TITLE: Shields & Dean Concessions, Inc., B-292901.2; B-292901.3, February 23, 2004
BNUMBER: B-292901.2; B-292901.3
DATE: February 23, 2004
**********************************************************************
Shields & Dean Concessions, Inc., B-292901.2; B-292901.3, February 23, 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: Shields & Dean Concessions, Inc.
File: B-292901.2; B-292901.3
Date: February 23, 2004
Ruth G. Tiger, Esq., Saltman & Stevens, for the protester.
Dorothy C. Slovak, Esq., Holland & Knight, for Global Golf Services, Inc.,
an intervenor.
Alton E. Woods, Esq., Sherry Kinland Kaswell, Esq., Pamela L. Barkin,
Esq., and Perri Rothemich, Esq., Department of the Interior, for the
agency.
Linda S. Lebowitz, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest is sustained where the agency failed to reasonably evaluate
proposals for the award of a concession contract in accordance with the
terms of the prospectus.
DECISION
Shields & Dean Concessions, Inc. (SHDE) protests the award of a concession
contract to Global Golf Services, Inc. (GLGO) by the National Park Service
(NPS), Department of the Interior, under prospectus No. GATE020-03, for
the provision of visitor recreational services at two locations within the
Jamaica Bay Unit of the Gateway National Recreation Area in Brooklyn, New
York. SHDE, the incumbent concessioner, protests the agency*s evaluation
of proposals.
We sustain the protest.
BACKGROUND
On February 12, 2003, the NPS issued the prospectus seeking competitive
proposals for the award of a 10-year concession contract to provide
visitor recreational services at two locations within the Jamaica Bay Unit
of the Gateway National Recreation Area. At the Flatbush Avenue location,
the concessioner is required to operate and manage a 75-tee golf driving
range and a snack bar; in addition, the concessioner is authorized to
operate and manage tennis courts, pro shop merchandising facilities, a
golf training center, a club house facility, heated tees, and indoor
simulated golf practice systems. At the Jacob Riis Park location, the
concessioner is required to operate and manage an 18-hole pitch and putt
golf course and to provide limited food service; in addition, the
concessioner is authorized to operate and manage miniature golf and
baseball batting practice facilities.[1] The prospectus was issued
pursuant to the National Park Service Concessions Management Improvement
Act of 1998, 16 U.S.C. S: 5951 et seq. (2000). One of the primary
objectives of this statute is the enhancement of competition in NPS
concession contracting. See 36 C.F.R. Part 51. Specifically, the statute
established a competitive selection process for the award of concession
contracts. The prospectus identified SHDE as the incumbent concessioner,
stating that SHDE *has operated satisfactorily during the terms of [its]
two concession authorizations, and is expected to compete for the new
contract.* Prospectus, Business Opportunity, at 2.
Under the prospectus, the NPS would select the *responsive proposal with
the highest cumulative point score as the best proposal.* Prospectus,
Proposal Instructions, at 3. The prospectus stated that only an offeror
submitting a *responsive* proposal was eligible for award, defining a
*responsive* proposal as a
timely submitted proposal that is determined by the [NPS] as agreeing to
all of the minimum requirements of the new concession contract and
prospectus and as having provided the information required by the
prospectus.
Id. at 1.
The prospectus included the following five *principal selection factors*
(PSF): (1) the responsiveness of the proposal to the objectives, as
described in the prospectus, of protecting, conserving, and preserving
resources of the park area; (2) the responsiveness of the proposal to the
objectives, as described in the prospectus, of providing necessary and
appropriate visitor services at reasonable rates; (3) the experience and
related background of the offeror, including the past performance and
expertise of the offeror in providing the same or similar visitor services
as those to be provided under the concession contract; (4) the financial
capability of the offeror to carry out its proposal; and (5) the amount of
the proposed minimum franchise fee,[2] if any, and/or other forms of
financial consideration to the NPS. Under the terms of the prospectus,
each of the first four PSFs, which contained multiple, narratively
described subfactors, would be scored on a scale of 0 to 5 points; the
fifth PSF, which required the insertion of the offeror*s proposed minimum
franchise fee, expressed as a percentage of the firm*s annual gross
receipts, would be scored on a scale of 0 to 4 points, with a score of 1
point being assigned where the offeror agreed to the minimum franchise fee
contained in the prospectus. The prospectus advised that the agency*s
consideration of revenue to the government would be subordinate to the
objectives of protecting, conserving, and preserving resources of the park
area and of providing necessary and appropriate visitor services to the
public at reasonable rates.
The prospectus also included a secondary selection factor (SSF) that would
assess the quality of the offeror*s proposal to conduct operations in a
manner that furthers the protection, conservation, and preservation of the
park area and other resources through environmental management programs
and activities. The SSF would be scored on a scale of 0 to 3 points.
In preparing proposals, the prospectus advised offerors that under the
PSFs, the NPS identified subfactors to ensure that all elements of the
selection factor were considered; the prospectus stated that *[y]ou, the
Offeror, should ensure that you fully address all of the selection factors
and related subfactors.* Prospectus, Proposal Instructions, at 4. In
addition, the prospectus advised that the proposal and related materials
submitted should reflect the offeror*s entire proposal, and that the NPS
would consider an offeror*s written submission as its *full and final
proposal in response to the prospectus.* Id. at 5.
Nine offerors, including SHDE and GLGO, submitted proposals. As relevant
here, the agency assigned the following scores to the proposals of SHDE
and GLGO:
+------------------------------------------+
| |SHDE |GLGO |
|--------------+-------------+-------------|
|PSF 1 |4 |3 |
|--------------+-------------+-------------|
|PSF 2 |4 |4 |
|--------------+-------------+-------------|
|PSF 3 |3 |4 |
|--------------+-------------+-------------|
|PSF 4 |3.5 |3.5 |
|--------------+-------------+-------------|
|PSF 5 |2 |3.5 |
|--------------+-------------+-------------|
|SSF |2.5 |2 |
|--------------+-------------+-------------|
|Total |19 |20 |
+------------------------------------------+
Evaluation Report at 21, 30, 39, 45, 47, 50.
These selection factor scores were supported by narrative evaluation
comments that corresponded to the subfactors under each PSF and to the
SSF. The NPS assigned points to the selection factors, but not to the
subfactors. (In evaluating proposals, since the agency did not assign
points to the subfactors, it is not clear how the agency arrived at the
score assigned for each selection factor.) Because GLGO*s proposal had
the highest cumulative point score--by only 1 point--the NPS decided to
award to GLGO. As shown in the above chart, GLGO*s proposal won the
competition primarily due to the franchise fee selection factor, PSF 5;
however, if the franchise fee selection factor is excluded, GLGO*s
proposal was actually lower rated. In effect, then, the NPS conducted a
tradeoff, determining that the additional 1.5 points assigned to GLGO*s
proposal for PSF 5, reflecting GLGO*s higher proposed franchise fee,
offset the small point advantage of SHDE*s proposal for the
non‑franchise fee selection factors which, under the terms of the
prospectus, were more important that an offeror*s proposed franchise fee.
In short, the record reflects an extremely close competition in which any
flaw in the evaluation of the SHDE and GLGO proposals could have affected
the agency*s selection decision.
ISSUES AND ANALYSIS
SHDE protests the evaluation of proposals, basically contending that the
agency did not evaluate the proposals of SHDE and GLGO in accordance with
the terms of the prospectus.[3]
As a threshold matter, we point out that the NPS does not dispute the
authority of our Office, pursuant to the Competition in Contracting Act of
1984 (CICA), 31 U.S.C. S:S: 3551-56 (2000), to review this protest.
Agency Report (AR), Dec. 15, 2003, at 1; AR, Feb. 3, 2004, at 1, 3. In
this regard, where the government invites private offerors to compete for
a business opportunity, the performance of which also involves the
delivery of goods or services to the government, the contract is one for
the procurement of property or services within the meaning of CICA and,
therefore, is encompassed within our Office*s bid protest jurisdiction.
Starfleet Marine Transp., Inc., B-290181, July 5, 2002, 2002 CPD P: 113 at
6. Here, in addition to providing visitor recreational services for the
10-year term of the concession contract, the concessioner also is required
to provide a variety of maintenance, repair, housekeeping, and
groundskeeping services, as well as to undertake a construction and
demolition program projected to cost more than $800,000. Clearly, the
value of the services to be provided by the concessioner to the government
is significant, not de minimis, and it is, therefore, adequate to justify
our review of this mixed transaction. Id. at 8.
While the portions of CICA regarding our Office*s bid protest jurisdiction
thus apply here, the CICA provisions governing the conduct of procurements
do not. This is because CICA exempts *procurement procedures [that are]
otherwise expressly authorized by statute.* 41 U.S.C. S: 253(a)(1)
(2000). The NPS statute, as referenced earlier, provides for such a
procedure since it establishes the processes that are to be followed when
the NPS awards a concession contract. Where, as here, CICA and the
implementing Federal Acquisition Regulation (FAR) (see FAR S:S: 1.104,
2.101) do not apply to procurements that are within our jurisdiction, we
review the record to determine if the agency*s actions were reasonable and
consistent with any statutes and regulations that do apply. Starfleet
Marine Transp., Inc., supra, at 9-10. In this case, based on our review
of the record, including the proposals submitted by SHDE and GLGO, the
agency*s contemporaneous evaluation narratives, and the agency*s arguments
in response to the protest, we conclude that the agency did not reasonably
evaluate the SHDE and GLGO proposals in accordance with the terms of the
prospectus.
PSF 1--Environmental Management Program
This selection factor contained four narrative subfactors. The second
subfactor required that each offeror *[s]ubmit with [its proposal] a draft
Environmental Management Program (EMP) for this operation, addressing the
elements identified in the draft CONTRACT, Section 6, Environmental and
Cultural Protection, and the specific objectives listed below,* which
included: (1) solid waste management, including recycling; (2) water and
energy conservation; (3) emergency planning and response; (4) pollution
prevention and waste reduction; (5) reduction of emissions from vehicles
and other operations that affect air quality; (6) sustainable design and
construction practices; (7) pest management practices; and (8) education
of public regarding environmental protection/awareness. Prospectus,
Proposal Package, at 8‑9.
The requirement for an EMP was described in section 6 of the draft
contract, which was included as a material part of the prospectus.
Section 6 of the draft contract described an EMP as a *comprehensive
written* plan to achieve the environmental management objectives of
complying with all applicable laws pertaining to the protection of human
health and the environment and incorporating best management practices in
the concessioner*s operation, construction, maintenance, acquisition,
provision of visitor services, and other activities under the contract.
Prospectus, Draft Contract, at 13-14. The EMP was to *account for all
activities with potential environmental impacts conducted by the
Concessioner or to which the Concessioner contributes.* Id. at 14. More
specifically, section 6 of the draft contract stated that the *EMP shall
include, without limitation,* the following narratively described
elements: (1) policy; (2) goals and targets; (3) responsibilities and
accountability; (4) documentation; (5) documentation control and
information management system; (6) reporting; (7) communication;
(8) training; and (9) monitoring, measurement, and corrective action. Id.
at 14-15.[4]
SHDE*s EMP, as included in its proposal, was a [deleted]-page document
that substantively addressed each of the eight specified environmental
objectives and each of the nine EMP elements, as listed above. In
addition to substantive narrative discussions, SHDE*s EMP included, for
example, [deleted] and other [deleted] documents and [deleted]
guidelines. The contemporaneous NPS evaluation narrative for SHDE*s
proposal stated that SHDE *adequately addressed all eight specific
environmental objectives and demonstrated [its] understanding of the
specific objectives. It also addressed all nine required EMP elements,
and all to a level that demonstrated an understanding of those particular
EMP elements and how these applied to the services required under the
draft contract.* Evaluation Report at 17.
In contrast, GLGO*s EMP, as included in its proposal, consisted of
[deleted] pages. In these pages, while GLGO listed as page headings the
eight environmental objectives and provided a narrative for each, GLGO did
not address with any degree of specificity the nine EMP elements.
Nevertheless, the contemporaneous NPS evaluation narrative for GLGO*s
proposal stated that GLGO *addressed all eight of the specific
[environmental] objectives in its proposal and all eight were addressed to
a level where the response demonstrated the Offeror*s understanding of the
specific objective. GLGO addressed eight of the nine required [EMP]
elements . . . and seven . . . were to a level that demonstrated its
understanding of those particular required EMP elements.* Id. at 16.
Based on the contemporaneous evaluation narrative, it was the agency*s
view at the time of proposal evaluation that GLGO did not address the
first EMP element--policy--and that GLGO did not demonstrate its
understanding of the first and second EMP elements--policy and goals and
targets.[5]
An offeror*s EMP was evaluated under PSF 1, for which GLGO*s proposal
received 3 points and SHDE*s proposal received 4 points. SHDE argues that
under the terms of the prospectus, GLGO should not have been eligible for
award because it failed to address all of the required EMP elements as
listed in section 6 of the draft contract, which was included as a
material part of the prospectus. In the alternative, based on the SHDE
and GLGO responses to the requirement to submit an EMP, SHDE argues that
for PSF 1, either GLGO*s proposal was scored too high or SHDE*s proposal
was not scored high enough.
In response to the protest (but not reflected in the contemporaneous
evaluation record), the NPS explains that in evaluating proposals,
particularly an offeror*s proposed EMP, the agency considered information
found within the offeror*s entire proposal, explaining that *information
in a proposal that addressed a particular selection factor could be found
not only under the principal or secondary selection factor itself but also
elsewhere in the proposal.* Declaration of Evaluation Panel Chair, Jan.
9, 2004, at 1. More particularly, in evaluating whether GLGO addressed
the nine required EMP elements, the agency *reviewed [GLGO*s] proposal as
a whole.* Id. at 2. For example, with respect to the first EMP
element--policy--the agency stated that although GLGO *did not expressly
provide a single *clear statement** in accordance with section 6 of the
draft contract, GLGO*s *substantive commitments in this regard were
contained throughout its proposal, including its agreement to [the] terms
of the contract.* Id. at 3. The agency lists each EMP element and the
various pages within GLGO*s proposal where the firm purportedly addressed
these elements.
Here, where the prospectus required an offeror to submit a *comprehensive
written* EMP, we are troubled by the agency*s position in response to the
protest that GLGO complied with this requirement based on statements
scattered throughout its proposal. In our view, such statements do not
constitute a *comprehensive written* plan as contemplated by the
prospectus. Moreover, even if such an approach, as just described,
reasonably could be construed as satisfying the requirement that an
offeror submit an EMP, the agency*s post hoc explanation of its evaluation
is not consistent with its contemporaneous evaluation narrative that
states that GLGO addressed only eight of the nine required EMP elements
and demonstrated its understanding of only seven of them. Clearly, even
if what GLGO submitted reasonably could be construed as an EMP as
contemplated by the prospectus, the agency*s contemporaneous evaluation
narrative shows that this EMP was incomplete and inadequate because GLGO
did not address, nor demonstrate an understanding of, all nine of the
required EMP elements. On this record, we conclude that in evaluating
GLGO*s proposal, the agency either improperly relaxed for GLGO the
prospectus requirement for the submission of a comprehensive written EMP
or did not reasonably downgrade GLGO*s proposal based on the firm*s
failure not only to address, but also to demonstrate an understanding of,
all nine of the EMP elements as required by the prospectus.[6]
PSF 1--Environmental Program Manager
The third subfactor under this selection factor required an offeror to
identify its proposed environmental program manager, including a brief
description of his or her qualifications and past experience with regard
to managing an environmental program. This subfactor also required an
offeror to specify the amount of time the *[environmental program] manager
[would] spend performing his [or] her duties.* Prospectus, Proposal
Package, at 9. SHDE and GLGO each identified in their respective
proposals an individual who would serve as the firm*s environmental
program manager. As relevant here, SHDE stated in its proposal that its
proposed environmental program manager would be *engaged [deleted],* and
as evidenced from this individual*s resume, he would work *[deleted] hours
per week* in that position. SHDE*s Proposal at 0017, 0193. GLGO stated
in its proposal that its proposed environmental program manager was
*committed to spending [deleted] days a week overseeing Environmental
Programming and Environmental Management* for GLGO, and as evidenced from
this individual*s resume, he would work *[deleted] hours per week* in that
position. GLGO*s Proposal at 32, 142. The contemporaneous NPS evaluation
narrative stated that SHDE and GLGO each identified an environmental
program manager and each firm *specif[ied] that the [proposed]
environmental program manager would spend [deleted] hours/week performing
his/her duties in the park.* Evaluation Report at 17.
Again, for PSF 1 (the same selection factor under which an offeror*s EMP
was evaluated), GLGO*s proposal received 3 points and SHDE*s proposal
received 4 points. SHDE challenges the reasonableness of the agency*s
evaluation, particularly the agency*s equalizing of the amount of
time--[deleted] hours--that each offeror*s proposed environmental program
manager would spend in the position. SHDE points out that its proposed
environmental program manager committed to spending more than
[deleted] hours per week in that position (i.e., *[deleted] hours per
week*), while GLGO*s proposed environmental program manager expressly
committed to spending significantly less than [deleted] hours per week in
that position, specifically, *[deleted] days,* or *[deleted] hours,* per
week.
In response to the protest (but not reflected in the contemporaneous
evaluation record), the NPS explains that because the individual proposed
by SHDE had other duties, for example, serving as the [deleted] and
holding [deleted] responsibilities, the agency estimated that this
individual would only be able to spend between [deleted] to [deleted]
hours per week on environmental program management matters. The NPS also
noted that two other managers (the [deleted] and the [deleted]) on the
SHDE team would likely spend some time on environmental program management
matters. Accordingly, the NPS now explains that it estimated that the
total amount of time that these three SHDE team members would spend on
environmental program management matters was between [deleted] to
[deleted] hours per week. Declaration of Evaluation Panel Chair, supra,
at 3-4. In contrast, recognizing that GLGO*s proposed environmental
program manager was committed to spending only [deleted] days, or
[deleted] hours, per week in that position, the NPS explains that a number
of other managers (the [deleted], the [deleted], the [deleted], and the
[deleted]) on the GLGO team also would have environmental program
management responsibilities. For this reason, the NPS now explains that
it estimated the total amount of time that these five GLGO team members
would spend on environmental program management matters was between
[deleted] to [deleted] hours per week. Id. at 4.
Again, we are troubled by the agency*s evaluation of proposals under PSF
1. Here, SHDE and GLGO each identified, in accordance with the terms of
the prospectus, a specific individual to serve as the firm*s environmental
program manager and indicated the amount of time the individual would
spend performing the duties
associated with the position. Under the terms of the prospectus, it is
the information
as submitted for the specifically identified individual proposed to serve
as the offeror*s dedicated environmental program manager that reasonably
should have been evaluated by the agency in assessing whether the offeror
had proposed a qualified individual who was committed to serve in the
position for a sufficient number of hours per week in order to carry out
the responsibilities associated with protecting, conserving, and
preserving park resources. In response to the protest, the agency appears
to acknowledge that the [deleted]-hours commitment from GLGO*s proposed
environmental program manager was not sufficient in order for this
individual to carry out the responsibilities associated with the
position. The agency nevertheless asserts that GLGO otherwise satisfied
the prospectus requirement for a sufficiently committed and dedicated
environmental program manager based on the work that four other members of
the GLGO team allegedly will perform. However, the agency*s consideration
of a *team approach* in evaluating the sufficiency of the commitment of
the individual proposed by GLGO to serve as the firm*s dedicated
environmental program manager was not contemplated by, nor consistent
with, the terms of the prospectus, as described above. On this record, we
believe the agency did not reasonably evaluate the hourly commitment of
GLGO*s proposed environmental program manager.
CONCLUSION AND RECOMMENDATION
In view of the closeness of the competition--as discussed above, there was
only a 1‑point difference between the total cumulative scores
assigned to the SHDE and GLGO proposals--we conclude that any of the flaws
in the NPS evaluation could have changed the agency*s selection decision.
This problem is compounded by the agency*s failure in its evaluation to
indicate the scores being assigned to the subfactors under the selection
factors, thus making it impossible to understand how the agency arrived at
the score assigned for each selection factor. Thus, for example, we have
no idea what weight was accorded to the EMP subfactor under PSF 1, which
makes it impossible to determine the potential effect of the
above‑discussed evaluation flaw involving GLGO*s EMP on the
selection decision.
Accordingly, we sustain the protest. While our recommendation under these
circumstances normally would be for the agency to reevaluate proposals,
with a view to possibly awarding to a different firm, this remedy is not
feasible here because the concession contract awarded to GLGO did not
contain a termination for convenience clause. Our Office has held that in
the absence of such a clause, we will not recommend termination of an
awarded contract, even if we sustain the protest and find the contract
award improper. See, e.g., Peter N.G. Schwartz Cos. Judiciary Square Ltd.
P*ship, B-239007.3, Oct. 31, 1990, 90-2 CPD P: 353 at 11‑12; SWD
Assocs.--Costs, B-226956.3, Sept. 1, 1989, 89-2 CPD P: 206 at 2. For this
reason, we recommend that the agency reimburse SHDE for its proposal
preparation costs as well as the
reasonable costs of filing and pursuing the protest, including reasonable
attorneys*
fees. 4 C.F.R. S: 21.8(d) (2003). SHDE*s certified claim for costs,
detailing the time expended and costs incurred, must be submitted to the
agency within 60 days of receiving this decision.
The protest is sustained.
Anthony H. Gamboa
General Counsel
------------------------
[1] As part of the overall concession contract, the concessioner also is
required to perform various other maintenance, repair, housekeeping, and
groundskeeping services for the agency, e.g., installation, maintenance,
and replacement of all interior and exterior signs at the facility; trash
and garbage disposal; maintenance of roads, parking areas, curbing,
sidewalks, and walkways; seed, fertilizer, and herbicide application;
operation, maintenance, and repair of all utility services; and
winterization and dewinterization. In addition, the prospectus contains a
provision entitled the *Concession Facilities Improvement Program* under
which the concessioner is required to undertake and complete an
improvement program (construction and demolition of a number of facility
structures) projected to cost, according to the prospectus, approximately
$855,200. Prospectus, Business Opportunity, at 4-5.
[2] The prospectus required the concessioner to pay the NPS a minimum
franchise fee, calculated as a percentage of the concessioner*s annual
gross receipts, of 8.5 percent on the combined driving range and golf
course operation and 9 percent if miniature golf was also proposed.
Offerors were advised that they could propose franchise fees higher than
the stated minimum. Prospectus, Business Opportunity, at 3. While SHDE
and GLGO each proposed a franchise fee that exceeded the minimum fee
required by the prospectus, SHDE*s proposed fee was less than GLGO*s
proposed fee.
[3] This decision addresses SHDE*s primary arguments regarding the
agency*s evaluation of proposals. In light of our decision sustaining the
protest, we need not address the other arguments raised by SHDE
challenging the agency*s evaluation of proposals.
[4] Section 6 of the draft contract required that the initial EMP be
developed and submitted to the NPS for approval within 60 days of the
effective date of the contract.
[5] Section 6 of the draft contract states that for *policy,* the *EMP
shall provide a clear statement of the Concessioner*s commitment to the
Environmental Management Objectives.* Section 6 of the draft contract
states that for *goals and targets,* the *EMP shall identify environmental
goals established by the Concessioner consistent with all Environmental
Management Objectives. The EMP shall also identify specific targets (i.e.
measurable results and schedules) to achieve these goals.* Id. at 14.
[6] In contrast, the voluminous, multi-page, substantive EMP submitted by
SHDE reasonably constituted the *comprehensive written* plan as
contemplated by the prospectus. As discussed above, the agency*s
contemporaneous evaluation narrative recognized that SHDE addressed, and
also demonstrated its understanding of, the eight environmental objectives
and the nine EMP elements. Although the contemporaneous evaluation
narrative for SHDE*s EMP also stated that *five of SHDE*s EMP elements
lacked sufficient detail and standard operating procedures that would
typically be included in an effective EMP to allow it to serve as a
consolidated environmental resource for management and operational staff,*
the evaluation narrative nevertheless included *the opinion of the Panel
that these details and standard operating procedures could easily be
developed and incorporated into the EMP once an Offeror is operational.*
Evaluation Report at 21. Thus, the agency*s contemporaneous evaluation
narrative does not indicate that SHDE*s EMP was other than acceptable or
otherwise provide a basis for downgrading SHDE*s proposal.