BNUMBER: B-280283.3
DATE: December 22, 1998
TITLE: Du & Associates, Inc., B-280283.3, December 22, 1998
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Matter of:Du & Associates, Inc.
File: B-280283.3
Date:December 22, 1998
Lucie Du for the protester.
Bruce M. Kasson, Esq., Department of Housing and Urban Development,
for the agency.
Robert C. Arsenoff, Esq., and Paul I. Lieberman, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protest of technical evaluation is denied where it is merely based
on protester's disagreement with the evaluators' conclusions.
2. Protest that discussions were not meaningful is denied where
record establishes that protester was led into the areas in which the
agency was concerned that the proposal needed amplification and
improvement.
DECISION
Du & Associates, Inc. (D&A) protests the elimination of its proposal
from the competitive range under request for proposals (RFP) No.
R-OPC-21184, issued by the Department of Housing and Urban Development
(HUD) for multifamily real estate assessment and analysis services.
D&A principally alleges that its proposal was misevaluated and that
HUD failed to conduct meaningful discussions.
We deny the protest.
BACKGROUND
The RFP, issued on April 22, 1998, contemplated the award of five
separate fixed-price, indefinite-quantity contracts for different
geographic regions. Agency requirements were set forth in a detailed
statement of work (SOW). RFP, Section C. Award was to be made on a
best value basis considering technical merit and, secondarily, price.
RFP amendment 1, Section M.IV.
The most important technical factor (worth 50 points out of a possible
total of 120) is entitled Prior Experience and provides as follows:
Offerors's proposal demonstrates experience, knowledge and
ability to perform, and manage the services listed in the [SOW].
Offeror's proposal provides documented evidence of previous
performance of similar or related work, as well as provides
evidence of the qualifications of the professional staff proposed
(including subcontractors and consultants) to perform the tasks
identified in the [SOW].
RFP amendment 1, Section M.III.A (hereinafter "Factor 1").
Past Performance, the second most important technical factor (worth 40
points), is not at issue in this protest. See RFP amendment 1,
section M.III.B.
The final technical factor (worth 30 points), entitled Management
Capability and Quality Control, provides, in relevant part, as
follows:
The offeror's proposal provides evidence regarding the ability to
perform all tasks under the contract in a quality and efficient
manner, including the management of subcontractors, if any. The
offeror demonstrates a clear understanding of the magnitude of
the contract requirements and of organizational ability to manage
the work required.
RFP amendment 1, section M.III.C (hereinafter "Factor 3").
With respect to Factor 1, the RFP's proposal preparation instructions
cautioned
offerors to provide evidence of qualifications of key staff performing
the same or similar work to the SOW and specifically required the
submission of job descriptions, resumes and/or organizational charts
reflecting key personnel to perform "the tasks identified in the
[SOW]," and provided that this experience was required to have been
gained within the last 3 years. RFP amendment 1, Section L.1(c)(1).
On June 8, proposals were received from 19 offerors. Following an
evaluation by the technical evaluation panel (TEP), competitive ranges
were established for each geographic area. D&A was included in the
competitive range for each of the five areas. On July 1, oral
discussions were conducted with D&A. The protester was also provided
with the following pertinent, written questions under the heading
"Technical Concerns":
1. We realize that [D&A] is a newly form[ed] company. Please
provide assurance that the company has the capacity and financial
ability to perform the contract.
. . . . .
4. It is our concern that the costs reflect the understanding of
the solicitation and tasks that will be required by the
contractor. Please provide a breakdown of costs supporting your
proposed fees to assure that adequate resources will be dedicated
to the contract(s).
Agency Report, Exh. 8, attachment.
D&A submitted a revised proposal on July 8. Upon evaluation of all
revised proposals, the contracting officer (CO) made a second
competitive range determination on August 14. The top five ranked
proposals had technical scores ranging from 100 to 117; D&A's
proposal, ranked sixth, had a final score of 78. D&A was not included
in the final competitive range, which was limited to two offerors who
were considered to have submitted the most highly rated proposals for
all five areas considering technical merit and price. The CO's
statement submitted as part of the agency report indicates that it was
primarily technical considerations, rather than price, that led to
D&A's exclusion.[1] Agency Report, Exh. 13 at 3. Following further
discussions with the two finalists, award was made to Pinnacle Reality
on August 28 for all geographic areas.
The protester received a written debriefing on September 5 which
summarized the agency's concerns with its final technical proposal as
follows:
The Government's evaluation of the significant weakness[es] or
deficiencies in the proposal, resulted in a lower rated technical
score.
Factor 1
The proposal indicated experience of key personnel in multifamily
housing and other HUD programs, however, the personnel identified
in the proposal does not list the experience associated with the
tasks to be performed. Most experience indicated in the proposal
was of a general nature and did not provide specific details of
the experience to determine if it was substantially similar to
the tasks required in the RFP.
Factor 3
The panel had concerns on the proposal's organizational structure
and ability to perform the contract. You were asked during oral
discussions to provide assurance that your firm had the capacity
and financial ability to perform the contract.
The proposal is a "flat" organization and identified yourself as
the Key Principle and Project Manager and using subcontractors as
project managers. However, the proposal did not address how the
work would be managed should you be unavailable or demonstrate
that your firm's employees have the management capability to
perform in your place. The panel considered your proposed
organizational structure inadequate and depended on the
subcontractors for the management of a majority of the tasks in
the contract . . . .
Agency Report, Supplemental Exh. at 1.
This protest followed.
PROTEST
Based largely on the debriefing letter quoted above, D&A alleges that
HUD misevaluated its proposal by not considering its contents and by
failing to evaluate the proposal in accordance with the stated RFP
evaluation criteria. Protester's October 27 Comments at 8. In its
comments on the agency report, D&A invites our Office to review its
proposal to determine whether the agency failed to properly consider
the contents of its final proposal. Id. at 12.
D&A also alleges that the concerns expressed in the debriefing letter
were not communicated during oral discussions or in the written
discussion questions and argues, therefore, that the discussions were
inadequate. In connection with the oral discussion session the
protester further states that it was advised that in preparing its
revised proposal the firm was to "solely rely" on the written
discussion questions. Protester's October 27 Comments, Second
Attached Affidavit at 1. Finally, D&A further alleges that it was
prejudiced by advice, said to have been given by the CO in a
conversation after the conduct of discussions, indicating that the
firm's price was too low.
ANALYSIS
Alleged Misevaluation
Referring us to extensive portions of its proposal, D&A argues that
its low overall technical score is unjustified and indicates that HUD
ignored the contents of the proposal. D&A also argues that the
findings summarized in the debriefing letter for Factors 1 and 3
indicate that the agency did not evaluate the proposal in accordance
with those evaluation factors.
It is not the function of this Office to independently evaluate
proposals. Rather, the determination of the relative desirability and
technical adequacy of proposals is a matter of agency discretion,
which we will not disturb unless it is shown to be without a
reasonable basis or inconsistent with the stated evaluation criteria.
Axion Corp., B-252812, July 16, 1993, 93-2 CPD para. 28 at 3. A
protester's mere disagreement with the agency's evaluation is not
itself sufficient to establish that the evaluation was unreasonable.
ASR Management & Technical Servs., B-252611, July 15, 1993, 93-2 CPD para.
22 at 6.
As for D&A's argument that the contents of its proposal were ignored,
the individual and consensus TEP scoring sheets, which contain
detailed comments, indicate otherwise. It is clear that the
evaluators read the proposal and did not regard it as highly as the
protester believes is warranted. D&A's disagreement with the
evaluators' conclusions does not serve to establish that they lacked a
reasonable basis. Id.
For example with respect to Factor 1, the TEP downgraded D&A for a
summary presentation of its staff members' experience. The factor
requires significant detail relating that experience to the SOW tasks.
D&A submits that the summary representative lists of "some" of the
experience of its staff was necessitated by RFP page limitations and
criticizes the TEP findings as merely a matter of form. While the
lists contain some of the experience of some of D&A's staff, there is
no direct tie of that experience to the specific SOW tasks.
Accordingly, the agency's criticism reasonably reflects the contents
of the protester's proposal and, at best, D&A disagrees with the
evaluators with regard to this factor.
Likewise, the TEP criticized D&A's proposal for not indicating that
the experience of its proposed key personnel was gained within the
last 3 years as required by the proposal instructions in the RFP. D&A
mistakenly reads the instruction as requiring a separate listing of
recent contracts, not requiring evidence of experience gained in the
last 3 years. As is clear from the language of the Factor 1 proposal
instruction set forth above, D&A's disagreement is based on an
erroneous reading of the instruction, which requires precisely the
information which the agency downgraded D&A for failing to provide.
As for D&A's assertion that the findings relating to Factors 1 and 3
are inconsistent with those criteria, we disagree. Factor 1 expressly
calls for relating the experience of proposed staff, contractors and
subcontractors to their ability to perform the
tasks set forth in the SOW and the TEP's findings that D&A failed to
adequately relate experience to the ability to perform fall squarely
within that factor. Similarly, where Factor 3 requires a
demonstration of an ability to manage contractors and subcontractors,
the TEP's concern that D&A had not adequately demonstrated this was
consistent with the factor. Accordingly, we have no basis to disturb
the evaluation.
Discussions
On July 1, HUD conducted oral discussions with D&A at which time
written discussion questions were distributed. On the evening of that
date, HUD and D&A had a follow-up telephone conversation. Because the
written record of this protest contains divergent accounts of what
transpired on July 1, we held a telephonic hearing on November 18 to
resolve the apparent factual disputes.
At the outset, D&A alleges that at the oral discussion session the CO
advised its representatives that they did not need to take notes
because written discussion questions would be distributed upon which
the offeror was to "solely rely" in preparing its revised proposal.
D&A argues that it followed these instructions which caused it to
respond only to the written questions in its revised proposal, to its
detriment.
At the hearing, the CO categorically denied that he gave any such
instructions to D&A on July 1 or at any other time. He also testified
that he used the written questions, which he orally clarified, to
structure the oral discussion session. In its comments on the agency
report, D&A attached an affidavit from one of its participants at the
July 1 session which states that the CO gave advice to "solely rely on
the written questions." Protester's October 27 Comments, Second
Attached Affidavit at 1. That participant further stated that "[w]e
used the information from the meeting to interpret the [written]
questions relating to HUD's technical concerns . . . ." Id.
The hearing officer requested the affiant's presence at the hearing
but D&A reported that she was unavailable. At the hearing, one of
D&A's witnesses testified that she recalled the CO giving the alleged
advice and wrote a note to that effect. The hearing officer requested
that D&A produce the note in its post-hearing comments but the
protester failed to do so. Because of the failure to testify upon our
request and the failure to produce evidence relating to whether the CO
instructed D&A to "rely solely" on the written questions, we draw an
inference adverse to the protester, Bid Protest Regulations, 4 C.F.R. sec.
21.7(f) (1998), and find that the record supports the conclusion that
the CO did not give the advice alleged by the protester, and did use
the written questions to structure the oral session as indicated by
the agency. In reaching this conclusion, in addition to drawing an
adverse inference, we view the purported instruction as implausible
because it would effectively have rendered the oral discussions
meaningless, raising a question as to why they were being conducted.
In short, we conclude that the protester was not instructed, and
therefore was not free as it claims, to ignore the content of the oral
discussion session when preparing its revised proposal.
D&A also asserts that it was not apprised of the agency's concerns
about the experience of its personnel or its ability to manage
subcontractors during oral discussions.
Solicitations issued after January 1, such as this one, are governed
by the revisions to Part 15 of the Federal Acquisition Regulation
(FAR) contained in Federal Acquisition Circular (FAC) No. 97-02. The
Part 15 rewrite revised the rules that apply when an agency is
contracting using negotiated procedures, including those rules
governing exchanges with offerors after receipt of proposals. Section
15.306(d)(3) includes guidance with respect to the conduct of
discussions and states, in pertinent part, that:
The contracting officer shall . . . indicate to, or discuss with,
each offeror
still being considered for award, significant weaknesses,
deficiencies,
and other aspects of its proposal . . . that could, in the
opinion of the
contracting officer, be altered or explained to enhance
materially
the proposal's potential for award. The scope and extent of
discussions
are a matter of contracting officer judgment.
We view the statutory and regulatory mandate for discussions with all
competitive range offerors, which was not changed in the FAR Part 15
rewrite, as requiring that such discussions must be meaningful,
equitable and not misleading. See 41 U.S.C. sec. 253b(d)(1)(A) (1994);
FAR sec. 15.306(d)(1). At issue here is whether the FAR Part 15 rewrite
altered the rules governing the content of discussions in a way
relevant to the outcome of this protest. We recognize that the FAR
rewrite could be read to limit the discretion of the contracting
officer by requiring discussion of all aspects of the proposal "that
could, in the opinion of the contracting officer, be altered or
explained to enhance materially the proposal's potential for award."
We do not believe, however, that it was the intention of the rewrite
to limit the contracting officer's discretion in this manner. Cf. SDS
Petroleum Prods., Inc.
B-280430, Sept. 1, 1998, 98-2 CPD para. 59 at 5 (intent of Part 15 rewrite
was to give contracting officers discretion to establish a more
limited competitive range than was permitted previously).
Consequently, we do not view the rewrite as having changed the prior
legal requirements governing discussions in a manner which affects
this case. See MCR Fed., Inc., B-280969, Dec. 14, 1998, 98-2 CPD para. ___
at 10-11. The rule thus remains that, while an agency is required to
conduct meaningful discussions leading an offeror into the areas of
its proposal requiring amplification or revision, the agency is not
required to "spoon-feed" an offeror as to each and every item that
could be revised so as to improve its proposal. See Applied Cos.,
B-279811, July 24, 1998, 98-2 CPD para. 52 at 8. This is especially the
case where, as here, the RFP evaluation criteria and instructions to
offerors on proposal preparation are detailed and clear with respect
to the problem areas. Id.
The CO testified that, during oral discussions, he communicated HUD's
concerns reflected by written question 4 (which is couched in terms of
"cost" although listed as a "technical" question[2]), to indicate that
he was concerned with D&A's technical capacity to perform, including
whether the protester had the appropriate staffing to perform the
contract. This testimony was echoed by the testimony of the
contracting specialist who attended the discussion session; she
testified that the discussion started with capacity concerns and
shifted to cost. D&A's witnesses did not directly contradict these
accounts, rather they stated that the "focus" of the oral session was
"cost." In our view, this testimony does not contradict the agency's
account. Moreover, it is logical to infer that the agency
communicated a concern about staff experience because, as both parties
testified, the firm's president did address her staff's experience in
oral discussions--albeit not, in HUD's estimation, to the degree
required by the RFP. Accordingly, since the record supports a
conclusion that the protester was led into the area of the agency's
concern about tying experience to performance of specific SOW tasks,
we have no basis to conclude that discussions were not meaningful in
this regard. Id.
With respect to D&A's challenge to the adequacy of discussions
concerning its organizational structure and ability to manage
subcontractors--a concern of the agency's under Factor 3--while it
appears that no specific mention of the concern occurred during oral
discussions, the factor itself expressly requires (indeed emphasizes
the need for) a demonstrated ability to manage subcontractors. In
light of this, we believe that written technical question 1 requesting
assurances that the firm has the "capability" to perform the contract
served to sufficiently lead D&A into the area of organizational
structure and subcontractor management so as to support a conclusion
that discussions were meaningful in this regard. Id.
Finally, D&A alleged in its comments on the agency report that the
contracting officer advised the protester that its price was too low
thereby misleading the protester into significantly raising its price
in its revised proposal. At the hearing, D&A's president testified
that this advice occurred during a follow-up conversation to the oral
discussion session on the evening of July 1. The CO specifically
denied that he gave such advice. The contracting specialist, who was
a participant in the conference call, corroborated the CO's testimony.
Irrespective of the actual advice that was given, this argument is
essentially irrelevant because technical concerns, not whether the
protester's final price was too high, provided the basis for the
elimination of D&A's proposal from the competitive range. In any
event, a preponderance of the evidence supports the agency's position
in this regard and we deny this aspect of the protest.
The protest is denied.[3]
Comptroller General
of the United States
1. D&A's total evaluated price was $28.1 million. The final
competitive range offerors submitted prices of $10.4 million (eventual
awardee) and $32.1 million. Agency Report, Exh. 12 at 1.
Although the protester's $28.1 million price was for all five
geographic areas, Du's July 8 revised proposal stated that "[w]e would
like to emphasize that we are presenting our proposed prices for all
five areas but we are only bidding on two areas." Agency Report, Exh.
9 at 1.
2. Although couched in cost terms, the question itself relates to the
agency's concern that an offeror has an "understanding of the
solicitation and tasks" and seeks to determine whether an offeror has
"adequate resources" to perform. In our view, even without the oral
amplification of the CO at the discussion session, the question could
not be reasonably read in the restrictive manner urged by the
protester.
3. We have reviewed the various ancillary issues raised by D&A and,
although they do not warrant discussion here, we find them to be
without merit.