BNUMBER: B-280993
DATE: December 17, 1998
TITLE: Ervin & Associates, Inc., B-280993, December 17, 1998
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Matter of:Ervin & Associates, Inc.
File: B-280993
Date:December 17, 1998
John J. Ervin for the protester.
Bruce M. Kasson, Esq., Department of Housing & Urban Development, for
the agency.
Katherine I. Riback, Esq., and Paul Lieberman, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Agency's determination that protester's initial proposal was
technically unacceptable and outside the competitive range was
reasonable where the proposal would require major revisions in order
to become acceptable.
DECISION
Ervin & Associates, Inc. protests the exclusion of its proposal from
the competitive range under request for proposals (RFP) No.
R-OPC-21123, issued by the Department for Housing and Urban
Development (HUD) for property inspection services.[1]
We deny the protest.
BACKGROUND
Before the property inspection program contemplated under this
solicitation was operational, HUD contracted with two firms under the
General Services Administration Federal Supply Schedule (FSS) for
management, organizational, and business improvement services (MOBIS)
contracts which required the contractors to perform property
inspections and to pilot test a newly developed software and protocol.
The MOBIS contractors were also to provide feedback and analysis to
HUD regarding the new software and protocol before the property
inspection program contemplated under this contract was fully
operational. The inspectors for the MOBIS contractors and
subcontractors were required to attend a training course in order to
become certified to use the hardware and software to support
collection of the testing information. The certification that these
inspectors received as a result of this training expires upon the
completion of the MOBIS contracts.
The solicitation in question was issued on June 4, 1998, to manage the
performance of property inspections in three discrete geographical
areas. The RFP requires that the contractors perform property
inspections using HUD-certified inspectors, with hand-held computers,
also known as data collection devices (DCDs), provided by the
contractor, and using HUD's recently developed property inspection
software. All data collected during inspections is required to be
electronically transmitted from the inspector's DCD to the agency via
the Internet, where the data will be evaluated and used to generate a
score for the physical condition of the property.
Award was to be based on a best value analysis using the following
evaluation factors: prior experience (20), past performance (20),
management capability
(30), and training and quality control (30), for a maximum possible
score of
100 points. Technical merit was more important than cost in the award
decision. The RFP contemplated the issuance of one or more
requirements contracts with
fixed-price line items.
By the July 23 closing time the agency received a total of 35
proposals from
20 different offerors for three geographic areas (9 proposals for Area
1, 12 proposals for Area 2, and 14 proposals for Area
3). The protester submitted a proposal for consideration under each
of the three areas.
The technical evaluation panel (TEP) evaluated proposals under the RFP
evaluation scheme and established a competitive range for each area.
Five technically acceptable proposals were included in the competitive
range for Area 1, four acceptable proposals and two proposals that
were capable of being made acceptable were included in the competitive
range for Area 2, and four acceptable proposals were included in the
competitive range for Area 3. The technical scores received by the
proposals that were included in the competitive ranges were all
between 70 and 88.5 points. The TEP determined that 13 offerors,
including the protester, submitted proposals that contained serious
deficiencies warranting evaluation as technically unacceptable, and
these proposals were excluded from the competitive range. Ervin's
proposal received a total technical score of 41 points for Area 1, 42
points for Area 2, and 43 points for Area 3, and its proposal, for
each area, was found technically unacceptable. The TEP concluded that
Ervin's proposal "materially failed to address the requirements of
this solicitation and contained material weaknesses which increase the
risk of unsuccessful contract performance." TEP Initial Evaluation
Report at 24. The agency conducted discussions with the competitive
range offerors, requested best and final offers (BAFO), and
reevaluated the proposals based on the BAFOs. The agency determined
that Building Inspection Services submitted the proposal for Area 1
most advantageous to the government, and that MTB Investments, Inc.
submitted proposals for Areas 2 and 3 that were most advantageous to
the government, and on August 18, awarded contracts to those firms.
This protest to our Office followed Ervin's debriefing by the agency.
Ervin challenges the awards on numerous grounds, all of which we have
carefully considered and find without merit. We will address Ervin's
principal allegations below.
DISCUSSION
Evaluation Of Ervin's Proposal
Ervin objects that its proposal should not have been eliminated from
the competitive range because its proposal "clearly reflect[ed] its
ability to perform physical inspections." Ervin's Comments at 6. The
protester also contends that "HUD is (and has been) thoroughly aware
of Ervin's capabilities to perform such inspections, and to manage and
perform large data collection and submission contracts." Id.
The determination of whether a proposal is in the competitive range is
principally a matter within the reasonable exercise of discretion of
the procuring agency, and in reviewing an agency's evaluation of
proposals and subsequent competitive range determination we will not
evaluate the proposals anew in order to make our own determination as
their acceptability or relative merits; rather, we will examine the
record to determine whether the documented evaluation was fair and
reasonable and consistent with the evaluation criteria. Spectrum
Sciences & Software, B-280700, Nov. 9, 1998, 98-2 CPD para. __ at 4. A
protester's mere disagreement with an agency's evaluation does not,
without more, establish that the evaluation was unreasonable. Beneco
Enters., Inc., B-278591, Feb. 17, 1998, 98-1 CPD para. 91 at 3.
Solicitations issued after January 1, 1998, such as this one, are
governed by the Federal Acquisition Regulation (FAR) as amended by the
Federal Acquisition Circular (FAC) No. 97-02, which includes the Part
15 rewrite. The current language concerning the composition of the
competitive range states that "[b]ased on the ratings of each proposal
against all evaluation criteria, the contracting officer shall
establish a competitive range comprised of all of the most highly
rated proposals, unless the range is further reduced for purposes of
efficiency . . . ." FAR sec. 15.306(c)(1) (FAC 97-02). We do not read
the revised language to require agencies to retain in the competitive
range a proposal that the agency reasonably concludes has no realistic
prospect of award. SDS Petroleum Prods., Inc., B-280430, Sept. 1,
1998, 98-2 CPD para. 59 at 5. Because the record here establishes that
the agency reasonably concluded that the protester's initial proposal
was technically unacceptable and would require major revision or
rewrite to be made acceptable, the agency properly determined not to
include Ervin's proposal in any of the competitive ranges. See
Spectrum Sciences & Software, supra, at 5.
The record shows that the TEP identified numerous informational
deficiencies and significant weaknesses in Ervin's technical proposal,
leading the evaluators to conclude that Ervin had failed to
demonstrate awareness and understanding of the complexities of the
contemplated contracts. As a result, the protester's proposal was
severely downgraded under all evaluation factors, resulting, as noted
above, in total scores of 41 points out of 100 for Area 1, 42 points
for Area 2, and 43 points for Area 3.
For example, under the prior experience factor, Ervin's proposal
received scores ranging from 8 to 12 points out of a possible 20. The
TEP downgraded Ervin's proposal for failing to provide an
organizational chart. While Ervin concedes that it did not include an
organizational chart with its proposal, it argues that the requisite
information was included in various other sections of its proposal.
In this regard, the protester disregarded the RFP's instructions to
respond to each factor separately and not rely on information in one
factor to be part of the response for another factor.
Ervin's proposal received scores ranging from 10 to 13 points out of a
possible 20, under the past performance evaluation factor. Ervin's
inclusion in its proposal of only scant information on the successful
performance of similar work of its one proposed subcontractor was
considered a significant weakness under this evaluation factor. The
protester asserts in its comments that its proposed subcontractor is
"the largest single property inspector in the country." Ervin's
Comments at 11. The protester seems to argue that the evaluators
should have been aware of its proposed subcontractor's performance of
similar work. However, an offeror must demonstrate affirmatively the
merits of its proposal, and it runs the risk of rejection if it fails
to do so. Vista Videocassette Servs., Inc., B-230699, July 15, 1988,
88-2 CPD para. 55 at 5. Here, the agency properly evaluated Ervin's
proposed subcontractor's past performance on the basis of the material
contained in Ervin's proposal. Our review of the record confirms that
the agency reasonably concluded that Ervin's proposal failed to
demonstrate that its proposed subcontractor had successfully performed
similar work.
Under the management capability factor, Ervin's proposal received
scores ranging from 8 to 12 points out of a possible 30. The
management capability factor evaluates, among other things, the
offeror's ability to execute the mechanics of the contract, this means
proposing the appropriate hardware that will interact with the
HUD-provided software and software updates. RFP at 50. The TEP
concluded that while "the offeror has a general understanding of the
services required," the Ervin proposal failed to acknowledge the
computer operations as described in the RFP. TEP Initial Evaluation
Report at 23. For example, Ervin's proposal failed to specify the
computer hardware and software that it would use to electronically
transmit, via the Internet, the inspection results to HUD. In this
regard Ervin's proposal states that "[w]e have already begun research
into the best possible hardware to be utilized for this engagement."
Ervin's Technical Proposal, Section 3 at 6. While Ervin asserts that
its proposal "acknowledged" the operation of the HUD system, as
defined by the IFB, Ervin does not contend that its proposal contained
specifics such as what computer hardware it would use. Ervin's
Comments at 13. The technical evaluation of a proposal is based on
information submitted in it and an offeror runs the risk of having its
proposal rejected if the proposal submitted is inadequately written.
Defense Sys. Concepts, B-242755.2, July 1, 1991, 91-2 CPD para. 2 at 7.
This principle is particularly applicable where, as here, the
offeror's recognition and discussions of specific information served
as an indicator of whether it understood the work to be performed.
Ervin's proposal also included, under the management capability
factor, the development of a database, which was not required, "to
track the name, address, and other salient features of the projects to
be inspected." Ervin's Technical Proposal Section 3 at 6. Ervin
argues that this database, which would operate as an internal control
mechanism, was not properly scored by the TEP. The RFP simply did not
require a database that would track information relating to each
inspection and would operate as an internal control mechanism; rather,
the solicitation requested that the offeror provide specifics relating
to the computer hardware that it will provide to interact with the
HUD-provided software and software updates. In our view, the agency
acted reasonably in not giving Ervin's proposal extra credit for the
submission of an additional database that was not requested.
Ervin's proposal received scores ranging from 6 to 9 points under the
training and quality control factor. The TEP found two significant
weaknesses in Ervin's proposal under this evaluation factor. First,
the TEP determined that Ervin's proposal did not propose a plan for
dealing with conflicts of interest that may arise during the course of
this contract. Ervin's proposal states that there are no potential
conflicts of interest and that it will require inspectors to sign a
statement that they have none. Ervin's Technical Proposal, Section 4
at 4. The TEP determined that Ervin's general statement of compliance
regarding conflicts of interest exhibited a basic misunderstanding of
the issue. Particularly as noted by one evaluator, "when they are
stating that they will be drawing from 650 or so inspectors from
around the country--one would presume that in order to have sufficient
expertise to perform this work they have other jobs and relationships
than only this contract." Evaluation of Ervin's Proposal for Area 3
at 18. Ervin did not address the TEP's criticism of its proposal
concerning its lack of a plan for dealing with conflicts of interest
that may arise, and we have no basis to question the TEP's evaluation
of Ervin's proposal in this regard.
The second evaluated significant weakness in Ervin's proposal under
the training and quality control factor was that its quality control
plan was determined to be "basic and generic." TEP Initial Evaluation
Report at 63. The TEP noted that Ervin's proposal stated that
inspectors were to be monitored "periodically" with no explanation of
"whether this means every few months or twice a day, as opposed to a
plan outlining some statistical percentage." TEP Initial Evaluation
Report at 63. Ervin argues that it was not possible for it to state
how frequently it will monitor its inspectors, because, "[i]f
inspectors know when and how their work will be reviewed, unscrupulous
inspectors would be able to manipulate their work to accommodate the
Quality Control Plan, instead of constantly providing the highest
quality work product on a continuing basis." Ervin's Comments at
17-18. However, responses that are essentially blanket offers of
compliance are not adequate substitutes for the detailed and complete
technical information necessary to establish that what the offeror
proposes will meet the agency's needs. M.C. Dean Elec. Contracting,
Inc., B-246193, Feb. 24, 1992, 92-1 CPD para. 219 at 4. We agree with the
TEP that it is possible to state how frequently inspectors will be
monitored without alerting them to what specific inspections will be
monitored. In our view, the agency reasonably downgraded Ervin's
proposal for its failure to give some indication regarding how
frequently inspectors will be monitored.
The record makes clear that the TEP reasonably downgraded Ervin's
proposal, in substantial measure for failing to provide required
information showing that Ervin understood the requirements and the
complexities of the contemplated contracts. These assessments
accurately reflect the content of Ervin's proposal, notwithstanding
the protester's disagreement with them. Accordingly, we have no basis
to question the TEP's conclusion, based on these findings, that
Ervin's proposal was technically unacceptable, and the proposal
properly was eliminated from the competitive range for the three
geographical areas.
Other Issues
The protester argues that the awardees enjoyed a competitive advantage
as a result of their experience as subcontractors under the MOBIS
contracts. Specifically, the protester notes that personnel from
these firms attended an inspector training session during the pendency
of this procurement to become certified to use the hardware and
software to support collection of the testing information.[2]
Notwithstanding Ervin's contention that these offerors had an unfair
competitive advantage because they gained their relevant knowledge and
experience through their incumbency, it is not unusual for a
contractor to enjoy an advantage in competing for a government
contract by reason of such experience, and such an advantage, so long
as it is not the result of preferential treatment or other unfair
action by the government, need not be discounted or equalized. STS
Strategic Techs. & Sciences, Inc., B-257980, B-257980.2, Nov. 17,
1994, 94-2 CPD para. 194 at 6. In particular, an agency is not required
to structure a solicitation so as to neutralize natural advantages
gained by incumbency, such as having qualified personnel and
possessing a clear understanding of the areas the agency intends to
evaluate. LaQue Ctr. for Corrosion Tech., Inc., B-245296, Dec. 23,
1991, 91-2 CPD para. 577 at 6-7. Here, the record provides no basis to
question the propriety of the FSS contracts, thus Ervin's assertion
that Building Inspection Services, Inc. and MTB Investments, Inc.
enjoyed a resulting unfair competitive advantage is without merit.
Finally, the protester argues that the TEP is biased against Ervin.
Specifically, Ervin contends that the TEP members "know Ervin's
capabilities well," and "purposefully underscore[d]" its proposal.
Ervin's Comments at 1. Offerors are expected to demonstrate their
capabilities in their proposals rather than simply relying on what
they believe is known about them by contracting officials; those who
do not furnish detailed, comprehensive proposals do so at their own
risk. Agriculture Tech. Partners, B-272978, B-272978.2, Dec. 5, 1996,
96-2 CPD para. 226 at 5. Since we find no error in the evaluation of
Ervin's proposal, we have no basis to conclude that the TEP was biased
and acted with specific intent to injure Ervin. Hill's Capitol Sec.,
Inc., B-250983, Mar. 2, 1993, 93-1 CPD para. 190 at 3-4.
The protest is denied.
Comptroller General
of the United States
1. The purpose of this contract is to inspect properties with HUD-held
mortgages, properties for which HUD acts as the section 8 contract
administrator, and properties owned by public housing agencies.
2. Personnel from Building Inspection Services and MTB attended the
MOBIS inspector training because those firms were subcontractors to
the MOBIS contractors.