TITLE:  MVM, Inc., B-290726; B-290726.2; B-290727; B-290727.2, September 23, 2002
BNUMBER:  B-290726; B-290726.2; B-290727; B-290727.2
DATE:  September 23, 2002
**********************************************************************
MVM, Inc., B-290726; B-290726.2; B-290727; B-290727.2, September 23, 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:   MVM, Inc.
    
File:            B-290726; B-290726.2; B-290727; B-290727.2
    
Date:              September 23, 2002
    
James S. Phillips, Esq., Centre Law Group, LLC, for the protester.
Donald E. Barnhill, Esq., Barnhill & Assocs., for BNCI/AKAL, the
intervenor.
Elizabeth Gaffin, Esq., Department of Justice, for the agency.
Charles W. Morrow, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
1.  Experience of joint venture partners can be considered in evaluating
the experience of the joint venture.
    
2.  Protests that the agency misevaluated the competing offerors'
technical proposals are denied where the record shows that the evaluations
were reasonable; the protester's disagreement with the evaluations is not
a legal basis to overturn the evaluations.
    
3.  Price evaluation under solicitation for a fixed-price contract is
unobjectionable where the agency's analysis consisted of considering the
level of competition and a comparison of the prices of the competitive
range offerors.
DECISION
    
MVM, Inc. protests the awards of two contracts to BNCI/AKAL, a joint
venture, under request for proposals (RFP) Nos. ACL-0-R-0004 and
ACL-0-R-0005, issued by the Immigration and Naturalization Service (INS),
Department of Justice, for unarmed guard services at INS's service
processing centers.  MVM challenges the technical and price evaluations.
    
We deny the protests.
    
The largely identical RFPs, issued April 4, 2001, were to obtain unarmed
guard services for the INS's El Centro Service Processing Center,
California (-0004) and Florence Service Processing Center, Arizona
(-0005).  The RFPs contemplated the award of fixed-price requirements
contracts for a base year with four 1-year options.  The service
processing centers house alien detainees who are in removal proceedings or
may be subject to a final order of removal.  The contractors were required
to *furnish unarmed security guard services, including management
personnel, supervision, manpower, relief guards, uniforms, equipment, and
supplies to provide guard services seven (7) days a week, twenty-four (24)
hours per day at the [processing centers].*  RFPs at C‑2. 
    
The RFPs listed six technical evaluation factors:  (1) experience/past
performance, (2) personnel, (3) financial condition and capability, (4)
quality control plan, (5) training, and (6) records and reports.  The RFPs
advised that the experience and past performance subfactors of the first
factor were equal in importance to each other, and that each of these
subfactors was equal in importance to the second factor, which in turn was
equal to the combined weight of the remaining four factors.  The third
factor was said to be twice as important as the fourth and fifth factors,
and the fourth and fifth factors were of equal importance and each twice
as important as the sixth factor.  The combined weight of the technical
factors was said to be approximately equal in importance to price.  RFPs
at M-2-3.
    
With respect to the experience/past performance factor, the RFPs advised
that *[t]he evaluation of Experience and Past Performance will be a
subjective assessment based on the consideration of all relevant facts and
circumstances.*  Under the experience subfactor, the *Offerors['] guard
experience that is similar in size, scope, and complexity will be
evaluated to determine the capability to perform the work under this
contract.*  Past Performance was to be evaluated to determine, among other
things, whether the offeror has consistently demonstrated a *reputation
for providing high quality, timely, cost-effective services while
conforming to contract requirements* and the *Offeror's success in
providing customer satisfaction.*  The RFPs encouraged offerors *to
provide past performance information from predecessor companies,
subcontracts, key personnel who have relevant experience or other past
performance information such as relevant state and local government
contracts, and commercial contracts.*  RFP at M-3-4.
    
With respect to the financial condition and capability factor, the RFPs
advised:
    
The Government will assess the financial condition of the Offeror and its
financial ability to acquire and provide the necessary resources to
fulfill the requirements of the contract.  The Government is seeking to
determine if the Offeror has available financial resources for staff,
personnel, equipment, and supplies to support the contract. . . . The
offeror must show that it has:  Sufficient funds available for all start
up costs including a minimum of two months actual contract performance.
RFP at M-4-5. 
The INS received 17 proposals, including MVM's and BNCI/AKAL's, in
response to RFP --0004, and 15 proposals, including MVM's and BNCI/AKAL's,
in response to RFP --0005.  A Source Selection Evaluation Board (SSEB)
composed of six members evaluated the proposals and assigned each proposal
an adjectival rating for each evaluation factor.[1]  The SSEB established
a competitive range for both RFPs that included the proposals of MVM,
BNCI/AKAL, and a third offeror. 
The INS held discussions with each competitive range offeror tailored to
the weaknesses/deficiencies in its proposal.[2]  Discussions with MVM
addressed its experience and financial capability, while discussions with
BNCI/AKAL related to its experience, training, and the nature of its joint
venture.  Final proposal revisions were received on February 20, 2002. 
Based on the agency's evaluation of the final proposal revisions, MVM's
and BNCI/AKAL's proposals received identical final technical ratings under
each factor for both RFPs as follows:
Experience                            Good
Past Performance                 Outstanding
Personnel
               Key personnel           Good
               Staffing                       Good
Financial Condition              Outstanding
Quality Control Plan             Good
Training                                  Good
Records and Reports           Good
    
Agency Reports, Source Selection Decision Documents, at 10. 
    
The INS then evaluated each offeror's prices for accuracy and compared the
offerors' prices to one other.  Under RFP -0004, BNCI/AKAL submitted the
lowest price of $49,057,619.52, while MVM had the next lowest price of
$51,816,040.64.  Similarly, under RFP -0005, BNCI/AKAL submitted the
lowest price of $58,763,893.76, while MVM's was second low at
$61,119,918.08.  In light of the equal technical ratings and BNCI/AKAL's
lower prices, the INS made awards under both RFPs to that joint venture on
May 13.   These protests followed.
    
MVM alleges that the agency improperly evaluated the technical proposals. 
In reviewing protests against allegedly improper evaluations, it is not
our role to reevaluate proposals.  Rather, our Office examines the record
to determine whether the agency's judgment was reasonable and in accord
with the RFP criteria, and procurement statutes and regulations.  Abt
Assocs., Inc., B-237060.2, Feb. 26, 1990, 90-1 CPD P: 223 at 4.  The
protester's mere disagreement with the agency's judgment does not
establish that an evaluation was unreasonable.  UNICCO Gov't Servs., Inc.,
B-277658, Nov. 7, 1997, 97-2 CPD P: 134 at 7. 
    
With respect to past performance, MVM objects to BNCI/AKAL's outstanding
rating because the agency evaluated the newly-created joint venture's past
performance on the basis of the experience of the individual joint venture
partners, whereas under the evaluation scheme offerors with no past
performance history were to receive a neutral rating.[3]  This contention
is meritless.  Federal Acquisition Regulation (FAR) S: 15.305(a)(2)(iii)
directs agencies to take into account past performance information
regarding predecessor companies, key personnel, and major subcontractors
when such information is relevant to an acquisition.  Thus, the agency
properly can consider the relevant experience and past performance history
of the individual joint venture partners in evaluating the past
performance of the joint venture, so long as doing so is not expressly
prohibited by the RFP.  See Rolf Jensen & Assocs., Inc., B-289475.2,
B-289475.3, July 1, 2002, 2002 CPD P:___ at 6; Dynamic Isolation Sys.,
Inc., B-247047, Apr. 28, 1992, 92-1 CPD P: 399 at 7 n.7.  Here, not only
did the RFP not prohibit considering the experience/past performance of
the individual joint venture partners in the evaluation, as noted above,
it specifically encouraged (RFP at 3-4) offerors to provide such
information.
    
MVM also complains that its experience as the incumbent contractor should
have been rated outstanding (and superior to BNCI/AKAL's experience),
instead of good, and that the agency unreasonably upgraded the ratings for
BNCI/AKAL's experience from acceptable to good after discussions, even
though BNCI/AKAL did not identify in its revised proposals any additional
experience beyond that identified in its initial proposals.  The record
shows that both offerors' experience was initially rated only acceptable
because, although they both had significant security services experience,
their detention experience was limited. 
    
    
    
The record shows that BNCI/AKAL's rating was upgraded to good because, in
response to discussions, the joint venture highlighted and described in
more detail its relevant detention experience under several contracts that
it had previously listed as relevant experience.  See Agency Reports, Tab
8, BNCI/AKAL's Revised Proposal (Feb. 20, 2002); Tab 10, Source Selection
Decision Documents, at 8.  While MVM questions the relevance of this
experience, based on our review, the additional detail in MVM's revised
proposal reasonably supported BNCI/AKAL's good rating. 
    
Moreover, the record shows that MVM had only recently begun performance of
the interim contracts,[4] and that prior to receiving these contracts, the
agency found MVM did not possess the same level of experience with
detention facilities as BNCI/AKAL.   See Agency Reports, Tab 7, Initial
Technical Evaluations for BNCI/AKAL's and MVM's Proposals; Tab 14, MVM's
Initial Technical Proposal at 8-1-15 and BNCI/AKAL's Initial Technical
Proposal at 7-14.  The agency initially rated MVM's experience as
acceptable, but upgraded this rating to good after considering that firm's
limited but so far successful performance of the interim contracts. 
Agency Reports, Tab 10, Source Selection Decision Documents at 9.  Given
MVM's limited detention facility experience, the agency's judgment not to
rate MVM's experience as outstanding was reasonable.  MVM's challenge to
the evaluation here amounts to nothing more than a disagreement with the
way the agency evaluated its proposals, which is not a basis to overturn
the agency's evaluation.[5]
    
With regard to financial condition and capability, MVM argues that the
agency was unjustified in assigning outstanding ratings to BNCI/AKAL
because the joint venture is a new entity and is allegedly thinly
capitalized, with only $1000 in working capital.  MVM also argues that the
line of credit identified in BNCI/AKAL's proposal was on behalf of AKAL
Security, not the joint venture, and was due to mature in June 2001, and
that the financial statements reveal a *clear dearth of available cash for
financing the contract.*  MVM argues that the agency simply accepted, at
face value, BNCI/AKAL's statements that it had a wealth of financial
resources. 
    
The record shows that BNCI/AKAL's proposals contained the required
financial information regarding both individual joint venturers.  Agency
Report, Tab 14, BNCI/AKAL Proposal S: C.  Contrary to MVM's contentions,
the separate qualifications and financial capability of each of the legal
entities in a joint venture properly can be considered in evaluating the
qualifications of the joint venture.  See Beneco Enters., Inc.,
B-239543.3, June 7, 1991, 91-1 CPD P: 545 at 6‑7.  Our review
confirms that the agency considered, and could reasonably conclude from,
the information submitted in BNCI/AKAL's proposal that the joint venture
could complete the requirements of the contracts.  See Agency Reports Tab
8, Financial Condition Spreadsheet. 
    
With regard to MVM's specific contentions under this factor, BNCI/AKAL's
proposal contained a financial commitment letter from a bank to AKAL which
the record shows could be applied to this contract.  Although this letter
indicated that AKAL's current line of credit would *mature* on June 30,
2001, it also stated that *[s]hould the [INS] award a contract to AKAL
[the bank] will, if the present commitment is insufficient to cover needs
created by a new contract . . . consider additional commitment amounts.* 
Agency Report, Tab 14, BNCI/AKAL's Proposal, app., Bank's Letter of
Commitment.  Further, the proposal included the financial statements of
both joint venture partners, which reflected a considerable combined net
worth and resources.  We find no reason that the agency could not accept
this information at face value in considering the joint venture's
financial capability.  Thus, the agency could reasonably find that the
thin capitalization of the joint venture itself was not a concern and rate
BNCI/AKAL's proposal outstanding under this factor.
    
MVM also protests that the agency's price evaluation of BNCI/AKAL's
proposals was inadequate because the agency did not evaluate the
documentation supporting BNCI/AKAL's proposed prices.  Where, as here, a
fixed-price contract is anticipated, the government may use various price
analysis techniques and procedures to ensure a fair and reasonable price,
including the comparison of proposed prices received in response to the
solicitation; adequate price competition can establish price
reasonableness.   See FAR S: 15.404-1(b)(2)(i). 
    
Here, the record reflects that the agency determined that BNCI/AKAL's
prices, which were only slightly lower than the protester's prices, were
fair and reasonable based upon the level of competition received in
response to the RFPs and a comparison of the competitive range prices. 
See Agency Reports, Tab 9, Price Reasonableness Determination.  While the
INS did obtain certain supporting pricing information from the offerors,
the RFP did not commit the agency to performing a detailed analysis of
this information for purposes of determining price reasonableness (or for
any other purpose).  The depth of an agency's price analysis is a matter
within the sound exercise of the agency's discretion; we find no legal
requirement here for the agency to have done a more in-depth analysis than
was undertaken here.  See Redcon, Inc., B-285828, B-285828.2, Oct. 11,
2000, 2000 CPD P: 188 at 9-10.
    
    
    
    
    
Finally, MVM protests that the source selection decision was improper
because the INS made the awards to BNCI/AKAL solely on the basis of its
low prices.  Since
MVM's and BNCI/AKAL's proposals were reasonably rated equally under the
technical evaluation factors, the agency properly considered BNCI/AKAL's
lower prices to be the determining factor.
    
The protests are denied.
    
Anthony H. Gamboa
General Counsel
                
    
    
    

   ------------------------

   [1] The SSEB evaluated proposals under each technical evaluation factor
based upon an adjectival scale of outstanding, good, acceptable, and
unacceptable, except past performance, which was evaluated based upon a
scale of neutral, outstanding, good, satisfactory, marginal or
unsatisfactory.  Agency Reports, Source Selection Decision Documents, at
4-5. 
[2] Contrary to the protester's unsupported contentions, there is no
evidence that the agency conducted unequal or improper discussions.
[3] The BNCI/AKAL joint venture agreement states that the venture was
formed for the *proposal, negotiation and performance* of the two INS
unarmed security guard contracts.  See Agency Reports, Joint Venture
Agreement.
[4] MVM recently assumed performance of these contracts because of the
default of the previous contractor.  Protests at 2.
[5] MVM similarly asserts that its performance as the interim contractor
should have resulted in its receiving outstanding ratings under the
personnel, quality control plan, and training factors.  However, MVM's
experience as the incumbent did not have to be considered in rating these
factors.  Modern Techs. Corp. et al., B-278695 et al., Mar. 4, 1998, 98-1
CPD P: 81 at 7.