TITLE:  DevTech Systems, Inc., B-284860.2, December 20, 2000
BNUMBER:  B-284860.2
DATE:  December 20, 2000
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DevTech Systems, Inc., B-284860.2, December 20, 2000

Decision

Matter of: DevTech Systems, Inc.

File: B-284860.2

Date: December 20, 2000

Alex D. Tomaszczuk, Esq., John E. Jensen, Esq., and Daniel S. Herzfeld,
Esq., Shaw Pittman, for the protester.

Kevin F. O'Donnell, Esq., Agency for International Development, 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 failed to conduct meaningful discussions with the protester where, in
taking corrective action in response to a prior protest, it reevaluated the
protester's proposal as having a number of weaknesses and deficiencies that
had not been previously identified and were critical to the contracting
officer's determination not to select the proposal for award, and the
weaknesses and deficiencies were not raised with the protester by the agency
during discussions.

DECISION

DevTech Systems, Inc. protests the award of contracts to the Academy for
Educational Development (AED) and Creative Associates International, Inc.,
(CAI) under request for proposals (RFP) No. M/OP-99-644, issued by the U.S.
Agency for International Development (USAID) for professional short-term
advisory and technical assistance services. DevTech argues that the agency
failed to conduct

meaningful discussions with it, and that the agency's evaluation of its
proposal and selection for award of the proposals submitted by AED and CAI
were unreasonable.

We sustain the protest.

The RFP provided for the award of indefinite-delivery/indefinite-quantity
contracts for a 3-year period. [1] The successful contractors under the RFP
will be required to provide USAID with short-term advisory and technical
assistance services in the areas of education, training,
telecommunication/information technologies, and related human development.
RFP at 8.

The RFP stated that the awards would be made to the offerors submitting the
proposals representing the best overall value to the government, with
technical merit considered more than twice as important as price. RFP at 74.
The solicitation listed

the following evaluation criteria: understanding of the scope of work,
corporate capability, management structure, and past performance. RFP at
72-73. The RFP informed offerors that the understanding of the scope of work
and past performance criteria were equal in importance, and approximately 1ï¿½
times more important than the equally weighted corporate capability and
management structure criteria. RFP at 74. The RFP further stated that "[t]he
Government intends to evaluate proposals and award a contract after
conducting discussions with offerors whose proposals have been determined to
be within the competitive range." RFP at 59.

The agency received seven proposals by the RFP's closing date. The proposals
were evaluated, and the agency included four proposals, including those
submitted by DevTech, AED and CAI, in the competitive range. Agency Report
at 4. The agency forwarded written discussion questions to each of the
offerors whose proposals had been included in the competitive range, and
requested that the offerors submit revised proposals. Agency Report, Tabs
H-K, USAID Discussion Letters to Offerors.

Revised proposals were received and evaluated, with AED's proposal receiving
a score of [DELETED] out of 100 points at an evaluated price of [DELETED]
per labor hour, CAI's proposal receiving a score of [DELETED] points at an
evaluated price of [DELETED], DevTech's proposal receiving a score of
[DELETED] points at an evaluated price of [DELETED], and the proposal of the
fourth offeror receiving a score of [DELETED] points at an evaluated price
of [DELETED]. [2] Agency Report, Tab M, Negotiation Memorandum, Feb. 15,
2000, at 4. The agency determined that the proposals submitted by AED and
CAI represented the best value to the government, and on February 17, 2000,
awarded contracts to those firms. Agency Report at 5.

After requesting and receiving a debriefing, DevTech protested the awards,
contending that the agency had failed to conduct meaningful discussions with
it, that the agency's evaluation of its proposal was unreasonable, and that
the selection for award of the proposals submitted by AED and CAI was
unreasonable. DevTech specifically argued that the agency had failed to
inform it during discussions of a perceived weakness or deficiency in its
past performance that resulted in DevTech's proposal receiving a relatively
low rating under the past performance criterion. Protest, Mar. 7, 2000, at
10-11.

In response to the protest, the agency informed our Office that its
"examination of the record suggests that there may have been shortcomings
and also inadequacies in documentation concerning this procurement." Agency
Report/Corrective Action Letter, Apr. 5, 2000, at 1. The agency stated that,
because of this, it would take "corrective action" by "conven[ing] an
evaluation panel whose function will be to carry out a fresh technical
evaluation of the proposals of those four companies originally in the
competitive range." Id. at 2. The agency argued that its proposed corrective
action rendered the protest academic given that "a new round will now take
place and, of course, a new award pattern may take place at the completion
of that round." Id. We agreed and dismissed DevTech's protest as academic on

April 12, 2000.

A new technical review panel reevaluated the original and revised proposals
of AED, CAI, DevTech, and the fourth competitive range offeror. Agency
Report, Tab U, Negotiation Memorandum, Aug. 8, 2000, at 2. The new panel
members were "advised to obtain all new past performance feedback and were
not given access to any of the comments collected or created by the original
technical panel." Id. The new panel was also informed that "initiating
another round of proposals/reviews was an option if they perceived that an
offeror had a reasonable chance of substantially increasing their standing
with their response." Id. The panel chose not to conduct discussions, and
assigned scores of [DELETED] out of 100 points to AED's proposal, [DELETED]
points to CAI's proposal, [DELETED] points to the fourth offeror's proposal,
and [DELETED] points to DevTech's proposal. Agency Report, Tab T, Technical
Review Panel Memorandum, July 18, 2000, at 1; Tab U, Negotiation Memorandum,
Aug. 8, 2000 at 2.

As noted, DevTech's proposal's total point score fell from [DELETED] points
to [DELETED] points. In the reevaluation DevTech's revised proposal received
[DELETED] out of [DELETED] points under the understanding of the scope of
work criterion, whereas its revised proposal had originally received
[DELETED] points under this criterion. In the reevaluation DevTech's
proposal received [DELETED] and [DELETED] points under the corporate
capability and management structure criteria, respectively, whereas its
proposal had originally received scores of [DELETED] and [DELETED] points
under these same criteria. Finally, DevTech's past performance score
remained at [DELETED] of [DELETED] points. Agency Report, Tab T, Technical
Review Panel Results, July 18, 2000, at 1; Tab Q, USAID Post-Award
Debriefing Letter to DevTech, Mar. 3, 2000. The new technical review panel
prepared narratives that describe, consistent with the panel's scoring, a
number of weaknesses and deficiencies in the protester's proposal.

Based on this reevaluation, the agency again determined that AED's and CAI's
proposals represented the best values to the government, and authorized
commencement of the contracts previously awarded to those firms. After
another debriefing, this protest followed.

The protester primarily argues that it did not receive meaningful
discussions on the weaknesses and deficiencies identified by the new panel
for the first time during the reevaluation that formed the basis for
DevTech's proposal's significantly lower score. The protester notes that,
except with regard to past performance, none of these weaknesses and
deficiencies had been identified in the initial evaluation and thus had not
been raised with the protester during discussions, and argues that the
agency erred in failing to conduct discussions regarding these weaknesses
and deficiencies. As in its prior protest, the protester argues that the
agency erred in not informing the protester during discussions of the
agency's perceived deficiencies in the protester's past performance.

Where contracting agencies conduct discussions with offerors whose proposals
are within the competitive range, the discussions must be meaningful; that
is, an agency is required to point out weaknesses or deficiencies in a
proposal as specifically as practical so that the agency leads the offeror
into areas of its proposal which require amplification or correction.
Professional Servs. Group, Inc., B-274289.2, Dec. 19, 1996, 97-1 CPD para. 54 at
3. Discussions cannot be meaningful if an offeror is not advised of the
weaknesses, deficiencies, or excesses in its proposal that must be addressed
in order for the offeror to be in line for award. Mechanical Contractors,
S.A., B-277916.2, Mar. 4, 1998, 98-1 CPD para. 68 at 4; CitiWest Properties,
Inc., B-274689.4, Nov. 26, 1997, 98-1 CPD para. 3 at 5.

This case highlights the challenge that an agency may face when, for
whatever reason, it reevaluates initial proposals after discussions are
complete. If during the reevaluation of proposals the agency identifies
concerns that would have had to be raised had they been identified before
discussions were held, the agency is required to reopen discussions in order
to raise the concerns with the offerors. Mechanical Contractors, S.A.,
supra, at 5-6; CitiWest Properties, Inc., supra, at 5. The key fact is that
the concerns (while identified relatively late) relate to the proposals as
they were prior to discussions. [3]

Here, as noted, USAID initially conducted discussions with DevTech (as well
as other competitive range offerors), which were followed by submission of
revised proposals. The initial evaluation panel found that for the most part
DevTech's revised proposal addressed the concerns that had been raised
during discussions, with the panel remaining concerned only with DevTech's
[DELETED]. Agency Report, Tab M, Negotiation Memorandum, Feb. 15, 2000, at
3. As mentioned previously, the initial panel assigned DevTech's revised
proposal a score of [DELETED] out of 100 points.

In contrast, the record reflects that the new evaluation panel found
DevTech's revised proposal to be considerably weaker than did the original
evaluation panel, with the same revised proposal receiving a score of only
[DELETED] out of 100 points. In this regard, the negotiation memorandum
prepared in response to the reevaluation states that:

[DELETED]

Agency Report, Tab U, Negotiation Memorandum, Aug. 8, 2000, at 3-4. The
record reflects that these "primary weaknesses" resulted in DevTech's
proposal being downgraded to [DELETED] out of 100 points, and were critical
to the agency's decision not to select DevTech's proposal for award. These
weaknesses (with the exception of weakness (6) relating to DevTech's past
performance) were first identified by the new evaluation panel, which chose
not to conduct discussions with DevTech or the other competitive range
offerors. Agency Report at 7 (discussions not held because "further lines of
inquiry or areas of clarification" were not identified by the new evaluation
panel); Tab K, Contracting Officer's Letter to DevTech, Dec. 10, 1999. The
weaknesses identified do not appear to have arisen because of changes made
through DevTech's proposal revisions; that is, the weaknesses all appear to
relate to DevTech's proposal as it was prior to the discussions. Because of
the significance of these "primary weaknesses," the agency would have had to
raise them during discussions, if they had been identified before
discussions were held. None of them, however, was raised with DevTech during
discussions.

Because DevTech was not informed during discussions of the weaknesses and
deficiencies that formed the basis for DevTech's proposal not being selected
for award, we conclude that the firm was not provided with meaningful
discussions, and we therefore sustain the protest. We recommend that the
agency reopen and conduct appropriate discussions with all offerors whose
proposals are in the competitive range, request revised proposals, and make
a new source selection. [4] If DevTech's proposal is selected, the agency
should terminate for convenience the appropriate contract, and award a
contract to DevTech. In addition, we recommend that DevTech be reimbursed
the costs of filing and pursuing this protest, including attorneys' fees. 4
C.F.R. sect. 21.8(d)(1) (2000). The protester should submit its certified claim,
detailing the time expended and costs incurred, directly to the contracting
agency within 60 days of receiving this decision. 4 C.F.R. sect. 21.8(f)(1)
(2000).

Anthony H. Gamboa

Acting General Counsel

Notes

1. The RFP informed offerors that the agency anticipated making three awards
under the solicitation, with two awards being made on the basis of an
unrestricted competition, and one contract being awarded on the basis of a
competition restricted to small business concerns. RFP at 64-65. This
protest only concerns the two unrestricted awards.

2. The offerors' price/business proposals were evaluated in accordance with
the instructions set forth in the RFP, which provided, in essence, that the
agency would calculate an average hourly burdened rate (comprised of the
rates for the 34 labor categories) for the three skill levels (senior,
mid-level, junior) set forth in the RFP, and would then apply a utilization
factor for each level to determine a single evaluated hourly rate for each
offeror. RFP at 3-6, 74.

3. This contrasts with the situation where an offeror introduces an element
in a post-discussion revision to its proposal that the agency views as a
deficiency or a weakness. In that situation, the agency is not required to
reopen discussions to address the new concern. See Ogden Support Servs.,
Inc., B-270354.2, Oct. 29, 1996, 97-1 CPD para. 135 at 7.

4. DevTech also protests that USAID's evaluation of its proposal and
selection of the awardees' proposals for awards were unreasonable. However,
we need not address the propriety of USAID's evaluation or source selection
given our recommendation that the agency reopen discussions, and request and
evaluate revised proposals.