BNUMBER:  B-279756; B-279756.2           
DATE:  July 17, 1998
TITLE: Robertson Leasing Corporation, B-279756; B-279756.2, July 17,
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:Robertson Leasing Corporation

File:B-279756; B-279756.2          
        
Date:July 17, 1998

Donald O. Ferguson, Esq., for the protester. 
John C. D. Drolla, Jr., Esq., and Richard J. Wieland, Esq., for Gaston 
& Sheehan Auctioneers, Inc., an intervenor. 
Joni M. Gibson, Esq., Department of Justice, U.S. Marshals Service, 
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

Award of a contract to the offeror of the higher technically rated, 
higher-priced proposal was permissible where the request for proposals 
(RFP) stated that technical evaluation factors were considered more 
important than price, the awardee's proposal received the greatest 
number of combined price/technical evaluation points under the RFP's 
price/technical tradeoff formula, and the contracting officer 
reasonably determined that the superior technical merit of the 
awardee's proposal warranted its higher price.

DECISION

Robertson Leasing Corporation (RLC) protests the United States 
Marshals Service's award of a contract to Gaston & Sheehan 
Auctioneers, Inc. (G&S), pursuant to request for proposals (RFP) No. 
MS-96-R-0017, for services involving vehicles seized by the 
government.  The protester contends it should have been awarded the 
contract based upon its many years of successful performance of such 
contracts and because its proposed price was less than the awardee's.  
Initial Protest at 2; Supplemental Protest at 1.  The protester also 
contends that the agency failed to follow the RFP's evaluation scheme 
since it could not justify paying a significantly higher price to have 
the work performed by G&S.  Initial Protest at 2, 4.

We deny the protests.

Issued on April 30, 1996, the RFP solicited offers for towing, storing 
and disposing of seized/forfeited vehicles in the Southern District, 
Texas; initial proposals were due by July 5.[1]  RFP amend. A001 at 1.  
The RFP contemplated award of a 1-year indefinite-delivery, 
indefinite-quantity contract and included options for 4 additional 
years.  RFP section B; RFP  sec.  L-8.  The contractor would be required to 
tow the vehicles from the point of seizure to a storage facility 
operated by the contractor.  The contractor would also be required to 
perform maintenance, make repairs, prepare the vehicles for disposal, 
and dispose of the vehicles by auction or sale to salvage dealers.  
RFP section C.  Tasks would be performed in response to delivery 
orders, and payment would be made on a fixed-price basis (except for 
repairs, for which the contractor would be reimbursed costs).  RFP  sec.  
I-54, L-8.

The RFP stated that the contract would be awarded to the offeror whose 
proposal was determined to be in the best interests of the government, 
price and other factors considered, and reserved to the government the 
right to select other than the lowest cost proposal.  RFP  sec.  M-1.  The 
RFP stated that technical factors would be given a weight of 60 
percent in the evaluation, while cost would be given a weight of 40 
percent.  RFP  sec.  M-2, M-4.  The equally weighted technical evaluation 
factors (each worth 15 evaluation points) were:  towing, storage, 
sales, and work capability.  RFP  sec.  M-3.  The RFP further stated, at  sec.  
M-5:

     Notwithstanding this [40/60] price/technical ratio, for 
     determining whether a premium is warranted, the Government will 
     only award a contract to other than the low acceptable offeror if 
     specific technical advantages can be identified and the 
     Contracting Officer determines that those specific technical 
     advantages are worth the amount of any premium in price.  The 
     Contracting Officer has the right to determine whether any 
     differences in technical weighing are "significant" for purposes 
     of evaluating the overall merit of proposals.

Seven timely offers were received.  After initial proposals were 
evaluated by the technical evaluation board, and a preliminary price 
analysis was conducted by the contracting officer, four offers 
(including RLC's) were included in the competitive range.  Agency 
Report at 3.  Discussions were held with all competitive range 
offerors.  Id. at 4.  After discussions were concluded and best and 
final offers (BAFO) evaluated, the contracting officer initially 
recommended that the contract be awarded to RLC.  Id. at 5.  However, 
before a contract was awarded, the contracting officer learned that, 
due to a recent Border Patrol initiative, the number of vehicles being 
seized per day had greatly increased; the RFP was amended to increase 
the estimated quantities and offerors were requested to submit second 
BAFOs responding to the revised requirement.  Id.; RFP, amend. A004 at 
1. 

In response to the increased estimates, three offerors increased their 
proposed prices; G&S, however, significantly decreased its proposed 
price.  Contracting Officer Statement at 4-5.  After second BAFOs were 
evaluated, RLC's BAFO was the lowest-priced of the four offers and 
ranked third on technical merit, while G&S's BAFO was second 
lowest-priced and ranked first on technical merit.  Negotiation 
Memorandum at 5; Contracting Officer Statement at 5.  G&S's and RLC's 
BAFOs were evaluated as follows:

    OFFEROR    PROPOSED
                 PRICE      TECHNICAL
                              SCORE        PRICE
                                           SCORE       TOTAL
                                                       SCORE

      G&S        [deleted]  [deleted]    [deleted]   [deleted]

      RLC        [deleted]  [deleted]    [deleted]   [deleted]
Contracting Officer Statement at 5; Agency Report at 5.

Based upon a comparison of G&S's price with the prices proposed by the 
other offerors, the agency determined that G&S's proposed prices were 
fair and reasonable.  Determination of Price Reasonableness at 2.  The 
contracting officer noted that G&S's total proposed price was roughly 
$[deleted] more than RLC's over the base period and 4 option years; 
RLC's prices were highest for the base period and would decline with 
each option period.[2]

The contracting officer believed that RLC's prices were mathematically 
unbalanced and suggested that they might be materially unbalanced as 
well.  Negotiation Memorandum at 5; Determination of Price 
Reasonableness at 2.  The contracting officer reports that the 
government would not reap the roughly $[deleted] benefit of RLC's 
pricing unless all four options were exercised, and that at the 
completion of
3 years of the contract (i.e., after the basic period plus two option 
periods had been performed) RLC's proposal would represent a savings 
of only about 
$[deleted].  Contracting Officer Statement at 6-7.  The contracting 
officer determined that it was not in the government's interest to 
have to exercise several options in order to obtain the benefit of 
lower-priced later years.  Negotiation Memorandum at 5.  Nonetheless, 
the contracting officer did not reject RLC's proposal due to its 
pricing structure, and it is not clear from the record that the 
concern about unbalanced pricing actually had an impact on the source 
selection.

After comparing the evaluations of RLC and G&S, and noting that G&S's 
BAFO was rated as technically superior in all areas of the evaluation, 
the contracting officer concluded that G&S's BAFO offered significant 
advantages in spite of its greater proposed price.  Contracting 
Officer Statement at 6-7.  Accordingly, the contracting officer 
awarded the contract to G&S on April 1, 1998, and RLC was debriefed on 
April 7.  Agency Report at 5.  Shortly thereafter, RLC filed its 
initial protest in our Office; after receiving the agency's report on 
its initial protest, RLC filed a supplemental protest on May 20.  
Contract performance has been stayed pending our decision on the 
protests.  Id. at 1.

The protester contends that the award to G&S is inconsistent with the 
RFP's evaluation scheme.[3]  RLC states that it is an experienced 
contractor with many years of successful experience in performing 
these types of contracts.  In view of RLC's significant past 
performance experience, and because its proposed price is roughly 
$[deleted], or [deleted] percent, lower than G&S's proposed price, the 
protester argues that the agency could not, consistent with the RFP 
evaluation scheme, justify paying such a substantial premium to have 
G&S perform the work.  Initial Protest at 4.

In a negotiated procurement, a procuring agency has the discretion to 
select a more highly rated technical proposal if doing so is 
reasonable and is consistent with the RFP's evaluation scheme.  Stone 
& Webster Eng'g Corp., B-255286.2, Apr. 12, 1994, 94-1 CPD  para.  306 at 8.  
An agency may properly award a contract to the offeror of a  
higher-rated technical proposal with a significantly higher proposed 
cost, where the agency determined that the cost premium was justified 
considering the significant technical superiority of the selected 
offeror's proposal.  Id.

As detailed above, G&S's BAFO received a total evaluation score, 
including both technical and price points, of [deleted] points, while 
RLC's BAFO received a total evaluation score of [deleted] points.  As 
G&S's BAFO received the highest cost/technical point total under the 
RFP's cost/technical tradeoff scheme, the selection of G&S for 
contract award was plainly consistent with that scheme.  Moreover, the 
contracting officer examined the key technical advantages of G&S's 
proposal and reasonably determined that the extra technical merit 
associated with G&S's proposal was worth its higher price.  
Specifically, the contracting officer compared the technical 
evaluations of the G&S and RLC proposals and observed that, while 
G&S's proposal was technically superior to RLC's in every area 
evaluated, G&S's proposal's significantly higher technical rating was 
primarily due to technical advantages that G&S's proposal had over 
RLC's proposal in the evaluation of sales and work capability.  The 
contracting officer determined that G&S's proposal had a more 
efficient sales plan, previous auction sales attracting large numbers 
of people and resulting in proceeds that were greater than appraised 
values; the contracting officer also noted G&S's commitment to provide 
the staffing to handle the auctions.  Negotiation Memorandum at 6; 
Final Evaluation Report at 1, 5; Contracting Officer Statement at 6.  

In terms of points, the evaluation record shows that G&S's proposal 
received [deleted] points (out of 15.0 available points) for a 
"superior" rating on sales, while RLC's proposal received only 
[deleted] points for a "poor" rating.  Final Evaluation Report at 1, 
5; Technical Evaluation, Attach. 2.  In the work capability 
evaluation, G&S's proposal received [deleted] (out of 15.0 available 
points) for a "good" rating, while RLC's received only [deleted] 
points for a "weak" rating.  Id.  

In view of the much higher ratings achieved by G&S's proposal on these 
two evaluation factors, we have no basis to find unreasonable the 
contracting officer's determination that G&S's technical advantages in 
the sales and work capability areas were worth G&S's additional cost.  
Furthermore, the record shows that G&S's proposal was rated as 
technically superior to RLC's on every evaluation factor.  Overall, 
G&S's proposal was rated approximately [deleted] percent higher than 
RLC's on technical merit and was only approximately [deleted] percent 
more expensive.  Since the RFP's evaluation scheme indicated that 
technical merit was more important than price, we believe that the 
contracting officer's selection of G&S was both reasonable and 
consistent with the RFP's evaluation scheme.

In its supplemental protest, RLC complains that, while the Marshals 
Service considered G&S's proposal to be technically superior to RLC's 
in part because G&S offered a superior sales plan, the agency did not 
require G&S to provide documentary proof to support claims made in 
G&S's proposal that G&S's gross sales receipts from previous auctions 
exceeded pre-sale estimates.  We note, first, that G&S's proposal's 
high rating in the sales evaluation was not based solely upon its 
claim that the proceeds of two previous auctions exceeded pre-sale 
estimates, but was also based upon the other aspects of its proposal 
discussed above.  Moreover, while the RFP, at  sec.  L-2c.iii, required 
offerors to describe their sales methods and past experience, the RFP 
did not require documentary proof to support each statement made in a 
proposal.  In fact, though, G&S's proposal's description of its sales 
methodology and past experience was supported by a list of 19 auctions 
it conducted for government agencies in just the last 3 years, 
complete with agency contacts, telephone numbers, and approximate 
receipts.  As there was no reason for the agency to believe that G&S 
had misrepresented its claims of prior auction successes--and RLC has 
provided no reason in its protests--we think that the Marshals Service 
reasonably relied upon the information contained in the proposal 
rather than requiring any additional supporting documentation.

In its supplemental protest, RLC also complains that the Marshals 
Service incorrectly determined that G&S's prices were fair and 
reasonable without conducting a comprehensive comparison of G&S's 
year-by-year prices with those proposed by RLC.  However, the agency 
determined that adequate price competition had been obtained and that 
G&S's prices were fair and reasonable based upon a comparison to the 
other offers received in this procurement and to a contract for 
similar services in the Laredo area.  Determination of Price 
Reasonableness at 2; Contracting Officer Statement at 5.  The prices 
received in the current procurement ranged from a low price of 
$[deleted] to a high price of $[deleted].  Determination of Price 
Reasonableness at 1.  G&S's price was near the low end of the range 
and was only about [deleted] percent higher than RLC's.  In these 
circumstances, the agency reasonably determined that G&S's proposed 
prices were fair and reasonable, and there was no need to perform a 
year-by-year analysis.  Federal Acquisition Regulation  sec.  15.805-2(a) 
(June 1997); Pearl Properties; DNL Properties, Inc., B-253614.6, 
B-253614.7, May 23, 1994, 94-1 CPD  para.  357 at 11-12.

In its supplemental protest, the protester also asserts that the 
contracting officer improperly did not consider the lower prices that 
RLC proposed for the option years (and even beyond the fourth option 
year, if the contract were extended, as was apparently done in a prior 
contract) contrary to the RFP's express statement, at  sec.  M-4a, that an 
offer's total price, including option year prices, would be considered 
in the evaluation.[4]  However, consistent with the RFP, option year 
prices were, in fact, considered as part of each offer's total price 
when offers were awarded price points under the RFP price/technical 
formula.  As noted above, RLC's proposal received a perfect score of 
40 price points based upon its lowest proposed price, and RLC's price 
was only lowest when all option years were considered.  Nothing in the 
RFP required the agency to consider pricing in the event of the 
contract being extended beyond its term, and the agency acted properly 
in not doing so.

The protests are denied.

Comptroller General 
of the United States

1. The Southern District, Texas, is comprised of two areas:  McAllen 
and Laredo.  RFP at  sec.  C-1, C-4.  Offerors were allowed to propose for 
either requirement, or both, and two separate contracts were to be 
awarded.  RFP Cover Sheet; RFP section B.  The protests concern only 
the McAllen area award; therefore, the remainder of this decision will 
discuss only the McAllen area award and contract actions relating to 
it. 

2. For example, RLC proposed a price of $[deleted] for the basic 
contract period, but only $[deleted] for the fourth option period.  On 
the other hand, G&S's prices were very even throughout the entire term 
of the contract ($[deleted] for the basic contract period and 
$[deleted] for each of the option periods).  Determination of Price 
Reasonableness at 1.  

3. In its initial protest, RLC also alleged that the agency failed to 
hold meaningful discussions with it.  The agency report on the initial 
protest included a detailed response to this allegation, but RLC 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.

4. In its supplemental protest, RLC also complains about the 
contracting officer stating that RLC's pricing was mathematically 
unbalanced and very likely materially unbalanced as well.  This 
complaint provides no basis for overturning the award decision because 
the contracting officer did not reject RLC's proposal as unbalanced.  
To the extent that RLC's apparently front-loaded pricing caused the 
agency to discount the value to the government of the firm's overall 
lower price, we see no basis to find such a consideration improper in 
the context of a cost/technical tradeoff.