TITLE:  Beneco Enterprises, Inc., B-283512.3, July 10, 2000
BNUMBER:  B-283512.3
DATE:  July 10, 2000
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Beneco Enterprises, Inc., B-283512.3, July 10, 2000

Decision

Matter of: Beneco Enterprises, Inc.

File: B-283512.3

Date: July 10, 2000

Clark B. Fetzer, Esq., Kirton & McConkie, for the protester.

M. Dale Marsh, Esq., Cassady, Fuller & Marsh, for Hammer LGC, Inc., the
intervenor.

Col. Nicholas P. Retson and Capt. Elizabeth G. Eberhart, Department of the
Army, for the agency.

Henry J. Gorczycki, Esq., and James Spangenberg, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Agency's determination that the awardee's past performance, based on the
experience of one of the awardee's proposed key personnel, was equal to the
extensive, successful past performance of the protester, was unreasonable
and inconsistent with the solicitation's evaluation scheme.

DECISION

Beneco Enterprises, Inc. protests the award of a contract to Hammer LGC,
Inc. under request for proposals (RFP) No. DABT01-99-R-0002, issued by the
Department of the Army for construction services at Fort Rucker, Alabama. We
previously sustained Beneco's protest of an award to Hammer under this RFP
in Beneco Enters., Inc., B-283512, Dec. 3, 1999, 2000 CPD para. __, finding that
the past performance evaluation of Hammer was unreasonable, and recommending
that the agency reevaluate proposals under the past performance factor and
make a new source selection decision. Beneco protests that the agency's
reevaluation and new source selection decision are unreasonable.

We sustain the protest.

The RFP, issued March 10, 1999, contemplated the award of a fixed-price,
indefinite-delivery/indefinite-quantity job order contract (JOC) for the
construction services for 1 year with 4 option years. RFP at B-3 to B-6 and
amend. 0002, at C-1. The RFP stated that award would be based on the best
overall value to the government based on the technical, past performance and
price evaluation factors, with technical being "somewhat more important"
than past performance, past performance being "slightly more important" than
price, and technical and past performance combined being "significantly more
important than price." [1]
RFP amend. 0002, at M-2.

Under past performance, the RFP stated five subfactors--quality of service,
timeliness of performance, cost control, business relations, and customer
satisfaction--and provided that past performance information would be used
to conduct a performance risk assessment as it relates to the probability of
successfully performing the contract. RFP amend. 0002, at M-4. RFP sect. L.8
provided instructions on the format and content of proposals, and stated the
following:

PAST PERFORMANCE

  1. Offerors shall submit the following information as part of their
     proposal:

  a. A list of all contracts and subcontracts awarded during the past three
     years. Contracts listed may include those entered into with the Federal
     Government, agencies of the state and local governments and commercial
     customers. Offerors that are newly formed entities without prior
     contracts should list contracts and subcontracts as required above for
     all key personnel.
  b. To comply with [the above paragraph], offeror shall use the record
     format located at [RFP] Attachment E.

  1. Based upon the information provided in each past performance record
     [RFP attach. E], the Government will issue a past performance survey to
     those individuals and organizations you have specified. The survey
     shall be used to evaluate your firm's past performance. The offeror may
     provide information on problems encountered on the contracts and
     subcontracts identified in paragraph b.(1) above and corrective actions
     taken to resolve those problems. Offerors should not provide general
     information to their performance on the identified contracts. General
     performance information will be obtained from the references.
  2. Each offeror will be evaluated on his/her performance under existing
     and prior contracts for similar construction work. Performance
     information will be used for both responsibility determinations and as
     an evaluation factor against which offerors' relative ranking will be
     compared to assure best value to the Government. The Government will
     focus on information that demonstrates quality of performance relative
     to the size and complexity of the procurement under consideration. The
     Past Performance Survey identified in [RFP] Attachment F will be used
     to collect this information. References other than those identified by
     the offeror may be contacted by the Government with the information
     received used in the evaluation of the offeror's past performance.

RFP amend. 0002, at L-12, L-13 (emphasis added).

The top two proposals of those received and evaluated by the Army were those
of Beneco and Hammer. Hammer's proposal received the highest technical
score, which was approximately 10 percent higher than Beneco's, the next
highest-rated proposal. Under past performance, the Army rated Hammer
excellent and Beneco good. Beneco proposed the lowest evaluated price;
Hammer's proposed price was approximately [DELETED] percent higher. Original
Agency Report, Tab K, Source Selection Decision, at 1-2

On August 10, 1999, the Army awarded a contract to Hammer, which Beneco
protested. Agency Report at 4. In part, Beneco's protest alleged that the
agency unreasonably evaluated past performance because Hammer received an
excellent rating, even though it had never performed a JOC as a prime
contractor, and Beneco received a lower rating, even though it had
successfully performed numerous JOCs as the prime contractor, including the
incumbent contract.

Our Office sustained that protest on the basis that the agency's evaluation
of past performance was not reasonable and not consistent with the RFP.
Although the
RFP clearly contemplated a qualitative assessment of the quality of
performance of contracts relative to the size and complexity of the job
order construction contract being procured, the agency unreasonably gave the
highest possible rating to Hammer, a contractor with experience performing
only relatively small dollar construction projects and with no JOC prime
contractor experience, and unreasonably rated Beneco lower under past
performance than Hammer, even though Beneco has an extensive record of
successfully performing job order construction contracts, including the
incumbent contract. Beneco Enters., Inc., supra, at 9-10. We recommended
that the Army reevaluate past performance consistent with the terms of the
RFP and our decision, and make a new source selection decision. Id. at 12.

Our prior decision also noted that, during a hearing on the protest, agency
witnesses advanced a new explanation for evaluating Hammer's past
performance through testimony, namely, that the experience of Hammer's key
personnel was also evaluated as part of the agency's evaluation of Hammer's
past performance. Id. at 11 n.12. Our decision stated that this testimony
was not supported by the record. In addition, our decision noted that the
RFP states that newly formed entities, without prior contract experience,
may rely on the experience of their key personnel for the past performance
evaluation; that Hammer's proposal had not provided references for key
personnel for the evaluation of past performance; and that the agency had
not obtained past performance surveys for Hammer's proposed key personnel.
Id.

The source selection evaluation board (SSEB) reevaluated past performance
for these two offerors based solely on information provided in the
proposals, and the surveys that the agency had previously solicited and
received from the offerors' contract references during the original
evaluation; no additional information was requested from offerors or
gathered by the agency. Contracting Officer's Statement at 5. Beneco's past
performance was evaluated based on Beneco's stated performance of 18
contracts, 15 of which the Army considered highly relevant job order-type
contracts, and on 6 surveys for 6 of these job order-type contracts. [2] Id.
at 6. Overall, three of the surveys rated Beneco's performance as good, and
the other three rated it as excellent. Agency Report, Tab E, SSEB
Reevaluation of Past Performance, at 1. The SSEB stated the following:

It is apparent that Beneco Enterprises has past experience in the
administration of JOC contracts to rate them in the Good/Low Performance
Risk category.

Id.

For Hammer's proposal, the SSEB stated that, of the six past performance
surveys received for that firm, five gave Hammer an overall rating of
excellent and one a rating of good. Id. The SSEB stated:

One of the surveys was for a project of similar size and complexity of the
procurement under consideration and documented the past experience of
Hammer, LGC's, Senior Project Manager. The others were for construction work
typical of the work on task orders handled under JOC type contracts. This
past performance history shows an ability to perform JOC type task orders
simultaneously.

Id. Concluding that Hammer was a newly formed entity, the SSEB's evaluation
then focused solely on the experience of Hammer's senior project manager,
relying on the statement in RFP sect. L.8.b(1) that "[o]fferors that are newly
formed entities without prior contracts should list contracts and
subcontracts as required above for all key personnel." Agency Report, Tab E,
SSEB Reevaluation of Past Performance, at 2. The SSEB referenced Hammer's
senior project manager's role as the top on-site manager for several years
under Beneco's incumbent Fort Rucker JOC and stated:

[His] expertise cannot be overlooked inasmuch as he is now employed by
Hammer, LGC. He has demonstrated the ability to manage multiple JOC task
orders and will be responsible for Hammer's overall operations.

In [Hammer's proposal] Volume II, Past Performance, it is noted that [the
proposed senior project manager] has managed over 20 JOC type contracts,
including the Fort Rucker JOC contract. [The following text was quoted
directly from Hammer's proposal:]

The ten-year direct JOC experience of our Director of Operations [name
omitted]--proposed as on-site Senior Project Manager for this contract--is a
valuable asset to Hammer Construction. As such [his] experience imputes
directly to Hammer Construction's corporate experience. We could in this
Volume list the over twenty JOC contracts that [he] has impacted with
superior performance. For the sake of brevity and relevance we include only
reference to the Fort Rucker [JOC]. Clearly no evaluation of the contractors
past performance on the Fort Rucker JOC Contract would be complete, or
accurate, without acknowledging [his] contribution.

Accordingly, the qualifications of the Senior Project Manager to overlook
and manage JOC contracts of the magnitude which Beneco manages warrants a
rating of GOOD/LOW PERFORMANCE RISK.

Id.

The contracting officer/source selection authority (SSA) noted the
information identified for both offerors in the SSEB evaluation, and stated
that Hammer had provided past performance information on 26 construction
projects and 1 JOC, that being Beneco's incumbent JOC under which Hammer's
proposed senior project manager served as project manager for the past 3
years. Agency Report, Tab F, New Source Selection Decision, at 2. She also
found:

In further evaluating past performance of Hammer, the SSEB also reviewed the
past performance of . . . the President of Hammer LGC, and the former owner
and manager of his own construction company. Although the survey responses
received on these projects indicated an overall excellent performance, they
were not for JOC type contracts and were thus given relatively less weight
in the past performance rating for this contract.

. . . . .

Although the companies are not equal in the number of JOC contracts surveyed
nor in the amount of past corporate experience, both Hammer (through the
past performance of key person, [Hammer's proposed senior project manager])
and Beneco have good to excellent past performance on JOC contracts. This
review of how well these companies have performed JOC contracts in the past
gives a good indication of how well they will perform in the future on Fort
Rucker's JOC contract. Both companies are considered good performance risks.

[The SSA then summarized the previously evaluated technical advantages of
Hammer's proposal.]

In consideration of the above, the proposal submitted by Hammer is deemed
technically superior with a technical score approximately 10% above that of
[Beneco's] next highest rated proposal. Although Hammer's price is
approximately [DELETED]% higher than that of Beneco's, I consider the
technical strengths, as discussed above, to offset the additional cost.

Therefore, my source selection decision is that Hammer LGC represents the
best overall value to the government.

Id. at 2-3.

The agency awarded the contract to Hammer on March 14, 2000. Agency Report
at 6. The agency conducted a debriefing with Beneco on March 22. Id. Beneco
filed the present protest on March 31.

Beneco alleges that the past performance evaluation of Hammer was improperly
based on the experience of Hammer's key personnel rather than on Hammer's
performance under prior contracts, that the agency unreasonably evaluated
the past performance of Hammer's key personnel to be equal to the past
performance of Beneco's corporate past performance, and that the resulting
source selection decision is unreasonable. Protest at 7-10; Protester's
Comments at 4-10.

In reviewing a protest of an agency's evaluation of proposals, we examine
the record to ensure that the agency's evaluation was reasonable and
consistent with the terms of the solicitation. Terex Cranes, Inc., B-276380,
June 10, 1997, 97-1 CPD para. 209 at 3; Ogden Support Servs., Inc., B-270012.2,
Mar. 19, 1996, 96-1 CPD para. 177 at 5.

Here, although the agency states that it considers Beneco and Hammer to be
"tied" under the past performance reevaluation, Contracting Officer's
Statement at 4, we conclude that for a variety of reasons the record of the
reevaluation provides no reasonable basis to support the agency's finding.

Specifically, in the reevaluation of Hammer's past performance, unlike the
initial evaluation, the agency considered Hammer to be a new entity,
apparently in order to justify evaluating past performance based on one of
Hammer's key employees under the RFP provision stating that the past
performance for an offeror that is a "newly formed entity" "without prior
contracts" can be based on past performance information for "all key
personnel." RFP amend. 0002, at L-13. Here, Hammer's proposal does not
represent that the offeror is a new entity without prior contracts, but
rather lists many contracts awarded to Hammer for projects similar to the
work to be performed under the RFP for a period even greater than the last 3
years specified in the RFP. [3] Agency Report, Tab D, Hammer Proposal, vol.
2, Past Performance, Records of Prior Contracts. Although Hammer's proposal
does ask that the experience of its proposed senior project manager be
imputed to Hammer's corporate experience, it does not request, as required
by the new entity past performance provision, that its past performance be
based on the past performance of "all" of its key personnel, instead of its
experience as a company; nor does it provide the required detailed contract
information (with the single exception of the specific identification of
Beneco's incumbent contract) for any contracts under which its key personnel
may have performed. Thus, the agency's consideration of Hammer's key
personnel in evaluating that firm's past performance, in lieu of that
entity's past performance on contracts it completed, was not consistent with
the RFP evaluation scheme. [4]

Moreover, the agency did not have substantive information on which to
evaluate the past performance of Hammer's personnel. [5] Contrary to the
terms of the RFP, the evaluation accepted without support the general
statement in Hammer's proposal that its proposed senior project manager had
"impacted with superior performance" over 20 unidentified job order-type
contracts. Although the RFP's stated evaluation plan listed five evaluation
subfactors for evaluating past performance, and set forth a process for
offerors to identify prior contracts and for the agency to solicit from
those references survey responses pertaining to the stated evaluation
subfactors, the agency collected no information concerning these still
unidentified contracts. [6]

Furthermore, the agency's evaluation is based upon a material
misrepresentation. While the SSEB and SSA state that a past performance
survey on Hammer's proposed senior project manager's performance under
Beneco's incumbent contract was obtained and evaluated in making this source
selection, the record contains no such survey. The record for the prior
protest showed that the agency did not evaluate the experience of Hammer's
key personnel under the past performance factor, Beneco Enters., Inc.,
supra, at 11 n.12, and the agency states that it did not gather for the
reevaluation any additional information beyond that which existed for the
prior evaluation. Contracting Officer's Statement at 5. The only past
performance survey in the record on Beneco's incumbent contract regarding
Hammer or its key personnel was prepared by the agency's contract
administrator for Beneco's incumbent contract and provides an evaluation of
Hammer's performance as a subcontractor under Beneco's contract. [7]
Agency's Report on Prior Protest, Tab F, Past Performance Surveys for
Hammer, at 12-19. While Hammer's proposal contained a brief description of
the Beneco contract as part of its past performance proposal, the agency
requested no survey on this contract (other than on Hammer's performance as
subcontractor), as contemplated by the RFP evaluation scheme. [8]

Finally, besides the aforementioned agency misstatements and failures to
adhere to the RFP evaluation scheme, we think that the agency's judgment
that one person's performance as a project manager under one of Beneco's job
order prime contracts is essentially equivalent to all of Beneco's
performance under that same contract and many other job order prime
contracts, six of which are supported by detailed positive surveys, is
fundamentally flawed and does not support a past performance rating for
Hammer equal to Beneco's.

In sum, the record does not support the agency's determination that Hammer's
past performance rating is equal to Beneco's, so that the source selection
decision based on this evaluation is unreasonable.

We recommend that the agency appoint a new SSEB and SSA, conduct a new
evaluation of proposals under all evaluation criteria stated in the RFP, and
make a new source selection decision. [9] If a proposal other than Hammer's
is selected for award, the Army should terminate the contract previously
awarded to that firm. We also recommend that the protester be reimbursed the
reasonable cost of filing and pursuing its protest including attorneys'
fees. 4 C.F.R. sect. 21.8(d)(1) (2000). The protester should submit its claim
for costs, detailing and certifying the time expended and costs incurred,
with the contracting agency within 60 days after receipt of this decision. 4
C.F.R. sect. 21.8(f)(1).

The protest is sustained.

Comptroller General
of the United States

Notes

1. Also, in order to receive consideration for award, the offeror's proposed
price must be considered reasonable and realistic, and any large business
offeror must have a satisfactory subcontracting plan. RFP amend. 0002, at
M-2.

2. No survey was obtained for Beneco's performance under the incumbent
contract. Agency Report, Tab E, SSEB Reevaluation of Past Performance, at
3-8.

3. The contracting officer/SSA states that Hammer was incorporated in
September 1998. Agency Report, Tab F, New Source Selection Decision, at 2.
The agency does not provide evidence of this incorporation and Hammer, the
intervenor in this protest, has not commented on this matter. Hammer's
proposal states that its prior contracts were awarded to "George S. Hammer
Lic. Gen. Contractor (Hammer LGC, Inc.)" as long ago as 1994. Agency Report,
Tab D, Hammer's Proposal, vol. 2, Past Performance, Records of Prior
Contracts. Therefore, even assuming that Hammer was first "incorporated" in
September 1998, we see no basis for the agency to find, and Hammer does not
claim, that it is a newly formed entity without a history of contract
performance.

4. The contracting officer/SSA states, "As required by the GAO decision,
very little weight was given to [Hammer's non-JOC prime contract] type
projects." Contracting Officer's Statement at 4. Our decision did not
indicate that very little weight should be given these obviously relevant
contracts in the evaluation of Hammer's past performance. Rather, our
decision found that the agency's actions of assigning Hammer the highest
possible rating for its successful performance on non-JOC prime contracts of
relatively small size, and of rating such performance superior to Beneco's
successful performance on JOC prime contracts similar to the JOC being
procured, were unreasonable, given the importance stated in the RFP of
evaluating quality of performance on contracts relative to the size and
complexity of the procurement under consideration. Beneco Enters., Inc.,
supra, at 7-11. It is the contracting agency's responsibility to
meaningfully consider the complexity of an offeror's contracts in a past
performance evaluation vis-ï¿½-vis the complexity of the contract to be
awarded where the solicitation so provides; our Office will review the
reasonableness of the agency's evaluation. PMT Servs., Inc., B-270538.2,
Apr. 1, 1996, 96-2 CPD para. 98 at 1, 6-8.

5. To the extent the agency may evaluate past performance of key personnel
in addition to the corporate past performance of offerors, the solicitation
did not so advise offerors, and thus Beneco's proposal did not include
information on the past performance of its proposed personnel. Given
Beneco's extensive, successful experience with similar JOCs, we presume that
it would benefit from the opportunity to prepare a proposal with the actual
evaluation plan in mind.

6. To the extent Hammer's assessment of the quality of experience of its
proposed senior project manager relates to past performance, it constituted
general information provided in the proposal that was specifically precluded
by the RFP. RFP amend. 0002, sect. L.8.b(2).

7. The agency states that this survey was previously gathered, although not
considered in the prior evaluation, but was used in the reevaluation.
Contracting Officer's Statement at 5. Our prior decision identified and
discussed this very survey of Hammer's performance as subcontractor under
Beneco's contract. Beneco Enters., Inc., supra, at 4 n.4.

8. The agency also could not mean that it relied upon a survey obtained for
Beneco's performance under the incumbent contract to rate Beneco's former
project manager, because no such survey was obtained to rate Beneco's past
performance.

9. The record indicates that in defending the protests and performing the
reevaluation, the SSEB and SSA were intent on justifying the award to
Hammer, regardless of the RFP's evaluation scheme. As indicated in our prior
decision, the agency advanced a number of alternate and inconsistent
arguments as to how it evaluated Hammer's past performance that were not
consistent with the record, and on reevaluation it has evaluated Hammer's
past performance based on its proposed key personnel, even though our prior
decision specifically pointed out the pitfalls of such an evaluation. Beneco
Enters., Inc., supra, at 11 n.12. Considering that the agency's actions have
repeatedly favored Hammer without a reasonable basis, the protester's
complaints of bias cannot be dismissed as mere unsupported allegations, and
the agency's actions have, at the very least, cast a shadow over the
integrity of this procurement process. We believe that, given the history of
the procurement, this can only be addressed through a complete reevaluation
of proposals and new source selection decision conducted by a new SSEB and
SSA. Under the circumstances, we do not consider Beneco's challenges to the
cost/technical tradeoff.