TITLE:  Mid Pacific Environmental, B-283309.2, January 10, 2000
BNUMBER:  B-283309.2
DATE:  January 10, 2000
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Mid Pacific Environmental, B-283309.2, January 10, 2000

Decision

Matter of: Mid Pacific Environmental

File: B-283309.2

Date: January 10, 2000

Richard B. Oliver, Esq., and Christopher B. McDavid, Esq., McKenna & Cuneo,
for the protester.

Karen E. Schools, Esq., Defense Logistics Agency, for the agency.

Jacqueline Maeder, Esq., and Paul I. Lieberman, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest that agency failed to perform proper best value determination is
denied where the source selection authority considered technical
evaluations, past performance ratings and cost in his award determination
and reasonably determined that the evaluated superiority of the highest
technically rated proposal warranted payment of the associated cost premium.

DECISION

Mid Pacific Environmental protests the award of a contract to Willbros
Operating Systems, Inc. under request for proposals (RFP) No. SPO600-R-0009,
issued by the Defense Energy Support Center (DESC), Defense Logistics Agency
to provide and operate an automated fuel dispensing facility at the U.S.
Marine Corps Air Ground Combat Center, 29 Palms, California. Mid Pacific
questions the propriety of the agency's evaluation of the awardee's past
performance, and asserts that the resulting best value determination is
flawed and inadequately documented.

We deny the protest.

The RFP, issued October 2, 1998, contemplated the award of a fixed-price
contract for a 5-year base period with three 5-year option periods. RFP sect.
L74 and amend. 8

sect. B34.01(6). The RFP, as amended, required that the facility consist of
metered fuel pumps capable of fueling a minimum of 50 vehicles (trucks or
equipment) per hour with JP8 (aviation), diesel, or unleaded gasoline, and 8
track-type vehicles (tanks) per hour with JP8 or diesel fuel. RFP amend. 8,
sect. B34.01(2). Associated fuel dispensing storage was to include tanks for the
3 grades of government-provided fuel. A minimum of one automated bulk truck
loading facility was required for the three products, which was to be
equipped with, among other things, overfill protection and spill
containment. Id. The facility was to be configured to allow for future
expansion. The dispensing pumps and islands were to be positioned to allow
for unimpeded flow of vehicles and equipment to all pump positions and
simultaneous use of all pumps. The track area was to have reinforced pivot
pads for turning the tanks. Id. sect. B34.01(5)(a)(3). The RFP also required
that the contractor furnish computer equipment capable of interfacing with
the agency's Fuels Automated System (FAS) software programs and designed to
interface all receipts, bulk and retail issues and accounting transactions
to the FAS. [1] Id. sect. B34.01(5)(a)(4). Finally, the RFP required that the
contractor provide an auxiliary power source to enable the facility to
remain operational 24 hours per day during power outages and emergency
situations. Id. sect. B34.01(5)(a)(13).

At section M28.100, the RFP provided for award to the responsible offeror
whose proposal represented the best overall value to the government,
considering price and technical factors, which were equal in importance. As
proposals became more equal in technical merit, price would become more
important. RFP amend. 4,

sect.sect. M28.100(a), (b). The amended RFP set forth three equally weighted
technical evaluation factors, consisting of operational capability, past
performance, and subcontracting. Id. sect. M28.100(b)(ii). Proposals were to be
rated under each factor as "exceptional," "very good," "satisfactory,"
"marginal," or "unsatisfactory." [2] Id.

sect. M28.100(c). With respect to past performance, the RFP instructed each
offeror to list all contracts and subcontracts (completed or in progress)
for the last 3 years for DESC, other government agencies, or the private
sector that were related to the work required here. RFP sect.
L2.31.100(b)(2)(ii). Each offeror was to provide for each contract, the
contract type and dollar amount, a brief description of the work, and the
point of contact for the contract. Id. The solicitation stated that the
agency had the option to consider information from these sources, from the
proposal, or from other sources in order to make an accurate assessment of
the contractor's past performance. Id.; RFP amend. 4, sect. M28.100(b)(ii).

With respect to the price evaluation, the RFP provided that the agency
reserved the right to award to other than the low evaluated offer and stated
that the low offer would be determined by computing the total cost in
current year dollars for the

initial 5-year base period plus the cost for the three 5-year option
periods. RFP amend. 4, sect. M28.100(b)(i). The RFP also provided for a 10
percent small disadvantaged business cost preference. RFP sect. I237.03.

DESC received seven offers by the January 14, 1999 closing date. Proposals
were assessed under each evaluation factor by a Technical Evaluation Team
(TET). For past performance, the contracting officer forwarded past
performance surveys to the references provided by each of the offerors.
Agency Report, Aug. 24, 1999, at 5. The survey contained 29 questions
dealing with performance schedules, management of key personnel, quality of
service, and business relations. Id. at 6. For 18 of the questions, survey
respondents were asked to circle a numerical score of 1 to 5, representing
ratings of "unsatisfactory," "marginal," "satisfactory," "good," or
"excellent," respectively. Id. For 11 questions, respondents were asked to
circle "yes" or "no." Id. at 7. Survey respondents could also submit
narrative comments. The numerical scores for each offeror were initially
keyed into DESC's database to produce a computer-generated average score.
Based on the average score, each offeror's past performance was assigned a
rating of "exceptional," "very good," "satisfactory," "marginal" or
"unsatisfactory." [3] In determining the overall adjectival rating, the
agency also considered the yes/no answers and the narrative comments
submitted by the references. Id. at 10.

The agency conducted discussions and revised proposals were received from
all seven offerors. Id. at 13. Offerors were not given an opportunity to
substitute past performance references in revised proposals, but were
permitted to respond to negative comments from references. Id. at 12.

The TET performed a final evaluation of each proposal, using the guidance
set forth in the Source Selection Plan, and prepared a written Final
Technical Evaluation memorandum of its determinations. Id. at 13. In
particular, the TET found that Willbros's proposal met and exceeded the RFP
requirement to fuel 50 wheeled and 8 tracked vehicles per hour. Agency
Report, Aug. 24, 1999, Tab 23, Final Technical Evaluation, at 1. The TET
noted that the awardee's design included [deleted] bulk loading racks
[deleted]. The TET found that Willbros's proposed traffic pattern was
"exceptionally well designed, allowing for safe traffic flow within the
facility, as well as safe entrance and exit of the facility." Id. The
evaluators noted that tanks would enter and exit [deleted]. Id. The
evaluators also found that the proposed facility could be easily expanded
and that the proposal exceeded the requirements for automation and interface
with FAS based on the awardee's proposed [deleted] computer system for
timely data collection and information transfer. The TET specifically noted
that Willbros's proposed backup generator, [deleted], was exceptional, and
that this system and the proposed configuration of tanks and pumps "offers
assurance that the station will be operational 24 hours per day, 7 days per
week for all three products." Id. Finally, the TET noted that Willbros had
proposed a paved facility with 8-inch wire mesh reinforced concrete, which
would be increased in thickness at tank entrances and exits, exceeding the
requirements of the RFP. Id. at 2.

With respect to Mid Pacific's proposal, the TET found that it too exceeded
the requirement to fuel 50 wheeled and 8 tracked vehicles per hour. Id. Mid
Pacific proposed only one bulk loading rack and its traffic pattern was
determined to be "acceptable for safe entrance and exit of the facility,"
although track vehicles would have to make a 90-degree pivot on entering and
exiting. Id. The evaluators found that Mid Pacific's design allowed for
future expansion and that it met the requirements for automation and
interface with FAS. The agency found that Mid Pacific's back up system,
comprised of a diesel generator and standby pumps, was adequate. Like
Willbros, the protester proposed to pave the facility with 8 inch wire mesh
reinforced concrete with additional thickness at tank entrances and exits.
Id.

In assessing the offerors' past performance, DESC used computer calculations
showing past performance survey averages of [deleted] for the awardee and
[deleted] for the protester and, based on these scores and an analysis of
adverse comments and rebuttals, the agency assigned Willbros a past
performance rating of "exceptional" and assigned Mid Pacific a past
performance rating of "satisfactory." Agency Report, Aug. 24, 1999, Tab 15,
Prenegotiation Memorandum, at 6, 9, 11. The SSA determined that the Willbros
proposal offered the best value to the government and awarded the contract
to Willbros.

Thereupon, Mid Pacific protested to our Office on July 26, 1999, arguing
that DESC failed to conduct meaningful discussions, unreasonably evaluated
past performance and operational capability and failed to properly apply the
10 percent small disadvantaged business price evaluation factor. Mid Pacific
also argued that the agency had conducted a flawed best value determination.
Protest, July 26, 1999, at 1-2. In response to the agency report, the
protester withdrew its protest grounds concerning meaningful discussions,
the evaluation of the operational capability of the offerors and the
application of the 10 percent SDB evaluation factor. Protester's Comments,
Sept. 7, 1999, at 1 n.1. However, the protester reiterated its argument that
the agency had improperly evaluated past performance and, using the data
referenced by DESC, calculated a past performance survey average of
[deleted] for the awardee, as opposed to the agency's [deleted] average. Id.
at 3. Based on this discrepancy, the agency determined that its
computer-generated past performance score for Willbros was incorrect. In its
investigation of the error, DESC found that its past performance database
contained input errors and, in some cases, attributed past performance
information to the wrong firm. Supplemental Agency Report, Sept. 27, 1999,
at 2-3. Accordingly, DESC took corrective action commencing with a
reevaluation of past performance for all offerors using hard data. Based on
the reassessment, past performance ratings for three offerors remained the
same, three were downgraded and one was upgraded. Id. at 3-7.

In performing Willbros's reevaluation, the agency used responses from four
past performance surveys to calculate an average past performance survey
score of [deleted]. Id. at 4. One survey had three negative responses to
yes/no questions relating to negotiations on pricing issues under one
contract. Specifically, the respondent noted that Willbros on several
occasions [deleted]. Willbros had previously responded to each of these
adverse comments. Id. at 4-6. All survey respondents indicated that they
would hire this contractor again. Supplemental Agency Report, Sept. 27,
1999, Tab 7, Addendum to Source Selection Memorandum, at 2. Based on the
surveys and the awardee's responses to the three adverse comments, the
contracting officer downgraded Willbros's past performance rating from
"exceptional" to "very good," consistent with its revised [deleted] average
numerical score. [4] Id. at 3.

For Mid Pacific, the agency used responses from two past performance surveys
to calculate an average past performance survey score of [deleted], which
was unchanged from the initial evaluation. Id. at 1. The surveys contained
three adverse yes/no responses which were not rebutted by Mid Pacific. Mid
Pacific's adjectival rating was "satisfactory." Id. at 2.

The final, recalculated technical ratings and final prices for Mid Pacific
and Willbros were as follows:

 Contractor  Operational   Past          Subcontracting  Price [5]
             Capability    Performance

 Mid         Very Good     Satisfactory  Satisfactory    $ 9,562,980
 Pacific

 Willbros    Exceptional   Very Good     Satisfactory    $10,353,720

Id. at 3.

The SSA determined that Willbros's higher-priced proposal represented the
best value to the government because of Willbros's exceptional design,
better back-up systems and interface with FAS, and [deleted] bulk loading.
As a result, the SSA again selected Willbros for award.

IMPROPER PAST PERFORMANCE EVALUATION

Mid Pacific first protests that DESC unreasonably evaluated the past
performance of Willbros. Specifically, Mid Pacific points to language in the
Source Selection Plan that specified that a "very good" rating would apply
when an "[o]fferor's past performance survey scores average [deleted] with
no negative yes/no responses." Agency Report, Aug. 24, 1999, Tab 14, Source
Selection Plan, at 7. Mid Pacific contends that the agency ignored the
adverse comments in assigning Willbros a "very good" rating. The protester
takes the position that Willbros's responses to the adverse comments were
not valid and that the agency did not explain why it accepted the
explanations; therefore, based on the guidelines contained in the Source
Selection Plan, the awardee should have received a "satisfactory" past
performance rating. Protest at 9.

Mid Pacific's argument that DESC's failure to follow the Source Selection
Plan is a fatal flaw in the evaluation is without merit. The evaluation
"requirement" Mid Pacific relies upon is not an RFP requirement but rather
is simply listed as one of several criteria in DESC's Source Selection Plan.
Source selection plans provide internal agency guidelines and, as such, do
not give outside parties any rights. Centech Group, Inc., B-278904.4, Apr.
13, 1998, 98-1 CPD para. 149 at 7 n.4; Ameriko, Inc., B-272989, Nov. 4, 1996,
96-2 CPD para. 167 at 3 n.3. It is the evaluation scheme in the RFP, not
internal agency documents, such as the source selection plan, to which an
agency is required to adhere in evaluating proposals and in making the
source selection. Centech Group, Inc., supra; General Atronics Corp.,
B-272685, Oct. 23, 1996, 96-2 CPD para. 157 at 3 n.4.

Here, the record shows that the agency did follow the RFP in evaluating past
performance and the record provides no basis to call into question the
propriety of the agency's evaluation. Specifically, the agency averaged the
scores from the past performance surveys to calculate an average past
performance score and considered the adverse comments received concerning
each offeror's past performance. Indeed, the three adverse comments and
Willbros's rebuttals are contained in full in the SSA's source selection
statement. Supplemental Agency Report, Sept. 27, 1999, Tab 7, Addendum to
the Source Selection Memorandum, at 2-3. Contrary to the protester's
assertion that the agency never explains why it accepted Willbros's
responses, the memorandum specifically states that the agency viewed the
awardee's responses as adequate because "the three adverse responses all
concerned negotiations" and because Willbros's pricing practices were
confirmed by the Defense Contract Audit Agency. Based on Willbros's average
score and its rebuttals to the adverse comments, DESC assigned Willbros a
"very good" past performance rating. Id. at 3. While Mid Pacific disagrees
with the agency's acceptance of Willbros's rebuttals, Mid Pacific's mere
disagreement with this evaluation does not make it unreasonable and the
record provides no basis to question the evaluation. Ogden Support Servs.,
Inc., B-270354.2, Oct. 29, 1997, 97-1 CPD para. 135 at 3. We also note that even
under the Source Selection Plan guidelines, Willbros's past performance
survey average is above the 2.5 to 3.49 range set forth for a "satisfactory"
rating and thus, contrary to Mid Pacific's allegation, did not warrant a
"satisfactory" rating. Accordingly, Mid Pacific's objection to the agency's
past performance evaluation is without merit.

BEST VALUE DETERMINATION

Mid Pacific next contends that the agency "conducted a flawed best value
determination by deciding to pay a premium of more than $1.2 million to
award the contract to Willbros . . . ." Protest at 2. The protester alleges
that the SSA's selection decision is unreasonable essentially because it is
based on an incorrect past performance rating for Willbros, and that it
represents a superficial analysis of the strengths and weaknesses of the
various proposals. Specifically, Mid Pacific argues that DESC did not
analyze or document the comparative advantages of the Willbros and Mid
Pacific proposals or explain why the advantages of the awardee's proposal
warrant paying such a substantial premium. Protester's Comments at 8. The
protester maintains that the Addendum to the Source Selection Memorandum
prepared by the SSA in support of his selection decision "is woefully
inadequate" because it reflects only the positive aspects of the awardee's
proposal but contains no meaningful qualitative comparison of the awardee's
proposal with the protester's proposal. Id. at 10. Finally, Mid Pacific
argues that DESC's reevaluation and redetermined source selection should be
disregarded because they were prepared "in the heat of the adversarial
process" and "may not represent the fair and considered judgment of the
agency." Id. at 12.

Source selection officials in negotiated procurements have broad discretion
in determining the manner and extent to which they will make use of
technical and cost evaluation results. Grey Adver., Inc., B-184825, May 14,
1976, 76-1 CPD para. 325 at 12; Mevatec Corp., B-260419, May 26, 1995, 95-2 CPD
para. 33 at 3. In exercising that discretion, they are subject only to the tests
of rationality and consistency with the established evaluation criteria. Id.
We will uphold awards to offerors with higher technical ratings and higher
costs so long as the results are consistent with the evaluation criteria and
the contracting agency reasonably determined that the cost premium involved
is justified given the technical superiority of the selected offeror's
proposal. International Consultants, Inc.; International Trade Bridge, Inc.,
B-278165, B-278165.2, Jan. 5, 1998, 98-1 CPD para. 7 at 5-6.

First, to the extent that the protester's argument is premised on its
assertion that Willbros was too highly rated on past performance, the
argument is unfounded. As explained above, the agency followed the RFP in
evaluating past performance and the record provides no basis to question the
agency's rating. Next, despite the brevity of specific comparisons in the
source selection statement, it is clear from the record that the SSA did
consider technical merit and price in making the award determination and the
record establishes that the best value determination was reasonable,
substantiated, and consistent with the RFP evaluation scheme.

The record does not support the protester's contention that the SSA did not
understand the differences between the proposals and did not document the
comparative advantages of the Willbros proposal. Specifically, the agency
report, which is signed by the SSA, states that in reaching the selection
decision, the SSA "utilized information contained in the Final Technical
Evaluation and was fully aware of the strengths and weaknesses of [Mid
Pacific's], as compared to Willbros' proposal." Agency Report, Oct. 21,
1999, at 14-15. The SSA had before him an accurate and thorough evaluation
of the competing proposals. Additionally, the SSA had the past performance
ratings, which he summarized in the Addendum to the Source Selection
Memorandum, and the rankings and adjusted prices of the offerors. The SSA
acknowledged in his Addendum that the Willbros proposal received the highest
technical rating and that its technical proposal was rated exceptional on
every requirement. Supplemental Agency Report, Sept. 27, 1999, Tab 7,
Addendum to Source Selection Memorandum, at 4.

While the protester complains that the source selection memo did not contain
a meaningful qualitative comparison of the proposals, the SSA expressly
compared the Willbros proposal, which was the third low-priced proposal with
both the low-priced and the second low-priced (Mid Pacific) proposals. The
SSA eliminated the low-priced proposal because its technical ranking was
sixth out of the 7 proposals and the offeror's proposed layout would result
in congested and unsafe traffic conditions. As for Mid Pacific, the SSA
noted that it was ranked second in technical merit and that its past
performance rating was "satisfactory." Id. The SSA specifically cited
adverse yes/no past performance survey responses relating to Mid Pacific's
failure to read and follow shut down requirements and effectively control
the quality of services provided, and noted that these adverse comments were
not rebutted by Mid Pacific. Id. at 2. The SSA then recited in detail the
technical merits of the awardee's proposal, including, for example, its
proposed traffic pattern, [deleted] generator for providing full facility
power and computer system and FAS interface capabilities. The SSA also noted
that the proposed back-up systems would ensure that the facility would be
operational 24 hours per day, 7 days per week. To the extent that Mid
Pacific argues that the precise technical advantages were not quantified in
determining that Willbros's proposal warranted the payment of a price
premium, in performing a cost/technical tradeoff there is no requirement
that a selection official dollarize the process by making a precise
mathematical calculation that an additional dollar will be paid only if
there is a corresponding discrete technical advantage. KRA Corp., B-278904,
B-278904.5, Apr. 2, 1998, 98-1 CPD para. 147 at 14. Here, the SSA specifically
recognized that Willbros's "evaluated price is about $59,000 per year higher
than Mid Pacific's" but determined that this higher price was "justified by
[Willbros's] superior technical proposal and a better past performance
rating." Supplemental Agency Report, Sept. 27, 1999, Tab 7, Addendum to
Source Selection Memorandum, at 4. The SSA recommended award to Willbros
based on its price, exceptional technical design and capabilities and its
"very good" past performance record. The SSA expressly stated that "[t]he
assets that Willbros will bring to this project more than offset the 14%
increase in price over Mid Pacific and the 18% increase in price over [the
low-priced offeror]." Id. at 5.

We see nothing improper in this selection decision. It reflects an
appropriate comparison of the competing proposals and a reasoned
determination to select a higher-cost proposal because of its technical
merit. Thus, we have no basis to object to the award decision.

Finally, we disagree with Mid Pacific's assertion that the SSA's
reconsideration of his selection decision should be given no weight because
it was prepared "in the heat of an adversarial process," citing our decision
in Boeing Sikorsky Aircraft Support, B-277263.2, B-277263.3, Sept. 29, 1997,
97-2 CPD para. 91 at 15. In Boeing, the agency asserted throughout the protest
process that there was no error in its evaluation, but also submitted a
hypothetical reevaluation that it argued was not necessary. We discounted
the agency's after-the-fact decisional materials prepared for the sole
purpose of ensuring that our Office would conclude there was no prejudice to
the protester. Boeing Sikorsky Aircraft Support, supra. Here, in contrast,
the agency admitted its error and took corrective action in the form of
rescoring past performance scores and performing a new best value
determination. Contracting officials in negotiated procurements have broad
discretion to take corrective action where the agency determines that such
action is necessary to ensure fair and impartial competition, and we will
not object to an agency's corrective action where the agency discovers an
obvious error in the evaluations and corrects the error by reassessing the
proposals. Kellie W. Tipton Constr. Co., B-281331.3, March 22, 1999, 99-1
CPD para. 73 at 4-5. Here, as noted above, DESC learned of an error in its
evaluation during the pendency of the initial protest and it was appropriate
for DESC to correct the error by reassessing the past performance of all the
offerors and performing a new best value determination. Under these
circumstances, where the redetermination is reasonable and consistent with
the evaluation criteria, we have no basis to reject the SSA's
redetermination to award to Willbros.

The protest is denied.

Comptroller General
of the United States

Notes

1. The FAS is an automated information system designed to support DESC in
performing its responsibilities in fuels management and distribution. FAS
provides for point of sale data collection, inventory control, finance and
accounting, procurement, and facilities management. RFP amend. 8, sect.
B34.01(5)(a)(4).

2. The agency's Source Selection Plan set forth evaluation standards for
each of the three technical factors, outlining the requirements needed to
obtain each of the five possible ratings. Agency Report, Aug. 24, 1999, Tab
14, Source Selection Plan, at 6-9. For example, to achieve a rating of "very
good" in past performance, the source selection plan specified that, among
other things, the offeror must demonstrate a history of very good
performance in similar contracts of similar complexity with a commitment to
customer satisfaction, adherence to contract deadlines and schedules and a
good reputation for cooperation. The guidelines also provided that for a
"very good" rating the offeror's past performance survey scores should
average [deleted] "with no negative yes/no responses." Id. at 7.

3. An average score of [deleted] was considered "exceptional," [deleted] was
considered "very good," [deleted] was "satisfactory," [deleted] was
"marginal" and less than [deleted] was "unsatisfactory."

4. Our Office dismissed the initial protest on October 1 because the
corrective action rendered the protest academic. Because of the relatively
late corrective action taken by the agency, DESC agreed to reimburse the
protester its protest costs.

5. Prices listed in the table are the offerors' proposed prices. When
calculated in current year dollars with the 10-percent evaluation preference
added to Willbros's offer (Mid Pacific is a small disadvantaged business),
Willbros's price is $9,257,983 and Mid Pacific's price is $8,074,141. Agency
Report, Aug. 24, 1999, at 15. These calculations are undisputed; the
adjusted prices were used by the SSA in performing the best value
determination.