TITLE: Consortium HSG Technischer Service GmbH and GeBe Gebäude- und, B-292699.6, June 24, 2004
BNUMBER: B-292699.6
DATE: June 24, 2004
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Consortium HSG Technischer Service GmbH and GeBe GebACURude- und, B-292699.6,
June 24, 2004
Decision
Matter of: Consortium HSG Technischer Service GmbH and GeBe Geba:ude- und
Betriebstechnik GmbH Su:dwest Co., Management KG
File: B-292699.6
Date: June 24, 2004
Reed L. von Maur, Esq., for the protester.
Paul D. Reinsdorf, Esq., Reinsdorf & Associates, for Joint Venture SKE
GmbH-Siemens Geba:udemanagement und Services GmbH & Co. OHG, an
intervenor.
Maj. Gregg A. Engler, Department of the Army, for the agency.
Ralph O. White, Esq., and Christine S. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protester*s contention that a change in ownership of one of the two
entities comprising a joint venture, which occurred between the time
offerors submitted final proposal revisions and the award decision,
renders the agency*s evaluation of the joint venture*s proposal
unreasonable, is denied where the record shows that, although the entity*s
ownership and name were changed, the entity remains intact, retains the
same location and offices, and promises to honor its previous commitments,
and where there is no showing in the record that the resources offered by
this entity have been rendered unavailable, or have in any way changed, as
a result in the change of ownership.
DECISION
Consortium HSG Technischer Service GmbH and GeBe Geba:ude- und
Betriebstechnik GmbH Su:dwest Co., Management KG (HSG) protests a decision
by the Department of the Army to reselect SKE GmbH/Siemens
Geba:udemanagement und Services GmbH & Co. OHG, Joint Venture (SKE/SGM),
as its contractor for preventive maintenance and repairs of facilities and
equipment used by the Defense Commissary Agency in Germany, Belgium, and
the Netherlands. HSG complains that the sale of SGM after the submission
of final proposal revisions (FPR) but prior to the agency*s reselection
decision, rendered the evaluation of SKE/SGM*s proposal unreasonable.HSG
also argues that the agency will not be able to enter into a novation
agreement with SKE/SGM under the circumstances here.
We deny the protest.
The Army*s request for proposals (RFP) No. DABN01-03-R-0010 contemplated
award of a mixed fixed-price and time-and-materials requirements contract
for preventive maintenance and repairs at facilities used by the Defense
Commissary Agency in Germany, Belgium, and the Netherlands. The award at
issue was for one of four geographic regions covered by the solicitation;
this region was referred to in the RFP as area IV. Area IV includes not
only a portion of the regular commissary facilities identified in the RFP,
but also includes the Central Meat Processing Plant, the principal
meat-packing plant for the U.S. forces in Europe, which is located at
Ramstein Air Base in Germany.
In response to the initial award, HSG protested to our Office that the
agency*s favorable evaluation of SKE/SGM*s proposal disregarded the
proposal*s failure to provide required documentation in several areas.
After all pleadings on both the initial and a supplemental protest were
submitted, the Army decided to reopen discussions, request revised
proposals, conduct new evaluations, and make a new selection decision (to
include terminating the initial award to SKE/SGM if HSG prevailed in the
reopened competition). As a result, we dismissed HSG*s protest of the
initial award.
HSG also filed a protest challenging the breadth of the Army*s corrective
action, arguing that the corrective action should be limited to a
reevaluation of the proposals as submitted. We denied this protest.
Consortium HSG Technischer Service GmbH and GeBe Geba:ude- und
Betriebstechnik GmbH Su:dwest Co., Management KG, B-292699.4, Feb. 24,
2004, 2004 CPD P: 44.
After deciding to reopen the competition, in November 2003, and after
holding discussions, the Army requested submission of FPRs by December 19,
2003. At the conclusion of its reevaluation, the Army rated both offers
equal under each factor and subfactor identified in the solicitation, and
again selected SKE/SGM for award, based on its lower price of 6,309,902
euros. On March 10, 2004, the Army lifted the stop-work order it had
issued to SKE/SGM in response to HSG*s protest of the initial award, and
notified HSG of the results of the recompetition. On March 19, HSG filed
the instant protest.
Unbeknownst to the Army (until HSG filed its March 19 protest), SGM was
sold to another company after the submission of FPRs and prior to the
award decision. Specifically, effective January 1, 2004, the corporate
shares of SGM were taken over by Hochtief Facility Management GmbH
(hereinafter Hochtief), with the entity to be operated under the name of
Hochtief Geba:udemanagement GmbH & Co. OHG. Agency Report (AR), Tab 3, at
2. By letter dated January 19, Hochtief advised the joint venture that
despite the change in ownership and the change in SGM*s name, the location
and address of the entity would remain the same, and the entity would
continue to honor its contractual relationship with the joint venture.
Id. The public announcement of the acquisition also advised that SGM
would remain an intact entity under its new owner. AR at 3.
Given the sale of SGM, HSG argues that the evaluation of SKE/SGM*s
proposal in several areas, as well as the agency*s responsibility
determination, are now invalid. In addition, HSG argues that the agency
will not be able to enter into a proper novation agreement with SKE/SGM.
For the reasons set forth below, we deny HSG*s challenge to the agency*s
evaluation of SKE/SGM*s proposal, as well as its related challenge to the
responsibility determination, and we conclude that HSG*s argument
regarding the agency*s ability to enter into a novation agreement raises a
matter we will not review.
HSG*s arguments regarding the evaluation and the agency*s responsibility
determination are based upon the premise that the entity whose proposal
the agency evaluated no longer exists, and, as a result, the agency*s
conclusions about that proposal (and entity) have been rendered invalid.
Under the logic of this premise, HSG contends that the agency*s evaluation
review of SKE/SGM*s licenses and permits, specialized personnel,
information conveyed during the oral presentation, and administrative
resources--which, presumably, relied on SGM*s contributions to the joint
venture--now lacks a reasonable basis. Our standard in reviewing
evaluation challenges is to examine the record to determine whether the
agency*s judgments were reasonable and consistent with stated evaluation
criteria and applicable statutes and regulations. ESCO, Inc., B-225565,
Apr. 29, 1987, 87-1 CPD P: 450 at 7. In our view, HSG*s premise
overstates the effect of the change of ownership in this case.
Our reading of the materials submitted with the agency report provides no
support for HSG*s contention that the Army*s evaluation has been rendered
invalid by the change in SGM*s ownership. For example, the record shows
only that the corporate shares of SGM changed hands. AR, Tab 3, at 2. In
addition, the new owners have indicated that the entity formerly known as
SGM remains intact, has the same location and offices, and intends to
honor its prior commitments. Id. In our view, this situation is
analogous to those where an agency properly credits an offeror with the
favorable past performance experience of key employees who gained their
experience working elsewhere. See MCR Eng*g Co., Inc., B-287164,
B-287164.2,
Apr. 26, 2001, 2001 CPD P: 82 at 7. In fact, unlike in MCR, there is no
suggestion that any of the strengths of the entity formerly known as SGM
are other than fully intact and available. Put simply, there is nothing
in this record that suggests that the licenses and permits, the
specialized personnel, the information conveyed during the oral
presentation, or the administrative resources offered by SGM have been
rendered unavailable, or in any way changed by this transaction.
One of HSG*s most specific challenges to the reevaluation is the agency*s
assessment of SKE/SGM*s financial resources, an area of review expressly
identified in the solicitation*s evaluation scheme. In its protest of the
previous selection decision, HSG alleged that agency*s assessment of
SKE/SGM*s financial resources was improperly based, at least in part, on a
financial statement from Siemens AG, without any explanation of the
relationship between that company and SGM.[1] During the earlier protest,
HSG argued that its proposal offered better evidence of strong financial
responsibility, and challenged any conclusion that it and the SKE/SGM
proposal were on equal footing in this regard.
In our review of this protest, we examined the record to determine whether
the agency*s evaluation of the SKE/SGM proposal continued to rely on
financial information from Siemens AG to bolster the joint venture*s
financial resources--as it had in the previous evaluation. In this
regard, we recognized that the agency*s reliance on the finances of
Siemens AG to evaluate the financial resources of SKE/SGM, given the
subsequent sale of SGM, could provide support for HSG*s challenge to the
validity of the reevaluation. Again, we found no support in the record
for HSG*s contentions. In the selection decision, the source selection
authority (SSA) expressly concluded that *[t]he joint venture as well as
both companies that compose it are financially sound, and the offeror
demonstrated sufficient resources and ability to obtain credit in case of
an unforeseen contingency.* AR, Tab 11, at 4. Given the SSA*s reliance
on the joint venture*s resources to reach his conclusions in this area,
rather than relying on the resources of SGM*s corporate owner, even this
area of inquiry provides no support for HSG*s contention.
In a derivative argument, HSG also challenges the agency*s responsibility
determination, based again on the change in ownership of SGM. Our Office
generally will not consider a protest challenging an agency*s affirmative
determination of responsibility, except under limited exceptions, because
the determination that a particular contractor is capable of performing a
contract is largely committed to the contracting officer*s (CO)
discretion. 4 C.F.R. S: 21.5(c) (2004). The exceptions are protests that
allege that definitive responsibility criteria in the solicitation were
not met, and those that identify evidence raising serious concerns that,
in reaching a particular responsibility determination, the CO unreasonably
failed to consider available relevant information or otherwise violated
statute or regulation. Id.
While there is no dispute here that the CO had not considered the
information about the change in SGM*s ownership and this information was
available on the Internet (and perhaps other places), we cannot say--as
our bid protest rules require--that the CO*s failure to consider the
information was unreasonable. The sale of SGM occurred after the
submission of FPRs, and SKE/SGM did not provide information about the sale
to the CO prior to the award decision. There is also no evidence here
that the CO was aware of this information, or should have been aware of
it. Without a showing that the CO unreasonably failed to consider
available information, we will not consider a protest challenging the CO*s
affirmative responsibility determination.[2]
As a final matter, HSG argues that the award to the joint venture was
improper as a legal matter due to the change in ownership of SGM. We see
no impediment to award on this basis given that the award was made to a
joint venture that continues to exist--as do both of the entities that
comprise the joint venture--even though ownership of one of the joint
venturers has changed. See generally Sunrise Int*l Group, Inc., B-266357,
Feb. 12, 1996, 96-1 CPD P: 64 at 2-3. HSG also argues that the agency is
precluded from entering into a novation agreement with the awardee. HSG*s
contention is not only speculative, but raises a matter of contract
administration not for consideration by our Office. 4 C.F.R. S: 21.5(a);
Bosma Mach. and Tool Corp., B-257443.2, B-257443.3, Oct. 17, 1994, 94-2
CPD P: 143 at 4.
The protest is denied.
Anthony H. Gamboa
General Counsel
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[1] Although both companies contained the word *Siemens* in their names,
the SKE/SGM proposal had not explained the relationship between the two
companies. In the discussion that follows, we assume a relationship
between the two companies, although the precise nature of the relationship
is not relevant here.
[2] In any event, even if the CO had been aware of this information, there
is no basis to conclude that it would have had any material effect on the
agency*s responsibility determination, given that, as discussed above,
there has been no change in SGM*s resources or role in the joint venture,
despite the change in ownership.