BNUMBER: B-280362; B-280362.2
DATE: September 23, 1998
TITLE: Caterpillar Inc., B-280362; B-280362.2, September 23, 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:Caterpillar Inc.
File: B-280362; B-280362.2
Date:September 23, 1998
William A. Roberts, III, Esq., Lee P. Curtis, Esq., Brian A. Darst,
Esq., and Douglas S. Manya, Esq., Howrey & Simon, for the protester.
C. Stanley Dees, Esq., Thomas C. Papson, Esq., and Richard P.
Castiglia, Esq., McKenna & Cuneo, for Deere & Company, the intervenor.
Susan M. Lewandowski, Esq., and Vera Meza, Esq., Department of the
Army, for the agency.
Henry J. Gorczycki, Esq., and Guy R. Pietrovito, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest that the contracting agency unreasonably evaluated the
protester's and awardee's competing proposals under certain technical
evaluation factors is denied where the record shows that the
evaluation was reasonable.
DECISION
Caterpillar Inc. protests an award to Deere & Company under request
for proposals (RFP) No. DAAE07-97-R-X062, issued by the Department of
the Army, Tank-automotive and Armaments Command (TACOM), for an
estimated quantity of 135 hydraulic excavators (HYEX) of three
types.[1]
We deny the protest.
The RFP, issued on December 24, 1997, provided for the award of a
fixed-price requirements contract for a 5-year period. The
acquisition sought commercially available equipment with only minor
military modifications and using existing commercial technical manuals
to the maximum practical extent. Section M.1, at page 90 of the RFP,
stated that award would be made to the offeror whose proposal
represents the best value to the government under the stated source
selection criteria. The RFP in section M.2 provided for a two-phased
evaluation under which proposals would initially be evaluated under
identified pass/fail requirements and proposals that passed those
requirements would be evaluated under the following areas listed in
descending order of importance:
1. Logistics
2. Technical
3. Price
4. Past Performance/Small Business Participation
The RFP stated that the non-price factors are significantly more
important than price, but reserved the right to award on the basis of
price where two or more proposals are considered equal under the
non-price areas, a superior proposal is unaffordable, or the
advantages of higher-priced, higher-rated proposals are not considered
to be worth the price premium. RFP sec. M.2(c), at 91.
The evaluation areas were sub-divided into elements and factors, and
their relative weights where stated in the RFP sec. M.3-M.6, at 91-94,
as follows:
Area 1: Logistics.
Element 1: Commercial Logistics Support
Factor 1: Support
Factor 2: Warranty
(Relative weight of above factors: "Support is by far the
most important factor and is significantly more important than
. . . Warranty.")
Element 2: Manuals
Element 3: Unique Tools
(Relative weight of above elements: Element 1 is approximately
as important as the other two elements combined, and is more
important than Element 2, which is significantly more important
than Element 3.)
Area 2: Technical
Element 1: Type I/II Bucket and Stick Force
Element 2: Type III Bucket and Stick Force
Element 3: Rock Drill Integration
Element 4: Maintainability
(Relative weight of above elements: Element 1 is significantly
more important than Element 2, which is more important than
Element 3, which is more important than Element 4.)
Area 3: Price
Area 4: Past Performance/Small Business Participation
Element 1: Past Performance
Element 2: Small Business Participation
(Relative weight of above elements: Element 1 is significantly
more important than Element 2.)
Detailed proposal preparation instructions were provided that informed
offerors that proposals were to be divided into a written proposal and
an oral presentation. RFP sec. L.1, at 81. The instructions addressed
the information for each of the stated evaluation areas, elements and
factors that should be included in a proposal, and whether such
information should be included in the written proposal or the oral
presentation. RFP sec. L.2-L.7, at 81-87.
The RFP at 78-79 included Federal Acquisition Regulation (FAR) sec.
52.212-1 (June 1997), "Instruction to Offerors--Commercial Items",
which states in pertinent part:
(g) . . . The government intends to evaluate offers and award a
contract without discussions with [offerors]. Therefore, the
offeror's initial offer should contain the offeror's best terms
from a price and technical standpoint.
Caterpillar and Deere submitted written proposals generally offering
commercial equipment, manuals, and warranties by the March 26, 1998
closing date for receipt of proposals. Caterpillar provided its oral
presentation on April 21, and Deere provided its presentation on April
23.
Due to the similarity of requirements and schedules between the HYEX
solicitation and another solicitation for vibratory rollers, a single
source selection evaluation board (SSEB) was assembled to evaluate
proposals received under both RFPs. These two procurements had nearly
identical logistics requirements and the evaluation criteria for the
logistics and past performance areas were identical. Evaluation of
proposals under the vibratory roller procurement was completed before
the HYEX evaluations were completed. The contract for vibratory
rollers was awarded to Caterpillar. On May 6, TACOM debriefed
Caterpillar on the agency's evaluation of Caterpillar's vibratory
roller proposal. Although Caterpillar had been awarded the contract,
the evaluation identified disadvantages for which Caterpillar's
proposal was downgraded. Contracting Officer's Statement para. 11, at 3.
In particular, the agency evaluated Caterpillar's commercial warranty
as "marginal" due to Caterpillar's failure to provide pass-through
warranties of items used on Caterpillar's machines, which were
manufactured and warranted by other manufacturers. The agency also
downgraded the warranty evaluation for language which excluded most of
Caterpillar's overseas dealerships from warranty coverage.
Caterpillar informed TACOM in the debriefing that Caterpillar
disagreed with TACOM's interpretation of the warranty, stating that
pass-through warranties were not necessary because Caterpillar
provided "bumper to bumper" world-wide warranty coverage, covering all
components of its machine regardless of a component's manufacturer.
This warranty was identical to the one Caterpillar submitted with its
HYEX proposal. Protest, June 15, 1998, at 5-6.
Subsequent to the vibratory roller award and debriefing, the SSEB
completed the HYEX evaluations and on May 27 briefed the source
selection authority (SSA). See Agency Report, at Tab 32. As part of
this briefing, the SSA was informed of Caterpillar's assertions in the
vibratory roller debriefing regarding the asserted coverage of
Caterpillar's warranty. The evaluation results are synopsized as
follows:
Evaluation Area/Element/Factor Caterpillar Deere
Logistics Adequate Good
Commercial Logistics Support Good Excellent
Support Excellent Excellent
Warranty Marginal Excellent
Manuals Adequate Good
Unique Tools Marginal Marginal
Technical ***[2] ***
Rock Drill Integration Excellent
ExcellentMaintainability Excellent Excellent
Past Performance/Small Business Adequate Excellent
Past Performance Adequate Excellent
Small Business Participation Good Good
Price $25,283,276 $32,539,197
From his review of the SSEB's evaluation results, the SSA determined
that Deere's proposal represented the best value to the government as
follows:
Deere was evaluated as better than Caterpillar in the most
heavily weighted Area, Logistics. There are significant
advantages to Deere's warranty to include extended pass through
warranties on major components, particularly the 24 month engine
warranty, an item most likely to incur warranty claims. Their
manuals are evaluated as better than Caterpillar's. This should
result in less time to negotiate the supplementation after award
and due to reduced effort, less risk of timely delivery of usable
manuals. Under the other items evaluated in Logistics,
Caterpillar offered no significant advantages over Deere. In the
Technical Area, under the most important Element, Deere's Type
I/II machine has a significantly higher bucket force, which will
result in improved digging capability under the most extreme
conditions. This is particularly significant considering that
more than 87.5% of the vehicles to be purchased are Type I/II.
There are no significant differences between the offerors for the
bucket and stick force for Type III machines, however, the Deere
machine is heavier and provides a more stable platform for
digging operations. Neither offeror poses any risk with rock
drill integration. Notwithstanding the Board's finding that both
offerors were Excellent in Maintainability, I find that Deere's
vehicles have a higher capability to accurately isolate and
diagnose faults. This, together with the ease of access to
problem areas, as indicated by their lower maintainability index,
has the potential to significantly reduce life cycle costs. Both
Caterpillar and Deere earned a Good rating for the Small Business
Participation Element in the Past Performance/Small Business
Participation Area. However, in Past Performance, the
significantly more important Element, Deere is substantially
better. Deere's record on recent and relevant contracts tells me
that there is a very low performance risk under contract. Both
Deere's manuals and hardware have historically been delivered in
a timely manner and in accordance with contract requirements,
unlike Caterpillar who has often had problems with timely
delivery of manuals. Deere's commitment to customer satisfaction
is exemplary. Based on their history of cooperation with their
customers, I believe that if any problems should arise during
performance of this contract, Deere will be more willing to work
with the government to arrive at a mutually satisfactory
resolution. Additionally, historical inference is that we can
anticipate the smooth and efficient negotiation of the manual
supplementation and [direct vendor delivery (DVD) contract].[3]
Despite the $7.3 [million] evaluated price difference, I feel
that Deere's significant advantages in the other Areas, coupled
with the potential cost savings over the life of the vehicles,
make Deere's proposal the best value for the government. This is
consistent with the evaluation criteria in the RFP, which says
that the non-price Areas combined are significantly more
important than Price. Therefore, I direct that award of this
contract be made to Deere & Co.
Source Selection Authority Decision at 6-7, Agency Report, Tab 33.
On May 29, TACOM awarded the contract to Deere on the basis of initial
proposals. Caterpillar requested and received a debriefing from
TACOM. This protest followed. The agency has suspended contract
performance pending resolution of the protest.
Caterpillar challenges the reasonableness of the agency's evaluation
under virtually all of the areas, elements or factors and asserts that
the offerors were treated unequally under the agency evaluation and
source selection process. Caterpillar also contends that, as a result
of the flawed evaluation upon which the selection decision rests, that
decision is unreasonable.
The evaluation of technical proposals is a matter within the
discretion of the contracting agency since the agency is responsible
for defining its needs and the best method of accommodating them.
Matrix Int'l Logistics, Inc., B-277208, B-277208.2, Sept. 15, 1997,
97-2 CPD para. 94 at 4. In reviewing an agency's evaluation, we will not
reevaluate technical proposals, but instead will examine the agency's
evaluation to ensure that it was reasonable and consistent with the
solicitation's stated evaluation criteria. Id. An offeror's mere
disagreement with the agency does not render the evaluation
unreasonable. Id.
We have reviewed all of Caterpillar's allegations and the record of
the challenged evaluations. From our review, we do not find that the
agency acted unreasonably or treated offerors unequally, and find no
basis to disturb the agency's evaluation and source selection
decision.
The primary focus of Caterpillar's protests is the agency's evaluation
of the offerors' warranty provisions. These were evaluated under the
least important factor under the most important element of the most
important area, Logistics. The RFP sec. M.3.1.2, at 91, informed
offerors:
Your warranty will be evaluated based on length, extent of
coverage, and ease of administration.
The RFP sec. L.3.1.2, at 82, instructed offerors to:
Provide a written copy of your warranty and any applicable pass
through warranties. This warranty will be incorporated into the
resultant contract. A discussion of the warranty shall not be a
part of your oral presentation.
Caterpillar submitted its commercial warranty which provided coverage
for 12 months/unlimited hours from the date of delivery. In pertinent
part, it stated:
Caterpillar warrants [machines and attachments installed prior to
delivery] sold by it and operating within the area specified
under "Limitations" to be free from defects in material and
workmanship. . . . An additional warranty against breakage is
applicable to certain Caterpillar Ground Engaging Tools. An
additional warranty against wear is also applicable to certain
weld-on landfill compactor plus tips. Refer to the appropriate
warranty statement for coverage detail. This warranty does not
apply to Caterpillar brand batteries which are covered by a
different warranty.
. . . . .
Limitations
. . . . .
Neither the foregoing express warranty nor any other warranty by
Caterpillar, express or implied, is applicable to any item
Caterpillar sells which is warranted to the user by its
manufacturer.
. . . . .
This warranty applies to all geographic areas worldwide. See
Attachment A - Caterpillar Dealer Directory for locations of
Caterpillar Dealer Facilities worldwide.
As used in this warranty, the term "Caterpillar" means
Caterpillar Inc., or one of its subsidiaries, except Caterpillar
Overseas S.A., Caterpillar France S.A., Caterpillar (U.K.)
Limited, or Caterpillar Belgium S.A., whichever last sold the
product involved.
Agency Report, Tab 9, sec. 1.1.2.
The SSEB noted that, although expressly requested by the RFP,
Caterpillar failed to provide any pass-through warranties, i.e.,
warranties from the original manufacturers, when other than
Caterpillar, to the user of the HYEX machines. The SSEB determined
this constituted a significant disadvantage because warranty coverage
for components not manufactured by Caterpillar could not be assessed.
The SSEB also determined that the definition of Caterpillar which
excluded Caterpillar Overseas S.A. and three other foreign
subsidiaries raised questions about the extent of coverage, which
constituted a significant disadvantage. For these and other
disadvantages, Caterpillar's warranty received a marginal rating.
Agency Report, Tabs 21 and 24.
Caterpillar contends that it did not need to provide pass-through
warranties because its warranty specifically covered all of the items
which Caterpillar sells to the agency (except Caterpillar batteries
covered under another Caterpillar warranty); that is, the warranty was
a bumper-to-bumper warranty under which Caterpillar agreed to warrant
all items regardless of manufacturer. Protest at 12-13; Protester's
Comments, Aug. 14, 1998, at 12-13.
We find that the agency was reasonably concerned with the extent of
Caterpillar's warranty coverage. Although Caterpillar's warranty
states, as it asserts, that it warrants all machines and attachments
sold by it, the warranty also states:
Neither the foregoing express warranty nor any other warranty by
Caterpillar, express or implied, is applicable to any item
Caterpillar sells which is warranted to the user by its
manufacturer.
We agree with TACOM that this language indicates that the Caterpillar
warranty will not apply to components covered by the pass-through
warranties of component manufacturers. Since Caterpillar did not
submit any pass-through warranties with its proposal, identify what
components were covered by pass-through warranties, or state that no
such warranties existed, we find that the agency was justifiably
concerned with the extent to which the HYEX machines would be covered
by Caterpillar's warranty.
Caterpillar also objects to TACOM's evaluation conclusion that
Caterpillar's warranty excluded most of Caterpillar's overseas
dealers, raising a serious concern regarding the extent of
Caterpillar's warranty coverage. The protester asserts that its
warranty provides world-wide coverage and that, to the extent its
warranty excluded specific subsidiaries from the definition of
"Caterpillar", that exclusion is only applicable where the excluded
subsidiaries "sell" machines to TACOM under the contract. Because,
the protester argues, "Caterpillar Inc." is identified as the offeror
in the proposal, these subsidiaries would not be selling any machines
to TACOM and the subsidiary exclusions are inapplicable here and do
not limit its warranty's general world-wide coverage. Protest at
12-13; Protester's Comments at 10-12.
We do not find unreasonable TACOM's interpretation of Caterpillar's
commercial warranty in this regard. The warranty language defining
Caterpillar reasonably indicates that a number of Caterpillar's
subsidiaries and overseas dealers were excluded from the coverage of
the warranty provisions. At best, Caterpillar's asserted
interpretation of the warranty provisions indicates that the language
is ambiguous; that is, it is subject to two or more reasonable
interpretations. See Solar Foam Insulation, B-243059, July 2, 1991,
91-2 CPD para. 13 at 6. Because the ambiguity creates reasonable doubt
about the obligations of the excepted subsidiaries and associated
dealerships to provide warranty service, the agency evaluation is
reasonable.
Caterpillar argues that TACOM should have nevertheless known
Caterpillar's interpretation of its warranty from the vibratory roller
debriefing on May 6. Protest, at 13-15. The agency responds that
Caterpillar's debriefing explanation of its warranty could not be
considered in this procurement without conducting discussions with the
offerors, because Caterpillar's oral explanation modified, rather than
merely clarified, material terms of the proposal. Contracting
Officer's Statement para. 12, at 3.
We agree that consideration of Caterpillar's comments in the vibratory
roller debriefing to correct the ambiguity of its warranty would have
constituted discussions because they would have resulted in material
proposal revisions. Where, as here, a solicitation informs offerors
that the agency intends to make award without conducting discussions,
the agency is generally not required to conduct discussions with the
offerors. Robotic Sys. Tech., B-278195.2, Jan. 7, 1998, 98-1 CPD para. 20
at 11-12. In the absence of conducting discussions with both
offerors, TACOM reasonably did not consider Caterpillar's debriefing
comments here.
Caterpillar next complains that its comparatively longer 12-month
vehicle warranty should have been evaluated to be superior to Deere's
6-month vehicle warranty. Caterpillar argues that TACOM unreasonably
focused on the length of Deere's 24-month engine warranty to the
exclusion of the firms' overall warranty length. Protest at 16;
Protester's Comments at 15-17; Protester's Supplemental Comments, Aug.
31, 1998, at 13-14.
From our review of the record, we find that the agency reasonably
considered the respective merits of the firms' offered warranties.
Although it is true that the SSA identified the length of Deere's
engine warranty as a significant advantage in his source selection
decision, the record does not support Caterpillar's allegation that
the overall length of the firms' respective warranties was not
reasonably evaluated.
The SSEB and SSA were aware of the overall length of the warranty
coverage offered by the firms and that Caterpillar had offered overall
longer warranty coverage. This apparent advantage for Caterpillar,
however, was mitigated by the reasonable concerns the agency had
regarding exactly what was the extent of coverage offered by
Caterpillar both in terms of the components covered and geographic
applicability. In contrast to Caterpillar's proposed warranty, Deere
offered a vehicle warranty with finitely identified limits on the
applicability, from which the agency could clearly identify terms of
coverage for the warranty period. Ultimately, the overall length of
the firms' respective warranties was only one of a number of
considerations weighed by the agency in its evaluation of the firms'
proposed warranties.
Caterpillar also argues that the agency placed unreasonable emphasis
upon Deere's 24-month engine warranty, which was an identified
strength for Deere in the source selection decision. We disagree.
The record shows that the Deere's 24-month engine warranty was only
one of many factors considered by the agency in its assessment that
Deere's proposed warranty should be evaluated as excellent. Although
the parties disagree as to the significance of engine problems in the
historical record of warranty claims, the engine is without doubt a
significant component of the HYEX machine. Even accepting
Caterpillar's data suggesting that hydraulic problems are more
significant in terms of total warranty claims, that data shows that
claims attributable to engine problems are still considerable. See
Protester's Comments at 16-17; Protester's Supplemental Comments at
14. Thus, putting aside the uncertainties in Caterpillar's warranty,
Deere's engine warranty provides 12 more months of warranty service on
the engine than does Caterpillar's, and this could reasonably be
considered by the SSA in the source selection decision.
Caterpillar also complains that TACOM's evaluation of the firms'
warranties reflects an overall pattern of unfair, disparate treatment.
Specifically, Caterpillar asserts that Deere's proposed warranty was
similar to Caterpillar's with regard to pass-through warranties, ease
of administration, and requirements for proper maintenance, but was
not similarly downgraded.
Regarding pass-through warranty limitations, Caterpillar complains
that Deere did not provide all applicable pass-through warranties and
that the pass-through warranties provided by Deere contained language
limiting the coverage of the pass-through warranty to items
manufactured by the pass-through warranty provider. Caterpillar
contends that Deere should have been downgraded as Caterpillar was for
its failure to provide any pass-through warranties.
Caterpillar's and Deere's proposals were not similar in this regard.
Unlike Caterpillar's proposal, Deere identified the specific
components for which pass-through warranties would be applicable and
included pass-through warranties. Agency Report, Tab 8. Although
Deere did not provide all of the pass-through warranties identified in
the warranty document, the proposal left no doubt as to what parts of
the vehicle were warranted by Deere, and what parts were warranted by
other manufacturers. Thus, unlike Caterpillar, Deere's warranty did
not contain an open-ended limitation on the application of the
warranty. The agency's evaluation reasonably reflected the much
greater certainty the agency had as to what warranty coverage would be
received from Deere as opposed to the substantial uncertainty posed by
Caterpillar's failure to provide or identify any pass-through
warranties.
Caterpillar also complains that TACOM did not evaluate the firms'
warranties equally with regard to ease of administration because both
offerors' warranties were identical on this point, and the agency
considered information from Deere's oral presentation in its
evaluation which was prohibited under the RFP instructions.
Supplemental Protest, July 17, 1998, at 5-6; Protester's Comments at
8-10.
We find that the offerors' warranties were not essentially identical
with regard to warranty administration. As stated by Deere in its
oral presentation, Deere's federal accounts manager will facilitate
warranty implementation with Deere dealers on the agency's behalf,
both at vehicle hand-off, and when the agency transfers a vehicle to
another location. Agency Report, Tab 10; Agency Supplemental Report,
Tab 46, Videotape (VT) 1. Caterpillar in its oral presentation
addressed warranty implementation under vehicle hand-off procedures,
by informing the agency that Caterpillar's dealers were responsible
for this task. Agency Report, Tab 11, Agency Supplemental Report,
Tab 47, VT 1. The agency reasonably concluded that having one person
responsible for this task, as opposed to having to deal with this
through many dealers, was an obvious advantage in ease of
administration.
As noted above, TACOM's evaluation of this information was based on
the firms' oral presentations. Although the RFP sec. L.3.1.2, at 82,
instructs offerors not to discuss their warranties in their oral
presentations, the preceding section of the RFP instructs offerors to
discuss their "approach and plans for meeting the requirement for
vehicle hand-off in [section] C.8." The RFP sec. C.8(c), at 36,
(vehicle hand-off requirement), sets forth the warranty activation and
administration requirement for offerors. The RFP thus separated the
presentation of the terms of the warranty from the offeror's warranty
administration procedures. Both offerors addressed warranty
administration under vehicle hand-off procedures in their oral
presentations. We thus conclude that the agency's evaluation of ease
of warranty administration based on the vehicle hand-off section of
oral presentations was not prohibited by the RFP, and that the
offerors were treated equally in this regard.
Caterpillar also complains that the SSEB was concerned with the proper
maintenance requirements of Caterpillar's warranty, where both
offerors' warranties contained express exclusions of warranty claims
resulting from improper maintenance. Agency Report, Tabs 8, 9. The
record shows that the agency was concerned with Caterpillar's warranty
because the warranty stated that the user was responsible for use of
proper oil lubricants and Caterpillar previously had expressed to
TACOM its opposition to the use of a military oil lubricant in parts
of Caterpillar's machines. Agency Supplemental Report, Aug. 4, 1998,
Tab 51. That same lubricant is specified for use under this RFP.
Accordingly, the SSEB was concerned with the scope and coverage of
Caterpillar's warranty in light of the anticipated use of military oil
lubricants. Contracting Officer's Supplemental Statement para. 5-9, at
1-3; see Agency Report, Tab 24. The agency did not express similar
reservations with the proper maintenance requirements of Deere's
warranty, because there was no indication that Deere viewed the
agency's anticipated maintenance in general, or the use of military
oil lubricants in particular, to be a concern. We see no evidence of
unequal treatment in this regard.
In sum, we find no basis to object to the agency's evaluation of
proposals under the warranty factor, which was the primary focus of
Caterpillar's protest. As indicated, Caterpillar also raised numerous
other objections to the agency's evaluation and source selection. We
have considered all of these other issues in depth and also find that
they do not provide any basis to object to the agency's evaluation and
source selection.
For example, Caterpillar complains that it was unreasonable for the
agency not to evaluate Caterpillar's proposal superior to Deere's
under the support factor, where Caterpillar has a global network with
more dealer locations than that offered by Deere. Similarly,
Caterpillar alleges that the agency unreasonably failed to evaluate as
a significant advantage under the unique tools element Caterpillar's
proposal of fewer unique tools than Deere. Protest at 17-19;
Protester's Comments at 21-22, 26-28. Here, the agency required
worldwide support to ensure service in a variety of locations, and a
minimum of unique tools so as not to burden the Army's logistics
system. RFP sec. L.3.1.1(a), M.3.1.1, M.3.3, at 81, 91, 92.
While the RFP undisputedly provides for evaluating such differences in
both instances, the protester's arguments ignore the application of
reason within the confines of a best value procurement such as this.
Since the overarching and obvious purpose is for the government to
obtain the best value product or service, logical principles for
valuing goods and services, such as the law of diminishing returns,
must apply.
Specifically, Caterpillar's worldwide network has 1,217 dealer
locations compared to Deere's 884. Agency Report, Tabs 10, 11. The
agency evaluated both as expansive networks exceeding its needs.
Contracting Officer's Statement para. 24, at 9; Agency Report, Tabs 14,
23. The protester does not present any evidence to show that the
agency will actually benefit from Caterpillar's additional dealer
locations. Moreover, the number of dealer locations was only one
consideration in the agency's evaluation of the offerors' demonstrated
ability to provide support. The agency found that both Caterpillar's
and Deere's were excellent in their demonstrated ability to meet the
support requirements.
Similarly, Caterpillar proposed 210 unique tools while Deere proposed
259. Agency Report, Tabs 16, 25. The agency found that the large
number of unique tools proposed by both offerors placed "a very heavy
burden" on [the agency's] logistics system" and evaluated the firms'
proposals as "marginal" for this element. Id. The SSA was informed
of the exact number of unique tools proposed by each offeror and was
aware that Caterpillar had offered less unique tools than had Deere.
Although Caterpillar proposed less unique tools than Deere, the number
of tools proposed was still far more than desired. We have no basis
to question the agency's conclusion that both firms' proposals were
marginal under the unique tools element.
Caterpillar also complains that it was unreasonable for the agency to
evaluate both firms' proposals similarly under the rock drill
integration element because Caterpillar has experience successfully
integrating rock drills onto excavators and Deere has no experience in
this area. Protest at 19-20.
The RFP stated that this element would be evaluated by "assess[ing]
the risk involved with the integration of the rock drill onto the Type
II HYEX." RFP sec. M.4.3, at 92. Offerors were instructed to describe
in their oral presentation how they would minimize risk involved with
installing the rock drill by covering relevant issues, and the RFP
identified four such issues. Id. sec. L.4.3, at 84. Deere addressed
each of the issues in detail, and the agency determined that Deere's
proposal provided a detailed integration plan, good quality control
procedures, and use of a qualified subcontractor with a history of a
sound working relationship with Deere and of performing quality
modifications on Deere's products. Agency Report, Tab 17.
Caterpillar, on the hand, addressed the issues identified in the RFP
on a "cursory level" and the SSEB determined:
The lack of detail concerning the critical installation
procedures, on its own merits, provides only a moderate degree of
confidence that the risk is low. However, the fact that
Caterpillar manufactures, assembles, and installs their own rock
drills is a significant risk mitigator.
Id., Tab 26.
The SSEB concluded that risk under this element was very low for both
proposals, albeit for different reasons, and rated both as excellent
under this element. Id., Tabs 17, 26. The record supports the
agency's evaluation ratings. Although Caterpillar argues that
experience must be a discriminator in the evaluation of risk under
this element, the RFP did not identify experience in this integration
procedure as either a requirement or one of the issues to be addressed
in proposals. Rather, offerors were generally instructed at the
pre-proposal conference that in order to perform well under the
evaluation process, offerors should "specifically" explain their
approaches to addressing the requirements and "not rely on [their]
experience or reputation in industry to convince [the agency.]" Id.,
Tab 6, at 64. As noted above, Deere explained its approach in detail
during its oral presentation, while Caterpillar did not.[4] Thus,
Caterpillar provides no basis to object to the agency's evaluation in
this regard.
Caterpillar also complains that the agency failed to distinguish
between the relevancy of Deere's and Caterpillar's prior contracts in
the evaluation under the past performance element. Essentially, the
protester alleges that the agency should have found Caterpillar's
proposal superior to Deere's under past performance because
Caterpillar's contracts were allegedly more relevant to this
procurement than are those identified for Deere and its
subcontractors. Protest at 8-10, 22-24.
The RFP sec. M.6.1, at 93, stated that the past performance element would
be evaluated as follows:
We will assess performance risks associated with your likelihood
of success in performing the solicitation's requirements. The
evaluation will consider your record of the following:
a. Conformance to specifications and standards of good
workmanship (Both hardware and data)
b. Adherence to delivery schedules
c. Reasonableness, cooperative behavior, and commitment to
customer satisfaction
d. Subcontractor management.
The RFP sec. L.6.1(a), at 85, instructed offerors to provide information
on recent, relevant contracts and defined relevant contracts as
follows:
2. Relevant contracts are those which are similar in scope to
the requirements of this solicitation. Each past contract does
not have to meet all of the criteria below to be considered
relevant, but interested especially in those contracts that
included:
a) Similar hydraulic excavator technology (tracked or wheeled)
b) Military unique or custom work for commercial customers
c) Volume production
d) Manuals, both commercial and military
e) New Equipment Training.
Thus, the RFP provides for the evaluation of past performance based
upon contracts of similar scope. The agency found that both
Caterpillar and Deere presented relevant contracts for evaluation.
While Caterpillar complains that its reported contracts were of
greater complexity, such that it should have been entitled to a higher
evaluation score, the record shows that the primary reason for the
agency's differentiation between these two offerors is that
Caterpillar's contract references reported instances of late
performance in delivering modified user manuals, as will be required
here, and some difficulty with cooperative behavior and commitment to
customer satisfaction under contracts where late performance has
occurred. Agency Report, Tab 29, at 6-13, 18. Although Caterpillar
disagrees with the extent of its responsibility for such performance
problems, it does acknowledge partial responsibility. Protester's
Comments at 36.[5] On the other hand, Deere was rated highly, without
exception from any contract reference, under all four criteria stated
under this evaluation element. Agency Report, Tab 20 at 10, 15-16.
Although Caterpillar's problems occurred on more complex, relevant
contracts than Deere has performed, the marked differences in
performance histories exist, and we find that the agency's evaluation
on this basis is reasonable and consistent with the stated evaluation
criteria.
Caterpillar also challenges TACOM's cost/technical tradeoff decision,
arguing that the decision was based upon the allegedly flawed
technical evaluation and that Caterpillar's proposed price was
approximately $7.3 million lower than that of Deere. We do not find
that Caterpillar's arguments provide us with any basis to question the
SSA's selection decision. As explained above, we find that the
agency's technical evaluation was reasonable. Although Caterpillar
proposed a lower price than Deere, the SSA considered Caterpillar's
lower price and found that it was outweighed by significant advantages
offered by Deere's proposal. This decision, which was well documented
by the SSA, is consistent with the RFP award criteria and is
reasonable. Matrix Int'l Logistics, Inc., supra, at 14.
In sum, we have examined the record in response to all of
Caterpillar's allegations. The record shows that the agency
reasonably evaluated both offerors proposals, treated both offerors
equally, reasonably considered the relative value of differences in
the proposal, and based its source selection decision on a reasonable
best value analysis that, as evidenced by the details discussed in the
source selection document quoted previously, was consistent with the
stated evaluation plan. The protest provides no basis to disturb that
decision.
The protest is denied.
Comptroller General
of the United States
1. HYEX Type I is used for general excavation, digging, trenching and
lifting operations. A HYEX Type II is a Type I machine with a rock
drill attachment used in quarry operations. A Type III is a larger,
heavier machine also used in quarry operations. Contracting Officer's
Statement para. 4, at 1.
2. The first two elements under the technical area--Type I/II and Type
III bucket and stick force--were not
adjectivally evaluated but were
initially evaluated on a pass/fail
basis. Both proposals passed these
requirements. The evaluation
results, comparing bucket and stick
force and operational weight in
pounds, were provided to the SSA for
consideration in his source
selection decision:
Element Caterpillar Deere
Type I/II Bucket Force 29,700 34,800
Type I/II Stick Force 25,400 25,700
Type I/II Weight 53,200 54,700
Type III Bucket Force 42,300 41,600
Type III Stick Force 37,400 37,000
Type III Weight 63,300 67,500
3. Because the expected field life of the HYEX is 15 years, the agency
intends to acquire replacement parts for the vehicles under separately
awarded DVD contracts. The cover letter of the RFP, at pages 1
through 2, stated that the awardee would be required to submit a
proposal for, and negotiate a DVD contract for repair parts over the
term of the HYEX contract.
4. Although Caterpillar states that it provided more slides for the
rock drill integration portion of the presentation than did Deere,
Protester's Comments at 28, the record does not support Caterpillar's
suggestion that its rock drill integration presentation was as
detailed as Deere's. Specifically, the agency found as a disadvantage
Caterpillar's "lack of detail concerning the critical installation
procedures." Agency Report, at Tab 26. Deere asserts that, instead
of addressing in detail the information actually requested by the RFP,
Caterpillar spent "an inordinate amount of time during its oral
presentation merely describing the individual parts, components, and
operation of its rock drill and HYEX vehicles." Intervenor's
Comments, at 53 n.28; see Agency Supplemental Report, Tab 47 at VT 2.
Caterpillar does not rebut this assertion.
5. Caterpillar also complains that it was not given an opportunity to
comment on the reports of its adverse past performance. FAR sec. 15.610,
as applicable to this procurement, however, did not require the agency
to provide such an opportunity where the agency did not otherwise
conduct discussions. International Data Prods., Corp. et al.,
B-274654 et al., Dec. 26, 1996, 97-1 CPD para. 34 at 17.