TITLE:  Trusted Hand Service, Inc., B-285355, August 21, 2000
BNUMBER:  B-285355
DATE:  August 21, 2000
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Trusted Hand Service, Inc., B-285355, August 21, 2000

Decision

Matter of: Trusted Hand Service, Inc.

File: B-285355

Date: August 21, 2000

Katy Moon for the protester.

Denise Rhone for Sparkle Cleaning Associates, Inc., an intervenor.

Emilia M. Thompson, Esq., Naval Undersea Warfare Center Division, 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

Contracting agency did not mislead protester into raising its price where
although it informed the protester that its price was low in comparison to
the government estimate, it also informed the protester that the government
estimate might be outdated and that the protester's pricing might be
justified, and, rather than telling the protester to revise its prices, told
it to review its prices and provide either a confirmation of pricing or a
revision.

DECISION

Trusted Hand Service, Inc. protests the award of a contract to Sparkle
Cleaning Associates, Inc. under request for proposals (RFP) No.
N66604-00-R-0152, issued by the Department of the Navy for custodial and
sidewalk snow removal services at the Naval Undersea Warfare Center
Division, Newport, Rhode Island. The protester complains that the agency
enticed it to increase its price and then selected Sparkle for award based
on its lower price.

We deny the protest.

The RFP, which requested prices for a base and 4 option years, contemplated
the award of a fixed-price contract combining definite-quantity line items
and indefinite-quantity line items. The solicitation furnished detailed
information regarding the nature, volume, location, and frequency of the
various cleaning services to be performed. The RFP provided for award to the
offeror whose proposal represented the best value to the government, with
technical capability of significantly greater importance than price.
Subfactors to be considered under technical capability were management
approach and past performance. RFP sect. MX35.

Nine offerors submitted proposals prior to the January 6, 2000 closing date.
The contracting officer determined that only the two lowest-priced offers,
those of Trusted Hand and Sparkle, should be included in the competitive
range. Competitive Range Determination, Mar. 3, 2000, at 1. Both proposals
were rated as low risk for past performance and as unacceptable but
susceptible to being made acceptable for management approach. Technical
Evaluation Report, Feb. 24, 2000, at 1.

The contracting officer conducted discussions with both offerors and
requested revised proposals. Both offerors corrected all technical
deficiencies. Agency Report, June 9, 2000, at 9. Sparkle raised its price
significantly (from $4,527,086 to $6,996,776), while Trusted Hand reduced
its price from $5,318,456 to $5,189,529.

The contracting officer, concerned by the substantial increase in Sparkle's
price, reopened discussions with Sparkle and instructed it to review its
pricing and provide a final revision. The contracting officer asked Trusted
Hand to review its pricing as well, noting that:

In comparison to the Government estimate, we had been concerned initially
that your overall pricing was based on a low number of hours. There were a
few high prices that I see you have adjusted downward, but overall the
original pricing was low and you have revised them even lower.

The Government believes that very low prices may lead to administrative
problems, and, therefore, become false economy. Our Government estimate may
be out of date, and you may be correct in your pricing. However, I would
like you to review again your pricing and provide either a confirmation of
pricing or a revision . . . .

Letter from Contracting Officer to Trusted Hand (Apr. 11, 2000).

Upon receipt of the agency's letter, a representative of Trusted Hand
contacted the contracting officer, stating that he had heard that the
frequency of services was going to be reduced, and inquiring whether this
was the case. The contracting officer informed Trusted Hand that she was not
aware of an anticipated reduction in the frequency of services. The
contracting officer instructed Trusted Hand to calculate its price based on
the information in the solicitation and informed it that should the
frequency of services be reduced after award, the government would expect a
corresponding reduction in price. [1] Agency Report, supra, at 11. The
contracting officer then contacted Sparkle and conveyed the same
information. Id.

Sparkle responded to the contracting officer's second request for a revised
proposal by decreasing its price to $5,373,100.50. Trusted Hand, on the
other hand, increased its price to $5,419,027.11. Trusted Hand noted that
its first revised proposal had been prepared "using information [regarding
an anticipated reduction in the frequency of services] that was not a part
of the Solicitation"; use of this information, the protester acknowledged,
"was an error on [its] part." Letter from Trusted Hand to Contracting
Officer at 1 (Apr. 18, 2000).

The technical evaluation panel (TEP) determined that the proposals of both
offerors, as revised, were acceptable, but ranked Sparkle's higher than
Trusted Hand's for the following reasons:

   * Sparkle made an extra attempt to note inefficiencies occurring under
     the present contract and proposed ways to solve them, which indicated a
     more pro-active management approach.

   * Sparkle attended a site visit and obtained a copy of the drawings,
     which, in the TEP's view, provided it with more insight into the scope
     of the requirement.

   * The manager/owner of Sparkle attended face-to-face discussions and
     indicated personal involvement in any future contract, which, in the
     TEP's view, reduced risk to performance should any difficulties during
     contract administration require the involvement of management.

Final Evaluation Report, Apr. 25, 2000, at 2. The contracting officer
determined that since the TEP had ranked Sparkle's proposal above Trusted
Hand's, and since Sparkle's total price was lower than Trusted Hand's,
Sparkle's proposal represented the best overall value to the government.
Business Clearance Memorandum, supra, at 4. On May 3, the agency awarded a
contract to Sparkle.

Trusted Hand complains that the agency misled it into raising its price by
telling it that its initial price, which was virtually identical to the
price at which award was ultimately made to Sparkle, was too low.

It is a fundamental precept of negotiated procurement that discussions, when
conducted, must be meaningful and must not prejudicially mislead offerors.
Hago-Cantu Joint Venture, B-279637.2, July 20, 1998, 98-2 CPD para. 99 at 4.
Specifically, an agency may not, even inadvertently, mislead an
offeror--through the framing of a discussion question or a response to a
question--into responding in a manner that does not address the agency's
concerns; misinform the offeror concerning a problem with its proposal; or
misinform the offeror about the government's requirements. Id. With regard
to the specific facts of this case, an agency may not mislead an offeror
into raising its price. SIMSHIP Corp., B-253655.2, Dec. 2, 1993, 93-2 CPD para.
293 at 4; Marine Transport Lines, Inc.; Lant Shipping, Inc., B-238223.2,
B-238223.3, July 30, 1990, 90-2 CPD para. 80 at 6.

Here, we do not think that the record supports the protester's allegation
that the agency misled it into increasing its price. Although the
contracting officer did inform the protester in her letter of April 11 that
its original pricing was low in comparison to the government estimate, she
went on to note that the government estimate might be outdated and that
Trusted Hand might be justified in its pricing. Moreover, she did not
instruct--or even advise--the protester to revise its pricing; she told it
to review its prices "and provide either a confirmation of pricing or a
revision." Letter from Contracting Officer to Trusted Hand (Apr. 11, 2000).
Given that the contracting officer informed Trusted Hand that the government
estimate might be out of date and that the protester's pricing might be
justified, and that she gave the protester the option of confirming or
revising its pricing, we think that the protester's decision to increase its
final revised price to a level slightly higher than its original price can
be attributed only to its exercise of its own business judgment, and not to
any improper action on the agency's part.

Trusted Hand also complains that, in ranking Sparkle's technical proposal
above its own, the agency considered factors other than, and unrelated to,
those stated in the RFP, such as Sparkle's attendance at the site visit and
the presence of its owner/manager at face-to-face discussions, and a factor
that, according to the protester, it had been instructed not to consider,
i.e., means of achieving cost efficiencies. Protester's Comments, June 21,
2000, at 2.

It is unnecessary for us to address the protester's argument regarding the
ranking of technical proposals given that it is apparent from the record
that, even had the agency ranked the proposals as technically equivalent, it
would have selected Sparkle's proposal for award based on its lower price.
In this regard, the protester has not argued that its technical proposal
should have been ranked ahead of Sparkle's; it has argued only that the two
proposals should have received equivalent rankings. The solicitation made
clear, however, that in the event that technical proposals were rated as
technically equal, price would become the determinative factor in the
selection of an awardee. Accordingly, it is clear that the agency would have
selected Sparkle for award even if Sparkle had not been ranked higher, as
the protester argues. Under these circumstances, the protester was not
prejudiced as a

result of the agency action it challenges. McDonald-Bradley, B-270126, Feb.
8, 1996, 96-1 CPD para. 54 at 3 (protester must demonstrate a reasonable
possibility that it was prejudiced); see Statistica, Inc. v. Christopher,
103 F.3d 1577, 1581 (Fed. Cir. 1996).

The protest is denied.

Robert P. Murphy

General Counsel

Notes

1. The contracting officer notes that some of the services are to be
performed less frequently under this contract than under its predecessor,
but that the lower frequencies are reflected in the RFP. Business Clearance
Memorandum, Apr. 25, 2000, at 4.