TITLE: Ashe Facility Services, Inc., B-292218.3; B-292218.4, March 31, 2004
BNUMBER: B-292218.3; B-292218.4
DATE: March 31, 2004
**********************************************************************
Ashe Facility Services, Inc., B-292218.3; B-292218.4, March 31, 2004
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: Ashe Facility Services, Inc.
File: B-292218.3; B-292218.4
Date: March 31, 2004
Michael A. Gordon, Esq., Holmes, Schwartz & Gordon, for the protester.
Ira E. Hoffman, Esq., and James A. McMillan, Esq., Grayson, Kubli &
Hoffman, for Kira, Inc., an intervenor.
Richard G. Welsh, Esq., Naval Facilities Engineering Command, for the
agency.
Edward Goldstein, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protest is sustained where solicitation contained an ambiguity
regarding whether the agency intended to include indefinite-quantity
prices in its evaluation of total price or whether the agency intended to
evaluate indefinite-quantity prices solely for reasonableness. Because
the ambiguity was latent, the issue was timely when raised after award.
2. Protest that agency improperly failed to consider the protester*s key
personnel under the corporate experience factor is sustained where the
record reveals that the agency considered the awardee*s key personnel when
it evaluated the awardee*s corporate experience.
3. Protest that awardee*s proposal contained material misrepresentations
regarding its status as a qualified Historically Underutilized Business
Zone (HUBZone) small business concern is dismissed; protest ultimately
involves issue of whether awardee was a qualified HUBZone concern, a
matter within the exclusive statutory authority of the Small Business
Administration.
DECISION
Ashe Facility Services, Inc. protests the award of a contract to Kira,
Inc. for base operating support services at two Navy installations in
Florida under request for proposals (RFP) No. N69272-03-R-1010, issued by
the Naval Facilities Engineering Command (NAVFAC). Ashe principally
alleges that the RFP*s price evaluation provision contained a latent
ambiguity and that the agency improperly evaluated its proposal, as well
as the proposal submitted by Kira.
We sustain the protest.
BACKGROUND
NAVFAC issued the RFP as a Historically Underutilized Business Zone
(HUBZone) set-aside to acquire base support services at the Naval Air
Station Jacksonville, Florida and the Naval Station Mayport, Florida, as
well as certain outlying areas, for a base year with four 1-year options
and three 1-year award option periods, referred to as the Regional Base
Operating Support 2 (*RBOS 2*) contract.[1] The RFP divided the base
support services into four main functional work areas (janitorial, pest
control, refuse collection/recycling, and grounds maintenance) and within
each functional area identified both fixed-price and indefinite-quantity
work items.
Offerors were required to separately price the fixed-price work items and
the indefinite-quantity work items. Specifically, contract line item
number (CLIN) 0001 required a lump sum price for all of the fixed-price
work under the contract for the base period. CLINs 0003, 0005, 0007, and
0009 required lump sum prices for the fixed-price work for each of the
four 1-year options, and CLINs 0011, 0013, and 0015 required lump sum
prices for the fixed-price work for each of the three 1-year award option
periods. These lump sum prices were drawn from exhibits A-D in section J
of the RFP, which required detailed unit pricing for the fixed-price work,
as well as supplemental pricing sheets.[2]
The RFP also provided for a variable pricing element, which was specific
to the fixed-price work under the solicitation. The agency anticipated
that buildings and/or areas within buildings would be added, deleted, or
changed by contract modification during the course of the contract, thus
changing the contract*s value. See RFP, annex 2, at 18. Apparently in an
effort to pre-establish the price of such modifications (rather than
having to negotiate their price at the time the modifications arose), the
RFP required offerors to submit a *cost factor* for adding work and a
separate *cost factor* for deleting quantities of work for the fixed-price
services under each of the four service categories.[3] RFP S: B, attach.
JB-2. The RFP expressly instructed that the add/delete pricing was for
the fixed-price work; there was no add/delete pricing for the
indefinite-quantity work. These add and delete factors were then applied
to *hypothetical* contract modifications. [4] Offerors were required to
calculate their add/delete prices for the base, option, and award option
periods and to include a lump sum add/delete price under CLIN 9008 for the
base, option, and award option periods.[5]
Lump sum pricing was also required for the indefinite-quantity work. CLIN
0002 required a lump sum price for all of the indefinite-quantity work for
the base period. CLINs 0004, 0006, 0008, and 0010 required lump sum
prices for the indefinite-quantity work for each of the four 1-year
options, and CLINs 0012, 0014, and 0016 required lump sum prices for the
indefinite-quantity work for each of the three 1-year award option
periods. These lump sum prices were drawn from exhibits E-J in section J
of the RFP, which required detailed unit pricing for the
indefinite-quantity work.
Section M of the RFP advised that award would be made to the offeror whose
proposal represented the *best value* and further advised that price
(Factor E) was equal to the combined weight of four technical factors: (1)
past performance information (Factor A); (2) corporate experience (Factor
B); (3) management (Factor C); and (4) technical approach/methods (Factor
D) (consisting of four subfactors: (a) janitorial; (b) pest control; (c)
refuse/recycling; and (d) grounds maintenance). RFP S: M. The four
technical factors were of equal weight, as were the four subfactors within
Factor D.
Specifically, with respect to the evaluation of price, the RFP provided:
The price proposal will be evaluated to determine reasonableness and
realism of price as well as whether proposed pricing demonstrates an
understanding of the work and an ability to perform the contract. Price
will be evaluated by adding the base, each option period quantities, each
award-option period quantities, and add/delete/change services period
totals for the firm fixed-price items (Indefinite-quantity items will be
reviewed for reasonableness).
RFP S: M.
With regard to the technical factors, the RFP provided that an offeror*s
*technical proposal will be evaluated to determine whether the offeror
possesses the capability to successfully perform the stated requirements
of the RFP.* RFP S: M. Specifically, as it relates to this protest,
section M stated that corporate experience would be evaluated based on
*any* information submitted by the offeror and references submitted by the
offeror. RFP S: M.
Section L required submission of specific information in order to evaluate
an offeror*s past performance and corporate experience. Specifically,
section L instructed:
[Factor A -- Past Performance Information] The offeror shall provide
references of past performance on contracts performed within the past (5)
years that demonstrate a history of performance on relevant contracts of
similar scope, size and complexity in performing work suitable for this
requirement . . . (PLEASE NOTE: specific experience on contracts of
similar complexity should be addressed via separate EVALUATION FACTOR B
[Corporate Experience]. . . . Key personnel and subcontractor*s past
performance may also be evaluated. . . .
[Factor B -- Corporate Experience] The offeror shall provide a single data
sheet for each relevant contract during the past five (5) years which is
similar in complexity (i.e. type of work, size ($) and volume) as required
by this solicitation. . . . The offeror shall provide this information
for any subcontractors proposed for use on this contract. The offeror
shall describe experience (including subcontractors) in performing
contracts of similar complexity for the last five (5) years.
RFP S: L (emphasis in original).
The agency received several proposals in response to the solicitation,
including proposals from Kira and Ashe. In accordance with the agency*s
source selection plan (SSP), the agency assembled a technical evaluation
board (TEB) to evaluate the strengths and weaknesses of the offerors*
technical proposals and a separate price evaluation board (PEB) to
evaluate their price proposals. The SSP further provided that the TEB and
PEB evaluations would be reviewed by a source selection board (SSB). In
its evaluation of technical proposals, the agency employed the following
adjectival rating scheme: exceptional, acceptable, marginal, and
unacceptable. If an offeror lacked pertinent past performance
information, the offeror would receive a *neutral* rating. Agency Report
(AR), exh. 2, SSP, at 12.
In its initial evaluation of proposals, the TEB scored Kira as
*acceptable* for both past performance information and corporate
experience. Under the past performance factor, the TEB noted that the
past performance survey results were very favorable for Kira and its
subcontractors. Under corporate experience, the TEB stated that Kira had
*demonstrated corporate experience in contracts that were similar in
scope, complexity, context and relevancy.* AR, exh. 6, TEB Report,
Aug. 18, 2003 (revised Aug. 22, 2003).
Ashe*s initial evaluation ratings were less favorable. The TEB rated Ashe
*neutral* for past performance and *marginal* for experience. In its
evaluation of Ashe*s past performance information, the TEB noted several
weaknesses, specifically, that Ashe failed to submit evidence of past
performance in [deleted] and that Ashe lacked *multifunction service* past
performance. With regard to Ashe*s corporate experience, the TEB
concluded that Ashe*s experience did not involve contracts similar in
complexity to the work required under the solicitation. The TEB focused
on the fact that Ashe*s experience was in grounds maintenance only and
noted that managing one functional area is less complicated than managing
the four functional areas required under the solicitation. The TEB also
indicated that Ashe failed to establish corporate experience for
[deleted].
Upon its review of the TEB report, however, the SSB disagreed with several
of the TEB*s conclusions. While the SSB agreed with Kira*s acceptable
past performance rating (adding that Kira had moderate performance risk
because Kira*s team had not worked together before), it expressed concerns
with Kira*s acceptable rating for corporate experience, and instead rated
Kira *marginal* for that factor. In its narrative statement addressing
Kira*s experience the SSB stated:
All five contracts submitted for consideration were Housing Maintenance
Contracts that included some janitorial, pest, refuse, and grounds
functions. For example, Kira maintained [deleted] acres of grounds verses
the 2700 plus acres under RBOS 2. Also this same contract is not similar
in complexity; for example the TEB commented that mowing grounds around
housing is less complex than mowing airfield and weapons areas. With
grounds maintenance being approximately 40% of the total cost, and 60% of
the total effort, there is risk associated with Kira*s proposal in this
area. Also, as identified in the TEB Report, Kira*s proposed key
personnel had limited experience in other areas as well. . . . Proposed
personnel have limited experience in some of the areas specified in the
request for proposal.
AR, exh. 6, SSB Report, Sept. 16, 2003, at 2-3.
With regard to Ashe, the SSB expressed concerns with the TEB*s neutral
rating under the past performance information factor. While noting that
Ashe did not have multifunction past performance, the SSB found that
Ashe*s team, which consisted of the [deleted] and the management of the
[deleted], had *successful* past performance, and that Ashe*s past
performance history of grounds maintenance services was successful. AR,
exh. 6, supra, at 4. Because of *moderate performance risk* stemming from
the fact that Ashe and the subcontractors had not worked together under
one contract, the SSB rated Ashe *acceptable* under the past performance
information factor. AR, exh. 6, supra, at 4.
Under corporate experience, the SSB concurred with the TEB*s *marginal*
rating for Ashe. The SSB noted that despite Ashe*s strength in the single
grounds maintenance function, Ashe had little experience with similar
multifunction contracts. AR, exh. 6, supra, at 4.
Based on its overall evaluation of the proposals submitted, the agency set
a competitive range, which included Kira and Ashe, and held an initial
round of discussions with these firms. In its discussions with Ashe, the
agency raised issues concerning Ashe*s past performance and corporate
experience. Specifically, the agency asked Ashe to provide past
performance information of [deleted] related to the solicitation, or to
explain how it intended to mitigate its lack of past performance for this
function. With regard to the corporate experience factor, the agency
informed Ashe that its proposal lacked *multifunction team experience of
similar size, scope and complexity* and asked how Ashe intended to
mitigate the lack of multifunction team experience related to the
solicitation requirements. AR, exh. 8, Discussion Questions for Ashe,
Sept. 22, 2003. The agency also asked Ashe to provide information that
showed corporate experience in the [deleted] because, according to the
agency, Ashe*s proposal did not reflect such experience.
In its discussions with Kira, the agency raised concerns with Kira*s
corporate experience and stated: *Your proposal lacks multifunction team
experience of similar size, scope and complexity. Of specific concern is
the lack of corporate experience in [deleted].* AR, exh. 7, Discussion
Questions for Kira, Sept. 22, 2003. The agency asked Kira to explain how
it intended to mitigate its lack of multifunction team experience as
related to the solicitation requirements.[6]
Upon evaluation of the offerors* revised proposals, the TEB again rated
Kira*s corporate experience as *acceptable.* While the TEB report
indicated that Kira*s lack of corporate experience in [deleted] was a
weakness, it concluded that this lack of experience was offset by the
experience of its key personnel. AR, exh. 11, TEB Report, Kira Synopsis,
Oct. 15, 2003, at 1.[7] In answering the agency*s concerns about its lack
of [deleted] experience Kira stated that *one must consider our proposed
key personnel and their extensive experience in [deleted] . . . .* AR,
exh. 9, Kira*s First Revised Technical Proposal, Oct. 6, 2003, Answer to
Discussion Question 1. Kira*s past performance rating of *acceptable* did
not change.
In evaluating Ashe*s revised proposal, the TEB revised its initial
*neutral* rating for Ashe*s past performance to *acceptable* based on
*additional consideration given to sub-contractors and key personnel.*
AR, exh. 11, TEB Report, Oct. 15, 2003, Ashe Synopsis, at 1. The TEB
noted that Ashe*s past performance had a weakness due to its lack of past
performance with contracts that were similar in complexity (its *lack of
multifunction experience*). AR, exh. 11, supra. Under corporate
experience, the TEB again rated Ashe *marginal* because Ashe demonstrated
*limited experience* on multifunction contracts and *[deleted].* AR, exh.
11, supra.
The TEB*s report on the revised proposals was submitted to the SSB and
again, the SSB disagreed with the TEB*s conclusions as to Kira*s corporate
experience. The SSB maintained that Kira*s proposal warranted a
*marginal* not an *acceptable* rating under this factor because of Kira*s
lack of corporate experience in [deleted]; because Kira *demonstrated
little evidence of having experience performing contracts of similar
scope, size, and complexity to the RFP requirements*; and because Kira
failed to demonstrate *average* experience in managing multifunction
contracts. AR, exh. 11, SSB Report, Oct. 20, 2003, at 2-3. The SSB,
however, agreed with the TEB*s adjectival ratings for Ashe*s revised
proposal under the past performance information and corporate experience
factors. Based on its evaluation of the revised proposals, the SSB
recommended a second round of discussions with the offerors in the
competitive range.
During discussions with Kira, the agency stated:
Your proposal fails to demonstrate that your firm has multifunction
corporate experience managing contracts of similar complexity (i.e. type
of work, size ($) and volume) commensurate with the requirements of this
solicitation. Specifically, the Government has concern with your firm*s
apparent lack of corporate experience in the area of [deleted].
AR, exh. 12, Discussion Questions for Kira, Nov. 10, 2003.
Based on this concern, the agency asked Kira to explain how it intended to
mitigate its *lack of corporate experience in managing multifunction
facilities support services contracts related to the requirements of this
solicitation.* AR, exh. 12, supra.
In its discussions with Ashe, the agency stated that Ashe failed to
demonstrate *multifunction (i.e. grounds maintenance, janitorial,
refuse/recycling and pest control) corporate experience* and asked Ashe to
explain how it intended to mitigate this lack of experience. AR, exh. 13,
Discussion Questions for Ashe, Nov. 10, 2003.
In response to the discussion questions both Kira and Ashe revised their
proposals. Kira sought to address the agency*s concerns regarding its
corporate experience primarily by comparing its work experience under its
Naval Air Station contract at Lemoore, CA (NAS Lemoore), which had a $5.5
million annual value. Kira explained that this contract required work in
each of the functional areas under the RBOS 2 contract and that the
grounds maintenance work under the NAS Lemoore contract had an annual
value of approximately $4.3 million while the RBOS 2 grounds maintenance
value was approximately $4.1 million. In addition, Kira described the NAS
Lemoore contract with reference to specific work requirements, including
the fact that it required [deleted] acres of grounds maintenance.[8] AR,
exh. 14A, Kira*s Answers to Second Round of Discussion Questions.
Ashe responded to the agency*s concerns regarding its corporate experience
by emphasizing its experience in grounds maintenance, the experience of
its proposed subcontractors and proposed [deleted] management staff, as
well as the experience of its key personnel, which reflected management
experience in the areas of [deleted].[9] AR, exh, 15, Ashe*s Answers to
Second Round of Discussion Questions.
After reviewing the second round of proposal revisions both the TEB and
the SSB agreed that Kira warranted an *acceptable* rating for corporate
experience. Specifically, the SSB concluded that Kira*s NAS Lemoore
contract was similar in scope, size, and complexity to the RFP
requirements and stated that Kira*s acceptable rating under this factor
was based in part on its *key personnel.* AR, exh. 16, SSB Report, Nov.
19, 2003, at 3.
Similarly, with regard to Ashe, both the TEB and the SSB scored Ashe as
*marginal* under the corporate experience factor. The TEB emphasized that
Ashe demonstrated only *limited experience on multifunction contracts* and
that Ashe had *[deleted].* While noting two strengths, including Ashe*s
proposed subcontractors, the SSB nevertheless concluded that Ashe*s two
weaknesses justified a marginal rating.[10]
Because Kira had the highest rated and the lowest priced proposal, the SSB
recommended award to Kira.[11] The SSA approved this recommendation and
the contract was awarded to Kira. AR, exh. 16, SSB Report. After
receiving a debriefing, Ashe filed this protest.
DISCUSSION
Ashe challenges the agency*s price and technical evaluations.
Principally, Ashe argues that the agency*s evaluation of the offerors*
prices was materially flawed due to a latent solicitation ambiguity
regarding the evaluation of prices; the agency failed to properly consider
Ashe*s key personnel when evaluating its corporate experience; and the
agency*s evaluation of the offerors* past performance and corporate
experience was compromised by the agency*s reliance on an unstated minimum
requirement, specifically, experience in managing all four of the RFP*s
functional areas in a single contract.
Solicitation Ambiguity
Ashe maintains that the price evaluation provision in section M was
ambiguous and that the agency*s interpretation and application of the
provision differed from its understanding of how the agency intended to
evaluate price. Specifically, when the agency evaluated price it added
all the fixed-price items and the indefinite-quantity items together and
compared the total price of the proposals. Ashe, however, interpreted
section M to provide that only the fixed-price items would be added
together for a total evaluated price and that the prices for the
indefinite-quantity items would be considered solely for reasonableness.
An ambiguity exists where two or more reasonable interpretations of the
terms or specifications of the solicitation are possible. A party*s
particular interpretation need not be the most reasonable to support a
finding of ambiguity; rather, a party need only show that its reading of
the solicitation provisions is reasonable and susceptible of the
understanding that it reached. DynCorp Int*l LLC, B‑289863,
B‑289863.2, May 13, 2002, 2002 CPD P: 83 at 8; Aerospace Design &
Fabrication, Inc., B-278896.2 et al., May 4, 1998, 98-1 CPD P: 139 at 13.
We think that Ashe*s interpretation is reasonable. As noted above, with
regard to price evaluation, section M states that price will be evaluated
*by adding the base, each option period quantities, each award-option
period quantities and add/delete/change services period totals for the
firm fixed-price items (Indefinite-quantity items will be reviewed for
reasonableness).* RFP S: M (emphasis added). Because the base, option
periods, and award option periods had separate fixed-price and
indefinite-quantity CLINs, we think that Ashe reasonably understood the
phrase *for the firm fixed-price items* to indicate that only those prices
for the fixed-price elements of the base, option periods, and award option
periods would be added together. Moreover, the parenthetical at the end
of the sentence specifying in very general terms that indefinite-quantity
items would be reviewed for reasonableness, suggests that the
indefinite-quantity prices for the base, option periods, and award option
periods were to be evaluated separately from the fixed-price items.
The agency argues that Ashe*s interpretation is unreasonable because there
is no comma after the word *totals,* thus limiting the qualifying phrase
*for the firm fixed-price items* to the last antecedent. According to the
agency, the phrase *for the firm fixed-price items* can only be read in
conjunction with the phrase *add/delete/change services period totals,*
which merely describes the amount offerors were to place in CLIN 9008.
While the government*s interpretation is not unreasonable, the sentence*s
punctuation alone does not mandate the agency*s interpretation or render
Ashe*s unreasonable. See U.S. v. Bass, 404 U.S. 336, 340 n.6 (1971)
(concluding omitted comma not determinative of statutory language); Porto
Rico Railway, Light & Power Co. v. Mor, 253 U.S. 345, 348 (1920) (stating
*When several words are followed by a clause which is applicable as much
to the first and other words as to the last, the natural construction of
the language demands that the clause be read as applicable to all*)
(citing United States v. Standard Brewery, 251 U.S. 210, 218 (1920)).
In arguing the unreasonableness of Ashe*s interpretation, the agency also
contends that the parenthetical regarding the indefinite-quantity items
was intended to inform offerors that the indefinite-quantity unit pricing
captured in Exhibits E-J of the RFP would be evaluated for
reasonableness. While such a reading may have been intended, the general
language of the parenthetical does not clearly state this intention, nor
does the solicitation when read as a whole appear to require such an
interpretation.
Assuming then that both the agency*s and the protester*s interpretations
of the provision are reasonable, this indicates an ambiguity in the RFP
with respect to the price evaluation of the indefinite-quantity items.
Accordingly, we must determine whether the ambiguity is latent or patent
since, if patent, it would have had to be protested prior to proposal
submission date. The Arora Group, Inc., B-288127, Sept. 14, 2001, 2001
CPD P: 154 at 7 n.5. A patent ambiguity exists where the solicitation
contains an obvious, gross, or glaring error, (e.g., where the
solicitation provisions appear inconsistent on their face), while a latent
ambiguity is more subtle. See Brickwood Contractors, Inc., B-292171, June
3, 2003, 2003 CPD P: 120 at 6 (explaining a patent ambiguity as one which
is obvious on its face); Bank of Am, B‑287608, B-287608.2, July 26,
2001, 2001 CPD P: 137 at 10 (finding patent ambiguity where solicitation
terms were in direct conflict). Since Ashe*s interpretation of the
solicitation provision did not directly conflict with any of the other
solicitation provisions and the ambiguity only came to light in the
context of the agency*s price evaluation, we conclude that the ambiguity
was latent rather than patent and Ashe*s protest of this issue thus is
timely.
The agency argues that, even assuming a latent ambiguity, Ashe cannot show
prejudice as a result. In support of its argument the agency relies on
the fact that under Ashe*s interpretation of the RFP*s price evaluation
provision, its price would have been higher than Kira*s.[12]
Our Office will not sustain a protest unless the protester demonstrates a
reasonable possibility that it was prejudiced by the agency*s actions,
that is, unless the protester demonstrates that, but for the agency*s
actions, it would have had a substantial chance of receiving the award.
Enola-Caddell JV, B-292387.2, B-292387.4, Sept. 12, 2003, 2003 CPD P: 168
at 6. The agency*s position here, however, is flawed because it is
premised on evaluating the possible prejudice to the protester based on an
interpretation of the solicitation that the agency clearly did not
intend. Where a solicitation contains a latent ambiguity, prejudice is
measured with respect to the agency*s intended meaning of the ambiguous
provision, not the unintended meaning. Thus, we examine whether the
offeror would have altered its proposal to its competitive advantage if it
had had the opportunity to respond to the intended meaning. CW Constr.
Servs. & Materials, Inc., B-279724, July 15, 1998, 98-2 CPD P: 20 at 8-9.
The record clearly reflects that the agency intended to, and did in fact,
evaluate price by adding the fixed-price and indefinite-quantity prices.
Moreover, the protester has reasonably asserted that it would have changed
its pricing strategy [deleted] had it known that the indefinite-quantity
items were to be part of the total cost evaluation, rather than evaluated
solely as to reasonableness.[13] See Decl. by Vice-President of Ashe,
Dec. 22, 2003, at 1. We believe that Ashe has demonstrated that it would
have a substantial chance of receiving the award in a competition if the
solicitation were not ambiguous as to the agency*s intended price
evaluation, and we therefore conclude that Ashe has reasonably
demonstrated that it was prejudiced by the agency*s inclusion of a
latently ambiguous price evaluation provision.
Under these circumstances, the appropriate course of action is to clarify
the RFP and afford offerors an opportunity to submit proposals based on
the clarified solicitation. Allied Signal, Inc; Elec. Sys., B-275032,
B-275032.2, Jan. 17, 1997, 97-1 CPD P: 136 at 11.
Evaluation of Key Personnel
With regard to the evaluation of corporate experience, the protester
raises several challenges, including the alleged failure to properly
consider the experience of its proposed management staff (Ashe*s key
personnel). The agency notes that Ashe received a *marginal* rating for
corporate experience, in part, because it failed to demonstrate that it
had experience in performing [deleted] of the complexity contemplated by
the RFP. According to the agency, while Ashe submitted information
concerning its [deleted] management personnel, under the terms of the
solicitation, the agency was not required to attribute the experience of
those personnel to Ashe as an entity in evaluating Ashe*s corporate
experience.
In considering a protest such as Ashe*s objecting to an agency*s
evaluation of proposals, we will not reevaluate the proposals, but will
instead review the record to determine whether the evaluation was
reasonable and consistent with the terms of the solicitation and
applicable procurement statutes and regulations. Atlantic Research Mktg.
Sys., Inc., B-292743, Dec. 1, 2003, 2003 CPD P: 218 at 4-5. As explained
below, the agency*s evaluation of Ashe*s corporate experience was
fundamentally flawed.
The agency does not dispute the protester*s assertion that the agency
failed to consider its key personnel under the corporate experience
factor. Rather, the agency maintains that it was not required to consider
Ashe*s management personnel when evaluating Ashe*s corporate experience as
an entity. [14] The record reflects, however, that the agency considered
Kira*s *key personnel* when it evaluated Kira*s corporate experience. For
example, in the final SSB report, which was approved by the SSA, the SSB
changed the *marginal* rating it had assigned to Kira*s corporate
experience in prior evaluations to an *acceptable* rating, stating that
Kira*s *key personnel* warranted the rating and offset performance risks.
See AR, exh. 16, supra, at 2-3. Moreover, the TEB report, which was
prepared after the first round of discussions, explains that Kira*s lack
of similar experience for the [deleted] work required under the RFP was
*offset by the experience of Key Personnel.* AR, exh. 11, TEB Report,
Kira Synopsis, at 1. Finally, the chairman of the SSB stated in a
declaration prepared in response to Ashe*s protest that Kira*s final
acceptable rating for corporate experience was warranted based, in part,
on Kira*s *key personnel.* AR, exh. 18, Decl. of SSB Chairman, at 3.
Given the clear indication in the record that the agency considered Kira*s
key personnel under the corporate experience factor, it was unfair for the
agency not to consider Ashe*s key management personnel under the same
factor. This disparate treatment rendered the agency*s evaluation of
corporate experience unreasonable. Lockheed Martin Info. Sys., B-292836
et al., Dec. 18, 2003, 2003 CPD P: 230 at 11-12.
Undisclosed Requirement
Ashe also argues that in evaluating past performance and corporate
experience the agency gave undue weight to whether an offeror had
multifunction contracting experience, which Ashe alleges the agency
understood as experience in managing all four of the RFP*s functional
areas (janitorial, pest control, refuse/recycling, and grounds
maintenance), and that such experience became a de facto requirement,
which was not disclosed in the solicitation. According to Ashe, the
agency improperly downgraded its ratings for past performance and
corporate experience while overstating Kira*s ratings for these factors
based on the multifunction contracting requirement.
We find nothing objectionable in the agency*s consideration of
multifunction contracting past performance and corporate experience.
Where detailed technical proposals are sought and technical evaluation
criteria are used to enable the agency to make comparative judgments about
the relative merits of competing proposals, vendors are on notice that
qualitative distinctions among competing proposals will be made under the
various evaluation factors. See Leach Mgmt. Consulting Corp.,
B-292493.2, Oct. 3, 2003, 2003 CPD P: 175 at 4-5. In making such
distinctions, an agency may properly take into account specific, albeit
not expressly identified, matters that are logically encompassed by or
related to the stated evaluation criteria. Si-Nor, Inc., B-292748.2 et
al., Jan. 7, 2004, 2004 CPD P: 10 at ____.
Here, the RFP required management of four different functional areas and
required offerors to demonstrate their past performance and corporate
experience with contracts of similar *complexity.* Clearly, an offeror*s
past performance history and experience with managing the four functional
areas to be performed is relevant to the offeror*s history and experience
with regard to contracts that were similar in *complexity* to the RFP
requirements. See Leach Mgmt. Consulting Corp., supra. Accordingly, it
was reasonable for the agency to consider the extent of the offerors*
multifunction contracting history and experience when evaluating the past
performance and corporate experience factors.
In addition, despite the protester*s contentions otherwise, the record
does not suggest that the agency treated multifunction contracting
experience as a minimum requirement. Rather, in considering Ashe*s past
performance and corporate experience, the agency rated Ashe *acceptable*
and *marginal,* respectively, even though the agency had concluded that
Ashe had no past performance or corporate experience with contracts that
combined the functional areas under the RFP. Had multifunction
contracting been a minimum requirement as argued by the protester, Ashe
would have received an *unacceptable* rating under these factors.
The protester also asserts that the agency*s evaluation of Kira*s past
performance and corporate experience was flawed because Kira failed to
demonstrate any past performance or corporate experience in performing
grounds maintenance work similar in complexity to that required by the
RFP. According to Ashe, the past performance and experience emphasized by
Kira and relied upon by the agency in rating Kira *acceptable* (the NAS
Lemoore contract) was not similar in complexity to the grounds maintenance
work required by the solicitation.
We find the agency*s evaluation in this regard unobjectionable. During
the first two evaluations, the SSB clearly expressed its concern with what
it believed to be Kira*s lack of comparable grounds maintenance
experience, rating Kira *marginal* for the corporate experience factor.
After evaluating Kira*s answers to the second round of discussion
questions, however, the SSB rated Kira *acceptable.* In answering the
SSB*s concerns, Kira more fully explained its [deleted] experience under
its NAS Lemoore contract noting that it had a higher dollar value than the
RBOS 2 grounds maintenance work and specifically compared the work under
the NAS Lemoore contract to the work required under the RBOS 2 contract.
While the protester concludes that the [deleted] work under Kira*s NAS
Lemoore contract was less complex than the RBOS 2 work because the NAS
Lemoore contract required only [deleted] acres of grounds maintenance and
the RBOS 2 contract required 2,700 acres, given the closeness of the
dollar values for the work as well as the similar work items, we see
nothing unreasonable in the agency*s conclusion that the NAS Lemoore
grounds work was similar in complexity to the grounds work required by the
RFP.[15] See American Artisan Prods., Inc., B-292559, B-292559.2, Oct. 7,
2003, 2003 CPD P: 176 at 6-7 (recognizing that dollar value is an
objective measure of the size (or scale) and complexity of referenced
contracts); Knightsbridge Constr. Corp., B‑291475.2, Jan. 10, 2003,
2003 CPD P:5 at 3.
Ashe also asserts that Kira did not actually perform the NAS Lemoore
grounds maintenance work; rather, Kira merely managed a subcontractor,
which performed the work. The distinction between performing grounds
maintenance work versus managing such work is relevant in this case,
according to Ashe, because Kira had proposed to perform all of the grounds
maintenance work in-house rather than subcontract the work [deleted].[16]
Ashe*s assertion in this regard is based entirely on a chart in the
intervenor*s comments on the agency report, which attempts to establish
the similarity between the NAS Lemoore contract and the RBOS 2 contract.
Under the NAS Lemoore contract heading, the chart states *proven
successful subcontract management for grounds maintenance.* Intervenor*s
Comments on AR, at 8. Because the cited chart and statement were not part
of the contemporaneous record evaluated by the agency, nor do they
conclusively establish Ashe*s assertions regarding the scope of Kira*s
grounds maintenance work under the NAS Lemoore contract, we have no basis
to find the agency*s conclusions regarding Kira*s grounds maintenance past
performance or corporate experience to be unreasonable.
Other Protest Issues
Ashe further alleges in its protest that information disclosed by the
agency during its discussions with Kira with regard to the grounds
maintenance factor constituted improper technical transfusion and that
Kira*s proposal contained material misrepresentations regarding its
HUBZone status.[17]
Technical transfusion connotes the disclosure of a *unique or ingenious*
technical solution from a competitor*s proposal. Gentex Corp. -- Western
Operations,
B-291793 et al., Mar. 25, 2003, 2003 CPD P: 66 at 25; see FAR S:
15.306(e)(2) (prohibiting disclosure of an offeror*s *technical solution,
including unique technology, innovative and unique uses of commercial
items, or any information that would compromise an offeror*s intellectual
property to another offeror*). In support of its technical transfusion
claim, Ashe points to the fact that during discussions the agency asked
Kira to address how it planned to perform particular grounds maintenance
work without certain *typical* [deleted] equipment and questioned whether
Kira*s number of [deleted] was sufficient given the required work. We do
not find any evidence in the record to suggest that the agency imparted to
Kira any of Ashe*s proposal information, let alone any *unique* or
*innovative* grounds maintenance ideas during the course of discussions.
To the extent that Ashe is arguing that the agency coached Kira through
the specificity of the discussion questions, we find nothing improper with
the detailed nature of the questions. See The Communities Group,
B-283147, Oct. 12, 1999, 99-2 CPD P: 101 at 4.
Ashe also filed a supplemental protest arguing that Kira is ineligible for
award because it is not a qualified HUBZone contractor and because Kira*s
initial proposal submissions contained material misrepresentations to the
extent that Kira indicated that *no material change in . . . HUBZone
employee percentage has occurred since it was certified by the Small
Business Administration in accordance with 13 CFR part 126 . . . .* AR,
exh. 3, S: K.
After Ashe had filed its protest with this office, Ashe filed a protest
with the Small Business Administration (SBA) challenging Kira*s HUBZone
status on the ground that less than 35 percent of Kira*s employee*s
resided in a HUBZone.[18] Ashe initially prevailed at the SBA.
Essentially, the SBA held that while Kira met the 35 percent HUBZone
residency requirement at the time it submitted its initial proposal, it
did not meet this requirement at the time of award. Interpreting its
regulations as requiring a HUBZone small business concern to meet the
residency requirement both at the time of its initial proposal submission
and the time of award, the SBA granted Ashe*s protest and decertified
Kira.
Kira appealed this decision, arguing that there is no requirement that a
HUBZone small business concern meet the 35 percent residency requirement
both at the time of initial offer and at the time of award. The SBA
agreed, reversing its prior decision and reinstating Kira into the
competition. Ashe requested reconsideration of this decision, which was
denied.
Under 15 U.S.C. S: 637(b)(6) (2000), the SBA has conclusive authority to
determine matters of size status for federal procurement purposes and our
Office will neither make nor review size status determinations. Bid
Protest Regulations, 4 C.F.R. S: 21.5(b)(1) (2003). Similarly, the SBA is
the designated authority for determining whether a firm is an eligible
HUBZone small business concern, and it has established procedures for
interested parties, including procuring agencies, for challenging a firm*s
status as a qualified HUBZone small business concern. 15 U.S.C. S:S: 632
(p)(5)(A), 657a (c)(1) (2000); 13 C.F.R. S:S: 126.503, 126.801 (2004);
Federal Acquisition Regulation (FAR) S:S: 19.306, 19.1303. As a
consequence, our Office will neither make nor review HUBZone status
determinations.
While Ashe concedes that the SBA has conclusively certified Kira as a
qualified HUBZone concern, Ashe maintains that our Office can address the
question of whether Kira*s proposal contained a misrepresentation
regarding the change in its HUBZone employee percentage since that issue
relates to Kira*s proposal submission and not Kira*s HUBZone status per
se. Ashe*s argument, however, misses the mark.
According to Ashe, Kira*s proposal submissions contained material
misrepresentations since Kira had dipped below the 35 percent residency
requirement and yet Kira certified that there was no material change in
its HUBZone employee percentage. In order for Kira to have falsely
certified that no material change had occurred regarding its HUBZone
employee percentage, however, Kira*s temporary dip below the 35 percent
residency requirement would have to be considered a *material* change.
The SBA, however, conclusively ruled that this change did not compromise
Kira*s status as a qualified HUBZone small business concern and thus
effectively decided that the dip in Kira*s employee percentage was not a
*material* change. Because Ashe*s allegation in this regard is
inextricably linked to the SBA*s decision regarding Kira*s HUBZone status,
our Office will not revisit this issue.
RECOMMENDATION
We recommend that the agency clarify the solicitation with regard to how
it intends to evaluate price. In addition, the agency should clarify the
solicitation regarding the evaluation of key personnel under the corporate
experience factor. The agency then should obtain revised proposals,
evaluate them, hold further discussions if necessary, and make a properly
documented award determination. If Kira is not the successful offeror,
the agency should terminate Kira*s contract for the convenience of the
government. We also recommend that Ashe be reimbursed the costs
associated with filing and pursuing its bid protest, including reasonable
attorney*s fees. 4 C.F.R. S: 21.8(d)(1). Ashe*s certified claim for
costs, detailing the time spent and the costs incurred must be submitted
to the agency within 60 days of receiving our decision. 4 C.F.R. S:
21.8(f)(1).
The protest is sustained.
Anthony H. Gamboa
General Counsel
------------------------
[1] The award option periods were included to provide the selected
contractor with an incentive to perform well by providing for the award of
additional option periods if the contractor achieves positive performance
ratings during the course of contract performance. See RFP, Award Option
Plan.
[2] The RFP instructed offerors to submit, in attachment JB-1,
supplemental pricing information by functional area (i.e., janitorial,
pest control, refuse/recycling, and grounds maintenance) for the
fixed-price portion of the contract for the base period, each option year,
and each award-option period. See RFP S: L. This supplemental
information required detailed information concerning the offerors* direct
costs (labor, material, equipment, subcontract, and *other*) and indirect
costs (labor, material and equipment, home office overhead, general and
administrative, and profit) within each of the four functional areas.
[3] Offerors were instructed that the add/delete pricing would be used to
price contract modifications *throughout the life of the contract.* RFP
S: B, attach. JB-2 (emphasis in original).
[4] For example, under the janitorial services function, attachment JL-2
of the RFP provided a hypothetical modification adding 6,044 square feet
of a specific sub-category of work described as *Service Class A.* This
quantity was multiplied by the contractor*s per square foot unit price for
Service Class A work as well as the contractor*s cost factor (which the
offeror was required to submit as a percentage). This calculation
resulted in the contractor*s price for adding the hypothetical quantity of
Service Class A work.
[5] The RFP also included CLINs 9000 through 9007. Offerors were
specifically instructed not to submit a dollar figure under these CLINs.
Rather, these CLINs appeared to be for administrative purposes and used as
place holders for the offerors* proposed add/delete cost factors under
attachment JB-2 of the RFP.
[6] During the course of the discussions, Kira asked the agency to define
what it meant by *multifunction* and the agency *explained that
multifunction meant all four work areas.* AR, Memorandum Re: Competitive
Range Discussions with Kira, Sept. 25, 2003, at 2.
[7] The agency*s report included two different TEB report synopses for
Kira, one of which had a line through it noting it was replaced by the
November 18, 2003 TEB Report. We considered both synopses as part of the
October 15, 2003 TEB report.
[8] The RBOS 2 contract requires grounds maintenance encompassing
approximately 2,700 acres. AR, exh. 6, supra, at 2.
[9] To meet the janitorial service function, Ashe had proposed the
management staff of the [deleted] and identified them as key personnel.
[10] The SSB concluded that both Kira*s and Ashe*s corporate experience
presented a risk due to the fact that their proposed teams had never
worked together as a single corporate entity.
[11] In the final evaluation Kira was ranked first and Ashe was ranked
second. In evaluating price, the agency added the prices for the
fixed-price items and the prices for the indefinite-quantity items.
Kira*s total combined price was $80,688,670, and Ashe*s total price was
[deleted].
[12] If the totals for the fixed-price items had been evaluated without
the indefinite-quantity items, Ashe*s evaluated price would have been
[deleted], while Kira*s evaluated price would have been [deleted], a
difference of [deleted].
[13] Kira*s total price for the indefinite-quantity items was [deleted],
while Ashe*s total price was [deleted], a difference of [deleted].
[14] While the agency contends that it was not required to consider key
personnel under this factor, the solicitation is not clear on this point.
The solicitation instructions regarding the corporate experience factor
required offerors to submit information about the experience of their
subcontractors and was silent as to key personnel. RFP S: L. Section M,
however, indicated that in evaluating corporate experience, the agency
would consider *any* information supplied by the offeror. RFP S: M.
[15] The protester also asserts that Kira overstated the dollar value of
the grounds maintenance work under the NAS Lemoore contract by including
work such as construction, design and installation of an irrigation
system, which are not grounds maintenance work items under the RBOS 2
contract. Ashe, however, presents no evidence and does not cite any
information in the record in support of this assertion.
[16] HUBZone contractors must actually perform 50 percent of the contract
work with their own personnel, RFP, Section I, FAR S: 52.219-3, and of the
four functional areas under the RFP, grounds maintenance represented 60
percent of the total labor hours.
[17] Ashe also argues that the agency unreasonably evaluated Kira*s price
for reasonableness and realism. Because we are sustaining the protest as
a result of a latent ambiguity as to the price evaluation scheme, and we
are recommending that the agency clarify the RFP and allow for the
submission of revised proposals, we need not address this issue.
[18] In general, in order to be a qualified HUBZone small business
concern, at least 35 percent of the firm*s employees must reside in a
HUBZone. 15 U.S.C. S: 632(p)(5)(A)(i)(I)(aa) (2000); 13 C.F.R. S:
126.200(b).