TITLE:  Centro Management, Inc., B-286935; B-286935.2, February 26, 2001
BNUMBER:  B-286935; B-286935.2
DATE:  February 26, 2001
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Centro Management, Inc., B-286935; B-286935.2, February 26, 2001

Decision

Matter of: Centro Management, Inc.

File: B-286935; B-286935.2

Date: February 26, 2001

Lynn Hawkins Patton, Esq., Ott & Purdy, for the protester.

Col. Michael R. Neds and Maj. John Alumbaugh, Department of the Army, for
the agency.

Paul I. Lieberman, Esq., and Michael R. Golden, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Solicitation provision setting forth applicability of Randolph-Sheppard Act
preference (establishing priority for the blind in the award of contract for
cafeteria services) does not establish a requirement that, in addition to
being included in the competitive range, in order to receive the statutory
selection preference a proposal submitted by a state licensing agency for
the blind must be evaluated as virtually equal in price and technical
capability to the other competitive range proposals.

DECISION

Centro Management, Inc. protests the exclusion of its proposal from the
competitive range under request for proposals (RFP) No. DAKF11-99-R-1005,
issued by the Department of the Army for food services at Fort Polk, and the
award of a contract for these services to Louisiana Rehabilitation Services
(LRS), a state licensing agency for the blind (SLA). Centro, the incumbent
contractor, contends that its proposal was misevaluated and therefore
incorrectly excluded from the competitive range, and that the award to LRS
is improper because it was based on the agency's misapplication of the RFP
provision advising that the solicitation is subject to the exercise of a
selection preference under the Randolph-Sheppard Act, 20 U.S.C. sect. 107-107f
(1994) (the Act).

We deny the protest.

It is undisputed that this procurement is for cafeteria services that
qualify for application of the selection preference afforded by the Act.
Section M.6(a) of the RFP notifies offerors that the solicitation is subject
to the Act, and that Army policy interprets the Act to provide a "selection
preference to qualified nominees of [SLAs] who represent clients seeking
Defense contracts for so-called ‘military cafeteria-style food
operations.'" The RFP goes on to state that "[a]pplication of this
preference may entitle a qualifying offeror, whose evaluated proposal is
included in the agency's competitive range determination, to receive award
without further consideration of other equally competitive proposals." RFP sect.
M.6(a), (b).

Five proposals were received by the August 14, 2000 closing date, including
Centro's and one submitted by LRS as the SLA representing a qualified
nominee joint venture consisting of Breaud Services Inc., a licensed blind
vendor, and Cantu Services Inc. Based on its evaluation of the initial
proposals, the agency established a competitive range consisting of the LRS
proposal and a proposal submitted by KCA Corporation. Centro's proposal was
excluded from the competitive range even though it was recognized as
offering the lowest price, on the basis that the proposal demonstrated a
lack of understanding of the requirement and contained material deficiencies
that would require a major or total rewrite to be made competitive. Agency
Report (AR), Tab 10, Pre-Negotiation Objective Memorandum, Oct. 18, 2000, at
12-13; AR, Tab 11, Determination of Competitive Range, at 5-6. Because the
SLA proposal was included in the competitive range, after conducting
discussions the Army determined to make award to the SLA on the basis that
it qualified for preference under the Act. AR at 4. After receiving its
debriefing, Centro timely filed this protest.

Centro's primary complaint is that the selection of LRS reflects a
misapplication by the agency of the preference as set forth in the RFP. In
Centro's view, had its proposal been properly evaluated, it would have been
included in the competitive range with a higher technical rating than LRS's
proposal, and at a significantly lower price. [1] Centro contends that the
agency could not properly have selected LRS for award based on the RFP's
preference language because LRS's higher-priced proposal could not
reasonably have been evaluated as substantially equal to Centro's.

As a threshold matter, Centro contends that the agency could not properly
have included LRS's proposal in the competitive range or credited the
proposal with the statutory preference because, in Centro's view, the SLA
nominee consists of a joint venture which does not qualify for preference
under the Act. The Act vests authority for administering and overseeing its
requirements solely with the Secretary of Education, 20 U.S.C. sect. 107a
(1994). Pursuant to this authority, the Secretary has promulgated
comprehensive regulations addressing all aspects of the Act's requirements,
including rules governing the relationship between the SLAs and blind
vendors in each state, rules for becoming a designated SLA within the
meaning of the Act, rules governing the use of nominee agreements by the
SLAs, procedures for oversight of the SLAs by the Secretary, and rules
governing the relationship between the SLAs and all federal government
agencies. 34 C.F.R. part 395 (2000); Mississippi State Dep't of
Rehabilitation Servs., B-250783.8, Sept. 7, 1994, 94-2 CPD para. 99 at 3.
Because Congress has vested exclusive oversight and decision-making
authority with the Secretary of Education, which encompasses an SLA's
determination to enter into an agreement with a joint venture as a
qualifying nominee under the Act, our Office will not review a protest of
that issue. Mississippi State Dept. of Rehabilitation Servs., supra, at 4-5.
Accordingly, we have no basis to question the agency's inclusion of LRS's
proposal in the competitive range as an SLA nominee or the agency's
crediting LRS's proposal with the statutory preference.

Centro's contention that the preference called out in the RFP does not
provide a basis to award to LRS based on the inclusion of its proposal in
the competitive range is without merit. Centro bases its argument on the RFP
notice at section M.6(b) that the preference may entitle a qualified offeror
whose proposal is included in the competitive range to receive award,
focusing on the phrase "without further consideration of other equally
competitive proposals" as if it creates a free-standing evaluation
criterion. Centro asserts that this language imposes a limitation that,
notwithstanding its status as an SLA nominee, LRS was not "entitled to the
selection preference [unless] there were only negligible differences in its
price, management proposal, and past performance compared to other
offerors." Protest at 6. Centro would extend the reach of the RFP phrase to
mean that the SLA proposal had to be evaluated as virtually equal to the
other selected proposals in order to be included in the competitive range as
well as in order to receive the statutory selection preference. Centro
opines that LRS's proposal was not "equally competitive" with Centro's,
primarily because the price difference was not negligible. Id.

In our view, Centro simply misconstrues the plain meaning of the RFP
preference notice. Contrary to Centro's position, the preference language
has no relation to the standard for inclusion of an SLA's proposal in the
competitive range. The criterion for inclusion is that a proposal must be
one of the most highly rated. Federal Acquisition Regulation sect. 15.306(c).
This standard does not contain a requirement that in order to be included in
the competitive range a proposal must be equally competitive with all other
competitive range proposals or, as Centro posits, contain only negligible
differences. The RFP phrase pointed to by Centro does not and could not
create any such overly restrictive requirement. Reasonably construed, the
RFP notice that application of the preference permits award to a competitive
range SLA without further consideration of other equally competitive
proposals means simply that the agency may make a determination to award to
that SLA without performing a comparison or tradeoff between the SLA
proposal and any other competitive range proposals. This is consistent with
our Office's view that 34 C.F.R. part 395 contemplates that if a designated
SLA's proposal is found to be within the competitive range for the
acquisition, award must be made to the SLA. Mississippi State Dep't of
Rehabilitation Servs., supra, at 1-2. This interpretation is further
supported by applicable Department of Defense regulations which provide that
"[if] the [SLA] submits a proposal and it is within the competitive range
established by the contracting officer, the contract will be awarded to the
[SLA] except [when a specified high-level determination is made by the
agency and approved by the Secretary of Education]." 32 C.F.R.
sect. 260.3(g)(1)(ii), (iii) (2000).

The Act as implemented contemplates a preference which permits award to an
SLA based on the inclusion of its proposal in the competitive range; the
solicitation language in question is plainly consonant with this
interpretation and should be so understood. Accordingly, we have no basis to
object to the agency's determination that once LRS's proposal was included
in the competitive range, appropriate application of the preference
warranted a determination to award to LRS.

The protest is denied.

Anthony H. Gamboa

Acting General Counsel

Notes

1. In its initial protest, Centro assumed that its proposal had been
included in the competitive range. After learning that this was not the
case, Centro timely protested its exclusion. In response to the agency's
explanation setting forth the various evaluated material omissions and
informational deficiencies in Centro's proposal which formed the basis for
the agency's determination that the proposal was technically unacceptable,
Centro argued primarily that the agency had knowledge of Centro's successful
performance as incumbent, and that this record was sufficient to establish
Centro's ability to successfully perform the functions that it failed to
address in its proposal. Centro's view that the agency was required to
recognize Centro's incumbency as providing an adequate substitute for
including required information in its proposal is unpersuasive; an offeror
must submit an initial proposal that is adequately written and affirmatively
states its merits, or run the risk of having its proposal rejected as
technically acceptable where the proposal omits or provides inadequate
information addressing fundamental factors. Essex Electro Eng'rs, Inc.,
B-284149, B-284149.2, Feb. 28, 2000, 2000 CPD para. 72 at 6. However, we need
not resolve the propriety of the agency's evaluation and exclusion of
Centro's proposal because, even if the proposal should have been included in
the competitive range, this would not provide any basis to sustain the
protest in view of our conclusion that the agency's application of the
preference was unobjectionable. That is to say, once the SLA proposal was
properly included in the competitive range, this provided a valid basis for
the agency to award the contract to the SLA irrespective of which other
proposals were also included.