TITLE:  Blue Rock Structures, Inc., B-287960.2; B-287960.3, October 10, 2001
BNUMBER:  B-287960.2; B-287960.3
DATE:  October 10, 2001
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Decision

Matter of: Blue Rock Structures, Inc.

File: B-287960.2; B-287960.3

Date: October 10, 2001

Hubert J. Bell, Jr., Esq., and Sarah E. Carson, Esq., Smith, Currie &
Hancock, for the protester.

Neil S. Lowenstein, Esq., James R. Harvey III, Esq., and William E.
Franczek, Esq., Vandeventer Black, for Chianelli Building Corporation, the
intervenor.

Vicki E. O'Keefe, Esq., Department of the Navy, Naval Facilities Engineering
Command, for the agency.

Susan K. McAuliffe, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest of agency's evaluation of protester's proposal and award
determination is denied where the record demonstrates that the evaluation
and source selection were reasonable and consistent with the solicitation's
evaluation factors for award.

DECISION

Blue Rock Structures, Inc. protests the award of a contract to Chianelli
Building Corporation, Inc. under request for proposals (RFP) No.
N62470-99-R-9152, issued by the Department of the Navy, Naval Facilities
Engineering Command, for the construction of an Amphibious Operations
Maintenance/Storage Complex at the Marine Corps Base, Camp Lejeune, North
Carolina. Blue Rock challenges the agency's reevaluation of its proposal and
the agency's affirmation of the award to Chianelli. [1] The protester, a
newly-formed firm, challenges the agency's failure to credit the firm's
proposal under the past performance and corporate experience evaluation
factors for the experience of its principals while employed by other firms.

We deny the protest.

The RFP, issued on March 9, 2001, contemplated the award of a fixed-price
contract for the construction of four buildings; the contractor was to
provide, among other things, all labor, materials, and equipment to perform
the work. RFP at 7. The RFP listed the following equally-weighted technical
evaluation factors which, combined, were equal in importance to price: past
performance of the prime contractor; corporate experience of the prime
contractor; small business subcontracting effort; quality control and key
personnel of the prime contractor (where the key personnel subfactor was to
be given less weight than the quality control subfactor of this combined
factor); and proposed schedule. Id. at 63-66. Offerors were advised that the
award determination would be based upon the proposal offering the best value
to the government, and that the offeror submitting the lowest price would
not necessarily receive the award. Id. at 63.

For evaluation of past performance, offerors were to provide narratives for
five construction projects valued over $5 million. Offerors were advised
that, separate from any responsibility determination, the agency intended to
evaluate the offeror's technical proposal for past performance experience to
assess the firm's relative capability to successfully meet the requirements
of the RFP; more weight was to be given to past performance on similar
projects. Id. at 64. For evaluation under the corporate experience factor,
each offeror was instructed to provide a list of relevant construction
projects valued over $5 million and performed "by your firm" within the past
5 years. Id. at 65.

Eight proposals were received by the amended May 7 closing date. The
protester's proposal offered the lowest price (at $8,292,768) and was rated
sixth for technical merit; the awardee's proposal offered the second lowest
price (at $8,561,100) and was rated third technically. [2] Blue Rock's
proposal remained sixth in line for technical merit after the agency's
reevaluation of that proposal. Considering the

3-percent price differential between the Blue Rock proposal--which the
agency considered to present substantial performance risk because Blue Rock
is a newly-formed firm with no corporate experience or past performance
history--and the higher-rated, lower-risk Chianelli proposal, the agency
decided that the slight cost premium involved in an award to Chianelli was
warranted. This protest followed.

Blue Rock first protests the evaluation of its proposal under the corporate
experience factor. Since the protester's proposal contained no actual
experience information about Blue Rock as a corporate entity, and instead
offered only limited relevant experience gained by an individual principal
of the firm while he was employed by another firm, the agency evaluated the
Blue Rock proposal as unacceptable under the corporate experience factor.
The firm alleges that the agency should have attributed the project
management experience of its individual principals, albeit gained while
working on contracts performed by other companies, to Blue Rock to bolster
its corporate experience evaluation rating.

In reviewing an agency's evaluation of proposals, our Office will question
the evaluation only where it violates a procurement statute or regulation or
if it lacks a reasonable basis or is inconsistent with the stated evaluation
criteria for award. B. Diaz Sanitation, Inc., B-283827, B-283828, Dec. 27,
1999, 2000 CPD para. 4 at 6. A protester's mere disagreement with the agency
over its technical evaluation does not make the evaluation unreasonable.
Id.; Cubic Applications, Inc., B-274768 et al., Jan. 2, 1997, 97-1 CPD para. 98
at 3. Our review of the record confirms the propriety of the agency's
evaluation of Blue Rock's proposal.

The solicitation here specifically provided for evaluation of the experience
of key personnel separate from the evaluation of the firm's corporate
experience. For the evaluation of the firm's corporate experience, the RFP
expressly instructed each offeror to provide corporate experience
information regarding construction work accomplished "by your firm." RFP at
65. As the agency points out, although an agency properly may, in
appropriate circumstances, consider the experience of supervisory personnel
in evaluating the experience of a new business, there is no legal
requirement for an agency to attribute employee experience to the contractor
as an entity. See The Project Management Group, Inc., B-284455, Apr. 14,
2000, 2000 CPD para. 66 at 4; Hard Bodies, Inc., B-279543, June 23, 1998, 98-1
CPD para. 172 at 4.

The agency reports that, although not required to do so, it did review the
firm's principals' experience while evaluating the firm's proposal under the
corporate experience factor. That experience, however, did not provide
sufficient confidence in Blue Rock's performance capabilities as a separate
corporate entity. [Deleted] projects listed in the proposal were found to
have met the RFP's project scope, value, and performance period
requirements. Those projects, however, reflect only the experience gained by
one of the protester's principals while working as a project manager for a
prior employer; no actual experience for Blue Rock as a corporate entity was
cited by the firm in its proposal.

The agency found that the lack of any actual corporate experience of the new
firm failed to show that the firm was capable of performing the required
work successfully and thus was found to present substantial risk to the
agency. [3] The agency reasoned that although one of the firm's principals
had some relevant experience, an individual's successful project management
in an established firm does not demonstrate good corporate management in a
newly-formed firm. Special Selection Evaluation Board Report at 4. The
protester's proposal was thus downgraded under the corporate experience
factor for a lack of corporate experience.

We have no basis to question the reasonableness of the agency's conclusion
that one principal's prior project management experience gained while
working under the control of a different and established firm, standing
alone, does not demonstrate the ability of that principal's newly-formed
corporation to perform similar work successfully. See York Sys. Corp.,
B-237364, Feb. 9, 1990, 90-1 CPD para. 172 at 3-4. Further, as stated above, the
RFP here specifically differentiated between the evaluation of a firm's
corporate experience, and its key personnel's experience (in fact, key
personnel experience was to be given less weight than the firm's corporate
experience), and the protester's proposal was, in fact, given full credit
for the principals' experience under that key personnel subfactor. The
record thus provides no reason to question the reasonableness of the
evaluation of corporate experience, which was consistent with the RFP's
evaluation terms. [4]

The protester also challenges the agency's assignment of "no rating" to the
protester's proposal under the past performance evaluation factor. The
agency reports that the "no rating" designation resulted from the fact that
no past performance information was available for Blue Rock, a newly-formed
corporation. Blue Rock contends that Federal Acquisition Regulation (FAR) sect.
15.305(a)(2)(iii) suggests that the individual work experiences of Blue
Rock's principals should have been considered in evaluating the new firm's
proposal under the RFP's past performance criterion. Although the cited
regulation generally provides that agencies should take key personnel's
experience into account when assessing a new firm's past performance where
such information is relevant to an acquisition, an agency may reasonably
determine that such personnel experience is not relevant to its assessment
of the corporate entity's performance history and that it is not necessarily
indicative of the entity's future performance. See Olympus Bldg. Servs.,
Inc., B-282887, Aug. 31, 1999, 99-2 CPD para. 49 at 3-4. In this regard, we
believe the agency here reasonably concluded that an individual's
experience, gained while employed by another firm, does not adequately
demonstrate or ensure the newly-formed Blue Rock firm's capability to
function as a corporate entity or to successfully perform the current
project. Our review of the record shows that, in accordance with FAR
sect.15.305(a)(2)(iv), the agency evaluated the new firm's lack of past
performance information in a neutral fashion, neither favorably nor
unfavorably; the protester's proposal was not downgraded in any way due to
the lack of relevant performance history for the firm. Our review thus
provides no reason to question the propriety of the "no rating" designation.
[5]

The protester continues to assert that the agency should have awarded the
contract to Blue Rock because of its lower price. However, where a
solicitation, as here, provides for award on the basis of the best value
offer, a determination to award to a higher-priced offeror with a good past
performance record over a lower-priced offeror with a neutral past
performance rating is not precluded. Such a determination is consistent with
making a price/technical tradeoff to determine if one proposal's technical
superiority is worth the higher cost associated with that proposal. See
Eng'g and Computation, Inc., B-275180.2, Jan. 29, 1997, 97-1 CPD para. 47 at
4-5; Excalibur Sys., Inc., B-272017, July 12, 1996, 96-2 CPD para. 13 at 3.
Here, the RFP stated that technical evaluation factors and price were of
equal importance in determining which offeror's proposal was most
advantageous to the government. The agency determined that it was worth
paying a slight cost premium (3 percent) to select Chianelli, an established
firm with demonstrated successful past performance and corporate experience
on similar projects. Special Selection Evaluation Board Report at 5. Blue
Rock simply has not presented any basis to question the reasonableness of
the source selection. [6]

The protest is denied.

Anthony H. Gamboa

General Counsel

Notes

1. By letter of June 1, 2001, Blue Rock filed an earlier protest (B-287960)
with our Office against the award to Chianelli. In response to that protest,
the agency agreed to reevaluate the protester's proposal; consequently, the
protester withdrew that protest. Blue Rock's current protest concerns the
agency's reevaluation of the firm's proposal.

2. An earlier price/technical analysis had been performed by the agency
between another firm's highest-rated, higher-priced proposal and Chianelli's
lower-priced proposal; Chianelli's proposal was found to offer the best
overall value to the agency between those proposals.

3. Blue Rock argues that the agency's consideration of risk associated with
the firm's lack of corporate experience was improper because performance
risk was not a stated evaluation factor for award. However, even where risk
is not specifically listed in a solicitation as an evaluation factor, it is
appropriate for an agency to consider risk arising from an offeror's
approach or lack of experience where performance risk is reasonably related
to the stated evaluation scheme--as here, where the RFP specifically called
for an assessment of the offeror's capability to perform based on its prior
performance history and experience. See Champion Serv. Corp., B-284116, Feb.
22, 2000, 2000 CPD para. 28 at 4-5.

4. Blue Rock contends that the evaluation of its proposal was inconsistent
with that of the awardee's proposal in that Blue Rock was evaluated as a new
corporation, but Chianelli, which recently changed its business name, was
credited for business conducted prior to the name change. Blue Rock contends
that the name change reflects a change in Chianelli's corporate structure
because [deleted]. The record does not support Blue Rock's argument. On the
contrary, the record shows that [deleted], but that the company has
continued as the same business entity in its operations, including unchanged
business obligations. The record also shows that the agency reasonably
investigated the name change and adequately supported its determination that
the name change was merely an administrative matter that should not in any
way preclude consideration of that firm's corporate experience.

5. To the extent Blue Rock protests that the solicitation's evaluation terms
limit competition and are restrictive to newly-formed firms, the allegation
is untimely. Under our Bid Protest Regulations, protests based upon alleged
improprieties in a solicitation which are apparent prior to the time set for
receipt of initial proposals must be filed prior to that time. 4 C.F.R. sect.
21.2(a)(1) (2001); Envirodyne Sys., Inc., B-279551, B-279551.2, June 29,
1998, 98-1 CPD para.  174 at 3.

6. In its supplemental protest, Blue Rock also challenges the agency's
reevaluation of its proposed schedule. The protester contends that the
agency wrongfully downgraded the firm's proposed schedule regarding
performance of certain [deleted]. Our review of the record shows that the
challenge lacks merit. In short, the protester's schedule [deleted].
Moreover, as the agency points out, since Chianelli's schedule was
[deleted], it reasonably was rated more favorably than Blue Rock's proposed
schedule. The protester's contentions regarding the evaluation of its
proposed schedule thus provide no basis to question the award.