BNUMBER: B-279697
DATE: July 13, 1998
TITLE: Dynamic Marketing Services, Inc., B-279697, July 13, 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:Dynamic Marketing Services, Inc.
File: B-279697
Date:July 13, 1998
David M. Nadler, Esq., Robert J. Moss, Esq., and William M. Rosen,
Esq., Dickstein Shapiro Morin & Oshinsky, for the protester.
Gilbert J. Ginsburg, Esq; and Daniel B. Abrahams, Esq., and Raymond
Fioravanti, Esq., Epstein, Becker & Green; for Aspen Systems
Corporation, an intervenor.
Jeffrey C. Morhardt, Esq., and Edmund J. Trepacz, Esq., Department of
Education, for the agency.
Glenn G. Wolcott, Esq., and Paul Lieberman, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protester's proposal was properly excluded from the competitive range
where the proposal contained numerous weaknesses and deficiencies
under each of the five technical evaluation factors and would have
required major revisions in order to become technically acceptable.
DECISION
Dynamic Marketing Services, Inc. (DMSI) protests the Department of
Education's exclusion of its proposal from the competitive range and
the subsequent award of a contract to Aspen Systems Corporation under
request for proposals (RFP) No. 98-001. The solicitation sought
proposals to operate a "state of the art one-stop center" for
distribution of the agency's various publications. Dynamic asserts
that the agency improperly evaluated its proposal as technically
unacceptable and contends that the proposal should have been included
in the competitive range.
We deny the protest.
The Department of Education yearly creates hundreds of information
products, including reports, fliers, videos, brochures and posters,
which are distributed to the public upon request. For several years,
DMSI has performed as a subcontractor under another Department of
Education contract for some of these product distribution services.
On April 17, 1997, the agency issued the solicitation at issue,
seeking fixed-price proposals to operate a "state of the art"
distribution center. In a cover letter accompanying the solicitation,
the agency explained that this procurement was significantly different
from prior product distribution contracts, stating:
This contract is significant because the U.S. Department of
Education (ED) will be for the first time centralizing their
dissemination function for all of its principal offices. Key
features of the One Pubs center will be an 800 line from which
customers can request any ED publication, a state of the [art]
inventory system, data base searches, publication storage,
effective mail handling, referral capabilities, and maintenance
of mailing lists.
Previously the Government acquired much of its support services
on a cost reimbursable basis using for the most part cost plus
fixed fee contracts. In many cases this was simply a level of
effort contract in which the contractor was paid for hours
incurred . . . .
. . . . .
The One Pubs contract contains a performance based statement of
work, a sophisticated surveillance plan, and incentive and deduct
provisions written into the performance requirement summary. The
Department with this performance based methodology is
anticipating the contractor will come forth with creative ideas
to improve ED's information product distribution efficiency. We
expect that One Pubs will be a state of the art, one stop
information products center.
Among other things, the RFP's statement of work (SOW) contained
requirements that the contractor use computer technology for a variety
of functions in operating the new, centralized distribution center.
In addition to stating that "[t]he purpose of this contract is to
support principal offices throughout the [agency] by providing a state
of the art one-stop center," the SOW required that, "[t]he
[c]ontractor shall accept and process on-line requests . . . (phone,
TDD, fax, letters, Internet, e-mail, electronic orders, on line forms)
for information products"; required that the contractor be responsible
for production of publications in alternative formats, including
computer diskettes; and required that the contractor "shall deliver
electronic versions of education information products . . . over
electronic networks such as the Internet via electronic mail." SOW sec.
100.3, 200.2, 200.3.
Section M of the solicitation provided that proposals would be
evaluated on the basis of technical merit, past performance, and
price, stated that technical merit and past performance were
"significantly more important than cost or price," and established the
five following technical evaluation factors: quality of technical
approach; facilities, staff experience and capability; corporate
capability; understanding the project; and sample questions. RFP sec.
M.1 (A), (C).
Finally, section L of the RFP advised offerors that proposals which
failed to demonstrate a thorough understanding of the contract
requirements would be unacceptable, stating:
You must submit an explanation of the proposed technical approach
in conjunction with the tasks to be performed in achieving the
project objectives.
A detailed work plan must be submitted indicating how each aspect
of the statement of work is to be accomplished.[1]
Three offerors, including DMSI, submitted proposals by the June 23,
1997 closing date and were subsequently evaluated. DMSI proposed the
lowest price of $15,324,755. However, the agency found numerous
weaknesses and deficiencies in DMSI's technical proposal and concluded
that it failed to provide the required details regarding its technical
approach to the various required tasks. Overall, DMSI's proposal
received the lowest technical score--638 points out of a possible
1,050 points--and was determined to be technically unacceptable and
not capable of being made acceptable without major revisions.
The weaknesses and deficiencies in DMSI's proposal were pervasive
under each of the five evaluation factors. Specifically, under the
first evaluation factor, "quality of technical approach," DMSI's
proposal received a score of 328 out of a possible 525 points. Under
this factor, the RFP listed several subfactors and provided for
evaluation regarding the "reasonability and feasibility of the
approach; staff quality and level of effort devoted." Under the first
subfactor, "database management and management information systems,"
DMSI's proposal was downgraded for being understaffed. The agency
specifically criticized DMSI's proposal that its system administrator
and database administrator would devote only 40 and 80 percent of
their time, respectively, to performance of this contract. DMSI's
proposal was also downgraded for proposing outdated computer
workstations and an underpowered Internet server.[2] Under another
subfactor, "customer service, including enhanced user survey
instruments," DMSI's proposal was downgraded for failing to provide
any details regarding its proposed approach to meeting the RFP
requirement that the Internet be used to process on-line customer
requests and for maintaining an on-line user survey. Under another
subfactor, "dissemination functions, distribution and warehouse, [and]
marketing," DMSI's proposal was downgraded for failing to provide
details responding to the RFP requirement that the contractor actively
market the agency's information products and the distribution center.
Under the second evaluation factor, "facilities, staff experience and
capability," DMSI's proposal received a score of 92 out of a possible
150 points. Among other things, DMSI's proposal was downgraded for
proposing that its project manager would spend only 50 percent of her
time performing this contract. DMSI's proposal was also downgraded
for failing to address the RFP requirement that "at least one employee
shall be fluent in Spanish." Finally, the proposal was downgraded
because the proposed systems supervisor did not hold clearinghouse or
mail room experience, the proposed production supervisor had only 4
months of production supervisory experience, and neither the proposed
project manager nor the assistant project manager had relevant
computer skills or background in computer operations.
Under the third evaluation factor, "corporate capability," DMSI's
proposal received a score of 84 out of 150 points. Under this factor,
the RFP stated that proposals would be evaluated with regard to the
offeror's demonstrated experience in similar contracts of comparable
technical complexity, and also on the basis of the "quality of the
organization and writing of the proposal." DMSI's proposal was
downgraded because it primarily reflected DMSI's bulk mailing
experience,[3] and did not demonstrate experience performing contracts
with the level of technological complexities anticipated here.
Additionally, DMSI's proposal was downgraded under this evaluation
factor for its poor organization and the fact that it contained
spelling and grammatical errors which reflected poorly on DMSI's
corporate capability.
Under the fourth evaluation factor, "understanding the project,"
DMSI's proposal received a score of 59 out of a possible 100 points.
The RFP stated that, under this factor, proposals would be evaluated
to assess the offerors' "understanding the needs of the U.S.
Department of Education in information products dissemination and a
one stop center." DMSI's proposal was downgraded on the basis that it
placed no emphasis on future technology, was "more reactive than
proactive," and that the proposal "fail[ed] to explain how the
technical challenge involved in merging the response center, online,
letter, fax and administrative dissemination facilities will be met."
Finally, under the fifth evaluation factor, "questions," offerors were
presented with various questions, including "What creative and
innovative approaches and cost savings techniques will you use . . .?"
and "What state of the art equipment would be used that would enhance
ED's dissemination strategies . . . ?" DMSI's proposal received a
score of 74 out of 125 points, and was downgraded for, among other
things, failing to propose state of the art equipment and for failing
to propose "anything creative or innovative."
In summarizing the evaluation of DMSI's proposal, the agency stated:
The DMSI proposal simply conveyed no forward thinking or vision
for this project. Some significant weaknesses noted were: DMSI
was insufficient in its Internet and electronic capabilities,
showed inadequate staffing plans, included minimal or no
information on their marketing plan, alternate formats and the
fee for service option, and showed no experience in call center
operations. Other significant weaknesses noted in this proposal
were DMSI's lack of emphasis on exceptional customer service as
well as cost savings ideas. The fact that the Project Manager
could only devote 50% of her time to this project was also noted
as a major weakness.
On the basis of this evaluation, the agency concluded that DMSI's
proposal was unacceptable without major revisions and, therefore,
eliminated it from the competitive range.[4] DMSI was subsequently
advised of its exclusion; this protest followed.
DMSI protests that it was unreasonable for the agency to evaluate its
proposal as so technically deficient as to warrant exclusion from the
competitive range. DMSI primarily expresses disagreement with the
agency regarding the bases for the evaluated weaknesses and
deficiencies and argues that, in any event, its proposal could have
been made acceptable through discussions.[5]
An offeror must submit an initial proposal that is adequately written
and that affirmatively presents its merits, or run the risk of having
its proposal rejected as technically unacceptable. Defense Group,
Inc., B-253795, Oct. 25, 1993, 94-1 CPD para. 196 at 5. Generally, offers
that are technically unacceptable as submitted and would require major
revisions to become acceptable are not required to be included in the
competitive range. Engineering & Computation, Inc., B-258728, Jan.
31, 1995, 95-1 CPD para. 155 at 3. Procuring agencies may reasonably find
a proposal to be unacceptable based on the offerors' generalized
statements that it will comply with those requirements rather than
providing a sufficiently detailed explanation of how the requirements
will be performed. Tri-Services, Inc., B-256196.4, Sept. 30, 1994,
94-2 CPD para. 121 at 4. In reviewing whether a proposal was properly
rejected as technically unacceptable for information deficiencies, we
examine the record to determine, among other things, whether the RFP
called for detailed information and the nature of the informational
deficiencies--for example, whether the deficiencies tend to show that
the offeror did not understand what it would be required to do under
the contract. Engineering & Computation, Inc., supra. Although we
will closely scrutinize an agency's decision, such as this one, which
results in a competitive range of one, we will not disturb such a
determination absent a clear showing that it was unreasonable. Native
Am. Consultants, Inc.; ACKCO, Inc.,
B-241531, B-241531.2, Feb. 6, 1991, 91-1 CPD para. 129 at 5-6.
The agency position is that, throughout DMSI's proposal, the agency
found numerous instances, discussed above, where DMSI's proposal
failed to meet the RFP requirements, including the specific RFP sec. L.3
requirement that offerors "must submit an explanation of the proposed
technical approach in conjunction with the tasks to be performed," as
well as a "detailed work plan . . . indicating how each aspect of the
statement of work is to be accomplished." The agency concluded that
DMSI failed to grasp the fundamental concept that the work to be
performed under this solicitation differed significantly from
subcontract work that DMSI had previously performed.
Although DMSI expresses disagreement with the agency's technical
evaluation, it offers no persuasive arguments that the agency
materially erred in this evaluation.[6] Further, in its submissions
under this protest, DMSI confirms the agency's perception that DMSI
failed to understand the differences between the requirements in this
solicitation and those that DMSI has performed as a subcontractor
under prior contracts. Specifically, in its comments responding to
the agency report, DMSI states:
The One Pubs project [solicited here] is a straightforward
clearinghouse operation. The successful offeror will essentially
store Education's information products in a warehouse, receive
and record orders for those information products, and then mail
out the requested products to the customer. These functions are
precisely the same functions that DMSI has been performing for
Education in an exemplary manner for the past ten years.[7]
It is clear from the record that the solicitation adequately advised
offerors of substantial new requirements, including reliance on "state
of the art" technology, and that the agency reasonably concluded that
DMSI failed to understand those requirements. Apparently as a result
of this lack of understanding, as outlined above, DMSI's proposal
contained a broad range of significant deficiencies, as a result of
which the agency reasonably concluded that correction of these
deficiencies would require major revisions to the proposal.
Accordingly, the agency reasonably eliminated DMSI's proposal from the
competitive range.
The protest is denied.
Comptroller General
of the United States
1. Section L.3 of the RFP also advised offerors that proposals which
merely repeated the RFP requirements would not be eligible for award,
and that technical proposals must reflect a clear understanding of the
contract requirements.
2. One evaluator explained: "The 386 processor supplied for the
initial installation of the Definity ECS is two generations old,
therefore susceptible to malfunction due to age and underpowered to
handle all the communications needs anticipated. No upgrade
configuration or plans are presented." With regard to the proposed
Internet server, an evaluator explained: "A DX100 server will not be
satisfactory to sustain a proper website serving all of ED and ED
customers. Concurrent users from public sector, plus ED staff usage
of website, search and ordering systems is very likely to exceed DX100
server capacities."
3. DMSI describes the services it has performed as "essentially
stor[ing] Education's information products in a warehouse, receiv[ing]
and record[ing] orders for those information products, and then
mail[ing] out the requested products to the customer."
4. Aspen Systems Corporation's proposal, offering a price of
$20,500,668 and receiving a technical score of 944 points, was
included in the competitive range. The third offeror's proposal,
offering a price of $45,180,951 and receiving a technical score of 760
points, was also excluded from the competitive range.
5. DMSI's protest also asserts that, "on information and belief,
Aspen's proposal was technically unacceptable and should not have been
considered for award." DMSI's comments following receipt of the
agency report, which included Aspen's proposal and the agency's
evaluation documents regarding that proposal, do not further discuss
this allegation. Accordingly, we view the issue as abandoned.
Appalachian Council, Inc., B-256179, May 20, 1994, 94-1 CPD para. 319 at 8
n.8.
6. In its comments, DMSI notes that one of the evaluators may have
misunderstood the physical location of DMSI's proposed call center.
Even if DMSI were correct, we do not view this as a material error.
7. DMSI's comments also assert that reliance on "state of the art"
technology was not critical to contract performance under this
solicitation.