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.