TITLE: International Resources Recovery, Inc., B-287160, March 30, 2001
BNUMBER: B-287160
DATE: March 30, 2001
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International Resources Recovery, Inc., B-287160, March 30, 2001
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Matter of: International Resources Recovery, Inc.
File: B-287160
Date: March 30, 2001
Sam Z. Gdanski, Esq., for the protester.
Clarence D. Long, III, Esq., and Wayne A. Warner, Esq., Department of the
Air Force, for the agency.
Henry J. Gorczycki, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Discussions with protester concerning unrealistic prices were meaningful
where agency identified specific line item prices that it considered too low
and stated that the overall price was too low, and provided the protester an
unrestricted opportunity to submit final proposal revisions.
DECISION
International Resources Recovery, Inc. (IRRI) protests an award to Urrutia,
Inc. under request for proposals (RFP) No. F08651-00-R-0035, issued by the
Department of the Air Force for refuse, recycling, and compost collection
and disposal services at Eglin Air Force Base, Florida.
We deny the protest.
The RFP, issued July 12, 2000, contemplated the award of a fixed-price,
requirements contract for a base period with 4 option years. The RFP
included 150 contract line item numbers (CLIN). The RFP stated an evaluation
scheme under which the offer deemed most advantageous to the government
would be selected for award from among the technically acceptable proposals,
based on a trade-off analysis of past performance and price. [1] The RFP
stated that past performance is significantly more important than price. RFP
at 52.
The RFP required past performance information for five of an offeror's most
recent and relevant contracts as well as past performance questionnaires
from at least three of the contract references. Although the references were
to send the questionnaires directly to the Air Force, the RFP stated that it
was "the sole responsibility" of the offeror to track and ensure that
questionnaires were received by the Air Force by proposal submission date.
The RFP stated that an adjectival past performance rating would be assigned
to each offeror based on the offeror's recent and relevant contract
performance as determined from the past performance questionnaires and
information independently obtained from other government and commercial
sources. The adjectival rating was to reflect the agency's assessment of
confidence in determining an offeror's ability to perform the solicited
contract requirements. The RFP stated six possible ratings ranging from a
high of exceptional/high confidence to a low of unsatisfactory/no
confidence, and included a rating of neutral/unknown confidence for offerors
with no relevant past performance history. RFP at 52-54.
Price was to be evaluated for reasonableness and realism. The RFP stated
that unrealistically low or high prices may be grounds for eliminating a
proposal from consideration for award on the basis that the offeror either
does not understand the requirement or has made an improvident proposal. RFP
at 54.
The RFP stated that the agency would make award without discussions, but
reserved the right to conduct discussions if it was deemed in the best
interests of the government to do so. The closing date for submission of
proposals was August 18. RFP amend. 0002.
The Air Force received nine proposals. All proposals were determined to be
technically acceptable. The agency conducted discussions with all nine
offerors between August 28 and November 15. [2] Agency Report at 4.
Discussions with IRRI addressed both past performance and price. By letter
of August 28, the agency identified and requested correction of
discrepancies between IRRI's unit and extended prices on the CLINs, and
stated that the agency had received only two of the three past performance
questionnaires required by the RFP. Agency Report, Tab 14, IRRI Discussion
Letter (Aug. 28, 2000). Following submission of proposal revisions and other
communications between the agency and IRRI, the agency's final discussion
letter stated that IRRI's prices on 75 CLINs as well as its overall price
appeared low, requested IRRI to verify its prices, and stated that the
agency still had not receive additional past performance questionnaires for
IRRI. This letter also stated the following:
This concludes discussions. Your firm is hereby provided the opportunity to
submit a Final Proposal Revision [which] must be received . . . by
28 Nov 00, 4:30 PM . . .
Agency Report, Tab 20, IRRI Discussion Letter (Nov. 15, 2000).
The results of the agency's evaluation of Urrutia and IRRI final proposals
were as follows:
Offeror Past Performance Price
Government Estimate -- $6,066,666
Urrutia Exceptional/High Confidence 5,881,556
IRRI Neutral/Unknown Confidence 3,358,955
[3]
Agency Report at 4. IRRI's price was substantially lower than Urrutia's. Of
the remaining seven proposals, the proposed prices ranged from 9.9 percent
lower to 19.9 percent higher than Urrutia's price. Agency Report, Tab 22,
Source Selection Decision, at 1.
IRRI's final proposed price reflected a slight increase over its initial
price; however, it did not otherwise address the basis for its low price.
The Air Force determined that IRRI's price was unrealistically low and that
the offeror did not understand the requirements. Agency Report, Tab 23,
Price Competition Memorandum, at 5. The bases for this determination were
that the structure of IRRI's proposed CLIN unit prices were inconsistent
with the extended prices, even after this issue was addressed with IRRI
during discussions, and IRRI's prices were significantly lower than the
government estimate and all of the other offerors' prices. Id.; Agency
Report, Tab 22, Source Selection Decision.
The source selection authority (SSA) determined that Urrutia's proposal
represented the best value to the government. On December 26, the Air Force
awarded the contract to Urrutia. This protest followed.
IRRI alleges that the agency failed to conduct meaningful discussions
because it failed to afford IRRI an opportunity to respond to the agency's
concerns about IRRI's low prices. Essentially, IRRI contends that, since the
November 15 discussion letter notifying IRRI of the Air Force's concern
about IRRI's prices also stated, "This concludes discussions," the agency
denied IRRI any opportunity to address this concern.
When conducted, discussions must be meaningful, that is, an agency must
point out weaknesses and deficiencies in a proposal as specifically as
practical so to lead the offeror into areas of its proposal that require
amplification or correction, and afford the offeror an opportunity to revise
or clarify its proposal after discussions. Mechanical Contractors, S.A.,
B-277916.2, Mar. 4, 1998, 98-1 CPD para. 68 at 4; Quality Elevator Co., Inc.,
B-271899, Aug. 28, 1996, 96-2 CPD para. 89 at 7.
The agency's discussions with IRRI specifically identified the individual
CLINs for which the agency considered IRRI's proposed prices too low, which
constituted half of the CLINs, as well as that IRRI's overall price was too
low. It then afforded IRRI an unrestricted opportunity to submit final
proposal revisions. The record thus shows that the Air Force conducted
meaningful discussions on the issue. See SEEMA, Inc., B-277988, Dec. 16,
1997, 98-1 CPD para. 12 at 5 n.4. IRRI has provided no persuasive basis to
support its contention that the terms of the agency's November 15 letter,
which specifically invited final proposal revisions, precluded IRRI from
presenting justification for its low prices with its final proposal
revisions. Although IRRI's protest submissions now offer an explanation for
its low prices, the protester could have provided this information in
response to the concerns raised by the agency during discussions. It did not
do so, and the agency reasonably evaluated the proposal based on IRRI's
failure to address the agency's stated concerns. See Quality Elevator Co.,
Inc., supra, at 8-9.
IRRI also alleges that the agency's source selection decision is not based
on a tradeoff between past performance and price consistent with the
evaluation plan stated in the RFP. This protest basis is meritless. The
source selection decision stated the differences in price and past
performance ratings between each proposal and the awardee's proposal before
determining that Urrutia's represented the best value under the stated
price/past performance tradeoff plan. Agency Report, Tab 22, Source
Selection Decision. In particular, the source selection decision stated that
IRRI's price was unrealistically low. The face of the source selection
document thus belies the protester's charge that the SSA did not consider
the price differences between proposals in the selection decision. Although
the SSA also emphasized the superior past performance record of Urrutia,
that emphasis is entirely consistent with the greater importance of past
performance over price in the evaluation plan stated in the RFP, and does
not show, as the protester alleges, that the SSA did not consider price in
the selection decision.
The protest is denied.
Anthony H. Gamboa
General Counsel
Notes
1. The RFP did not require technical proposals; rather, an offeror only had
to include a statement that it can meet the requirements and specifications
of the RFP without exception. RFP at 52.
2. The agency sent letters to the offerors on August 28, which were not
intended to constitute discussions but which the agency subsequently
determined had indeed opened discussions. Agency Report, Tab 17, Memorandum
for Record (Aug. 31, 2000).
3. The agency received only two past performance questionnaires for IRRI.
Agency Report, Tab 18, Evaluation of IRRI's Past Performance, at 18-19. The
agency reviewed the information on these contracts and the remaining
contract history identified in IRRI's proposal. All of IRRI's experience was
on small waste collection contracts, which the agency determined were not
relevant to the solicited requirements in terms of size or complexity, and
thus assigned IRRI a neutral rating for past performance. Id.; Agency
Report, Tab 21, Proposal Evaluation Report, at 3.