TITLE:   Johnson Controls World Services, Inc.; Meridian Management, B-281287.5; B-281287.6; B-281287.7, June 21, 1999
BNUMBER:  B-281287.5; B-281287.6; B-281287.7
DATE:  June 21, 1999
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Johnson Controls World Services, Inc.; Meridian Management, B-281287.5;
B-281287.6; B-281287.7, June 21, 1999

Decision

Matter of: Johnson Controls World Services, Inc.; Meridian Management
Corporation

File: B-281287.5; B-281287.6; B-281287.7

Date: June 21, 1999

Kathleen C. Little, Esq., David R. Johnson, Esq., James R. Farnsworth, Esq.,
and Suzanne Reifman, Esq., Vinson & Elkins, for Johnson Controls World
Services, Inc.; and Michael A. Gordon, Esq., and Fran Baskin, Esq., Holmes,
Schwartz & Gordon, for Meridian Management Corporation, the protesters.

Jacqueline B. Gayner, Esq., Ross, Suchoff, Hankin, Maidenbaum, Handwerker &
Mazel, and Richard Feldman, Esq., Feldman & Markman, for Citywide Office
Management Services, the intervenor.

Joseph J. Cox, Esq., Department of the Army, for the agency.

Henry J. Gorczycki, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Agency's evaluation of technical proposals was unreasonable under the best
value evaluation plan stated in the solicitation where it failed to evaluate
differences in technical merit of proposals beyond minimum requirements.

DECISION

Johnson Controls World Services, Inc. and Meridian Management Corporation
protest an award to Citywide Office Management Services under request for
proposals (RFP) No. DACA51-98-R-0007, issued by the U.S. Army Corps of
Engineers, New York District, for base operations and maintenance services
at Fort Hamilton, New York. The protesters allege that the agency conducted
an unreasonable evaluation and award selection.

We sustain the protests.

The RFP, issued March 5, 1998, contemplated the award of fixed-price
contract (with some cost reimbursable items) for 1 year with 4 option years.
The performance work statement (PWS) stated that the scope of work includes
the following major functional areas:

  1. Work Reception and Management
  2. Buildings and Structures and Utilities Systems

3. Roads and Grounds

4. Pest Control

5. Refuse Collection

6. Housing and [Unaccompanied Personnel Housing] Operations

7. Supply and Storage

8. Elevator Maintenance and Repair

9. Logistical Support

 10. Personal Property Shipping Office (PPSO)
 11. Transportation Motor Pool (TMP)

RFP sect. C.1.1, at 11, amend. 0002, at 34. The PWS stated the performance
requirements for each of these major functions. RFP sect. C.5, at 67-203.

The RFP stated that award would be made "based on the best overall proposal
with appropriate consideration given to the evaluation factors stated
below," RFP amend. 0002, sect. M.1.b, at 1, and that technical "is more
important than price." RFP amend. 0002, sect. M.2.B, at 5. The RFP stated a
total of 3 factors and 10 subfactors under technical. The RFP listed, in
descending order of importance," the technical factors: Factor I, Technical
Approach, Factor II, Management, and Factor III, Quality Control. Each
technical factor had either three or four subfactors "listed in descending
order of importance" within each factor. Id. Factor I, Technical Approach,
had the following three subfactors: (1) Technical Capability, (2) Labor
qualifications/mix for projects, and (3) Past Performance. Factor II,
Management, had the following four subfactors: (1) Organizational
Procedures, (2) Operational Structure, (3) Sub-Contract Plans, and (4)
Management Qualifications. Factor III, Quality Control, had the following
three subfactors: (1) Quality Control Plan, (2) Corrective Action, and (3)
Records and Reports. The RFP stated that offerors should prepare technical
proposals in a format following the identified evaluation factors, and
specified information to be addressed in proposals that would be considered
by the agency for evaluation purposes. RFP amend. 0002, sect.sect. L.9, at 2-5,
M.2.A.1, at 2-5.

The agency received proposals by the June 5, 1998 closing date from Johnson
(the incumbent contractor), Meridian, and Citywide. The agency's evaluation
team evaluated technical proposals on a 900-point scale with factor I,
technical approach, being allotted 400 points; factor II, management, 300
points; and factor III, quality control 200 points; the subfactors under
each factor received a share of the total points allotted to the factor
consistent with the descending order of importance evaluation scheme.

The agency conducted discussions and evaluated revised proposals. Citywide's
proposal received the highest technical score and offered the lowest price,
and the agency determined that it represented the best value to the
government.

On September 18, the agency awarded the contract to Citywide. Johnson
protested that award to our Office. After reviewing the protest, the agency
determined that corrective action was appropriate, which included a new
evaluation of the proposals performed by a new evaluation team. In response
to the corrective action, Johnson withdrew its protest.

The new evaluation team evaluated the proposals as previously submitted. In
so doing, the evaluation team used the scoring breakdown as initially
established and scored proposals under certain criteria designated on the
evaluators' rating sheets for each of the subfactors stated in the RFP;
there were 38 of these criteria. [1] Following the evaluation, the agency
conducted discussions with the offerors and requested revised proposals. All
three offerors submitted revised proposals by the February 12, 1999 due
date.

Under the final evaluation, Citywide's technical proposal received a perfect
score for every criterion and thus a perfect score overall of 900 points,
while Johnson's and Meridian's proposals received near perfect overall
scores of 884 and 878 points, respectively. Johnson's and Meridian's
proposals both received perfect scores on 35 out of 38 criteria. Citywide
proposed the lowest price; Meridian proposed a slightly higher price and
Johnson proposed a significantly higher price. On February 24, the agency
determined that Citywide's lowest-priced, highest-rated proposal represented
the best value to the government and awarded the contract to Citywide. These
protests followed.

Johnson and Meridian essentially contend that the evaluation was improper
because the agency failed to evaluate proposals for relative technical merit
beyond the minimum requirements under the best value plan stated in the RFP
and unequally evaluated the proposals, and that this evaluation resulted in
Citywide's proposal being overrated under various subfactors, even though
its proposal was assertedly inferior to the protesters', and in Johnson's
and Meridian's proposals effectively not being given credit for existing
proposal strengths beyond the minimum requirements. We sustain the protests
on this basis.

While the evaluation of proposals is primarily within the discretion of the
contracting agency, the agency must conduct the evaluation in accordance
with the terms of the RFP; it does not have the discretion to announce in
the RFP that one evaluation scheme will be used and then follow another in
the actual evaluation. Trijicon, Inc., B-244546, Oct. 25, 1991, 91-2 CPD
para. 375 at 5. Where, as here, the RFP states a best value evaluation plan--as
opposed to selection of the lowest-priced, technically acceptable
offer--evaluation of proposals is not limited to determining whether a
proposal is merely technically acceptable; rather, proposals may be further
differentiated to distinguish their relative quality by considering the
degree to which technically acceptable proposals exceed the stated minimum
requirements or will better satisfy the agency's needs. Israel Aircraft
Indus., Ltd., MATA Helicopters Div., B-274389 et al., Dec. 6, 1996, 97-1 CPD
para. 41 at 5-6.

Here, the RFP's best value evaluation scheme stated that technical would be
more important than price and that the objective of the evaluation was to
determine which proposal offered the best overall value considering all of
the stated factors. RFP amend. 0002, sect.sect. M.2.A.1, at 2, M.2.B, at 5. All
three proposals received perfect scores under the overwhelming majority of
evaluation criteria, and points were deducted only for aspects of a proposal
considered less than satisfactory, as evidenced by the evaluators' comments,
and no comments were provided under criteria for which proposals received
perfect scores. Agency Report, Tab 41, Final Technical Findings, attach.,
Final Consensus Rating Sheets. The source selection decision document
identifies only final point scores and price differences; it does not
identify any differences in technical merit. The evaluation record overall
simply does not evidence consideration by the agency of differences between
the proposals in technical merit (other than the few comments which formed
the basis for the limited score reductions). Consistent with this record,
the agency does not contend that it evaluated for relative technical merit
beyond the minimum requirements. See Contracting Officer's Statement on
Johnson Protest at 29th unnumbered page. Absent a reasonable evaluation of
relative technical merit, the record cannot support an award on other than a
lowest priced, technically acceptable basis, which is contrary to the terms
of the RFP and is improper. See Trijicon, Inc., supra, at 7.

The agency contends that the evaluation factors here were not written in
terms of minimum standards that offerors could strive to exceed. See
Contracting Officer's Statement on Johnson Protest at 29th unnumbered page.
We disagree. Our review of the RFP shows that the evaluation factors were
stated such that offerors reasonably could anticipate being rewarded in the
technical evaluation for submitting a technically superior proposal.

For example, past performance was accorded a total of 100 possible points
out of the overall total of 900 points. [2] Agency Report, Tab 10, Source
Selection Evaluation Plan, at 7. The RFP's technical evaluation scheme
stated that an offeror's technical proposal will demonstrate experience
through past performance providing the 11 major functions which were listed
in the PWS and sections L and M. RFP sect.sect. C.1.1,
at 11, amend. 0002, at 34, L.9, at 3, M.2.A.1.a, at 2-3. The RFP also stated
that the
Past Experience/Performance subfactor would be evaluated as follows:

The Offeror's capability to perform the requirements of this specification
must be supported by previous and/or current experience detailed in the
proposal. Proposals will be evaluated based upon past experience/performance
on contracts with similar scope and complexity.

RFP amend. 0002, sect. M.2.A.1.a, at 3.

The RFP's proposal submittal instructions stated the same and added the
following:

Cite specific examples of past work, which most closely resembles that
required at Fort Hamilton.

RFP amend. 0002, sect. L.9, at 3.

Although the agency has the discretion under this evaluation factor to
determine what contract experience is sufficiently similar in scope and
complexity to the RFP requirements to be considered acceptable, see Saratoga
Medical Ctr., Inc., B-281350, B-281350.2, Jan. 27, 1999, 99-1 CPD para. __ at 3,
the RFP did not give the agency discretion to give identical scores to
offerors with significant differences in relevant experience. See Ogden
Support Servs., Inc., B-270012.4, Oct. 3, 1996, 96-2 CPD para. 137 at 3 (under
past performance evaluation factor in a best value procurement, proposal
with more relevant successful past performance should be rated higher than a
proposal reflecting less relevant past performance); Premiere Vending,
B-256437, June 23, 1994, 94-1 CPD para. 380 at 8 (past performance evaluation
factor for "similar experience" in a best value procurement renders more
similar experience preferable to, and thus higher rated than, less similar
experience).

Both Johnson's and Citywide's received perfect scores for past performance,
even though the record demonstrates that Johnson's proposal was more
detailed and addressed specific experience with every one of the major
functions. Agency Report, Tab 2, Johnson's Technical Proposal, at 1-10, 1-15
to 1-17, 1-20 to 1-21, 1-25 to 1-26, 1-28 to 1-29, 1-32 to 1-34, 1-37 to
1-38, 1-40 to 1-41, 1-44 to 1-45, 1-47 to 1-48, 1-50, 1-52. As the incumbent
at Fort Hamilton, Johnson had experience at Fort Hamilton under every
function, and also had experience from other similar military base contracts
under every function. Id.

In contrast, Citywide's proposal was neither detailed nor specific under
this subfactor, and did not identify experience for all of the major
functions. Agency Report, Tab 3, at 126-29. The agency's preliminary
evaluation identified this lack of information and deducted points from
Citywide's score. The agency raised this issue in discussions with Citywide
and requested a detailed discussion of the technical complexity of its past
performance. In response, Citywide identified three non-governmental
contracts involving commercial or residential facilities and stated that
these "are projects with greater scope and complexity than Fort Hamilton."
Agency Report, Tab 34, Letter from Citywide to Source Selection Team, at 4th
unnumbered page (Feb. 9, 1999). In this regard, Citywide's final revised
proposal stated:

[DELETED]

Agency Report, Tab 40, Citywide's Final Proposal Revision, at 131-32.

This statement by Citywide is general and fails to identify major functional
experience under specific contracts; moreover, it fails to address two of
the major functions stated in the RFP-PPSO and TMP services. [3] Although
Citywide's final proposal provides a brief description of the services
performed for each contract, all of these contract descriptions, both
individually and collectively, fail to identify experience in many of the
major functions. [4] Agency Report, Tab 40, at 134. Considering that
Johnson's proposal demonstrated successful prior performance on contracts of
the same or greater complexity on every one of the major functions, and
Citywide's proposal did not, the agency unreasonably scored both proposals
the same under the past performance subfactor, which effectively removed the
evaluation weight assigned this subfactor. See Ogden Support Servs., supra,
at 3.

Moreover, we note that Meridian's proposal was slightly downgraded under
this subfactor for not having PPSO contract experience, although its
proposal indicated that it had apparently informally performed PPSO services
under a contract at another base during base closure operations. However,
Citywide's proposal, which contained no evidence of having performed such
services, received a perfect score. Such an unequal evaluation is
unreasonable. See Sci-Tec Gauging, Inc.; Sarasota Measurements & Controls,
Inc., B-252406, B-252406.2, June 25, 1993, 93-1 CPD para. 494 at 11; J.M.
Cashman, Inc., B-233773, Apr. 14, 1989, 89-1 CPD para. 380 at 8-11.

Another example is the evaluation of organizational procedures, the most
important subfactor under the second factor (management), under which the
agency evaluated the offeror's understanding of the work status report
requirements. In pertinent part, the RFP required the contractor to use the
agency's Integrated Facilities System (IFS) to record work status data. RFP
sect. C.5.1.8, at 70. Johnson proposed using IFS and had experience using the
system. Agency Report, Tab 2, Johnson's Technical Proposal, at 2-9. Both
Citywide and Meridian essentially proposed using the IFS in conjunction with
their own work control database systems. Meridian proposed its own system
for internal use and proposed the IFS system for formal records; it
apparently had experience doing this successfully. Agency Report, Tab 68,
Meridian's Technical Proposal, at 1.4-1.4a. Citywide apparently did not have
experience using the IFS system, and stated that it understood that IFS was
inefficient and proposed to attempt to integrate the two systems in the
first 3 months of the contract. Agency Report, Tab 40, Citywide's Final
Revised Proposal, at 132. In the evaluation under this subfactor, Citywide's
proposal received a perfect score, Johnson's proposal was downgraded for a
reason unrelated to IFS, and Meridian was downgraded because of its IFS
approach. The record does not indicate why Johnson's proposal was not
considered superior to Citywide's proposal under this subfactor or why
Citywide's proposal was not downgraded, particularly given how Meridian's
proposal was rated.

As illustrated by the foregoing, the record evidences that the agency did
not reasonably evaluate differences in technical merit between the proposals
under the RFP's best value evaluation scheme, such that we cannot determine
that the award selection based upon this evaluation was proper, and we
sustain the protest on this basis. [5]

The protesters also allege that the agency's evaluation of Citywide's price
did not reasonably account for the wage requirements of the Davis-Bacon Act
and the Service Contract Act, which were incorporated into the RFP. Johnson
Protest at
14-21; Johnson Comments at 14-18; Meridian Comments at 16-17. We do not find
unreasonable the agency's contemporaneous evaluation of Citywide's price.
Citywide's proposal did not take exception to this requirement; the firm
confirmed during discussions that it intended to comply with the wage
requirements. Citywide explained that [DELETED], and specified other factors
that allowed it to offer such a low price. Contracting Officer's Report on
Johnson Protest at 38th_40th unnumbered page. Based on its review, the
agency could reasonably determine that Citywide's price was realistic and
reasonable. [6] See Milcom Sys. Corp., B-255448.2, May 3, 1994, 94-1 CPD para.
339 at 9-11.

We recommend that the agency either reevaluate proposals consistent with the
RFP's existing evaluation scheme or amend that scheme to reflect the
agency's actual needs, then request revised proposals, evaluate revised
proposals, and make a new source selection decision. If an offeror other
than Citywide is selected for award, Citywide's contract should be
terminated. We also recommend that the agency reimburse the protesters their
reasonable costs of filing and pursuing these

protests, including attorneys' fees. 4 C.F.R. sect. 21.8(d)(1) (1999). The
protesters should file their claims for costs, detailing the time expended
and costs incurred, with the contracting agency within 60 days of receiving
this decision. 4 C.F.R.
sect. 21.8(f)(1).

The protests are sustained.

Comptroller General
of the United States

Notes

1. Only the past performance subfactor was not subdivided into criteria and
is thus itself counted as one of the 38 criteria.

2. Johnson also alleges that the agency was required to give significantly
more weight to the past performance subfactor than it actually did.
Specifically, Johnson cites a publication of the Office of Federal
Procurement Policy (OFPP), OFPP Guidance: Best Practices for Past
Performance (May 1995), which offers guidance on the evaluation of past
performance and states that past performance should be at least equal in
importance to any non-cost factor or, if numerical weights are used, past
performance should be allotted at least 25 percent. Johnson Protest at
13-14; Johnson Comments at 11-12. However, this OFPP publication discusses
executive branch policy on past performance. The cited guidance on weight of
past performance is not a statement of procurement law or regulation. See 10
U. S.C.
sect. 2305(a) (1994); Federal Acquisition Regulation sect.sect. 15.304, 15.305. Nor does
Johnson allege a violation of any procurement laws or regulations pertaining
to the evaluation weight accorded past performance. Protests alleging
violations of OFPP statements of executive branch policy which, as here, do
not violate procurement laws or regulations are not reviewed by our Office.
See Systems Eng'g & Management Co., B-275786, Mar. 26, 1997, 97-1 CPD para. 133
at 7-8 n.8; Systems & Programming Resources Inc., B-192190, Aug. 16, 1978,
78-2 CPD para. 124 at 2.

3. The agency now states that Citywide has its own motor pool. Contracting
Officer's Statement on Meridian Protest at 21st unnumbered page. However,
this information was not presented in the past performance section of
Citywide's proposal, and there is no evidence that the motor pool includes
transportation services, nor is there evidence in the evaluation record that
such information was considered during the evaluation.

4. The agency states that the individual personnel proposed by Citywide have
experience with the various components of work and that individual personnel
with relevant experience proposed by Citywide should be considered in the
evaluation. Contracting Officer's Statement on Johnson Protest at 33rd
unnumbered page. Although the RFP does not preclude such an evaluation, the
agency does not assert that it actually evaluated past performance in this
manner and there is no evidence in the record suggesting that the agency
performed the evaluation in this manner. Therefore, we will not consider
this post hoc argument. See Boeing Sikorsky Aircraft Support, B-277263.2,
B-277263.3, Sept. 29, 1997, 97-2 CPD para. 91 at 15 (alternate rationale offered
in heat of adversarial process is given little weight). In any event,
Johnson also proposed experienced personnel and, even if the experience of
individuals was considered in the agency's evaluation of past performance,
the record does not show that the two proposals reasonably deserve identical
scores.

5. While both protesters assert that the selection was based on the fact
that Citywide was a "local" rather than a "non-local," company, they have
provided no evidence to support this contention.

6. We note that Johnson has submitted relevant information in the exhibits
to its protest comments pertaining to [DELETED], which, though not
previously known by the agency, may be relevant and considered by the agency
upon the reevaluation.