TITLE: Calian Technology (US) Ltd., B-284814, May 22, 2000
BNUMBER: B-284814
DATE: May 22, 2000
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Calian Technology (US) Ltd., B-284814, May 22, 2000
Decision
Matter of: Calian Technology (US) Ltd.
File: B-284814
Date: May 22, 2000
Milton C. Johns, Esq., for the protester.
Laura K. Kennedy, Esq., and Geoffrey A. Barrow, Esq., Jenner & Block, for
Kay and Associates, Inc., the intervenor.
Daniel A. Laguaite, Esq., Naval Air Warfare Center Aircraft Division, for
the agency.
Aldo A. Benejam, Esq., and Christine S. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protester's contention that the agency improperly evaluated its proposal
is denied where the record shows that the agency evaluated in accordance
with the criteria announced in the solicitation, and the record reasonably
supports the lower ratings assigned protester's proposal.
2. Allegations that awardee lacks necessary facility security clearances and
is not registered to do business in the states where services are to be
provided concern the awardee's responsibility, the affirmative determination
of which is not for review by General Accounting Office absent evidence of
fraud, bad faith or failure to meet definitive responsibility criteria.
DECISION
Calian Technology (US) Ltd. protests the award of a contract to Kay and
Associates, Inc. (KAI), the incumbent, under request for proposals (RFP) No.
N00421-99-R-1506, issued by the Department of the Navy, Naval Air Systems
Command, for administrative, financial, and technical support services for
the Kuwait Air Force Liaison Office. Calian primarily challenges the
evaluation of its proposal.
We deny the protest.
BACKGROUND
Foreign countries that have purchased the Navy's F/A-18 fighter aircraft for
their national air forces require U.S.-based assistance to address issues
related to the maintenance and upgrade of the aircraft. Agency Report (AR)
at 1. Calian and KAI currently provide these support services to various
countries. KAI has been providing these services to the government of Kuwait
under a contract scheduled to expire in 2000. AR, exh. 14. The agency issued
the instant RFP to continue providing these services.
The RFP, issued August 26, 1999, contemplated the award of an
indefinite-delivery/indefinite-quantity, time and materials-type contract
with reimbursable line items for travel and material. RFP sect. L, sect. 52.216-1,
at 111. The solicitation contemplated the award of one contract for a base
year with up to four 1-year option periods. Id. at 2. The RFP required
offerors to provide the support services at three locations as follows:
administrative, financial, and technical support at the Washington,
D.C./Northern Virginia office; and logistical and administrative support at
the Philadelphia, Pennsylvania, and San Antonio, Texas offices. Id. sect. B.
Section M of the RFP listed the following evaluation factors: personnel,
technical, management, past performance, and cost/price. The RFP stated that
the personnel area was to be considered the most important, while the
technical, management, and past performance areas were of equal importance.
The RFP stated that cost/price would be considered the least important
factor. Award was to be made to the offeror whose proposal was determined to
be most advantageous to the government. Id. sect. M.
Three firms, including the protester and the awardee, responded to the RFP
by the time set on October 5 for receipt of proposals. Separate teams of
agency personnel evaluated initial proposals by assigning adjectival ratings
(unsatisfactory, marginal, satisfactory, highly satisfactory, or
outstanding) and risk ratings (low, medium, or high) under each technical
evaluation factor. The past performance area was assigned only a risk rating
(ranging from "unknown" to "very high"). The evaluation teams then met as a
group to arrive at the following consensus ratings for each proposal for the
three offerors:
Personnel Tech. Mgmt. Past Total
Perf.
Cost/Price
(Risk)
Calian Low/ Low/ Medium/ Very $4,966,740
Low
Satisfactory Satisfactory Satisfactory
Offeror Medium/ High/ Medium/ Low $4,742,320
B Marginal Marginal
Satisfactory
KAI Low/Highly Low/Highly Low/Highly Very $4,215,680
Low
Satisfactory Satisfactory Satisfactory
AR, exh. 8, Competitive Award Panel Proposal Analysis Report/Minutes, Jan.
11, 2000, at 2.
Based on these results, a competitive award panel (CAP) recommended to the
source selection authority (SSA) that the contract be awarded to KAI. AR,
exh. 8. The SSA agreed with that recommendation. AR, exh. 9, SSA Decision
Memorandum, Jan. 14, 2000. Accordingly, on February 11, the contracting
officer awarded KAI the contract. This protest followed a debriefing by the
agency.
PROTEST ISSUES
Calian primarily challenges the evaluation of its proposal in the
management, technical, and personnel areas. Calian also maintains that KAI
failed to comply with certain security provisions included in its current
contract, which were also included in the instant RFP. The protester further
contends that KAI gained an unfair cost/price advantage in the competition.
[1]
EVALUATION OF CALIAN'S PROPOSAL
Our Office will not engage in an independent evaluation of proposals nor
make an independent determination of their relative merits. Litton Sys.,
Inc., B- 239123, Aug. 7, 1990, 90-2 CPD para. 114 at 9. Rather, we review the
agency's evaluation only to ensure that it was reasonable and consistent
with applicable statutes and regulations as well as with the terms of the
solicitation. Sensis Corp., B-265790.2, Jan. 17, 1996, 96-1 CPD para. 77 at 6. A
protester's mere disagreement with the agency's conclusions does not render
the evaluation unreasonable. ESCO, Inc., B-225565, Apr. 29, 1987, 87-1 CPD para.
450 at 7. Based on our review of the record, we conclude that the evaluation
of Calian's proposal is reasonably supported. Below, we discuss some of the
more significant findings of the evaluators in support of our conclusion.
Management
Calian complains that the evaluators unreasonably assigned its proposal a
weakness in the management area because all of its proposed employees were
contingent hires.
Under the management evaluation factor, the RFP listed two
subfactors--management plan and manpower utilization matrix. With respect to
the evaluation under the management plan subfactor, the RFP explained as
follows:
Evaluation Subfactors:
(1) Management Plan: Evaluation of the management plan will be based on a
demonstration of sound business practices in response to the requirements of
Section L.
A poorly defined management approach regarding the proposed subcontractors,
a poorly defined integration of a large number of subcontractors, a poorly
structured partnership/joint venture, a high proportion of contingency
hires, a poor staffing plan, or poor augmentation plan will result in the
assessment of increased proposal risk and/or a reduced qualitative rating.
RFP sect. M, at 135 (emphasis added).
The evaluators assigned Calian's proposal an adjectival rating of
"satisfactory" with "medium" risk under the management area. The consensus
rating report reveals that the evaluators were concerned that Calian
proposed virtually all of its personnel, including key personnel, as
contingent hires. AR, exh. 7, Caucus Rating & Rationale Summary, Feb. 14,
2000. Although the evaluators recognized that Calian has experience with
foreign military sales aircraft, especially the F/A-18 program, they found
Calian's approach to filling key positions was a limiting factor in
assigning its proposal a rating better than "satisfactory" in this area. In
addition, the evaluators found that "[s]ince Calian did not provide any
letters of intent for the proposed employees, it is hard to determine
whether or not they will remain on this program should Calian receive
award." Id., at 2 The evaluators further concluded that Calian's approach
potentially could result in some disruption of schedule, increase in cost,
or disruption of performance, especially if some of KAI's employees elected
not to work for the protester if it were awarded the contract. Id.
Calian argues that it was unfair for the evaluators to downgrade its
proposal for failure to provide letters of commitment because the RFP did
not require offerors to provide such letters. The protester also maintains
that the evaluators unreasonably assumed that the incumbent employees would
remain performing the contract if employed by KAI, but might leave if
employed by Calian. Calian further argues that if Calian had submitted
letters for all of its proposed employees, the proposal would have violated
the RFP's page limitations, pointing out that, in any event, all of the
resumes contained the original signatures of each candidate. Calian's
arguments are without merit.
Although the RFP did not explicitly require the submission of letters of
intent [2] from proposed key personnel, section M of the RFP clearly placed
offerors on notice that in responding to section L of the RFP, they were
expected to demonstrate "sound business practices." In addition, section M
was clear that proposing "a high proportion of contingency hires," among
other things, would result in the assignment of higher risk and/or a lower
adjectival rating to the proposal. In our view, in light of the RFP's
specific warnings, and given Calian's approach in proposing all of its key
personnel as contingent hires, it was not unreasonable for the evaluators to
expect that to demonstrate sound business judgment, Calian would have
provided reliable assurances regarding its proposal to hire and retain
incumbent personnel. Contrary to the protester's position, although the
resumes it provided with its proposal may have contained original signatures
of the candidates for each key position, the resumes, standing alone, did
not provide the agency with any assurances that the individuals proposed, in
fact, intended to work for Calian if awarded the contract. Further, there is
no reason to conclude that Calian could not have made the appropriate
adjustments to its proposal to include the necessary assurances to allay the
agency's concerns, without exceeding the RFP's page limitations. Since
Calian's proposal provided no such assurances, the evaluators reasonably
identified this as a weakness.
The evaluators also assigned a weakness to Calian's proposal under the
management area in connection with the firm's apparent lack of understanding
of the RFP's security requirements related to generating and handling
classified materials. Calian argues that the agency included security
requirements in the solicitation without fully understanding those
requirements. For instance, in its protest, Calian attempts to explain how,
based on its own prior experience, it believes that the RFP's security
requirements are not the best approach for the contemplated contract. Calian
further objects that the "Defense Security Service. . . was not consulted
for input or review" of the RFP. Protest at 2. These allegations are
untimely.
To be timely under our Regulations, protests based upon alleged
improprieties in a solicitation which are apparent prior to the time set for
receipt of initial proposals must be filed prior to that time. 4 C.F.R. sect.
21.2(a)(1). Accordingly, if Calian believed that the RFP's security
requirements were overstated or inappropriate for the required services, it
was required to raise its objections either with the agency or with our
Office before the time set on October 5, 1999, for receipt of proposals.
Since Calian did not file its protest until March 2, 2000, well after
closing, these allegations are untimely, and will not be considered.
Technical
Calian argues that the evaluators improperly assigned weaknesses to its
proposal in this area because they misunderstood or misread at least one
sentence in the proposal.
This area contained the following subfactor:
Technical Approach: The Government will evaluate each Offeror's overall
understanding of all the details regarding the methodology used in
performing the required tasks in the Statement of Work (SOW) and how to
approach them based on their clearly written answers. Offerors will be
evaluated on their demonstrated understanding of the SOW functions, such as
operating environment, configurations and engineering problems inherent to
this type of effort.
In making this evaluation, the Government will consider an Offeror's
knowledge of the content of the work in terms of its activities, their
inputs and outputs, and their interrelationships. Recognition of appropriate
sequence and realistic duration of the work activities; knowledge of the
appropriate types of resources required to perform the work and of their
appropriate allocation to the work activities.
Familiarity with the difficulties, uncertainties, and risks associated with
the work, and knowledge of the personnel and subcontractor qualifications
necessary to the performance of the work.
RFP sect. M, at 133-34.
The evaluators assigned Calian's proposal one strength and three weaknesses
in this area. AR, exh. 7, Approved Strengths and Weaknesses, Feb. 14, 2000
at 4. In support of one weakness, the evaluators noted that Calian made
inaccurate references to the role of Lackland Air Force Base (AFB) in San
Antonio, Texas, stating in its proposal that Calian would have relationships
with the U.S. Air Force for both F/A-18 issues and training issues at
Lackland AFB. Calian essentially maintains that the evaluators misread its
proposal.
The evaluators found that Calian's interpretation of the required tasks
raised questions about the firm's knowledge of the role the Air Force plays
in training Kuwaiti students. In this regard, the agency explains that
Lackland is the site of the Defense Language Institute and that the only
function that Lackland serves in the effort for the Kuwait Air Force is to
provide English language training to members of the Kuwait Air Force. In
short, there are no "F/A-18 issues" or "training issues" addressed at
Lackland. Memorandum of Law, Apr. 7, 2000, at 10. In fact, the RFP clearly
required the contractor to "[f]urnish administrative and logistic support to
the Liaison Office Defense Language Institute, English Learning Center for
the Kuwait Air Force (KAF) in San Antonio, TX in accordance with Section C .
. . ." of the RFP. Section C of the RFP describes the functions of the
personnel required at Lackland and none of those functions relates in any
way to the F/A-18 aircraft or training.
In addition, the evaluators assigned a weakness in this area for Calian's
failure to address a "clear understanding of policy decisions for release of
price and availability data, technologies, equipment, etc." AR, exh. 7,
Approved Strengths and Weaknesses, Feb. 14, 2000, at 4. In our view, the
evaluators were reasonably concerned that, based on Calian's interpretation
of the tasks in its proposal, the firm lacked an overall understanding of
all the details regarding the required tasks. In addition, the evaluators
could reasonably conclude that Calian had not fully demonstrated a clear
understanding of the various functions described in the RFP's SOW. Calian
does not take issue with this aspect of the evaluation.
In sum, since Calian's proposal did not clearly demonstrate the firm's
knowledge of the content of the work to be performed at Lackland AFB and
failed to address certain policy decisions, the evaluators reasonably
assigned two weaknesses to Calian's proposal in this area, and were
justified in assigning Calian's proposal a "satisfactory" rating under this
factor. [3]
Personnel
The record shows that both Calian and KAI proposed identical personnel, yet
Calian's proposal was downgraded in this area, receiving a rating of only
satisfactory while KAI's proposal was rated "highly satisfactory" under the
personnel subfactor. The evaluators assigned a weakness to Calian's proposal
under this factor primarily because it failed to address the proposed
employees' citizenship status and lacked details concerning training and
experience as required by the RFP.
Calian relies on several decisions of our Office to argue that since it
proposed the same key personnel that KAI has employed for performing the
current contract, the agency evaluators either knew or should have known
that Calian's proposed employees had the same qualifications, training,
experience, citizenship, and clearances as KAI's key personnel. [4] Calian
thus maintains that it was unreasonable for the agency to evaluate the
firms' proposals differently in this area. As explained below, we need not
resolve this issue since it is clear that the agency's action did not
prejudice Calian.
Prejudice to the protester is critical to our decisionmaking, since our
Office will not sustain a protest unless the protester demonstrates a
reasonable possibility of prejudice, that is, unless the protester
demonstrates that, but for the agency's actions, it would have had a
substantial chance of receiving the award. McDonald-Bradley, B-270126, Feb.
8, 1996, 96-1 CPD para. 54 at 3; see Statistica, Inc. v. Christopher, 102 F.3d
1577, 1581 (Fed. Cir. 1996). For the agency's actions to be prejudicial
here, there must be some showing that had the agency in the evaluation
assigned a higher rating to Calian's proposal in the personnel area, its
proposal would have received a better overall assessment and reasonably
could have been selected for award. There is no such showing in the record.
Even assuming that the evaluators had assigned Calian's proposal the same
rating as KAI's proposal in the personnel area (highly satisfactory), that
rating alone would not be sufficient to overcome the lower adjectival and
risk ratings its proposal received in the technical and management areas.
Moreover, given KAI's proposal's higher ratings and several enhancing
features identified by the evaluators under those two areas (technical and
management), as well as its significantly lower cost/price, there is no
basis to conclude that assigning a higher rating to Calian's proposal in the
personnel area could have materially affected the award decision.
Calian further contends that the award was improper because KAI lacks
facility security clearances; in support of this contention, Calian asserts
that under its existing contract KAI has not operated its Arlington facility
in accordance with government security regulations.
The RFP did not require proof of security clearances prior to award. Rather,
the RFP required only that the awardee develop, implement, and maintain a
program under the relevant regulations to protect classified and sensitive
information to be held at the contractor's facilities during contract
performance. RFP sect. C.4.8. To the extent that Calian challenges the
evaluation of KAI's proposal regarding compliance with the RFP's security
requirements, the record shows that the evaluators specifically noted that
KAI's proposal did not mention how it proposed to satisfy the RFP's
requirements concerning the handling of classified or sensitive information,
and assigned the proposal a weakness under the management factor. The
evaluators noted, however, that this weakness "can be overcome with extra
contractor effort and close government oversight, specifically some training
and orientation for contractor personnel in the OPSEC process and the
actions required of them under the contract." AR, exh. 7, Approved Strengths
and Weaknesses, Feb. 25, 2000, at 3. The record thus shows that, contrary to
Calian's suggestion, the agency took this weakness into account in the
overall evaluation of KAI's proposal.
Calian also points to its allegation that KAI does not operate its Arlington
facility in accordance with government security regulations under the
current contract as evidence that the agency could not reasonably conclude
that KAI could perform in accordance with the security requirements under
the current RFP. As a preliminary matter, the agency takes the position that
Calian's allegation is not factually correct. The Navy states that it is not
aware of any instance where KAI has needed to receive or store classified
documents in the Arlington office. The agency further explains that when KAI
employees need to use classified information under the current contract,
they use facilities that are cleared to hold classified information. In
addition, the intervenor explains that its contract did not require the
Arlington office to handle or store classified information, and that
consequently, under applicable regulations, KAI was neither required to
obtain nor eligible to receive a facility clearance license for the
Arlington office.
In any event, Calian's assertion regarding KAI's alleged failure to meet
security requirements under its existing contract relates to KAI's ability
to perform, and thus concerns a matter of responsibility. See Ktech Corp.;
Physical Research, Inc., B-241808, B-241808.2, Mar. 1, 1991, 91-1 CPD para. 237
at 3 (whether a prospective contractor has the ability to obtain any
necessary security clearances concerns the firm's ability to perform and is
therefore a matter of responsibility). The contracting officer has concluded
that KAI is responsible, that is, the firm is capable of satisfactory
performance, including meeting the requirements for obtaining the required
security clearances. This Office does not review an agency's affirmative
determination of responsibility unless the protester shows either that the
determination was made fraudulently or in bad faith or that definitive
responsibility criteria in the solicitation were not met. 4 C.F.R.
sect. 21.5(c). There is no evidence of fraud or bad faith on the part of the
contracting officer, and the requirements contained in the RFP for providing
protection for handling classified and sensitive information did not
constitute definitive responsibility criteria since they were not required
prior to award. See Telos Field Eng'g, B-233285, Mar. 6, 1989, 89-1 CPD
para. 238 at 5-6. Accordingly, we have no basis to object to the contracting
officer's affirmative determination of responsibility.
ALLEGED IMPROPER COST/PRICE ADVANTAGE
The protester also argues that the awardee is not registered to do business
in any of the states where it proposes to perform the contract. According to
Calian, if the awardee is not registered to do business in those states, it
is possible that KAI is not paying applicable state and local taxes, thus
allowing the firm to gain an unfair advantage in preparing its cost/price
proposal.
Although Calian characterizes its argument in terms of KAI's alleged unfair
advantage in preparing its cost/price, the premise underlying Calian's
argument is Calian's assertion that KAI is not licensed to do business in
the states where the contract is to be performed. Although a contracting
officer may determine that the absence of an appropriate business license
renders an offeror nonresponsible, compliance with state or local
requirements is generally a matter between the contractor and the issuing
authority, and will not be a bar to contract award absent a specific
requirement in the solicitation. See Technology Advancement Group, B-238273,
B-238358, May 1, 1990, 90-1 CPD para. 439 at 2. Here, the RFP did not contain
any specific requirement for offerors to have a business license of any kind
to be eligible for award. In any event, if KAI does not comply with
applicable state or local laws and, as a result of enforcement action by the
cognizant authorities, KAI chooses
to not perform the contract or is enjoined from doing so, the contract may
be properly terminated for default. See Mark Dunning Indus., Inc., B-258373,
Dec. 7, 1994, 94-2 CPD para. 226 at 6; Lewis & Michael, Inc.; Stark Van Lines of
Columbus, Inc.--Recon., B-215134.2, B-215134.3, June 26, 1984, 84-1 CPD para.
673 at 1-2.
The protest is denied.
Comptroller General
of the United States
Notes
1. KAI argues that the protest should be dismissed because Calian is not an
"interested party" under our Bid Protest Regulations to maintain the
protest. 4 C.F.R. sect. 21.0(a) (2000). In this regard, KAI points out that
since Calian submitted the highest cost/price proposal, it would not be in
line for award because there is a third, intervening offeror (Offeror B),
that submitted a lower cost/price proposal and thus "could be next in line
for award" if KAI's contract were terminated. KAI Comments, Apr. 18, 2000,
at 10. KAI's argument overlooks the substance of Calian's challenge--that
the agency improperly evaluated its proposal in several areas. Specifically,
Calian argues that had the agency conducted a proper evaluation of its
proposal under the technical, management, and personnel factors, its
proposal would have received higher technical ratings, and it could have
been selected as offering the best value to the government. Thus, if we
found that Calian's arguments had merit and sustained its protest, it is
possible that upon reevaluation, the agency would determine that Calian's
proposal exceeded the RFP requirements, and contained "enhancing features"
(i.e., criteria for earning a rating of "Outstanding" under the technical
factors) that could reasonably justify paying a premium for Calian's
proposal. We therefore consider Calian an interested party to maintain the
protest. See Pan Am World Servs., Inc., et al., B-231840 et al., Nov. 7,
1988, 88-2 CPD para. 446 at 6.
2. Letters of intent provide agencies with assurances that the key personnel
proposed by offerors are, in fact, intending to work for the offeror
proposing them. See, e.g., Essex Corp., B-246536.3, June 25, 1992, 92-2 CPD
para. 170 at 8.
3. The evaluators also assigned Calian's proposal a weakness for making
inaccurate references to the Kuwait F/A-18 aircraft baseline. According to
the evaluation documents, Calian referred to the aircraft baseline as "Lot
13," which led the evaluators to question Calian's knowledge of the correct
aircraft configuration. In its agency report, the agency concedes that the
technical evaluators incorrectly downgraded Calian's proposal for the stated
reason and withdrew this weakness. AR at 13. In view of the remaining two
weaknesses in this area as discussed above, however, and in view of the fact
that the evaluators found that Calian's proposal did not exceed any of the
RFP requirements in any area and failed to offer any "enhancing features,"
the impact of withdrawing this weakness on the overall ratings Calian's
proposal earned in this area is de minimis. Further, throughout its
submissions, Calian suggests that the evaluation of its proposal shows bad
faith. However, to show bad faith there must be a showing that the agency
intended to harm the protester. Complere Inc., B-257946, Nov. 23, 1994, 94-2
CPD para. 207 at 4. Calian made no such showing here, and we see no evidence to
support Calian's allegation of bad faith.
4. Calian cites to Consolidated Eng'g Servs., Inc., B-279565.2, B-279565.3,
June 26, 1998, 99-1 CPD para. 75 (protest sustained where, since protester and
awardee proposed same subcontractor, they should have received the same
score for subcontractor's experience); GTS Duratek, Inc., B-280511.2,
B-280511.3, Oct. 19, 1998, 98-2 CPD para. 130 (protest sustained where agency
improperly ignored relevant past performance information that was personally
known to one of the evaluators, and the agency failed to comply with the
solicitation's evaluation criteria with respect to the past performance
evaluation); and International Bus. Sys., Inc., B-275554, Mar. 3, 1997, 97-1
CPD para. 114 (protest sustained where the agency failed to consider the
protester's past performance on a contract involving the same agency, the
same services, and the same contracting officer because an individual in the
agency did not complete and return the past performance evaluation
materials).