TITLE:  M&W Construction Corporation, B-288649.2, December 17, 2001
BNUMBER:  B-288649.2
DATE:  December 17, 2001
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Decision

Matter of: M&W Construction Corporation

File: B-288649.2

Date: December 17, 2001

Michael J. Gardner, Esq., Francis E. Purcell, Jr., Esq., James S. Phillips,
Esq., and Robert E. Korroch, Esq., Williams Mullen Clark & Dobbins, for the
protester.

Mary E. Clarke, Esq., Defense Logistics Agency, for the agency.

Katherine I. Riback, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1. Incumbent contractor did not have organizational conflict of interest or
unfair competitive advantage where, contrary to the protester's assertion,
the agency, not the incumbent, drafted the statement of work used in the
protested procurement.

2. Agency reasonably found awardee's technical proposal to be technically
superior to the protester's proposal, where the awardee's proposal contained
more relevant details and evidenced superior qualifications.

3. Awardee was reasonably considered to have past performance superior to
the protester's, where the awardee had performed the identical work and had
received consistent positive references for its work, while the protester
had not performed directly relevant work and had received a negative
reference for what it asserts is its most relevant contract.

DECISION

M&W Construction Corporation protests the award of a fixed-price contract to
Teilhaber Manufacturing Corporation under request for proposals (RFP) No.
SP3100-01-R-0010, issued by the Defense Logistics Agency (DLA), Defense
Distribution Center, for the repair of a rack system at the Defense
Distribution Mapping Activity in Richmond, Virginia. M&W asserts that the
award was improper because Teilhaber has an organizational conflict of
interest inasmuch as Teilhaber was assertedly involved in drafting of the
scope of work (SOW) for this solicitation. M&W also asserts that the
agency's technical and past performance evaluations were unreasonable.

We deny the protest.

BACKGROUND

The rack system in question was installed in 1998. Teilhaber manufactured
the components for the system and another firm installed the racks. The
system consists of 40 rows of racks, all approximately 237 inches in height,
with varying depths and widths. According to the agency, because of a
"questionable design" and "improper installation," the racks quickly became
"unsafe, unstable and unusable." Agency Report at 2; Tab 16, Price
Negotiation Memorandum, at 1. Because of the attendant safety concerns, the
agency, on September 8, 2000, made a sole source award, based on urgency, to
Teilhaber to repair three racks (Rows 1-3). After the completion of that
contract, the agency then determined that the racks could be repaired rather
than replaced, and that these services should be obtained under competitive
procedures. [1]

On April 25, 2001, the agency issued this solicitation for the repair of the
existing rack systems (Rows 4-40) to render them structurally sound and
operationally viable. The SOW required the contractor to disassemble the
existing racks and to install
37 new rows of rack using existing (Teilhaber) components "to the maximum
extent possible" where "undamaged" and "structurally sound," with new
components as necessary. The SOW did not require that the new components be
Teilhaber components, only that they be compatible. However, there was a
"Government preference" for Teilhaber components to ensure compatibility.
Additional technical information would have to be submitted with the
proposal if Teilhaber components were not used. RFP SOW at 1. Included with
the RFP were five drawings to show the required repair design if Teilhaber
components were used. [2]

The RFP advised offerors that award would be based on consideration of past
performance, technical/business, and price. The technical/business factor
had four subfactors: project management plan, organization structure and
qualifications, system layout/design, and sprinkler system work. The
solicitation provided that the combined technical/business capabilities and
past performance factors were significantly more important than price. Price
was to be evaluated for reasonableness.

The agency received proposals from Teilhaber and M&W by the May 29 closing
date. The agency evaluated proposals, conducted several rounds of
discussions, and received and evaluated best and final offers (BAFO) as
follows:

                           Teilhaber            M&W

 Subfactor 1               Highly Acceptable    Acceptable

 Project Mgmt. Plan        Low Risk             Low Risk

 Subfactor 2               Highly Acceptable    Acceptable

 Organization Structure    Low Risk             Low Risk
 & Qualifications

 Subfactor 3               Highly Acceptable    Acceptable

 System Layout/Design      Low Risk             Low Risk

 Subfactor 4               Highly Acceptable    Acceptable

 Sprinkler System Layout   Low Risk             Low Risk

 Past Performance          Highly Acceptable    Marginally
                                                Acceptable

 Price                     $2,699,275           $2,235,164

Agency Report at 9-10, 12. Based on the evaluation, the agency determined to
make award to Teilhaber on August 13, 2001. This protest followed.

ORGANIZATIONAL CONFLICT OF INTEREST

M&W argues that DLA should have excluded Teilhaber from the competition
because that firm helped to prepare the SOW and, therefore, has an
organizational conflict of interest that may have given Teilhaber an unfair
competitive advantage.

The Federal Acquisition Regulation (FAR) sets forth both general and
specific instructions on organizational conflicts of interest in subpart
9.5. The FAR requires that if a contractor: (1) "prepares, or assists in
preparing, a work statement to be used in competitively acquiring a system
or services," or (2) "provides material leading directly, predictably, and
without delay to such a work statement," the contractor may not supply the
system or services, except in certain limited situations. FAR
sect. 9.505-2(b)(1). This restriction is intended to: (1) avoid the possibility
of bias in situations where a contractor would be in a position to favor its
own capabilities, see FAR sect. 9.505(a), or (2) avoid the possibility that the
contractor, by virtue of its special knowledge of the agency's future
requirements, would have an unfair advantage in the competition for those
requirements. FAR sect. 9.505(b); see GIC Agric. Group, B-249065, Oct. 21, 1992,
92-2 CPD para. 263 at 6. The responsibility for identifying and resolving
conflicts of interest is that of the contracting officer, who in doing so is
admonished to exercise "common sense, good judgment and sound discretion."
FAR sect.sect. 9.504, 9.505. We will not disturb a contracting officer's
determination regarding a conflict of interest unless it is shown to be
unreasonable. Abt Assocs., Inc., B-253220.2, Oct. 6, 1993, 93-2 CPD para. 269 at
6.

The record here does not support M&W's claim that Teilhaber had an
organizational conflict of interest or that Teilhaber gained an unfair
competitive advantage. Specifically, the record shows that DLA engineers
prepared the SOW in the current RFP. Agency Report, Tab 27, Statement of DLA
Engineer. While the protester expresses doubt whether DLA actually prepared
the SOW without the assistance of Teilhaber, this SOW largely mirrors the
SOW for the solicitation that was awarded to Teilhaber on a sole-source
basis for the repair of Rows 1-3. See M&W Comments, Tab 2, Teilhaber's
Contract to Repair Rows 1-3; RFP SOW. M&W does not argue, and the record
does not in any way suggest, that Teilhaber helped to prepare the SOW for
the repair of Rows 1-3. [3]

Moreover, to alleviate any competitive advantage that Teilhaber may have had
by virtue of its repairing Rows 1-3 using its (Teilhaber's) components, the
agency provided all offerors with the "as built" drawings of the repair of
Rows 1-3, which were prepared by a DLA engineer and which were the required
design if Teilhaber components were used. While M&W asserts that Teilhaber
still had a competitive advantage, the mere existence of a prior or current
contractual relationship between a contracting agency and a firm does not
create an unfair competitive advantage; an agency is not required to
compensate for every competitive advantage inherently gleaned by a potential
offeror's prior performance of a particular requirement, unless the
offeror's advantage was created by improper preference or other unfair
action by the procuring agency. Optimum Tech., Inc., B-266339.2, Apr. 16,
1996, 96-1 CPD para. 188 at 7. Here, the advantages gained by Teilhaber as the
incumbent were fair ones. Indeed, incumbent contractors with good
performance records can offer real advantages to the government, and
proposal strengths flowing from a firm's prior experience are proper
considerations in selecting an awardee. Benchmark Sec., Inc., B-247655.2,
Feb. 4, 1993, 93-1 CPD para. 133 at 10-11.

TECHNICAL EVALUATION

The protester challenges the agency's evaluation for each of the four
subfactors, under each of which M&W's proposal received acceptable/low risk
ratings and Teilhaber's proposal received highly acceptable/low risk
ratings. The evaluation of technical proposals is primarily the
responsibility of the contracting agency. Our Office will not make an
independent determination of the merits of technical proposals; rather we
will examine the record to ensure that the agency's evaluation was
reasonable and consistent with the stated evaluation criteria. Litton Sys.,
Inc., B-237596.3, Aug. 8, 1990, 90-2 CPD para. 115 at 8. A protester's mere
disagreement with the agency's evaluation does not render the evaluation
unreasonable. SWR Inc., B-286044.2, B-286044.3, Nov. 1, 2000, 2000 CPD para. 174
at 3. As discussed below, we find the agency's evaluation reasonable.

Project Management Plan (PMP)

While M&W's project management plan was ultimately found to "meet[] the
requirements of this subfactor," [4] Teilhaber's was found to provide an
excellent and very detailed plan for managing and coordinating the proposed
work. Agency Report, Tab 9, Evaluation of M&W's BAFO, at 1; Tab 11,
Evaluation of Teilhaber's Initial Proposal, at 1. For example, Teilhaber's
project management plan listed items that were not noted at all by the
protester's project management plan, such as dumpster delivery, palletizing
excess components, and inspection for sharp edges. Agency Report, Tab 10,
Teilhaber's Initial Proposal. This evaluation was reasonable.

Organization Structure and Qualifications

While M&W's proposal was found to "meet[] the requirements of this section,"
[5] Teilhaber's proposal was found to "clearly demonstrate[] a thorough
understanding of the requirements." Agency Report, Tab 7, Evaluation of
M&W's Revised Proposal, at 3; Tab 11, Evaluation of Teilhaber's Initial
Proposal, at 11. Teilhaber was found "uniquely qualified to perform the job
because of his past experience" in rebuilding the first three rows of racks
and because it is the manufacturer of the components. Agency Report, Tab 11,
Evaluation of Teilhaber's Initial Proposal, at 3. In this regard,
Teilhaber's proposal notes that many of its proposed personnel have hands-on
experience installing its products, and that its proposed installation
manager and site supervisor worked on the previous contract repairing Rows
1-3. Agency Report, Tab 10, Teilhaber's Initial Proposal, vol. II, sect. 2. This
evaluation subfactor lists matters that would merit "additional
consideration" in the evaluation, for example, "work experience with the
Teilhaber Shelf Q rack product and evidence that offeror's team has worked
together on previous successful project." RFP at 31. Given the fact that
Teilhaber has experience installing its components and is basically
proposing the same installation team, whereas M&W's proposal does not show a
comparable organization structure and qualifications, Teilhaber's higher
rating under this subfactor is reasonable.

System Layout and Design

With regard to this subfactor, M&W essentially argues that because both
offerors propose to repair the racks using Teilhaber components, their
proposals' ratings should have been identical. According to the RFP, one of
the elements that will be judged under this subfactor is the completeness of
the layout. RFP at 32. The evaluators noted that while M&W's "proposal meets
the requirements of this section," Teilhaber's proposal contained "an
excellent design which is laid out in extremely fine detail." Agency Report,
Tab 4, Evaluation of M&W's Initial Proposal, at 9; Tab 11, Evaluation of
Teilhaber's Initial Proposal at 4. As the protester acknowledges,
Teilhaber's proposal included a proposed storage location matrix, and a list
of new parts to be supplied, whereas M&W's proposal did not. Agency Report,
Tab 10, Teilhaber's Proposal sect. 3; Protester's Comments at 10. M&W stated in
its proposal that it would utilize Teilhaber components and provided general
statements regarding its system layout and design, but it did not provide
any significant details. Agency Report, Tab 3, M&W's Initial Proposal at 13.
Given the level of detail provided by Teilhaber for this subfactor, we find
the evaluation reasonable. [6]

Sprinkler System Work

With regard to this subfactor, M&W contends that Teilhaber, as the incumbent
contractor, had already figured out how to support the sprinkler system
during the rack repair of Rows 1-3, while M&W had to "guess" at a solution.
[7] Protester's Comments at 12. As noted, an agency is not required to
construct its procurements in a manner that neutralizes the competitive
advantages that some potential offerors (including incumbent contractors)
may have over others by virtue of their own particular circumstances where
the advantages did not result from unfair action on the part of the
government. See Optimum Tech., Inc., supra. In contrast to M&W's proposal,
Teilhaber's proposal was "very detailed" for this subfactor. Agency Report,
Tab 11, Evaluation of Teilhaber's Initial Proposal, at 15. Based on our
review, we find the agency's evaluation of this subfactor reasonable.

PAST PERFORMANCE

As noted, Teilhaber received a highly acceptable past performance rating and
M&W a marginally acceptable rating. Teilhaber's past performance history was
consistently positive on relevant contracts, in particular its contract for
the first three rows. In contrast, M&W did not submit "any evidence of ever
having performed this type work." Most of M&W's references concerned
ordinary construction projects, not related to the installation of racks.
With regard to the contract that M&W asserted was most relevant, for the
renovation of bleachers at five different schools, the contract reference
expressed extreme dissatisfaction with M&W's work. Agency Report, Tab 16,
Price Negotiation Memorandum, at 5-6; Tab 17, Source Selection Decision
Document, at 1-2.

While the protester asserts that too much weight was given to prior
experience in installing Teilhaber racks in evaluating past performance, the
agency was to evaluate each offeror's past performance of contracts that are
"similar in scope and size" to the work to be performed under this contract.
RFP at 27. Agencies properly may take into consideration specific, albeit
not expressly identified, experience in making qualitative distinctions
between competing proposals, so long as the specific experience is logically
encompassed by or related to the RFP's requirements and stated basis for
evaluation; accordingly, it is not objectionable for an agency to rate a

firm that has previously performed the same type of work called for under
the RFP higher than a firm with more general experience. Chant Eng'g Co.,
Inc., B-280250,
Aug. 7, 1998, 98-2 CPD para. 38 at 4. M&W's claimed most relevant experience was
for bleacher renovations at five different schools, which, when added
together, total $1.5 million. We think the agency could reasonably find that
this bleacher work was not "similar in size and scope" to the present work
of one large renovation project. Agency Report, Tab 9, M&W's Revised
Proposal, at 15. Moreover, in contrast to Teilhaber's consistently positive
references, M&W's most relevant reference was

very negative. [8] Thus, the agency reasonably evaluated Teilhaber's past
performance superior to M&W's. [9]

AWARD SELECTION

M&W argues that the best value determination was flawed because it did not
account for the protested evaluation errors. Since we have found that there
was nothing unreasonable or objectionable in the agency's evaluation, there
is no basis to question the determination that Teilhaber's proposal
represented the better value.

The protest is denied.

Anthony H. Gamboa

General Counsel

Notes

1. The record shows that agency officials initially considered a sole-source
award to Teilhaber, and that, prior to the issuance of this RFP, Teilhaber
submitted an unsolicited proposal for this work.

2. The drawings, prepared by a government engineer, were the "as built"
drawings from Teilhaber's repair of the first three rows of racks. Agency
Report, Tab 27, Statement of DLA Engineer.

3. On December 4, 2000, Teilhaber submitted an unsolicited proposal to
complete the remaining racks (Rows 4-40). Teilhaber's proposed SOW is a
digest of the SOW as set forth in the sole-source contract. M&W Comments,
Tab 2, Teilhaber's Contract to Repair Rows 1-3; Tab 4, Teilhaber Letter to
DLA (Dec. 4, 2000).

4. M&W's project management plan was initially found to be very general and
without any detail. Specifically, the agency found that the M&W's project
management plan lacked a schedule of events that tracked the necessary work
and failed to identify the key aspects that will impact on the timely
completion of the project. Agency Report, Tab 4, Evaluation of M&W's Initial
Proposal at 4. After two rounds of discussions, the agency determined that
M&W's proposal met the requirements of this subfactor.

5. M&W's proposal was initially rated unacceptable with high risk for this
subfactor because it did not identify specific responsibilities for each
individual, failed to identify individuals that would be on-site, and did
not identify all subcontractors. Agency Report, Tab 4, Evaluation of M&W's
Initial Proposal at 4. After discussions, M&W's proposal was found
acceptable. Agency Report, Tab 7, Evaluation of M&W's Revised Proposal,
at 3.

6. While M&W questions this rating by noting that one evaluator rated
Teilhaber's proposal only acceptable under this subfactor, we note that
evaluators may have different judgments as to a proposal's merits, and one
evaluator's scoring is not unreasonable merely because it is based on
judgments different from those of other evaluators. Digital Sys. Group,
Inc., B-286931, B-286931.2, Mar. 7, 2001, 2001 CPD para. 50 at 7.

7. The protester makes much of the fact that its proposal was not rated
acceptable under this subfactor until it submitted a drawing that detailed
the support members utilized for supporting the sprinkler pipe. However, the
RFP required that offerors provide a drawing "that depicts the offeror's
approach to supporting the sprinkler system during the dismantle and
re-assembly process of the rack system." RFP at 29.

8. The protester, in its comments on the agency report, contends that the
agency should have pointed out this adverse past performance information
during discussions. The protester was advised at the debriefing of the
nature of this adverse information and that it was considered in the
evaluation. However, its initial protest did not complain about the content
of discussions. Thus, this protest contention, raised more than 10 days
after the factual basis for this ground was known, is dismissed as untimely.
4 C.F.R. sect. 21.2(a)(2) (2001). Similarly, the protester's comments, for the
first time, contest the agency's determination that Teilhaber's price is
reasonable. However, at the debriefing, M&W's representative stated his
belief that this price was unreasonable and M&W's initial protest did not
contest this aspect of the evaluation. Thus, this issue is dismissed as
untimely as well.

9. M&W argues that the agency improperly failed to consider prior relevant
experience that one of its employees had regarding specialized pallet
storage racks. While the agency noticed this individual's claimed experience
in the evaluation, M&W's proposal failed to provide dates, telephone numbers
or points of contacts, so that the agency could not confirm this
information. Agency Report, Tab 9, M&W's BAFO; Tab 23, M&W's Debriefing
Memorandum, at 1. It is an offeror's responsibility to prepare an adequately
written proposal demonstrating the merits of the proposal, and an offeror
fails to do so at its own risk. Engineering Mgmt. Res., Inc., B-248866,
Sept. 29, 1992, 92-2 CPD para. 217 at 5.