TITLE:  MW-All Star Joint Venture, B-291170.4, August 4, 2003
BNUMBER:  B-291170.4
DATE:  August 4, 2003
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MW-All Star Joint Venture, B-291170.4, August 4, 2003

   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:   MW-All Star Joint Venture
    
File:            B-291170.4
    
Date:              August 4, 2003
    
Mitchell W. Quick, Esq., Michael Best & Friedrich, for the protester.
Christopher Solop, Esq., Ott & Purdy, for Madison Services, Inc., an
intervenor.
Capt. Charles K. Bucknor, Jr., Department of the Army, for the agency.
Mary G. Curcio, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
1.  Agency reasonably assigned neutral rating for past performance of
mentor‑protege joint venture offeror, where solicitation provided
that a neutral rating would be assigned to firms with no past performance
and, although mentor firm had performance history, the joint venture
itself did not.
    
2.  Agency reasonably rated awardee*s performance risk lower than
protester*s where awardee had performed contracts similar to that
contemplated by the solicitation while joint venture protester had not,
and evaluation was otherwise in accordance with solicitation.
    
3.  Agency reasonably evaluated realism of awardee*s proposal where it
determined that, although awardee*s total price was lower than that of
other proposals, its prices for four of the five most ordered items were
in line with the incumbent*s, and its lower prices resulted from cost
saving measures and lower profit.
DECISION
    
MW-All Star Joint Venture protests the award of a contract to Madison
Services, Inc. under request for proposals (RFP) No. DAPC50-02-R-0029,
issued by the Department of the Army for maintenance services for military
family housing at military installations in Hawaii. MW-All Star complains
that the Army misevaluated its and Madison*s past performance, and the
price realism of Madison*s offer.
    

   We deny the protest.
    
The solicitation, for award of a fixed-price contract, provided for a
*best value* evaluation based on three factors:  performance risk,
technical and price.  The performance risk factor was comprised of two
subfactors--past performance and experience.  Proposals were to receive
color/adjectival ratings under the performance risk factor (including the
past performance and experience subfactors) and the technical factor.[1] 
Price was to be evaluated to determine if it was reasonable, realistic and
consistent with the proposal, for purposes of assessing whether the
offeror understood the project and would be able to perform
successfully.[2]
    
MW-All Star is a joint venture formed under the Small Business
Administration*s (SBA) mentor-protege program.  See 13 C.F.R. S: 124.520
(2003).  It is comprised of MW Services, Inc., a small disadvantaged
business, and All Star Services Corporation, a large business.  Under the
firms* joint venture agreement, All Star, as the mentor firm, would be
involved in performing the contract and would assist MW, the protege firm,
in gaining the experience and training necessary to compete for and
perform federal contracts in the future.  All Star would provide
management support under the contract, while MW would be the managing
partner of the joint venture, with responsibility for managing and
supervising project performance.  Joint Venture Agreement at 2-3.
    
Following the evaluation, MW-All Star*s proposal was rated gray for past
performance, yellow for experience, yellow for performance risk and green
for technical.[3]  In assigning a gray (neutral) rating to the MW-All Star
proposal for past performance, the SSA considered that, while All Star had
substantial past performance, the MW-All Star joint venture entity had
none.  Source Selection Decision (SSD) at 17.  Likewise, in rating the
joint venture*s proposal yellow (acceptable) for experience, the SSA took
into account All Star*s substantial experience, but determined that,
because MW was a protege with no experience, the joint venture proposal
represented a moderate risk.  Id.  The SSA averaged the gray past
performance rating and the yellow experience rating for a yellow
performance risk rating.  Id.  Madison*s proposal, which offered the
lowest price, was rated green for past performance, green for experience,
green for performance risk, and green for technical.  The Army made award
to Madison based on its lower price and superior performance risk and
technical ratings. 
    
PERFORMANCE RISK EVALUATION--MW-ALL STAR
    
MW-All Star protests the evaluation of its proposal under the past
performance and experience subfactors, as well as its overall rating under
the performance risk factor, arguing that the evaluation did not properly
reflect the significant past performance and experience of All Star, the
mentor firm.
    
In reviewing a protest against an agency*s proposal evaluation, our role
is limited to ensuring that the evaluation was reasonable and consistent
with the terms of the solicitation and applicable statutes and
regulations.  Urban-Meridian Joint Venture, B‑287168, B-287168.2,
May 7, 2001, 2001 CPD P: 91 at 2.
    
Past Performance
    
MW-All Star argues that the Army improperly failed to consider the past
performance of All Star in rating MW-All Star*s proposal under the past
performance factor, as required by the solicitation.  The Army disagrees,
asserting that, while the solicitation provided that it could consider the
prior work record of the project manager and other proposed management
personnel when evaluating experience, only the offering entity*s past
performance--in this case, the joint venture itself--was to be considered
in evaluating past performance.
    
We agree with the Army.  With respect to performance risk, the
solicitation instructions provided:
    
Performance Risk (Experience and Past Performance):  . . . The offeror
shall provide information pertaining to current and previous Federal,
State, Municipal, or commercial contracts. . . .
Offerors that are newly formed entities without sufficient prior contracts
may also include contracts and subcontracts for the proposed Project
Manager or other management personnel. 
RFP S: L.14 (B)(2)(a).  The evaluation factors provided:
Past Performance--. . . The absence of past performance will result in a
neutral rating in which the offeror will not be rated favorably or
unfavorably.  However, a neutral rating may affect the offeror*s overall
ranking. 
Work Experience--. . . Experience of the offeror*s proposed project
manager and other key personnel may be considered for those newly formed
entities that do not have previous work experience.              
RFP S: M.4 (1) and (2).  We think it is clear from these solicitation
provisions that past performance was to be rated based on the past
performance of the offeror itself, here, the joint venture.  More
specifically, while the instructions permitted offerors to include past
contracts for management personnel in their performance risk proposals,
the evaluation provision only stated that such contracts would be
considered when evaluating experience; the RFP nowhere stated that past
performance of other than the offering entity would be considered in the
past performance evaluation.  Thus, since the MW-All Star did not have any
past performance as a joint venture, it was reasonable for the Army to
rate MW-All Star*s proposal gray in that area. 
    
MW-All Star maintains that the agency*s failure to factor All Star*s past
performance into the joint venture*s past performance rating was
inconsistent with Federal Acquisition Regulation (FAR) S:
15.305(a)(2)(iii).  However, this provision provides only that past
performance evaluations *should* take into account past performance
information regarding *predecessor companies, key personnel who have
relevant experience, or subcontractors . . . ,* when relevant.  We have
held that this provision permits, but does not require, procuring agencies
to consider the experience and past performance of these additional
entities and personnel in evaluating an offeror*s past performance. 
Olympus Bldg. Servs., Inc., B-282887, Aug. 31, 1999, 99-2 CPD P: 49 at 4;
see also TyeCom, Inc., B-287321.3, B-287321.4, Apr. 29, 2002, 2002 CPD P:
101 at 7 (in appropriate circumstances, a procuring agency may, but is not
required to, consider the past performance of other than the performing
entity).[4]  Accordingly, since the solicitation did not provide that the
agency would consider the past performance of each member of a joint
venture, the agency properly rated MW-All Star*s proposal gray for past
performance based on the joint venture*s lack of a performance history.[5]
    
Experience
    
MW-All Star*s proposal was rated yellow under the experience subfactor;
the protester maintains that this rating failed to accord sufficient
weight to All Star*s substantial relevant experience.  This argument is
without merit.  In reaching its rating, the agency considered that All
Star*s management team had over 8 years of experience, but that MW, the
protege firm, had no experience.  SSD at 17.  The SSA determined that
All Star would provide stable leadership for the contract, and had the
necessary experience, management and personnel to ensure acceptable
performance while MW assisted and learned the process, but that there
still was a moderate amount of risk due to MW*s lack of experience.  Id. 
We find nothing unreasonable in the SSA*s conclusions.  Notwithstanding
All Star*s substantial experience, we think the SSA reasonably could
conclude that MW*s lack of experience presented a moderate risk of
performance problems in light of its substantial management and
performance obligations under the contract; an overall yellow/moderate
risk/acceptable rating was appropriate in light of this legitimate
concern.  See Urban Meridian Joint Venture, supra.  MW*s disagreement does
not establish otherwise.
    
PERFORMANCE RISK EVALUATION--MADISON
    
Madison*s green (good) ratings for past performance, experience and
overall performance risk were based on Madison*s prior performance of
four military family housing contracts for properties with between 1,500
and 2,500 dwelling units, and past performance references that rated
Madison exceptional for three of those contracts and above average for the
fourth.  Agency Report at 17.  MW-All Star maintains that Madison should
have received a lower performance risk rating than MW-All Star, because
the solicitation defined relevant experience as maintaining over 2,000
units, and Madison has performed only one contract, as a subcontractor,
that meets that standard.  MW-All Star notes that, in contrast, All Star
has extensive experience performing military family housing contracts with
more than 2,000 units.
    
The evaluation of Madison*s performance risk was reasonable.  The RFP
instructions advised offerors to provide information pertaining to
contracts performed within the past 3 years that are relevant to the
scope, effort, and magnitude of this contract, and that it would *rate the
relevancy of past references provided (i.e. similar end items, family
housing maintenance on at least 2,000 units, multiple projects
concurrently accomplished, and efforts with similar services).*  RFP S:
L.14 (B)(2).  While the protester reads the reference in this provision to
2,000 units as precluding the agency from considering contracts covering
fewer units, we find no basis for such a narrow reading.  The provision
did not expressly state that only contracts covering 2,000 or more units
would be deemed relevant, and it appears to have been listed only as an
example of the most relevant experience an offeror could demonstrate. 
This view is supported by RFP S: M, which stated that *[w]ork experience
that is not comparable to the effort required by this project will result
in a higher performance risk rating.*  RFP S: M.4 (a)(2).  In other words,
the agency was not required to ignore prior contract efforts that were not
comparable to the work under the RFP but, rather, would assign lower
ratings for such work depending upon its comparability; the agency did
downgrade Madison by rating its proposal green, not blue, in this area. 
Further, as discussed above, while All Star had substantial past
performance and experience, the joint venture*s yellow experience and
performance risk ratings also reasonably reflected MW*s and the joint
venture*s lack of past performance and experience.  Madison*s past
performance and experience, on the other hand, were fully attributable to
it.  Accordingly, there was nothing unreasonable in the Army*s rating
Madison*s proposal superior to MW-All Star*s under the performance risk
factor.  See Alpha Data Corp., B‑291423, Dec. 20, 2002, 2003 CPD P:
18 at 4.
    
PRICE REALISM--MADISON
    
MW-All Star protests that the Army did not properly evaluate the realism
of Madison*s price proposal, which is 17 to 19 percent lower than those of
the other offerors. 
    
Price realism is not generally considered where, as here, the agency
intends to award a fixed‑price contract, because such a contract
places the risk and responsibility for all contract costs and resulting
profit or loss on the contractor.  Star Mountain, Inc., B‑285883,
Oct. 25, 2000, 2000 CPD P: 189 at 4.  An agency may, however, as the
agency did here, provide for a price realism analysis for such purposes as
assessing offerors* understanding of the solicitation or the risk inherent
in their proposals.  In such cases, the nature and extent of the agency*s
price realism analysis are ultimately within the agency*s discretion. 
Id. 
The price realism analysis here was reasonable.  In reviewing Madison*s
proposal, the agency recognized that Madison*s price was substantially
lower than those of the other offerors, and sought to determine the reason
for the disparity.  In doing so, the agency compared Madison*s prices for
the five most frequently ordered items with those of the other offerors
and found that Madison*s prices were in line with the incumbent*s for four
of the items.  SSD at 18, 20.  The Army believed this indicated that
Madison*s prices were fair and reasonable and reflected the company*s
understanding of pricing in the industry, as well as its experience.  The
agency further determined that Madison*s lower pricing reflected cost
saving measures such as [DELETED].  SSD at 20.  In addition, the agency
noted that, while profit and overhead for these services are usually
charged at a 20-25 percent rate [DELETED].  Id.  Finally, the agency noted
that Madison had a proven record of satisfactory performance on contracts
for which it had bid low prices.  Id.  MW-All Star does not challenge the
agency*s findings regarding Madison*s low pricing, and we find that the
agency*s conclusions were reasonable.  The protester does assert that the
agency was required to conduct, essentially, an item-by-item analysis of
Madison*s price.  However, given the fixed-price nature of the contract,
such a detailed analysis was not required.  Star Mountain, Inc., supra.;
Integrity Mgmt. Servs., Inc., B-283094.2, May 3, 2000, 2000 CPD P: 67 at
4-5.
    
The protest is denied. 
    
Anthony H. Gamboa
General Counsel
    
    

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

   [1] The possible ratings were:  blue (very low risk/exceptional), green
(low risk/highly successful), yellow (moderate risk/acceptable), pink
(high risk/minimally acceptable), red (very high risk/unacceptable), or
gray (unknown risk/neutral).
[2]This procurement was the subject of three earlier protests.  Initially,
Atlantic Coast Contracting protested the terms of the solicitation.  That
protest (B-282075) was dismissed because Atlantic failed to respond to the
agency report.  Subsequently, the agency evaluated the proposals received
and awarded a contract to MW-All Star.  Two protests were filed against
that award decision, by Madison Services, Inc. and KIRA, Inc. (B-282075.2,
B‑282075.3), in response to which the agency decided to reevaluate
the proposals and make a new award determination.  MW-All Star*s current
protest involves the award to Madison following that reevaluation.  In
some instances, MW-All Star attempts to rely on the first evaluation to
support its protest allegations.  However, that evaluation is not relevant
in light of the fact that the award to Madison was based solely on the
reevaluation.  See  SDS Int*l, B-285822, B‑285822.2, Sept. 29, 2000,
2000 CPD P: 167 at 7 n.2. 
[3] The Source Selection Authority (SSA) assigned these ratings to MW-All
Star*s proposal after she reviewed the evaluations of the source selection
evaluation board (SSEB), and disagreed with them.  MW-All Star complains
that the SSA could not ignore the evaluations of the SSEB.  However,
source selection officials are not bound by the evaluation judgements of
lower level evaluators; they may come to their own reasonable evaluation
conclusions.  EBA Eng*g, Inc., B-275818, Mar. 31, 1997, 97-1 CPD P: 127 at
10.  As discussed below, the SSA*s evaluation was reasonable.
[4] MW-All Star asserts that, by downgrading its proposal under the
performance risk factor because of MW*s lack of experience and past
performance, the Army violated the SBA*s mentor-protege requirements. 
However, MW‑All-Star has pointed to, and we have found, nothing in
those regulations that prohibits an agency from basing a past performance
or experience evaluation on the performance and experience of the offering
entity, or that requires that the mentor firm*s past performance and
experience be accorded a particular amount of weight in the evaluation. 
See 13 C.F.R. S:S: 124.513 and 124.520.
[5] We note that, in any event, the contemporaneous source selection
documentation shows that the SSA would have rated MW-All Star*s proposal
yellow (acceptable) for the performance risk factor even had she
considered each member of the joint venture separately.  In this regard,
she explains in the SSD that she would have rated All-Star blue
(exceptional), but MW red (unacceptable).  She states that combining these
ratings would have resulted in a yellow performance risk rating for the
joint venture, reflecting the fact that MW and the joint venture both
lacked past performance and experience.  SSD at 17.