BNUMBER: B-281800
DATE: April 9, 1999
TITLE: Korrect Optical, B-281800, April 9, 1999
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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:Korrect Optical
File: B-281800
Date:April 9, 1999
Stephen E. Smith, Esq., Goldberg & Simpson, for the protester.
Phillipa L. Anderson, Esq., Merilee D. Rosenberg, Esq., and Philip S.
Kauffman, Esq., Department of Veterans Affairs, for the agency.
Linda C. Glass, Esq., and Paul I. Lieberman, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protest of agency's evaluation of offeror's past performance is
denied where the record shows that the evaluation was reasonable and
consistent with the applicable evaluation factors.
2. Selection of technically superior, higher-priced proposal is
unobjectionable where the solicitation made technical considerations
and past performance more important than price and the agency
reasonably concluded that the technical superiority and better past
performance record of the awardee warranted payment of the associated
price premium.
DECISION
Korrect Optical protests the award of a contract to Classic Optical
Laboratories, Inc. under request for proposals (RFP) No. 583-75-98,
issued by the Department of Veterans Affairs (VA) for prescription
eyeglasses and services for VA beneficiaries. Korrect principally
contends that the agency improperly evaluated its past performance
because the agency relied on negative reference information to which
the protester was not provided an adequate opportunity to respond.
We deny the protest.
The solicitation, issued August 12, 1998 as a commercial-item
procurement, contemplated the award of a fixed-price contract to
provide the necessary resources, facilities, and establishments in
each community where either a Veterans Integrated Services Network
(VISN) 11 VA Medical Center or Outpatient Clinic is located, in order
to furnish prescription eyeglasses to eligible beneficiaries. RFP sec.
A.6.3. The solicitation provided for award to the responsible offeror
whose conforming offer was most advantageous to the government. RFP sec.
C.4. The RFP provided for evaluation of the proposals under the
criteria of technical factors, past performance, and price. Id. The
technical evaluation criteria consisted of the education of
individuals providing supplies and services to VA beneficiaries and
the offerors' management capabilities and approach. Id. Under
management capabilities, offerors were to describe management methods
to ensure the provision of prompt and quality service. Id. Under
past performance, the solicitation required offerors to identify all
federal, state and local government contracts and private contracts of
similar type, size, scope, and complexity that were ongoing, or had
been completed within the past 3 years. RFP sec. C.4.B. The RFP further
provided that the information must evidence customer satisfaction with
the offeror's products and services, and demonstrate the offeror's
compliance with and fulfillment of the requirements under previous
contracts. Id.
Three offerors, including Korrect and Classic, submitted proposals by
the September 30, 1998 closing date. One proposal was determined to
be technically unacceptable and was not further considered. After
performing an initial evaluation, the agency determined that
discussions should be held with each of the other two offerors. Under
the initial evaluation, Classic's management approach was determined
to be better than that of Korrect, and Korrect was found not to have
provided sufficient information about the education and experience of
its employees. The evaluators were also concerned about whether
Korrect's management and capacity would be sufficient to permit
Korrect to satisfactorily handle a large increase in workload.
Additionally, the evaluators had concerns with Korrect's past
performance on current/recent contracts with other VA medical centers.
In the initial evaluation, Classic's proposal received a score of 34.5
out of 40 for technical, 15.75 out of 20 for past performance, and
25.23 out of 40 for price. Korrect's proposal received a score of 20
out of 40 for technical, 4.25 out of 20 for past performance, and 40
out of 40 for price. Agency Report, exh. 5.
The contracting officer and the chairman of the technical evaluation
team held discussions with both offerors, seeking clarification of
various issues, such as past performance, frame selection, and
additional dispensing locations. During these discussions, the
contracting officer advised Korrect of the adverse past performance
information identified by the evaluation team and requested Korrect to
provide a written response to the adverse past performance matters and
to the other issues as well. Agency Report, exh. 1. The protester
responded to the agency's concerns by letter dated October 24, 1998.
Specifically, Korrect explained that certain delivery delays at VA
medical facilities in Illinois and Virginia were due to continuous
frame backorders from certain manufacturers and other delays were due
to the size of Korrect's former facility. Protest, exh. 2. Korrect's
representative pointed out that it had recently moved into a larger
facility which allowed both expandability and better production flow.
Additionally, the protester stated that delays in a Washington, D.C.
hospital were the result of the prosthetic service's inability to
provide timely responses to its concerns regarding missing information
on prescription forms. Lastly, Korrect stated that it did not recall
quality problems at the Topeka, Kansas hospital, but that if there had
been problems, they must have related to Korrect's previous production
flow problems. Id.
The final evaluation was based on the original proposals, discussions
with both offerors and the additional information received from both
offerors regarding past performance, personnel background and
experience of employees. In the final analysis, the contracting
officer determined that after consideration of all the past
performance information for both offerors, Classic had the superior
overall past performance record. Agency Report, exh. 8. The
evaluation team concluded that Classic's education qualifications and
experience were "superior/better" to those of Korrect. Agency Report,
exh. 8. The evaluators found that Classic clearly outlined the number
of years of experience and education of its staff and justified its
capabilities to handle a contract of this magnitude. Classic's
management overview was found to articulate its capabilities and
approach to the type and size of contract, and its approach was found
to be more defined than Korrect's. Classic was determined to offer a
better defined understanding of quality management and its quality
assurance plan was found to indicate a defined style of its
management. Lastly, Classic offered to provide at least 30 different
frame styles for the original price, while Korrect agreed to provide
only 22 at the same price.
In making the award determination, the contracting officer concluded
that Classic demonstrated that it offered the better technical
capabilities, skills, management, resources and performance potential
to provide the best performance at a reasonable price. Agency Report,
exh. 8. While the contracting officer recognized that Korrect's
overall price was significantly lower than Classic's, he concluded
that Classic's technical superiority, combined with Classic's overall
superior past performance record, warranted award to Classic. Id. On
November 27, 1998, award was made to Classic.
By letter dated December 1, 1998, Korrect filed an agency-level
protest objecting to the award and contending that its technical
proposal and other factors as submitted, when coupled with the price
offered, entitled Korrect to the award. Agency Report, exh. 9. The
agency-level protest was denied by letter dated December 21 and
Korrect filed this protest with our Office on December 31, 1998.
Korrect primarily objects to the agency's evaluation of its past
performance as improper because Korrect was not given an opportunity
to rebut negative past performance information relied on by the agency
and maintains that it did not have significant delivery problems in
the performance of past or present contracts.
The evaluation of technical proposals, including the evaluation of
past performance, is primarily the responsibility of the contracting
agency since the agency is responsible for defining its needs and the
best method of accommodating them, and it must bear the burden of any
difficulties resulting from a defective evaluation. Federal Envtl.
Servs., Inc., B-260289, B-260490, May 24, 1995, 95-1 CPD para. 261 at 3.
In reviewing protests challenging an agency's evaluation of proposals,
we will not substitute our judgment for that of the agency regarding
the merits of proposals; rather, we will examine the agency's
evaluation to ensure that it was reasonable and consistent with the
solicitation's evaluation criteria. Honolulu Marine, Inc., B-245329,
Dec. 27, 1991, 91-2 CPD para. 586 at 3. A protester's mere disagreement
with the agency's evaluation does not render it unreasonable. CORVAC,
Inc., B-244766, Nov. 13, 1991, 91-2 CPD para. 454 at 5.
Korrect challenges its past performance evaluation and disputes that
there were widespread significant delivery problems on its completed
and existing contracts. The contracting officer states that the new
format for delivery of glasses being used in this procurement was
developed specifically to enable veterans to receive prompt delivery
of eyeglasses in order to improve service and customer satisfaction.
The contracting officer explains that in order to evaluate the past
performance of both offerors, he sent a past performance questionnaire
to a number of the past performance references included in each
offeror's technical proposal. Agency Report, exh. 1. The contracting
officer also obtained data from other VA medical centers on both
offerors. Korrect's initial past performance evaluations included a
number of instances of unsatisfactory performance which resulted in
the contracting officer's further examination of Korrect's past
performance. Id. at 4. The additional inquiries into Korrect's past
performance history resulted in many satisfactory and
above-satisfactory ratings and comments on the various aspects of
performance, but also resulted in numerous unsatisfactory ratings and
comments. In several instances, Korrect was cited by several VA
facilities for problems meeting delivery schedules. Agency Report,
exh. 6. There were also several instances where, while Korrect
received an overall above-satisfactory evaluation, comments indicated
that Korrect had delivery problems in performing the contract.
Moreover, Korrect's letter of explanation noted above concedes, rather
than disputes, the existence of such problems and attempts to explain
the measures it has taken which it believes will ameliorate the
performance problems for future contracts. Because the documentation
supports the contracting officer's finding that Korrect had a record
which included performance problems while Classic's past performance
received uniformly favorable ratings, there is no basis to question
the agency's lower evaluation of Korrect's proposal under past
performance.[1]
Korrect also objects to this evaluation on the basis that it was not
given a sufficient opportunity to respond to the adverse past
performance evaluation. As explained above, the agency held oral
discussions with the offerors and communicated the adverse past
performance matters to Korrect and requested Korrect to provide a
written response. The adverse past performance issues involved
delivery problems in the performance of several contracts at VA
medical facilities in Illinois, Virginia, Kansas, and Washington, D.C.
Agency Report, exh. 6. As noted above, in fact, by letter dated
October 24, 1998, Korrect responded to the agency's concerns about its
adverse past performance evaluation, and provided the agency specific
explanation for delivery delays at the VA facilities. Protest, exh.
2. Further, the record shows that, contrary to the protester's
assertions, at least one of the VA facilities provided Korrect with
the opportunity to correct past performance problems. Specifically,
the VA Medical Center in Danville, Illinois provided Korrect with
specific concerns the agency had with its performance, including
delivery delays, and also made several suggestions to enable Korrect
to improve its performance. Id. Thus, Korrect was provided with an
opportunity to address adverse past performance information, and we
therefore have no reason to object to the propriety of the past
performance evaluation on this basis.
Korrect also asserts that the agency in its award decision improperly
relied too heavily on the past performance evaluation. The agency
position is that it properly awarded the contract to Classic on the
basis of an appropriate technical/price tradeoff. In a negotiated
procurement, agency officials have broad discretion in determining the
manner and extent to which they will make use of technical and price
evaluation results. Price/technical tradeoffs may be made; the extent
to which one may be sacrificed for the other is governed by the test
of rationality and consistency with the established evaluation
factors. General Servs. Eng'g Inc., B-245458, Jan. 9, 1992, 92-1 CPD para.
44 at 9. Where, as here, the RFP indicates that technical
considerations are more important than price considerations, selection
of a technically superior, higher-priced proposal is proper where the
record shows that the price premium was justified in light of the
proposal's technical superiority. Dynamics Research Corp., B-240809,
Dec. 10, 1990, 90-2 CPD para. 471 at 2. Here, the record supports the
contracting officer's decision to award the contract to Classic as the
technically superior offeror, notwithstanding Classic's higher
proposed price.
After reviewing the proposals submitted by the offerors, the
information provided by the offerors' references, as well as the
responses provided by the offerors in response to discussion
questions, the VA determined that Classic's proposal demonstrated that
it had the better technical capabilities, skills, management,
resources and performance potential to provide the best performance
under the contract. Although Korrect's overall price was lower, the
cost savings were outweighed by Classic's demonstrated superiority and
by Korrect's weaker proposed management approach and its poorer past
performance record. Contrary to Korrect's argument that the agency
placed undue emphasis on past performance, the record demonstrates
that, in accordance with the solicitation, the agency's determination
of the relative merits of the proposals involved consideration of the
educational qualifications and experience of the offerors' proposed
staff, management capability and approach, past performance, and scope
of offered frame selection. Consequently, this record provides no
basis to question the reasonableness of the award determination.[2]
The protest is denied.
Comptroller General
of the United States
1. The protester asserts that the agency's actions here constitute
"blackballing" or a de facto debarment essentially because it is being
penalized for its unproven past performance problems. This allegation
is entirely unfounded--it does not set forth any alleged pattern of
conduct by the agency and instead appears to be based on Korrect's
speculation about possible future actions by the agency. As for the
procurement at issue here, the record shows that the agency conducted
a reasonable analysis of both offerors' past performance consistent
with the stated evaluation criteria and Korrect reasonably was not
selected for award because it did not present the best value in part
because of the agency's valid assessment of its past performance as
weaker than Classic's. This does not constitute "blackballing" or
debarment. See JCI Envtl. Servs., B-250752.3, Apr. 7, 1993, 93-1 CPD para.
299 at 9.
2. The protester in its comments submitted in response to the agency
report complained that the agency failed to provide any foundation or
documentation to support the allegations of poor performance.
However, after the agency then produced all of the evaluation
documentation, the protester declined to submit any comments, i.e., it
failed to dispute and rebut the agency's rationale, which is not
otherwise called into question by the record.