TITLE:  Special Operations Group, Inc., B-287013; B-287013.2, March 30, 2001
BNUMBER:  B-287013; B-287013.2
DATE:  March 30, 2001
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Special Operations Group, Inc., B-287013; B-287013.2, March 30, 2001

Decision

Matter of: Special Operations Group, Inc.

File: B-287013; B-287013.2

Date: March 30, 2001

J. Patrick McMahon, Esq., and William T. Welch, Esq., Barton, Baker, McMahon
& Tolle, for the protester.

Dennis J. Gallagher, Esq., Department of State, for the agency.

Glenn G.Wolcott, Esq., and Michael R. Golden, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

1. Agency improperly awarded a contract on the basis of the lowest priced
proposal where the proposal failed to comply with a material solicitation
requirement.

2. Where solicitation provided for contract award on the basis of a
cost-technical tradeoff emphasizing technical merit over cost/price, it was
improper for the agency to evaluate technical proposals on a pass/fail basis
and then make its source selection decision on the basis of what it
perceived to be the lowest priced, technically acceptable proposal without
advising offerors of this change in the source selection criteria.

DECISION

Special Operations Group, Inc. (SOGI) protests the Department of State's
award of a contract to Triumph Technologies, Inc. under request for
proposals (RFP) No. S-LMAQM-00-R-0079 to provide personnel to safeguard
classified material while that material is in-transit to diplomatic
missions. SOGI protests that Triumph's proposal failed to comply with the
solicitation requirements, and that the agency failed to make its source
selection decision on the basis of the criteria specified in the
solicitation.

We sustain the protest.

BACKGROUND

The RFP was issued on August 16, 2000 as a competitive set-aside for small
disadvantaged businesses under the Small Business Administration's (SBA)
section 8(a) program, see 15 U.S.C. sect. 637(a) (1994), and sought proposals to
provide personnel "to protect and safeguard sensitive/controlled cargo and
classified material that may be vulnerable to technical penetration and
unauthorized access while the cargo/material is in-transit to U.S.
Diplomatic Missions." RFP at 7.

As amended, the solicitation directed offerors to submit separate technical
and price proposals and required that price proposals include fully loaded
fixed labor rates applicable to various labor categories for a 1-year base
period and four 1-year option periods. [1] The RFP identified the individual
proposed to serve as project manager as the only "key personnel," requiring
as follows: "The offeror shall provide a resume of the proposed Project
Manager . . . If the offeror proposes a person that is not currently
employed by the offeror then the offeror shall provide a signed copy of a
letter of intent with that person." [2] RFP at 46-47.

Regarding the evaluation of technical proposals, the RFP established two
evaluation factors--experience and past performance--and provided that
experience was to be more important than past performance. RFP at 52.
Regarding the relative importance of technical and cost/price factors, the
RFP stated "technical merit is more important than cost or price," and
advised offerors that "[t]he Contracting Officer shall determine what
trade-off between technical merit and cost or price promises the best value
to the Government." Id.

Six offerors, including SOGI and Triumph, submitted proposals by the
October 6, 2000 closing date. Thereafter, a single evaluator assessed the
technical proposals against ten evaluation criteria and made determinations
as to whether the proposals were acceptable or unacceptable with regard to
each criterion. [3] At a hearing conducted by the General Accounting Office
(GAO), [4] the technical evaluator testified that he established the 10
criteria based on the solicitation's statement of work and his knowledge of
the prior contract's requirements, and that he was directed to evaluate
proposals on an acceptable/unacceptable basis by the agency's contract
specialist. Video Transcript (VT) at 10:02-03, 11:14; Declaration of
Technical Evaluator para. 3.

Following the evaluation of initial proposals, the contracting officer
established a competitive range consisting of Triumph, SOGI, and two other
offerors, and thereafter conducted discussions with each competitive range
offeror. [5] Following discussions, final revised proposals were requested
and submitted. [6] In the final evaluation, each competitive range proposal
was evaluated as acceptable (that is, received a score of 1 point) for each
of the 10 evaluation criteria. Final evaluated prices were as follows:
Triumph $3,610,845; SOGI [deleted]; third competitive range offeror
[deleted].

The contracting officer states that, following the final evaluation, no
cost-technical tradeoff was performed and "[a]ward was based on lowest
price, technically acceptable offer." Contracting Officer's Statement para. 18.
On December 5, 2000, the agency awarded a contract to Triumph. This protest
followed.

DISCUSSION

SOGI first protests that award to Triumph was improper because Triumph's
proposal failed to comply with the solicitation requirements regarding its
proposed project manager. We agree.

The record shows that Triumph failed to submit a letter of intent for the
individual it proposed to serve as project manager even though that
individual was not, and had never been, employed by Triumph. [7] Further,
Triumph withdrew its offer of employment to the proposed project manager
immediately after receiving the contract award. Triumph, itself, describes
the situation as follows:

On December 5, [the proposed project manager] was to join several Triumph
staff members who were involved in this procurement, sign the offer letter,
and then proceed to the kick-off meeting. . . . To everyone's amazement,
[the proposed project manager] did not make the meeting nor call to say that
he was having difficulty finding the location.

. . . . .

After our kick-off meeting and upon returning to our corporate headquarters,
[Triumph's] director of operations immediately started investigating the
reason for [the proposed project manager's] failure to attend the meeting.
After locating him, he was asked what happened and why no one at Triumph was
contacted. [The proposed project manager] stated that he got lost and didn't
think to call. Given the nature of the contract and the responsibilities of
the project manager, [Triumph] found his response unacceptable and not
proactive considering what was at stake. [Triumph] called [the proposed
project manager] later that afternoon and retracted [Triumph's prior verbal
employment] offer.

Letter from Triumph to State Department (Feb. 1, 2001).

It is well settled that, in a negotiated procurement, a proposal that fails
to conform to one or more of the solicitation's material requirements is
technically unacceptable and cannot form the basis for an award. Farmland
Nat'l Beef, B-286607, B-286607.2, Jan. 24, 2001, 2000 CPD para. 31 at 8-10;
Marine Pollution Control Corp., B-270172, Feb. 13, 1996, 96-1 CPD para. 73 at
2-3.

Here, it is undisputed that the solicitation specifically mandated
submission of a letter of intent for any proposed project manager who was
not employed by the offeror at the time the proposal was submitted. Further
the solicitation identified the project manager as the only "key personnel,"
and described the role of the project manager as "essential to the work to
be performed." RFP at 20. Clearly, in light of the essential nature of this
position, submission of the required assurance that a non-employee proposed
as project manager would, in fact, be available to serve as such constituted
a material solicitation requirement. Indeed, Triumph's ultimate inability to
provide the sole "key personnel" it proposed, and on which its proposal was
evaluated, demonstrates the significance of this requirement. Accordingly,
Triumph's failure to comply with this requirement rendered its proposal
technically unacceptable and, thus, could not form a valid basis for
contract award.

SOGI also protests the agency's decision to award the contract on the basis
of the lowest cost, technically acceptable proposal. SOGI points out that
the solicitation expressly provided that "technical merit is more important
than cost or price," and that the contracting officer would award on the
basis of a "trade-off between technical merit and cost or price." RFP at 52.
SOGI maintains that, relying on these solicitation provisions, it submitted
a proposal which emphasized technical merit rather than the lowest possible
cost alternative.

In a negotiated procurement, an agency has broad discretion in determining
the manner and extent to which it will make use of evaluation results. TRW,
Inc., B-234558, June 21, 1989, 89-1 CPD para. 584 at 4. Agencies do not,
however, have the discretion to announce in the solicitation that they will
use one evaluation plan and then follow another; once offerors are informed
of the criteria against which their proposals will be evaluated and the
source selection decision made, the agency must adhere to those criteria or
inform all offerors of significant changes. DynCorp, B-245289, B-245289.2,
Dec. 23, 1991, 91-2 CPD para. 575 at 5. Specifically, it is improper to induce
an offeror to prepare and submit a proposal emphasizing technical
excellence, then evaluate proposals only for technical acceptability, and
make the source selection decision on the basis of technical acceptability
and lowest cost or price. Hattal & Assocs., B-243357, B-243357.2, July 25,
1991, 91-2 CPD para. 90 at 7-9.

As noted above, the agency does not dispute that it failed to adhere to the
stated solicitation criteria for source selection which emphasized technical
merit over cost or price. Specifically, the contracting officer acknowledges
that no cost-technical tradeoff was performed, that the evaluation was based
on essentially a pass/fail scheme, and award was then made on the basis of
what the agency perceived to be the lowest priced, technically acceptable
proposal.

Notwithstanding the agency's acknowledgment that various errors were made,
[8] it asserts that the protest should be denied on the basis that SOGI was
not prejudiced. This assertion is based on a post-protest reevaluation
performed by the agency's technical evaluator, which purports to support the
conclusion that Triumph's proposal was technically superior to SOGI's. We
reject the agency's assertion.

As noted above, Triumph's proposal failed to comply with a material
solicitation provision and, thus, could not form a valid basis for award.
Accordingly, on that basis alone, the agency's assertion that Triumph's
technical proposal was, in fact, superior to SOGI's is clearly erroneous.
[9] On this record, it is clear that, but for the agency's improper award to
Triumph on the basis of its proposal which failed to comply with the
solicitation requirements, SOGI should have had a substantial chance of
receiving an award. See Farmland Nat'l Beef, supra, at 10; McDonald-Bradley,
B-270126, Feb. 8, 1996, 96-1 CPD para. 54 at 3; Statistica, Inc. v. Christopher,
102 F.3d 1577, 1581 (Fed. Cir. 1996).

The protest is sustained.

RECOMMENDATION

Based on the record, it appears that the existing solicitation language,
which emphasizes technical factors over cost or price, may not reflect the
agency's actual requirements. [10] Accordingly, we recommend that the agency
review its requirements and amend the solicitation to reflect those
requirements, if appropriate. In any event, since the agency conducted
discussions, but failed to advise Triumph that its proposal failed to comply
with a material solicitation requirement, it should reopen negotiations with
all competitive range offerors, conduct meaningful discussions, request
submission of final revised proposals, evaluate those proposals in a manner
consistent with the solicitation provisions, and award a contract on the
basis of the proposal offering the best value to the government. If an
offeror other than Triumph is selected for award, Triumph's contract should
be terminated. We also recommend that the agency reimburse the protester for
its costs of filing and pursuing the protest, including reasonable
attorneys' fees. Bid Protest Regulations, 4 C.F.R. sect. 21.8(d)(1) (2000). In
accordance with section 21.8 of our Regulations, SOGI's certified claims for
such costs, detailing the time expended and the costs incurred, must be
submitted directly to the agency within 60 days after receipt of the
decision.

Anthony H. Gamboa

General Counsel

Notes

1. The labor categories, along with the annual estimated hours for each of
the contract periods, were as follows: project manager, 1,920 hours; control
officer, 7,380 hours; driver/messenger (Washington, D.C. warehouse), 7,680
hours; driver/messenger (Miami/Ft. Lauderdale), 7,680 hours; logistics
specialist, 1,920 hours. RFP at 2-5.

2. As initially issued, the solicitation also identified a "senior control
officer" as "key personnel"; however, RFP amendment No. 3 provided that "all
references to a senior Control Officer in the solicitation are to be
deleted." Agency Report, Tab 6, at 2.

3. The evaluator's handwritten worksheets indicate that proposals were rated
with a "1" or a "0" against each of the following criteria: "managing
couriers/control officers/experience"; "operating warehouse/experience";
"guarding classified material"; "past performance – 3 years; resume of
project manager"; "TS [top secret]

clearances"; "positions 1 PM [project manager]/1 LSS [logistical security
specialist]/ 8 warehouse/10 control officers"; "understands SOW [statement
of work]/knows jobs, requirements"; "back-up people –
qualified/clearance TS"; "first right of refusal." Agency Report, Tab 12.

4. In resolving this protest, GAO conducted a hearing on the record at which
testimony was obtained from the contracting officer, the contracting
specialist, and the technical evaluator involved in this procurement.

5. One of the four competitive range offerors withdrew from the competition
prior to discussions, leaving a competitive range of Triumph, SOGI, and the
third offeror.

6. Although the Federal Acquisition Regulation (FAR) requires a "common
cut-off date" for submission of final revised proposals, FAR sect. 15.307, the
agency established differing dates for submission of each offeror's final
revised proposal. Agency Report, Tab 15; VT at 14:09-18. Further, contrary
to the contracting specialist's representation that the differing submission
dates were established to provide all offerors with a uniform period of time
between final negotiations and submission of final revised proposals, VT at
14:12-13, Triumph was afforded more time than SOGI, and the contracting
specialist specifically denied SOGI's request for additional time. Agency
Report, Tab 15; VT at 14:14-15.

7. The record establishes that Triumph's proposed project manager had not
even completed an application for employment until the day before Triumph
was to begin contract performance. Letter from Triumph to State Department
(Feb. 1, 2001).

8. In responding to SOGI's protest, the agency states, "[GAO] may
legitimately identify several errors in the conduct of the protested
solicitation." Supp. Agency Report, Feb. 12, 2001, at 8.

9. The record also reflects various other flaws related to the technical
evaluator's post-protest evaluation. Among other things, the reevaluation,
again, reflected assessments against the individual evaluation criteria on a
"satisfactory/unsatisfactory" basis, rather than on a qualitative basis.
VT at 10:55-58. Further, the record shows that, in performing the
reevaluation the technical evaluator assessed one aspect of SOGI's proposal
as "unsatisfactory" because SOGI did not submit a resume for the logistics
specialist position--yet the agency expressly acknowledges that "the
solicitation as revised did not specify that a resume was to be provided for
the Logistics Specialist." Supp. Agency Report, at 5. Finally, the overall
"superiority" of Triumph's proposal is based on Triumph's representations
regarding its experience in performing activities that are not required to
be performed under this contract. VT at 10:59.

10. In addition to the agency's source selection based on the lowest priced,
technically acceptable proposal, the agency's technical evaluator testified
at the GAO hearing that an offeror's experience performing certain contract
requirements was of "minimal" importance, VT at 11:11--despite the
solicitation's identification of experience as the most important technical
evaluation factor.