TITLE: Myers Investigative and Security Services, Inc., B-288468, November 8, 2001
BNUMBER: B-288468
DATE: November 8, 2001
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Decision
Matter of: Myers Investigative and Security Services, Inc.
File: B-288468
Date: November 8, 2001
Lawrence J. Sklute, Esq., and Nolan Sklute, Esq., Sklute & Associates, for
the protester.
Benjamin N. Thompson, Esq., and Jennifer M. Miller, Esq., Wyrick, Robbins,
Yates & Ponton, for Industrial Loss Prevention, an intervenor.
George U. Lane, Esq., General Services Administration, for the agency.
Ralph O. White, Esq., and Christine S. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protest contention that evaluation was unreasonable is sustained where
the record shows that the agency treated offerors unequally in its
assessment of the past performance information used to justify the selection
decision.
2. Protest allegation that an agency's affirmative determination of
awardee's responsibility must have been made in bad faith is denied where
the record shows that, even though the agency received information raising
questions about how the awardee could have properly certified to state
authorities that it had taken the required steps for receiving the state
permits needed to perform the instant contract, the information received was
not sufficient to require a conclusion that the firm lacked integrity.
DECISION
Myers Investigative and Security Services, Inc. protests the award of a
10-month interim contract for guard services for federal buildings in the
Lumberton, North Carolina area by the General Services Administration (GSA)
to Industrial Loss Prevention, Inc. This contract was awarded pursuant to
solicitation No. GS-04P-01-EYC-0073. Myers argues that GSA's evaluation of
its and Industrial's past performance was unreasonable because the agency
had no basis for some of its conclusions, and because the companies were
treated unequally. Myers also argues that the agency's affirmative
determination that Industrial is a responsible contractor was made in bad
faith.
We sustain the protest.
BACKGROUND
This protest is the third challenge by Myers to a series of actions by GSA
related to the award of contracts for armed guard services for various
federal facilities in North Carolina. The 10-month interim contract under
protest here was awarded to allow GSA additional time to complete corrective
action taken in response to an earlier protest by Myers of the award of a
5-year statewide guard services contract.
For clarity in discussing the series of contracts at issue in this
dispute--and in discussing the differing past performance assessments
associated with these contracts--we will refer to each contract action by
its duration. Specifically, the contracts are: (1) the prior 5-year contract
for guard services in the Lumberton area, which Myers performed until April
30, 2001; (2) the 5-year statewide contract, which was awarded to Industrial
on April 25, protested by Myers, and placed on hold while GSA undertook
corrective action in response to the protest; (3) a 30-day stopgap contract
awarded to Myers on May 1; (4) a 60-day interim contract awarded to
Industrial on May 31, again protested by Myers (our Office sustained the
protest after GSA elected not to defend its selection decision [1]); and (5)
the instant 10-month interim contract awarded to Industrial on July 27 to
follow the prior 60-day contract. (The 30-day, 60-day, and 10-month
contracts were each limited to the Lumberton area while GSA completes its
review of its 5-year statewide contract; separate regional contracts for the
Charlotte and Ashville, North Carolina areas have also been awarded on an
interim basis while GSA completes it review.)
The solicitation for the instant contract was issued on July 6, 2001, as a
total small-business set-aside, and sought proposals by July 12. The
solicitation anticipated award of a fixed-price requirements contract, for a
4-month base period followed by one 6-month option, to the offeror whose
proposal offered "the best value to the Government, considering price and
technical factors." RFP sect.sect. F-3, M-2.1. The RFP identified two technical
factors--past performance, and experience and qualification--and advised
that the past performance evaluation factor would be approximately twice as
important as the experience and qualification factor, and that the two
technical factors combined would be more important than price. RFP sect. M-2.
With respect to the past performance evaluation factor, the RFP required
offerors to submit reference information for all of their current security
guard contracts, and for any such contracts performed within the previous 5
years similar in size to the instant contract. RFP sect. L-6.5. Potential
offerors were advised that the information received from these references,
as well as other performance information known to the agency, would form the
basis for the past performance evaluation. Id.
GSA received proposals from nine offerors in response to the RFP, four of
which were not eligible for award for reasons not relevant here. Upon
evaluation of the proposals, and the receipt of responses from each
offeror's past performance references, the results of the evaluation were as
follows:
OFFEROR Past Experience/ TOTAL TOTAL
Performance Qualification
Score POINT PRICE
Score
(670 points) SCORE
(330 points)
(1,000
points)
Industrial 536 330 866 $309,073.00
Offeror A 469 330 799 $365,734.74
Myers 268 330 598 $223,750.84
Offeror B 201 330 531 $380,185.46
Offeror C 335 165 500 $285,656.30
Agency Report (AR), Tabs 7-8.
In assessing Myers' past performance for the evaluation above, GSA
considered Myers' performance of the prior 5-year contract for guard
services, and its performance of the 30-day stopgap contract, which ran from
May 1 to May 31. The consideration of Myers' performance of these contracts
was not limited to the responses received from past performance references,
but also relied upon certain inspection reports and other information within
GSA about Myers' performance. In addition, GSA considered past performance
reports received from two additional references--one with the Environmental
Protection Agency, and one with the Department of the Navy. The only
negative information about Myers' past performance came from the GSA
references and materials.
In assessing Industrial's past performance, GSA considered references from
two GSA respondents describing Industrial's performance of the 60-day
interim contract, which ran from June 1 to July 31. In addition, GSA
considered past performance reports received from three additional
references--one with the North Carolina National Guard, one with the
Employment Security Commission of North Carolina, and one with the
Cumberland County Mental Health Center. Information that was arguably
negative about Industrial's past performance came from the North Carolina
National Guard.
Using the results outlined above, the Source Selection Technical Evaluation
Board (SSTEB) recommended award to Industrial (with its highest-rated, but
third highest-priced proposal) over award to Myers (whose proposal had the
lowest price, but the third-highest rating). The SSTEB based its
recommendation on the "demonstrated good performance" of Industrial during
the 60-day interim contract, compared to the "crucial and substantiated"
performance violations attributed to Myers during the prior 5-year contract,
and the 30-day stopgap contract. SSTEB Report at 11, July 27, 2001. In an
apparent adoption of the SSTEB Report's recommendation, the contracting
officer awarded the contract to Industrial on July 27. [2] This protest
followed.
DISCUSSION
Overview
Myers argues that the evaluation of past performance here was unreasonable
as the agency had no basis for some of its evaluation conclusions, and
because it and Industrial were treated unequally. Myers also argues that the
evaluation and the agency's affirmative determination of Industrial's
responsibility were made in bad faith.
With respect to Myers' challenges to the evaluation conclusions set forth in
the SSTEB Report--where the results of the evaluation are summarized and the
basis for the selection decision is explained--the record supports the
allegation that many of the evaluation conclusions do not match the
underlying reference information the report claims to summarize. Our review
shows, however, that GSA's selection decision was not based on the reference
information collected. As such, GSA's selection decision strays from the
evaluation scheme identified in the solicitation. Moreover, the conclusions
drawn from the performance information used to support the selection
decision--i.e., information collected in site visit reports during Myers'
performance of the previous 5-year contract and the 30-day stopgap contract,
and similar information collected during Industrial's performance of the
60-day interim contract--lead us to conclude that GSA has treated these
offerors unequally, and hence unreasonably. Finally, as we sustain the
protest on the basis that the evaluation was unreasonable, we do not reach
Myers' general contention that the evaluation was performed in bad faith,
and we deny Myers' specific contention that GSA made a bad faith affirmative
determination of responsibility when it selected Industrial for award.
Evaluation Issues
Myers' approach to challenging the evaluation in this procurement is to
focus on discrepancies between the SSTEB Report and the underlying past
performance materials upon which the conclusions in the report are based.
Specifically, Myers argues that the report's conclusions about Industrial's
past performance include favorable information not found in the underlying
materials, while excluding unfavorable information in those materials.
Conversely, Myers argues that the report's conclusions about its past
performance exclude favorable underlying information, while including
unfavorable information not found in those materials. In addition, Myers
indicates that in some areas, GSA evaluators drew unfairly different
conclusions from similar past performance information.
Our standard in reviewing evaluation challenges is to examine the record to
determine whether the agency's judgment was reasonable and consistent with
stated evaluation criteria and applicable statutes and regulations. ESCO,
Inc., B-225565, Apr. 29, 1987, 87-1 CPD para. 450 at 7. Where a solicitation
requires the evaluation of offerors' past performance, an agency has
discretion to determine the scope of the offerors' performance histories to
be considered, provided all proposals are evaluated on the same basis and
consistent with the solicitation requirements. IGIT, Inc., B-275299.2, June
23, 1997, 97-2 CPD para. 7 at 5.
As indicated in the RFP, and mentioned above, the past performance
evaluation factor was approximately twice as important as the experience and
qualification factor. RFP sect. M-2. Consistent with this approach, a
significant majority of the SSTEB Report is dedicated to summarizing the
responses received from each offeror's past performance references. In
addition, the summary of each response is set out under a separate heading.
As Myers alleged it would, our review showed multiple instances of
conclusions appearing in the SSTEB Report's "summary" of a performance
reference response when information to support the conclusion is found
nowhere in the underlying response.
To illustrate this issue, we note that the SSTEB report on Industrial's past
performance summarizes responses received from two GSA references and three
outside references. Although Myers accurately cites examples of undocumented
conclusions in the summaries of the responses of four of these five
references, we focus here only on the summaries for two of the outside
references--one from the Employment Security Commission of North Carolina,
and one from the Cumberland County Mental Health Center. The report's
summaries of the responses received from these references--as explained
above, each summary is set forth under a separate heading--include identical
statements that the "contractor is in compliance with labor standards" and
that "no safety violations have been observed." SSTEB Rep. at 3. In fact,
neither reference addressed these issues. AR, Tab 4.1.1. Moreover, both
summaries indicate that the reference advised that "all armed guards are
equipped with all new weapons and equipment." SSTEB Rep. at 3. Not only are
these responses silent on this matter, as before, but the questionnaire
completed by the reference from the Employment Security Commission of North
Carolina indicates that the commission's contract with Industrial was for
unarmed guards. AR, Tab 4.1.1. There is no explanation in the
contemporaneous record, nor the agency's pleadings, for these discrepancies:
although the agency filed an answer to the protester's comments, where these
examples were cited, it elected not to address this issue.
In our view, the unsupported conclusions in the SSTEB Report--and there are
many-- lend credence to Myers' allegation that the evaluation here was
unreasonable. We find particularly troubling the fact that the conclusions
set forth in the example above are attributed to past performance references
located outside of GSA. In these instances (unlike those where the
respondent is employed by agency, and might have, in some other way,
communicated valid evaluation information), there is no evidence in the
record of any contact between these references and the SSTEB beyond receipt
of the completed past performance questionnaire.
On the other hand, we note that in this case, the unsupported evaluation
conclusions did not play a significant role in the selection decision. Thus,
on this issue alone, we cannot conclude that Myers was prejudiced by the
unsupported information found in the report. See McDonald-Bradley, B-270126,
Feb. 8, 1996, 96-1 CPD para. 154 at 3. We turn next, however, to the disconnect
between the evaluation summary in the first 10 pages of the SSTEB Report,
and the recommendation for award set forth at its conclusion.
As indicated above, a significant majority of the SSTEB Report is dedicated
to summarizing the responses received from each offeror's past performance
references. In addition, the report indicates the evaluation results for
each offeror under the experience and qualification factor, and explains the
methodology by which each offeror's score was calculated. These materials
comprise the first 10 pages of the report. The concluding narrative (pages
11 and 12) explains the tradeoff decision underlying the recommendation that
Industrial receive the award. The basis for this decision is generally not
the evaluation information set forth on the first 10 pages of the report.
[3] Instead, the tradeoff is based on information derived from site visits
during Myers' performance of the previous GSA 5-year contract and 30-day
stopgap contract, and on similar information generated during Industrial's
performance of the 60-day interim contract.
As a preliminary matter, before turning to the substance of the conclusions
in the tradeoff decision, we note that the selection decision here is at
variance with the evaluation scheme identified in the RFP. The RFP advised
that the agency would seek performance information on all of the offeror's
current guard services contracts, and on any guard services contracts
performed in the previous 5 years similar in size to the instant contract.
RFP sect. L-6.5. While GSA did, in fact, gather this information, use it to
prepare past performance scores, and purport to summarize it in the SSTEB
Report, the information plays no discernable role in the selection decision.
In addition, the selection decision does not use the results of the
evaluation of the other evaluation factor, experience and qualification.
Instead, the only information considered in selecting Industrial for award
is how Myers and Industrial performed previously for GSA-and, as discussed
above, much of that information cannot be found in the responses of the GSA
references. [4] While the agency might have a reasonable explanation for why
it concludes that only past performance with GSA is relevant in this award
decision, or perhaps why it is more important than any of the other
information received, there is no such explanation in the record here.
Accordingly, even before turning to the substance of the conclusions in the
selection decision, we think the selection decision strayed from the
solicitation's stated evaluation scheme.
With respect to the conclusions about the past performance of Myers and
Industrial in performing the 5-year, 30-day and 60-day guard services
contracts for GSA, we acknowledge first that there is information in the
record supporting many of the conclusions reached. On the other hand, in
several instances, our review of this record leads us to find that there has
been unequal treatment of these offerors with respect to some of the
conclusions reached, given the similarities of the past performance
information upon which the conclusions were based. In that similar past
performance information has led the agency to unfavorable conclusions about
Myers, and favorable (or at least, less unfavorable) conclusions about
Industrial, we cannot conclude that the selection decision here is
reasonable. We set forth below examples of the agency's disparate treatment
of these offerors regarding guards who were tardy, or who abandoned their
posts during duty hours, and reports from customers about these incidents.
In its tradeoff analysis and in its summary of Myers' performance of the
5-year and 30-day GSA contracts, the SSTEB Report indicates that guards left
their posts "vacant on numerous occasions," "continuously reported to work
late leaving unmanned posts," and that customers were complaining about the
situation. SSTEB Rep. at 6, 11. The underlying record includes numerous site
visit reports describing inspections during Myers' performance of the prior
5-year contract; these reports date to late 1998. See AR, Tab 4.2.4. In
total, these reports describe one instance where a guard was one hour late,
one instance where a different guard was away from her post for 20 minutes,
and one instance where GSA asked that a third guard be removed for
repeatedly abandoning his post. AR, Tabs 4.2.3, 4.2.4.
For Industrial, the report indicates that "[a]ll posts inspected were
covered in accord with the contract, however some posts non-covered during
guard's lunch period." SSTEB Rep. at 11. The information underlying this
conclusion, however, is not very different from the information reported for
Myers. For example, the record includes a July 17 site visit report of an
inspection during Industrial's performance of the 60-day interim contract
which includes two customer complaints regarding two different guards, one
of whom was "not showing up on time for duty on many occasions," and one of
whom was frequently abandoning her post. AR, Tab 4.1.3. In fact, one of
these complaints was directly verified by the GSA inspector when the guard's
post was abandoned for 15 to 20 minutes when the inspector arrived on the
scene. Id. In addition, Industrial's reference from the North Carolina
National Guard indicated that while guards were generally on time for work,
"[t]ardy guards affect the end of day operations of the [National Guard]
causing [National Guard] employees to fill in" and that "there have been
cases when employees were on duty 24 hours without relief." AR, Tab 4.1.1.
Given the information which provides the basis for the characterization of
Myers on this issue, we fail to see how the information about Industrial's
performance supports a materially different conclusion.
As a second example, we note briefly that the SSTEB Report states that the
agency received complaints about Myers from several locations, but states
that, for Industrial, it received favorable reports from management at all
locations. SSTEB Rep. at 11. Again, the evidence in the record underlying
these comments does not appear to support such materially different
conclusions. First, there is no documentation in this record to support a
conclusion that there have been more complaints for Myers than for
Industrial. In addition, as indicated above, the July 17 report describing
visits to sites guarded by Industrial contains two such complaints. These
complaints contradict the SSTEB Report's conclusion that GSA is receiving
"favorable reports from management at all locations." [5] SSTEB Rep. at 11
(emphasis added).
In conclusion, our review of this record shows numerous examples of
discrepancies between evaluation conclusions and the underlying materials,
and an award decision that, without explanation, ignores much of the
information that the solicitation's stated evaluation scheme advised
offerors would be considered. Under the circumstances of this procurement,
we recognize that either or both of these problems might have been explained
or justified, though in this case, they were not. Regardless of these
issues, however, we find sufficient evidence of unequal treatment of Myers
and Industrial in the agency's tradeoff decision to conclude that the
evaluation here was unreasonable. See TFA, Inc., B-243875, Sept. 11, 1991,
91-2 CPD para. 239 at 4-5. Accordingly, given the unequal treatment of these
offerors in the selection decision, especially viewed in light of the
totality of the circumstances here, we sustain Myers' protest.
Bad Faith
Myers argues that the agency's evaluation of offers, in general, and its
affirmative determination of Industrial's responsibility, in particular,
were made in bad faith. We need not reach Myers' general challenge of bad
faith in the agency's evaluation, as our decision sustains its challenge to
the evaluation on other grounds. See IGIT, Inc., B-271823, Aug. 1, 1996,
96-2 CPD para. 51 at 7 n.7.
With respect to GSA's affirmative determination of Industrial's
responsibility, Federal Acquisition Regulation (FAR) sect. 9.104-1(d) requires
that a prospective contractor have a satisfactory record of integrity and
business ethics before it can be considered a responsible offeror. Myers
argues that the GSA should have concluded that Industrial lacked the
requisite integrity for a contract award, and argues that the agency's
failure to reach this conclusion can only be explained by bad faith. In
essence, Myers' contends that GSA was on notice that Industrial had
submitted improperly-certified training information to the North Carolina
Private Protective Services Board (the state entity that regulates the use
of firearms by armed security guards in North Carolina) in order to obtain
the state-issued firearms permits required for performance of this contract.
The record here shows that shortly after Industrial began performing the
60-day interim contract for these services, Myers filed a complaint with the
Board alleging that Industrial had hired Myers' guards, and had no valid
firearms permits for the guards. Myers explains that it filed this complaint
because, in North Carolina, permits for security guards to carry firearms
are the property of the guard's employer, and are not transferable from one
employer to another. Myers explains that Industrial certified to the Board
that it provided requisite firearms training to all of its guards on May 31,
2001, the day before Industrial began performing this contract. Since most,
if not all, of the guards covered by Industrial's certification to the Board
were still working for Myers on May 31 (during Myers' performance of the
30-day stopgap contract), Myers contends that Industrial did not have access
to the guards to train them, and that the certifications were false.
With respect to its contention that GSA was aware that Industrial had, in
Myers' view, falsely certified to the Board, and silently acceded to
Industrial's actions, Myers points out that firearms permits issued by the
Board are valid for one year, and that GSA received copies of permits for
Industrial's guards indicating that information was submitted to the Board
prior to the time Industrial began performing this contract. Specifically,
the record shows that GSA received from Industrial on July 13, a faxed copy
of 21 newly-issued firearms permits for Industrial's guards, 19 of which
have annual expiration dates of May 31, 2002. According to Myers, receipt of
copies of permits with expiration dates of May 31, 2002, was sufficient to
put GSA on notice that Industrial must have submitted paperwork to the Board
showing a training date that fell within Myers' performance of this
contract. Thus, according to Myers, agency bad faith is the only explanation
for GSA's decision to award the instant contract to Industrial two weeks
later, on July 27. We disagree.
Based on our review of the record, including GSA's response to this
allegation, we cannot conclude that the agency made a bad faith affirmative
determination of responsibility when it awarded this contract to Industrial.
GSA acknowledges that its receipt, on July 13, of copies of firearms permits
expiring May 31, 2002, raised questions about how Industrial had certified
to the Board that it had trained its guards on May 31, 2001, when many of
those guards were still employed by Myers. On the other hand, the agency
explains that there were reasonable explanations for the situation other
than an improper certification. In this regard, GSA states that it
considered the possibility that Industrial had independently verified the
training of these guards, or that the certifications might have been based
on training that Industrial had provided for Myers in the past. While Myers
argues that neither of these conclusions is reasonable, we see no basis to
conclude that receipt of the newly-issued permits was sufficient evidence of
a false certification to the Board by Industrial to demonstrate bad faith in
the agency's determination of responsibility. Accordingly, we deny this
basis of protest.
RECOMMENDATION
Since we conclude that unequal treatment of Myers and Industrial in the
agency's tradeoff decision rendered the award unreasonable, we recommend
that the agency reopen its evaluation of proposals, prepare a new evaluation
report, and make a new selection decision, taking care to explain any
benefits associated with any tradeoff decision. If Industrial is not the
successful offeror after the revised selection decision, we recommend that
the agency terminate the remainder of Industrial's 10-month interim
contract. We also recommend that the protester be reimbursed the reasonable
cost of filing and pursuing its protest, including reasonable attorneys'
fees. 4 C.F.R. sect. 21.8(d)(1) (2001). The protester should submit its
certified claim for such costs, detailing the time expended and the cost
incurred, directly to the contracting agency within 60 days after receipt of
this decision.
The protest is sustained.
Anthony H. Gamboa
General Counsel
Notes
1. Myers Investigative and Sec. Servs., Inc., B-287949.2, July 27, 2001,
2001 CPD para. 129.
2. For the record, there is no evidence in this record, other than award to
Industrial, of any contemporaneous determination by the contracting officer
(CO) that Industrial's proposal offers the best value to the government.
Instead, it is not until the CO's statement prepared in response to this
protest, and dated August 21, that the CO formally determined that
Industrial's proposal offers the best value.
3. When we say that the basis for the tradeoff decision between Myers and
Industrial is generally not the evaluation information set forth on the
first 10 pages of the report, an exception is the summary information
attributed to the GSA references (as opposed to information derived from
references outside the agency). During the course of this protest, Myers
complained that the summaries of these GSA reference responses (as well as
the summaries of responses from other references) included information not
found in the response, and in fact, Myers was correct. Our review of the
record shows that much of the information in the purported summaries of
responses from GSA references is based on site visit reports and other
sources. While we note that GSA was allowed to consider this information,
see RFP sect. L-6.5., its SSTEB Report incorrectly indicates that this
information was derived from the reference's response, when in fact it was
derived from other sources.
4. Although the RFP advised potential offerors that other performance
information known to the agency could be used in its past performance
evaluation, RFP sect. L-6.5, we do not think this provision can be read to
sanction abandoning the past performance evaluation and basing a tradeoff
decision solely on site visit information collected during performance of
the prior GSA contracts.
5. The mention of favorable reports for Industrial from GSA customers can be
found in an undated letter in the record from GSA to the president of
Industrial. AR, Tab 4.1.3. In this letter, GSA advises that "management at
all facilities are very pleased with the guards that are working at their
facilities and want to retain them." We note for the record that Industrial
is performing this contract with essentially the same guard workforce as
Myers. Since this comment says less about Industrial than it says about the
individual guards posted at the facilities covered by this contract, and
since the guards are generally the same guards used by Myers during its
performance, this comment provides little support for a distinction between
Myers and Industrial.