TITLE:  A. G. Cullen Construction, Inc., B-284049.2, February 22, 2000
BNUMBER:  B-284049.2
DATE:  February 22, 2000
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A. G. Cullen Construction, Inc., B-284049.2, February 22, 2000

Decision

Matter of: A. G. Cullen Construction, Inc.

File: B-284049.2

Date: February 22, 2000

Arlene Cullen for the protester.

Capt. Jessica D. Ursell, Department of the Air Force, for the agency.

Jennifer D. Westfall-McGrail, Esq., and Christine S. Melody, Esq., Office of
the General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1. Where request for proposals provided for award to offeror whose
combination of past performance and price represented best value to
government, with past performance of significantly more importance than
price, agency reasonably selected for award higher-priced offeror with
better past performance rating.

2. Where award is to be made without discussions, contracting officer must
give an offeror an opportunity to clarify adverse past performance
information to which the offeror has not previously had an opportunity to
respond only where there clearly is a reason to question the validity of the
past performance information; in the absence of a clear basis to question
the past performance information, contracting officer has discretion, short
of acting in bad faith, not to ask for clarifications.

DECISION

A. G. Cullen Construction, Inc. protests the rejection of its offer and the
award of a contract to DiCicco Contracting Company under request for
proposals (RFP) No. F36629-99-R-0001, issued by the Department of the Air
Force to maintain, alter, and repair the Base Supply, Building 312 and widen
Alpha Street at Pittsburgh Air Reserve Station. Cullen contends that its
proposal, which was lowest in price, should have been selected for award.

We deny the protest.

The RFP, which was issued on July 15, 1999, contemplated the award, without
discussions, of a fixed-price construction contract to the offeror whose
proposal represented the best value to the government. Best value was to be
determined based on a "Price/Performance Trade-Off," in which past
performance was significantly more important than price; offerors were
explicitly advised in this regard that award might be made to a
higher-rated, higher-priced offeror where the contracting officer determined
that the offeror's past/present performance outweighed the cost difference.
RFP sect. M.1, 2.

The solicitation identified five subfactors to be considered in the
evaluation of performance: quality control; timely performance; management
effectiveness; compliance with labor standards; and compliance with safety
standards. RFP sect. M.2.II(e). Under each subfactor were listed areas that
might be considered in the evaluation. Offerors were advised that the agency
would assign each proposal a rating under each subfactor and then use the
subfactor ratings to determine an overall performance rating. RFP
sect. M.2.II(j). Possible ratings were exceptional/high confidence; very
good/significant confidence; satisfactory/confidence; neutral/unknown
confidence; marginal/little confidence; and unsatisfactory/no confidence.
[1] RFP sect. M.2.II(i).

To facilitate the evaluation of past performance, the solicitation
instructed each offeror to submit with its proposal a reference list
identifying all contracts (both business and government) awarded to it
within the past 3 years. RFP at 21. Offerors to whom more than 10 contracts
had been awarded were instructed to identify only the last 6. Id. A copy of
the questionnaire to be completed by the references was included in the
solicitation. [2] Offerors were invited to submit with their proposals
information concerning problems encountered on the identified contracts and
the offeror's corrective actions. Id.

Five proposals were received by the August 26 due date. Cullen's price of
$890,000 was low, and DiCicco's price of $932,300 was third low. The agency
mailed copies of the performance questionnaire to each offeror's references
and considered those that were returned in rating each proposal. [3] Based
on the questionnaires returned by Cullen's references, the evaluators rated
the protester's proposal as satisfactory under two subfactors (timely
performance and compliance with safety standards) and as very good under the
other three subfactors; overall, the proposal was rated as very
good/significant confidence. DiCicco's proposal was rated as
exceptional/high confidence under each subfactor and overall. The evaluators
concluded that DiCicco's higher confidence rating outweighed its
approximately 5 percent higher price and that the proposal represented the
best value to the government. The source selection authority (SSA)
concurred, and on September 27, the Air Force awarded a contract to DiCicco.

First, Cullen argues that it should have received the award because it
submitted the lowest-priced, technically acceptable proposal.

The solicitation here did not provide for selection of the lowest-priced,
technically acceptable proposal; it provided for award to the offeror whose
proposal represented the best value to the government based on a price/past
performance trade-off, with past performance of significantly more
importance than price. Thus, it was consistent with the RFP's evaluation
scheme for the agency to select other than the lowest-priced proposal where
it determined that another offeror's combination of past performance and
price represented a better overall value to the government. See Axion Corp.,
B-252812, July 16, 1993, 93-2 CPD para. 28 at 2. To the extent that the
protester is arguing that the RFP should have provided for selection of the
lowest-priced, technically acceptable proposal, its protest is untimely. To
be timely, a protest based on an alleged impropriety in a solicitation which
is apparent prior to the time set for receipt of proposals must be filed
prior to the time set for receipt of proposals. Bid Protest Regulations, 4
C.F.R. sect. 21.2(a)(1) (1999).

The protester further argues that DiCicco's higher past performance rating
was not worth its higher price. Cullen's president asserts, in this regard,
as follows:

Even if . . . DiCicco is "exceptional," $42,300 is a lot of money and not
worth the difference over "very good." I am a businesswoman and would not
accept this kind of logic from an employee when purchasing an "exceptional"
car or toilet seat over a "very good" one, for that matter.

Protester's Response to Agency Request for Summary Dismissal, Nov. 24, 1999,
at 3.

In a best value procurement, it is the function of the source selection
official to perform a price/non-price factor tradeoff, that is, to determine
whether one proposal's superiority under the non-price factor (or factors)
is worth a higher price. Packaging Strategies, Inc., B-280814, Nov. 25,
1998, 98-2 CPD para. 120 at 8. Accordingly, where the RFP identifies past
performance and price as the evaluation factors, it is the role of the
source selection official to determine whether a proposal submitted by an
offeror with a better past performance rating is worth a higher price. We
will review the selection decision to ensure that it was reasonable and
consistent with the evaluation scheme set forth in the solicitation. Id. at
8-9.

Here, we see nothing unreasonable or inconsistent with the evaluation
criteria in the agency's determination that DiCicco's combination of past
performance and price represented the best value to the government. The RFP
provided that past performance would be significantly more important than
price in the award decision, and DiCicco's proposal, which was only about 5
percent higher than Cullen's in price, received a higher rating than
Cullen's under every past performance subfactor, as well as overall. Of
particular significance to the contracting officer was DiCicco's exceptional
rating under the timely performance subfactor, completion of the project on
schedule being of paramount importance to the agency due to the fact the
building was to remain occupied during the work. Source Selection Decision
Document at 2. Given that past performance was to be significantly more
important than price in the best value determination, that DiCicco received
a better past performance rating than Cullen, and that the difference in
price between the two offers was relatively small, we find no basis upon
which to question the propriety of the agency's best value determination.

Cullen also complains that the contracting officer was not required to
quantify his price/past performance tradeoff, that is, he was not required
to explain how much a higher past performance rating was worth in terms of
price. The protester argues that where a solicitation does not spell out a
specific formula for trading off past performance against price, "[i]n
essence, [the contracting officer] has total discretion in awarding
contracts with no accountability." Protest at 2.

There is no requirement that in making the tradeoff resulting in an award to
an offeror with a higher-rated, higher-priced proposal, the SSA provide an
exact quantification of the dollar value to the agency of the proposal's
technical superiority. Suddath Van Lines, Inc.; The Pasha Group, B-274285.2,
B-274285.3, May 19, 1997, 97-1 CPD para. 204 at 10; Kay and Assocs., Inc.,
B-258243.7, Sept. 7, 1995, 96-1 CPD para. 266 at 6. The fact that such a
quantification is not required does not mean that the source selection
authority has total discretion with no accountability, however. As
previously noted, tradeoff determinations must be reasonable and consistent
with the stated evaluation criteria, and we will review such determinations
to ensure that they were.

Finally, Cullen argues that it should have been given the opportunity to
address the past performance information that the agency obtained from one
of its references. The reference in question rated Cullen as marginal in
four of the nine areas listed under the timely performance subfactor. [4]

Federal Acquisition Regulation (FAR) sect. 15.306(a)(2), which addresses
clarifications and award without discussions, states in relevant part that
where, as here, an award will be made without conducting discussions,
"offerors may be given the opportunity to clarify certain aspects of
proposals (e.g., the relevance of an offeror's past performance information
and adverse past performance information to which the offeror has not
previously had an opportunity to respond) or to resolve minor or clerical
errors." Pursuant to this provision, a contracting officer has broad
discretion to decide whether to communicate with a firm concerning its
performance history. We will review the exercise of such discretion to
ensure that it was reasonably based on the particular circumstances of the
procurement. [5] Rohmann Servs., Inc.,
B-280154.2, Nov. 16, 1998, 98-2 CPD para. 134 at 8-9.

With regard specifically to clarifications concerning adverse past
performance information to which the offeror has not previously had an
opportunity to respond, we think that, for the exercise of discretion to be
reasonable, the contracting officer must give the offeror an opportunity to
respond where there clearly is a reason to question the validity of the past
performance information, for example, where there are obvious
inconsistencies between a reference's narrative comments and the actual
ratings the reference gives the offeror. In the absence of such a clear
basis to question the past performance information, we think that, short of
acting in bad faith, the contracting officer reasonably may decide not to
ask for clarifications. [6]

Applying this standard here, we think that the contracting officer
reasonably exercised his discretion in deciding not to communicate with
Cullen regarding the adverse past performance information received from one
of Cullen's references. There is nothing on the face of the reference that
would create concerns about its validity. Given the permissive language of
FAR sect. 15.306(a)(2), the fact that Cullen may wish to respond to the
reference does not give rise to a requirement that the contracting officer
give Cullen an opportunity to do so.

In any event, it is clear that Cullen was not prejudiced by the agency's
decision
not to ask for clarifications regarding the reference. McDonald-Bradley,
B-270126, Feb. 8, 1996, 96-1 CPD para. 54 at 3; see Statistica, Inc. v.
Christopher, 102 F.3d 1577 (Fed. Cir. 1996) (to prevail, protester must
demonstrate a reasonable possibility that it was prejudiced by agency
action). As noted above, Cullen received an overall rating of very good,
based on its ratings of very good in three of the subfactors, and
satisfactory in the remaining two subfactors, including the one area--timely
performance--in which it received the negative reference at issue. Even if
its rating improved in that one area to the highest possible
rating--exceptional--Cullen would still have scores of very good and
satisfactory in the other four areas. Under these circumstances, we see no
basis to conclude that Cullen's overall rating of very good would improve
even if its rating in the one subfactor at issue were increased.

The protest is denied.

Comptroller General
of the United States

Notes

1. The confidence ratings referred to the agency's level of confidence that
the offeror would perform the required effort.

2. The questionnaire listed precisely the same subfactors and areas for
consideration as the solicitation. It also included the same rating scale as
the RFP. References were asked to rate the offeror's performance under each
area of consideration using that scale.

3. The RFP included at section J a form entitled "Source Selection Reference
List," to be completed by the offeror. The form asked the offeror to furnish
the following information for each reference: contract number; type of
contract; complexity of work; description, location, and relevance of work;
contract dollar value; date of award and contract completion date; type and
extent of subcontracting; and name, address, and phone number of point of
contact. Cullen completed a copy of the form for five contracts, identifying
eight points of contact. (On three of the forms, the protester identified
two points of contact.) The agency sent each of the eight a copy of its
questionnaire. Three of Cullen's references returned completed
questionnaires, and it was on these three questionnaires that the agency
based Cullen's past performance rating.

4. The areas in which Cullen received a rating of marginal were: met
established progress schedules; submission of updated and revised progress
schedules; resolution of delays; and timely completion of work within
performance period.

5. In support of its position, Cullen cites McHugh/Calumet, a Joint Venture,
B-276472, June 23, 1997, 97-1 CPD para. 226. That case involved application of a
FAR provision--sect. 15.610(c)(6), regarding discussions with competitive range
offerors about certain past performance information--that is no longer in
effect. Thus, the case has no relevance to the current protest.

6. Similarly, with regard to minor or clerical errors--the other proposal
aspect mentioned in FAR sect. 15.306(a)(2)--we think the contracting officer
must give an offeror the opportunity to resolve such errors only where their
existence is clear.