TITLE:  ACC Construction Co., Inc., B-288934, November 21, 2001
BNUMBER:  B-288934
DATE:  November 21, 2001
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Decision

Matter of: ACC Construction Co., Inc.

File: B-288934

Date: November 21, 2001

David E. Hudson, Esq., Hull, Towill, Norman, Barrett & Salley, for the
protester.

James F. Archibald, III, Esq., Bradley Arant Rose & White, for Caddell
Construction Co., Inc., an intervenor.

Susan K. Weston, Esq., William A. Hough, Esq., and James R. Thornton, Jr.,
Esq., Department of the Army, for the agency.

Linda S. Lebowitz, Esq., and Michael R. Golden, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest is denied where the agency's evaluation of the protester's proposal
was reasonable and consistent with the terms of the solicitation, and where
the solicitation provided that the combination of technical evaluation
factors was significantly more important than price, the agency reasonably
selected for award a higher-priced, technically superior proposal.

DECISION

ACC Construction Co., Inc. protests the award of a contract to Caddell
Construction Co., Inc. under request for proposals (RFP) No.
DACA21-01-R-0043, issued by the Department of the Army, United States Army
Corps of Engineers, to construct the Separate Battalions Barracks Complex,
Phase I, at Fort Bragg, North Carolina. ACC, which submitted the low-priced
proposal, challenges the agency's evaluation of its proposal and the
agency's decision to award to a firm submitting a higher technically rated,
higher-priced proposal.

We deny the protest.

BACKGROUND

The RFP, issued on June 21, 2001, contemplated the award of a fixed-price
contract to the offeror whose proposal represented the best value to the
government, considering technical evaluation factors (past performance,
experience, and management effectiveness) and price. The RFP provided that
the technical evaluation factors, when combined, would be considered
significantly more important than price, and only as proposals became more
equal in technical merit would price become the determining factor for
award. RFP at 8. The RFP advised that since the agency intended to evaluate
proposals and award a contract without conducting discussions, an offeror's
initial proposal should contain the firm's best terms from a technical and
price standpoint. RFP at 17.

Five firms, including ACC and Caddell, submitted initial technical and price
proposals by the closing time on August 14. Each member of the agency's
source selection evaluation board (SSEB) individually evaluated each
technical proposal submitted; the SSEB then met as a group and assigned an
overall consensus rating to each technical proposal. (According to the
agency's source selection plan, the consensus adjectival ratings were
outstanding, above average, satisfactory, marginal and unsatisfactory; risk
ratings were high, moderate, and low.) At this time, without factoring in
price, ACC's technical proposal (rated satisfactory, low/moderate risk) was
ranked fourth overall and Caddell's proposal (rated outstanding, low risk)
was ranked first overall. Agency Report (AR), Tab 8, SSEB Evaluation
Memorandum, at 2.

More specifically, and as relevant here, ACC proposed a project manager in
accordance with the requirements of the RFP, but the SSEB viewed as a
weakness ACC's failure to dedicate this individual as an on-site project
manager. In addition, while ACC provided an extensive list of projects
performed over the last 5 years--its two most expensive projects involved
multi-building barracks renewal and barracks replacement at Fort Benning,
Georgia, and were valued at approximately $24 million and approximately
$39 million--the SSEB viewed as a weakness ACC's lack of large scope/size
construction projects similar to the approximate $60 million project
requirements contemplated by this RFP. AR, Tab 8, ACC Technical Evaluation,
at 1-3.

In contrast, Caddell proposed an on-site project manager, which the SSEB
viewed as a proposal strength. Moreover, the SSEB viewed as a strength
Caddell's experience in constructing similar multi-building facilities, for
example, barracks at Fort Bragg, federal penitentiaries in Texas, Louisiana,
and Kentucky, and a Veterans Affairs medical center in Tennessee; these
projects individually ranged in value from approximately $48 million to
approximately $120 million. AR, Tab 8, Caddell Technical Evaluation, at 1-3.

After evaluating technical proposals, and in order to establish final
overall rankings, the SSEB then considered each offeror's proposed price.
ACC submitted the low price ($60,752,239); Caddell's price ($63,064,000) was
approximately 3.8 percent higher than ACC's price. Because ACC submitted the
low price, its proposal received a final ranking of second overall. [1]
Caddell's technically superior, higher-priced proposal received a final
ranking of first overall. AR, Tab 8, SSEB Evaluation Memorandum, at 2-3. The
SSEB recommended that the award be made to Caddell on the basis of its
initial proposal without conducting discussions.

The contracting officer, who served as the source selection authority,
determined that Caddell's technically superior, higher-priced proposal
represented the best value to the government, consistent with the terms of
the RFP, which provided that the combination of technical evaluation factors
was significantly more important than price. The contracting officer
believed that it was worth paying a 3.8 percent price premium to Caddell
because, among other reasons, Caddell proposed an on-site project manager
and the firm demonstrated its experience and successful performance in
completing numerous large-scale, high dollar value construction projects
similar to the project requirements of this RFP. On September 21, the
contracting officer awarded the contract to Caddell. AR, Tab 7, Source
Selection Decision.

ISSUES AND ANALYSES

ACC, which does not challenge the evaluation of Caddell's technical
proposal, complains that the SSEB improperly used an unstated evaluation
factor--dedication of an on-site project manager--to downgrade its technical
proposal. We disagree.

In reviewing an agency's evaluation of proposals, our Office will question
the agency's evaluation only where it violates a procurement statute or
regulation, 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. We conclude that the agency reasonably
evaluated ACC's proposal consistent with the terms of the RFP.

Here, the RFP's management effectiveness technical evaluation factor
included a subfactor captioned "Organizational Chart/Structure and Key
Personnel." Under this subfactor, offerors were asked to provide, among
other things, names and titles of proposed key personnel (identified in the
RFP as the construction project manager, site supervisor, quality control
system manager, and safety program manager), as well as their specific
assignments on this project. In its proposal, ACC named its proposed project
manager, but did not indicate that the project manager would be an on-site
position.

We believe the SSEB reasonably assigned a satisfactory rating to ACC's
proposal for the referenced subfactor because the firm did no more than
satisfy the minimum RFP requirement to propose a project manager. (In
contrast, Caddell received an above average rating for this subfactor
because, for example, it proposed an on-site project manager, thus
demonstrating an approach with more organizational control and on-site
decisionmaking.) In our view, the SSEB's recognition that ACC did not
propose an on-site project manager does not constitute the use of an
unstated evaluation factor, but rather, reasonably reflects the SSEB's
assessment of ACC's proposed organizational approach for purposes of
successfully performing the project requirements.

In ACC's comments on the agency's administrative report, the firm's
president states that at all times, ACC planned to have an on-site project
manager, just as the firm did on its other barracks projects. ACC's
president asserts that had the agency inquired, ACC would have furnished
this information, explaining that since the RFP did not specifically require
an on-site project manager, ACC did not list the project manager as an
on-site position in its initial proposal. Protester's Comments, Affidavit of
ACC's President, Oct. 29, 2001.

ACC is essentially arguing that prior to award, the contracting officer
should have conducted discussions regarding perceived weaknesses in the
firm's initial proposal. Here, however, the RFP advised offerors that the
agency intended to evaluate proposals and award a contract without
conducting discussions. As a result, the RFP specifically advised that an
offeror's initial proposal should contain the firm's best terms from a
technical and price standpoint. In these circumstances, where ACC was on
notice that it might not have an opportunity to amplify the contents of its
initial proposal prior to award, it was incumbent upon ACC to submit an
initial proposal adequate for evaluation, that is, ACC was responsible for
providing a complete description of its organizational approach within the
four corners of its initial proposal. We have no basis to object to the
contracting officer's decision not to discuss with ACC perceived weaknesses
in the firm's initial proposal prior to making award. SDS Int'l, B-285822,
B-285822.2, Sept. 29, 2000, 2000 CPD para. 167 at 11 n.4. [2]

ACC next complains that in evaluating the similarity of its prior experience
on large scope/size projects, the SSEB failed to recognize its performance
of two large-scale barracks projects with an aggregate value of more than
$63 million. This complaint, however, is not supported by the
contemporaneous evaluation record.

In this regard, the record clearly shows that the SSEB recognized ACC's
recent barracks construction experience by assigning an above average rating
to ACC's proposal for the large scope/size subfactor under the experience
technical evaluation factor. AR, Tab 8, ACC Technical Evaluation, at 2.
While ACC aggregates the values of its two prior barracks projects (doing so
for the first time in its comments on the agency report), we believe the
SSEB reasonably viewed the individual project values as presented by ACC in
its initial proposal (approximately $24 million and approximately
$39 million) [3] as not being "near the size" of the approximate $60 million
value of the current barracks requirements. Id. On this record, we have no
basis to question the reasonableness of the SSEB's decision not to assign a
higher (outstanding) rating to ACC's proposal for the large scope/size
subfactor. [4]

Finally, ACC believes that as the low-priced offeror, it should have
received the award and that the price premium associated with Caddell's
technically superior proposal was not justified.

In a negotiated procurement, where the solicitation does not provide for
award on the basis of the lowest priced, technically acceptable proposal, an
agency has the discretion to make an award to an offeror with a higher
technical score and a higher price where it reasonably determines that the
price premium is justified and the result is consistent with the evaluation
criteria. B. Diaz Sanitation, Inc., supra, at 8.

The RFP stated that the combination of technical evaluation factors was
significantly more important than price in determining the proposal
representing the best value to the government. As discussed above, we
believe the SSEB reasonably evaluated ACC's technical proposal as
satisfactory overall, while it evaluated Caddell's proposal as technically
superior. On this record, we have no basis to question the contracting
officer's decision, consistent with the terms of the RFP, to pay a price
premium to Caddell in order to obtain a contractor which, among other
things, proposed an on-site project manager and had an extensive record of
successful performance of similar large-scale construction projects.

The protest is denied.

Anthony H. Gamboa

General Counsel

Notes

1. ACC is factually incorrect in asserting that the agency failed to take
into account its low price. As shown above, when price was considered, ACC's
overall ranking improved from fourth to second.

2. The RFP also included a provision that stated that price would be a
factor in establishing the competitive range prior to conducting
discussions. RFP at 8. To the extent ACC maintains that this provision
required the agency to conduct discussions and is, therefore, inconsistent
with the RFP provision stating that the agency intended to award on the
basis of initial proposals without conducting discussions, ACC was required
to protest this alleged solicitation impropriety prior to the closing time
for receipt of initial proposals, not after award. Bid Protest Regulations,
4 C.F.R. sect. 21.2(a)(1) (2001). In any event, we point out that no competitive
range was established in this procurement, no discussions were held, and the
award was made on the basis of Caddell's initial proposal--all actions
consistent with the terms of the RFP.

3. We note that the SSEB did not aggregate the values of Caddell's prior
construction projects, which individually ranged from approximately $48
million to approximately $120 million.

4. ACC alleges that at the post-award debriefing, the contract specialist
made a comment that ACC currently had too much work; ACC speculates that
this comment, which it apparently viewed as being negative, constituted an
unstated evaluation factor. The contract specialist, however, was not a
member of the SSEB and there is no evidence in the contemporaneous
evaluation record that the SSEB downgraded ACC's proposal based on the
amount of work ACC had. Rather, the record shows that the SSEB recognized
that over the last 5 years, ACC worked on more than 10 large (over $10
million each) military projects, most of them in the Savannah, Georgia area.
The SSEB noted that ACC had a wealth of experience working for the federal
government, and, accordingly, assigned an outstanding rating to ACC's
proposal for the military work experience subfactor.