TITLE: Burns and RoeServices Corporation, B-291530, January 23, 2003
BNUMBER: B-291530
DATE: January 23, 2003
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Burns and RoeServices Corporation, B-291530, January 23, 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: Burns and RoeServices Corporation
File: B-291530
Date: January 23, 2003
Kenneth B. Weckstein, Esq., and Shlomo D. Katz, Esq., Epstein Becker &
Green, for the protester.
William A. Roberts, III, Esq., David M. Southall, Esq., and Jonathan L.
Kang, Esq., Wiley Rein & Fielding, for J.A. Jones Management Services,
Inc., the intervenor.
Robert Roylance, Esq., and Richard G. Welsh, Esq., Department of the Navy,
for the agency.
John L. Formica, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Agency properly considered the particular benefit associated with an
offeror*s experience as the incumbent contractor in making its source
selection where the solicitation advised offerors that corporate
experience was an evaluation factor.
2. Agency*s evaluation of the protester*s proposal under a small business
program support evaluation criterion was unreasonable where the protester
submitted its proposal as a teaming agreement/joint venture between a
large business and a small business, and the agency considered only the
protester*s reliance on small business subcontractors, but not whether the
protester*s performance entailed the participation of a small business.
DECISION
Burns and Roe Services Corporation (B&R) protests the award of a contract
to J.A. Jones Management Services, Inc. under request for proposals (RFP)
No. N62470-01-R-5541, issued by the Department of the Navy, for regional
base operations support services at the Naval Station Roosevelt Road,
Puerto Rico, and other federal facilities in the Carribean. The protester
argues that the agency*s evaluation of proposals and selection of Jones*s
proposal for award were unreasonable.
We sustain the protest.
The RFP provided for the award of a fixed-price, indefinite-quantity
contract for a base period of 1 year with four 1-year options. The
successful contractor will provide all labor (including supervision and
management), tools, materials, equipment, and transportation for base
operations support, real property operations, and maintenance and repair
services.
The RFP stated that the award would be made to the offeror submitting the
proposal representing the best value to the government, considering the
equally weighted evaluation factors of price and technical. The
solicitation added that the technical evaluation factor was comprised of
the following five equally weighted technical criteria: (1) past
performance; (2) corporate experience; (3) staffing plan; (4) work
accomplishment; and (5) support for the small business, small
disadvantaged business, and woman-owned business program.
The RFP included detailed instructions for the preparation of proposals.
Offerors were to submit separate price and technical proposals. With
regard to price, offerors were instructed to complete the price schedule
set forth in the RFP. The price schedule included, for the base year of
the contract and each option period, a number of contract line items
(CLIN) under the headings of *firm fixed price work* and *indefinite
quantity work.* With regard to the *firm fixed price work,* the RFP
provided CLINs setting forth a general description of the work required, a
contract requirement reference number, an estimated annual quantity, and a
unit measure.[2] Each offeror was required to complete the schedule by
providing its unit and total price for each of the *firm fixed price work*
CLINs. Similarly, for the CLINs under the heading *indefinite quantity
work,* the RFP provided a general description of the work required, a
contract requirement reference number, an estimated annual quantity, and a
unit measure.[3] Each offeror was required to complete the schedule by
providing its unit and total price for each of the indefinite-quantity
CLINs. The RFP*s price schedule also provided a *recap sheet base year --
option 4,* that offerors were to complete by entering, for the base period
and each of the option periods of the contract, their total price for the
*firm fixed price work* and *indefinite quantity work,* as well as the sum
of these items. RFP at B-73. Offerors were required to submit offers for
all items and quantities listed. RFP at M-2.
The agency received proposals from six offerors by the RFP*s closing
date. The proposals were evaluated, and four proposals, including those
submitted by Jones (the incumbent contractor) and B&R, were included in
the competitive range. Discussions were held, and final revised proposals
were requested and received.
Jones*s proposal was evaluated as *good* under the technical factor at an
evaluated price of $95,287,642. With regard to the evaluation criteria
comprising the technical factor, Jones*s proposal was evaluated as *good*
under the past performance, corporate experience, and support for small
business criteria, and *satisfactory* under the staffing and work
accomplishment criteria.[4] B&R*s proposal was evaluated as *good
(minus)* under the technical evaluation factor at an evaluated price of
$92,441,617. B&R*s proposal was evaluated as *good* under the past
performance and corporate experience criteria, *good (minus)* under the
support for small business criterion, and *satisfactory* under the
staffing and work accomplishment criteria. AR, Tab 17, Source Selection
Board (SSB) Report, Sept. 24, 2002, at 6.
In determining which proposal represented the best value to the agency,
the agency noted that although B&R*s total proposed price was *2.8% lower*
than Jones*s, all of that price advantage was due to B&R*s lower price for
the *indefinite quantity work* ($15,733,880 for B&R in comparison to
$19,497,006 for Jones). As to the *firm fixed price work,* the agency
found that Jones*s proposal was slightly lower priced than B&R*s
($71,790,636 for Jones in comparison to $72,707,736 for B&R). The agency
noted here that over the past 5 years it had ordered only 37 percent of
the *indefinite quantity work* set forth in the solicitation, and
calculated that if it were to order the same percentage of *indefinite
quantity work* under the contract to be awarded here, the *difference in
actual cost to the government would be just over one-half of one
percent.* AR, Tab 17, SSB Report, Sept. 24, 2002, at 9; Tab 18,
Post‑Negotiation Business Clearance Memorandum (BCM), at 14.
The SSB next noted that the proposals of Jones and B&R were evaluated
respectively as *good* and *good (minus)* under the technical factor, and
that the *difference in the overall rating is in the small business
subcontracting plan.*
AR, Tab 17, SSB Report, Sept. 24, 2002, at 9; Tab 18, Post-Negotiation
BCM, at 6.
Finally, the SSB noted that Jones *is the incumbent contractor currently
performing most of the services for the same customers in the same remote
location as called for in this solicitation,* and that *[t]hey propose to
roll their existing management team over from the current contract to the
new one.* The SSB found that Jones*s *incumbency provides the government
a high degree of confidence and low risk in the successful performance of
[Jones] on a follow on contract.* AR, Tab 17, SSB Report, Sept. 24, 2002,
at 9-10; Tab 18, Post-Negotiation BCM, at 6-7.
The SSB concluded that because, in its view, the evaluated 2.8 percent
price advantage associated with B&R*s proposal *is actually expected to be
considerably less,* it did not offset the advantages associated with
Jones*s *slightly better technical proposal* and status as the incumbent
contractor that provided the SSB with more confidence as to the successful
performance of the contract. AR, Tab 17, SSB Report, Sept. 24, 2002, at
9; Tab 18, Post-Negotiation BCM, at 7. In addition to the detailed
analysis in the source selection documentation regarding the agency*s view
that the price advantage associated with B&R*s proposal was expected to be
closer to .58 percent, rather than 2.8 percent, the Post-Negotiation BCM
(approved by the source selection authority (SSA)) also stated, apparently
in the alternative, that Jones*s *slightly better technical proposal* and
greater experience due to its status as the incumbent contractor *is worth
more than the small price differential
of 3%.* AR, Tab 18, Post-Negotiation BCM, at 7.
Award was made to Jones, and, after requesting and receiving a debriefing,
B&R filed this protest, challenging the evaluation and source selection
decision on the basis that the agency inappropriately considered
incumbency in the source selection decision, unreasonably evaluated the
proposals under the support for small business criterion, and did not
consider the actual total offered prices in the source selection
decision.[5]
With regard to the source selection decision*s reference to Jones*s status
as the incumbent contractor, B&R argues that *since incumbency was not
among the stated evaluation criteria, this action by the SSA was clearly
improper.* Protest at 11.
Where a solicitation advises offerors that experience is to be evaluated,
an agency may properly consider an offeror*s specific experience in the
area that is the subject of the procurement. In this regard, experience
as an incumbent may offer genuine benefits to an agency and may reasonably
distinguish the incumbent*s proposal. IBP, Inc., B-289296, Feb. 7, 2002,
2002 CPD P: 39 at 5.
As mentioned previously, the solicitation specifically listed corporate
experience as an evaluation criterion under the technical evaluation
factor. In this regard, the RFP stated that *[t]he offeror shall
demonstrate experience in performing similar type work, size, volume and
complexity for the last five years with a value of $8,000,000 or more per
project annually.* The RFP added here that, among other things, it was
*the Offeror[*]s responsibility to clearly explain and demonstrate to the
Government how their work experience in each referenced contract is
relevant to the contract requirements in this solicitation.* RFP amend.
1, at L-9.
In considering the impact of incumbency, the SSB noted that Jones*s status
as *the incumbent contractor currently performing most of the services for
the same customers in the same remote location,* and the firm*s intent to
*roll their existing management team over from the current contract to the
new one . . . provides the government a high degree of confidence and low
risk in the successful performance . . . on a follow on contract.* AR,
Tab 17, SSB Report, Sept. 24, 2002, at 9-10. Although, as noted by the
protester, both Jones*s and B&R*s proposals received ratings of *good*
under the corporate experience criterion, the agency could consider
Jones*s incumbency as a discriminator in the source selection decision
because this criterion was part of the evaluation scheme.[6] IBP, Inc.,
supra, at 7.
The protester next argues that the agency acted unreasonably in evaluating
its proposal as *good (minus)* under the *Support for the Small Business,
Small Disadvantaged Business, and Woman-Owned Business Program* evaluation
criterion, given that Ferguson-Williams (B&R*s teaming partner) is a small
business, and according to the proposal, would perform approximately 40
percent of the work if B&R were awarded the contract, see AR, Tab 5, B&R
Technical Proposal, at 157, which the agency did not credit in the
evaluation.
This criterion was listed as one of the five equally weighted technical
criteria in section M of the RFP. This section, however, provided no
explanation as to what information the agency would consider in a positive
manner while evaluating proposals under this criterion. Instead, the
detail as to what the agency would look for under this criterion was
provided in the RFP under section L, *Instructions and Conditions, and
Notices to Bidders.*
As initially issued, section L of the RFP referred to the *Support for the
Small Business, Small Disadvantaged Business, and Woman-Owned Business
Program* evaluation criterion and explained that it was comprised of two
subfactors: (A) Small Business Past Performance and (B) Subcontracting
Plan Effort. As to subfactor (A), the solicitation explained that if the
offeror were a large business, it was required to submit with its proposal
two standard forms, both of which report information regarding the
offeror*s past small business subcontracting efforts.
With regard to subfactor B, the solicitation provided the Navy*s *goals in
terms of percentage of all subcontracted work in dollars,* and requested
that offerors submit subcontracting plans demonstrating, among other
things, *[t]he extent of participation of such firms in terms of the value
of the total acquisition and the percentage of subcontracted effort.* The
solicitation added that *[f]or Small Businesses, contractors are not
required to submit a subcontracting plan nor
[the standard forms], but must self certify as a Small Business.* The
solicitation concluded in this regard that *Small Business offerors . . .
will be rated Superior for this factor.* RFP at L‑11.
The agency issued a total of eight amendments to the solicitation, none of
which modified the evaluation factors or criteria set forth in section M
of the RFP. However, amendment No. 4 modified the two subfactors
identified in section L that comprise the *Support for the Small Business,
Small Disadvantaged Business, and Woman-Owned Business Program* evaluation
criterion to read: (a) Past Performance in Utilizing [Historically
Underutilized Business Zone Small Businesses, Small Businesses, Small
Disadvantaged Businesses (SDB), Women‑Owned Small Businesses,
Veteran-Owned Small Businesses, and Historically Black College and
University or Minority Institutions] in Previous Contracts; and (b)
Participation of Small Businesses in the Performance of this Project.
These subfactors were said to be of equal importance. The RFP specified
with regard to subfactor (b) that the *[e]valuation will include the
extent of participation of small businesses in terms of the total value of
the acquisition,* and required large business offerors to *[i]dentify the
extent of participation of small businesses in terms of the value of the
total acquisition.* The amendment also deleted the statement that small
businesses would receive a rating of *superior* under this evaluation
criterion, and informed small business offerors that they were to
*[i]dentify, in terms of dollar value and percentage of total proposed
price, the extent of the work you will perform as the prime contractor,*
and the extent that they planned to subcontract work to, among others,
large businesses, other small businesses, or SDBs. RFP amend. 4,
at L-11.
In response to the protest, the agency asserts that because B&R *is a
large business, the proposal must be considered as being submitted by a
large business.* The agency explains that it thus considered, during its
evaluation of B&R*s proposal, the *level of subcontracting (in terms of
dollars) the prime proposed with various types of small businesses.* The
agency concludes that because *[B&R*s] goal matched the RFP requirements,
but did not exceed them . . . they received a rating of Satisfactory for
the current project subcontracting plan subfactor.* Thus, the agency did
not credit B&R with Ferguson & Williams*s participation in its evaluation
of this criterion. AR at 6.
In our view, the agency*s evaluation was clearly inconsistent with the
terms of the solicitation. As indicated above, the RFP, while initially
referring only to the evaluation of proposals to determine the extent of
each offeror*s proposed subcontracting plan, was amended to provide that
the *[e]valuation will include the extent of participation of small
businesses in terms of the total value of the acquisition.* RFP, amend.
4, at L-11. B&R*s proposal plainly states that Ferguson-Williams, a small
business, would perform approximately 40 percent of the work if B&R were
awarded the contract.[7] AR, Tab 5, B&R Technical Proposal, at 157. In
light of this, we find that the agency*s evaluation of B&R*s proposal
under the *Support for the Small Business, Small Disadvantaged Business,
and Woman‑Owned Business Program* evaluation criterion was
unreasonable. See Summit Research Corp., B-287523; B-287523.3, July 12,
2001, 2001 CPD P: 176 at 7 (in evaluating proposals under small business
participation factor, agency was required by the terms of the solicitation
to consider whether the offeror itself was a small business in addition to
whether the offeror proposed to rely on small business subcontractors).
The impact of the agency*s actions here on the overall source selection
must now be considered. In this regard, our Office will not sustain a
protest unless the protester demonstrates a reasonable possibility of
prejudice, that is, unless the protester demonstrates that, but for the
agency*s actions, it would have had a reasonable possibility of receiving
the award. McDonald-Bradley, B-270126, Feb. 8, 1996, 96-1 CPD P: 54 at 3;
see Statistica, Inc. v. Christopher, 102 F.3d 1577, 1581 (Fed. Cir. 1996).
Here, as mentioned previously, the *Support for the Small Business, Small
Disadvantaged Business, and Woman‑Owned Business Program* criterion
was one of five equally weighted technical evaluation criteria used by the
agency to assess the merits of the competing proposals, and was the only
criterion under which the proposals of Jones and B&R received different
ratings--Jones was rated as *good* and B&R was rated as *good (minus).*
Although the agency also discussed Jones*s incumbency in the source
selection decision, the record does not indicate that this evaluated
advantage was the basis for the source selection (and certainly not the
sole basis), given the decision*s reliance on Jones*s higher rating under
the *Support for the Small Business, Small Disadvantaged Business, and
Woman‑Owned Business Program* criterion. Accordingly, because the
competition was relatively close with regard to both technical merit and
price (with the price difference in B&R*s favor), the record reflects a
reasonable possibility that B&R would have been selected, but for the
agency*s failure to evaluate its proposal in a manner consistent with the
solicitation*s *Support for the Small Business, Small Disadvantaged
Business, and Woman‑Owned Business Program* criterion. We therefore
conclude that the agency*s action prejudiced B&R and therefore sustain the
protest.
Accordingly, and in light of our recommendation that the agency perform a
new evaluation, we need not address the protester*s argument that the
agency failed to follow the solicitation*s stated price evaluation scheme
with regard to the SSA*s determination, discussed above, that the 2.8
percent price advantage associated with B&R*s proposal was actually
expected to be considerably less, that is, .58 percent, except to observe
that the RFP contemplated that the total evaluated price--including both
*firm fixed price* and *indefinite quantity* work--would be the basis for
the award evaluation. See RFP at M-2.[8]
The protest is sustained.
We recommend that the agency evaluate proposals under the *Support for the
Small Business, Small Disadvantaged Business, and Woman-Owned Business
Program* evaluation criterion in a manner consistent with the
solicitation, that is, in a manner that considers the extent of
participation of small businesses as a fraction of the total value of the
acquisition, rather than solely the percentage of effort subcontracted to
small businesses, and then make a new source selection decision. If a
proposal other than Jones*s is selected for award, the Navy should
terminate the contract previously awarded to that firm. We also recommend
that the protester be reimbursed the reasonable cost of filing and
pursuing its protest including reasonable attorneys* fees. 4 C.F.R.
S: 21.8(d)(1). The protester should submit its claim for costs, detailing
and certifying the time expended and costs incurred, with the contracting
agency within 60 days after receipt of this decision. 4 C.F.R.
S: 21.8(f)(1).
Anthony H. Gamboa
General Counsel
------------------------
[1] The proposal included a *teaming agreement* between B&R and
Ferguson-Williams, Inc., and explained that B&R and Ferguson-Williams
*intend to form a joint venture specifically to perform the Project.*
Agency Report (AR), Tab 13, Burns and Roe/Ferguson-Williams Proposal, at
154. Accordingly, it appears that the *team* of B&R and
Ferguson-Williams--not B&R itself--is the interested party with standing
to protest the agency*s actions. Although Jones argues that we should
dismiss the protest, it is apparent that B&R is acting as an authorized
agent of the team and is thus eligible to file this protest. H.J. Group
Ventures, Inc., B-246139, Feb. 19, 1992, 92‑1 CPD P: 203 at 1 n.1.
Except where otherwise clear from the context, the references to B&R in
this decision are references to the B&R/Ferguson-Williams team.
[2] For example, CLIN 0113AA was described as family housing *Change of
Occupancy Maintenance,* with an estimated quantity of 12 and a unit
measure of *month.*
[3] For example, CLIN 0213A was described as family housing *floor tile
replacement,* with an estimated quantity of 3,000, and a unit measure of
square feet.
[4] Proposals were evaluated under the technical factor and evaluation
criteria as either excellent, good, satisfactory, marginal, or poor. The
source selection plan (SSP) also provided that proposals could be
evaluated under the past performance criterion as *no rating.* AR, Tab 3,
SSP, at 11.
[5] B&R also argued in its protest that the agency *arbitrarily
wrapped-up* B&R*s *Past Performance subscores* in arriving at an overall
rating of *good* under the past performance criterion, and *failed to
award [B&R] strengths for its significant air operations experience.*
Protest at 2, 14. Although the agency addressed these arguments in its
report, the protester did not respond to the agency*s position in either
its comments or its supplemental comments. Accordingly, we consider B&R
to have abandoned these aspects of its protest. Uniband, Inc., B-289305,
Feb. 8, 2002, 2002 CPD P: 51 at 5-6 n.3.
[6] The protester also complains that because approximately 17 percent of
the work reflected in the RFP represents *new contract work,* the agency
erred in considering Jones the incumbent contractor. However, the source
selection decision reflects the clear awareness that this RFP included
*new work* in crediting Jones*s incumbent experience.
[7] This of course is in addition to the subcontracts proposed by B&R in
its proposal that resulted in the agency determining that B&R*s proposal
met, but did not exceed, the subcontracting goals set forth in the RFP.
[8] We find it troubling, however, that the agency has repeatedly
indicated its belief during the course of this protest that it will, in
fact, require only about 37 percent of the *indefinite quantity* estimates
set forth in the solicitation, which appears to establish that the agency
has little or no confidence in those estimates. Estimated quantities in
a solicitation for an indefinite-quantity contract should be realistic,
based upon the best information available, and represent the agency*s
anticipated needs. Federal Acquisition Regulation S: 16.504(a)(1); Carr*s
Wild Horse Center, B‑285833, Oct. 3, 2000, 2000 CPD P: 210 at 3 n.3;
Howard Johnson, B-260080, B‑260080.2, May 24, 1995, 95-1 CPD P: 259
at 3. We believe that the agency would be well advised to review the
solicitation*s quantity estimates, so that, if it concludes that they do
not reflect the agency*s current judgment about its anticipated needs, the
solicitation can be amended to correct the estimates and request revised
proposals before the agency proceeds to implement our recommendation.