TITLE:   Matter of: Meridian Management Corporation
BNUMBER: B-285127
DATE:  July 19, 2000
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United States General Accounting Office Washington, DC 20548

Comptroller General of the United States

Decision Matter of: Meridian Management Corporation

File: B- 285127

Date: July 19, 2000 Michael A. Gordon, Esq., Holmes, Schwartz & Gordon, for
the protester. Scarlett D. Grose, Esq., General Services Administration, for
the agency. Jennifer D. Westfall- McGrail, Esq., and Christine S. Melody,
Esq., Office of the General Counsel, GAO, participated in the preparation of
the decision.

DIGEST

1. Agency may not exclude a technically acceptable proposal from the
competitive range without taking into account that proposal's price.

2. Solicitation for operations and maintenance services at two federal
buildings and two parking facilities did not put offerors on notice that
they would be required to perform specialized operations and maintenance
services in laboratories housed in those buildings, given that solicitation
did not in any way refer to the specialized services and offerors were not
given the opportunity to visually inspect the laboratories themselves to
determine whether equipment requiring specialized service was present.

DECISION

Meridian Management Corporation protests the exclusion of its proposal from
the competitive range under request for proposals (RFP) No. GS05P00GAC0126,
issued by the General Services Administration (GSA) for operations and
maintenance services at two buildings and two parking facilities in Chicago.
The protester contends that the agency improperly failed to consider its
proposed price before deciding to exclude its proposal from the competitive
range. The protester also argues that the solicitation improperly failed to
apprise offerors that they would be expected to perform specialized services
in agency laboratories located in one of the buildings.

We sustain the protest.

DOCUMENT FOR PUBLIC RELEASE

The decision issued on the date below was subject to a GAO Protective Order.
This redacted version has been approved for public release.

Page 2 B- 285127 The RFP requested proposals for a base period (of 12
months) and two option

periods (of 12 and 36 months, respectively) to operate and maintain the
mechanical, electrical, utility, and interior and exterior architectural/
structural (A/ S) systems in the four facilities. RFP sect.sect. B, C. Offerors were
to submit unit prices on a monthly basis for certain services (preventive
maintenance, repairs, and service calls) and unit prices on an hourly basis
for other work (such as overtime service and emergency calls). RFP sect. B. The
solicitation provided for award to the offeror whose proposal represented
the best value to the government in terms of total evaluated price,
experience, and past performance. The solicitation noted that past
performance and experience combined would be more important than price, but
that as proposals became more equal in terms of past performance and
experience, price would become more important. Similarly, experience was
more important than past performance, but as experience became more equal,
past performance would become more important. RFP sect. M. To permit evaluation
of their experience and past performance, offerors were instructed to submit
a minimum of three references for similar past or current contracts. Id.

[Deleted] proposals were received. The contract specialist contacted three
references for each offeror and asked each a series of 31 questions, 16
focusing on the nature of the contract that the offeror had performed for it
(e. g., type of services performed, length of contract, dollar amount) and
15 focusing on the offeror's performance under the contract. A point score
of 0 to 5 was assigned for each response. Some questions were scored on an
all- or- nothing basis (i. e., the only scores possible were 0 and 5);
others (generally those related to past performance) were scored on a
graduated basis (i. e., scores of 0, 1, 2, 3, 4, or 5 were possible). For
example, each reference was asked whether the contractor had worked in
special use areas such as laboratories (with a response of “yes”
receiving a score of 5, and a response of “no,” a score of 0);
the references were then asked to rate the contractor's performance in this
area (with a rating of “excellent” receiving 5 points; a rating
of “very good,” 4 points; a rating of “good,” 3
points; a rating of “fair,” 2 points, a rating of
“poor,” 1 point, and a rating of “not applicable,” 0
points). The contract specialist calculated an experience/ past performance
(E/ PP) score for each contract by adding together the point scores for each
of the 31 questions and dividing by 31. The agency then averaged the three
E/ PP scores for each offeror to come up with an overall E/ PP rating for
each firm and ranked the proposals in order of their E/ PP ratings.

The contracting officer determined that there were too many highly rated
proposals for an efficient competition to be conducted and that the size of
the competitive range should be limited. 1 Contracting Officer's Statement,
May 11, 2000, at 1. The

1 Under Federal Acquisition Regulation (FAR) sect. 15.306( c)( 2), a contracting
officer may limit the number of offers in the competitive range (which
otherwise is comprised of all the most highly rated proposals) to the
greatest number that will

(continued...)

Page 3 B- 285127 contracting officer decided to include in the competitive
range only those proposals

with E/ PP ratings of [deleted] or higher (“ because there was more
than adequate competition above that range”) and prices of less than
[deleted] (because prices above [deleted] were considered too high for the
offerors to have a reasonable chance of award). Id.; Competitive Range
Determination at 1. Meridian's proposal, which was lower in price than
[deleted] of the competitive range proposals, was not included in the
competitive range because it received an E/ PP score of [deleted].

In commenting on the agency report, the protester argued that the agency had
unfairly penalized it by assigning it a past performance score of 0 (for
“not applicable”) in an area in which it lacked experience (i.
e., special use areas such as laboratories). We asked the agency to respond
to this argument, and in its reply, the agency acknowledged that it had
erred in assigning offerors without experience in laboratories scores of 0
for their performance in this area. 2 Contracting Officer's Statement, June
1, 2000, at 2. The contracting officer recalculated offerors' E/ PP scores
by dividing the point totals on questionnaires regarding contracts which did
not involve work in laboratories by 30 rather than 31. The scores, as
revised, for the 10 top- ranked proposals were as follows:

Contractor E/ PP Rating % of total points Price Offeror A [deleted]
[deleted] [deleted] Offeror B Offeror C Offeror D Offeror E Offeror F
Offeror G Offeror H Offeror I Meridian

Contracting Officer's Statement, June 1, 2000, at 3; Competitive Range
Determination at 1.

(... continued) permit an efficient competition provided that (as here) the
solicitation notifies offerors that this may be done. RFP sect. L (incorporating
FAR sect. 52.215- 1( f)( 4)). 2 In this regard, the inclusion of a score of 0
for past performance for an area in

which the offeror in fact has no experience serves to lower the offeror's
overall past performance score, in violation of the requirement that firms
lacking relevant past performance history receive a neutral evaluation for
past performance. FAR sect. 15.305( a)( 2)( iv); NAHB Research Ctr., Inc., B-
278876.2, May 4, 1998, 98- 1 CPD para. 150 at 5.

Page 4 B- 285127 Although Meridian's score improved from [deleted] to
[deleted] as a result of the

rescoring, the scores of all the other offerors improved as well, leading
the contracting officer to raise the cutoff for inclusion in the competitive
range to [deleted]. The competitive range thus consisted of proposals with
E/ PP scores of [deleted] or higher and prices of below [deleted] (i. e.,
the proposals of offerors A, C, D, G, and H).

The protester argues that it was improper for the agency to exclude it from
the competitive range without any consideration of its price. We agree.

Cost or price to the government must be included in every RFP as an
evaluation factor, and agencies must consider cost or price to the
government in evaluating competitive proposals. 41 U. S. C. sect. 253a( c)( 1)(
B) (1994); FAR sect.15.304( c)( 1); Kathpal Techs., Inc.; Computer & Hi- Tech
Management, Inc., B- 283137.3 et al., Dec. 30, 1999, 2000 CPD para. 6 at 9. This
requirement means that an agency may not exclude a technically acceptable
proposal from the competitive range without taking into account the relative
cost of that proposal to the government. Columbia Research Corp., B- 284157,
Feb. 28, 2000, 2000 CPD para. ___; Kathpal Techs., Inc.; Computer & Hi- Tech
Management, Inc., supra. Here, the agency did not consider the relative cost
of Meridian's proposal in deciding to exclude it from the competitive range;
Meridian's proposal was eliminated solely because its E/ PP score [deleted]
was below the cut- off score of [deleted]. The agency gave no consideration
to the fact that Meridian's price [deleted] was considerably lower than that
of one of the competitive range offerors whose technical score, while above
the [deleted] cut- off, nevertheless was very close to Meridian's score (i.
e., offeror G, with a technical score of [deleted] and a price of
[deleted]).

Meridian also argues that it should have received credit under the E/ PP
questionnaire item relating to its experience in “special use
areas.” In this regard, the questionnaire asked the offeror's
references about the offeror's experience and performance in “special
use areas such as labs,” describing them as areas that “operate
24 hours/ 7 days. Special temperature and humidity levels must be
maintained.” E/ PP Questionnaire, Question 14. Meridian argues that
the agency should have given it credit for its performance of operations and
maintenance services in areas such as [deleted] that require maintenance of
temperature and humidity levels on a 24- hour basis. Protester's Comments,
May 22, 2000, at 5. The protester maintains that it performed services in
such areas under all three of its reference contracts.

The agency responds that it did not give offerors credit under this item for
their experience in special use areas other than laboratories because non-
laboratory areas such as [deleted] involve less complex equipment and
require less complex services than laboratories. In this regard, the
contracting officer explains that [deleted] have only temperature and
humidity controls, whereas certain laboratories housed in the

Page 5 B- 285127 building covered by the RFP (referred to as the Drug
Enforcement Administration

(DEA), Environmental Protection Agency (EPA), and Federal Bureau of
Investigation (FBI) laboratories) have “temperature and humidity
controls, floor pressurization and fume hood calibration and all the
equipment that goes with it,” and the contractor “has to know
and understand how all these things fit together.” Contracting
Officer's Response to GAO Questions, June 1, 2000, at 1. Further, the
contracting officer explains, the contractor must “know how to read,
understand, replace and repair” sash sensors and flow rings. Id. at 1-
2.

The protester has not attempted to rebut the contracting officer's argument
that laboratories require more complex services than [deleted]; it does
argue, however, that the RFP did not place offerors on notice that they
would be required to perform specialized maintenance and repair work such as
that described by the contracting officer, and that if the agency does
indeed intend for the awardee under this solicitation to perform such
services, the solicitation should be amended to make this clear. The
protester further states that if it had been on notice of the specialized
requirements, it would have revised its proposal to specifically address
those requirements, including [deleted].

GSA responds that the RFP did place offerors on notice of the specialized
maintenance and repair work required in the laboratories by stating that the
agency needed service in the DEA, EPA, and FBI laboratories located in the
buildings covered by the RFP. Contracting Officer's Response to GAO
Questions, June 20, 2000, at 1. The agency further notes that offerors were
given an opportunity to tour the buildings and to raise any questions that
they had regarding the specifications.

The protester counters this argument by pointing out that the section of the
solicitation that addresses service in the laboratories, RFP sect. J, exh. 8,
identifies no special equipment to be maintained, but instead focuses on the
need for around- theclock maintenance of temperature and humidity levels.
The protester further notes that the building tour did not alert offerors to
the fact that the laboratories contained specialized equipment that they
would be expected to maintain because offerors were not allowed in the FBI
and EPA laboratories, and because the DEA laboratory had “no visible
indications of equipment that had to be maintained to retain temperature and
humidity levels that was different from the normal equipment listed in RFP sect.
J, Ex. 1 [Equipment and Systems to be Operated, Maintained and
Repaired].” Protester's Comments, June 22, 2000, at 2.

The issue originally raised by the protester-- whether it should have
received credit for experience in special use areas-- in fact turns on
whether the RFP adequately indicated that the contractor would be called on
to provide specialized maintenance and repair work of the type now said by
the agency to be required at the DEA, EPA, and FBI laboratories. If the
solicitation, reasonably read, did not so indicate, the agency could not
reasonably deny credit to the protester for lack of such experience without
first amending the RFP to advise that such services would be required. As

Page 6 B- 285127 discussed below, we conclude that the RFP did not place
offerors on notice that they

would be required to perform specialized maintenance and repair work. A
procuring agency must provide sufficient information in a solicitation to
enable offerors to compete intelligently and on a relatively equal basis. J&
J Maintenance, Inc., B- 272166, July 29, 1996, 96- 2 CPD para. 56 at 3. An
agency can accomplish this by furnishing offerors with sufficiently detailed
information in the solicitation or, to the extent the agency is unable to
furnish the necessary level of detail, by giving offerors the opportunity to
obtain such information on their own through site visits. See KCA Corp., B-
236260, Nov. 27, 1989, 89- 2 CPD para. 498 at 2. Here, GSA did neither. In our
view, the RFP did not convey to offerors that they would be responsible for
operating, maintaining, and repairing specialized equipment found only in
the laboratories, such as fume hoods, sash sensors, and flow rings. In this
regard, the RFP contained an exhibit entitled “Equipment Requiring
Special Consideration,” which provided in relevant part as follows:

C. Location 1 houses DEA, EPA, PHS and FBI Laboratories. These areas operate
24 hours a day, 7 days a week. Temperature and humidity levels must be
maintained as required by tenant agencies. The contractor shall be
responsible for maintaining these levels as required.

RFP sect. J, exh. 8. We think that a reasonable reading of this paragraph is
that the only equipment requiring special consideration in the laboratories
is the equipment used to maintain temperature and humidity levels and that
the special consideration that it requires is that it must be operated so as
to maintain those levels on an around- theclock basis. There is nothing in
the language to suggest that work involving items such as fume hoods, which
bear no apparent relationship to temperature and humidity control, will be
required. Further, since the agency did not allow offerors to visit two of
the laboratories, it cannot reasonably argue that offerors had the
opportunity to obtain additional information regarding the equipment to be
maintained through their own visual inspection. Accordingly, we conclude
that the RFP did not put offerors on notice that they would be required to
perform specialized operations and maintenance services in the laboratories
housed in the buildings.

We recommend that the agency amend the RFP to make clear that the work to be
performed includes the maintenance and repair of specialized equipment found
in the laboratories, and that it then request submission of revised offers.
We further recommend that in making a new competitive range determination,
it take both E/ PP scores and price into account. 3 We also recommend that
the agency reimburse the

3 In its protest, Meridian also argued that its E/ PP scores were based on
erroneous information provided by its references regarding the scope of
services that it furnished on the contracts performed for them, specifically
with regard to

(continued...)

Page 7 B- 285127 protester for its costs of filing and pursuing the protest,
including reasonable

attorneys' fees. Bid Protest Regulations, 4 C. F. R. sect. 21.8( d)( 1) (2000).
In accordance with section 21.8 of our Regulations, Meridian's certified
claims for such costs, detailing the time expended and the costs incurred,
must be submitted directly to the agency within 60 days after receipt of the
decision.

The protest is sustained. Robert P. Murphy General Counsel

(... continued) maintaining [deleted]. Meridian asserted that its technical
score would have improved significantly had it received the appropriate
credit for maintaining all three systems under its reference contracts, and
argued that the agency should have communicated with it regarding the scope
of its experience prior to establishing the competitive range. During the
course of the protest, Meridian presented information regarding its
experience in maintaining the three systems at issue, and explained why it
believed that the agency should not rely on the information furnished by its
references; in effect, Meridian has had an opportunity to communicate with
the agency on this point. Given this communication and the fact that we are
otherwise recommending that the agency request and evaluate revised offers
and make a new competitive range determination, we need not resolve the
dispute regarding the references. We believe that the agency, in
implementing our recommendation, should take into consideration the
information presented by Meridian during the course of this protest
regarding its experience in maintaining [deleted] under its reference
contracts.
*** End of document. ***