BNUMBER:  B-279665; B-279665.2           
DATE:  July 8, 1998
TITLE: Technical Support Services, Inc., B-279665; B-279665.2, July
8, 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:Technical Support Services, Inc.

File:B-279665; B-279665.2          
        
Date:July 8, 1998

Jonathan M. Bailey, Esq., Theodore M. Bailey Law Office, for the 
protester. 
Rexford T. Bragaw, III, Esq., Defense Commissary Agency, for the 
agency. 
Peter A. Iannicelli, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest is sustained where the agency disregarded the solicitation's 
stated best value evaluation scheme and awarded the contract to the 
offeror of the lowest-priced, technically acceptable proposal without 
weighing the awardee's low price against the benefits potentially 
associated with the protester's higher-rated proposal.

DECISION

Technical Support Services, Inc. (TSSI) protests the Defense 
Commissary Agency's (DCA) award of a contract for commissary services 
to Ace Services, Inc., pursuant to request for proposals (RFP) No. 
DECA01-98-R-0005.  TSSI contends that the agency failed to inform it, 
either in the RFP or during discussions, that the contract was going 
to be awarded to the offeror of the lowest-priced, technically 
acceptable proposal.  TSSI also contends that DCA did not evaluate 
proposals and select the awardee in accord with the RFP's stated 
evaluation scheme, and that DCA unreasonably induced it to increase 
its staffing levels and its associated prices during discussions and 
then improperly awarded the contract to Ace on the basis of its 
lowest-priced proposal.  TSSI also alleges that the agency failed to 
conduct a meaningful price realism analysis of Ace's offer.[1]  
Initial Protest at 4; Supplemental Protest at 1, 11-12.

We sustain the protests.

Issued on November 18, 1997, as a total small business set-aside 
procurement, the RFP solicited fixed-price proposals for performing 
shelf-stocking, custodial, and receiving/storage/holding area services 
at the Offutt Air Force Base commissary.  RFP section C; RFP  sec.  L.14.  
The RFP contemplated a 1-year contract and included options for 4 
additional years.  RFP section B.  Fifteen offerors timely submitted 
initial proposals, and six offers were determined to be in the 
competitive range.  Discussions were held with all competitive-range 
offerors.  During three successive rounds of discussions with TSSI, 
the agency raised concerns regarding low staffing levels in the firm's 
proposal.  In response, TSSI increased proposed staffing, resulting in 
an increase in its proposed price.  Best and final offers (BAFO) were 
received and Ace's BAFO [deleted] was the lowest-priced, while TSSI's 
[deleted] was the fifth-lowest.[2]  Contracting Officer (CO) Statement 
at 4; Agency Report at  para.  I.2.

On March 20, 1998, the contracting officer notified TSSI that he 
intended to award the contract to Ace based upon its lowest price; on 
March 28, the contract was awarded to Ace.  TSSI filed its initial 
protest on March 30, and, after receiving the agency's protest report, 
TSSI filed a supplemental protest on May 11.  Finding performance to 
be in the best interests of the government, the agency authorized Ace 
to perform the contract notwithstanding TSSI's protests.

The protester contends that DCA did not evaluate proposals in accord 
with the RFP's evaluation scheme.  TSSI asserts that the RFP required 
the agency to make award to the offeror whose proposal represented the 
best value to the government, and emphasized that technical 
merit--particularly proposed staffing--was more important than price.  
The protester also contends that DCA misled it during discussions by 
repeatedly telling it to raise its staffing levels, causing TSSI to 
increase its price as a result, and then awarding the contract to Ace 
on the basis of its lowest-priced, technically acceptable proposal.

The agency reports that it always intended to award the contract to 
the offeror of the lowest-priced, technically acceptable proposal, but 
concedes that "the solicitation inadvertently omitted the language 
that award would be made to the lowest technically acceptable 
offeror."  Agency Report at  para.  I.3 and  para.  III.5.  The agency reports, 
however, that the award decision was consistent with the agency's 
internal technical evaluation plan, which indicated that the contract 
was to be awarded to the "lowest technically acceptable offeror."  Id. 
at  para.  I.3.  The agency states that it has previously included 
lowest-priced, technically acceptable award criteria in solicitations 
for these types of contracts and awarded more than 40 contracts for 
similar services on that basis for the past several years, and the 
agency reports that TSSI has participated in at least four of those 
procurements.  Agency Report at  para.  III.5; CO Statement at 2; CO 
Supplemental Statement at 2.  

The agency contends that, since TSSI participated in several previous 
DCA procurements for similar services where contracts were awarded on 
lowest-priced, technically acceptable bases, TSSI should have known 
that DCA intended to award the contract to the offeror of the 
lowest-priced, technically acceptable offer in the current 
procurement.  CO Supplemental Statement at 2.  DCA argues that, as an 
experienced offeror, TSSI should have noticed that the lowest-priced, 
technically acceptable award criteria had not been included in the 
current RFP.  Id.; CO Statement at 2.  Therefore, DCA contends that 
TSSI's protest is untimely because it alleges an impropriety in the 
RFP but was not filed until after the time set for receipt of initial 
proposals.  Agency Report at  para.  III.5; see Bid Protest Regulations, 4 
C.F.R.  sec.  21.2(a)(1) (1998).
  
We do not consider previous DCA procurements to be relevant in this 
case.  While DCA did not provide our Office with any of the previous 
solicitations, it appears that the previous solicitations each stated 
that award would be made on a lowest-priced, technically acceptable 
basis.  Here, DCA failed to include the same or similar award criteria 
in the RFP.  Since an agency must evaluate proposals only on the basis 
of the evaluation scheme set forth in the solicitation in response to 
which they were submitted, 10 U.S.C.  sec.  2305(b)(1) (1994), the manner 
in which DCA evaluated proposals in other procurements is not relevant 
to the propriety of the selection process in the current procurement.  
Creative Apparel Assocs., B-275139, Jan. 24, 1997, 97-1 CPD  para.  65 at 7 
n.8.

In this case, the RFP's proposal evaluation provision listed five 
equally important technical evaluation factors as follows:  (1) past 
performance; (2) staffing - shelf stocking function; (3) staffing - 
custodial function; (4) staffing - receiving/storage/holding (R/S/H) 
function; and (5) project manager/supervisory manhours for all 
services and functions.  RFP  sec.  M.2.  The RFP stated that price would 
not be scored but would be evaluated for realism, to assess an 
offeror's understanding of the work, and to determine an offer's 
acceptability and establish the competitive range.  Id.  The RFP, at  sec.  
L.13(a), included a contract award provision that stated:

     The Government will award a contract resulting from this 
     solicitation to the responsible offeror whose offer conforming to 
     the solicitation will be most advantageous to the Government, 
     cost or price and other factors, specified elsewhere in this 
     solicitation, considered.  

The RFP also specifically reserved to DCA the right to "accept other 
than the lowest offer."  RFP  sec.  L.13(b).  

Thus, the RFP announced to offerors that the agency would use a best 
value evaluation scheme that would consider technical evaluation 
factors as well as price.[3]  The RFP stated that the contract would 
be awarded on the basis of the most advantageous proposal after 
evaluation of both cost and technical factors, and the RFP listed the 
five technical factors that would be evaluated.  TSSI reasonably 
concluded that a higher technically rated proposal could be selected 
for award even if it was not the lowest-priced offer.[4]  Even though 
DCA reports that it always intended to select the lowest-priced, 
technically acceptable proposal, and, in fact, expressly included such 
an evaluation scheme in its internal (and undisclosed) technical 
evaluation plan, DCA was not free to disregard the RFP's stated 
evaluation scheme.[5]  Trijicon, Inc., supra, at 6-7; see also Hattal 
& Assocs., B-243357, B-243357.2, July 25, 1991, 91-2 CPD  para.  90 at 7.

The record shows that TSSI's and Ace's initial proposals were 
evaluated and given ratings (letter/adjectival/points) as follows: 

     Evaluation Factor    TSSI        Ace

     Past performance     [deleted]   [deleted]

     Staffing  (shelf stocking)[deleted][deleted]

     Staffing (custodial) [deleted]   [deleted]

     Staffing (R/S/H)     [deleted]   [deleted]

     Supervisory          [deleted]   [deleted]
Using the RFP's equal weighting of evaluation factors, TSSI's proposal 
received a total score of [deleted] points and Ace's proposal received 
a total score of only [deleted] points.  Price Negotiation Memorandum 
at 1-2; Evaluation Summary.  

Discussions with all competitive-range offerors focused on staffing 
levels.  CO Statement at 4.  As a result, both TSSI and Ace increased 
their proposed staffing levels in their BAFOs.  Id.  The record 
reveals that DCA considered all BAFOs to be technically acceptable, 
but did not rescore  proposals.  Price Negotiation Memorandum at 2; CO 
Supplemental Statement at 2.  

As noted above, Ace's BAFO was the lowest-priced at a proposed total 
price of [deleted] for the base plus all option periods, while TSSI's 
total price of [deleted] was fifth-low.  The contracting officer 
determined Ace's prices to be fair and reasonable after comparing them 
to the prices of the next two lowest offers and because he believed 
that adequate price competition had been obtained.  Price Negotiation 
Memorandum at 4-5.  The record shows also that, although the 
contracting officer recognized that Ace's proposed staffing levels 
were more than [deleted] percent lower than the government's lowest 
estimate of the number of staff-hours that would be needed to perform 
the work, the contracting officer believed that Ace could successfully 
perform the work.  Id. at 3-4.  The contracting officer awarded the 
contract to Ace based upon its technically acceptable proposal and 
lowest proposed price.  Agency Report at 1; Price Negotiation 
Memorandum at 3.  Consistent with his intent to select the 
lowest-priced technically acceptable proposal, the contracting officer 
did not consider the relative strengths of the technical proposals and 
performed no technical/cost tradeoff.

It is clear that DCA disregarded the RFP's best value evaluation 
scheme in selecting Ace's proposal for award.  TSSI's proposal 
received four "[deleted]" ratings and one "[deleted]" rating on the 
evaluation factors; Ace's proposal received one "[deleted]" rating, 
three "[deleted]" ratings, and one "[deleted]" rating.  Based upon the 
total points given each proposal by the evaluation team [deleted], 
TSSI's proposal was rated approximately [deleted] percent higher than 
Ace's proposal.  The evaluation documentation shows that the 
evaluation team considered TSSI's proposal to be [deleted] to Ace's 
proposal on technical merit.[6]  However, based upon the erroneous 
belief that the evaluation scheme set out in the agency's internal 
evaluation plan was controlling, the contracting officer simply 
treated all BAFOs as technically acceptable without any comparative 
evaluation of offers and made award to the lowest-priced offer from 
among them.  This effectively negated any advantage in technical merit 
that TSSI's proposal had over Ace's proposal.  See Trijicon. Inc., 
supra, at 6-7.  In our opinion, by failing to weigh the extra 
increment of technical merit of TSSI's proposal (and other technically 
superior proposals) against the benefits of Ace's lowest price, DCA 
improperly converted the best value evaluation scheme in the RFP to 
one resulting in selection of the lowest-priced, technically 
acceptable proposal, thus prejudicing TSSI as well as other offerors 
that submitted proposals rated higher than Ace's.  Id.  

For the reasons set forth above, we sustain the protests.[7]  Since 
DCA reports that it intended from the outset to award the contract to 
the offeror of the lowest-priced, technically acceptable proposal, we 
recommend that DCA:  (1) amend the RFP to include a lowest-priced, 
technically acceptable award scheme, if that remains the agency's 
preference; (2) solicit revised BAFOs from all competitive-range 
offerors; and (3) evaluate and select the winning offer from among the 
revised BAFOs in accord with the RFP's amended evaluation scheme.  If, 
after revised BAFOs are evaluated, an offeror other than Ace is the 
successful offeror, then the agency should terminate Ace's contract 
for the convenience of the government and make award to the successful 
offeror under the amended evaluation scheme.  We also recommend that 
TSSI be reimbursed its costs of filing and pursuing the protests, 
including reasonable attorneys' fees.  Bid Protest Regulations, 4 
C.F.R.  sec.  21.8(d)(1).  TSSI should submit its certified claim for 
costs, detailing the time expended and costs incurred, directly to the 
contracting agency within 60 days after receipt of this decision.  4 
C.F.R.  sec.  21.8(f)(1).

The protests are sustained.

Comptroller General
of the United States 

1. In its initial protest, TSSI also alleged that, during discussions, 
the agency did not allow it to address negative information DCA 
received regarding TSSI's past performance.  The agency report on the 
initial protest included a detailed response to this allegation, but 
TSSI did not reply to the agency's response.  We therefore consider 
the issue abandoned.  Trijicon, Inc., B-244546, Oct. 25, 1991, 91-2 
CPD  para.  375 at 4 n.3. 

2. Prices have been rounded to the nearest dollar.

3. To the extent the agency believes that the RFP language was 
ambiguous about the basis of award, this ambiguity was latent (rather 
than patent) and thus was not required to be protested prior to 
submission of proposals.  See Niedermeyer-Martin Co., B-226623, July 
8, 1987, 87-2 CPD  para.  23 at 3 n.1.

4. We note that, while the RFP clearly established a best value 
evaluation scheme, it did not state the relative importance of price 
versus technical factors as required by 10 U.S.C.  sec.  2305(a)(3)(A).

5. The agency contends that TSSI is not an interested party to protest 
DCA's selecting the lowest-priced technically acceptable proposal 
because there are other firms whose proposals would be better values 
under a technical/cost tradeoff.   TSSI does not challenge the 
agency's right to select the awardee based on low price among the 
technically acceptable proposals; rather, it challenges the 
inconsistency between that method and the RFP criteria.  TSSI is an 
interested party to allege that the RFP failed to accurately state the 
intended basis of award. 

6. The record does not indicate the evaluation team's assessment of 
the offers' technical merit after proposals were revised in response 
to discussions, since, as noted above, BAFOs were not separately 
scored.  

7. Because we are sustaining the protest of award on the basis of the 
lowest-priced, technically acceptable proposal and recommending that 
the agency solicit and evaluate revised proposals, it is not necessary 
for us to address the allegations that DCA unreasonably induced TSSI 
to increase its staffing levels during discussions or that DCA failed 
to conduct a meaningful price realism analysis of Ace's offer.