TITLE:  Green Valley Transportation, Inc., B-285283.2, April 16, 2001
BNUMBER:  B-285283.2
DATE:  April 16, 2001
**********************************************************************
Green Valley Transportation, Inc., B-285283.2, April 16, 2001

Decision

Matter of: Green Valley Transportation, Inc.

File: B-285283.2

Date: April 16, 2001

Raighne C. Delaney, Esq., and Leo S. Fisher, Esq., Bean, Kinney, & Korman,
for the protester.

Capt. Ryan Zipf, and Col. Michael R. Neds, Department of the Army, for the
agency.

Tania Calhoun, Esq., and Christine S. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest that contracting agency improperly evaluated proposals with respect
to past performance is denied where the record shows the evaluation was
reasonable and consistent with the solicitation's stated evaluation
criteria; mere disagreement with the agency's evaluation is insufficient to
show it was unreasonable.

DECISION

Green Valley Transportation, Inc. protests awards made under request for
proposals (RFP) No. JD-5252-SH, issued by the Department of the Army,
Military Traffic Management Command (MTMC), for guaranteed traffic (GT)
freight transportation. Green Valley argues that the agency improperly
evaluated proposals with respect to past performance.

We deny the protest.

The GT program is a transportation management tool under which MTMC issues a
request for rate tenders for all the traffic for particular routes for a
specific period of time and awards what are, in effect, requirements
contracts to the successful carriers. Allstates Air Cargo, Inc., B-261266,
B-261266.2, Feb. 29, 1996, 96-1 CPD para. 138 at 2 n.3. This solicitation
concerns the movement of freight traffic from the Defense Distribution Depot
in San Joaquin, California (DDJC) to various destinations within the United
States. The procurement of these services has been the subject of prior
protests.

MTMC initially solicited for these requirements in 1999. In response to a
post-award protest by another carrier, MTMC terminated all awards and
resolicited for the requirements. The resolicitation anticipated the award
of 56 contracts, one for each lane of traffic. Traffic was to be awarded to
one primary carrier for each lane, with the possibility that alternate
carrier selections might be made for each lane. Each offeror could be
selected as a primary carrier or as an alternate for multiple lanes. Awards
were to be made to the firms whose proposals were most advantageous to the
government, considering equally important price and technical factors. The
RFP set forth two technical factors, past performance and service; past
performance was more important than service. MTMC reserved the right to
award on the basis of initial proposals, without conducting discussions.

Offerors were to complete a rate tender for each lane in which they were
interested. The price evaluation team input the rates into MTMC's automated
system and arrived at total prices for each offeror for each lane. For each
lane, the low-price offeror received the maximum number of price points and
all other offerors received prorated points. Since prices varied from lane
to lane, the points awarded for price varied for each offeror from lane to
lane.

The past performance factor was comprised of two equally important
subfactors, past percent on-time delivery and past performance "actions."
The technical evaluation team (TET) was to consider an offeror's past
performance activity in MTMC and other Department of Defense (DOD) movements
over the last 24 months. All performance actions were to be considered for
the term of the current GT contracts, to include extensions. If the current
GT contracts were shorter than 12 months, performance actions on the prior
contracts were to be considered. [1] The past performance subfactors were to
be adjectivally rated as outstanding, excellent, good, fair, poor, or
unsatisfactory, and the ratings converted into points. The ratings, and
points, assigned to the past performance subfactors remained constant for
each offeror from lane to lane.

For each proposal, the technical subfactor points were totaled, and the
total was weighted by assigning the maximum points to the offeror with the
most technical points and prorating the points for the remaining offerors.
The weighted technical ratio was added to the total price points to
determine the total points for each offeror in each lane. The offeror with
the most total points was ranked as the potential prime carrier, and
alternate positions were identified for those offerors with the next highest
totals. Awards were generally to be made on that basis. [2]

Green Valley was awarded contracts as the primary carrier on multiple lanes
and as an alternate carrier on others. Green Valley filed a protest, limited
to six lanes, in which it argued that MTMC improperly failed to consider all
of the information available to it when evaluating proposals under the past
performance subfactors.

Our Office sustained Green Valley's protest, finding that the agency's
evaluation of past performance was unreasonable. With respect to the past
percent on-time delivery subfactor, at issue here, we concluded that MTMC
failed to consider the wide variance in the offerors' shipping volume over
the relevant period. Green Valley Transp., Inc., B-285283, Aug. 9, 2000,
2000 CPD para. 133. We recommended that MTMC reevaluate the proposals with
respect to past performance and make appropriate award decisions in view of
the results of that reevaluation.

The TET reevaluated proposals in view of our decision and an Optimum Benefit
Negotiation (OBN) Review Board reviewed the results, concurred with most of
the ratings, and revised other ratings. MTMC converted the resulting ratings
to points by dividing the total points allocated for each technical factor
by six to allow a specific point for each grade level from outstanding to
satisfactory. As explained above, the weighted technical ratio was added to
the total price points to determine the total points for each offeror in
each lane. The offeror with the most total points was ranked as the
potential prime carrier and alternate positions were identified for those
offerors with the next highest totals.

As a result of the reevaluation, Green Valley was awarded the position as
the primary carrier on lanes 51 and 56 and as the first alternate carrier on
lanes 35 and 50. Green Valley subsequently filed this protest, limited to
lanes 35 and 50, in which it alleges that MTMC improperly evaluated the
proposals of itself and the primary carrier, Covenant Transport, with
respect to the past percent on-time delivery subfactor by failing to
consider all available information. [3]

Where a solicitation requires the evaluation of offerors' past performance,
we will examine an agency's evaluation only to ensure that it was reasonable
and consistent with the stated evaluation criteria, since determining the
relative merits of offerors' past performance information is primarily a
matter within the contracting agency's discretion. DGR Assocs., Inc.,
B-285428, B-285428.2, Aug. 25, 2000, 2000 CPD para. 145 at 11. We conclude that
the past performance evaluation challenged by Green Valley was reasonable.

The past percent on-time delivery subfactor measured each offeror's rate of
timely delivery. Offerors were to submit summaries of their DDJC delivery
reports showing their on-time rates; offerors without prior DDJC shipments
could submit summaries of their delivery reports for other customers. The
minimum required on-time delivery rate for these services is 95 percent. The
TET was to evaluate proposals "based on all available information," giving
emphasis to the performance achieved specifically at DDJC.

In our prior decision, we concluded that MTMC improperly failed to consider
each offeror's shipping volume in evaluating proposals under this subfactor.
The agency reviewed shipping volume to ensure that an offeror had made
enough shipments to show regular service, but did not consider the
implications of shipping volume for the past percent on-time delivery rate.
Given the RFP's explicit instruction to consider "all available
information," we found the agency's failure to consider these implications
unreasonable and stated that consideration of the relative volume of freight
carried could become particularly important when the vast difference between
the numbers of shipments made by some offerors might suggest a difference in
the reliability of their past on-time delivery rates. We stated that we did
not know if a consideration of such matters would have made a difference
here, or even if, as a general matter, an on-time percent delivery rate for
an offeror that has shipped a large volume of freight should be given more
credence than the rate of an offeror that has shipped considerably less
freight. Green Valley Transp., Inc., supra, at 11. Our decision left this
determination to the agency.

The record shows that MTMC made this determination during the reevaluation
and, in the process, considered various pieces of information in evaluating
proposals under this subfactor.

The TET considered the subjective statements in Green Valley's proposal
regarding its performance at DDJC and its status as one of the top tonnage
and revenue carriers with DOD for the past 5 years. The TET also considered
objective information from DDJC regarding Green Valley's performance. DDJC's
statistics showed that Green Valley's annual average on-time statistics were
[DELETED] percent in 1997, [DELETED] percent in 1998, and [DELETED] percent
in 1999. A letter from DDJC stated that Green Valley had a [DELETED]-percent
on-time delivery rate with velocity management loads [4] and maintained a
rate of [DELETED] percent and above in four regional lanes of traffic. The
letter also stated that the firm was not always submitting carrier
performance reports on a weekly basis, but that the staff had been pleasant
to work with and was attempting to provide the information in a timely
manner. Finally, the TET considered that Green Valley had made 27,184 DDJC
shipments over the relevant period of time and had a high shipping volume
DOD-wide. The TET rated Green Valley's proposal "good" under this subfactor,
a rating reserved for instances where better than acceptable performance
could be expected.

The TET considered the subjective statements in Covenant's proposal
regarding the firm's performance, including the assertion that the firm
provided a [DELETED]-percent on-time performance rate under the previous GT.
The TET also considered objective information from the DDJC regarding
Covenant's performance. DDJC's statistics showed that Covenant's annual
average on-time statistics were [DELETED] percent for 1997, [DELETED]
percent for 1998, and [DELETED] percent for 1999. The TET noted that the
DDJC believed Covenant's low rate for 1997 was attributable to the fact that
a humanitarian project that year increased the volume carried by the firm to
an extent that Covenant was not prepared to meet, and that the DDJC believed
the firm would have exceeded the standards absent these humanitarian
shipments. A letter from the DDJC confirmed Covenant's statement that it
provided [DELETED] percent on-time delivery performance under the prior GT,
and stated that, under the current DDJC GT, the firm was providing [DELETED]
percent on-time performance. Finally, the TET considered that Covenant had
made 1,077 DDJC shipments in the relevant period, and considered its
relatively low volume DOD-wide. The TET rated the firm's proposal
"excellent" under this subfactor, a rating reserved for instances where high
quality is likely but not assured.

The Board reviewed the TET's findings and undertook the following additional
analysis in response to our concerns expressed in the prior decision.

The Board addressed our concern regarding Covenant's 1997 humanitarian
project. In our prior decision, we stated that MTMC properly considered the
effect of the humanitarian project on Covenant's past on-time delivery rate,
and that its effort to avoid penalizing the offeror for an unexpected surge
in its requirements that was beyond its control was reasonable. We noted,
however, that the humanitarian project was not the sole reason for the low
rate. Green Valley Transp., Inc., supra, at 10. In what appears to be an
acknowledgment of this fact, the Board calculated Covenant's 1997 on-time
rate absent the figures for the months in which humanitarian shipments
caused delays. The resulting on-time rate for 1997 was [DELETED] percent,
for a 3-year average of 97 percent. [5] The Board concluded that this level
of performance was consistent with the TET's rating of "excellent."

The Board also addressed our concern that the agency had not considered the
relationship between an offeror's shipping volume and its on-time delivery
percentages. The Board expressed its view that the role of volume in
evaluating an offeror's past percent on-time delivery rate was twofold.
First, the volume must be sufficient to ensure regular service because the
agency would not want a carrier that handled only a few shipments being
assigned a high rating, even if the carrier handled those shipments well.
The Board considered that a minimum of 100 shipments per year indicated
regular service; Covenant's shipping volume exceeded this level. Second, the
Board explained that it used shipping volume as an indicator of the
reliability of a carrier's on-time performance. According to the Board,
while a higher number of shipments gives the agency greater confidence that
the carrier will keep delivering at its past on-time delivery rate, it does
not give the agency any indication that the carrier will deliver at a better
on-time rate in the future. As a result, the Board believed it reasonable to
rate a carrier with a lower volume but a higher on-time rate--such as
Covenant--higher than a carrier with a greater volume but a lower on-time
rate--such as Green Valley. In agreeing with the TET's ratings, the Board's
comments focused on the statistics provided by the DDJC. The Board noted
that Green Valley's 3-year DDJC average was 96 percent, which exceeded the
minimum requirement by just 1 point and received a "good" rating. In
contrast, Covenant's 3-year DDJC average was 97 percent, which exceeded the
minimum requirement by 2 points and received an "excellent" rating, one step
up from the "good" rating.

As this discussion makes clear, Green Valley is incorrect when it contends
that MTMC based its ratings solely on the average statistics provided by
DDJC. The record reflects that MTMC reviewed a range of available
information in evaluating proposals under this subfactor, including
statements made in proposals, DDJC statistics and commentary, and shipping
volume at DDJC and DOD-wide. That the agency gave more weight to the DDJC
statistics and commentary is consistent with the RFP's instruction to give
emphasis to the performance achieved at DDJC.

The record also shows that MTMC did not, as Green Valley asserts, fail to
consider carriers' relative shipping volumes or decide that there was no
relationship between the on-time rates and the number of shipments made by
carriers. The agency found that two such relationships were relevant here.
First, MTMC reviewed whether a carrier had made enough shipments to ensure
that the on-time rates resulting from those shipments were meaningful. Green
Valley apparently finds MTMC's baseline measure, 100 shipments per year,
inadequate, but we have no basis to find it unreasonable. Second, MTMC used
shipping volume to test the reliability of a carrier's on-time statistics.
The greater the number of shipments, the more confident the agency was that
the carrier would continue delivering at the rate it had delivered in the
past.

Our prior decision did not, as the protester suggests, direct the agency to
find a qualitative distinction between carriers that have shipped a large
volume of freight and carriers that have shipped considerably less freight.
To the contrary, we specifically stated that we did not know if there should
be any such distinction. Our underlying concern, expressed in the decision,
was that the agency did not consider the volume of freight carried by the
various offerors at all when the solicitation required it to consider "all
available information." Green Valley Transp., Inc., supra, at 11. It was
left to the agency to decide how to use this piece of available information
during the reevaluation, since the agency is responsible for defining its
needs and the best method of accommodating them. Digital Sys. Group, Inc.,
B-286931, B-286931.2, Mar. 7, 2001, 2001 CPD para. 50 at 7.

Green Valley has not persuaded us that it should receive an "excellent"
rating because it had substantially more shipments over the period than did
Covenant, because the number of shipments it made does not overcome the fact
that the most reliable information available to the agency showed that the
firm's on-time percentage rate was just a point above the minimum
requirement. To the extent that it has attempted to do so, Green Valley has
also not persuaded us that Covenant should receive a "good" or lower rating
because it had relatively few shipments over the period. We have no basis to
question the agency's conclusion that Covenant had a sufficient number of
shipments to render its performance statistics meaningful, and the most
reliable information available to the agency showed that the firm's on-time
percentage rate was higher than Green Valley's. While the reliability of
these on-time statistics may be compromised as the number of shipments
transported by a carrier moves closer to MTMC's baseline of 100 per year, we
cannot say that Covenant's shipping volume was insufficient to prove
reliable.

The firms' average on-time rates at DDJC were also not, as the protester
asserts, "roughly the same," and we do not agree that the distinction
between a 96-percent on-time rate and a 97-percent on-time rate (and a
"good" and an "excellent" rating) was an arbitrary "cut-off." These
distinctions were linked to the minimum 95-percent on-time requirement and
reflected the agency's reasoned judgment that there is a relationship
between the amount by which a carrier exceeds the minimum requirement and
its adjectival rating. See OPSYS, Inc., B-248260, Aug. 6, 1992, 92-2 CPD para.
83 at 8.

Green Valley also argues that MTMC has penalized high-volume carriers
because none of the carriers in the top quarter of carriers by volume were
rated "excellent" but two of the carriers in the bottom quarter were rated
"excellent." Green Valley omits to say that the record shows that there are
underlying reasons for these ratings. The agency found that there was no
support for the claims made by most carriers in the top quarter, and the two
carriers in the bottom quarter had on-time rates in excess of 97 or 98
percent. Green Valley also fails to recognize that if the agency did what it
suggested, and assigned higher ratings to high-volume carriers and lower
ratings to low-volume carriers on a per se basis, it would be penalizing
small-volume carriers.

Finally, Green Valley complains that Covenant was given undue credit for its
1997 humanitarian shipments when its performance on the lane at issue was
"abysmal" even prior to the humanitarian shipments. As discussed above, MTMC
deleted the data for the months when these humanitarian shipments were made
from the 1997 data to arrive at a [DELETED]-percent on-time rating for 1997.
The late deliveries for the lane at issue that were not related to the
humanitarian project are incorporated into this percentage. While Green
Valley complains that it is not clear if all of the shipments in the deleted
months were related to the humanitarian project, the fact that the
humanitarian shipments increased the volume carried by Covenant to an extent
the firm was not prepared to meet would naturally have an effect on its
non-humanitarian shipments. As we stated in our prior decision, MTMC's
effort to avoid penalizing the offeror for an unexpected surge in its
requirements that was beyond its control was reasonable. [6]

The protest is denied.

Anthony H. Gamboa

General Counsel

Notes

1. Since the current GT contracts were shorter than 12 months, the TET
considered performance actions and on-time delivery reports dating back to
the previously awarded contract, or 1997.

2. The RFP stated that the government might choose to pay a higher price to
an offeror whose performance risk and price reasonableness gave the
government greater confidence in that offeror's ability to keep its
commitments. RFP encl. 5, at 30.

3. Another carrier has also filed protests in this matter, which we plan to
address in a separate decision.

4. Velocity lanes are those where shipments are made directly from the depot
to an Army installation and must be delivered immediately.

5. MTMC made this same calculation during the prior protest and arrived at a
lower rate; the record shows that this lower rate was the result of a
mathematical error.

6. Green Valley's complaint that it was not given credit for humanitarian
activities under this subfactor misses the point. Covenant was not "given
credit" for humanitarian activities here. Instead, the agency tried to avoid
penalizing it for such activities based upon its on-time delivery rate. The
agency's consideration of the information in its possession regarding Green
Valley's humanitarian efforts was given appropriate credit under the past
performance actions subfactor.