TITLE:  Millar Elevator Service Company--Costs, B-284870.3, August 3, 2000
BNUMBER:  B-284870.3
DATE:  August 3, 2000
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Millar Elevator Service Company--Costs, B-284870.3, August 3, 2000

Decision

Matter of: Millar Elevator Service Company--Costs

File: B-284870.3

Date: August 3, 2000

Susan L. Schor, Esq., McManus, Schor, Asmar & Darden, for the protester.

Scarlett D. Grose, Esq., General Services Administration, Public Buildings
Service, for the agency.

Mary G. Curcio, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

General Accounting Office recommends that protester be reimbursed the costs
of filing and pursuing its protest where the agency unduly delayed taking
corrective action in response to the protest, which was clearly meritorious.

DECISION

Millar Elevator Service Company requests that we recommend that it be
reimbursed the costs of filing and pursuing its protest challenging the
award of a contract to Amtech Elevator Services under solicitation for
offers (SFO) No. GS-03P-CDC-0006, issued by the General Services
Administration (GSA) for elevator modernization and maintenance in the
Moorhead Federal Building in Pittsburgh, Pennsylvania.

We recommend that GSA reimburse Millar its protest costs.

The SFO, issued on October 29, 1999, contemplated the award of a fixed-price
contract based on a best value evaluation. The evaluation was to be based on
six technical evaluation criteria listed in descending order of
importance--design, maintenance and performance history, modernization
experience and past performance, schedule, key personnel and staffing plan,
and women owned business and small disadvantaged business participation in
subcontracting--and on price, which was slightly less important than the
technical criteria. With respect to past performance, offerors were required
to submit a list of six comparable projects they had performed, including
two in the Pittsburgh area.

After the agency evaluated the proposals, held discussions, and requested,
received and evaluated two rounds of best and final offers, Millar received
a score of 85 (out of 100 possible points) under the technical factors, and
Amtech received a score
of 91. Amtech's evaluated price was $5,877,919 and Millar's $5,742,203.
Millar's evaluated price included $137,000 of sales tax added by GSA. The
agency selected Amtech's proposal for award as representing the best value
to the government.

On March 7, Millar protested to our Office, asserting, among other things,
that in evaluating Amtech's past performance GSA did not consider that
Amtech had failed to show that it had performed two projects in the
Pittsburgh area, and that GSA improperly added sales tax to Millar's bid.

In its April 7 report, GSA acknowledged that it had improperly evaluated
Amtech's proposal under the past performance criterion, and improperly had
added sales tax to Millar's bid. GSA asserted, however, that these
deficiencies had no effect on the award decision, and that Millar therefore
was not prejudiced, since Amtech's score would have been reduced only
slightly if the agency had considered Amtech's lack of past performance in
the Pittsburgh area, and Millar's price advantage would be increased only
from 2 percent to 4 percent if the sales tax were removed. In its comments
on the report, submitted on April 18, Millar reiterated its complaints with
respect to all issues, and also asserted that GSA's prejudice argument was
based on mere speculation as to whether the award decision would change if
the evaluation errors were corrected.

On May 1, at the request of the parties, the GAO attorney handling the
protest conducted an "outcome prediction" alternative dispute resolution
(ADR) conference by telephone. [1] During that conference, the GAO attorney
informed the parties that she agreed that GSA had improperly evaluated
Amtech's past performance, and improperly had added sales tax to Millar's
price. She further informed the parties of her view that, given the close
technical scores and Millar's lower price, it did not appear that there was
a sufficient basis to conclude that the agency's errors in the technical and
price evaluations had not prejudiced Millar. On May 9, GSA advised our
Office that it had taken corrective action through issuance of an amendment
to the solicitation. Accordingly, by decision dated May 11 (B-284870,
B-284870.2), we dismissed Millar's protest as academic.

Millar now requests that we recommend reimbursement of its protest costs on
the basis that the agency unduly delayed taking corrective action.

Where a procuring agency takes corrective action in response to a protest,
our Office may recommend that the agency reimburse the protester its protest
costs where, based on the circumstances of the case, we determine that the
agency unduly delayed taking corrective action in the face of a clearly
meritorious protest, thereby causing protesters to expend unnecessary time
and resources to make further use of the protest process in order to obtain
relief. Pemco Aeroplex, Inc.--Recon. and Costs, B-275587.5, B-275587.6, Oct.
14, 1997, 97-2 CPD para. 102 at 5. A protest is clearly meritorious when a
reasonable agency inquiry into the protest allegations would show facts
disclosing the absence of a defensible legal position. The Real Estate
Ctr.--Costs, B-274081.7, Mar. 30, 1998, 98-1 CPD para. 105 at 3. As noted above,
a GAO attorney will inform the parties through outcome prediction ADR that a
protest is likely to be sustained only if she or he has a high degree of
confidence regarding the outcome, so that the GAO attorney's willingness to
do so is generally an indication that the protest is viewed as clearly
meritorious.

With respect to the merits of the protest here, GSA conceded in its report
that it improperly evaluated Amtech's past performance and improperly added
sales tax to Millar's offer. Thus, the merit of these issues was evident.
However, we will sustain a protest only where the protester demonstrates a
reasonable possibility that it was prejudiced by the agency's improper
actions, that is, that, but for the agency's actions, the protester would
have had a substantial chance of receiving the award. See McDonald-Bradley,
B-270126, Feb. 8, 1996, 96-1 CPD para. 54 at 3; Statistica, Inc. v. Christopher,
102 F.3d 1577, 1581 (Fed. Cir. 1996). Consequently, the relevant question
here is whether there was clear merit to the protester's allegation that it
was prejudiced by the agency's admitted errors.

While GSA asserts that correcting the evaluation deficiencies would not
affect the award decision, this was in no way demonstrated by the record. To
the contrary, the evaluation deficiencies affected both the technical and
price evaluations, and since correcting the deficiencies would reduce
Amtech's 6-point technical advantage and increase Millar's price advantage,
necessitating a new price/technical tradeoff, we think Millar was in a
position where it had a substantial chance for award. Accordingly, we
conclude (as our attorney pointed out during the outcome prediction ADR)
that the harm to Millar from the agency's admitted evaluation errors clearly
met the standard for finding prejudice. Millar's allegation of prejudice was
clearly meritorious, and this should have been evident to the agency since
it recognized the merit of Millar's substantive complaint about evaluation
of its proposal.

Regarding the other prong of our analysis, the question of the promptness of
the agency's corrective action, we generally do not consider corrective
action to be prompt where it is taken after the due date for the agency
report. See CDIC, Inc.--Entitlement to Costs, B-277526.2, Aug. 18, 1997,
97-2 CPD para. 52 at 2. GSA did not propose corrective action until May 8, well
after the agency had submitted its report and the protester had incurred the
time and expense necessary to respond to that report. Under these
circumstances, we do not consider the corrective action to have been prompt.
Tri-Ark Indus., Inc.--Declaration of Entitlement, B-274450.2, Oct. 14, 1997,
97-2 CPD para. 101 at 4-5. Accordingly, we recommend that Millar be reimbursed
its protest costs. Millar should submit its claim for such costs, detailing
and certifying the time expended and costs incurred, directly to the agency
within 60 days of receipt of this decision. Bid Protest Regulations, 4
C.F.R. sect. 21.8(f)(1) (2000). [2]

Robert P. Murphy

General Counsel

Notes

1. In outcome prediction ADR, the GAO attorney handling a protest convenes
the parties, at their request or at GAO's initiative, and informs the
parties what the GAO attorney believes the likely outcome will be, and the
reasons for that belief. A GAO attorney will engage in this form of ADR only
if she or he has a high degree of confidence regarding the outcome. Where
the party predicted to lose the protest takes action obviating the need for
a written decision (either through the agency taking corrective action or
the protester withdrawing the protest), our Office closes the case. Although
the outcome prediction reflects the view of the GAO attorney, and generally
that of a supervisor as well, it is not an opinion of our Office, and it
does not bind our Office, should issuance of a written decision remain
appropriate.

2. In its April 18 comments on the agency report, Millar raised
supplemental, independent protest arguments--that offerors were not treated
equally during the evaluation, and that two of the evaluators had a conflict
of interest. Our recommendation that Millar be reimbursed its protest costs
does not extend to these issues, since they were not the subject of the
agency's corrective action.