TITLE:  Encorp-Samcrete Joint Venture, B-284171; B-284171.2, March 2, 2000
BNUMBER:  B-284171; B-284171.2
DATE:  March 2, 2000
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Encorp-Samcrete Joint Venture, B-284171; B-284171.2, March 2, 2000

Decision

Matter of: Encorp-Samcrete Joint Venture

File: B-284171; B-284171.2

Date: March 2, 2000

James J. McCullough, Esq., and Catherine E. Pollack, Esq., Fried, Frank,
Harris, Shriver & Jacobson, for the protester.

Edward J. Tolchin, Esq., Fettmann, Tolchin & Majors, for Contrack
International, Inc., the intervenor.

Richard C. Bennett, Esq., and Nancy J. Williams, Esq., Department of the
Army, 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

Agency's rejection of the protester's proposal on a construction project as
technically unacceptable is unobjectionable where the proposal's project
schedule failed to address demobilization, which was reasonably considered
to be a material solicitation requirement; the fact that neither the
protester's nor the awardee's proposals addressed final inspection does not
render the agency's rejection improper, because final inspection was the
agency's responsibility, so that the offerors' failure to address this item
was immaterial.

DECISION

Encorp-Samcrete Joint Venture protests the award of a contract to Contrack
International, Inc. under request for proposals (RFP) No. DACA78-99-R-0015,
issued by the United States Army Corps of Engineers, for the construction of
a stock control administration facility for F-16 aircraft in El Bassateen,
Egypt. Encorp-Samcrete contends that the agency's evaluation of its proposal
as technically unacceptable was unreasonable.

We deny the protest.

The RFP provided for the award of a fixed-price contract to the offeror
submitting the lowest-priced, technically acceptable offer. RFP at 00100-4.
The RFP stated that the agency would "determine technical acceptability by
evaluating the technical features of each proposal on a pass/fail basis
against the technical requirements specified in [the RFP]" under the
experience, past performance, and management/execution plan criteria. Id.
at 00100-4-7.

With regard to the management/execution plan evaluation criterion, the RFP
informed offerors that the agency would "review and evaluate the offeror's
management and execution plan to confirm it includes all the elements
specified in the solicitation and all milestones and completion terms
identified conform to the solicitation requirements," and noted that any
plan which failed to include the specified elements, milestones or
completion terms would be considered technically unacceptable. Id. at
00100-6. The RFP required that offerors submit, among other things, a
project schedule to be evaluated under the management/execution plan
evaluation criterion, and stated that it was to include, at a minimum, the
following major phases of work: (1) Mobilization; (2) Site Preparation; (3)
Submittal process; (4) Demolition; (5) Construction duration; (6)
Equipment/materials procurement; (7) Delivery duration; (8) Shipping; (9)
Finish Work; (10) Final Inspection; and (11) Demobilization. Id.

The RFP also included a price schedule to be completed by the offerors,
which listed eight items, including, for example, "Mobilization and
Demobilization" and "Site Development to include Paving, Sidewalks, and
Landscaping to Building 1.5 meter line, complete as shown and specified."
Id. at 00010-3.

The RFP stated that the agency intended to evaluate proposals and award the
contract without discussions unless it found that discussions were
necessary, and thus advised offerors that their initial proposals should
contain their best terms from a price and technical standpoint. Id. at
00100-12.

The agency received a number of proposals, including those of
Encorp-Samcrete and Contrack, by the RFP's closing date. The technical
proposals of three offerors, including Encorp-Samcrete and Contrack, were
forwarded to the cognizant technical evaluation team (TET) for review. [1]
The members of the TET individually rated each of these three proposals on a
pass/fail basis under numerous evaluation factors that corresponded to the
evaluation criteria set forth in the RFP. [2] Agency Report, Tab 4A, TET
Memorandum for Record, Nov. 4, 1999, at 3-4. The TET reached a consensus
finding that both Encorp-Samcrete's proposal, priced at [DELETED], and
Contrack's proposal, priced at $8,906,426, were technically acceptable under
each of the evaluation criteria. Id. at 5, 7; Agency Report, Tab 4B, Source
Selection Authority's (SSA) Memorandum for Contract File, Nov. 12, 1999, at
1. However, the TET noted, among other things, that one member believed that
Encorp-Samcrete's proposal was unacceptable under the management/execution
plan evaluation criterion because the proposed project schedule failed to
address demobilization as required by the RFP. Agency Report, Tab 4A, TET
Memorandum for Record, at 4-6. The Chairman of the TET thus recommended that
the "SSA review this aspect concerning the offeror's failure to include a
demobilization activity in [its] project schedule," but noted that, in the
Chairman's view, "the said omission does not justify a finding of technical
unacceptability." Id. at 6.

The SSA reviewed the three lowest-priced, technically acceptable proposals
and the TET report, and concluded that contrary to the TET's consensus
evaluation, Encorp-Samcrete's proposal was technically unacceptable under
the management/execution plan evaluation criterion because the proposed
project schedule failed to address demobilization. Agency Report, Tab 4B,
SSA's Memorandum for Contract File, at 1. In this regard, the SSA noted that
demobilization was set forth in the RFP as one of the "major phases of work"
that offerors were expressly required to address in their project schedules.
Id. The SSA explained as follows:

Demobilization of a contractor on an Egyptian Air Base is not an easy
undertaking in Egypt. The contractor must satisfy the Egyptian
Air Force as well as other Egyptian Government Agencies of their compliance
with Egyptian rules and regulations in order to accomplish this phase. There
are questions regarding taxes on labor as well as equipment, and excess
materials. This phase can linger for months into years if the contractor has
not properly planned for demobilization. On this project, the Egyptian Air
Force is looking for a very prestigious appearance in the building for which
they are having us manage construction. Once this project is completed and
turned over to the Egyptians, the appearance of a contractor who has not
demobilized might hinder the visible appearance of the building.

Id. The SSA also considered Encorp-Samcrete's price schedule, and found
among other things that the "low cost for mobilization and demobilization
might be a reflection of the fact that they have not considered
demobilization as an element of work as indicated in the technical proposal
and the cost associated." [3] Id. at 2. The SSA concluded that
Encorp-Samcrete's proposal was technically unacceptable, and determined that
the contract should be awarded to Contrack as the offeror submitting the
low-priced, technically acceptable proposal. Id.

Encorp-Samcrete protests that its proposal should not have been rejected as
technically unacceptable for failing to address demobilization in its
project schedule. In this regard, the protester first points out that its
proposal included a completed price schedule that set forth a price of
$420,000 for "Mobilization and Demobilization." The protester explains here
that because the RFP included a "Payment for Mobilization and
Demobilization" clause, it was clear that Encorp-Samcrete's "proposal
committed $168,000 toward demobilization." [4] Protest at 4. The protester
also points out that its project schedule set forth "several
completion-related activities, including two ‘punchlist' items," and
concludes that "[d]emobilization is [an] implicit aspect of these punchlist
activities, since demobilization must be complete so that all items on the
punchlist can be checked off." Id.

The evaluation of technical proposals is a matter within the discretion of
the contracting agency since the agency is responsible for defining its
needs and the best method of accommodating them. Matrix Int'l Logistics,
Inc., B-277208, B-277208.2, Sept. 15, 1997, 97-2 CPD para. 94 at 4. In reviewing
an agency's evaluation, we will not reevaluate technical proposals, but
instead will examine the agency's evaluation to ensure that it was
reasonable and consistent with the solicitation's stated evaluation
criteria. Id. An offeror's mere disagreement with the agency does not render
the evaluation unreasonable. Id.

As mentioned previously, the RFP expressly required that proposals include
project schedules that address demobilization. Although Encorp-Samcrete's
project schedule does, as the protester argues, address in a couple of
instances matters that are, at best, arguably related to demobilization,
such as the punchlist items, the submitted schedule simply does not
specifically address demobilization, as was required by the RFP. In light of
the agency's explanation as to the importance of demobilization to the
project's success, which led to the RFP's specific requirement that
demobilization be specifically set forth in the project schedule, we have no
basis on which to conclude that the agency acted unreasonably in finding
that Encorp-Samcrete's proposal was technically unacceptable in this regard,
and, because of the evaluation scheme set forth in the RFP, technically
unacceptable overall. [5]

Encorp-Samcrete argues that Contrack's proposal should have been evaluated
as technically unacceptable by the agency because the project schedule
submitted by Contrack failed to address final inspection as required by the
RFP. Protester's Comments/Supplemental Protest at 9. Although
Encorp-Samcrete's project schedule also fails to specifically address final
inspection, the protester nevertheless contends that it did "indicate the
timing of final inspection in its proposed schedule, through the main
building punchlist item." Protester's Supplemental Comments at 7.

As mentioned previously, the RFP expressly required that proposals include
project schedules that address final inspection. RFP at 00100-6. The RFP
also provided for the performance of a "Final Acceptance Inspection" and
stated that "[t]he final acceptance inspection will be formally scheduled by
the Contracting Officer based upon results of the Pre-Final inspection." RFP
sect. 01451, at 9. The RFP added with regard to the pre-final inspection that
"[t]he Government will perform this inspection." Id.

In response to the protester's argument concerning Contrack's project
schedule's failure to address final inspection, the agency first points out
that, based upon the agency's review of the proposals, neither Contrack's
nor Encorp-Samcrete's proposal "included final inspection as a specific term
in their proposed schedules." Agency Supplemental Report at 2. The agency
states that, nevertheless, neither proposal was determined technically
unacceptable because of their failure in this regard because under the RFP
(and resultant contract) provisions, as set forth above, "the timing and
duration of final inspection is ultimately the government's responsibility

. . . [and] [s]ince the government controls the activity, it is difficult to
reason that the offeror[s'] failure to show the duration of the activity is
a material omission." Id. at 3. The agency adds that in any event "both
offerors were treated equally with respect to the inclusion of final
inspection as a [proposed] schedule item." Id. at 2.

Although the Encorp-Samcrete's proposed project schedule again refers to
certain activities which are related to the conduct of the final inspection,
and may be construed as "indicat[ing]" the timing of final inspection, the
fact remains that the protester's project schedule is, at best, unclear as
to when the protester believed that the agency's final inspection should be
conducted. Accordingly, the agency's conclusion that neither offeror's
proposal addressed final inspection as required by the RFP was reasonable.
Because the agency treated Encorp-Samcrete and Contrack equally by
effectively waiving for both offerors the RFP's requirement that the
offerors' proposed project schedules address final inspection,
Encorp-Samcrete has no basis to challenge the waiver as to Contrack. See
Serv-Air, Inc.; Kay and Assocs., Inc., B-258243 et al., Dec. 28, 1994, 96-1
CPD para. 267 at 12-13; PADCO, Inc., B-270445, Mar. 6, 1996, 96-1 CPD para. 142 at
4; Bannum, Inc., B-248169.2, Sept. 29, 1992, 92-2 CPD para. 216 at 5.

The protester nevertheless contends that it was unreasonable for the agency
to waive the RFP's requirement that the offerors' proposed project schedules
address final inspection while at the same time choosing to enforce the
RFP's requirement that proposed project schedules address demobilization.
Protester's Comments/Supplemental Protest at 9. As explained by the agency
and described above, the agency concluded that whether the offerors' project
schedules addressed final inspection was immaterial because, according to
the RFP, the agency, not the protester, was responsible for scheduling the
final inspection. On the other hand, as explained by the SSA and set forth
above, whether the offerors' project schedules addressed demobilization was
material, given the importance of demobilization to the completion and
overall success of the project, the potential difficulties in accomplishing
this task, and the fact that its scheduling was the responsibility of the
contractor (rather than the agency). As such, the agency did not act
unreasonably or treat the offerors in an unfair manner by waiving the RFP's
immaterial requirement that the offerors' proposed project schedules address
final inspection, while at the same time choosing to enforce the RFP's
material requirement that proposed project schedules address demobilization.

The protester argues that the agency acted improperly in rejecting
Encorp-Samcrete's proposal without providing the protester with
clarifications
"to resolve the perceived deficiency in [the] proposal" regarding the
failure of its proposed project schedule to address demobilization.
Protester's Comments/Supplemental Protest at 7. We disagree. Given that the
agency reasonably found Encorp-Samcrete's proposal technically unacceptable
because its proposed project schedule failed to address demobilization, the
purpose of any communication with Encorp-Samcrete with respect to its
scheduling of demobilization would have been to provide Encorp-Samcrete with
the opportunity to cure a material defect in its proposal, and the
communication would therefore have constituted discussions. Wellco Enters.,
Inc., B-282150, June 4, 1999, 99-1 CPD para. 107 at 7. Because there is
generally no obligation that a contracting agency conduct discussions where,
as here, the RFP specifically advises offerors of the agency's intent to
award a contract on the basis of initial proposals without discussions,

Robotic Sys. Tech., B-278195.2, Jan. 7, 1998, 98-1 CPD para. 20 at 11, and the
protester does not argue that the agency was required to conduct discussions
with the offerors, this aspect of Encorp-Samcrete's protest will not be
considered further.

The protest is denied.

Comptroller General
of the United States

Notes

1. The RFP provided that "[i]n order to enhance the efficiency of the
procurement process, the [agency] intends to evaluate only the three
lowest-priced responsive proposals for technical acceptability. RFP at
00100-4. The RFP added that if any of these three proposals were determined
technically unacceptable, the fourth (and if necessary, the fifth)
lowest-priced proposal would be evaluated until three technically acceptable
proposals were identified. Id.

2. The TET was comprised of three voting members and one non-voting member.

3. The SSA also noted that the agency's price analysis found
Encorp-Samcrete's price "unreasonable due to low equipment costs,
mobilization and demobilization, and material cost." Id.

4. RFP sect. 52.236-7004, "Payment for Mobilization and Demobilization" (which
is nearly identical to Defense Federal Acquisition Regulation Supplement
sect. 252.236-7004), provides that 60 percent of the lump-sum price for
mobilization and demobilization shall be paid upon completion of the
Contractor's mobilization at the work site, with the remaining 40 percent to
be paid upon completion of demobilization.

5. The fact that Encorp-Samcrete priced, and was therefore legally bound to
perform, demobilization is irrelevant, given that firm's failure to address
this material requirement in its schedule.