TITLE:   Universal Building Maintenance, Inc., B-282456, July 15, 1999
BNUMBER:  B-282456
DATE:  July 15, 1999
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Universal Building Maintenance, Inc., B-282456, July 15, 1999

Decision

Matter of: Universal Building Maintenance, Inc.

File: B-282456

Date: July 15, 1999

Christopher M. Wawack, Esq., Joseph A. Camardo, Jr. Law Office, for the
protester.

John M. Hewins, Esq., General Services Administration, for the agency.

Michael R. Golden, Esq., Office of the General Counsel, GAO, participated in
the preparation of the decision.

DIGEST

1. Even under simplified acquisition procedures, award decision is not
reasonable where the record does not provide any documentation or
explanation which supports the price/technical tradeoff, and the award
determination appears to be based entirely on a comparison of total
technical point scores without consideration of protester's lower
technically scored, but low priced proposal.

2. Agency improperly attributed past performance of parent company or its
other subsidiaries to awardee where record does not establish that parent
company or subsidiaries will be involved in the performance of the protested
contract.

DECISION

Universal Building Maintenance, Inc. (UBMI) protests the General Services
Administration's (GSA) award of a fixed-price contract to Service Star USA,
Inc. under request for proposals (RFP) No. GS-08P-99-JBC-0006, for custodial
services at the New Customs House in Denver, Colorado. UBMI principally
contends that its proposal, as well as the awardee's proposal, was
improperly evaluated, and that the agency's selection decision was
unreasonable.

We sustain the protest.

The RFP, issued as a small business set-aside, contemplated the use of
commercial item procedures. This requirement also used simplified
acquisition procedures as authorized by Federal Acquisition Regulation (FAR)
Subpart 13.5. This subpart authorizes as a test program the use of
simplified procedures for the acquisition of commercial supplies and
services in amounts greater than the simplified acquisition threshold but
not exceeding $5 million dollars. FAR sect. 13.500.

The RFP called for firms to submit written technical proposals limited to 10
pages. In their technical proposals, the firms were asked to address past
performance, types of equipment, and organizational structure. For each of
these items, the RFP described the standard to be met. Of relevance here,
for past performance, the standard would be met when "the offeror
demonstrates that they have performed similar work of comparable size to
that described in this solicitation under at least five (5) contracts," and
"[t]he past performance on similar contracts was satisfactory or better."
The government reserved the right to request additional references and to
query sources not specifically identified by the offeror. The RFP also
called for oral presentations where offerors would be asked to address
quality control and plan of operation. A price proposal also was to be
submitted with the technical proposal. The amended RFP provided that award
would be made to the responsible firm whose proposal was considered most
advantageous to the government, technical factors and price, when combined,
being considered equal in value. RFP at 38-40.

On January 15, 1999, the due date for proposals, 18 proposals were received.
Oral presentations were scheduled, and all but one firm made presentations.
A competitive range of nine offerors was established. By letter, each
competitive range offeror was sent written questions concerning its price
proposal, and was requested to submit a best and final price proposal. The
nine offerors submitted revised price proposals. UBMI significantly reduced
its total price in its revised price proposal. As a result, its price was 24
percent less than the government estimate. Statement of Fact and Memorandum
of Law at 9. The evaluation board, consisting of three members, prepared a
document called "Recommendation of Awardee" for the contracting officer. The
document provided a narrative summary of the strengths and weaknesses of
each offeror's proposal, and rankings of the offerors based on points
assigned to each offeror after evaluation of their technical proposals and
oral presentations. Also, there were price charts summarizing the prices
proposed by each offeror for the services. Of particular relevance is the
chart which ranked the competitive range offerors by their technical scores
with each firm's total price. This chart showed that the awardee and another
firm received a point score of 19. Four other firms received scores ranging
from 15 to 17. UBMI received a score of 14, but submitted the lowest price
among the competitive range offerors. UBMI's price was 22 percent lower than
the awardee's price. The last page of the document contains the following
statements: "The evaluation board hereby recommends award to Service Star
USA, Inc., . . . ." and "It is the opinion of the evaluating board that
Service Star USA, Inc. provided the best value." The signatures of the
members of the evaluation board committee were below the statement. Below
their signatures, under "Approved By," is the contracting officer's name and
signature. Agency Report, Tab 32, Recommendation of Awardee.

Award was made to Service Star USA, Inc. on March 18, and on April 1, the
agency debriefed the protester. There is an unsigned document in the agency
file regarding the debriefing, which memorializes the contracting officer's
presentation at the debriefing. The contracting officer essentially stated
that UBMI lost because its technical score "contrasted to the successful
offeror and others was not high, in fact was middle of the road overall."
The contracting officer also stated that "[b]y the scoring, . . . weighing
technical and price as equals . . . [UBMI] was not considered as the best
value particularly with the low technical rating." Finally, the contracting
officer stated, "I looked at their price and considered it so low as to
endanger performance on this contract." Agency Report, Tab 25, Undated
Memorandum, at 16. This protest followed.

The protester argues that the contracting officer performed an inadequate
price/technical tradeoff when it awarded to Service Star USA, Inc. at a
price 22 percent above that proposed by UBMI. UBMI argues that the record
shows that the contracting officer basically adopted without explanation the
evaluation board ‘s recommendation based on the higher total point
score for technical factors given to the proposal of Service Star USA, Inc.
The protester points out that the evaluators and contracting officer do not
identify any deficiencies in UBMI's low priced proposal, or state why
Service Star USA, Inc.'s proposal was considered more advantageous and worth
the price premium. Protester's Comments at 11-12.

The agency argues that it performed a proper price/technical tradeoff. It
points out that this acquisition was conducted under simplified acquisition
procedures which do not require a formal source selection process or the
detailed documentation required under FAR Part 15 applicable to negotiated
acquisitions. It argues that "the Contracting Officer, through the technical
evaluation panel, carefully applied the various criteria for award and
arrived at a well reasoned well documented conclusion as to the offeror that
presented the best value." Agency Additional Statement at 13, 11-14.
Although not contemporaneously documented, the contracting officer states
that she met with the evaluation panel and verbally discussed its
recommendations for award. The panel recommended the top four technical
offerors in descending order as potential awardees. After discussing the
advantages and disadvantages of each of the four proposals, "the Contracting
Officer ratified the findings of the technical evaluation panel and chose
from the list of 4 the highest technical lowest priced proposal." Agency
Additional Statement at 3.

Simplified acquisition procedures are designed to, among other things,
reduce administrative expenses, promote efficiency and economy in
contracting, and avoid unnecessary burdens for agencies and contractors. FAR
sect. 13.002. Although the procedures for simplified acquisitions do not require
detailed justifications supporting a best value determination, the FAR
requires that the contracting officer evaluate proposals "on the basis
established in the solicitation" and support "the award decision if other
than price-related factors were considered in selecting the supplier." FAR
sect.sect. 13.106-2(a)(2), 13.106-3(b)(3)(ii). Thus, even when using simplified
acquisition procedures, an agency must conduct the procurement consistent
with a concern for fair and equitable competition and must evaluate
proposals in accordance with the terms of the solicitation. See National
Aerospace Group, Inc., B-281958, B-281959, May 10, 1999, 99-1 CPD para. ___ at
3; Sawtooth Enters., Inc., B-281218, Dec. 7, 1998, 98-2 CPD para. 139 at 3. In
reviewing protests against an allegedly improper simplified acquisition
evaluation and selection decision, we examine the record to determine
whether the agency met this standard and exercised its discretion
reasonably. Sawtooth Enters., Inc., supra.

In addition, as applicable here, there are several FAR provisions governing
commercial item acquisitions that require the agency to explain and document
its award decision. Under FAR Subpart 12.6, Streamlined Procedures for
Evaluation and Solicitation for Commercial Items, which the agency
recognizes is applicable here, the contracting officer is to "[s]elect the
offer that is most advantageous to the Government," and to "[f]ully document
the rationale for selection of the successful offeror including discussion
of any trade-offs considered." FAR sect. 12.602(c); Agency Additional Statement
at 12. Also, under the test program for commercial items, the agency is
required to include in the contract file "[a]n explanation, tailored to the
size and complexity of the acquisition, of the basis for the contract award
decision." FAR sect. 13.501(b)(3). Here, we conclude that the selection decision
was flawed because the contracting officer made no qualitative comparison of
the technical differences between the proposals to determine whether the
awardee's technical superiority justified the price premium. Further, the
award decision was not adequately supported and documented.

The contemporaneous record shows that the contracting officer's selection
decision consisted of her signing off on the evaluation panel's
recommendation. Agency Report, Tab 32, Recommendation of Awardee. There is
no evidence in the record that the contracting officer actually considered
whether the relative differences in the proposals, as reflected by the point
scores, represented any meaningful qualitative differences that warranted
the payment of the price premium to the awardee. In fact, the contracting
officer states that she basically disregarded the protester's low price
because its proposal was not among the top four technically rated proposals
based on the points. The tradeoff was limited to the top four technically
ranked firms. Agency Additional Statement at 3. Here, the record clearly
shows that the award decision was based on the point scores, and that the
contracting officer "ratified" the evaluation panel's recommendation without
any consideration of the protester's proposal.

The contracting officer suggests, after the fact, that she basically did not
consider the protester in her "trade-off" decision because UBMI's low final
price was so low as to endanger performance. To the extent that the agency
believed that UBMI, a small business, was incapable of performing at its
proposed price, this was essentially a nonresponsibility determination and
the agency was required to refer the matter to the Small Business
Administration (SBA) for review under its certificate of competency (COC)
procedures. 15 U.S.C. sect. 637(b)(7) (1994); FAR sect. 19.602-1(a).

We note that the narratives the evaluation panel submitted with its award
recommendation do not indicate any significant concern with UBMI's proposal.
The narrative identifies several strengths for UBMI including its 18
different GSA contracts, the use of a dedicated inspector/supervisor, and
the use of an onsite computer for the supervisor. Weaknesses identified by
the panel included the type of vacuum to be used by UBMI and the firm's
quality control plan. However, the panel also identified strengths and
weaknesses in Service Star USA, Inc.'s proposal. Apart from the point score
rankings, there was no attempt to compare the merits of these proposals or
to document any reason that UBMI was not eligible for award. Simply, the
record does not show that the award decision included any consideration of
UBMI's low priced proposal. Accordingly, we conclude that the agency failed
to support and document the selection decision as required by the FAR for
this type of acquisition.

The protester also argues that the agency improperly evaluated Service Star
USA, Inc.'s past performance by considering the contracts of Service Star's
"affiliate," its parent company, Star Group International, Inc. Protester's
Comments at 3-7. The awardee received a consensus score of 2 for past
performance based on individual scores of +1, +1, and 2. The score sheet for
Service Star USA, Inc. contains the following comment: "Current + past
exceeds criteria in similar performance + great reference checks." Agency
Report, Tab 3, Service Star Contract and Supporting Documentation, at 1. The
record shows, however, that Service Star USA, Inc. is performing only one of
the five referenced contracts. In fact, although not made clear by the
awardee in its written proposal, two of the five contracts listed were
performed by Commercial Building Services, Inc., and two other contracts
were performed by Service Star Building Cleaning, Inc., both of which are
subsidiaries of Service Star International, Inc. One individual wholly owns
Service Star USA, Inc., the above-named companies, and two other firms. The
companies all perform commercial building services. Agency Report, Tab 35,
Letter from Service Star USA, Inc. to Contracting Officer (May 5, 1999).

The protester argues that, based on the awardee's one contract, the awardee
should have been given a 0 for failing to meet the standard for past
performance. Protester's Comments at 7. The agency responds that it properly
considered the parent company's and its other subsidiaries' contracts in its
evaluation of Service Star USA, Inc.'s performance. The agency cites FAR sect.
15.305 (a)(2)(iii) as the basis for its decision to consider these
contracts. This provision provides in essence that a past performance
evaluation "should [consider] information regarding predecessor companies,
key personnel . . ., or subcontractors that will perform major or critical
aspects of the requirement when such information is relevant." FAR
sect.15.305(a)(2)(iii). The agency also points out that we essentially have
taken the same position in prior cases. See, e.g., Fluor Daniel, Inc.,
B-262501, B-262051.2, Nov. 21, 1995, 95-2 CPD para. 241 at 12.

We have stated that in determining whether one company's performance should
be attributed to another, an agency must consider the nature and extent of
the relationship between the two companies--in particular, whether the
workforce, management, facilities, or other resources of one may affect
contract performance by the other. In this regard, while it would be
inappropriate to consider a company's performance record where that record
does not bear on the likelihood of successful performance by the offeror, it
would be appropriate to consider a company's performance record where it
will be involved in the contract effort or where it shares management with
the offeror. NAHB Research Ctr., Inc., B-278876.2, May 4, 1998, 98-1 CPD para.
150 at 4; Fluor Daniel, Inc., supra. In these decisions, the proposals
clearly showed that the affiliate or other company had meaningful
involvement in the performance of the contract. Here, the awardee's proposal
does not establish this fact. We conclude that the agency did not reasonably
evaluate the relationship of the companies for purposes of attributing the
past performance of the parent company or its other subsidiaries to Service
Star USA, Inc., and therefore could not consider four of the five contracts
referenced by Service Star USA, Inc. in evaluating its past performance.

More specifically, there is no indication from the awardee's proposal that
the parent company intends to use its workforce, management, facilities, or
other resources in performing this contract. For example, GSA states that it
relied in part on a corporate management chart in the awardee's technical
proposal. The chart is not identified as Star Group International, Inc's
management. We note that the narrative directly underneath the chart states
that "Service Star is comprised of seasoned professionals." Agency Report,
Tab 3, Service Star Contract and Supporting Documentation, at 88. Thus, it
is not clear how the agency determined that this chart refers to the parent
company's management. The chart certainly does not establish that the parent
company's management or resources would be used for this contract. In fact,
on the next page of the proposal is a specific organization chart for this
contract. Although the president is the same for both companies (the awardee
and its parent company), the director of operations and project manager are
Service Star USA, Inc. personnel. Id. at 89. More importantly, four of the
contracts described under past performance, as noted above, were performed
by two other companies that GSA does not even argue are involved in this
contract, and Star Group International Inc., the "umbrella company," did not
perform any of the contracts described in the awardee's proposal. Based on
the record, we have no basis to conclude that any of these firms' past
performance is relevant here.2 [1]

UBMI also protests the evaluation of its past performance. UBMI argues that
it should have been given the highest score available--2 points--under past
performance. Protester's Comments at 9-11. The record shows that three of
five references for UBMI responded to questionnaires from GSA. The
questionnaires, among other things, asked the references to rate overall
performance. UBMI received two good ratings and one excellent rating. The
evaluators then gave offerors a numerical rating of 0 (fails), 1 (pass), or
2 (exceeds) for past performance. The three evaluators gave UBMI scores of
1+, 2, and 1, and (without explanation) a consensus score of 1. Agency
Report, Tab 34, UMBI Award Criteria Evaluation Sheets, at 19, 45-56. We note
that, under the RFP, the standard for evaluation of past performance
consisted of having to demonstrate performance on five comparable contracts
and satisfactory past performance. RFP at 38. It appears that UBMI exceeded
the former requirement, given the 18 GSA contracts it had, but there is no
indication how this was accounted for in the evaluation. Further, the UBMI
references support a conclusion of satisfactory past performance. In light
of the absence of documentation for the score assigned and in view of our
decision to sustain the protest, we believe it would be advisable for the
agency to reevaluate UBMI's past performance in order to ensure that its
rating is appropriate. [2]

We recommend that the agency reevaluate the past performance of the
protester and awardee, properly document this evaluation, and perform and
document a proper tradeoff analysis. If the agency believes that UBMI is
nonresponsible, the matter should be referred to the SBA for COC
consideration. If a different award determination results, the agency should
terminate Service Star USA, Inc.'s contract for the convenience of the
government. In addition, we recommend that the protester be reimbursed its
costs of filing and pursuing the protest, including reasonable attorneys'
fees. 4 C.F.R. sect. 21.8(d)(1) (1999). The protester should submit its
certified claim, detailing the time expended and costs incurred, directly to
the contracting agency within 60 days of receiving this decision. 4 C.F.R.
sect. 21.8(f)(1).

The protest is sustained.

Comptroller General

of the United States

Notes

1. The agency argues that this matter was addressed in the oral
presentation. The record contains the awardee's "Oral Presentation Talking
Points." This document is labeled on each page " Service Star USA, Inc." The
quality control presentation identifies the awardee's director of
operations, project manager, and working supervisor as the primary
management staff. For plan of operation, a chart labeled "Program of
Operations" is limited to Service Star USA, Inc. employees. Again, other
references to managerial staff being assembled at Service Star corporate
headquarters or to corporate staff appear to refer to the awardee. There is
no specific statement of the parent company's role in contract performance.
Agency Report, Tab 3, Service Star Contract and Supporting Documentation, at
92, 95, 104-108. In any event, we think that commitments provided at an oral
presentation concerning the firms that would be providing the management and
resources for the performance of the contract would be material to the
contract and have to be put in writing. FAR sect. 15.102(f).

After the protest was filed, the agency received two letters from the
president of the two companies attempting to confirm that the two companies
will be sharing management and resources. These letters were not part of the
evaluation record and not before the contracting officer when she made her
award decision. Thus, we accord them little weight in determining the
propriety of the evaluation and selection decision. See Spectrum Sciences &
Software, B-280700, Nov. 9, 1998, 99-1 CPD ___ at 5 n.5; Boeing Sikorsky
Aircraft Support, B-277263.2, B-277263.3, Sept. 29, 1997, 97-2 CPD para. 91 at
15. In any event, these letters do not resolve the concerns that we have
regarding the proposal not evidencing the parent company's involvement in
this contract.

2. The protester objects to the agency's inability to contact the other two
references. The agency, however, is only required to make a reasonable
effort to contact the references, and it is not objectionable to evaluate an
offeror's past performance based on less than the maximum possible number of
references the agency could have received. See IGIT, Inc., B-275299.2, June
23, 1997, 97-2 CPD para. 7 at 6 (although agencies are required to evaluate the
past performance of all offerors on the same basis, there is no general
requirement that an agency contact all of an offeror's references, or
contact the same number of references for each offeror).