TITLE:   Allied Technology Group, Inc., B-282739, August 19, 1999
BNUMBER:  B-282739
DATE:  August 19, 1999
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Allied Technology Group, Inc., B-282739, August 19, 1999

Decision

Matter of: Allied Technology Group, Inc.

File: B-282739

Date: August 19, 1999

Raymond Fioravanti, Esq., and Kenneth B. Weckstein, Esq., Epstein Becker &
Green, for the protester.

Richard B. Oliver, Esq., Christopher B. McDavid, Esq., and Charles H.
Pomeroy, Esq., McKenna & Cuneo, for Environmental Chemical Corporation, an
intervenor.

Carl E. Korman, Esq., and Daniel J. Dykstra, Jr., Esq., Department of the
Army, for the agency.

C. Douglas McArthur, Esq., and Linda S. Lebowitz, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest is denied where the agency's evaluation of proposals was reasonable
and consistent with the solicitation's evaluation scheme and where the
agency reasonably selected for award a higher technically rated, 14 percent
higher priced proposal consistent with the solicitation's terms which
provided that technical evaluation factors were significantly more important
than price/cost.

DECISION

Allied Technology Group, Inc. (ATG) protests the award of a contract to
Environmental Chemical Corporation (ECC) under request for proposals (RFP)
No. DACA05-99-R-0010, issued by the Department of the Army, Corps of
Engineers, Sacramento District, for environmental abatement projects in its
South Pacific Division (SPD). ATG asserts that the evaluation of proposals
was neither reasonable nor consistent with the RFP's evaluation scheme and
that the agency's tradeoff decision was unreasonable.

We deny the protest.

On January 15, 1999, the agency issued the RFP for
indefinite-delivery/combination fixed-price and cost reimbursement task
order Pre-Placed Remedial Action Contracts (PRAC). RFP at L-15. Under these
contracts, contractors are to perform hazardous, toxic, and radioactive
waste (HTRW), ordnance and explosive (OE), and asbestos and lead-based paint
abatement within the Corps' SPD, which includes all or portions of the
states of Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon,
Texas, and Utah. RFP amend. 2, at C-1.

The RFP provided for the separate award of three contracts--one for award on
an unrestricted basis, one set aside for a qualified small business, and a
third for a qualified 8(a) contractor. RFP at M-1. This protest concerns
only the small business award. The RFP provided for awards to the
responsible offerors whose proposals were determined to be most advantageous
to the Government. Id. at M-14. In making these determinations, the RFP
stated that the technical evaluation factors, when combined, would be
considered significantly more important than price/cost. Id. The RFP further
stated that the Government was more concerned with obtaining superior
technical, management, quality, and/or past performance features than with
making awards at the lowest overall prices/costs. Id.

As relevant here, the RFP listed the following four technical evaluation
factors: (1) oral presentation; (2) key personnel and organizational
structure (offerors and subcontractors); (3) experience with HTRW
remediation projects; and (4) past performance/quality. RFP amend. 1, at
M-16-17. The first three factors were equally weighted; the fourth factor
was approximately four-fifths the weight of the first factor. Id. at M-16.
[1] Technical proposals would be evaluated by assigning points which
corresponded to the following adjectival ratings: unsatisfactory, marginal,
satisfactory, very good, and excellent. Points and adjectival ratings would
be supported by narratives of the strengths and weaknesses in an offeror's
proposal. Agency Report, Tab 3, Source Selection Evaluation Plan, at 3-4.

On February 23, the agency received proposals from ten offerors, including
ATG and ECC, which were eligible for the small business award at issue here;
these proposals were referred to the source selection evaluation board
(SSEB). The SSEB compiled consensus scores for each of the evaluation
factors and prepared a recommendation for the source selection authority
(SSA). The SSEB determined that 6 of the 10 small business proposals were
technically acceptable, with the proposals of ECC and ATG receiving the two
highest technical scores--[Deleted] and [Deleted] points, respectively, out
of a possible [Deleted]. Agency Report, Tab 7, Memorandum from the SSEB to
the SSA 1 (Apr. 23, 1999). Of the technically acceptable small business
proposals, ATG submitted the second low price and ECC submitted the highest
price. Agency Report, Tab 8, Cost Proposal Evaluation Report, Mar. 26, 1999,
at 2. The SSEB advised the SSA that three of the proposals, although
technically acceptable, were lower in technical score and higher in price
than ATG's; accordingly, these proposals were eliminated from the
competition. Agency Report, Tab 9, SSEB Best Value Comparative Analysis,
Apr. 30, 1999, at 2. The SSEB then compared ECC's highest technically rated,
highest priced proposal with ATG's second highest technically rated, lower
priced proposal. Id. at 4-6. [2]

More specifically, the SSEB noted that the proposals of ECC and ATG were
considered very good overall and that both firms were well-qualified to
perform the agency's requirements. Id. at 4-5. With respect to ECC, the SSEB
noted that its proposal received [Deleted] ratings for experience with HTRW
remediation projects; [Deleted] ratings for oral presentation (technical
capability and experience), past performance/quality, and cost and schedule
management; and a [Deleted] rating for key personnel and organizational
structure. Id. at 4. The SSEB believed that ECC demonstrated above average
geographic coverage in the SPD; that the firm provided a good discussion of
expected simultaneous task order awards at different locations; and that the
firm clearly defined its role as the prime contractor and the role of its
subcontractors. Id. The SSEB further believed that ECC demonstrated very
strong PRAC experience in the SPD as a prime contractor and that ECC had a
good past performance record for relevant projects. Id. The SSEB noted some
weaknesses in ECC's oral presentation and that many of ECC's proposed
personnel, [Deleted], appeared to lack relevant experience. Id. at 4-5.
Nevertheless, the SSEB concluded that the risk in awarding to ECC, even with
these weaknesses, was low. Id. at 5.

With respect to ATG, the SSEB noted that its proposal received [Deleted]
ratings for oral presentation (technical capability and experience) and cost
and schedule management, and [Deleted] ratings for key personnel and
organizational structure, experience with HTRW remediation projects, and
past performance/ quality. Id. The SSEB believed that ATG defined team and
key personnel responsibilities; provided a good organizational chart and
well-organized resumes; demonstrated good experience for its proposed
program and project managers; and demonstrated good experience in the SPD
using innovative technologies. Id. The SSEB pointed out that ATG had some
excellent past performance evaluations on file, including those for HTRW
projects. Id. The SSEB noted some weaknesses in ATG's proposal. For example,
ATG relied on a team subcontractor--Montgomery Watson--to provide geographic
coverage in the SPD, but indicated that this subcontractor would only
perform 8.5 percent of the work. Id. In addition, ATG did not clearly
address construction execution and task order close-out or levels of effort
required for different sized task orders. Id. The SSEB also believed that
ATG did not demonstrate relevant experience for several key personnel and
the experience provided for the proposed program and project mangers was
limited to two states, not the entire SPD. Id. The SSEB noted that ATG did
not demonstrate large scale construction experience, but rather,
demonstrated that its experience was limited to smaller, less complex
projects for which ATG encountered field oversight and management problems
(which were subsequently corrected). Id. The SSEB concluded that the risk in
awarding to ATG, with these weaknesses, was moderately low. Id.

Based on these evaluations, the SSEB recommended to the SSA that payment of
the approximate [Deleted] percent higher price associated with ECC's
proposal was warranted because of that offeror's "technical capabilities,
proven track record and experience." Id. at 6. The SSEB distinguished ECC's
proposal from ATG's in the areas of technical capability, experience with
HTRW remediation projects, and past performance/quality. Id. The SSEB noted
that ECC's advantages in these technical areas would result in less of a
performance risk than that associated with ATG. In this regard, the SSEB
pointed out ATG's recent performance problems on some Sacramento District
Corps projects which required additional agency oversight at increased
project costs. Id. The SSEB further advised the SSA that while ATG had some
excellent ratings and was technically qualified, its experience was with
projects generally of smaller size and of less technical complexity than
those with which ECC had experience. Id. The SSEB recognized that ECC's
proposal presented a low risk, while ATG's presented a moderate to low risk.
Id. The SSEB recommended award to ECC, an offeror submitting a higher
technically rated, higher priced proposal. The SSA accepted the SSEB's
recommendation, and by letter of May 6, advised ATG of the selection of ECC
for the small business portion of the work. Protest exh. 1. This protest,
challenging the reasonableness of the agency's evaluation of proposals and
source selection decision, followed.

Evaluation of Proposals

In reviewing an agency's evaluation of proposals, we will only question the
agency's evaluation where it lacks a reasonable basis or is inconsistent
with the stated evaluation criteria for award. Suddath Van Lines, Inc.; The
Pasha Group, B-274285.2, B-274285.3, May 19, 1997, 97-1 CPD para. 204 at 5. The
offeror has the obligation to submit an adequately written proposal, and its
failure to fulfill that obligation does not render the evaluation
unreasonable. Pacifica Servs., Inc., B-280921, Dec. 7, 1998, 98-2 CPD para. 137
at 3. Nor does an offeror's mere disagreement with the agency render the
evaluation unreasonable. McDonnell Douglas Corp., B-259694.2, B-259694.3,
June 16, 1995, 95-2 CPD para. 51 at 18. We find the agency's evaluation here
reasonable and consistent with the RFP's evaluation scheme.

Evaluation under the organizational structure evaluation subfactor

Under the organizational structure evaluation subfactor, for which ATG's
proposal received [Deleted] out of a possible [Deleted] points, [3] the RFP
provided, among other things, that an offeror's proposal would be evaluated
to determine the firm's ability to respond to the contract requirements and
the firm's understanding of the organizational coordination necessary for
proper operation/management of the contract. RFP amend. 1, at M-16. The RFP
stated that the offeror's ability to respond to varying geographic locations
in a cost effective, expeditious, and responsive manner would be evaluated.
Id. at M-16-17.

ATG, as the prime contractor, teamed with three subcontractors to perform
the agency's requirements. In its proposal, ATG stated, "Collectively, Team
ATG has 19 offices servicing all states within the SPD. Our team is
comprised of 1,270 key personnel with the requisite licenses, registrations,
certifications and training necessary to fulfill the contract requirements."
Agency Report, Tab 4, ATG Technical Proposal, Feb. 23, 1999, Factor 2a, at
1. ATG has three office locations--two in California and one in New Mexico.
Id. at 7. In addition, it appears from its proposal that ATG's own personnel
comprise approximately 35 to 44 percent of its team. Id. In describing its
teaming agreement with Montgomery Watson, ATG stated in its proposal that it
"anticipate[d]" that this subcontractor, which was proposed for performing
requirements involving chemical data quality management, engineering
support, and investigations/studies/field activities, would "perform
8.5 [percent] of [the] contract efforts." Id. at 11. ATG's proposal
indicated that Montgomery Watson has at least 13 (and possibly even 17) of
the above-referenced 19 "team" offices in the 9 SPD states. Id. at 2, 13.
Moreover, it appears from ATG's proposal that Montgomery Watson personnel
comprise approximately 47 to 59 percent of ATG's team. Id. at 7.

ATG objects to the agency's downgrading of its proposal for the
organizational structure evaluation subfactor because the evaluators
concluded that ATG's significant use of Montgomery Watson's offices to
provide geographic coverage over nine states in the SPD was not adequately
explained with respect to ATG's representation in its proposal that it
anticipated that this subcontractor would perform 8.5 percent of the work.
More specifically, the evaluators did not understand how ATG and its other
two team members would perform approximately 90 percent of the work in light
of the fact that ATG appeared to be relying on Montgomery Watson to provide
a significant portion of the geographic and personnel assets for this
contract--namely, over two-thirds of the offices and approximately 50
percent of the personnel. We think the evaluators could reasonably conclude
that ATG failed to adequately explain in its proposal how it would
coordinate the work effort with Montgomery Watson, given its significant
reliance on this subcontractor for offices and personnel, while representing
that Montgomery Watson would do only a relatively small percentage of the
work. [4]

ATG also objects to the agency's downgrading of its proposal for the
organizational structure evaluation subfactor based on the evaluators'
concerns with how ATG, located in California, intended to access and to
interface with its only ordnance and explosives (OE) subcontractor, located
in North Carolina. The record shows that the agency did not question the
capabilities of ATG's OE subcontractor, but rather, questioned how, in view
of the geographic distance between them, ATG and this subcontractor would
coordinate local OE contract performance efforts, for example, preparation
of plans, reviews, and technical support; interface with installations; and
interface with the prime contractor, agency, and state and/or local
regulators. Other than basically describing its OE subcontractor's prior and
current experience and providing a summary of its teaming agreement with
this subcontractor, Agency Report, Tab 4, ATG Proposal, at 1-3, 11, ATG's
proposal does not address how it, as the California-based prime contractor,
would coordinate with its only OE subcontractor, which was located in North
Carolina, to provide cost effective, expeditious, and responsive service in
the nine states comprising the SPD as required by the RFP. On this record,
the agency reasonably downgraded ATG's proposal because it did not contain
enough information on how ATG planned to accomplish the necessary local
coordination with an OE subcontractor from outside the area.

Evaluation under the past performance/quality evaluation factor

ATG next objects to the agency's evaluation of its and ECC's past
performance. [5] Under the past performance/quality evaluation factor, the
RFP stated that project examples would be evaluated as to their relevance
and similarity to work under the PRAC. RFP amend. 1, at M-17. The RFP
instructed offerors to provide a customer reference point of contact for 10
of the 30 HTRW remediation projects evaluated under the experience with HTRW
remediation projects evaluation factor. Id. at M-6. The RFP also provided
that the SSEB could consider ratings on file for previous service,
architect-engineer, or construction contracts, and past performance
information from sources other than those listed by an offeror. Id. at M-17.

ATG complains that the evaluators did not consider its response to negative
past performance reports. [Deleted] The reference reported the need for
extensive government oversight of ATG, but gave credit to the project
manager for persevering despite the lack of qualified personnel. The
reference recommended ATG for future work on small projects only. For the
other task order, the reference reported problems with ATG's accounting
office, which took 6 months to process final payment, and the performance of
key personnel (program manager). The reference reported intensive government
field oversight of ATG, but attributed the eventual successful completion of
the work to the efforts of the project manager.

By letter dated April 19, ATG responded by discussing its implementation of
changes in its document quality and control systems and with its personnel,
promising that its proposed project manager would receive sufficient
resources to perform under the PRAC. Protest exh. 4. ATG also indicated that
it had implemented new control and oversight systems to accommodate the
company's growth. ATG referenced its excellent and outstanding performance
of a project for the Navy for the installation and removal of underground
storage tanks as evidence of its successful implementation of quality
improvements in its project execution since completion of the task orders
for which negative past performance reports, as discussed above, were
provided.

Contrary to ATG's assertion, the record clearly shows that the agency did
consider the firm's responses to the negative past performance information.
Specifically, the SSEB memorandum to the SSA stated, "[p]ast performance
evaluations were primarily for smaller, less complex projects and indicated
some problems with past projects in the area of field oversight and
management, although the firm indicated corrective action to be taken in the
future." Agency Report, Tab 9, at 5. The record also reflects that the
evaluators listed as a strength of ATG's proposal under the past
performance/quality evaluation factor the firm's "[e]xcellent . . . rating
for Navy project, large [underground storage tanks]." Agency Report, Tab 7,
ATG Narrative, at 8.

ATG further complains that the evaluators disparately rated it and ECC for
the past performance evaluation factor. With respect to the overall past
performance ratings, ATG was rated [Deleted] and ECC was rated [Deleted].
Agency Report, Tab 7, ATG Narrative at 7; ECC Narrative at 4. In reviewing
the past performance evaluation record consisting of unequal numbers of
completed past performance questionnaires and ratings on file with the
agency for both ATG and ECC, ATG maintains that it had three "outstanding"
and three "satisfactory" ratings, which should have merited a past
performance rating higher than [Deleted], i.e., [Deleted]. Protester's
Comments at 5-6. In contrast, ATG maintains that since ECC received ratings
of [Deleted] on the majority of its contracts, including

PRAC contracts, it should have received a rating of "satisfactory," not
[Deleted]. Id. at 4.

While it is not entirely clear from the record the exact number of
particular adjectival ratings assigned to ATG and ECC for past performance,
even using ATG's count of these ratings, thereby construing the record in
the light most favorable to ATG, we believe the record provides no basis to
question the reasonableness of the agency's past performance evaluation. In
this regard, we see nothing unreasonable in the [Deleted] rating assigned to
ATG in view of its previously discussed, recent performance problems at
Tooele Army Depot or the fact that its work generally has been on smaller,
less complex projects than typical for PRAC efforts. Moreover, we do not
think it was unreasonable for the agency to assign a moderately favorable,
or slightly higher, past performance rating to ECC, even though its past
performance generally was reported to be [Deleted]. The record shows that
ECC's past performance, unlike ATG's, involved PRAC and PRAC-type efforts
which, consistent with the terms of the RFP, the agency could reasonably
view as more relevant and similar to the requirements contemplated by the
RFP, thus justifying a more favorable past performance rating. ATG's
disagreement with this aspect of the evaluation does not mean that the
evaluation was unreasonable. [6]

Tradeoff Decision

Finally, ATG, which received the second highest technical score and proposed
a lower price than ECC, contends that the agency acted unreasonably in
making its "best value" decision, arguing that the record contains no
meaningful explanation of why the agency believed ECC's technical advantages
justified the payment of a [Deleted] percent premium.

In a negotiated procurement, where the solicitation does not provide for
award on the basis of the lowest priced, technically acceptable proposal, an
agency has the discretion to make an award to an offeror with a higher
technical score and a higher price where it reasonably determines that the
price premium is justified and the result is consistent with the evaluation
criteria. Systems Integration & Dev., Inc., B-271050, June 7, 1996, 96-1 CPD
para.  273 at 6. In making the tradeoff decision resulting in an award to an
offeror with a higher technically rated, higher priced proposal, there is no
requirement that the agency provide an exact quantification of the dollar
value to the agency of the proposal's technical superiority. Kay and
Assocs., Inc., B-258243.7, Sept. 7, 1995, 96-1 CPD para.  266 at 6.

Here, in selecting ECC's highest technically rated, higher priced proposal
for award, the agency did not exactly quantify the monetary value of the
technical advantages associated with the firm's proposal. Rather, the record
contains ample narrative documentation of the agency's rationale for paying
a premium to ECC for its technically superior proposal. For example, while
the proposals of ECC and ATG were considered very good overall and both
firms were considered well-qualified to perform the PRAC requirements, the
agency believed that ECC's experience with large scale PRAC and PRAC-type
projects was more relevant and similar to the requirements of this RFP, as
compared to ATG's experience on smaller, less complex construction projects
for which ATG required more government oversight than generally might be
necessary. The agency believed that ECC, when compared to ATG, provided a
better explanation in its proposal of its geographic coverage and of its
teaming arrangements with proposed subcontractors. The agency believed that
ECC's proposal presented less risk to the government than ATG's proposal
when considering the firms' technical capabilities, experience, and past
performance. As explained above, the RFP provided that the technical
evaluation factors would be considered significantly more important than
price/cost in making the selection decision; furthermore, the RFP stated
that the agency was more concerned with awarding to an offeror with a
technically superior proposal, rather than making the award to the offeror
with the lowest overall price/cost. Under these circumstances,

we have no basis to question the agency's decision to award to ECC, a firm
which submitted a technically superior, higher priced proposal.

The protest is denied. [7]

Comptroller General
of the United States

Notes

1. Offerors competing in the small business or 8(a) set-aside categories
were not required to respond to the fifth technical evaluation factor
involving small/disadvantaged/women-owned/minority business partnership
compliance. The sixth technical evaluation factor was cost and schedule
management. Id. at M-18.

2. The SSEB also compared ECC's proposal to the lowest technically rated,
lowest priced proposal of Offeror A, which is not relevant here. Id. at 2-4.

3. ECC's proposal received [Deleted] out of a possible [Deleted] points for
this evaluation subfactor.

4. ATG argues that since Montgomery Watson received award under the full and
open portion of the competition, it would be reasonable to assume that this
firm would make its offices available to ATG, even if its services were not
required by ATG. Protester's Comments at 11. We note that even if this were
a viable option, ATG failed to address this type of an arrangement in its
proposal and neither the agency nor ATG could have relied upon Montgomery
Watson's selection to resolve an inadequately explained prime and
subcontractor relationship in ATG's proposal.

5. ATG's proposal received [Deleted] and ECC's proposal received [Deleted]
out of a possible [Deleted] points for the past performance/quality
evaluation factor.

6. ATG, referencing a comment in the evaluation narrative for ECC that
"[t]his firm has been selected for and is performing 6 other PRACs," Agency
Report, Tab 7, ECC Narrative, at 4, complains that the evaluators
inappropriately gave ECC credit under the past performance evaluation factor
for information that should have been considered only under the experience
evaluation factor. Protester's Comments at 10. We note that the referenced
comment is one of five strengths listed for ECC for the past performance
evaluation factor and, even if this comment were improperly listed as a past
performance strength, this in no way affects the reasonableness of the
agency's past performance evaluation.

7. In its protest, ATG challenged the evaluation of its proposal for the
oral presentation and experience with HTRW remediation projects evaluation
factors. The agency addressed these matters in its administrative report. In
its comments on the report, ATG did not rebut the agency's positions.
Accordingly, we deem these two matters to be abandoned. See Heimann Sys.
Co., B-238882, June 1, 1990, 90-1 CPD para. 520 at 4 n.2.