TITLE:  J. A. Jones/IBC Joint Venture; Black Construction Company, B-285627; B-285627.2, September 18, 2000
BNUMBER:  B-285627; B-285627.2
DATE:  September 18, 2000
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J. A. Jones/IBC Joint Venture; Black Construction Company, B-285627;
B-285627.2, September 18, 2000

Decision

Matter of: J. A. Jones/IBC Joint Venture; Black Construction Company

File: B-285627; B-285627.2

Date: September 18, 2000

Douglas L. Patin, Esq., Robert J. Symon, Esq., and Claire E. Kresse, Esq.,
Spriggs & Hollingsworth, for J. A. Jones/IBC Joint Venture; and Gary Y.
Shigemura, Esq., and Koji Kato, Esq., Shigemura and Harakal, for Black
Construction Company, the protesters.

Richard Welsh, Esq., and Damon Martin, Esq., Naval Facilities Engineering
Command, for the agency.

Peter A. Iannicelli, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protests that agency unreasonably determined that protesters' proposals for
design/construction contract were unacceptable but susceptible to being made
acceptable and impermissibly awarded contract on the basis of initial
proposals are denied, where record shows that protesters' proposals did not
meet several of the solicitation's design requirements and contained
informational deficiencies, and award to the offeror of the only technically
acceptable proposal without discussions was consistent with the
solicitation.

DECISION

J. A. Jones/IBC Joint Venture (Jones/IBC) and Black Construction Company
(Black) protest the Navy's award of contract to Dick Pacific Construction
Co., Ltd. (Dick) pursuant to request for proposals (RFP) No.
N62766-99-R-0200 for design and construction of an Army Reserve Center in
Guam. Both protesters contend that the Navy misevaluated their proposals
and, therefore, the selection of Dick was improper.

We deny the protests.

BACKGROUND

Issued by the Naval Facilities Engineering Command on February 14, 2000, the
RFP solicited fixed-price offers for the design and construction of an Army
Reserve Center including five buildings (administration, training,
maintenance, storage, and unheated storage), utility connections (sewer,
water, telephone, electrical, cable television, and other local area
network), and other related work. The RFP included a large number of
mandatory design requirements that offers were required to meet.

The RFP stated that the contract would be awarded to the offeror whose
proposal represented the best value, after evaluation of price and technical
factors. The technical evaluation factors were building design; proposer
experience/past performance; designer qualifications, experience and past
performance; management plan; construction company's safety record; and
small business subcontracting effort. Price proposals would be evaluated to
determine that prices were balanced, fair, and reasonable. The RFP stated
that the agency intended to award a contract without conducting discussions
and, therefore, advised that initial proposals should contain the offeror's
best terms. The RFP also advised that proposals should set forth full,
accurate and complete information, and that the government would rely on the
information contained in the proposal in awarding the contract.

Four offers were received and evaluated by the technical evaluation board
(TEB). Three of the four proposals, including those of Jones and Black, were
given overall technical ratings of "unacceptable but susceptible to becoming
acceptable." Dick's proposal was given an overall rating of "highly
acceptable" and ranked first on technical merit. [1] The Jones proposal
(total price of [deleted]) was the [deleted] Black's proposal (total price
of [deleted]) was the second [deleted] and Dick's proposal (total price of
$15,248,982) was the highest-priced. [2]

The TEB recommended to the source selection board (SEB) that discussions be
conducted and prepared questions to be asked of each offeror. The SSB agreed
with the overall technical ratings given by the TEB, but decided that enough
information was available to determine the best value and to award the
contract without discussions. After comparing the costs of the perceived
technical benefits of Dick's highest rated proposal with those of Black's
[deleted] rated proposal and determining that Dick's price compared
favorably with the government estimate and other proposals, the SSB
recommended that the contract be awarded to Dick.

After reviewing the TEB and SEB reports, the source selection authority
(SSA) noted that Dick's proposal was the only acceptable proposal received.
The SSA also noted that the Jones proposal did not meet all RFP
requirements, would require significant redesign to achieve conformance, and
therefore was not eligible for award. While recognizing that Black's
technically unacceptable proposal would not require extensive redesign to
make it acceptable, the SSA concurred with the TEB's assessment that the
proposal contained several minor design weaknesses that would have to be
corrected before the proposal could be considered acceptable for award.
After noting that Dick's proposal contained numerous design features that
exceeded the RFP requirements, and comparing Dick's price with the lower
price proposed in Black's technically unacceptable proposal, the SSA
determined that the additional design features proposed by Dick merited
paying Dick's higher price. Thus, the SSA concurred with the SEB's
recommendation that the contract should be awarded to Dick without
discussions. The contract was awarded to Dick on May 24. Jones and Black
filed these protests shortly thereafter.

THE Jones Protest

Jones contends that its proposal should have been rated as "acceptable"
rather than "unacceptable but susceptible to becoming acceptable," and that
the Navy should have informed it of the perceived weaknesses in its proposal
and allowed it to clarify the proposal with regard to the Navy's concerns.
Jones also contends that the Navy did not consider the cost savings
represented by its proposal and therefore the Navy's best value
determination was not supportable.

Our Office will question an agency's evaluation and selection decisions only
where they violate a procurement statute or regulation, lack a reasonable
basis, or are inconsistent with the stated evaluation and selection scheme.
See B. Diaz Sanitation, Inc., B-283827, B-283828, Dec. 27, 1999, 2000 CPD
para. 4 at 6.

The Jones proposal received "acceptable" ratings on three evaluation factors
(proposer experience/past performance, management plan, and small business
subcontracting effort). The proposal also received ratings of "unacceptable
but susceptible to becoming acceptable" on three evaluation factors
(building design; designer qualifications, experience and past performance;
and safety record). Based upon deficiencies in the areas of building design;
designer qualifications, experience, and past performance; and safety
record, the TEB rated the Jones proposal overall as "unacceptable but
susceptible to becoming acceptable." From our review of the record, we
conclude that the Navy reasonably rated the Jones proposal as unacceptable
but susceptible to being made acceptable. We discuss below some of the
deficiencies that the Navy found in the Jones proposal that caused the Navy
to reasonably determine that it was unacceptable as submitted.

In evaluating building design, the most important technical evaluation
factor, the TEB determined the Jones proposal to be unacceptable but
susceptible to becoming acceptable because it did not meet the RFP's minimum
requirements in three different areas.

The first deficiency concerned the RFP requirement that the contractor plant
a minimum of 25 royal palm trees in front of the administration building.
RFP part 2 (Technical Requirements), at 2B-23. The Jones proposal offered to
plant [deleted] instead. The agency explains that it required royal palms
because they are larger in circumference and therefore better able to
withstand the destructive power of seasonal typhoons. In addition, the
agency states that it desired to avoid the introduction of [deleted]. Agency
Report (Jones Protest) at 4, 8.

The second deficiency concerned the RFP requirements that the contractor
provide main sewer lines that are a minimum of 200 millimeters (mm) in
diameter and lateral sewer lines that are a minimum of 150 mm in diameter.
RFP part 2 (Technical Requirements), at 2B-14. Jones proposed main lines
that were [deleted] mm in diameter and lateral lines that were [deleted] mm
in diameter instead. The agency explains that these were serious
deficiencies because insufficient sewage drainage increases the risk of
blockage and backflow, which can have serious health and safety
implications. The agency also states that the [deleted] sewage
infrastructure proposed by Jones would frustrate the Navy's ability to
expand the system. Agency Report (Jones Protest) at 4, 8.

The third deficiency concerned water runoff. The TEB noted that the Jones
proposal was deficient because it did not ensure that water runoff would be
diverted [deleted] as required by the RFP. RFP part 2 (Technical
Requirements), at 2B-7; Agency Report (Jones Protest) at 4. The RFP
explained that this requirement was to prevent the runoff from entering
adjacent property.

Additionally, in evaluating the Jones proposal as unacceptable but
susceptible to becoming acceptable on designer qualifications, experience,
and past performance, the TEB noted that Jones did not provide the [deleted]
required by the RFP for evaluation, [deleted], and that Jones did not
[deleted].

Jones concedes that it offered [deleted] trees, that its sewer pipes were
[deleted] and that because of a "clerical mistake" it did not provide the
qualifications of its design team. Jones Protest at 9. Moreover, Jones has
not refuted the agency's assertion that the proposal was deficient with
regard to diverting water runoff. Under these circumstances, and based on
the record, we think the agency reasonably concluded that the Jones proposal
was unacceptable. Jones nonetheless argues that these deficiencies could
have been easily corrected if the Navy had informed it of the agency's
concerns and allowed it to "clarify" its proposal. Jones also argues that,
if awarded the contract, it can change any part of its design that does not
meet the RFP's minimum requirements under RFP provisions that require
submission and approval of the contractor's final design documents by the
government.

Where award will be made without discussions, agencies may have limited
exchanges with an offeror for the purpose of clarifying certain aspects of
its proposal or to resolve minor or clerical errors. Such limited exchanges
do not constitute discussions. Federal Acquisition Regulation (FAR)
sect. 15-306(a)(2). Discussions occur when an offeror is given an opportunity to
revise or modify its proposal, or when information requested from and
provided by an offeror is essential for determining the acceptability of its
proposal. Joint Threat Servs., B-278168, B-278168.2, Jan. 5, 1998, 98-1 CPD
para. 18 at 12.

Here, the information Jones says it would have given to the agency, if it
had been allowed to do so, would not have been clarifications, as Jones
suggests. Rather, Jones would have provided additional information (for
example, the qualifications of its design team) or revised its design
specifications (for example, [deleted] of its sewer pipes to meet the RFP's
minimum requirements) in order to make its proposal technically acceptable.
Allowing Jones to revise its proposal or provide additional information to
make its proposal acceptable would have constituted discussions and required
the agency to hold discussions with the other offerors. FAR sect. 15.306(d);
Kahn Instruments, Inc., B-277973, Dec. 15, 1997, 98-1 CPD para. 11 at 8 n.5. The
Navy could not properly have held discussions with Jones alone under the
guise of obtaining clarifications.

There generally is no requirement that an agency hold discussion where, as
here, the RFP advises that the agency intends to make award without
discussions. Since the RFP notified offerors of the agency's intention to
make award without discussions, Jones could not presume that it would be
given a chance to improve its proposal through discussions. The burden was
on Jones to submit an initial proposal containing sufficient information to
demonstrate its technical merits and to show that all of the RFP's required
design specifications were met. Jones ran the risk that its proposal would
be rejected when it failed to do so. Given the solicitation language and our
conclusion that the Navy reasonably found that the Jones proposal was
unacceptable, the agency was not required to hold discussions here. Id.

There is also no merit to the protester's suggestion that the agency could
have awarded it the contract and then allowed it to modify its design
specifications as necessary. The RFP specifically stated, in a provision
entitled "Enforceability of Proposal," that the proposal must set forth
full, accurate, and complete information as required under the RFP; that the
government would rely such information in awarding the contract; and that
all items proposed would be utilized for the duration of the contract. RFP
sect. 5B.4. Thus, the agency would not have been able to enforce all of the
RFP's mandatory requirements on Jones if it awarded a contract to the firm
based upon its nonconforming proposal. While the RFP included provisions
that allow government-approved changes to specifications after award, see
RFP section 01110, at 2-3, we think it is clear that the purpose of those
provisions is to allow the government an opportunity to review all design
documents and to approve any necessary changes before construction begins;
we do not believe that such provisions are intended as a means for the
contractor to revise its unacceptable proposal after award to make it
acceptable.

BLACK'S PROTEST

Black contends that the Navy incorrectly evaluated its proposal in a number
of areas and that none of the weaknesses the agency perceived in Black's
proposal would prevent Black from completing the project in accord with the
RFP. Black Protest at 2-7.

The Black proposal received an "unacceptable but susceptible to becoming
acceptable" on building design, the most important evaluation factor. The
proposal received "highly acceptable" ratings on three factors (proposer
experience/past performance; management plan; and small business
subcontracting effort). The proposal also received "acceptable" ratings on
two evaluation factors (designer qualifications, experience and past
performance; and safety record). Based upon deficiencies in the building
design area, the TEB rated Black's proposal as "unacceptable but susceptible
to becoming acceptable." From our review of the record, we conclude that the
Navy reasonably rated Black's proposal as unacceptable but susceptible of
becoming acceptable. We discuss below some of the deficiencies that the Navy
found in Black's proposal that caused the Navy to reasonably determine that
the proposal was unacceptable as submitted.

The first deficiency concerns the RFP requirement, noted above, that the
contractor plant a minimum of 25 royal palm trees in front of the
administration building. Black's proposal offered to plant [deleted] royal
palms instead. Black admits that it offered fewer royal palm trees than were
required, but states that it did so to make the plans symmetrical; Black
also states that it will plant [deleted] additional trees if the Navy
requires them. The Navy points out that 25 trees can be placed symmetrically
in front of the administration building as long as one is placed on the
centerline and that Black could have offered to plant [deleted] trees,
meeting the RFP minimum requirement, and still have offered an even number
of trees. Agency Legal Analysis (Black) at 6-7. Black's proposal in this
regard did not meet the agency requirement.

Another deficiency found in Black's proposal concerned the RFP's requirement
that the contractor provide a C1-type ceiling (suspended,
humidity-resistant, acoustical-tile ceiling) in the classroom/break room of
the maintenance building). RFP part 2 (Technical Requirements), app. I,
at 6, 11. Black's proposal included a maintenance building drawing that
showed that Black was proposing to install [deleted] ceiling [deleted] in
the classroom/ breakroom. The Navy explains that it required a C1-type
suspended ceiling with acoustical tiles in order to control noise in the
classroom and for its humidity resistance characteristic. Agency Legal
Analysis (Black) at 7. The Navy further explains that the type of ceiling
offered by Black, unlike the ceiling required by the RFP, would be
unpainted, would allow ventilation ducts to be seen, and would allow direct
exposure and would not be resistant to humidity. Agency Additional Statement
(Black) at 3.

Black concedes that the required suspended ceiling was not shown on the
plans submitted as its proposal. Black's Protest at 5. However, Black
attached a document entitled "Room Finish Schedule" to its protest, which
purports to show that it will provide the required suspended ceiling.
Black's Protest, exh. H, at 2. From our review of Black's proposal's
drawings, it appears, as the agency found, that Black offered an exposed,
unpainted ceiling rather than the required type of suspended ceiling.
Moreover, it is not clear from the room finish schedule attached to Black's
protest that the required suspended ceiling will be installed in the
classroom/breakroom. In any event, the agency points out, and Black has not
refuted, that the room finish schedule was not part of Black's proposal. A
proposal can only be evaluated on the basis of the information included in
it; where, as here, the RFP contained a specific requirement for a
particular type of ceiling, Black disregarded that requirement at its peril
and ran the risk, as in this case, that its proposal would be rejected as
unacceptable. See Allenhurst Indus., Inc., B-256836, B-256836.2, July 8,
1994, 94-2 CPD para. 14 at 3-4.

A further deficiency in Black's proposal concerned [deleted] drinking
fountains in the storage building, which contained the physical fitness room
and both the men's and women's locker rooms. The RFP required drinking
fountains to be "strategically located" in the corridor, in both the men's
and women's locker rooms, and in the physical fitness room. RFP sect. 2C.3.d.
The TEB considered Black's proposal to be unacceptable because it [deleted].
The Navy explains that this was [deleted] because Army Reservists finishing
physical training require readily available drinking water to avoid negative
health consequences. Agency Legal Analysis (Black) at 8. Black concedes that
the water fountains were not shown on its architectural plans for the
storage building, but states that its electrical plans included fountains.
Black Protest at 4, exh. F. However, as the Navy correctly asserts, the
electrical plans only show that electrical lines for fountains would be
provided, not that the fountains themselves would be provided. Agency Legal
Analysis (Black) at 8. Since Black's proposal [deleted] at best, only showed
electricity for the fountains, the TEB reasonably considered the proposal
unacceptable with regard to this requirement. [3]

SUMMARY

Based upon the deficiencies, discussed above, and others, we conclude that
the Navy reasonably determined that both the Jones and Black proposals were
"unacceptable but susceptible to becoming acceptable." Since Dick's initial
proposal was technically acceptable (in fact, Dick's proposal was rated as
"highly acceptable" overall), we conclude that the Navy reasonably awarded
the contract to Dick on the basis of initial proposals, consistent with the
RFP. [4]

The protests are denied.

Anthony H. Gamboa
Acting General Counsel

Notes

1. Black's proposal was ranked [deleted] on technical merit, while the Jones
proposal was ranked [deleted].

2. All four proposals were less than the government estimate of [deleted].

3. Black also complains that the RFP did not indicate the relative weight of
cost versus the combined technical factors in the evaluation and selection
process. Black's Protest at 5. Under our Bid Protest Regulations, this
protest issue, alleging an impropriety in the RFP, should have been filed
before the time set for receipt of initial proposals. 4 C.F.R. sect.21.2(a)(1)
(2000). As the protest was filed after the closing date, the issue is
dismissed as untimely.

4. Jones and Black also object to the Navy's selection of Dick's
higher-priced offer because it was not the best value. In view of our
finding that the Navy reasonably determined the Jones and Black proposals to
be technically unacceptable, neither proposal could form the basis for
award, notwithstanding its lower price. TEAM Support Servs., Inc.,
B-279379.2, June 22, 1998, 98-1 CPD para. 167 at 9. Because Dick's proposal was
the only technically acceptable proposal, and since the RFP warned offerors
that the agency intended to award on the basis of initial proposals, the
agency was not required to consider Jones's or Black's lower price in making
its award decision. See Exploration Prods., B-279251.2, B-279251.3, June 1,
1998, 98-2 CPD para. 15 at 11-12. Here, in any event, we note that, in deciding
to award to Dick, the SSA compared Dick's price to both the government
estimate and the prices proposed by the other offerors and determined that
the additional design features proposed by Dick merited paying Dick's higher
price, so that discussions (which could have led the offerors to improve
their proposals to an acceptable level) were not appropriate. Agency
Reports, Tabs 18 and 19. In our view, the Navy's determination that Dick's
proposal represented the best value and the award to Dick on the basis of
its having submitted the only technically acceptable initial proposal were
consistent with the RFP's stated selection scheme.