TITLE:  Acepex Management Corporation, B-283080; B-283080.2; B-283080.3, October 4, 1999
BNUMBER:  B-283080; B-283080.2; B-283080.3
DATE:  October 4, 1999
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Acepex Management Corporation, B-283080; B-283080.2; B-283080.3, October 4,
1999

Decision

Matter of: Acepex Management Corporation

File: B-283080; B-283080.2; B-283080.3

Date: October 4, 1999

James F. Nagle, Esq., and W. Gregory Guedel, Esq., Oles Morrison Rinker &
Baker, for the protester.

J. Michael Morgan, Esq., Lohf, Shaiman & Jacobs, for Kleen-Tech Building
Services, Inc., the intervenor.

Clarence D. Long, III, Esq., Department of the Air Force, for the agency.

John L. Formica, Esq., and James A. Spangenberg, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

1. Protest challenging the agency's evaluation of the awardee's present and
past performance is denied where the record shows that the evaluation was
reasonable; an agency has the discretion in evaluating present and past
performance to determine the scope of the performance histories to be
considered provided that all proposals are evaluated on the same basis and
consistent with the terms of the solicitation.

2. The record of the agency's evaluation of the offerors' present and past
performance was adequate where the documentation allowed our Office to
review the agency's actions and determinations, and reach a reasoned
conclusion as to the reasonableness of the agency's evaluation and source
selection.

3. Agency's post-award, post-protest communications with the awardee were
not discussions where the awardee was neither provided the opportunity nor
did it attempt to modify its proposal.

4. Protest that the agency improperly permitted the assignment of the
contract to the awardee's affiliate (where the awardee was merged into its
affiliate) is a matter

of contract administration because it involves a preexisting contract and
there is no evidence that the agency awarded the contract with the intention
of allowing for its assignment.

DECISION

Acepex Management Corporation protests the award of a contract to Kleen-Tech
Support Services, Inc., under request for proposals (RFP) No.
F04700-99-R-0014, issued by the Department of the Air Force, for custodial
services at Edwards Air Force Base, California.

We deny the protest.

The RFP provided for the award of a fixed-price contract for a base period
with two 1-year options. RFP at 2-7. The successful contractor is required
to provide all personnel, equipment, tools, materials, vehicles, supervision
and other items to perform the custodial services. RFP Performance Work
Statement, at 1.

Offerors were advised that the agency would "utilize the Performance Price
Tradeoff (PPT) technique" to arrive at a best value award decision under
which the performance risk ratings were considered significantly more
important than price. The application of this technique involves determining
the acceptability of each offeror's proposal, ranking all acceptable
proposals by evaluated price, and assigning the proposals a performance risk
rating of exceptional/high confidence, very good/significant confidence,
satisfactory/confidence, neutral/unknown confidence, marginal/little
confidence, or unsatisfactory/no confidence. The RFP listed "types of
information," such as "[q]uality of service" and "[t]imeliness of
performance" that would be considered in determining the performance risk
ratings. RFP at M-1, M-2.

The RFP included detailed instructions for the preparation of proposals. The
instructions requested, among other things, that offerors complete the RFP's
price schedule and include a statement detailing any exceptions taken to the
terms of the solicitation. Offerors were also to submit a list of at least
three "contracts or subcontracts performed for the same or similar kind of
work described in [the] solicitation that have been issued within the last
five (5) years." The RFP added here that the present and past performance
information provided "may include data on services performed by other
divisions, corporate management, critical subcontractors, or teaming
subcontractors if such resources will be brought to bear or significantly
influence the performance of the proposed service," and specified that the
present and past performance information submission was limited to four
pages in length. RFP at L-1, L-2.

The agency received 41 proposals by the RFP's closing date. Kleen-Tech's and
Acepex's proposals were the lowest-priced (at $2,131,190) and fifth
lowest-priced
(at $3,072,546), respectively, of the 12 proposals that received performance
risk ratings of exceptional/high confidence. Agency Report, Tab 21, Price
Competition Memorandum, attach. 1. Using the PPT technique, the agency
determined that Kleen-Tech's proposal represented the best value to the
government and made award to that firm. [1] Agency Report, Tab 17, Source
Selection Decision Document.

Acepex (the incumbent contractor) contends that the agency's evaluation of
the offerors' present and past performance and assessment of performance
risk ratings were unreasonable, and that Kleen-Tech's past performance
rating should have been less than exceptional/high confidence. Protest at 4;
Supplemental Protest, July 16, 1999, at 2.

The evaluation of past performance is a matter within the discretion of the
contracting agency. HLC Indus., Inc., B-274374, Dec. 6, 1996, 96-2 CPD para. 214
at 3. In reviewing an agency's evaluation of past performance, we will not
reevaluate proposals, but instead will examine an agency's evaluation to
ensure that it was reasonable and consistent with the solicitation. CDA Inv.
Techs., Inc., B-272093, B-272093.2, Sept. 12, 1996, 97-1 CPD para. 102 at 7.

The present and past performance section of Kleen-Tech's proposal included
information on three contracts, and in accordance with the RFP's
instructions, was limited to four pages. Agency Report, Tab 12, Kleen-Tech's
Present and Past Performance Proposal. The first contract was described as
involving "[j]anitorial, rodent control, plutonium filter changing, lead and
beryllium cleanup, & complete exposure control services" at Los Alamos
National Laboratory with a contract value of $28.8 million. The second and
third contracts were described as involving "[j]anitorial and support
services in high-density offices, computer areas, and medical and production
facilities" at private corporations with a contract values of $5.8 and $6
million, respectively.

The agency evaluated the offerors' present and past performance by sending
to each point of contact (POC) identified in the proposals a present and
past performance questionnaire to be completed and returned to the cognizant
agency contracting officer. Contracting Officer's Statement at 3; Agency
Report, Tab 14, Completed Present/Past Performance
Questionnaires--Kleen-Tech. The questionnaires listed eight separate
evaluation areas, such as "[q]uality of service" and "[t]imeliness of
performance," that could be rated using the adjectival scheme provided and,
if desired, commented on, as well as a separate space to provide an overall
rating of the contractor's performance. [2]

Questionnaires were sent to the three POCs listed in Kleen-Tech's proposal,
and each of the POCs returned a completed questionnaire to the agency.
Agency Report, Tab 14, Completed Present/Past Performance
Questionnaires--Kleen-Tech. Kleen-Tech's performance was rated as
exceptional under each of the eight evaluation areas and exceptional overall
on two of the questionnaires, with one of the two responses including
numerous positive comments regarding Kleen-Tech's performance. The remaining
questionnaire rated Kleen-Tech's performance as exceptional under the
majority of applicable evaluation areas, satisfactory under the remaining
evaluation areas, and exceptional overall.

The completed questionnaires were reviewed by the agency, with the agency
concluding, based upon the ratings and positive comments under each of the
evaluation areas on the completed questionnaires, that Kleen-Tech's proposal
merited a performance risk rating of exceptional/high confidence. Agency
Report, Tab 14, Memorandum of Agency Evaluator, Completed Present/Past
Performance Questionnaires--Kleen-Tech.

Acepex complains that the agency's evaluation of Kleen-Tech's present and
past performance was inadequate because the agency "merely looked at a
contract which had some component of a related service in it and concluded
that was sufficient" without "parsing of how large a portion of that
contract janitorial services is." Protester's Comments, Aug. 6, 1999, at 10.
That is, with regard to Kleen-Tech's contract to perform "[j]anitorial,
rodent control, plutonium filter changing, lead and beryllium cleanup, &
complete exposure control services" at Los Alamos National Laboratory, the
protester argues the agency could not "make an informed past performance
rating" unless it determined how much of the services rendered (presumably
by dollar amount) involved janitorial work and "as compared to the
environmental remediation aspect of cleaning up lead and beryllium or of
changing plutonium filters." Id. at 10-11. The protester similarly argues
that in order to make an informed determination regarding the two contracts
listed by Kleen-Tech involving "[j]anitorial and support services in
high-density offices, computer areas, and medical and production
facilities," the agency was required to determine how much of the services
involved janitorial work as opposed to support services. Id.

Where, as here, a solicitation requires the evaluation of offerors' past
performance, an agency has the discretion to determine the scope of the
offerors' performance histories to be considered, provided all proposals are
evaluated on the same basis and consistent with the solicitations
provisions. CDA Inv. Techs., Inc., supra.

The contracts described by Kleen-Tech had values so far in excess of the
contract awarded under the subject RFP that even if the janitorial services
components of the contracts did not constitute the majority of the work to
be performed they would still have a greater value than that provided for by
this RFP. Additionally, the agency could properly consider the fact that
Kleen-Tech performed the contracts as a custodial and facility support
services contractor (as opposed to environmental remediation services). We
find, therefore, that the agency's consideration of the contracts cited by
Kleen-Tech, without the "parsing" advocated by the protester, to be
reasonable.

Acepex also argues that the documentation provided by the agency is not
sufficient to support the agency's actions. The protester points out that
the RFP stated that the performance risk rating would be based upon, among
other things, "types of information" such as "quality of service,"
"timeliness of performance," and "effectiveness of quality control," and
complains that "[t]here is no evidence of these items being reviewed."
Protester's Comments, Aug. 6, 1999, at 5.

An agency's evaluation of proposals and source selection decision should be
documented in sufficient detail to allow for the review of the merits of the
protest. Matrix Int'l Logistics, Inc., B-272388.2, Dec. 9, 1996, 97-2 CPD
para. 89 at 5. An agency which fails to adequately document its evaluation runs
the risk that its determinations will be considered unsupported, and absent
such support, our Office may be unable to determine whether the agency had a
reasonable basis for its determinations. Id.

The protester's assertion that the agency failed to evaluate the types of
information specified in the RFP is simply incorrect. As mentioned
previously, the questionnaires sent to the POCs identified in the offerors's
proposals included eight questions, with each question asking for exactly
the same information as that identified in the RFP. For example, the RFP
noted that the performance risk rating would be based, in part, upon
"quality of service," and the first evaluation area set forth in the present
and past performance questionnaires required the individual

completing the questionnaire to rate the "[c]ontractor's quality of
service." RFP at M-1; Agency Report, Tab 14, Completed Present and Past
Performance Questionnaires--Kleen-Tech.

Moreover, as indicated above, the record includes, among other things, the
offerors' proposals, Agency Report, Tabs 12 and 13; agency's response to
supplemental document request, questionnaires sent to and received from the
POCs listed in the offerors' proposals along with the relevant instructions
for the questionnaires' completion, Tabs 14 and 15, memoranda documenting
the agency's evaluation of the information contained in the completed
questionnaires, Tabs 14 and 15, as well as a price competition memorandum,
Tab 21, and a source selection decision document, Tab17. These documents
allowed our Office to follow, understand, and review the agency's actions
and determinations in this procurement, thus allowing our Office to reach a
conclusion as to reasonableness of the evaluation and source selection. [3]

Based on our review, the record reasonably supports Kleen-Tech's
exceptional/high confidence rating, given its documented favorable
references.

Acepex next argues that the agency acted improperly in awarding the contract
to Kleen-Tech without first conducting discussions. In support of this
contention, the protester refers to the following paragraph of the RFP (at
M-1):

The government reserves the right to award without discussions to any
offeror who submits a proposal compliant with the Terms and Conditions of
the [RFP], has an exceptional/high confidence performance risk rating, and
has the lowest evaluated price. The Government reserves the right to award
to a different offeror, other than the offeror submitting the lowest
evaluated price, compliant proposal, if that offeror is judged to have a
greater performance/confidence risk rating.

Acepex contends that the agency was precluded from awarding the contract to
Kleen-Tech without first conducting discussions because another offeror,
whose proposal received a performance risk rating of
"satisfactory/confidence," submitted the lowest-priced proposal.
Supplemental Protest, Aug. 2, 1999, at 4-5; Protester's Supplemental
Comments, Aug. 17, 1999, at 9-12. The agency refers to the paragraph quoted
above as well as other statements set forth in the RFP, and argues that the
solicitation can only reasonably be read as permitting an award without
discussions if discussions are unnecessary. Agency Report, Legal Memorandum,
Aug. 9, 1999, at 2.

Our Office will not sustain a protest unless the protester demonstrates a
reasonable possibility that it was prejudiced by the agency's actions, that
is, unless the protester demonstrates that but for the agency's actions, it
would have had a substantial chance of receiving the award. American Native
Med. Transport, L.L.C., B-276873, Aug. 5, 1997, 97-2 CPD para. 73 at 8. Here,
Acepex has not claimed that it was prejudiced in any way by the lack of
discussions; for example, it does not state how it would have changed its
proposal if it had been accorded discussions. Accordingly, we will not
consider this aspect of Acepex's protest further.

Acepex also contends that the agency conducted improper discussions with
Kleen-Tech. In this regard, the protester points out that after it filed its
protest with our Office challenging the agency's assessment of Kleen-Tech's
present and past performance, the contracting officer contacted Kleen-Tech
"for the purposes of confirming the relevancy of [Kleen-Tech's] performance
record." Supplemental Protest, Aug. 2, 1999, at 5, quoting Contracting
Officer's Statement, July 8, 1999, at 4.

In the context of a bid protest, an agency is permitted to obtain post-BAFO,
post-award clarifications from an offeror which do not provide an
opportunity to revise or modify a proposal. Sociometrics, Inc., B-261367.2,
B-261367.3, Nov. 1, 1995, 95-2 CPD para. 201 at 4 n.2; Aquidneck Sys. Int'l,
Inc., B-257170.2, Sept. 30, 1994, 94-2 CPD para. 122 at 5-6. The record reflects
that here, in response to the protest, the agency contacted the awardee in
order to assess the merits of the protest; the awardee was neither provided
the opportunity nor did it attempt to modify its proposal. Contracting
Officer's Statement, July 8, 1999, at 4; Agency Report, Tab 25, Intervenor's
June 28, 1999 Response to the Protest. Accordingly, this ground of protest
is also without merit.

Acepex finally argues that "the award cannot stand because the awardee no
longer exists." Supplemental Protest, Aug. 2, 1999, at 2. The protester
points out in this regard that according to the record Kleen-Tech was merged
into its affiliate KTBS shortly after award. Id.

As noted previously, Kleen-Tech and KTBS were affiliates, with common
ownership, location and management. Agency Report, Tab 20, SBA Size
Determination Memorandum, at 2. According to the awardee, the principals of
KTBS initially incorporated Kleen-Tech "to undertake government contracts
while KTBS would continue to represent commercial contracts." Agency Report,
Tab 25, Intervenor's June 28, 1999 Response to the Protest, at 1. The
awardee explains that the "sole purpose for the creation of KTSS was to
provide an administrative separation of the financial functions of Cost
Accounting Practices associated with government procurements from General
Accounting Procedures associated with commercial contracts." Id.

The awardee states that "[d]uring the past year . . . many vendors,
customers, employees and various governmental agencies (including the SBA)
experienced confusion with the corporate separation of KTBS and
[Kleen-Tech]." Id. at 1-2. After conferring with representatives of "the
Department of Defense to ensure that appropriate facility clearances would
not experience any detrimental impact and to obtain their approval," and
confirming that the accounting concerns that led to the incorporation of
Kleen-Tech could be resolved, the principals of KTBS and Kleen-Tech (which
were the same individuals) decided to merge Kleen-Tech into KTBS. Id. at 2.
The awardee states that the Articles of Merger were filed with the Colorado
Secretary of State on June 24 (6 days after the contract had been awarded to
Kleen-Tech), and that KTBS now uses "Kleen-Tech Support Services as one of
its trade names." Id.

The agency argues that the assignment of the contract was permissible under
the applicable statutory and case law, and that it was unnecessary to enter
into a novation agreement with Kleen-Tech and KTBS because of the nature of
the merger. [4] Supplemental Report, Aug. 9, 1999, at 1-3.

When a contract has been awarded, we generally will not review a protest
that the assignment of the contract to a different firm was improper. Bosma
Mach. and Tool Corp., B-257443.2, B-257443.3, Oct. 17, 1994, 94-2 CPD para. 143
at 4. The propriety of an agency's decision to enter (or not enter) into a
novation agreement, or otherwise allow for or disapprove of the assignment
of a contract is a matter of contract administration, and therefore not for
consideration by our Office. 4 C.F.R. sect. 21.5(a) (1999); Bosma Mach. and Tool
Corp., supra; JA & Assocs., Inc.; Son's Quality Food Co., B-256280.2,
B-256280.4, Aug. 19, 1994, 95-1 CPD para. 136 at 5 n.7. This case clearly
involves a preexisting contract, and because there is no evidence that the
agency awarded the contract to Kleen-Tech with the intention of allowing its
assignment to KTBS, the assignment relates not to the award of the contract
but to contract administration.

The protest is denied.

Comptroller General
of the United States

Notes

1. Prior to awarding the contract to Kleen-Tech, the agency notified the
disappointed offerors that Kleen-Tech was the apparent awardee. Acepex and
another offeror filed protests challenging Kleen-Tech's small business size
status. The contracting officer forwarded these protests to the Small
Business Administration (SBA). Agency Report, Tab 18, Acepex's Size Protest;
Tab 19, Olympus Building Services, Inc. Size Protest; Tab 20, SBA Size
Determination Memorandum. Both size protests claimed that Kleen-Tech
exceeded the applicable small business size standards because of its
affiliation with Kleen-Tech Building Services, Inc. (KTBS). For example,
Acepex contended in its size protest that Kleen-Tech and KTBS were
co-located, have identical ownership and management, and that KTBS would
perform the "primary and vital requirements of the contract." The SBA agreed
that Kleen-Tech (the apparent awardee) and KTBS were affiliated based upon
their representation of affiliation, co-location, common ownership and
management. Agency Report, Tab 20, SBA Size Determination Memorandum, at 2.
The SBA noted that the receipts of Kleen-Tech and KTBS must be combined in
determining their size because of their affiliation, and concluded that
Kleen-Tech was a small business for the purposes of this procurement because
the average receipts of Kleen-Tech and KTBS combined were less than the
maximum amount permitted under the applicable size standard. Id. at 4.

2. The questionnaires provided for ratings of exceptional, satisfactory,
marginal, unsatisfactory, and not applicable.

3. The protester also complains about the documentation surrounding the
price evaluation, but does not assert that Kleen-Tech's or Acepex's prices
were not properly evaluated. Thus, we will not consider this argument
further.

4. A novation agreement is a "legal instrument executed by (a) the
contractor (transferor), (b) the successor in interest (transferee), and (c)
the government by which, among other things, the transferor guarantees
performance of the contract, the transferee assumes all obligation under the
contract, and the government recognizes the transfer of the contract and
related assets." FAR sect. 42.1201.