TITLE:  Venturi Technology Partners, B-292060, June 10, 2003
BNUMBER:  B-292060
DATE:  June 10, 2003
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Venturi Technology Partners, B-292060, June 10, 2003

   Decision
    
    
Matter of:   Venturi Technology Partners
    
File:            B-292060
    
Date:              June 10, 2003
    
C. W. Laugerbaum for the protester.
Phillipa L. Anderson, Esq., Department of Veterans Affairs, for the
agency.
Paula A. Williams, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
1.  Protest is denied where in a competitive procurement under the Federal
Supply Schedule (FSS) the record shows that the evaluation was reasonable
and consistent with the stated evaluation factors.
    
2.  Agency's conduct of discussions with two other FSS vendors without
affording protester an opportunity to address technical deficiencies in
its proposal is unobjectionable where agency reasonably concluded that
protester's proposal should be excluded from further consideration because
of reasonable concerns about its technical compliance and its higher
price.
DECISION
    
Venturi Technology Partners protests the issuance of a task order to
Genuity, Inc. under Genuity's General Services Administration (GSA) FSS
contract No. GS-35F-0177J, pursuant to a request for proposals (RFP)
issued by the Department of Veterans Affairs (VA) to acquire Internet
service provider (ISP) services.  Venturi challenges the evaluation of its
proposal and complains that the agency improperly failed to conduct
discussions with the firm.  The protester also alleges that the agency
improperly selected Genuity for award after Genuity had filed for
bankruptcy.
    

   We deny the protest.
    
The VA's Office of Cyber Security has a requirement for an ISP to provide
the agency with a reliable, secure source for intranet connectivity with
expansion capability to all VA employees and their designated business
partners, support contractors, veterans, and other authorized users.  The
objective of this acquisition was to obtain the best available commercial
pricing based on the agency's consolidation of all services under a single
ISP task order.
    
The RFP was issued electronically on October 18, 2002, to five vendors
holding current FSS contracts under GSA's commercial information
technology schedule.  Vendors were notified that this was a Federal
Acquisition Regulation (FAR) Part 8 competition that would *follow the
concepts* of FAR Part 12, commercial item acquisition procedures.  RFP
Cover Letter at 1.  The successful contractor is required to provide all
personnel, supervision, and other resources to operate and maintain
dial-up ISP services 24 hours a day, 365 days a year with system
availability of at least 99.9 percent.  This includes ISP service that is
compatible with the Microsoft Windows and MacIntosh operating systems. 
RFP Statement of Work (SOW) at 1-2.  The ISP estimated usage was set forth
in the solicitation as 2,000 users at the start of service, 20,000 by the
end of Year 1, 50,000 by the end of Year 2, and 100,000 by the end of Year
3.  Id. at 1.
    
The RFP contemplated the award of a single fixed-price task order for a
base year, with two 1-year options and provided for award on a *best
value* basis, price and other factors considered.  The solicitation listed
technical, management, and past performance as equally weighted non-price
factors.  RFP at 1.  The RFP specifically advised offerors that *if your
offer does not present sufficient information to permit complete technical
evaluation by the Government, it may be rejected.*  Id.  With respect to
price, the RFP requested price proposals that included, among other
things, pricing for each offeror's proposed ISP based on the total hours
used by all VA users on a monthly basis and discount pricing based on
usage.  RFP SOW at 5-6.  The RFP cautioned that the government intended to
make award without discussions, although it reserved the right to conduct
discussions if necessary, and advised that offerors should propose the
best commercial pricing based on their GSA schedule.  RFP Cover Letter at
1.
    
Four offerors (Genuity, the protester and two other firms) submitted
timely technical and price proposals on November 1.  The technical
proposals were evaluated by assigning color/adjectival ratings of
purple/exceptional, blue/good, green/satisfactory, yellow/marginal, or
red/unacceptable and risk ratings of low, medium, or high under the
non-price factors.[2]  Agency Report (AR) exh. 8, Rating Scale.  Based on
that evaluation, the evaluation team prepared a narrative assessment and
overall color/adjectival consensus rating for each offeror.  The consensus
rating assigned to each initial proposal, is set forth below:
    
Offeror A                    Blue/good                              Low
risk
Genuity                      Blue/good                              Medium
risk
Offeror B                    Green/satisfactory                Medium risk
Venturi                       Green/satisfactory                Medium
risk
AR exh. 5, Contracting Officer's Memorandum for File, at 2.
    
In the evaluation of Venturi's proposal, the evaluators identified
numerous weaknesses in its technical approach which will be discussed in
detail below.  Under past performance, the evaluators noted that on its
most relevant contract the protester provided a three-page description but
no reference or point of contact to verify its past performance and that
the other two identified contracts were smaller in scope.  AR exh. 7,
Venturi's Consensus Evaluation Report, at 1-2.  The agency separately
evaluated the offerors' price proposals, using different cost models in
order to determine which commercial price schedule would provide the most
advantageous pricing based on the ISP usage estimates set forth in the SOW
for the base and option years.  It is undisputed that under any of the
VA's cost models or a comparison of unit pricing for these services,
Venturi's price was evaluated as significantly higher than that of the
other three offerors.  Id. 
    
The contracting officer reviewed the technical and price evaluations and
concluded that both lower rated proposals would not be considered for
award because *both had some technical deficiencies which do not make them
of best value to the Government.*  AR exh. 5, Contracting Officer's
Memorandum for File, at 2.  With regard to Venturi, the contracting
officer found that *Venturi had some technical deficiencies which hinted
at a network buil[t] on older technology and not kept current* and
determined that *Venturi and [Offeror B] were considered not to have
strong enough proposals to be further considered for award.*  Id. at 3. 
The contracting officer then made the decision to seek
*clarification/discussions* with the two higher rated, lower-priced
offerors (Offeror A and Genuity), and each was given the opportunity to
provide further pricing discounts.  Thereafter, on
December 6, the agency determined that Genuity's lower-priced revised
proposal represented the best value to the government and issued the task
order to Genuity on December 9.  AR exh. 5, Contracting Officer's
Memorandum for File, at 3-7.  After receiving notice of the award and a
debriefing, Venturi filed a protest with the agency.  Following denial of
its agency-level protest, Venturi filed this protest with our Office. 
Performance of Genuity's order has been ongoing based on a finding by the
head of the contracting activity that continued performance was in the
best interests of the government.  AR exh. 15, Authorization to Continue
Performance.
    
Venturi raises a number of challenges to the conduct of this procurement. 
Specifically, the protester challenges the evaluation of its technical
proposal, arguing that its proposal met all solicitation requirements. 
The protester also argues that the agency improperly failed to hold
discussions with the firm despite identifying various pricing concerns
which the protester asserts it could have addressed through discussions. 
Protester's Comments at 1-2. 
    
As a preliminary matter, the RFP stated that the VA intended to issue a
task order against the vendor's GSA FSS contract and, as the RFP stated,
the procedures of FAR Subpart 8.4 applied here.  Those provisions
anticipate that agencies will review vendors' federal supply schedules and
place an order directly with the schedule contractor that can provide the
supplies or services that represent the best value and meet the
government's needs.  FAR S: 8.404(b)(2); Digital Sys. Group, Inc.,
B-286931,
B-286931.2, Mar. 7, 2001, 2001 CPD P: 50 at 6.  Where the agency intends
to use the vendors' responses as the basis of a detailed technical
evaluation, it may elect, as the VA did here, to use an approach that is
like a competition in a negotiated procurement.  We will review the
agency's actions to ensure that the evaluation was reasonable and
consistent with the terms of the solicitation.  Amdahl Corp.,
B-281255, Dec. 28, 1998, 98-2 CPD P: 161 at 3.  The fact that the
protester disagrees with the agency does not render the evaluation
unreasonable.  Id.; ESCO, Inc.,
B-225565, Apr. 29, 1987, 87-1 CPD P: 450 at 7. 
    
The contracting officer determined that Venturi's technical proposal had
technical deficiencies because the firm's proposed ISP service did not
satisfy all the solicitation requirements.  The consensus evaluation
report on Venturi's initial proposal shows that the agency evaluators had
a number of detailed reasons to support this finding.  For instance,
Venturi's proposed ISP did not establish that its system was compatible
with MAC OSX, as required by SOW P: 3(a)(5)(ii); rather, the protester
simply stated without explanation or support that MAC OSX *[would] be
available in late November.*  AR exh 9, Venturi's Technical Proposal, at
13.  The agency evaluators noted that Venturi currently did not offer MAC
OSX compatibility and had not provided any guarantee of availability.  AR
exh.1, Contracting Officer's Statement of Facts, at 6.  The protester's
response under SOW P: 3(a)(2), which requires the successful contractor to
provide dial-up modems that are capable of providing V.90 connections, did
not state how the firm would satisfy the requirement, but stated that
*[w]herever available, V.90 and V.92 modems are supplied.*  The
protester's response did not indicate that the firm's proposed ISP
solution could support V.90 connections for all users, as required by the
SOW.  Id.  In this regard, the evaluators noted, *the issue with V.90 not
available [for all users], besides not meeting the requirement, may
signify a network built on older technology and has not been kept
current.*  AR exh. 7, Venturi's Consensus Evaluation Report, at 2.  The
evaluators also found that the protester's proposal did not clearly meet
the solicitation requirement set forth in SOW P: 3(b)(1) that the ISP
system availability should be at least 99.9 percent, because the protester
conditioned the availability based on a minimum $10,000 in actual usage
per month.  The evaluators also were concerned that Venturi's technical
approach otherwise was unclear as to the system availability guarantee. 
Id. at 1.  Venturi has not rebutted the evaluated technical deficiencies
in its proposal in either its protest or comments on the agency report. 
On this record, we have no basis to question the evaluation of Venturi's
proposal under the non-price factors.  Nor has Venturi established as
erroneous the agency's determination that Venturi's pricing was
significantly higher than all other firms' proposed pricing.[3]  Thus, we
have no basis to conclude that the agency's evaluation was unreasonable.
    
Venturi also challenges the agency's decision not to conduct discussions
with it concerning its proposal.  The protester maintains that it was
treated in a disparate manner because, while the agency had questions of
all offerors, the agency did not afford the protester an opportunity to
address these concerns, but held discussions only with the two higher
rated offerors.  Protester's Comments at 1-2.  It is not entirely clear
from the record whether the contracting officer determined that Venturi's
proposal was unacceptable, although we believe that the deficiencies
identified would support a determination to that effect.  If Venturi's
proposal was technically unacceptable, our Office has recognized that
where a quote or proposal is eliminated from the competition as
unacceptable, the vendor is not entitled to discussions.  Warden Assocs.,
Inc., B-291238, Dec. 9, 2002, 2002 CPD P: 215 at 3.  Alternatively, since
the contracting officer had reasonable concerns about the technical
compliance of Venturi's proposal and that Venturi's proposal was
significantly higher-priced than the other firms' proposals, we find that
the contracting officer reasonably concluded that Venturi's proposal was
inferior from a technical and price standpoint to the proposals of Offeror
A and the awardee.  Therefore, if the contracting officer believed that
Venturi's proposal was so inferior to the other two proposals that Venturi
did not have a reasonable chance for award, we think the contracting
officer's decision to exclude Venturi from discussions was justified.  In
these circumstances, we view the contracting officer's decision to exclude
Venturi from further consideration in this FSS procurement to be
comparable to an exclusion of a proposal from the competitive range under
FAR Part 15, which governs contracting by negotiation.  Under the
circumstances here, we conclude that the VA had a reasonable basis for
eliminating the protester's proposal from further consideration without
conducting discussions with the firm.
    
The protest is denied.[4]
    
Anthony H. Gamboa
General Counsel
    

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

   [1]Because a protective order was not issued in connection with this case,
the language in our decision, which is based in part upon source selection
sensitive and confidential information, is necessarily general.
[2]The color/adjectival ratings used here were not disclosed in the
solicitation.
[3]We note that after Venturi was debriefed on the winning proposal,
Venturi stated in its agency-level protest that it could have submitted a
lower price and included a price revision that purports to show that the
government could have saved approximately $1.8 million had the agency
conducted discussions with the firm.  The fact that Venturi could have
offered a lower price does not establish any impropriety in the agency's
evaluation.  This price reduction was not part of Venturi's original
proposal and, as stated above, the RFP specifically advised vendors to
propose their best pricing initially.  As discussed previously, the record
supports the evaluation conclusion that Venturi's price proposal was the
highest of the four proposals.
[4]Venturi argues that issuance of the order to Genuity was improper
because the agency knew, prior to award, that the firm had commenced
bankruptcy proceedings.  This argument is without merit.  The mere fact
that an offeror files a petition in bankruptcy under Chapter 11 of the
Bankruptcy Act does not necessarily require a finding of
nonresponsibility.  FAR S: 9.104-1; Sprint Communications Co. LP; Global
Crossing Telecomms., Inc.--Protests and Recon., B-288413.11, B-288413.2,
Oct. 8, 2002, 2002 CPD P: 171 at 4.  Venturi also alleges other
improprieties regarding the manner in which the VA conducted the
procurement.  We have reviewed these allegations and conclude that they do
not provide any basis to disturb the award.