TITLE: J. A. Jones Management Services, Inc., B-284909.5, October 2, 2000
BNUMBER: B-284909.5
DATE: October 2, 2000
**********************************************************************
J. A. Jones Management Services, Inc., B-284909.5, October 2, 2000
Decision
Matter of: J. A. Jones Management Services, Inc.
File: B-284909.5
Date: October 2, 2000
William A. Roberts III, Esq., William Lieth, Esq., Kevin J. Maynard, Esq.,
and Eric W. Leonard, Esq., Wiley, Rein & Fielding, for the protester.
Lars E. Anderson, Esq., and Paul N. Wengert, Esq., Venable, Baetjer and
Howard; and Thomas J. Madden, Esq., and Johana A. Reed, Esq., Venable,
Baetjer, Howard & Civiletti, for Raytheon Technical Services Company, an
intervenor.
Sharon A. Jenks, Esq., and Gregory H. Petkoff, Esq., Department of the Air
Force, for the agency.
Christina Sklarew, Esq., and Paul I. Lieberman, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protest that agency improperly evaluated offerors' past performance is
denied
where record reflects that the evaluation ratings are reasonable and were
arrived at under an assessment conducted in accordance with the criteria set
forth in the solicitation.
2. Selection of higher-rated, higher-priced proposal is unobjectionable
where solicitation provided for best-value award with technical and past
performance considerations significantly more important than price, and the
agency reasonably determined that the superior past performance presented by
the higher-rated proposal outweighed the associated slightly higher price.
DECISION
J. A. Jones Management Services, Inc. protests the Department of the Air
Force's award of a contract to Raytheon Technical Services Company under
request for proposals (RFP) No. F64605-99-R-0013 for base operating support
services at Johnston Atoll. Jones questions the propriety of the agency's
past performance evaluations and asserts that the resulting award decision
lacks a rational basis.
We deny the protest.
BACKGROUND
The RFP, issued in July 1999, contemplated the award of an
indefinite-quantity contract to provide base operating services, including
the disposal of munitions and chemical agents, for a period of up to 7
years, including a 6-month base period and all options, at Johnston Atoll
Air Force Base, a remote location in the Pacific Ocean. The solicitation
advised offerors that a single contract would be awarded on the basis of the
best overall value to the government, and listed the following evaluation
areas in descending order of importance: past performance, technical, and
price. The RFP further stated that past performance and technical, combined,
would be significantly more important than price, so that the lowest-priced
proposal would not necessarily receive the award. As relevant here, at
section L the RFP instructed offerors to provide their experience performing
on similar base operating support service contracts by listing no more than
25 contracts that the firm had performed since 1994, and to rank these
contracts in order of their relevance to this solicitation's performance
work statement. Offerors were further instructed to include in their
description of relevant contracts specific detail regarding "why or how that
effort is relevant and similar in scope and magnitude to the effort required
by this solicitation." RFP sect. L.(2).(I).(c). Section M of the RFP specified
that in assessing offerors' past performance, the agency would "focus[] on
the currency and relevancy (i.e., scope and magnitude)." RFP sect. M.(I).(1).
Four firms submitted proposals. After reviewing the initial proposals, the
Air Force conducted oral and written discussions and invited offerors to
submit revised proposals. All four final proposals received a rating of
acceptable with low risk in the technical evaluation area. Under the past
performance factor, Jones's proposal was rated "very good" (the
second-highest adjectival rating available), while Raytheon's proposal was
rated "exceptional," the highest available rating. Jones's overall price of
$[deleted] was the second-lowest among the four offers, while Raytheon's
$160,630,151 was third lowest. [1] Agency Report (Apr. 6, 2000) [Agency
Report I], Tab 7, Source Selection Decision (Mar. 3, 2000), at 14. The
Source Selection Authority (SSA) concluded that Raytheon's exceptional/high
confidence past performance rating reflected a record of substantial current
and past experience providing base operating services with an exceptional
level of performance, and that the benefit of this experience far outweighed
the relatively small difference in price compared to any of the other
offerors. The SSA therefore selected Raytheon for the award.
On March 14, 2000, Jones filed a protest with our Office (B-284909.2),
challenging the Air Force's best value determination and the resulting award
decision; after reviewing the agency report, Jones supplemented its protest
on April 17 and April 20, alleging improprieties in the agency's evaluation
of Jones's past performance. During the development of the supplemental
protest, the Air Force decided to take corrective action by empanelling a
new performance risk assessment group (PRAG) to conduct a new past
performance evaluation and to make a new best value determination.
Thereupon, we dismissed Jones's protest as academic because the agency had
taken corrective action.
CURRENT PROTEST
The new PRAG reviewed each offeror's past performance proposal volume, the
evaluation notices and responses, and the completed past performance
questionnaires. The PRAG's source selection decision document included an
evaluation matrix summarizing the relevance of work performed under prior
contracts as well as a narrative evaluation of the PRAG's analysis and
conclusions.
Again, Raytheon's past performance was rated exceptional, and Jones's was
rated very good. The SSA reviewed the PRAG's past performance evaluation
report and concurred with its ratings and conclusions. After assessing past
performance and technical ratings as well as price, the SSA selected
Raytheon for award as the best value offeror. Agency Report (July 17, 2000)
[Agency Report II] at 1. Jones received a debriefing concerning the new past
performance evaluation and award on June 28 and this protest to our Office
followed, challenging the new past performance evaluation and the resulting
award determination.
Stating that the timely award of a contract was considered critical to the
Air Force's ongoing mission on Johnston Atoll, and because an extension of
the interim contract that was in effect when Jones filed this protest was
not a viable option, the Air Force overrode the stay of performance under
the Competition in Contracting Act, citing the best interests of the
government. [2] See 31 U.S.C. sect. 3553(d)(3)(C)(i)(I) (1994).
Jones contends that the new PRAG's past performance evaluation improperly
focuses on the "relative relevance" of the offerors' reference contracts,
asserting that such emphasis on "relevance ratings" was neither mentioned in
the RFP and source selection plan, nor in discussions with Jones. Jones also
questions the best value determination, alleging that there is no rational
basis upon which the agency could have concluded that Raytheon's past
performance is superior to Jones's in any meaningful way that would justify
paying the price premium involved.
Past Performance Evaluation
We will review an agency's evaluation of proposals to ensure that it is
fair, reasonable, and consistent with the evaluation criteria stated in the
solicitation and with applicable statutes and regulations. Wind Gap
Knitwear, Inc., B-261045, June 20, 1995, 95-2 CPD para. 124 at 3.
As a general matter, where the comparative merit of offerors' past
performance is to be evaluated to assess the probability of successful
accomplishment of the work at issue, relevance is logically encompassed by
and related to the past performance factor, whether or not specifically
identified in the RFP. American Dev. Corp., B-251876.4, July 12, 1993, 93-2
CPD para. 49 at 10. In addition, here the RFP expressly provides that the
agency's past performance assessment would focus on the currency and
relevance of the information provided, and the solicitation further
instructs offerors to include past performance information in sufficient
detail to identify previous experience as it related to the probability of
successful accomplishment of the statement of work, and directs offerors to
rank the contracts listed in their proposals as references in order of their
relevance to this solicitation's statement of work. Thus, assessment of the
relevance of past performance was required under the RFP evaluation
criteria, and indeed was specified as the focus of the past performance
assessment. Jones's assertion to the contrary is directly contradicted by
the solicitation evaluation criteria and is simply wrong.
Moreover, the record establishes that the agency's new evaluation is
reasonable.
Specifically, the record reflects a thorough agency analysis of the past
performance proposals. Offerors' references were assessed under the areas of
quality of service, schedule, business relations, and management of key
personnel. Raytheon's performance was essentially evaluated as excellent or
outstanding under the first three areas and satisfactory under the fourth.
In all instances, where any performance problems were noted, Raytheon was
assessed as having taken appropriate and satisfactory corrective action to
resolve the problem. Agency Report II, Tab 10, Source Selection Decision
(June 21, 2000), at 6. Jones was evaluated as outstanding under quality of
service after taking into account its corrective action taken under its
quality control program. Jones was evaluated as having various weaknesses
under schedule, which was seen as raising a question whether or not it could
ensure strict adherence to subcontractor monitoring and schedule
performance. Under business relations, Jones was assessed as "proactive" in
correcting prior deficiencies and weaknesses. Under management of key
personnel, Jones's strengths were assessed as exceeded by its weaknesses.
Id. at 4-5. Thus, Jones's past performance was generally assessed less
favorably than Raytheon's overall, and in all areas the PRAG noted that with
one exception, Jones's contracts were of limited relevance to the contract
at issue. Id.
In assessing relevance, the PRAG reviewed the top five ranked contracts
submitted by each offeror. The evaluators measured the relevance of an
offeror's prior contracts by using a matrix that listed the 39 areas or
categories of tasks as they were identified in the RFP. The PRAG completed
matrices for each offeror (indicating which of the 39 areas were included in
the prior contract) based on the offeror's past performance proposal, and
also had the offeror's references for the prior contracts complete the
matrix. Even if a contract included an area that was only partially relevant
to the RFP's areas of performance, the PRAG gave full credit under this
comparison. This method of review produced the following summarization of
how many of the 39 areas were performed under the prior contracts:
Relevant Requirements Completed
Jones Raytheon
Contract 1 37 38
Contract 2 25 38
Contract 3 15 39
Contract 4 19 38
Contract 5 16 34
Id. at 4.
The contracts were rated under an adjectival scale for relevance, based on
the number of relevant requirements each one included, as shown in the
following summary:
Relevance by Contract
Jones Raytheon
Contract 1 Extremely Relevant Extremely Relevant
Contract 2 Somewhat Relevant Extremely Relevant
Contract 3 Somewhat Relevant Extremely Relevant
Contract 4 Somewhat Relevant Extremely Relevant
Contract 5 Somewhat Relevant Somewhat Relevant
Id. at 3.
The source selection decision reflects the Air Force's concern that the
successful offeror will be responsible for the safe disposal of munitions
and chemical agents stored at Johnston Atoll and will need to support the
chemical demilitarization activity through a wide range of requirements,
some of which are unique to the remote location. In this regard, the agency
notes that maintaining the supply of potable water, producing power and
maintaining the island infrastructure (including the operational runway and
flight line), providing food for the island inhabitants and providing
recreational activities are crucial requirements which, if not properly
performed, can seriously jeopardize the Johnston Atoll mission. Id. It is
the agency's view that the best indicator of how well the work is likely to
be accomplished is the offeror's past performance record.
The evaluation record and source selection decision reflect the agency's
generally favorable assessment of Jones's performance under its prior
contracts. However, the record also reflects the agency's substantially more
favorable assessment of Raytheon's past performance on contracts that were
assessed as significantly more relevant than Jones's. The agency had
concerns about the fact that Jones had only performed one contract that was
considered extremely relevant, as demonstrated on the matrices, above. [3]
Further, since Jones was not the prime contractor but only one firm among
three that performed the work as a joint venture under that contract, it was
not clear which work Jones had actually performed. [4] Agency Report II, Tab
9, Past Performance Evaluation, at 11. In addition, the PRAG was reasonably
concerned by several areas in which it considered Jones's past performance
to be weak, including ones that were considered among the more "mission
essential" areas, such as medical, food, environmental, and air
terminal/airfield services. Agency Report II at 5. While Jones disagrees
with these conclusions, it has not offered any persuasive rebuttal of the
evidence in the record. [5] In these circumstances, where the solicitation
involves a very complex and somewhat unique requirement and the protester
has not been the prime contractor on a single contract that involves the
same requirements or can be shown to be extremely similar, we find
reasonable the agency's conclusion that "the evaluated contracts only give a
picture of what [Jones] can do for contracts with less complex requirements
than what is required" for this effort. Agency Report II, Tab 10, Source
Selection Decision (June 21, 2000), at 5. In sum, the agency reasonably
concluded that Raytheon offered better performance on substantially more
relevant contracts than Jones.
Best Value Determination
Jones argues that Raytheon's past performance could not reasonably be
considered superior to its own in any meaningful way that would justify
paying the associated price premium. We find this allegation without merit.
Source selection officials are often required to make a price/technical
tradeoff to determine if one proposal's technical superiority is worth the
higher price associated with that proposal, and that determination properly
may reflect a price/past performance tradeoff where to do so is consistent
with the solicitation's evaluation scheme. Rotair Indus., Inc., B-276435.2,
July 15, 1997, 97-2 CPD para. 17 at 3. Where, as here, the solicitation provides
for award based on the best value to the government, and provides that past
performance is to be considered more important than price, and the offeror
with the best past performance rating does not propose the lowest price, the
selection official ultimately must decide whether the higher-priced proposal
represents the best value in light of the offeror's better past performance
rating. Excalibur Sys., Inc., B-272017, July 12, 1996, 96-2 CPD para. 13 at 3.
To the extent that Jones's objection to the tradeoff determination is based
on its disagreement with the agency's assessment of the relative merits of
the two offerors' past performance, the objection is without merit since, as
explained above, the agency's assessment is reasonable and supported. As to
the propriety of the extant tradeoff, the record shows that Jones's less
favorably rated past performance reflected contracts that were generally
smaller in scope than those that were listed for Raytheon, and on which
Raytheon was more favorably rated; Jones's prior contracts averaged
$[deleted] million per year, Agency Report I, Tab 7, Source Selection
Decision (March 3, 2000),at 8, while Raytheon's contracts averaged $150.5
million per year. Id. at 9. Moreover, Raytheon's most relevant contract was
a near-perfect match for this procurement: it was a 5-year effort performed
for the Navy at Johnston Atoll, which included all but one of the current
requirements. Agency Report II, Tab 9, Past Performance Evaluation, at 17.
In addition, as shown on the matrices above, four of Raytheon's most recent
five contracts included at least 38 of the 39 areas of performance required
here. As provided for in the RFP, the SSA equated Raytheon's higher past
performance rating with a reduced level of risk for successful performance
of this contract and reasonably concluded that this consideration offset
Raytheon's higher price. In these circumstances, we see no basis to object
to the SSA's conclusion that Raytheon's higher-rated and slightly
higher-priced proposal represented the best value to the government. [6] See
AdvanChip Corp., B-282571, July 29, 1999, 99-2 CPD para. 35 at 4.
The protest is denied.
Anthony H. Gamboa
Acting General Counsel
Notes
1. Although the RFP required offerors to submit prices for two different
possible levels of performance, (one reflecting full performance and the
other reflecting a gradual reduction in force), our decision will refer only
to the full-performance pricing, since the different levels do not have any
impact on the protest issues.
2. The Air Force and the protester both requested that our Office provide
alternative dispute resolution (ADR) in the form of protest "outcome
prediction" under an expedited schedule agreed to by the parties. We granted
the expedited ADR request, and the agency delayed lifting the stay of
performance until the ADR process was completed. The GAO attorney of record
held an outcome prediction conference call on July 28, during which she
explained to all of the parties why she anticipated that the protest should
and would be denied, explaining in detail the facts and legal reasoning on
which this prediction was based. The protester nonetheless elected not to
withdraw its protest. This decision is somewhat abbreviated because the
parties have already been provided with a detailed oral explanation of the
reasoning underlying the conclusion that the protest is without merit.
3. During a telephone conference conducted by our Office in connection with
our ADR effort and in its comments on the agency report, Jones attempted to
show that it could have provided evidence that it had performed a higher
number of the relevant requirements under its prior contracts if it had
known its past performance would be evaluated in this manner. However, even
accepting Jones's allegations without further scrutiny, the number of
requirements it cited would not be sufficient to raise its rating from
"somewhat relevant" to "extremely relevant" for any of the four contracts
for which it received that rating. Similarly, while Jones contends that the
Air Force failed to conduct meaningful discussions because it did not ask
Jones to address the relevance of its past performance proposal, Jones has
not shown that it could have improved its rating in any significant way as a
result of such discussions.
4. Indeed, to the extent Jones's proposal sheds any light on this question,
it suggests that Jones itself performed in only eight areas as a member of
the joint venture under that contract. Agency Report I, Tab 3, Jones's Past
Performance Proposal, at 9-10.
5. In contrast, while Jones alleges that the agency overlooked a number of
weaknesses in Raytheon's past performance, the agency has provided a
reasonable rebuttal of each allegation. Agency Report II at 6-7; Contracting
Officer's Supplemental Statement, July 24, 2000, at 1-4. For example, Jones
alleged that the SSA had ignored weaknesses in Raytheon's past performance,
such as "wastewater system problems that resulted in discharge violations";
the agency explained that the violations were caused by an undersized
wastewater system (in place when Raytheon became the contractor) and heavy
rains, and that Raytheon in fact designed the project used to fix the
problem. Id. at 1.
6. As we explained during the ADR conference, we consider the relative price
difference between the two proposals--approximately $[deleted] over the full
term of the $160 million contract--to be sufficiently small (less than 6
percent) that the agency had considerable discretion in determining that it
was outweighed by a meaningfully superior past performance rating.