TITLE: CMC & Maintenance, Inc., B-292081, May 19, 2003
BNUMBER: B-292081
DATE: May 19, 2003
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CMC & Maintenance, Inc., B-292081, May 19, 2003
Decision
Matter of: CMC & Maintenance, Inc.
File: B-292081
Date: May 19, 2003
Michael McCue for the protester.
C. Gordon Jones, Esq., Department of the Air Force, for the agency.
Sharon L. Larkin, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. In evaluating past performance, agency's assignment of neutral rating
for past performance to the protester was reasonable where the protester's
referenced past performance was either of far less magnitude than, or
different from, the work being solicited.
2. Agency is not required to refer a neutral past performance evaluation
to the Small Business Administration for a possible certificate of
competency.
DECISION
CMC & Maintenance, Inc. protests the award of a contract to Navales
Enterprises, Inc. under request for proposals No. F64605-02-R-0026, issued
by the Department of the Air Force for custodial services at Hickam Air
Force Base in Hawaii. CMC challenges the agency's past performance
evaluation and selection of a higher priced proposal, and argues that it
was found nonresponsible without referral to the Small Business
Administration (SBA) for a possible certificate of competency (COC).
We deny the protest.
The RFP, issued June 7, 2002 as a competitive Historically Underutilized
Business Zone (HUBZone) set-aside, contemplated award of a fixed-price
contract for 1 base year with four 1-year options. The solicitation
provided for a *best value source selection,* based on a comparison of
past performance and price/cost, which were said to be approximately equal
in weight. RFP at 143. The possible past performance ratings were
exceptional/high confidence, very good/significant confidence,
satisfactory/confidence, neutral/unknown confidence, marginal/little
confidence, and unsatisfactory/no confidence. RFP at 145.
The RFP provided that past performance would be evaluated for *currency
and relevancy (i.e., scope and magnitude),* and for each contract
identified, offerors were to explain *how that effort is relevant and
similar in scope and magnitude to the effort required by this
solicitation.* RFP at 142-144. Although not defined in the RFP, in
evaluating past performance, *scope* was considered to be *performing the
quality, quantity and level of custodial duties essentially similar to
that of the Statement of Work,* and *magnitude* was considered to be *50%
of the annual government estimate, or a minimum of $600,000* per year,
*[i]n order to not restrict competition among the [HUBZone] Offerors and
maintain the requirements of the RFP.* Agency Report, Tab 7A, Proposal
Evaluation Report, Past Performance Evaluation, at 1.
By the closing date of August 13, 24 offerors submitted proposals, which
included past performance references. CMC submitted three past
performance references, all of which the agency found to be current (i.e.,
performed within the past 3 years), but none of which were found to be
relevant because they were not of the same *scope and magnitude* as
required by the RFP. The agency found that two of CMC's contracts for
janitorial and general cleaning provided *essentially similar* services,
but that the dollar value of the contracts (approximately $200,000 and
$100,000 per year) was far less in magnitude than $600,000 per year. A
third contract was found sufficient in magnitude, but not in scope, since
the services provided were for operations and maintenance, not custodial
services. Since the agency found that none of CMC's contracts were
sufficiently similar in both scope and magnitude, it determined that the
contracts were not relevant and gave CMC a *neutral/unknown confidence*
rating for past performance.[1] Agency Report, Tab 7A, Proposal
Evaluation Report, Past Performance Evaluation, at 16-17.
Navales submitted five references, all which were found to be current and
relevant, that is, meeting the scope and magnitude requirements. The
agency rated Navales's past performance as *very good/significant
confidence,* noting strengths such as Navales's *strong top management,
excellent administrative support and experienced project managers.* The
agency determined that Navales's past performance left *little doubt of
the capability and reliability of performance of the [Statement of Work],*
while, in contrast, there was *concern whether [CMC] is able to meet the
scope and magnitude of the RFP having provided no relevant performance
ratings for review.*[2] Agency Report, Tab 9, Source Selection Decision,
at 6.
The agency recognized that CMC proposed the lowest price of all offerors
at almost 43 percent below the government estimate of approximately $6.8
million.[3] Navales's price, while still below the government estimate,
was approximately 7 percent, or $290,000, higher than CMC's. However,
given its higher-rated past performance, including its specific strengths,
Navales's proposal was found to present the *best value* to the government
and was selected for award. Agency Report, Tab 9, Source Selection
Decision, at 5-6. This protest followed.
CMC contends that the agency's neutral rating for its past performance was
improper because the agency could not have properly determined that only
contracts that had a *magnitude* exceeding $600,000 per year and a *scope*
including custodial services were relevant, since the RFP failed to
provide these definitions of scope and magnitude.
As indicated above, the RFP clearly informed offerors that both *scope and
magnitude* would be considered in determining relevance, and this
reasonably includes consideration of contracts of similar dollar size and
services. In our view, the agency was not unreasonable in determining
that contracts less than 50 percent of the annual government estimate were
too small to be relevant, or that contracts unrelated to custodial
services were similarly not relevant. Given that CMC did not submit a
single past performance reference of similar scope and magnitude to that
of the RFP, the agency's rating of neutral was reasonable. Ostrom
Painting & Sandblasting, Inc., B-285244, July 18, 2000, 2000 CPD P: 132 at
4-5.[4] CMC's disagreement with the agency's judgment on this point is
insufficient to show it was unreasonable. Westinghouse Gov't and Envtl.
Servs. Co., Inc., B-280928 et al., Dec. 4, 1998, 99-1 CPD P: 3 at 17.
CMC next contends that the agency should have held communications or
discussions to provide CMC with an opportunity to better explain the
relevance of its past performance references, or to provide additional
references. Here, however, the nature of the contracts referenced by CMC
was clear, so we cannot see any basis to require communications with CMC
on this point. Ostrom Painting & Sandblasting, Inc., supra, at 5 n.3.
While CMC contends that it would have explained that it holds contracts
with *many, many Federal Facilities* under which *it provides similar
services . . . that are as diverse and even more complicated than what is
required at Hickam [Air Force Base],* Protester's Comments at 1, CMC has
failed to provide any details or otherwise explain how these contracts are
of similar scope or magnitude to the effort here, or why it failed to
identify these allegedly *similar services* in its proposal, when the RFP
clearly required offerors to submit past performance information on *same
or similar type contracts.*
CMC also contends that the agency was required to refer this matter to the
SBA for a COC, arguing that the agency's failure to award CMC the contract
based upon a neutral past performance rating amounts to a finding of
nonresponsibility. However, the agency did not find CMC to be
nonresponsible. Furthermore, a neutral past performance rating is not a
determination of responsibility or nonresponsibility, but is the rating
assigned where there is no record of relevant past performance and cannot
be evaluated favorably or unfavorably on past performance by the agency.
See Federal Acquisition Regulation (FAR) S:15.305(a)(2)(iv); see also FAR
S:S: 9.104‑1(c) (responsibility determination shall not be based on
lack of relevant past performance); 15.305(a)(2)(i) (comparative
assessment of past performance is separate from responsibility
determination).
CMC finally challenges the agency's selection of a higher-priced proposal
for award. However, in a best-value procurement, price is not necessarily
controlling; rather, the best-value determination is made based upon the
evaluation factors in the RFP. In this regard, price/past performance
tradeoffs are permitted when they are reasonable and consistent with the
solicitation. Nomura Enter., Inc., B-277768, Nov. 19, 1997, 97-2 CPD P:
148 at 4. Nothing in the RFP here required selection of the lowest-priced
proposal. To the contrary, offerors were cautioned that, given the
evaluation scheme set forth in the RFP, *the lowest priced proposal may
not necessarily receive the award.* RFP at 143. The record demonstrates
here that the agency reasonably performed a best-value analysis,
consistent with the requirements of the solicitation, and balanced
Navales's higher past performance rating and higher price, against CMC's
neutral rating and lower price. After determining that Navales's proposal
strengths outweighed the slight cost premium, the agency reasonably
concluded that Navales was the best-value offeror.
The protest is denied.
Anthony H. Gamboa
General Counsel
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[1] The definition of neutral/unknown confidence is *[n]o performance
record identifiable.* RFP at 145.
[2] Of the 24 proposals, 16 offerors submitted relevant past performance
and received satisfactory or better ratings. Agency Report, Tab 9, Source
Selection Decision, at 5.
[3] However, CMC's pricing was also found to contain mathematical errors
and miscalculations. Agency Report, Tab 7B, Pricing Report, at 7.
[4] CMC also contends that it was unreasonable for the agency to rate its
past performance neutral, when the references provided *positive*
ratings. However, given that these ratings were not for relevant
contracts, they were properly not considered. Ostrom Painting &
Sandblasting, Inc., supra, at 4.