TITLE:  Ashland Sales and Service Company, B-291206, December 5, 2002
BNUMBER:  B-291206
DATE:  December 5, 2002
**********************************************************************
Ashland Sales and Service Company, B-291206, December 5, 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:    Ashland Sales and Service Company
    
File:             B-291206
    
Date:              December 5, 2002
    
Ruth E. Ganister, Esq., Rosenthal & Ganister, for the protester.
Marc Lamer, Esq., Kostos & Lamer, for Valley Apparel, LLC, an intervenor.
Daniel Barry, Esq., and John P. Patkus, Esq., Department of Defense, for
the agency.
Henry J. Gorczycki, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
1.  Protester's offered product demonstration model of jacket did not
comply with unambiguous purchase description requirement that bartack
stitches go through all plies of a jacket.
    
2.  Under a solicitation where technical quality was more important than
price, the source selection authority's (SSA) price/technical tradeoff
determination selecting a slightly lower-priced proposal over a slightly
higher-rated proposal was unreasonable, where the SSA relied on incorrect
evaluation information that made the technical superiority of the
higher-rated proposal appear significantly smaller than it actually was.
DECISION
    
Ashland Sales and Service Company protests an award to Valley Apparel,
LLC, under solicitation No. SPO100-00-R-4130, issued by the Defense
Logistics Agency (DLA), Defense Supply Center, Philadelphia, Pennsylvania,
for Navy shipboard jackets.
    
We sustain the protest.
    
The solicitation, issued as a total set-aside for small business concerns
on November 2, 2000, contemplated the award of an indefinite-quantity
contract for 1 year with 2 option years.  Award was to be made to the
offeror whose proposal was most advantageous to the government,
considering price and technical quality.  Technical quality was more
important than price.  The solicitation listed the technical evaluation
factors in descending order of importance:  (1) product demonstration
model (PDM), (2) experience/past performance, (3) manufacturing plan, (4)
quality assurance plan, and (5) DLA mentoring business agreement. 
An adjectival rating of either highly acceptable, acceptable, marginally
acceptable,
or unacceptable was to be assigned each proposal under each factor. 
RFP at 62, 66-67. 
    
Offerors were required to submit a PDM with their proposals.  The PDM was
to be evaluated for, among other things, *[c]onformance to the visual,
dimensional and manufacturing requirements of the purchase description.* 
Id. at 63.  Relevant here is the following requirement for bartack
stitching at the zipper:
    
3.2.11 Seams and stitches. . . . The jacket shall be . . . vertically
bartacked at the top and bottom of both sides of the slide fastener, thru
all plies including the slide fastener tape.
Agency Report, Tab 22, Purchase Description, June 13, 2000, at 8.
    
For the evaluation of experience/past performance, the solicitation
instructed offerors to *describe their experience with producing the same
or items of similar complexity within the past two (2) years.*  RFP at
58.  The solicitation stated that the agency's evaluation would consider
the information provided in proposals and obtained from other sources, and
that the evaluation would be a subjective assessment of the relevant facts
and circumstances to determine whether the offeror had consistently
demonstrated a commitment to customer satisfaction and timely delivery of
quality goods and services at fair and reasonable prices.  The
solicitation also stated that offerors might be given an opportunity to
respond to unfavorable reports of past performance, and the responses, or
lack thereof, would be considered in the evaluation.  RFP at 63-64.
    
The closing date for submission of initial proposals was December 27,
2000.  The agency received seven proposals, including Ashland's and
Valley's.  Under the PDM factor, the agency evaluation rated both
proposals acceptable.  Ashland's PDM had one minor defect and Valley's had
three minor defects.  Ashland's deficiency was the absence of the bartacks
required at the top and bottom of the slide fastener.  Agency Report, Tab
4, Pre-Negotiation Briefing Memorandum, Apr. 27, 2001, at 3-4.  Valley's
three deficiencies were:  (1) a larger hook and loop fastener on the
inside pocket than was specified, (2) all bartacks were 1/8-inch larger
than specified, and (3) the hanger loop was 1/2-inch shorter than
specified (+/-  1/4-inch).  Id. at 6.  The agency evaluation determined
that all the deficiencies for both of these PDMs would be *easily
corrected during production.*  Id. at 3, 6.
    
Under the experience/past performance factor, the agency evaluation rated
Ashland's proposal acceptable and Valley's marginally acceptable.  The
evaluation determined that both proposals had presented sufficient
evidence of producing items of the same or similar complexity.  The
material aspects of the evaluation for these proposals concerned the
offerors' records of timely performance and the quality of items
produced.  The evaluation determined that, while both offerors had
completed the majority of their contracts in a timely manner, both also
had completed some contract orders behind schedule.  Id. at 4, 6-7. 
Valley also had a warranty action invoked against 22 percent of a
contract.  Id. at 6.
    
The agency's discussions with Ashland identified the PDM deficiency for
omitting the bartacks, as well as issues under other evaluation factors;
however, the agency did not identify any negative past performance
information that the agency was considering.  In providing Ashland an
opportunity to revise its proposal, the agency stated, *If desired, you
may resubmit a [PDM] in an effort to achieve a higher rating.*  Agency
Report, Tab 5, Letter from DLA, June 22, 2001.
    
Ashland's response disagreed with the PDM evaluation, contending that its
PDM did have bartacks at the top and bottom of both sides of the slide
fastener that was sewn *through all plies, prior to turning the jacket.* 
Ashland stated that the purchase description does not require placement of
the bartack *after turning the jacket,* nor that the bartacks be visible
on the exterior of the jacket.  Ashland's letter explained how the agency
might disassemble a portion of the jacket to view the bartacks, and
requested notification if the agency could not verify the presence of the
bartacks.  It also requested that the agency increase the evaluation
rating for the offeror's PDM to highly acceptable.[1]  Agency Report, Tab
6, Letter from Ashland, June 28, 2001.  
    
In response, the agency reexamined Ashland's PDM.  It confirmed that the
bartacks were present, though not visible because they did not go through
the outer most ply of the jacket.  Since the purchase description required
that the bartacks must be sewn through all plies, DLA determined that the
defect remained.  The acceptable rating for Ashland's PDM did not change. 
Agency Report, Tab 7, Addendum to Pre‑Negotiation Briefing
Memorandum, Nov. 6, 2001, at 2-3.
    
On December 20, 2001, DLA amended the solicitation to incorporate
revisions to the purchase description.  The revisions included the
following revision to the bartack requirement at paragraph 3.2.11:
    
The top and bottom of the slide fastener closure and windflap shall be
vertically bartacked on the topstitching, through all plies including the
sl[i]de fastener tape.
RFP amend. 004, at 8.  The revisions also changed the type of fabric for
the outer shell of the jacket.  RFP amend. 004, at 3.  Revised proposals
were due by January 11, 2002.  RFP amend. 005, at 2.  The change in outer
shell fabric required a more expensive fabric, and the agency contemplated
price increases.  All offerors revised their proposals to some extent. 
    
Ashland continued to assert that its PDM complied with the bartack
requirement as originally issued and that its PDM rating should be
increased.  Ashland stated that it would not submit a revised PDM, and
thus its PDM should be evaluated based on the original requirement. 
Agency Report, Tab 10, Letter from Ashland, May 24, 2002.  Valley also did
not submit a revised PDM.
    
On June 19, DLA requested final revised proposals due by June 20.  RFP
amend. 0006.  Ashland responded with a letter restating its position on
the evaluation of its PDM and re-asserting its compliance with the
original bartack requirement.  Ashland also stated that the revised
requirement added that the bartacks are to be *on the topstitching,* which
now requires sewing of the bartacks *after turning and topstitching the
jacket.*  Ashland also submitted sewn examples of the bartack illustrating
Ashland's interpretation of each version of the requirement.  Ashland
continued to assert that its PDM, as submitted, complied with the original
requirement.  Agency Report, Tab 13, Letter from Ashland, (June 19,
2002).  Ashland did not re-submit a PDM.
    
The final evaluated prices and technical rating for the three
lowest-priced offerors are presented below:
    

   +------------------------------------------------------------------------+
|Factor                 |Offeror A         |Valley            |Ashland   |
|-----------------------+------------------+------------------+----------|
|PDM                    |Acceptable        |Acceptable        |Acceptable|
|-----------------------+------------------+------------------+----------|
|Experience/Past        |Marginally        |Marginally        |Acceptable|
|Performance            |Acceptable        |Acceptable        |          |
|-----------------------+------------------+------------------+----------|
|Manufacturing Plan     |Acceptable        |Acceptable        |Acceptable|
|-----------------------+------------------+------------------+----------|
|Quality Assurance Plan |Acceptable        |Acceptable        |Acceptable|
|-----------------------+------------------+------------------+----------|
|Mentoring Agreement    |Neutral           |Neutral           |Neutral   |
|-----------------------+------------------+------------------+----------|
|Overall Technical      |Marginally        |Marginally        |Acceptable|
|                       |Acceptable        |Acceptable        |          |
|-----------------------+------------------+------------------+----------|
|Evaluated Price        |$[DELETED]        |$15,695,500       |$[DELETED]|
+------------------------------------------------------------------------+

    
Agency Report, Tab 14, Price Negotiation Memorandum, Aug. 6, 2002, at 1.
    
The final evaluation report stated Ashland's objection to the agency's
evaluation of its PDM, and that the agency had determined that the
original evaluation was justified.  Id. at 4. 
    
Under the experience/past performance factor, the final evaluation
summarized updated information on the offerors' performance records. 
Additional contracts for both Ashland and Valley were considered and all
were being performed in a timely manner; there was no new adverse
information in either offeror's updated records.  The previously evaluated
adverse information was summarized for each offeror. 
    
Ashland was determined to have two delinquencies, which were the result of
two large orders under a single contract being completed behind schedule;
those delinquencies were stated to have occurred *very early in the rating
period.*  Id. 
    
Valley was determined to have five delinquencies, four of which were for
small quantity, special-measurement items and had limited impact on the
overall evaluation.  In addition, the agency identified two other
contracts with small numbers of delinquent special order items; however,
since the regular portion of the contracts and the majority of the special
order quantities were delivered on schedule, these contracts were
considered to be performed on schedule.  The agency thus determined that
Valley had one significant delinquency and that it had occurred *at the
beginning of the rating period.*  The evaluation summary also described
the warranty action under another of Valley's contracts and stated that it
had occurred *at the very beginning of the rating period.*  Id. at 3. 
    
The report stated that the final ratings under the experience/past
performance factor were at *the low end of Acceptable* for Ashland and *at
the very high end of Marginally Acceptable* for Valley.  The summary
stated that the overall technical ratings were *Acceptable* for Ashland
and *Marginally Acceptable . . . at the very high end of the range* for
Valley.  Id. at 4-5. 
    
On August 8, a source selection decision document was prepared selecting
Valley for award.  In this document, the source selection authority (SSA)
first described his comparison of the evaluations of the proposals of
Offeror A and Valley, and then between Valley and Ashland.  The document
identified differences between all three proposals under the PDM and
experience/past performance factors and price; the proposals were
considered equivalent under the remaining factors. 
    
As between Offeror A's and Valley's PDM, both proposals had a few minor
defects that were easily correctable during production.  Valley's PDM had
fewer defects and, although the SSA considered that Offeror A's and
Valley's PDMs were *of comparable quality,* he determined that Valley's
was *slightly superior* and presented *slightly less risk.*  Under the
experience/past performance factor, Offeror A had a larger number of
contracts with delinquencies than did Valley and Offeror A's delinquencies
had occurred throughout the rating period, whereas Valley's occurred early
and its recent performance was on or ahead of schedule. 
On the other hand, Valley had the warranty invocation, which affected
quality, and Offeror A did not.  The SSA determined that, even considering
Valley's quality problems, Valley was superior under the experience/past
performance factor.  Overall, the SSA determined that *the overall better
quality of Valley's proposal* justified the higher price, which was
$[DELETED] or [DELETED] percent higher than Offeror A's.  Agency Report,
Tab 15, Source Selection Decision, at 1-4.
    
As between Valley's and Ashland's proposals, the source selection decision
document stated that Ashland's PDM had only one minor defect and
determined that *Valley's PDM presents a bit more risk to the Government
since it is slightly inferior to Ashland's near perfect submission.*  Id.
at 5. 
    
Under the experience/past performance factor, the SSA stated that Ashland
had two delinquencies under the same contract, both of which occurred
*very early in the rating period.*  The source selection decision also
stated that three orders under that contract *were each extended for six
weeks due to inexcusable delay.*  Additionally, Ashland had delivered
special measurement items behind schedule, although these late items *were
not held against Ashland.*  Ashland's *most recent performance [was]
satisfactory* and it did not have any *warranty actions or quality
deficiencies.*  Id.  
    
Valley had the five delinquencies, of which four for small quantities were
*given minimal weight* by the SSA.  The fifth delinquency, *like Ashland's
two delinquencies, occurred early in the rating period.*  The SSA also
identified the warranty action charged against Valley.  Id. 
    
The source selection document stated that, based on the above, the SSA
considered *Valley to have the edge in the area of timely delivery since
Ashland had delinquencies under two large orders while Valley had a
delinquency under one large and four very small contracts/orders.* 
However, since Valley had a warranty action and Ashland did not, the SSA
determined that Ashland has *the edge in the area of quality.*  The SSA
determined that the *quality issue somewhat outweighs* the timely delivery
issue, and thus *Valley represents slightly more risk to the Government
for [the experience/past performance] factor.*  Overall, the SSA
determined that Ashland's proposal is *slightly more credible* under the
PDM factor, and *somewhat more credible* under the experience/past
performance factor.  Id. at 6.  The SSA then stated the following:
    
The Contracting Officer has determined that paying $[DELETED] 
([DELETED]%) more to Ashland for a somewhat superior PDM and past
performance proposal is neither warranted nor justified.  I therefore
consider Valley to represent a better value to the Government than
Ashland.
Id. at 7.
    
On August 21, DLA awarded the contract to Valley.  Following a debriefing,
Ashland filed this protest.
    
Ashland alleges that its PDM complied with the bartack requirement in the
purchase description and therefore it submitted a perfect PDM that
deserves the highest rating.  It further alleges that the agency
unreasonably evaluated Ashland's delivery record.  Finally, the protester
alleges that the SSA's price/technical tradeoff determination was
unreasonable.
    
In reviewing a protest of an agency's evaluation and source selection
decision, we will not re-evaluate proposals, but will review the record to
determine whether the evaluation and selection decision are reasonable and
consistent with the stated evaluation criteria, and with applicable
procurement laws and regulations.  M&S Farms, Inc., B-290599, Sept. 5,
2002, 2002 CPD P: 174 at 6.  A source selection decision based on
inconsistent or inaccurate information concerning the technical evaluation
or the relative merits and contents of the offerors' technical proposals
is not reasonable.  OneSource Energy Servs., Inc., B-283445, Nov. 19,
1999, 2000 CPD P: 109 at 10; New Breed Leasing Corp., B-259328, Mar. 24,
1995, 96-2 CPD P: 84 at 4.
    
Here, as discussed below, the SSA made his source selection based on
erroneous information about the evaluated difference between Valley and
Ashland under the experience/past performance factor.  The selection
decision was very close and the SSA was not aware of the errors at the
time of his decision.  Hearing Transcript (Tr.) at 11-15, 23-25 (testimony
of the SSA).  We sustain the protest on this basis, but we first address
the protest of the agency's PDM evaluation.
    
Ashland's  PDM does not comply with the initial bartack requirement.  The
initial version of the purchase description required that bartacks be sewn
through *all plies* of the jacket at the top and bottom of both sides of
the slide fastener.  Agency Report, Tab 22, Purchase Description (June 13,
2000), at 8.  By definition, a ply is one thickness or layer of a
material.  The Random House College Dictionary 1022 (rev. ed. 1980).  As
Ashland states, its PDM has bartacks sewn at the top and bottom of the
slide fastener before it is turned.  This means that during the assembly
of the jacket, Ashland sewed the outer shell fabric to the slide fastener
tape before the shell fabric was folded over on itself, or 'turned.*  The
shell fabric, when turned, covers the raw edge of the shell fabric and a
portion of the slide fastener tape.  The folded outer shell fabric is then
topstitched in place, creating a double layer of outer shell fabric on top
of the slide fastener tape.  If the bartacks are sewn before the outer
shell fabric is turned, as is the case with Ashland's PDM, the bartacks go
through only one layer of outer shell fabric at a location where that
fabric has two layers.  Thus, on Ashland's PDM, the bartacks on the slide
fastener tape do not go through all plies as required.
    
Ashland essentially alleges that, either the purchase description did not
require that the bartacks be sewn through all plies after the material was
turned, or the requirement is latently ambiguous with Ashland's
interpretation representing one of two reasonable interpretations.  We
disagree.  The requirement unambiguously stated that the bartacks had to
go through all plies without qualification.  Since Ashland's PDM is
constructed with two plies of outer shell fabric at the location of the
bartacks and the bartacks go through only one of them, Ashland's PDM does
not comply with the requirement.[2]
    
In any event, the defect in Ashland's PDM is minor.  It did not raise any
material concern with the agency because it is easily corrected during
production.[3]  In fact, all of the PDM defects for all offerors
considered for award were similarly minor in nature.  The SSA recognized
this and considered these PDMs to be very close;[4] although Ashland
maintained a slight evaluated advantage, it was not significant and did
not translate into value to the government for purposes of awarding at a
higher price.  Tr. at 11-13, 16 (SSA); Agency Report, Tab 15, Source
Selection Decision, at 5.  We find reasonable the SSA's assessment of the
evaluated PDM differences between these proposals.
    
Given the minor differences in PDMs and the equivalence of proposals under
other factors, the tradeoff determinations were based on past performance
and price.  Tr. at 16 (SSA).  The evaluated difference in past
performance, as stated in the source selection decision, was that Valley
had a slight advantage in the area of timely delivery, but Ashland had the
advantage under the area of quality of items delivered because Valley had
a significant warranty claim and Ashland had none.  Overall, the SSA
determined the evaluated difference in quality of performance *somewhat
outweighed* the evaluated difference in timely performance, and he gave a
slight advantage to Ashland under the experience/past performance factor. 
Agency Report, Tab 15, Source Selection Decision, at 6.
    
The SSA stated that the selection of Valley over Ashland was extremely
close--*a tough call*--given the slight evaluated technical advantage for
Ashland and the slight price advantage for Valley.  Tr. at 11-13 (SSA). 
His decision selecting Valley was based on the evaluation results as
stated in the source selection decision document.  Tr. at 23 (SSA).  The
SSA did not prepare the written source selection decision,[5] although, at
the time he approved the selection decision, he relied on the statement of
facts in it.  Tr. at 9, 23-25, 30-33 (SSA).  However, the record shows
that material facts in the source selection decision were incorrect.
    
The most significant error was that the selection decision incorrectly
stated that Ashland's two delinquencies and Valley's one significant
delinquency all occurred early in the rating period.  The rating period
was a 2-year period used by the agency to determine which contracts would
be considered in evaluating the experience and past performance of
offerors.[6]  Here, the rating period was from December 27, 1998 to
December 27, 2000.  Tr. at 24-25 (SSA), 50-52 (contracting officer). 
Ashland's two delinquencies occurred prior to December 1998.[7]  Tr. at 52
(contracting officer).  Valley's delinquency occurred in April 2000. 
Agency Report, Tab 25, Evaluation Documentation for Valley, at 5.  Thus,
rather than both offerors' delinquencies occurring early in the rating
period, Ashland's occurred prior to the rating period, and Valley's
occurred well into the last year of the rating period.  There is no
evidence that the SSA was aware of this discrepancy when he made his
source selection decision.
    
This problem was further compounded by the incorrect statement in the
source selection decision that three orders (under the same contract with
the two delinquencies) were each extended *6 weeks due to inexcusable
delay.*  Agency Report, Tab 15, Source Selection Decision, at 5.  In fact,
this was an excusable delivery extension granted for all three orders. 
Agency Report, Tab 23, Letter from Agency, July 9, 1998, at 2; Tr. at 39
(contracting officer).  While the agency contends that if the source
selection decision is carefully read, it is apparent that this was an
obvious error that did not affect the decision, the SSA testified that, at
the time of the source selection decision, he did not know that this was
an error.[8]  Tr. at 23, 30‑31 (SSA).
    
Thus, the record is clear that the SSA's tradeoff decision was based on
incorrect information concerning the relative timing of Ashland's and
Valley's delinquencies and a misstatement that a contract was extended due
to inexcusable rather than excusable delay.  Because of this, the
decision's conclusion that Valley had a superior timely record was
unsupported by the record.  Moreover, the decision cast Ashland's proposal
in a more negative light than would be the case if the facts were
correctly stated, so that the evaluated advantage of Ashland should be
greater than what the SSA believed to be the case when making the
price/technical tradeoff.  Since the SSA's price/technical tradeoff
decision favoring Valley's small price advantage over Ashland's narrow
technical advantage was extremely close, correction of these errors could
quite possibly tip the tradeoff in favor of Ashland's higher-rated
proposal.  In this regard, we note that as between Offeror A and Valley
that the SSA found a difference under the experience/past performance
factor that warranted payment of an even larger price premium than existed
between the proposals of Ashland and Valley.
    
We recommend that the agency review its evaluation of proposals, and make
a new source selection decision with appropriate documentation.  If an
offeror other than Valley is selected for award, the agency should
terminate the contract previously awarded to that firm.  We also recommend
that the agency reimburse the protester its cost of pursuing this protest,
including reasonable attorney's fees.  4 C.F.R. S: 21.8(d) (2002).  The
protester should submit its certified claim for costs, detailing the time
expended and the costs incurred, directly to the contracting agency within
60 days of receipt of this decision.  4 C.F.R. S: 21.6(f)(1).
    
The protest is sustained.
    
Anthony H. Gamboa
General Counsel
    
    

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

   [1] Ashland's letter also requested that the agency notify the offeror if
it did not agree with Ashland's position.  The agency did not change its
rating and did not indicate to Ashland either that the agency would change
the rating or that the agency agreed with the offeror's position.  Other
than extending subsequent opportunities to resubmit a PDM, the agency did
not further address this matter with Ashland prior to the post-award
debriefing.
[2] To the extent the requirement was subsequently revised to require that
the bartacks be on the topstitching, the revision more specifically
identified where at the top and bottom of the slide fastener tape the
bartacks are to be located.  RFP amend. 004, at 8.  Contrary to the
protester's argument, the revision did not alter the meaning of the
requirement that the bartacks go *through all plies.*
[3] The example of a bartack that did comply with the requirement, which
Ashland submitted just prior to the closing date for final proposal
revisions, served to confirm the agency's determination that this was a
minor, easily correctable defect.  Since the example--a portion of a slide
fastener with a swatch of outer shell material sewn to it--consisted of
only a portion of the entire jacket, it did not constitute a PDM, and thus
the agency did not alter the evaluation of Ashland's PDM.  Tr. at 86-87
(testimony of the contracting officer).
[4] One of the PDM defects evaluated for Valley's PDM was eliminated as a
result of discussions.  Agency Report, Tab 7, Addendum to the
Pre-Negotiation Briefing Memorandum, Nov. 6, 2001, at 7.  Therefore,
Valley had two PDM defects.  Nevertheless, the source selection decision
stated that Valley's PDM had three defects.  However, these minor defects
did not affect value to the government and were thus not material in
differentiating between the proposals.
[5] The contracting officer prepared it.  Tr. at 9 (SSA), 38 (contracting
officer).
[6] As noted, the proposal preparation instruction directed that offerors
describe their relevant contract experience for the past 2 years.  RFP at
58.  In such circumstances, we have held that it is proper for evaluators
to consider only the record of past performance histories during the
period stated in the RFP proposal instructions.  Wind Gap Knitwear, Inc.,
B-261045, June 20, 1995, 95-2 CPD P: 124 at 3. 
[7] Ashland's delinquencies occurred under two delivery orders under the
same contract.  The first one was completed late on July 21, 1998, and the
second on November 24, 1998.  Agency Report, Tab 24, Summary of Ashland's
Delivery Orders, at 1-2.
[8] The SSA's testimony at the hearing was fully credible as to what he
recalled doing or thinking at the time of the source selection decision
and what happened afterward.  When further questioned on the errors in the
source selection document, he speculated as to how he could have
recognized the errors in the document, but still stated that he was not
aware of the errors at the time he made the source selection decision. 
Tr. at 30-31 (SSA).