BNUMBER: B-281074.2
DATE: January 11, 1999
TITLE: National Toxicology Laboratories, Inc., B-281074.2, January
11, 1999
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Matter of:National Toxicology Laboratories, Inc.
File:B-281074.2
Date:January 11, 1999
Jerome S. Gabig, Jr., Esq., and Craig W. Dubishar, Esq., Venable,
Baetjer, Howard & Civiletti, for the protester.
Robyn Dyson Towles, Department of Justice, for the agency.
Aldo A. Benejam, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Contentions that agency unreasonably evaluated protester's
technical proposal and improperly concluded that the awardee's
higher-rated, higher-cost proposal offered the best value to the
government, are denied where the record shows that the evaluation was
reasonable and in accordance with the stated evaluation criteria, and
the agency reasonably determined that the technical superiority of the
awardee's proposal warranted the cost premium.
2. Contention that agency's method for allocating points for cost
placed undue emphasis on technical merit and allegedly resulted in a
misleading evaluation is denied where the scoring scheme used by the
agency accurately reflects the relative weights of the technical and
cost factors announced in the solicitation and there is no evidence
that the agency's approach resulted in a distorted or misleading
evaluation.
DECISION
National Toxicology Laboratories, Inc. (NTL) protests the award of a
contract to PharmChem Laboratories, Inc. under request for proposals
(RFP) No. OJP-97-R-010, issued by the Office of Justice Programs of
the Department of Justice (DOJ) for technical assistance and inmate
drug urinalysis. NTL primarily argues that the agency improperly
evaluated its proposal.
We deny the protest.
The RFP, issued on April 14, 1998, contemplated the award of an
indefinite-quantity/indefinite-delivery contract for a base period
with up to three 1-year option periods. RFP sec. H-1, L.4, L.6. The
RFP contemplated issuing task orders under the proposed contract on a
fixed-price basis, time and materials basis, or a combination thereof.
RFP sec. H-1. The RFP required offerors to submit proposals in three
separate volumes (technical/management in volume I, cost proposal in
volume II, and representations and certifications in volume III) and
contained detailed instructions on the type of information to be
provided in each volume. RFP sec. L.10, L.11, L.13. Section C-100.4 of
the RFP described in detail the specific work areas, divided into
seven distinct tasks, for which the successful offeror would be
responsible under the contemplated contract.
Section M of the RFP listed the following technical evaluation factors
(weight of each factor shown in parentheses): organization/management
(20 percent); technical approach (20 percent); staff qualifications
(20 percent); and past performance (25 percent). Cost was worth 15
percent. The RFP stated that the technical areas would be considered
more significant than cost in the award decision. RFP sec. M-4. Award
was to be made on the basis of the proposal determined to be the best
value to the government. RFP sec. M-4.
Three firms, including the protester and the awardee, responded to the
RFP by the time set on May 29 for receipt of proposals. A source
evaluation board (SEB) evaluated initial proposals by assigning
numerical scores under each technical evaluation factor and
calculating a total score for each proposal. The agency conducted
discussions with all three firms and requested best and final offers
(BAFO) from all three. The SEB rescored technical proposals based on
BAFOs, and the contracting office provided cost scores,[1] with the
following results:
Offeror Tech. ScoreCost Score Cost
PharmChem 78.00 14.55 $8,091,229
NTL 65.30 15.00 7,850,280
Offeror A 73.30 13.00 9,061,894
Post-Negotiation Memorandum, Aug. 28, 1998.
Based on these results, the SEB recommended that PharmChem be awarded
the contract. The contracting officer agreed with the SEB's
recommendation and, on August 28, awarded PharmChem the contract.
This protest followed a telephonic debriefing by the agency.[2]
Protester's Contentions
NTL primarily argues that DOJ misevaluated its proposal in several
respects. Specifically, NTL argues that DOJ failed to give it credit
for specific strengths in its proposal and improperly concluded that
there were certain weaknesses in its proposal. The protester asserts
that as a result of these alleged errors, the agency's cost/technical
tradeoff decision was flawed.
Discussion
Our Office will not engage in an independent evaluation of proposals
nor make an independent determination of their relative merits.
Litton Sys., Inc., B-239123, Aug. 7, 1990, 90-2 CPD para. 114 at 9.
Rather, we review the agency's evaluation only to ensure that it was
reasonable and consistent with the terms of the solicitation. Sensis
Corp., B-265790.2, Jan. 17, 1996, 96-1 CPD para. 77 at 6. A protester's
mere disagreement with the agency's conclusions does not render the
evaluation unreasonable. ESCO, Inc., B-225565, Apr. 29, 1987, 87-1
CPD para. 450 at 7. Based on our review of the record, including the
SEB's narrative in support of its evaluation, we conclude that the
numerical ratings assigned NTL's proposal are reasonably supported.
Below we discuss some of the more significant issues in support of our
conclusion.
Organization/Management
As noted above, the first technical evaluation factor was
organization/management. The RFP specifically instructed offerors to
present an organization and management plan that would ensure both
quality and accuracy of the services provided and the efficient
operation of the contract. RFP sec. L.10. Offerors were instructed to
demonstrate that they have the ability and resources to manage a
contract of the contemplated complexity, and to adhere to established
deadlines for completing the required tasks. Id. In addition,
offerors were required to provide control procedures to ensure
internal quality control in areas specified in the RFP, including
testing procedures, storage of specimens, office and billing
procedures, ability to meet deadlines, reporting test results, and
reporting formats for data, to name a few. The
organization/management factor was divided into two areas, operations
and quality control, each worth a maximum of 10 points.
Contrary to the protester's argument, the record shows that the SEB
identified several strengths in NTL's proposal in this area, assigning
a composite score of 14 out of a maximum of 20 points under this
factor. For instance, the SEB found that NTL's proposal demonstrated
an ability to manage a contract of the contemplated complexity and to
adhere to established deadlines for task completion. The SEB also
found that NTL's proposal demonstrated an adequate management
commitment to quality and accuracy in conducting laboratory testing
and to providing technical assistance, and that NTL's control plan
demonstrated sufficient internal control procedures in place at all
points in contract operations. Contrary to the protester's
assertions, the SEB specifically noted NTL's quality control program
as a strength in NTL's proposal. In addition, the SEB found that NTL
responded to its concerns regarding spoilage and degradation. The
record thus shows that the SEB recognized the strengths NTL points out
were included in its proposal under this factor and considered them in
its assessment.
However, the SEB identified several deficiencies, primarily due to
lack of detailed information in NTL's proposal. For example, the SEB
specifically noted that with respect to one of the tasks described in
the RFP--task 5.D, related to reconciling billing--NTL simply copied
the task as it appeared in the RFP, inserting "NTL" in place of "the
Contractor," without explaining how NTL would perform the required
task.[3] Based on the SEB's finding, the agency requested that the
protester provide further details regarding its billing procedures,
specifically asking how NTL would implement the requirement. While
NTL provided additional information in response to DOJ's questions
regarding billing, NTL's brief responses did not allay the SEB's
concerns, and the proposal was downgraded accordingly, which we do not
view as unreasonable.
Technical Approach
Under the second evaluation factor, technical approach, offerors were
instructed to clearly address tasks 1-5 contained in section C of the
RFP. Proposals were to be evaluated on the content and clarity of the
responses to the identified tasks, and on the soundness, feasibility,
effectiveness and completeness of approaches selected in terms of
staffing patterns, work loads and resources needed to accomplish each
task. RFP sec. M-3.2.
The protester's proposal earned a composite score of 13 out of a
maximum of 20 points under this factor. Contrary to the protester's
assertions, the record shows that the evaluators considered the firm's
experience with foreign laboratories and its transition plan as
strengths in NTL's proposal and credited the proposal accordingly.
The SEB found, however, that NTL had failed to provide sufficient
detail in response to task No. 2 (specimen handling procedures) on how
the firm would assist the agency in measuring sites' performance with
respect to the submission of urine specimens. The SEB concluded that
NTL's proposal was not tailored to the RFP's requirements. As with
other aspects of the proposal, the SEB found that NTL had merely
restated the tasks described in the RFP and simply promised to fulfill
them, without adequately discussing its resources or strategies, or
explaining steps involved in solving problems.
Our review of the record confirms the evaluators' unanimous conclusion
that in responding to the RFP in the organization/management and
technical approach areas, NTL's proposal essentially parrots the
language of the tasks described in the RFP, does not explain how NTL
proposed to accomplish the RFP's requirements, and lacked sufficient
detail to allow the agency to determine NTL's understanding of the
requirements. This was not an acceptable approach, especially in
light of the RFP's specific instructions that proposals be
"sufficiently detailed to enable the Government to evaluate the
proposal by each factor and subfactor . . . ." RFP sec. L.9. Moreover,
the RFP warned that general statements would be considered inadequate,
and that proposals should be "sufficiently complete to demonstrate the
manner in which the offeror will comply with and fulfill the
solicitation requirements." Id. In view of the RFP's specific
instructions which required offerors to provide clear, detailed
proposals, and based upon our review of the record, including NTL's
proposal and the evaluation documents, we have no basis to question
the SEB's downgrading of NTL's proposal in these areas.[4] See
Schleicher Community Corrections Ctr., Inc., B-270499.3, et al., Apr.
18, 1996, 96-1 CPD para. 192 at 4.
NTL also challenges the agency's method for allocating points for
cost, arguing that it resulted in distorted scores and placed an undue
emphasis on technical merit. As noted above, cost scores were
calculated by assigning the maximum number of available points (15) to
the offer with the lowest proposed cost; since NTL's proposed cost of
$7,850,280 was low, it received all 15 points. Proportionately lower
scores then were assigned to higher-cost proposals, with PharmChem
receiving 14.55 points based on its proposed price of $8,091,229, the
second lowest received. NTL argues that this scoring method distorted
the cost difference between the proposals by giving PharmChem a score
only 0.45 points lower than NTL's, despite the fact that NTL's price
was approximately $425,000 lower than PharmChem's.
As a preliminary matter, there is nothing inherently unreasonable
about scoring the cost factor based upon relative difference in cost
proposals, so long as the use of such an approach does not produce a
distorted or irrational result. See, e.g., First Ann Arbor Corp.,
B-194519, Mar. 4, 1980, 80-1 CPD para. 170 at 3; Design Concepts, Inc.,
B-186125, Oct. 27, 1976, 76-2 CPD para. 365 at 2. The use of normalized
point ratings for cost--i.e., a point-scoring system under which the
lowest-cost proposal is assigned the maximum number of points, with
higher-cost proposals assigned points based on their closeness to the
low offer--is a relatively common and acceptable approach. See, e.g.,
Robertson Leasing Corp., B-279756, B-279756.2, July 17, 1998, 98-2 CPD para.
46 at 2, 6; CDA Inv. Techs., Inc., B-272093, B-272093.2, Sept. 12,
1996, 97-1 CPD para. 102 at 3; American Overseas Book Co., Inc., B-266297,
Feb. 9, 1996, 96-1 CPD para. 60 at 2; Research Assocs. of Syracuse, Inc.,
B-259470, Mar. 28, 1995, 95-1 CPD para. 169 at 3.
Contrary to NTL's arguments, the scoring scheme used by the agency
here accurately reflects the relative weights of the technical and
cost factors--85 and 15 percent, respectively--as set forth in the
RFP. Further, there is no indication that the cost scoring
methodology in any way distorted the evaluation results. On the
contrary, the record shows that the SEB and the contracting officer
thoroughly considered the specific strengths and weaknesses in the
offerors' technical proposals, and reviewed their proposed costs in
detail as well. In sum, while it is possible that a particular
scoring methodology could distort an agency's evaluation of proposals,
there is no indication that that occurred here. Rather, since
PharmChem's proposed price was approximately 3 percent higher than
NTL's, it was not unreasonable for the agency to assign it
approximately 3 percent fewer points (.03 x 15 points = 0.45 points)
than the 15 points NTL received (15 - 0.45 = 14.55).
NTL also argues that the cost/technical tradeoff decision was flawed.
In deciding between competing proposals, cost/technical tradeoffs may
be made, the propriety of which turns not on the difference in
technical scores or ratings, per se, but on whether the source
selection official's judgment concerning the significance of that
difference was reasonable and adequately justified in light of the RFP
evaluation scheme. DynCorp, B-245289.3, July 30, 1992, 93-1 CPD para. 69
at 8. Award may be made to a higher-rated, higher-cost offeror where
the decision is consistent with the evaluation criteria and the agency
reasonably determines that the technical superiority of the
higher-priced offer outweighs the cost difference. Sabreliner Corp.,
B-242023, B-242023.2, Mar. 25, 1991, 91-1 CPD para. 326 at 11. As
explained further below, the award decision here is reasonably
supported by the record. See Southwest Marine, Inc.; American Sys.
Eng'g Corp. B-265865.3, B-265865.4, Jan. 23, 1996, 96-1 CPD para. 56 at
19.
The SEB documented its recommendation for award in a statement
detailing its findings with respect to each proposal. After examining
the strengths and weaknesses of the protester's and the awardee's
proposals, the SEB concluded that the proposals differed in the
technical areas, the proposed indirect costs applied to labor rates,
and the unit prices proposed for various tests. In its final
recommendation, the SEB concluded that PharmChem had submitted an
excellent response to the RFP and had responded fully to the agency's
discussion questions. The SEB found that PharmChem demonstrated a
comprehensive understanding of the contemplated project, and that the
firm, with its excellent technical approach, could clearly handle work
of this size and complexity. On the other hand, the SEB concluded
that, overall, NTL's proposal was a poor response to the RFP and that
NTL did not fully respond to the agency's discussion questions. The
SEB also found that, as contrasted with PharmChem's proposal, NTL had
demonstrated limited understanding of the project, concluding that
NTL's overall approach was poor. As discussed above, the record
reasonably supports the SEB's conclusion and the ratings assigned
NTL's proposal. Under these circumstances, the SEB's conclusion that
PharmChem's proposal was most advantageous to the government is
unobjectionable. See Reflectone Training Sys., Inc.; Hernandez Eng'g,
Inc., B-261224, B-261224.2, Aug. 30, 1995, 95-2 CPD para. 95 at 11-12.
In a supplemental protest, NTL also argues that since at least two of
the firms that responded to the RFP were small businesses, the
contracting officer improperly failed to investigate whether the RFP
should have been issued as a small business set-aside. NTL's argument
is a challenge to the unrestricted nature of the procurement, which
was clear on the face of the RFP. Under our Bid Protest Regulations,
4 C.F.R. sec. 21.2(a)(1), a protest alleging an impropriety in a
solicitation that is apparent prior to the time set for receipt of
initial proposals must be filed before that time. Because NTL did not
protest that the RFP should have been set aside for small businesses
until after award, this protest issue is untimely. Dunn Eng'g
Assocs., B-266273, Feb. 9, 1996, 96-1 CPD para. 59 at 2 n.1.
NTL maintains, however, that this argument is timely because it first
learned that another small business had responded to the RFP as a
result of its receipt of the agency's report on NTL's initial protest.
However, the fact that other small businesses capable of performing
the required services could have been interested in responding to the
RFP was public information that was readily available to NTL well
before the RFP's May 29, 1998 closing date. In this connection, NTL
itself provided to our Office a copy of a Federal Register notice
published September 2, 1994, by the Department of Health and Human
Services, listing the names, addresses and telephone numbers of
approximately 80 laboratories, including NTL and the other small
business firm that responded to the RFP here, which met minimum
standards to engage in urine drug testing for federal agencies. See
59 Fed. Reg. 45,681-82 (1994).[5] Thus, the information which forms
the basis for its argument--that at least one other small business
capable of performing the work might have been interested in
responding to the RFP--was either publicly available or could have
been discovered if it had been diligently pursued prior to the closing
date for receipt of proposals. Accordingly, this argument is
untimely. See XMCO, Inc., B-228357, Jan. 26, 1988, 88-1 CPD para. 75 at
3.
The protest is denied.
Comptroller General
of the United States
1. Cost scores were calculated by assigning the maximum number of
possible points (15) to the offer with the lowest total proposed cost,
and proportionately lower scores to higher-cost proposals.
2. DOJ argues that the protest should be dismissed because NTL is not
an interested party under our Bid Protest Regulations, 4 C.F.R. sec.
21.0(a) (1998). DOJ asserts that, since NTL's technical proposal was
ranked third, even if its protest were sustained NTL would not be next
in line for award because there is a higher-rated intervening offeror.
The agency's argument overlooks the substance of NTL's challenge--that
the agency improperly evaluated its proposal. Specifically, NTL
argues that had the agency conducted a proper evaluation, its proposal
would have received a higher technical rating and that with its lower
price, it would have been selected as the best value to the
government. Thus, if we found that NTL's arguments had merit and
sustained its protest, it is possible that upon reevaluation, NTL's
proposal would be in line for award. We therefore consider NTL an
interested party to maintain the protest. See Pan Am World Servs.,
Inc., et al., B-231840 et al., Nov. 7, 1988, 88-2 CPD para. 446 at 6.
3. Task 5.D states:
The Contractor shall reconcile billings with number of
tests performed for each of the sites by each age/gender
grouping. The Contractor shall specify which tests were
performed for any special analysis requested by [the
National Institute of Justice] and specify any other costs
incurred by tasks other than the routine quarterly
urinalysis for all [Arrestee Drug Abuse Monitoring] sites.
RFP at C-16.
4. NTL also challenges the evaluation of its proposal under the staff
qualifications technical factor. Although, in its consensus report,
the SEB identified no deficiencies with respect to the two key
personnel required by the RFP, the SEB assigned NTL's proposal an
average score of 17.3 rather than 20 points, the maximum number of
points available under the staff qualifications factor. Assuming that
NTL's proposal should have earned 20 points in this area, raising its
final technical score to 68 points, this revision would not affect its
relative ranking as the lowest-rated proposal. NTL was therefore not
prejudiced by this alleged error. Our Office will not sustain a
protest unless the protester demonstrates a reasonable possibility
that it was prejudiced by the agency's actions, that is, unless the
protester demonstrates that, but for the agency's action, it would
have had a substantial chance of receiving the award.
McDonald-Bradley, B-270126, Feb. 8, 1996, 96-1 CPD para. 54 at 3; see
Statistica, Inc. v. Christopher, 102 F.3rd 1577, 1581 (Fed. Cir.
1996).
5. NTL also provided our Office with a copy of another Federal
Register notice dated September 8, 1998, which transmits an updated
list of certified laboratories. See 63 Fed. Reg. 47,514 (1998).