
the first revision of its proposal, Heritage specifically stated that
it would be "the prime contractor performing 51% of the requirement
with [Son's] being the subcontractor performing 49% of the work."
Heritage Response and Offer Revision, Feb. 24, 1998, Attachment 1-1.
The awardee also included copies of its initial notification letter to
SBA, informing SBA of its intent to submit a proposal under the RFP
and its signed and dated certification that at least 50 percent of the
cost of contract performance would be incurred by Heritage. Id.,
Attachments 1-2, 1-3. Based on this information, the agency
reasonably concluded that Heritage's proposal evidenced its intent to
comply with the limitation on subcontracting clause.
SBA DETERMINATION
Finally, the protester argues that, after the receipt of BAFOs and the
close of discussions, the agency improperly held further discussions
only with Heritage. The protester argues that the discussions were
used by the agency to determine the acceptability of Heritage's
proposal. The protester also complains that the agency improperly
involved itself with SBA's determination of Heritage's eligibility for
award.
The record shows that the contracting officer was unsure whether
Heritage's "teaming arrangement" with Son's required SBA approval.
Therefore, according to the contracting officer, after the agency had
determined to award the contract to Heritage, the contracting officer
contacted SBA and was informed that a teaming arrangement constituted
a prime/subcontractor relationship that did not require pre-approval
from the SBA. To expedite the eligibility determination process, SBA
forwarded to the contracting officer a list of questions normally
posed by the SBA to the apparently successful 8(a) offeror in
determining eligibility. The contracting officer then forwarded the
questions to Heritage by letter dated March 11. Heritage responded by
letter dated March 12 and those responses were sent to SBA the same
day. By letter dated March 20, the SBA informed the Army that
Heritage was eligible for the contract.
Hago-Cantu argues that Heritage's responses to the SBA were used by
the Army to determine the acceptability of Heritage's proposal and
thus constitute discussions. The protester relies on language in the
Army's March 11 letter to Heritage which lists the SBA questions and
states, "To render a determination as to the nature of the
relationship and its acceptability under a competitive 8(a) award, the
following questions must be answered to make an affirmative
determination of eligibility . . . ." Hago-Cantu argues that there is
no evidence that a final award had been made at the time these
questions were sent to the intended awardee.
Discussions occur when the government communicates with an offeror for
the purpose of obtaining information essential to determine the
acceptability of a proposal or provides the offeror with an
opportunity to revise or modify its proposal. FAR sec. 15.601 (June
1997); Global Assocs. Ltd., B-271693, B-271693.2, Aug. 2, 1996, 96-2
CPD para. 100 at 4. If a procuring agency holds discussions with one
offeror, it must hold discussions with all offerors whose proposals
are in the competitive range. FAR sec. 15.610(b); Raytheon Co.,
B-261959.3, Jan. 23, 1996, 96-1 CPD para. 37 at 10-11. It is the actions
of the parties that determine whether discussions have been held, and
not merely the characterization of the communications by the agency.
The acid test of whether discussions have been held is whether it can
be said that an offeror was provided the opportunity to revise or
modify its proposal. Id. at 11.
The protester mischaracterizes the communication between Heritage and
the contracting officer after the receipt of BAFOs. As noted above,
the contracting officer has stated that the Army had already made an
award determination before she contacted SBA concerning teaming
agreements and before she received questions from SBA which she
forwarded to Heritage for Heritage's response. The contact with the
SBA was merely to clarify for the contracting officer SBA's
requirements concerning teaming agreements; the SBA questions given to
the agency to be forwarded to Heritage for Heritage's response were
for SBA's use in making its eligibility determination. The award had
not been made because the agency needed SBA approval of Heritage as an
eligible 8(a) firm. This SBA approval is what the Army alluded to in
its March 11 letter which refers to rendering "a determination as to
the nature of the relationship and its acceptability under a
competitive 8(a) award." The protester incorrectly interprets this
sentence as going to the acceptability of Heritage's proposal.
Indeed, the Army had previously accepted Heritage's statement and
certification that it would comply with the subcontracting limitation
and therefore the agency had no need to obtain additional information
to determine the acceptability of Heritage's proposal. Heritage was
not permitted to revise its proposal in any way.
The protester also asserts that the Army improperly involved itself in
the SBA's eligibility determination. Hago-Cantu argues that by
involving itself in the process, "the Army permitted Heritage to
submit significantly less information than would normally be required
by the SBA." Protester's Comments at 14.
Under the applicable regulations, the SBA is responsible for verifying
that a section 8(a) firm is eligible for a particular procurement that
has been reserved for the 8(a) program, and is the sole arbiter of
such eligibility, which cannot be challenged by a program participant
or any other party. FAR sec. 19.805-2(c), (e).
We see no reason to question the agency's actions here. While the
protester objects to the method employed, the Army properly referred
the question of Heritage's eligibility to the SBA and the SBA found
Heritage eligible for award with full knowledge of its relationship
with Son's. If, as the protester asserts, SBA required more
information to make its determination, it could have requested such
information.
The protest is denied.
Comptroller General
of the United States
1. This requirement exists to prevent small business concerns from
subcontracting to large businesses the bulk of a contract reserved for
small business participation. Ann Riley & Assocs., Ltd., B-271741.2,
Aug. 7, 1996, 97-1 CPD para. 120 at 2-3.
2. Other proposals, including one that was higher rated but also
higher priced than the eventual awardee's, are not discussed here,
since they are not relevant to the protest.
3. Of the nine facilities to be serviced under the RFP, three (Quad A
(Building 133), NCO Academy (Building 6056), and Headquarters Company
Fort Shafter (Building 503)) were designated as full food services
facilities and required, among other workers, dining facility managers
and alternate dining facility managers. The other facilities were
designated dining facility attendant (DFA) services facilities and
required, in terms of managers, only DFA supervisors.
4. Building numbers are identified in parentheses after the name. For
the sake of simplicity, we have not identified slight variations
occasionally proposed, such as slightly different hours for Fridays
than for other weekdays.
5. In a chart in its comments on the agency report, the protester
indicates that the staffing for the NCO Academy and Headquarters
buildings should be viewed as further instances of the awardee's BAFO
figures being lower than the protester's initial ones. Protester's
Comments at 4. The staffing of those two buildings is significant,
since those two locations are full food service facilities and
represent a significant proportion of the overall work (and therefore
the overall dollars). Comparison of the protester's chart and the
chart set out above, however, demonstrates that Heritage's BAFO
figures for both buildings were higher--not lower, as the protester
claims--than the figures in Hago-Cantu's initial proposal. The
protester's claim to the contrary is based on the addition to its
initial numbers of its management hours; as explained above, we view
it as reasonable for the agency to have evaluated the hours that
Hago-Cantu listed in its initial proposal's staffing charts, and those
charts did not include management hours for either NCO Academy or the
Headquarters building.
6. Indeed, if the protester's suggestion that a BAFO should have been
viewed as unacceptable if it proposed fewer hours for any building
than the agency had advised any offeror during discussions was an
understated level, then the protester's BAFO would have to be rejected
as unacceptable, since, as explained above, the protester's BAFO
proposed considerably fewer hours for the 25th Aviation building than
the 54 hours that the agency had advised Heritage represented
understated staffing.