TITLE:  Lynwood Machine & Engineering, Inc., B-285696, September 18, 2000
BNUMBER:  B-285696
DATE:  September 18, 2000
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Lynwood Machine & Engineering, Inc., B-285696, September 18, 2000

Decision

Matter of: Lynwood Machine & Engineering, Inc.

File: B-285696

Date: September 18, 2000

Nick Berkem for the protester.

Michael Briskin, Esq., and Mary E. Clarke, Esq., Defense Logistics Agency,
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. In evaluating past performance, agency properly considered performance
     record of company other than the one submitting a quotation where
     company submitting quotation intended to rely heavily on the other
     company's personnel in performing the job.
  2. Agency is not required to contact all of a vendor's references, but
     must act reasonably in determining which ones to contact and which not
     to contact.
  3. Agency was not required to conduct discussions with protester to allow
     it an opportunity to clarify its past performance information where
     procurement was conducted using simplified acquisition procedures.
  4. Agency properly considered information concerning vendor's past
     performance obtained from a source not identified by the vendor in its
     quotation.
  5. Where agency is not required to hold discussions or otherwise
     communicate with vendors regarding past performance information, and
     the contracting officer has no reason to question the validity of the
     information furnished by the vendor's

references, he or she can reasonably rely on the information furnished
without seeking to verify it or permitting the protester an opportunity to
rebut it.

DECISION

Lynwood Machine & Engineering, Inc. protests the issuance of an order to SAF
Engineering Associates under request for quotations (RFQ) No.
SPO833-00-Q-0137, issued by the Defense National Stockpile Center (DNSC),
Defense Logistics Agency for the weighing, banding, crimping and relocation
of approximately 34,000 metric tons of lead at DNSC's Hammond, Indiana
depot. The protester takes issue with the agency's evaluation of its past
performance.

We deny the protest.

DNSC explains by way of background that it is responsible for acquiring,
storing, and maintaining various strategic and critical materials, and that
it has acquired stockpiles in excess of current needs of a number of
materials and is in the process of selling its excess stores. One of the
materials that DNSC is selling is lead. Prior to resale, the lead must be
restacked, banded, and accurately weighed. The agency notes that work around
the lead, which has oxidized while being stored outside, is potentially
hazardous.

The RFQ, which was issued using simplified acquisition procedures pursuant
to the authority of Federal Acquisition Regulation (FAR) subpart 13.5 (Test
Program for Certain Commercial Items), [1] contemplated the award of a
fixed-price order to the vendor whose quotation represented the best value
to the government. The solicitation, as amended, provided for the evaluation
of quotations on the basis of experience, past performance, and price, in
descending order of importance. To assist in the evaluation of their past
performance, vendors were instructed to furnish "three (3) references with
information concerning projects completed within the last two years for the
same or similar work required by the solicitation." RFQ sect. 22.

Five vendors submitted quotations prior to the April 21, 2000 due date.
Lynwood's price of $422,514.24 was lowest, and SAF's price of $423,197.92
was second low. The contracting officer determined that the two vendors were
essentially equal in experience, but that SAF's past performance was
superior to Lynwood's. Agency Report at 3-5; Recommendation for Award, May
17, 2000, at 2. The contracting officer selected SAF's quotation as
representing the best value to the government, finding that SAF's
significantly better past performance outweighed Lynwood's slightly (i.e.,
$683.68) lower price. On May 19, DLA issued an order to SAF.

In its quotation, Lynwood highlighted its recent acquisition of the material
handling operation of a company named Contract Procurement Services, Inc.
(CPS) and advised the agency that if it were awarded this job, it would rely
heavily on CPS personnel in its performance. In particular, Lynwood noted
that the president of CPS would serve as project manager; it also indicated
that CPS's material handlers, banders, and forklift operators would work on
the job. Lynwood Quotation at 2. Lynwood listed the DNSC as its first
reference, noting that CPS, under the management of the above-mentioned
president, had completed four material handling contracts for the agency
(which Lynwood identified by contract number and amount, dates and location
of performance, and type and quantity of material handled). Lynwood also
listed three commercial references for itself in the quotation. While
Lynwood noted that it had "successfully moved millions of tons of materials
over the past two years for [these] clients [with] which it maintains
ongoing contracts," id. at 3, it did not identify any specific contracts it
had performed for them.

In evaluating Lynwood's past performance, the contracting specialist sought
references from the contracting officers for the two largest dollar amount
contracts performed by CPS, both of which involved the handling of lead, and
from the point of contact identified for Lynwood's largest commercial
customer. Because of the safety issues involved in the handling of lead, the
contracting officer also sought references regarding Lynwood/CPS and the two
other vendors under consideration for award from DNSC's Safety and
Occupational Health Manager.

The agency was unable to obtain a reference from Lynwood's largest
commercial customer because the point of contact identified by the protester
in its quotation did not return the contracting specialist's telephone
calls. The references for CPS's two largest dollar amount contracts both
rated CPS's performance as a 3 on a scale of

1-5, one noting that CPS had not been able to meet the contract's daily
requirements, that it had not completed the task on time, and that it had
"required constant oversight to ensure [that] the [statement of work] was
being followed, i.e. placement of bands, bundles being square, etc." Agency
Report, Tab 24. The Safety and Occupational Health Manager gave CPS a rating
of 1, commenting that:

[CPS] had to be constantly reminded to follow the OSHA regulations on lead
handling as far as personal protective equipment and respirators were
concerned. They were caught with unauthorized personnel in the work area.

Id. Based on the above point ratings, Lynwood was given an overall past
performance score of 1.25. [2]

SAF, in contrast, received two ratings of 5 and a rating of 4 from the three
references that it identified in its quotation. All three references
responded that SAF had finished their task on time and without performance
problems. The Safety and Occupational Health Manager gave SAF a rating of 3,
noting that he had minor problems with its performance, which involved
getting required air sampling results to DNSC in a timely manner. Based on
the above ratings, SAF was given an overall past performance score of 4.25.

Lynwood protests the agency's evaluation of its past performance,
complaining that DLA did not contact any of its references, but instead
considered only references pertaining to CPS's performance.

When using simplified acquisition procedures, an agency must conduct the
procurement consistent with a concern for fair and equitable competition,
and must evaluate quotations in accordance with the terms of the
solicitation. Environmental Tectonics Corp., B-280573.2, Dec. 1, 1998, 98-2
CPD para.140 at 4. When reviewing protests against an allegedly improper
evaluation, we will examine the record to determine whether the agency met
this standard and reasonably exercised its discretion. Id.

First, to the extent that the protester is arguing that the agency should
not have considered information regarding CPS's performance in its
evaluation of Lynwood's past performance because CPS was not the vendor
submitting a quotation, we disagree. There are circumstances in which it is
appropriate for an agency to consider the performance of a company other
than the one submitting the quotation in evaluating past performance. See
NAHB Research Ctr., B-278876.2, May 4, 1998, 98-1 CPD para.150 at 4. In
determining whether one company's performance should be attributed to
another, an agency must consider the nature and extent of the relationship
between the two companies--in particular, whether the workforce, management,
facilities, or other resources of one may affect contract performance by the
other. In this regard, while it would be inappropriate to consider a
company's performance record where that record does not bear on the
likelihood of successful performance by the offeror (or vendor), it would be
appropriate to consider a company's performance record where it will be
involved in the contract effort or where it shares management with the
offeror (or vendor). ST Aerospace Engines Pte. Ltd., B-275725, Mar. 19,
1997, 97-1 CPD para.161 at 3.

Here, as previously noted, the protester emphasized in its quotation that
both CPS management and workers would play prominent roles in performance if
this job were awarded to Lynwood. Most significantly, Lynwood proposed to
employ CPS's president as project manager. It also proposed to rely on CPS's
material handlers, banders, and forklift operators in performance. Given the
extent to which Lynwood intended to rely on CPS personnel in performing this
job, we think that the agency reasonably attributed CPS's past performance
to the protester.

Second, regarding the protester's complaint that the agency did not obtain
references from any of its commercial customers, it is clear from the record
that an attempt was made to contact Lynwood's largest commercial customer
and that the reason no reference was obtained was that the customer failed
to respond. An agency is only required to make a reasonable effort to
contact a reference, and where that effort proves unsuccessful, it is
unobjectionable for the agency to proceed with its evaluation without
benefit of that reference's input. Universal Bldg. Maintenance, Inc.,
B-282456, July 15, 1999, 99-2 CPD para. 32 at 8 n.1. Further, while the agency
did not attempt to contact the protester's other commercial references,
there is no requirement that an agency contact all of a vendor's references,
Oahu Tree Experts, B-282247, Mar. 31, 1999, 99-1 CPD para. 69 at 3, particularly
where a vendor furnishes more than the number of references requested.
Moreover, while the agency must act reasonably in deciding which references
to contact and which not to contact, Acepex Management Corp., B-279173.5,
July 22, 1998, 98-2 CPD para.128 at 8, we see nothing unreasonable in the
agency's selection of the three references to contact here. We think that it
was clearly reasonable for the agency to have regarded CPS's performance on
the contracts for which it obtained references as more relevant than
Lynwood's performance on its commercial contracts given that the CPS
contracts were for lead handling (i.e., the precise service sought here),
whereas the Lynwood contracts were for the movement of unspecified
materials. [3] Accordingly, we think that it was reasonable for the agency
to have decided to contact those references. [4]

Next, to the extent the protester objects to the agency's having obtained
information concerning its past performance from the agency's Safety and
Occupational Health Manager, a source it did not identify as a reference in
its quotation, an agency may properly consider evidence of a vendor's past
performance from sources that are not listed in the vendor's quotation.
Environmental Tectonics Corp., supra, at 4. Thus, we see nothing
objectionable in the agency's having obtained a reference from the Safety
and Occupational Health Manager.

Lynwood also argues that it was contrary to the terms of the RFQ sect. 22, which
instructed vendors "to provide three (3) references with information
concerning projects completed within the last two years," for the agency to
have considered projects completed more than 2 years ago in evaluating its
past performance. In this regard, both of the CPS contracts for which the
agency obtained references were completed more than 2 years prior to
issuance of the RFQ here.

The RFQ did not limit the scope of the projects to be considered in
evaluating a vendor's past performance; it provided simply for evaluation of
the vendor's past performance. Although the RFQ requested references for
projects completed within the last 2 years, it did not indicate that the
evaluation of past performance would be based exclusively on such projects.
See Young Enters., Inc., B-256851.2, Aug. 11, 1994, 94-2 CPD para.159 at 5.
Accordingly, we do not think that it was inconsistent with the terms of the
solicitation for the agency to have considered projects completed more than
2 years previously in evaluating Lynwood's past performance. We also think
that it is unreasonable for the protester to object to the agency's
consideration of these contracts in its past performance evaluation, since
the protester itself identified them on the list of references submitted
with its quotation.

The protester also takes issue with certain of the references' criticisms of
CPS's performance. Specifically, Lynwood denies that CPS failed to meet the
daily production requirements under one of the contracts. The protester also
disputes the statement by the Safety and Occupational Health Manager that
CPS required constant reminders to follow regulations regarding personal
protective equipment and respirators.

Notwithstanding the challenges to the validity of the reference-furnished
information that Lynwood now raises, the protester has not alleged--nor is
there anything in the record to suggest--that at the time the contracting
officer made her award decision, she had any reason to question the accuracy
of the information provided to her. Where an agency is not required to hold
discussions or otherwise communicate with vendors regarding past performance
information, as is the case where simplified acquisition procedures are
employed, see FAR sect. 13.106-2(b)(2), and the contracting officer has no
reason to question the validity of the past performance information, we
think that he or she can reasonably rely on the information furnished
without seeking to verify it or permitting the protester an opportunity to
rebut it. See A.G. Cullen Constr., Inc., B-284049.2, Feb. 22, 2000, 2000 CPD
para. 45 at 5.

It also appears that the contracting officer would have reached the same
conclusion regarding the superiority of SAF's quotation over Lynwood's even
had she not taken the criticisms that the protester now disputes into
consideration in evaluating Lynwood's past performance. In other words, it
appears that Lynwood was not prejudiced by the contracting officer's
consideration of the negative comments in question. See McDonald-Bradley,
B-270126, Feb. 8, 1996, 96-1 CPD para. 54 at 3, Statistica, Inc. v. Christopher,
102 F. 3d 1577 (Fed. Cir. 1996) (to prevail, protester must demonstrate a
reasonable possibility that it was prejudiced by agency action). In this
regard, the criticisms that the protester disputes were not the only
significant negative comments made regarding CPS's past performance, [5]
whereas no significant negative comments were made about SAF's past
performance. Accordingly, it appears to us that even if the contracting
officer had not considered the negative comments with which Lynwood takes
issue, she still would have concluded that SAF's past performance was
sufficiently superior to Lynwood/CPS's to outweigh Lynwood's miniscule price
advantage.

Next, Lynwood objects to the fact that this procurement was conducted using
an RFQ, as opposed to an invitation for bids or a request for proposals. The
protester contends that the use of RFQs enables DLA "to inappropriately
award . . . contracts to its favorites, with minimal evaluation, explanation
and documentation." Protester's Response to Agency Request for Dismissal,
June 28, 2000, at 3.

We will not consider this argument because it was not raised in a timely
manner. Our Bid Protest Regulations require that protests based upon alleged
improprieties in an RFQ be filed prior to the date set for receipt of
quotations. See 4 C.F.R. sect. 21.2(a)(1) (2000); Envirodyne Sys. Inc.,
B-279551, B-279551.2, June 29, 1998, 98-1 CPD para. 174 at 3. This means that to
be timely, any objection to issuance of the solicitation as an RFQ had to
have been raised prior to April 21. Since Lynwood instead waited until June
28 to raise the issue, its protest of the matter is untimely.

Finally, the protester complains that in performing the order, SAF has not
been using the same workforce that it uses to provide the same services to
the general public. According to Lynwood, use of the same workforce is
required by paragraph (e) under the definition of "commercial item" set
forth at FAR sect. 2.101. The agency responds that Lynwood's argument is based
on a definition which does not apply here, and that in fact the services
sought under this RFQ meet the definition that does apply, set forth at
paragraph (f) of the same FAR provision. We will not consider the
protester's complaint because it concerns a matter of contract
administration over which we do not exercise jurisdiction. See 4 C.F.R. sect.
21.5(a). In any event, we note that, in contrast to the provision on which
the agency relies (which defines what services generally are considered
"commercial"), the provision on which Lynwood relies applies by its terms
only to procurements of services provided in support of commercial items,
such as installation, maintenance, repair, and training. It is not clear why
Lynwood believes that definition would apply here, given that the services
being procured do not constitute support services of the type listed in that
provision.

The protest is denied.

Anthony H. Gamboa

Acting General Counsel

Notes

1. FAR Subpart 13.5 authorizes, as a test program, use of simplified
procedures for the acquisition of supplies and services in amounts greater
than the simplified acquisition threshold but not exceeding $5 million,
including options, if the contracting officer reasonably expects, based on
the nature of the supplies or services sought, and on market research, that
offers will include only commercial items. FAR sect. 13.500(a).

2. The agency acknowledges in its report that Lynwood's overall past
performance score was miscalculated and that it should have been 2.33 rather
than 1.25. The contracting officer maintains that this error did not affect
her source selection decision, which was based on a comparison of the
individual surveys themselves. Agency Report at 4 n.2.

3. In commenting on the agency report, the protester asserts that it has
moved hazardous materials such as silicic acid, solvents, paints, gases, and
oils for its commercial clients, Protester's Comments, at 1, and that if the
agency had concerns regarding the relevancy of these contracts, it should
have contacted Lynwood for additional information. There was no indication
in Lynwood's quotation that it had moved hazardous materials for its
commercial clients, however, and since this acquisition was conducted using
simplified acquisition procedures, the agency was not required to conduct
discussions with Lynwood for purposes of clarifying the nature of the
services that it had performed. FAR sect.13.106-2(b)(2); CDS Network Sys., Inc.,
B-281200, Dec. 21, 1998, 98-2 CPD para.154 at 3.

4. We also note that it does not appear that Lynwood was in fact prejudiced
by the agency's failure to contact its commercial references. In this
regard, the contracting officer states that even if she had obtained past
performance surveys from one or more of Lynwood's commercial customers, her
award decision would not have been affected because "[e]ven stellar
performance on all of Lynwood's commercial contracts would not have
eliminated the concerns [she] had over CPS's past performance and Lynwood's
inexperience with hazardous material." Agency Report at 7.

5. For example, the protester does not dispute the reference's statement
that under one contract CPS required constant oversight to ensure that the
statement of work was being followed with regard to the placement of bands
and bundles being square. Moreover, the protester concedes the correctness
of the Safety and Occupational Health Manager's statement that on one
occasion it was found to have an unauthorized worker in the work area.