TITLE:  WorldTravelService, B-284155.3, March 26, 2001
BNUMBER:  B-284155.3
DATE:  March 26, 2001
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WorldTravelService, B-284155.3, March 26, 2001

Decision

Matter of: WorldTravelService

File: B-284155.3

Date: March 26, 2001

Barry Roberts, Esq., and Brian J. Hundertmark, Esq., Roberts & Hundertmark,
and Paul M. Tschirhart, Esq., Sher & Blackwell, for the protester.

Mark Pestronk, The Travel Law Firm, for Omega World Travel, Inc., an
intervenor.

Terrence J. Tychan and Michael Colvin, Department of Health & Human
Services, for the agency.

Paul E. Jordan, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

1. In solicitation for fixed-price travel services, protest that awardee's
price is unreasonably low and demonstrates a lack of understanding of the
requirement is denied where solicitation did not provide for realism
analysis.

2. Protest that contracting agency conducted inadequate and unequal
discussions as between the protester and awardee is denied where the record
shows that the agency properly tailored discussions to each offeror, and
provided each the same opportunity to revise its proposal.

3. Fact that past performance evaluation does not specifically refer to
relative risk assessment contemplated by evaluation criteria is
unobjectionable, since relative risk assessment was implicit in agency's
scoring of each proposal, and protester has not shown that awardee's past
performance record indicates significant performance risk.

DECISION

WorldTravelService (WTS) protests the award of a contract to Omega World
Travel, Inc. under request for proposals (RFP) No. 263-99-P(BH)-0032, issued
by the National Institutes of Health (NIH), Department of Health and Human
Services, for travel services. WTS challenges the evaluation, the adequacy
of discussions and the price/technical tradeoff.

We deny the protest.

BACKGROUND

NIH issued this solicitation in 1999 for travel services, including
transportation, lodging, and car rental, for four types of travel: staff,
patient, VIP, and meeting travel. Proposed fees for these services were to
be based on the reasonable cost of making the appropriate reservations and
of providing related services. In addition to these fees, the successful
contractor was permitted to retain all revenue (e.g., commissions) accrued
from travel bookings and other services. This was a performance-based
procurement, under which offerors were left to propose the best method of
meeting the agency's requirements. Performance objectives were included to
ensure that the agency's standards were met. In addition to the required
services, the RFP requested certain "other desired services," and also
permitted offerors to propose additional "value-added" services. The RFP
contemplated the award of a fixed-price, indefinite-delivery, requirements
contract for a base year, with 4 option years.

Proposals were to be evaluated on the basis of mandatory qualification
criteria (conformance to specified minimum requirements and experience) and
four evaluation factors: understanding the requirement (100 points); quality
control, performance standards and management (30 points); past performance
(10 points); and other desired services (10 points). Prices for core
services were evaluated by multiplying proposed transaction fees by the
estimated volume of each transaction for the total performance period.
Prices for value-added services were to be evaluated for price
reasonableness. The technical factors combined were to be significantly more
important than price, and award was to be made to the offeror whose proposal
provided the combination of features offering the best overall value to the
government. RFP sect. M.1.

Six offerors, including WTS and Omega, submitted proposals, all of which
were found technically acceptable and placed in the competitive range. After
discussions, NIH determined that WTS's higher-rated proposal represented the
best value despite its significantly higher price, and made award to that
firm. Omega then filed a protest in our Office challenging the evaluation of
its technical proposal and the price/technical tradeoff. Recognizing that
its best value analysis was largely undocumented, NIH took corrective action
and we dismissed the protest as academic (B-284155, Dec. 8, 1999).

NIH reopened negotiations with all offerors in the competitive range and
obtained final proposal revisions (FPR) from each. Based on its evaluation
of the FPRs, NIH again determined that WTS's higher-rated, significantly
higher-priced proposal represented the best value. Omega filed a second
protest with our Office, again challenging the evaluation of its technical
proposal and the price/technical tradeoff. In response to this protest, NIH
again determined to take corrective action on the basis that the statement
of work did not adequately reflect the needs of the agency and the
evaluation factors did not reflect the importance of certain aspects of the
work. We therefore dismissed this second protest as academic (B-284155.2,
June 29, 2000).

NIH amended the RFP and requested new FPRs. Of the three offerors
responding, only WTS's and Omega's proposals were deemed acceptable. After
reviewing the revised proposals, the technical evaluation panel (TEP)
identified various concerns and questions for WTS and Omega. NIH conducted
discussions with and solicited FPRs from both. The final evaluation results
were as follows:

 Factor (points)/Offeror        WTS            Omega

 Understanding requirement      91.75          78.5
 (100)

 Quality control procedures     27             27.24
 (30)

 Past performance (10)          9              7

 Other desired services (10)    9.25           5.75

 Total Points (150)             137            118.5

 Price                          $3,088,050     $2,121,000

Even though WTS's proposal again was rated higher than Omega's, the source
selection authority (SSA) determined that there was no question that Omega
fully understood the stated requirements, and that WTS's technical
superiority was not sufficient to warrant paying its approximate $967,000
higher price; the SSA therefore concluded that Omega's proposal represented
the best value to NIH. After receiving notice of the ensuing award and a
debriefing, WTS filed this protest with our Office.

PRICE EVALUATION

WTS challenges the agency's price evaluation as flawed on the basis that it
failed to recognize that Omega's low price demonstrated a lack of
understanding of the RFP's requirements.

This argument is without merit. Where, as here, an RFP contemplates the
award of a fixed-price contract, the agency is not required to conduct a
realism analysis; this is because a fixed-price (as opposed to a cost-type)
contract places the risk and responsibility for loss on the contractor. PHP
Healthcare Corp., B-251933, May 13, 1993, 93-1 CPD para. 381 at 5. An agency may
provide for the use of a price realism analysis for the limited purpose of
measuring offerors' understanding of the requirements or to assess the risk
inherent in an offeror's proposal, PHP Healthcare Corp., supra, but there is
no requirement that it do so.

Here, the RFP did not provide that the agency would conduct a realism
analysis of the proposals, or otherwise assess technical understanding with
reference to the offered prices. [1] Rather, the RFP provided only for
multiplying the fixed unit prices by the estimated (historical) volume of
tickets--an analysis designed to assess whether offers were unbalanced--and
for a price reasonableness determination for the value-added services. RFP
sect.sect. M.3, M.4. Under these circumstances, the agency was not required to
evaluate Omega's price against the technical requirements. (We note that the
agency nevertheless actually compared all offerors' prices with one another
in spreadsheet form, and specifically concluded from this comparison that
Omega understood the requirement, Second Revised Source Selection Memorandum
(Selection Memo) at 5, and that its price was sufficient to perform the
contract. See Astro Pak Corp., B-256345, June 6, 1994, 94-1 CPD para. 352 at 5.
WTS has not shown that the agency's conclusions in this regard were
unreasonable.) [2]

TECHNICAL EVALUATION

WTS contends that several aspects of Omega's technical proposal failed to
meet the RFP's requirements, and that this calls into question the price
evaluation. According to WTS, had the agency either ensured that Omega met
the requirements or notified WTS that they had been relaxed, the difference
in the offerors' prices would have been much smaller.

In reviewing protests against allegedly improper evaluations, our Office
will examine the record to determine whether the agency's determination was
reasonable and consistent with the evaluation criteria listed in the
solicitation. Hattal & Assocs., B-243357, B-243357.2, July 25, 1991, 91-2
CPD para. 90 at 7.

We have reviewed each of WTS's allegations and find that none has merit. For
example, WTS asserts that Omega failed to provide adequate staffing in three
areas: VIP services, off-site office personnel, and the electronic
self-booking system. With regard to VIP services and the off-site office,
WTS observed that Omega had not proposed the same level of staffing as WTS,
which based its proposal on the levels maintained under the incumbent
contract. However, as noted above and by the agency, this was a
performance-based contract--rather than establish minimum requirements for
staffing, the RFP left it to offerors to determine the best means of meeting
the requirements. NIH therefore evaluated Omega's proposal on its own
merits, and concluded that Omega's proposed staffing was sufficient for the
required services. WTS has identified nothing in Omega's proposal or
elsewhere in the record that would lead us to question this conclusion.

As another example, the RFP advised offerors that NIH may be investigating
or implementing an electronic (Internet) self-booking system, and set forth
the agency's requirements regarding this system. WTS observes that Omega did
not satisfy the agency's requirements because it did not propose to have a
travel consultant involved in this reservation process, even though the RFP
required the contractor to make reservations and to issue and deliver
tickets. RFP sect. C.5.1. However, there was no requirement for a travel
consultant to be involved in this electronic system, and given that the
purpose of the system was to permit "self-booking," it is not apparent why
WTS believes a travel consultant was necessary. [3]

DISCUSSIONS

WTS asserts that discussions were unequal, and thus improper, because the
agency specifically advised Omega of deficiencies in its proposal, but did
not do the same for WTS. [4]

In negotiated procurements, the scope and extent of discussions with
offerors in the competitive range are a matter of contracting officer
judgment. FAR sect. 15.306(d)(3); Biospherics, Inc., B-285065, July 13, 2000,
2000 CPD para. 118 at 5. While offerors must be given an equal opportunity to
revise their proposals, and the FAR prohibits favoring one offeror over
another, discussions need not be identical; rather, discussions are to be
tailored to each offeror's proposal. FAR sect.sect. 15.306(d)(1), (e)(1); Northrop
Grumman Corp.; ITT Gilfillan, B-274204 et al., Nov. 27, 1996, 96-2 CPD para. 232
at 10. For discussions to be meaningful, they must lead offerors into the
areas of their proposals requiring amplification or revision. The
Communities Group, B-283147, Oct. 12, 1999, 99-2 CPD para. 101 at 4.

We find nothing improper in the discussions here. While Omega's discussions
contained a number of technical questions, and WTS's did not, the absence of
similar questions for WTS is attributable to the fact that the agency did
not find any technical deficiencies in WTS's proposal which required
correction through discussions. Supplemental Report at 4. The agency was not
required to conduct all-encompassing discussions or discuss every element of
WTS's proposal receiving less than the maximum points available, DAE Corp.,
Ltd., B-257185, Sept. 6, 1994, 94-2 CPD para. 95 at 6, and it did not do so with
Omega.

The agency did conduct discussions with WTS in the one area where its
proposal was deficient: price. In this regard, the agency specifically
advised WTS in the final round of discussions that it "need[ed] to take a
look at [its] prices [because] they are way too high." Agency Report (AR),
Tab IX, at 2. WTS asserts that this discussion question was not meaningful
because it did not specifically identify the value-added services which WTS
could eliminate to reduce its prices. [5] However, the agency was not
required to identify the specific areas where WTS should lower its price; it
was required only to lead WTS into the area of the deficiency, and its
statement that WTS's prices were "way too high" clearly did this. We note
that WTS in fact reduced its price in response to discussions.

TECHNICAL TRANSFUSION

WTS asserts that the agency engaged in technical transfusion--that is, that
it conveyed WTS's technical solution to an RFP requirement to Omega--which
is prohibited by FAR sect. 15.306(e)(2). Specifically, WTS notes that the RFP
required special treatment by contractors dealing with NIH patient travelers
for the reason (among others) that "these patients may speak different
languages, including sign language." RFP sect. C.1.1.b. WTS's technical solution
included an offer of staff capable of communicating in 25 languages,
including American Sign Language, and foreign language
interpretation/translation services. Omega's proposal did not mention any
foreign language or services for the hearing impaired and, in discussions,
NIH advised Omega that "[t]here was no mention of interpreter services being
available for on-site location." AR, Tab IX, at 4. Omega's FPR clarified its
intent to provide translation and interpretation services, and to equip its
office to handle the needs of the hearing-impaired. WTS maintains that the
agency's exchange with Omega improperly conveyed WTS's technical solution to
Omega.

There was no technical transfusion here. Even though the RFP did not list
interpretation services as a specific requirement, it is plain from the RFP
that such services were necessary to meet the stated requirement for the
special treatment of NIH patient travelers. As NIH observes, "[t]he ability
to communicate with any patient is then a requirement not a value added
service." Supplemental Report at 4. Advising Omega during discussions that
it had neglected to address these services was a proper means of ensuring
that the services would be provided if Omega received the award, and in no
way disclosed any unique technical solution developed by WTS. [6]

PAST PERFORMANCE EVALUATION

WTS asserts that the past performance evaluation was flawed. In this regard,
the RFP provided that the past performance evaluation would be based on
information obtained from offeror-provided references, which were to be
checked through a questionnaire, and was to include an assessment of the
relative risks associated with each offer. RFP sect. M.2.E. [7] WTS contends
that NIH improperly deviated from this stated approach, because the
questionnaires are not mentioned in the evaluation narrative and there is no
record of a risk assessment.

Determining the relative merit of an offeror's past performance is primarily
a matter within the contracting agency's discretion. Our Office will examine
a past performance evaluation only to ensure that it was reasonable and
consistent with the stated evaluation criteria and applicable statutes and
regulations. Pacific Ship Repair and Fabrication, Inc., B-279793, July 23,
1998, 98-2 CPD para. 29 at 3-4.

With regard to the questionnaires, each offeror submitted three
questionnaires completed by their respective references, and the TEP was
satisfied that this was a sufficient number to perform a thorough
evaluation. Supplemental Report at 4. The evaluation score sheets do not
quote the questionnaires, but the agency explains that the TEP reviewed them
prior to scoring each offeror's proposal. Id. We find no basis to question
the agency's account. While WTS alleges generally that its evaluation score
would have been higher, and Omega's lower, had the agency properly evaluated
the proposals, it does not point to anything in the questionnaires or
elsewhere in the record to support these allegations. Our own review of the
record discloses nothing that would contradict the agency's evaluation. [8]

Further, while there is no specific mention of a risk assessment in the
evaluation record, we think the assessment was implicit in the past
performance evaluation results. In this regard, the RFP defined the
performance risks to be evaluated as those associated "with an offeror's
likelihood of success in performing the acquisition requirements as
indicated by that offeror's record of past performance." RFP sect. M.2.E. Based
on this description, it is apparent that the performance risk associated
with an offeror was reflected in its past performance evaluation. Based on
its review of the questionnaires, the TEP assigned WTS a score of 9 (out of
10 available) points, and Omega 7 points. While WTS's score would equate
with a finding of less risk than that associated with Omega, the agency
found no weaknesses in this area for either proposal, and WTS points to
nothing in Omega's past performance information available to the agency that
would support a finding of significant risk. This aspect of the evaluation
therefore was unobjectionable.

PRICE/TECHNICAL TRADEOFF

WTS calculates (using its own mathematical formula) that, in making its
award determination, NIH weighted technical factors at only 69.9 percent and
price at 30.1 percent. In WTS's view, this weighting was inconsistent with
the RFP's statement that the technical factors would be "significantly" more
important than price. WTS believes its technical proposal was clearly
superior to Omega's, and that a proper weighting of the technical and price
factors would have resulted in selection of its proposal for award.

Our review of price/technical tradeoff decisions is limited to determining
whether the tradeoff was reasonable and consistent with the solicitation's
evaluation criteria. Loral Aeronutronic, B-259857.2, B-259858.2, July 5,
1995, 95-2 CPD para. 213 at 16. Notwithstanding a solicitation's emphasis on
technical merit, an agency properly may select a lower-priced, lower
technically rated proposal if it decides that the cost premium involved in
selecting a higher-rated, higher-priced proposal is not justified, given the
acceptable level of technical competence available at the lower price.
Tidewater Homes Realty, Inc., B-274689.5, Aug. 11, 1998, 98-2 CPD para. 40 at 4;
Research Triangle Inst., B-278254, Jan. 12, 1998, 98-1 CPD para. 22 at 6.

The tradeoff here was reasonable. Preliminarily, we note that WTS's
conclusion regarding the weightings accorded the technical and price factors
derives entirely from its own mathematical formula; it is not reflected in
the RFP or in the evaluation record, and thus carries no weight in our
review. Moreover, we do not agree with WTS that giving technical factors
more than twice as much weight as price is inconsistent with an RFP
designation of technical factors as significantly more important than price.

Nothing in the record indicates that the agency failed to give the technical
factors the proper weight. The SSA recognized that WTS's technical proposal
was superior to Omega's, and that technical factors were significantly more
important than price. Selection Memo at 2. In determining that Omega offered
the best overall value to the government, the SSA simply concluded that
WTS's technical superiority did not warrant paying WTS's substantially
greater price. Id. at 4. In this regard, NIH's intent to strike an
appropriate balance between technical merit and price is evident in its
discussions with WTS. By notifying the protester that its prices were "way
too high," the agency sent a clear message to WTS that it did not consider
the technical features of its proposal to be worth its proposed price.
While, in response, WTS lowered its price, the agency obviously did not
consider the reduction sufficient. We find nothing unreasonable in the
agency's conclusion. [9]

The protest is denied.

Anthony H. Gamboa

General Counsel

Notes

1. The RFP's evaluation provisions in section M make no mention of a realism
analysis, and WTS does not explain the basis for its assertion that a price
realism/technical understanding analysis was required. RFP section L.10.C.4,
"Information Other than Cost or Pricing Data," did call for the submission
of data to permit the contracting officer "to determine price reasonableness
or cost realism"; however, since the operative language is set forth in the
alternative, and this is a fixed-price, not a cost-type, contract, it
appears that the required information related to the evaluation of the
reasonableness of the value-added services.

2. WTS also asserts that the agency's price reasonableness evaluation of
Omega's low prices was flawed. However, the purpose of a price
reasonableness review is to determine whether the prices offered are
higher--as opposed to lower--than warranted. USATREX Int'l, Inc., B-275592,
B-275592.2, Mar. 6, 1997, 98-1 CPD para. 99 at 7. Since WTS asserts that Omega's
prices are too low, not too high, there is no reason to question Omega's
prices on the basis of price reasonableness.

3. The fact that WTS may have elected to propose additional staff to meet
this requirement does not make it the only acceptable approach for this
performance-based procurement. In any event, apart from a blanket promise to
meet the agency's requirements, WTS's own proposal of an on-line system does
not mention a reservation agent's involvement. WTS Proposal at 55-56.

4. WTS refers to this as "technical leveling," i.e., helping an offeror
bring its proposal up to the level of others through successive rounds of
discussions. While technical leveling was once prohibited under the Federal
Acquisition Regulation (FAR), this concept is no longer part of the
regulatory framework governing federal procurements. See Dynacs Eng'g Co.,
Inc., B-284234 et al., Mar. 17, 2000, 2000 CPD para. 50 at 4.

5. WTS also claims that the agency should have informed it of the RFP
requirements which it allegedly relaxed for Omega. As discussed above, the
agency did not relax any of the requirements for Omega.

6. Omega proposed its own approach of using its arrangement with a foreign
language interpretation service to provide NIH travelers with access to
interpreters and translators in more than 143 languages via three-way
telephone conferencing. Omega FPR at 1.

7. WTS also notes that the agency report contains no record of interviews
with references. However, while the original RFP (section L.10.B.13) called
for such interviews, the amended section L omitted any mention of them.

8. WTS contends that the agency should have considered Omega's allegedly
poor performance under a contract with the Public Health Service (PHS) in
evaluating the firm's past performance. However, the agency states that it
was unaware of the PHS contract, and Omega states that it did not submit it
as a reference because the contract was completed more than 5 years earlier,
and it had numerous newer contracts on which to rely. Accordingly, there was
nothing improper in the agency's failure to consider this contract.

9. WTS complains that the source selection decision was flawed because it
did not explain why the agency had reversed its two prior source selections,
in which it found the protester's proposal to be the best value despite even
larger price premiums. NIH's actions regarding the prior source selections
are irrelevant to the one here; the agency has justified its selection, and
we have found that it was reasonable.