TITLE: Cantu Services, Inc., B-289666.2; B-289666.3, November 1, 2002
BNUMBER: B-289666.2; B-289666.3
DATE: November 1, 2002
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Cantu Services, Inc., B-289666.2; B-289666.3, November 1, 2002
DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective
Order. This redacted version has been approved for public release.
Decision
Matter of: Cantu Services, Inc.
File: B-289666.2; B-289666.3
Date: November 1, 2002
Johnathan M. Bailey, Esq., Theodore M. Bailey Law Office, for the
protester.
Lynn H. Patton, Esq., Ott & Purdy, for South Carolina Commission for the
Blind, an intervenor.
Maj. Art J. Coulter, Department of the Army, for the agency.
Paul I. Lieberman, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Under solicitation subject to Randolph-Sheppard Act preference
(establishing priority for the blind in the award of contract for
cafeteria services), agency reasonably determined to include proposal by
state licensing agency for the blind (SLA) in the competitive range where
it was one of two proposals submitted, and received a higher technical
evaluation, notwithstanding the fact that the SLA's proposal's most
probable cost was higher.
DECISION
Cantu Services, Inc. protests the award of a contract to the South
Carolina Commission for the Blind, a state licensing agency for the blind
(SLA), under request for proposals (RFP) No. DABT47-01-R-0001 issued by
the Department of the Army for food services at Fort Jackson. Cantu
asserts that the SLA's proposed cost was not reasonable and that the SLA's
proposal was improperly included in the competitive range.
We deny the protest.
The RFP advised that this procurement would be conducted pursuant to the
Randolph-Sheppard Act (RSA), which establishes priority for blind persons
recognized and represented by SLAs, in the award of contracts for, among
other things, the operation of cafeterias in federal facilities.
20 U.S.C. S: 107b (2000); 34 C.F.R. S: 395.33(a) (2002). Under Department
of Defense regulations, if a designated SLA submits an offer found to be
within the competitive range, award must be made to the SLA absent a
high-level determination by the agency and agreement by the Secretary of
Education that, as applicable here, the SLA does not have the capacity to
operate a cafeteria in such a manner as to provide food service at a cost
and quality comparable to that available from other cafeteria services
providers. 32 C.F.R. S: 260.3(g)(1)(3) (2002). Here, the solicitation
specifies that the applicable RSA priority requires that award be made to
an SLA if its proposal is included in the competitive range, absent such a
high-level agency determination and approval by the Secretary of
Education. RFP amend. 3, at 9-10.
While Cantu has propounded a number of variations on its argument, the
gravamen of Cantu's protest is that the SLA's proposal should not have
been included in the competitive range because its proposed cost is
unreasonably high in comparison with Cantu's proposed cost.
The RFP provided for the award of a cost-plus-award-fee contract on the
basis of a *best value* determination under five specified technical
evaluation factors which, in combination, were significantly more
important than cost. Id. at 8-9.[1] Cantu and the SLA were the only
offerors that submitted proposals. The SLA's proposal received a rating
of *excellent* under management and food production, the most important
technical factor, versus Cantu's rating of *good.* The SLA's proposal
received ratings of *good* under the other four factors; Cantu's proposal
received ratings of *good* on those factors, with the exception of an
*excellent* rating under the past performance factor, which was
significantly less important than the management and food production
factor. The SLA's proposal also received substantially more subfactor
ratings of *excellent* than the Cantu proposal. The contracting officer
concluded that while both technical proposals received overall ratings of
*good,* the SLA's higher rating of *excellent* under the significantly
most important evaluation factor represented a technical advantage that
caused him to assess the proposal as clearly superior to Cantu's
proposal. Agency Report (AR) at 2.
Cantu's final proposed cost was $49,632,275 and the SLA's final proposed
cost was $57,734,567. The independent government cost estimate was
$61,560,686. As provided for by the RFP, the agency performed most
probable cost (MPC) evaluations, which resulted in an MPC of $60,912,379
for Cantu, and an MPC of $63,411,012 for the SLA. AR at 1. The agency
decided to include both proposals in the competitive range, and determined
that the SLA's proposed cost was fair and reasonable and that under the
terms of the solicitation there was no basis to award to other than the
SLA. AR, Tab Q, Price Negotiation Memorandum, at 7.
Cantu protests that it was irrational to include the SLA proposal in the
competitive range because of its 17 percent (actually 16 percent) higher
proposed cost, which Cantu asserts is unreasonable and establishes that
the SLA's proposal had no reasonable chance of award. Protest at 9.
The evaluation of proposals and the determination of whether a proposal is
in the competitive range are principally matters within the contracting
agency's discretion, since agencies are responsible for defining their
needs and for deciding the best method for meeting them. EAA Capital Co.,
L.L.C., B-287460, 2001 CPD P: 107 at 3-4. The criterion for inclusion in
the competitive range is that a proposal must be one of the most highly
rated, including cost and non-cost factors. SCIENTECH, Inc.,
B‑277805.2, Jan. 20, 1998, 98-1 CPD P: 33 at 7. Federal Acquisition
Regulation S: 15.306(c). This standard applies even where a procurement
is subject to the RSA priority, and there is no requirement that in order
to be included in the competitive range, an SLA's proposal must be rated
as high technically as other competitive range proposals or be very close
to them in price. See Centro Mgmt., Inc., B-286935, B-286935.2, Feb. 26,
2001, 2001 CPD P: 41 at 4. In this instance, where only two proposals
were received, both of which were technically acceptable, there is no
basis to question the agency's decision to include the SLA in the
competitive range notwithstanding the 16 percent higher proposed cost,
where technical factors were significantly more important than cost, both
offerors' proposed costs were within IGCE, and the SLA's proposal was
considered technically superior.[2]
As explained above, under Department of Defense regulations, where an
SLA's proposal is included in the competitive range, the SLA must be
awarded the contract (absent circumstances not present here). Id.;
Mississippi State Dept. of Rehab. Servs., B‑250783.8, Sept. 7, 1994,
94-2 CPD P: 99 at 1-2. Cantu points out that if the SLA's cost is
determined not to be reasonable, the regulations and the solicitation
provide that the agency may follow a procedure that may eventually result
in consulting with the Secretary of Education to seek approval not to
award to the SLA. However, once the SLA's proposal has reasonably been
included in the competitive range, the RSA and its implementing
regulations vest the decision to award or not with the agency and the
Secretary of Education, and that decision is not subject to review by our
Office. See Centro Mgmt. Inc., supra, at 3.
In any event, in addition to finding the SLA's MPC reasonable, the
contracting officer determined that the SLA's proposed cost was fair and
reasonable by comparison with Cantu's proposed cost. AR, Tab Q, Price
Negotiation Memorandum, at 7. In our view, the contracting officer's
discretion in determining the cost reasonableness of an SLA proposal
entitled to RSA priority should be at least as broad as that afforded a
contracting officer in making the required price reasonableness
determination as the predicate for an award to a small business under a
small business setaside. Under a setaside, because of the analogous
congressional policy favoring small businesses, a contracting officer has
substantial discretion and our Office has found reasonable a contracting
officer's determination that a price premium of as much as 51 percent over
a *courtesy* large business offer did not warrant a finding that the small
business' price was unreasonable. Hardcore DuPont Composites, L.L.C.,
B‑287371, Jan. 20, 1998, 98-1 CPD P: 28 at 3. In the circumstances
presented here, the 16 percent cost premium associated with the SLA's
proposed cost does not provide any basis to conclude that the contracting
officer was required to find the SLA's cost unreasonable, and the
determination to award to the SLA is unobjectionable.[3]
The protest is denied.[4]
Anthony H. Gamboa
General Counsel
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[1] The agency had previously decided to award to the SLA, but had taken
corrective action in response to a protest to our Office filed by Cantu,
in the form of amending the RFP technical and cost evaluation criteria,
soliciting proposal revisions, and performing a new evaluation. The
agency took this corrective action because the evaluation had been
performed on the basis of internal agency guidance that differed from the
solicitation evaluation criteria, which also had not included notice of
the RSA evaluation preference. While neither offeror elected to change
either its technical or cost proposals as a result of the corrective
action, the agency performed a new technical and cost evaluation for both
proposals.
[2] Cantu also objects to the SLA proposal's technical evaluation on the
grounds that both proposals were previously evaluated overall as *good,*
and neither was changed in response to the corrective action. As
explained above, the SLA's overall technical rating continued to be
*good,* even though the contracting officer considered that it presented
technical advantages relative to Cantu's proposal, which received the same
overall *good* rating. In any event, the agency performed a new
evaluation as part of its corrective action and Cantu has not provided any
specific basis for objecting to the results of this new technical
evaluation. Even though there were no changes in the proposals, and the
applicable evaluation criteria may have been unchanged, the mere fact that
the predecessor evaluation may have been different, absent more, does not
by itself provide any basis to question the current evaluation; Cantu has
not provided the requisite *more.* Accordingly, there is no basis to
object to the technical evaluation of the SLA's proposal, which on its
face appears reasonable.
[3] While Cantu styles its objection in terms of the SLA's cost
reasonableness, as this discussion suggests, the actual objective of
Cantu's protest is to require a cost/technical tradeoff in order to obtain
the benefit of the lower proposed cost. As explained above, the RSA
priority eliminates the requirement for a tradeoff.
[4] Cantu raises a number of collateral issues and recast iterations of
its issues, all of which we have considered and find without merit.