TITLE: Kathpal Technologies, Inc., B-291637.2, April 10, 2003
BNUMBER: B-291637.2
DATE: April 10, 2003
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Kathpal Technologies, Inc., B-291637.2, April 10, 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: Kathpal Technologies, Inc.
File: B-291637.2
Date: April 10, 2003
Robert M. Nutt, Esq., for the protester.
Douglas Kornreich, Esq., Centers for Medicare & Medicaid Services, for the
agency.
Paul E. Jordan, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Agency properly considered adverse past performance information in
evaluating protester's proposal, even though the information had not been
formally recorded during performance, where agency specifically identified
adverse comments and provided protester an opportunity to respond during
discussions.
2. Evaluation of protester's past performance at level below highest
possible ratings under the applicable criteria was unobjectionable where
record establishes that agency followed stated evaluation criteria and
rating had a reasonable basis.
DECISION
Kathpal Technologies, Inc. (KTI) protests the failure to award it a
contract under request for proposals (RFP) No. CMS-02-0003 issued by the
Centers for Medicare & Medicaid Services (CMS), Department of Health and
Human Services, for consulting services. KTI challenges the agency's
evaluation of its technical proposal under the past performance factor.
[1]
We deny the protest.
The RFP sought proposals to provide a broad range of consulting services
to support CMS and its 10 regional offices in the areas of analyzing
management or operating processes, analyzing Medicare/Medicaid issues,
researching alternatives, providing objective findings, and making
concrete recommendations. The RFP contemplated multiple awards of
indefinite-delivery/indefinite-quantity contracts for a base year, with
four 1-year options. Task orders under the contracts would be awarded
under a variety of pricing schemes, including fixed-price,
cost-plus-fixed-fee, and time and materials.
Proposals were to be evaluated under three factors, listed in descending
order of importance: technical proposal, small disadvantaged business
(SDB) utilization plan, and business (cost) proposal. The technical
proposal, evaluated under two equally weighted factors--past performance
and management plan--was to be rated as outstanding, better, acceptable,
or marginal.[2] Proposed costs were to be evaluated for reasonableness
and realism. Non-cost factors were considered significantly more
important than cost and awards were to be made to the offerors whose
proposals were evaluated as providing the best value to the government.
Twenty-nine proposals, including KTI's, were received and were evaluated
by a technical evaluation panel. The final evaluation results for the
eight awardees and KTI, in order of technical merit, were as follows:
+------------------------------------------------------------------------+
| |Technical |SDB Plan |Business |Eval'd Cost |
|------------------+------------+---------------+---------+--------------|
|Booz Allen |Outstanding |Signif. Credit |Yellow |$753.34 |
|------------------+------------+---------------+---------+--------------|
|AdminiStar |Outstanding |Credit |Yellow |$548.36 |
|------------------+------------+---------------+---------+--------------|
|Peterson |Better |Credit |Yellow |$1,053.46 |
|------------------+------------+---------------+---------+--------------|
|RTI |Better |Signif. Credit |Green |$746.99 |
|------------------+------------+---------------+---------+--------------|
|CNA |Better |Signif. Credit |Green |$794.69 |
|------------------+------------+---------------+---------+--------------|
|AdvanceMed |Better |Credit |Green |$601.86 |
|------------------+------------+---------------+---------+--------------|
|Iowa Foundation |Better |Credit |Yellow |$655.96/722.02|
|------------------+------------+---------------+---------+--------------|
|IPRO |Better |Credit |Yellow |$809.32 |
|------------------+------------+---------------+---------+--------------|
|Other Offerors[3] | | | | |
|------------------+------------+---------------+---------+--------------|
|KTI |Acceptable |Signif. Credit |Green |$568.07 |
+------------------------------------------------------------------------+
The contracting officer determined that awarding contracts to the top
eight offerors would best meet CMS's needs, given the amount of work
anticipated and the relative quality of the proposals. After receiving
notice of the award and a debriefing, KTI filed a protest with our Office
in November 2002. KTI asserted that the agency had improperly failed to
provide it an opportunity to respond to allegedly negative comments made
by its past performance references. The agency took corrective action in
the form of identifying which task orders were associated with the
challenged comments and provided KTI the opportunity to submit additional
information. KTI then withdrew the protest. The agency re-evaluated
KTI's past performance and the contracting officer determined that no
change in its rating of acceptable under this factor was warranted. After
KTI received notice of the agency's decision, it filed this protest.[4]
PAST PERFORMANCE INFORMATION
KTI maintains that the agency's past performance evaluation was flawed
because it was based on references' negative comments made long after some
of the task orders to which they related had been performed. KTI asserts
that, because it did not have the opportunity to respond to the negative
evaluations at the time of performance, and because the agency did not
provide it with sufficient information during discussions to respond to
the negative comments, the agency was prohibited from relying on them in
its evaluation.
The Federal Acquisition Regulation (FAR) requires that an agency indicate
to, or discuss with, offerors still being considered for award, adverse
past performance information to which the offeror has not yet had an
opportunity to respond. FAR S: 15.306(d)(3). While agencies generally
are required to conduct meaningful discussions by leading offerors into
the areas of their submissions requiring amplification, Arctic Slope World
Servs., Inc., B‑284481, B‑284481.2, Apr. 27, 2000, 2000 CPD P:
75 at 9, the degree of specificity required in conducting discussions is
not constant and is primarily a matter for the procuring agency to
determine. Quality Elevator Co., Inc., B-271899, Aug. 28, 1996, 96-2 CPD
P: 89 at 2.
Here, the agency provided KTI with past performance information sufficient
to lead KTI into the areas requiring amplification. For example, as to
task order No. 2003, CMS advised KTI that its performance was rated
unsatisfactory to fair, and that the past performance respondent stated
that KTI did not learn the subject matter; all its work had to be done
over by a follow-on contractor; its work product was of low quality,
though not over budget; it met its due dates, but with inferior work
products; and the respondent was disappointed and would not hire KTI
again. Agency Report (AR), Tab 11 at 723. Regarding task order Nos.
2008, 2009, and 2010, the agency advised KTI that the respondent indicated
that KTI had walked away from the order at one point; had overloaded every
task with management fees and hours; and that the respondent had worked
with 5 to 6 different people, none of whom worked out.[5] Id.
We find that these comments conveyed to KTI the bases for the agency's
concerns with its past performance, and provided KTI with a reasonable
opportunity to respond to those concerns. In its response during
discussions, KTI did not specifically address the comments but, rather,
expressed general disagreement with them; it asserted its belief that CMS
was satisfied with its performance, noted that no contemporaneous negative
statements were documented, and, with regard to the specific comments on
task order No. 2003, asserted only that they could not be true, without
any additional substantive response.[6] KTI asserts that it was hampered
in its responses by the agency's failure to document any performance
problems. However, notwithstanding the agency's failure to document
problems contemporaneously, the fact remains that, during discussions, the
agency provided KTI with very specific reasons for its concerns with KTI's
past performance. We see no reason why the level of specificity the
agency provided was not adequate to permit KTI to respond to the agency's
concerns. KTI claims that its ability to respond also was hampered by
CMS's failure to identify the references; however, the FAR actually
prohibits agencies from providing such information. FAR
S: 15.306(e)(4).[7]
PAST PERFORMANCE EVALUATION
KTI asserts that, even if the negative comments about its past performance
were properly taken into account in the evaluation, they should have been
outweighed by its more favorable performance ratings under the other task
orders. Specifically, it observes that, of the 11 task orders evaluated,
it received excellent to outstanding ratings on 7 orders valued at
approximately $10 million, while it received poor, unsatisfactory, or fair
to good ratings on only 4 task orders (2003, 2008, 2009, 2010) valued at
only approximately $2.9 million.
In reviewing an agency's evaluation of past performance, we will not
reevaluate a firm's performance but, instead, will examine the evaluation
to ensure that it was reasonable and consistent with the solicitation and
applicable statutes and regulations. Kay & Assocs., Inc., B-291269, Dec.
11, 2002, 2003 CPD P: 12 at 4.
The RFP stated that the agency would evaluate *the quality of the
offeror's past performance and the depth and breadth of [the] offeror's
experience in similar, directly related work of similar scope and
complexity of work described in the Statement of Work; including any
relevant experience with the Medicare and/or Medicaid programs.* RFP
S: M.3. KTI's acceptable rating was based on information obtained from
relevant contracting personnel on 11 of KTI's prior task orders, 7 of
which KTI identified in its proposal, and all of which KTI performed under
a predecessor CMS contract with a scope very similar to that under the
RFP. [8] KTI's performance was rated outstanding to excellent for four
task orders, excellent to good for two, good to fair for one, fair to
unsatisfactory for one, and poor for three. AR, Tab 7, at 669-71,
674‑81. In reviewing the references and KTI's rebuttals, the
contracting officer concluded that KTI had provided the right team and
successfully performed certain task orders, but had been unable to provide
the necessary expertise on others. Contracting Officer's Declaration (CO
Decl), P: 34-35. Based on the lack of expertise evidenced in the
performance of some task orders, coupled with staff turnover on another,
and problems in performance on three related task orders, the contracting
officer concluded that, while KTI could *probably . . . do work of
adequate quality[,] . . . the potential risks of delay, degradation of
performance and lack of customer satisfaction still remain.* CO Decl.,
P: 36-40.
We find nothing unreasonable in the agency's assessment. While KTI had
better performance ratings in the majority of its task orders, and their
combined value outweighed that of the remaining task orders, its poor and
unsatisfactory ratings were not insignificant, and for the 11 task orders
only four respondents gave an unqualified *yes* in response to the
question whether they would contract with KTI again. Three additional
respondents indicated that they would contract with KTI again, but stated
that this was dependent upon KTI's hiring of a good subcontractor or on
the type of work required. AR, Tab 7, at 668. The respondents for the
other four orders answered *no.* In our view, KTI's mixed past
performance on these directly relevant task orders reasonably supports the
agency's conclusion that its past performance was not better than
acceptable. KTI's position to the contrary constitutes mere disagreement
with the agency's judgments, which does not establish that the evaluation
was unreasonable. UNICCO Gov't Servs., Inc., B‑277658, Nov. 7,
1997, 97-2 CPD P: 134 at 7.
The protest is denied.
Anthony H. Gamboa
General Counsel
------------------------
[1] For award purposes, the requirements were divided into two *bundles.*
KTI only submitted a proposal for one bundle and does not directly
challenge the awards to the successful contractors.
[2] The SDB plan was to be rated as significant credit, credit, or no
credit. The business proposal, which included cost information, was to be
rated as green (low risk), yellow (some risk), or red (substantial risk).
[3] Seven proposals were ranked lower than IPRO's and higher than KTI's.
These proposals are not relevant to the issues before us.
[4] KTI raises a number or arguments in support of its protest. We have
reviewed them all and find that none have merit. This decision addresses
only the more significant assertions.
[5] The respondent also criticized KTI for failing to provide contracting
officials with access to its subcontractors, and KTI did provide a
specific response to this criticism. However, the contracting officer
determined that this was not an appropriate criticism and disregarded it
in his re-evaluation. AR, Tab 14, at 746.
[6] We note that, while KTI states that it believed the agency was
satisfied with its past performance on these task orders, it did not
include them in the past performance information provided with its
proposal. This suggests that KTI actually may have been aware of CMS's
less than favorable view of its performance.
[7] KTI asserts that the agency failed to comply with FAR S: 42.1503,
which calls for agencies to evaluate past performance at the time work is
completed and to provide contractors with that information and an
opportunity to submit responses. While it appears that KTI is correct,
nothing in that provision, or elsewhere in the FAR, prohibits an agency
from evaluating a proposal based on past performance information that was
not recorded contemporaneously. Likewise, nothing in the RFP prohibited
CMS from considering such information.
[8] To the extent KTI believes it was improper for CMS to consider the
four task orders not referenced in its proposal, it is incorrect.
Agencies properly may consider evidence of past performance from sources
not listed in the offeror's proposal, Lynwood Mach. & Eng'g, Inc.,
B-285696, Sept. 18, 2000, 2001 CPD P: 113 at 6, and may properly consider
their own experience with an offeror's past performance. Quality Elevator
Co., Inc., supra, at 3. Further, the RFP here specifically reserved the
agency's right *to obtain information for use in the evaluation of past
performance from any and all sources . . . .* RFP S: M.3.