BNUMBER: B-281876; B-281876.2
DATE: April 22, 1999
TITLE: Marathon Watch Company Limited, B-281876; B-281876.2, April
22, 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:Marathon Watch Company Limited
File:B-281876; B-281876.2
Date:April 22, 1999
Claude P. Goddard, Jr., Esq., Kilcullen, Wilson and Kilcullen, for the
protester.
Philip F. Eckert, Jr., Esq., and Stephen Stastny, Esq., Defense
Logistics Agency, for the agency.
Adam Vodraska, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Agency selection of higher-priced vendor with excellent performance
history instead of lower-priced vendor, whose performance reflected
delivery delinquencies, was reasonable and consistent with the
solicitation's evaluation scheme, which provided that if the vendor
with the best past performance history did not offer the lowest price,
the agency would make a tradeoff of price and past performance
(including such considerations as inventory status and historical
delivery problems), where there was a low inventory of the solicited
item and the higher-priced vendor's better performance record
indicated a lower performance risk.
DECISION
Marathon Watch Company Limited protests the issuance of a purchase
order by the Defense Logistics Agency, Defense Supply Center Richmond
(DSCR), to Stocker & Yale, Inc. (S&Y) under request for quotations
(RFQ) No. SPO440-99-X-L121 for analog navigator wrist watches.[1]
Marathon challenges the adequacy of the best value determination which
resulted in the agency's issuance of the purchase order to S&Y.
We deny the protest.
DSCR issued the RFQ on November 30, 1998 for a quantity of 2,000
watches, National Stock Number 6645-01-364-4042, a "critical
application item." RFQ at 1, 3-5. Delivery of the watches was
required within 60 days after the vendor's receipt of the order. Id.
at 1. The RFQ stated that the watches must conform to specification
MIL-W-46374F. Id. at 3. The RFQ contained the standard
"Qualification Requirements" clause, as set forth in Federal
Acquisition Regulation sec. 52.209-1, which provides notice that award is
limited to vendors offering products that have previously been tested
and approved for inclusion on the applicable qualified products list
(QPL). Id. at 8-9.
The RFQ advised that the best value determination would be based on a
comparative assessment of prices and past performance, which were
equally weighted. Id. at 18-19. The past performance factor
considered quality performance and delivery performance to be "of
equal value." Id. at 18. If the vendor with the best past
performance history did not offer the lowest price, the agency would
make the appropriate tradeoff of price for past performance, and
listed several considerations such as delivery schedule/inventory
status and historical delivery/quality problems that could affect the
tradeoff determination. Id. at 19.
The RFQ, at 18-19, established that past performance would be
evaluated in accordance with an automated best value model (ABVM).
The ABVM is a computerized compilation of data on vendors' past
performance under DSCR contracts that is converted into numeric scores
for comparison by the agency for evaluation purposes. An ABVM score
ranging from 0 to a perfect score of 100 is assigned on a monthly
basis to each vendor for a particular Federal Supply Class (FSC) (FSC
score) and for performance in all FSCs with DSCR (Center score). An
offeror may have multiple FSC scores for different items but will have
only one Center score, which is an average of the offeror's FSC
scores. The ABVM score, whether FSC or Center, is a combination of a
vendor's delivery performance score and quality performance score.
The ABVM score measures delivery performance during the preceding 15
months, excluding the most recent 2-month period, and quality
performance during the past 15 months, excluding the most recent
month. The delivery performance score reflects delinquent contract
line items--shipments that are not shipped and/or received in their
entirety by the delivery due date.
Negative delivery and quality performance data to be included in the
ABVM score are made available to each vendor by the 15th day of the
month on the DSCR electronic bulletin board. The RFQ advised vendors
that they could review their negative performance data and challenge
its accuracy if they disagreed with it. In this regard, the RFQ
stated that "[t]he challenge period for the performance data used to
calculate the ABVM score for a particular month ends the day before
the new score becomes effective." RFQ at 18. Since the posted ABVM
scores would be used in making best value award decisions, vendors
were urged to file any challenges to the performance data in a timely
manner. The RFQ provided instructions on where and to whom challenges
should be submitted.
The RFQ stated that in using the ABVM score for evaluating vendors'
past performance, the agency would first evaluate each vendor using
the FSC score for the solicited FSC in effect at the time quotations
are evaluated.[2] A vendor without an FSC score for that particular
FSC would be evaluated on its Center score.
Both Marathon and S&Y submitted quotations to DSCR by the December 2,
1998, due date. Marathon submitted the lowest-priced quotation of
$[DELETED]. S&Y quoted a price of $93,060. In comparing the relative
merits of the two quotations, the contracting officer consulted the
ABVM ratings effective for Marathon and S&Y. In his "Award
Justification" document, the contracting officer determined that S&Y's
higher-priced quotation was the best value based on the following:
[S&Y] is unscored for the FSC. S&Y's Center score is [DELETED]%
for five contract lines. Marathon . . . has an FSC score of
[DELETED]% with delivery of [DELETED]% and quality of [DELETED]%
for 12 contract lines. Marathon's Center score is [DELETED]% for
14 contract lines. Center delivery for Marathon is [DELETED]%
for 14 contract lines. Although Marathon has a quoted price that
is $[DELETED] or [DELETED]% less than [S&Y]'s, award will be made
to [S&Y] because of Marathon's poor delivery rating and higher
performance risk. Marathon has demonstrated a poor record of
delivery for the FSC and center score which are both well below
the FSC average delivery of [DELETED]%. The minimal savings in
price do not offset Marathon's higher performance risk. [S&Y]'s
[ABVM] center score of [DELETED]% indicates an excellent past
performance record.
The contracting officer also stated in the "Award Justification"
document that the price/performance tradeoff was influenced by the
"required delivery schedule and inventory status" of the item.
Specifically, the contracting officer noted that "[t]his is an Urgent
and Compelling procurement with delivery required in 60 days," the
item was out of stock, and there were numerous back orders waiting to
be filled. DSCR subsequently issued a purchase order for the watches
to S&Y on January 4, 1999, in the amount of $93,060.
Marathon contests the agency's price/past performance tradeoff
resulting in the issuance of the purchase order to S&Y because the
agency allegedly departed from the RFQ's evaluation scheme by giving
more importance to past delivery performance than to past quality
performance or to price. To support its contention that the agency
placed undue weight on past delivery performance, Marathon points to
the following statement made by the contracting officer in response to
its inquiry about the issuance of the purchase order to S&Y:
The trade-off in this urgent and compelling acquisition was
influenced by the delivery schedule/inventory status and
historical delivery problems. . . . That trade-off consequently
gave more weight to delivery ratings as opposed to price.
Letter from Contracting Officer to Protester 2 (Jan. 11, 1999).
Notwithstanding any imprecision in the wording of the contracting
officer's statement, the record does not support the protester's view
that DSCR used only delivery performance as a basis for comparison
between Marathon and S&Y, or that the agency changed the relative
importance of delivery performance under the evaluation scheme.
The mere fact that the contracting officer compared the ABVM delivery
performance ratings of S&Y and Marathon does not mean he improperly
allotted delivery performance more weight than was allowed under the
RFQ's evaluation scheme. Rather, as described above in the "Award
Justification" document, the contracting officer considered delivery
performance in the context of Marathon's and S&Y's overall ABVM past
performance ratings (including quality performance) and prices.
Because Marathon and S&Y had the same quality performance scores
([DELETED]), it was the differences in their scores for delivery
performance that distinguished their past performance. Since S&Y had
the best past performance history under the ABVM, but had not offered
the lowest price, the contracting officer, as provided for by the RFQ
at 19, determined that the appropriate tradeoff of price for past
performance would include delivery schedule/inventory status and
historical delivery problems. The contracting officer decided that,
given these tradeoff considerations, Marathon's lower price was not
worth the increased performance risk associated with its past delivery
delinquencies, and that award to S&Y, with a slightly higher price but
an excellent performance history, was justified to ensure timely
delivery and represented the best value to the government. The
contracting officer's conclusion was consistent with the RFQ's
evaluation scheme and the discretion afforded the contracting officer
in making the tradeoff decision.[3] See Phillips Indus., Inc.,
B-280645, Sept. 17, 1998, 98-2 CPD para. 74 at 5; USA Elecs., B-275389,
Feb. 14, 1997, 97-1 CPD para. 75 at 4.
The protester nonetheless argues that the agency had insufficient data
on S&Y's past delivery performance record to make any valid comparison
with Marathon's. In this regard, the protester argues that S&Y has
not established a history of meeting delivery dates for production
runs (large quantities) of the watches, and that its deliveries of
small quantities of other types of items do not support the agency's
conclusion that S&Y has an excellent past performance record, or that
it represented a lower performance risk than Marathon.
Even if, as Marathon contends, S&Y has not provided any watches under
FSC 6645 to DSCR, and has only delivered small quantities of other
items under other FSCs, the protester has failed to show that the
agency's evaluation of S&Y's past performance was inconsistent with
the RFQ's past performance evaluation scheme or that the agency
unreasonably concluded that S&Y had an excellent past performance
history. While the RFQ states that vendors will first be evaluated
using the FSC score for the solicited FSC, and that the contracting
officer could consider the volume of business on which an FSC score is
based "as a measure of confidence in the score's indication of
performance risk," the RFQ also specifically contemplates that where,
as here, a vendor such as S&Y does not have an FSC score for the item
solicited, the vendor will be evaluated on its Center score. RFQ at
19. As described above, a vendor's Center score includes its past
performance score for all FSCs, including other types of items than
the item solicited. S&Y may have delivered only small quantities of
these items, but its delivery performance score, under the ABVM, is
based on contract lines, not on the quantities of the items shipped.
Because all the items S&Y had delivered to DSCR under other FSCs were
delivered or sent by their delivery due dates, S&Y properly received a
Center ABVM score of [DELETED].
Moreover, notwithstanding Marathon's previous deliveries of large
quantities of watches and related items, its delivery performance
score for FSC 6645 was below the ABVM average, as was its Center
delivery performance score. Considering Marathon's lower-than-average
delivery performance for this and other FSCs, and S&Y's excellent
delivery performance for the FSCs comprising its Center score, the
agency's comparison of the vendors' past performance was reasonable
and consistent with the RFQ.[4] To the extent Marathon protests that
the RFQ's evaluation scheme should have favored a vendor's past
delivery performance history for this particular FSC in terms of the
item or quantity shipped, its protest of the ABVM past performance
evaluation scheme after issuance of the purchase order is untimely.
Bid Protest Regulations, 4 C.F.R. sec. 21.2(a)(1) (1998); Rotair Indus.,
Inc., B-276435.2, July 15, 1997, 97-2 CPD para. 17 at 4-5.
The protester points out that the ABVM data for Marathon did not
include several contract lines that reflected timely deliveries of
substantial orders of watches and other items. Marathon maintains
that had these contract lines been included in its ABVM data, as they
should have been, its past performance score would have increased
enough so that S&Y's price premium could no longer be reasonably
justified.[5]
DSCR concedes that the contract lines at issue should have been
included in Marathon's ABVM data for the rating period but were
inadvertently omitted. DSCR has now revised Marathon's ABVM score to
reflect this omitted data. According to the agency, Marathon's FSC
score would still be close to what its original score was, had the
omitted lines been included in the first place. Specifically,
Marathon's FSC score increased from [DELETED] to [DELETED] (this
includes an increase in Marathon's FSC delivery performance score from
[DELETED] to [DELETED]). The agency advises that Marathon's Center
score increased from [DELETED] to [DELETED] (this includes an increase
in Marathon's Center delivery performance score from [DELETED] to
[DELETED]). This adjusted Center score, however, includes not only
the adjustment for the inadvertently omitted data, but also ABVM data
regarding two additional contract lines from subsequent orders
unrelated to the error. As a result, while the exact impact of the
erroneous omission is not clear, it cannot exceed the [DELETED]-point
increase in the Center score. The agency represents that the
contracting officer reviewed Marathon's revised ABVM scores, but after
comparing these new scores "to the other rating and the evaluation
criteria . . . advised [that] he did not consider that the increases
were significant enough to justify a change in his award decision, and
that the decision [award to S&Y] therefore would remain the same."[6]
Letter from Mr. Stastny to Mr. Goddard 2 (Mar. 26, 1999).
We disagree with Marathon's assertion that the contracting officer's
reconsideration of his price/past performance tradeoff should be given
no weight because it is a "redetermination prepared in the heat of an
adversarial process," as we stated in our decision in Boeing Sikorsky
Aircraft Support, B-277263.2, B-277263.3, Sept. 29, 1997, 97-2 CPD para.
91 at 15. There is nothing in the record here to support a conclusion
that the resulting increase in Marathon's ABVM scores, standing alone,
would alter the contracting officer's price/past performance tradeoff
decision. Instead, the resulting increase of less than [DELETED]
points on a 100-point scale in both Marathon's FSC and Center scores
is so small a change that it alone does not compel us to sustain
Marathon's protest. See Advanced Data Concepts, Inc., B-277801.4,
June 1, 1998, 98-1 CPD para. 145 at 5. Although the almost
[DELETED]-point increase in Marathon's FSC and Center delivery
performance scores (which are components of the FSC and Center scores,
respectively) may not itself be de minimis, both Marathon's revised
FSC ([DELETED]) and Center ([DELETED]) delivery performance scores
remain below the Center average ([DELETED]) for delivery performance
under this FSC. As described above, Marathon's below-average delivery
performance was determinative in the contracting officer's price/past
performance tradeoff, and since Marathon's delivery performance is
still below average, even with its revised ABVM scores, the
contracting officer's conclusion that he still would have selected
S&Y, rather than Marathon, is reasonable.
The protester also argues that in considering Marathon's revised ABVM
scores, the contracting officer failed to take into account
information provided by Marathon in a February 10, 1999 agency-level
challenge to the inclusion of S&Y's watch on the QPL for alleged
nonconformance with specification MIL-W-46374F. According to the
protester, the contracting officer's failure to consider this
information, which it states has a direct bearing on S&Y's ability to
deliver compliant products on time, renders his revised price/past
performance tradeoff unreasonable. This allegation is untimely. Our
Bid Protest Regulations do not contemplate the unwarranted piecemeal
presentation of protest issues, and a protester may not introduce a
new issue in its comments that it could have raised in its initial
submission to our Office. OHM Remediation Servs. Corp., B-274644 et
al., Dec. 23, 1996, 97-1 CPD para. 4 at 9. The information forming the
basis of Marathon's contention was apparently first known to the
protester as early as December 23, 1998, the date on which it received
a report from a consultant documenting the alleged deficiencies based
on testing of one of S&Y's navigator watches. The protester did not
convey this information to DSCR until February 10, in its challenge to
S&Y's QPL status,[7] or raise this allegation with our Office until
April 7, in its comments in response to the contracting officer's
revised tradeoff determination. Since Marathon did not raise the
allegation concerning S&Y's QPL status in its protests filed in our
Office on January 12 and February 12, despite already knowing the
basis for its allegation, and has offered no reason for the delay, we
will not consider this new ground of protest.
Finally, Marathon contends that S&Y's ABVM delivery data does not
support the agency's conclusion that S&Y "is capable of meeting a
production requirement of 2,000 watches." However, in making this
assertion, Marathon appears to be challenging S&Y's responsibility,
and the RFQ, at 19, advised that "ABVM scores shall not be used to
make determinations of responsibility." There is no indication that
the agency used the ABVM scores for other than their intended
purpose--for comparison of past performance among vendors. The
protester also asserts that the contracting officer failed to take
into account Marathon's present ability to deliver the solicited
watches on time. The contracting officer did not question whether
Marathon would be able to deliver the watches within 60 days or
conclude that Marathon was not a responsible vendor. Instead, the
contracting officer, reasonably and consistently with the RFQ,
considered in his tradeoff determination that Marathon's past delivery
performance record (as reflected by the ABVM scores) presented an
increased performance risk not worth its slightly lower price.
The protest is denied.
Comptroller General
of the United States
1. Marathon, a Canadian corporation, was joined in this protest by the
Canadian Commercial Corporation (CCC), which endorsed Marathon's
quotation. Pursuant to the Defense Federal Acquisition Regulation
Supplement (DFARS) sec. 225.870, contracts with Canadian firms generally
are to be made with the CCC, which then subcontracts performance of
the contract to a specific firm. However, where, as here, simplified
acquisition procedures are used, the small purchase is handled
directly with the Canadian firm, not through the CCC. DFARS sec.
225.870-1(c)(3), 225.870-2(e).
2. The watches solicited here are in FSC 6645.
3. The protester disputes the urgency of the requirement but has
failed to show that the agency improperly considered the requirement
urgent at the time of the tradeoff determination.
4. Although Marathon maintains that the agency failed to consider the
fact that some of its late deliveries were not significantly late,
that some portions of these shipments were delivered on time, and that
other shipments were delivered early, Marathon has not demonstrated
that the agency was required to separately consider such factors
beyond what was already accounted for in the ABVM system or that
consideration of such factors was required by the RFQ's ABVM
evaluation scheme.
5. The agency cites Dayton-Granger, Inc.--Recon., B-279553.3, Oct. 2,
1998, 98-2 CPD para. 90 to suggest that this protest ground should be
dismissed as untimely because Marathon had a responsibility to
contemporaneously check its ABVM scores to ensure the scores'
accuracy. As described above, the ABVM system provides vendors with
information on the negative delivery data used to compute their scores
and a procedure for challenging such negative data. We held in
Dayton-Granger that a protest challenging an ABVM score based on the
agency's inclusion of erroneous negative data was properly dismissed
as untimely where it was not filed prior to the closing time for
receipt of offers. Here, however, the agency omitted positive
delivery data but the ABVM system apparently does not provide vendors
with information on the positive data used to compute their scores or
a procedure for bringing to the agency's attention the omission of
such data. Accordingly, we do not view this issue as untimely.
6. In response, the protester complains that it was unreasonable for
DSCR to rely on the ABVM data because the ABVM system is materially
deficient in that it omitted positive delivery data for Marathon and
does not have the capability to take into account all positive data.
We need not consider this contention here because DSCR, once informed
of the omitted data, proceeded to revise Marathon's ABVM scores
accordingly, and the contracting officer reconsidered his tradeoff
decision based on this information. Likewise, notwithstanding the
technical inability of the ABVM system to record one particular
on-time shipment for Marathon, the contracting officer nonetheless
considered this shipment along with the other omitted data in
reconsidering his tradeoff decision. The agency states that it will
flag Marathon's ABVM file so that Marathon is credited for this
particular shipment in future ABVM evaluations, and, when feasible,
actually include the data for this shipment in Marathon's ABVM score.
7. Because Marathon's agency-level challenge to S&Y's QPL status was
not filed until a month after the issuance of the purchase order at
issue here, and did not specifically protest the qualification of
S&Y's watch for this purchase order (raising instead a blanket
challenge to any potential contract award to S&Y for this type of
watch), we do not construe the February 10 challenge as a timely
agency-level protest of the issuance of the purchase order to S&Y.