TITLE:  Poly-Pacific Technologies, Inc., B-293925.2, December 20, 2004
BNUMBER:  B-293925.2
DATE:  December 20, 2004

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   Decision

   Matter of:   Poly-Pacific Technologies, Inc.

   File:            B-293925.2

   Date: December 20, 2004

   Chris Howard for the protester.

   James B. Howarth, Esq., and Eric Kattner, Department of the Air Force, for
the agency.

   Jonathan L. Kang, Esq., and Michael R. Golden, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Protest that agency improperly determined that protester's proposal was
technically unacceptable is denied where the protester failed to
adequately address technical deficiencies that the agency had brought to
the protester's attention during multiple rounds of discussions. 

   DECISION

   Poly-Pacific Technologies, Inc. protests the rejection of its proposal
under request for proposals (RFP) No. F42650-03-R-A111, issued by the
Department of the Air Force for lease and recycling of abrasive blast
media.  Poly-Pacific argues that the agency improperly determined that its
proposal was technically unacceptable.

   We deny the protest.

   BACKGROUND

   The RFP was issued on March 3, 2004, as a total small business set aside,
and anticipated the award of a fixed-price,
indefinite-delivery/indefinite-quantity contract for an 8-month base
period followed by up to four 1-year options.  The RFP sought proposals to
lease `blast media,' such as plastic, aluminum oxide, glass, garnet, and
other media blends, to Hill Air Force Base, Utah, for use as an abrasive
in the removal of organic and other coatings from aircraft, components,
and equipment.  RFP, Statement of Work (SOW), at 1.  After the material is
used as an abrasive and is no longer usable for that purpose, it is deemed
`spent blast media' (SBM) and the contractor is responsible for removing
the SBM.  Id.  The RFP required offerors to propose a means of removing
and recycling the SBM that meets U.S. Environmental Protection Agency
(EPA) regulations that exclude such recycled products from the definition
of `solid waste.'  RFP at 23.  During the course of the contract the
contractor will retain legal title to the media, as well as liability for
its handling and disposal.  Id.

   The RFP technical requirements were comprised of two subfactors,
`recycling' and `material conformance.'  RFP at 40, P 2.2.1.  These
technical subfactors required offerors to submit proposals detailing their
approach to providing media and recycling SBM as set forth in the SOW. 
Id.  Furthermore, the RFP advised offerors that compliance with all
requirements in the RFP and SOW was mandatory, and that proposals which
failed to meet those requirements could be rejected as technically
unacceptable.  RFP at 36, P 4.1, and at 39, P 1.1.  The RFP stated that
award would be made to the responsible offeror submitting a technically
acceptable proposal and offering the lowest evaluated price.  RFP at 39, P
1.0.

   Poly-Pacific submitted a timely proposal on April 6.  Agency Report (AR),
Tab 4, Poly-Pacific Proposal.  Poly-Pacific proposed to lease media to the
agency and recycle the SBM at its facility in Ontario, California. 
Poly-Pacific stated that it would recycle SBM into `plastic lumber,' a
process that involves `mixing shredded high density polyethylene (HDPE)
with Spent Blasting Media (SBM) and . . . an extruding process [that]
produces plastic lumber which can be used in a number of approved means
(above ground decking, rail fencing, general building material).'  Id. SM,
PP C, F. 

   Following its initial technical evaluation of offerors' proposals, the
agency conducted discussions with Poly-Pacific and the other offeror whose
proposal was in the competitive range.  Contracting Officer's Statement at
3.  During the first round of discussions, the agency requested additional
information regarding five areas in which it found Poly-Pacific's proposal
technically unacceptable.  AR, Tab 8, First Discussions Questions, at
1-2.  Poly-Pacific provided written responses to the agency's request. 
AR, Tab 8, First Discussions Responses.  Following its evaluation of the
Poly-Pacific responses, the agency determined that `there are still major
substantive issues that must be resolved.'  AR, Tab 8, E-mail from
Technical Evaluator to Contracting Officer, June 10, 2004.  The agency
conducted a second round of discussions with Poly-Pacific, requesting
additional information that largely reiterated the agency's concerns from
the first round of discussions.  AR, Tab 8, Second Discussions Questions,
at 1-2.  Poly-Pacific provided written responses to the second round of
discussions.  AR, Tab 8, Second Discussions Responses.  Again, however,
the agency determined that Poly-Pacific's response did not adequately
address technical deficiencies in several key areas.  AR, Tab 8, E-mail
from Technical Evaluator to Contracting Officer, June 24, 2004. 

   The agency notified Poly-Pacific on September 13 that its proposal was
technically unacceptable and was no longer under consideration for
award.[1]  AR, Tab 12, Notice of Technical Unacceptability, at 1. 
Poly-Pacific requested a debriefing, and was provided a written
explanation of the basis for the elimination of its proposal from award
consideration.  AR, Tab 13, Debriefing Letter, at 1.  The debriefing
summary cited five areas in which Poly-Pacific's proposal was technically
unacceptable for failing to meet mandatory RFP requirements, all of which
were identified during one or both of the two rounds of discussions:  (1)
failure to demonstrate the ability to recycle a maximum of 110,000 pounds
of SBM per month; (2) failure to demonstrate that SBM was an `effective
substitute' for HDPE in Poly-Pacific's proposed recycling process; (3)
failure to address the agency's concerns regarding the prohibition on
`applying recycled products to the land'; (4) failure to address the
agency's concerns regarding the RFP's prohibition on `speculative
accumulation' of SBM prior to recycling; and (5) failure to demonstrate
that there was an established market for Poly-Pacific's recycled product. 
Id.

   DISCUSSION

   Poly-Pacific contends that the agency misevaluated its technical proposal
and improperly eliminated its proposal from consideration for award. Specifically, in its initial protest, Poly-Pacific argues that the agency
unreasonably evaluated each of the five areas identified in its debriefing
by the agency as technical deficient.

   Where a protester challenges an agency's evaluation resulting in the
rejection of its proposal as technically unacceptable, our review is
limited to considering whether the evaluation is reasonable and consistent
with the terms of the RFP and applicable procurement statutes and
regulations.  National Shower Express, Inc.; Rickaby Fire Support,
B-293970, B-293970.2, July 15, 2004, 2004 CPD P 140 at 4-5.  Clearly
stated RFP technical requirements are considered material to the needs of
the government, and a proposal that fails to conform to such material
terms is technically unacceptable and may not form the basis for award. 
Id.; Outdoor Venture Corp., B-288894.2, Dec. 19, 2001, 2002 CPD P 13 at
2-3.  As with any evaluation review, our chief concern is whether the
record supports the agency's conclusions. Innovative Logistics Techniques,
Inc., B-275786.2, Apr. 2, 1997, 97-1 CPD P 144 at 9. 

   We find that the agency's conclusions regarding technical deficiencies in
Poly-Pacific's proposal are reasonable in at least three of the five
areas:  (1) effective substitute, (2) speculative accumulation, and (3)
known market.  Since the RFP advised that an offeror's proposal which does
not comply with all RFP requirements could be rejected as technically
unacceptable, and because we find that the agency's evaluation of these
three areas was reasonable and sufficient to find Poly-Pacific's proposal
technically unacceptable as not demonstrating the ability to meet material
RFP requirements, we do not need to address the balance of Poly-Pacific's
initial protest counts as we would not sustain the protest even if we
found that the agency had unreasonably evaluated Poly-Pacific's proposal
with regard to those remaining issues.[2]  See Shilog Ltd., Inc.,
B-261412.4, Nov. 8, 1995, 95-2 CPD P 260 at 9-10.  To the extent that
Poly-Pacific disagrees with the agency's conclusions, its mere
disagreement with the agency's evaluation does not render the evaluation
unreasonable.  Kathryn Huddleston & Assoc., Ltd., B-294035, July 30, 2004,
2004 CPD P 142 at 2.

   We additionally find, as discussed below, that the agency conducted
meaningful discussions with Poly-Pacific, but that Poly-Pacific did not
adequately respond to the agency's concerns.  The agency reasonably
informed Poly-Pacific during two rounds of discussions of all of the areas
in which its proposal was found technically unacceptable, and afforded
Poly-Pacific the opportunity to address those deficiencies.  An offeror
that does not adequately respond to an agency's request for additional
information during discussions risks having its proposal rejected as
technically unacceptable, especially where, as here, the offeror had
multiple opportunities to address the same agency concern.  See A-1 Serv.
Co., Inc., B-291568, Jan. 16, 2003, 2003 CPD P 27 at 4. 

   Effective Substitute

   Offerors were required to acknowledge that SBM is a `spent material' that
can no longer be used for its original purpose, but will not be considered
a `solid waste' under EPA rules if it is recycled using one of three
methods identified in 40 C.F.R.S 261.2(e)(1)(i)-(iii).  RFP S L, P 4.2.3.i.
As relevant here, an offeror that proposes to recycle SBM using method (ii)
under the above-identified regulation would use the SBM as an `effective
substitute' for a commercial product in the recycling process.[3]  Id.  

   The RFP stated that

   [i]f method (ii) is used, the contractor shall provide documentation
showing how much SBM is used in the formulation and what ingredients it is
a substitute for shall be provided.  Proof that it is an `effective
substitute' shall be provided, such that the `toxics along for the ride
(TAR)' concern, as addressed by EPA, is satisfied.  This documentation
must be provided to the government and also to regulatory agencies.

   RFP S L, P 4.2.3.i.

   Poly-Pacific proposed to use SBM along with HDPE in the production of
plastic lumber in a manner similar to the production of plastic lumber by
its subsidiary, Everwood Agriculture Products International, Inc.  AR, Tab
4, Poly-Pacific Proposal, S M.  Poly-Pacific currently recycles HDPE, in
the form of shredded used pesticide containers, into plastic lumber in its
Everwood facility in Aylmer, Ontario (Canada).

   During the second round of discussions, the agency noted that Poly-Pacific
had not adequately addressed the effective substitute requirement:

   Poly-Pacific suggests that SBM is a replacement material for `clean' HDPE
in production formulation.  You also state that SBM is an effective
substitute for HDPE, including reduction of the amount of color
concentrate that must be added to the mix, that it makes the product much
stronger and more pliable and finally that it modulates the impact of
temperature changes . . . [P]lease provide technical documentation that
supports these statements.  Further, has appropriate documentation of
these statements been provided to the States of California and/or Utah?

   AR, Tab 8, Second Discussions Questions, at 1.

   In its response, Poly-Pacific referred the agency to a report prepared in
October 2001 by CH2M HILL, a consultant retained by Poly-Pacific, and
submitted in Poly-Pacific's initial proposal.  AR, Tab 8, Second
Discussions Responses, at 1.  The CH2M report evaluated the recycling
process at the Everwood facility in Canada, but not Poly-Pacific's
facility in California.  Poly-Pacific's response reiterated the CH2M
report's observation that the addition of SBM in the recycling process was
effective in reducing the need for additional coloring and increasing the
strength of the final product.  AR, Tab 8, Second Discussions Responses,
at 1-2.  The agency concluded, however, that the response was still
inadequate because the claims made by Poly-Pacific concerning the benefits
of the use of SBM were not supported by technical data that could be
reviewed by the agency, and that the California and Utah agencies had
apparently not been provided Poly-Pacific documentation concerning the use
of SBM as an effective substitute.  AR, Tab 8, Second Discussions
Evaluation, at 2. 

   We conclude that the agency reasonably found that, despite the agency's
request to provide specific data, Poly-Pacific did not adequately respond
to the agency's concerns and thus did not demonstrate that SBM was an
effective substitute in Poly-Pacific's recycling process.  The CH2M report
did not contain any specific information aside from the claim that
`[c]omponents of the [SBM] (i.e. the paint chips) improve the final
product by adding strength and uniform colour.'  CH2M Report at 4-3.  The
only technical data cited was that `the use of colour concentrate pellets
. . . have been significantly reduced . . . [f]or example, less than 1
percent colorant is now required for the grey plastic lumber (as compared
to the previous 4 percent).'  Id. at 3-2.  Aside from this information,
neither the CH2M report nor Poly-Pacific's responses to the discussions 
questions furnish or even cite to data to support the claims regarding 
strength or temperature, as requested by the agency, and do not cite any 
information regarding the `toxics along for the ride' requirements.

   Furthermore, we find that the agency reasonably concluded that
Poly-Pacific failed to adequately address the RFP requirement that state
regulatory agencies be provided with documentation regarding the effective
substitute criterion.  During the second round of discussions, the agency
requested that Poly-Pacific state whether `appropriate documentation' of
the data indicating compliance with the effective substitute requirement
had been provided to the respective Utah and California environmental
regulatory agencies.  Poly-Pacific responded that Utah and California
`have been well informed of our processes as evidenced by the approval
letters from these states' that were submitted with Poly-Pacific's
proposal.  AR, Tab 8, Second Discussions Responses, at 2.  We agree with
the agency that Poly-Pacific's reliance on these letters, however, does
not clearly satisfy the requirement as both letters condition approval of
Poly-Pacific's recycling process on its ability to conform the process to
specific requirements.  For example, the California state letter
conditions approval of Poly-Pacific's recycling process on its ability to
utilize SBM as an effective substitute for a commercial product.  AR, Tab
4, Poly-Pacific Proposal, Letter from California Environmental Protection
Agency, June 30, 1998, at 1.  There is no evidence in the record that
Poly-Pacific provided adequate documentation pertaining to the `effective
substitute' criterion for its California facility to the state agencies,
as required by the RFP.

   Prohibition on Speculative Accumulation

   The RFP prohibited offerors from `speculatively accumulating' SBM, that
is, the contractor was required to recycle or dispose of all SBM removed
from Hill AFB as it is collected.  RFP S L, P 4.2.3.j.iii.  As part of the
requirement to describe their proposed recycling process, offerors were
required to demonstrate their ability to comply with the prohibition on
speculative accumulation, that is, the SBM would be immediately recycled
without accumulation of SBM inventory: 

   `Materials accumulated speculatively', the definition of which is given at
40[ ]CFR 261.1(c)([8])).  The SBM, prior to recycle, shall not be
accumulated speculatively.  The Offeror shall provide documentation and
data that demonstrates compliance with this requirement for each month
that the recycle process has been used.

   Id.

   The agency determined that Poly-Pacific had not addressed this requirement
in its initial proposal, and asked during discussions, `How will
Poly-Pacific insure that they meet the regulatory requirement for
speculative accumulation?  Specifically, how the recycling and operational
processes employed as part of this effort will in fact comply with the
specific requirements detailed in paragraph 4.2.3.j?'  AR,
Tab 8, First Discussions Questions, at 2.

   Poly-Pacific responded by explaining that `[s]ince the capacity of the
recycling facilities far exceed the anticipated volume of SBM to be
recycled, Poly-Pacific does not have any reason to `speculatively
accumulate,'' and further explained that if additional contracts are
obtained by Poly-Pacific that affect its capacity to recycle SBM, the firm
has `bank financing' for additional equipment that `can be readily set
up.'  AR, Tab 8, First Discussions Responses, at 4.

   The agency determined that Poly-Pacific's response to the discussions
question did not provide adequate documentation to support its assurances
that SBM would not be speculatively accumulated.  AR, Tab 8, E-mail from
Technical Evaluator to Contracting Officer, June 10, 2004, at 2.  In the
second round of discussions, the agency specifically requested data
demonstrating that Poly-Pacific could meet the non-speculative
accumulation requirement: `Another significant concern is your ability to
meet the `speculative accumulation' requirement.  Please provide
documentation to demonstrate how you have met this requirement in previous
years.  This would include data on hazardous SBM receipts, usage and
beginning and ending inventory by month and year.'  AR, Tab 8, Second
iscussions Questions, at 2.  In response to the specific request for
annual and monthly data, Poly-Pacific provided data regarding annual
recycling of SBM and sales of plastic lumber.  AR, Tab 8, Second
Discussions Responses, at 3. 

   The agency determined that Poly-Pacific's failure to provide monthly data
regarding recycling was a technical deficiency.  AR, Tab 8, Second
Discussions Evaluation, at 2.  

   Poly-Pacific concedes that it did not respond to the request for
monthly accumulation and usage data, but instead challenges the agency's
evaluation by noting that EPA regulations at 40 C.F.R. S 261.1(c)(8) do
not require monthly certifications that SBM is not being speculatively
accumulated.  Comments at 7.  Thus, Poly-Pacific contends, the agency
improperly requested information regarding `a standard of appropriate
monthly inventory and sales information' . . . [as] [t]his just is not
required by regulation.  Comments at 7. 

   Poly-Pacific's objection here fails because it is untimely, as the
requirement to demonstrate that all SBM received in a month is recycled
without accumulation was clearly set forth in the RFP.  RFP S L, P
4.2.3.j.iii.  Offerors were thus required to challenge the requirement
prior to the time for receipt of proposals.  Because Poly-Pacific did not
raise this challenge to a solicitation provision prior to the time for
receipt of proposals, its protest of this ground is untimely and cannot be
raised post-award.  Bid Protest Regulations, 4A C.F.R. SA 21.2(c)(1)
(2004).

   Because Poly-Pacific did not provide information regarding monthly usage
of SBM that demonstrated compliance with the RFP requirement, despite
repeated requests by the agency, we conclude that the agency reasonably
determined that Poly-Pacific failed to meet this RFP requirement.

   Demonstration of a Market for Resulting Product

   The RFP required offerors to demonstrate that there is a `known market or
disposition' for recycled SBM products.  SOW P 6.12 (incorporating by
reference 40 C.F.R. S 261.2(f)).  During the first round of discussions, the
agency requested that Poly-Pacific provide `historical sales quantities' to
demonstrate that `there is a viable market for the product produced from
the spent media.'  AR, Tab 8, First Discussions Questions, at 2.

   In its response, Poly-Pacific cited sales figures for its Canadian plastic
lumber production facility, noting that annual sales from 2002 through
2004 averaged 74,000 to 76,000 pieces.  AR, Tab 8, First Discussions
Responses, at 5.  Poly-Pacific estimates that the maximum amount of
plastic produced under the proposed contract, assuming full collection,
would require additional sales of approximately 56,170 pieces per year. 
Id.  Poly-Pacific added that it perceived a large market demand based on
its ability to sell all of its production to date.  Id.

   The agency determined that Poly-Pacific's response was inadequate, as it
only addressed production and sales of plastic lumber from its Canadian
facility, and not the California facility that would perform the work
under the contract.  AR, Tab 8, E-mail from Technical Evaluator to 
Contracting Officer, June 10, 2004. The agency's second round of discussions 
questions requested that Poly-Pacific provide specific data regarding sales 
and overall amounts of recycled materials produced at its California facility 
in pounds, as opposed to dollar amounts, and by product type.  AR, Tab 8, 
Second Discussions Questions at 2.  The agency also asked Poly-Pacific to 
address the agency's concern that `if you meet our concerns about the `Applied
to the Land/Fence Post' issue, how will this impact your projected sales 
analysis?  That is, if all sales of products that could be used as fence
posts [can] not contain SBM what is the impact on sales and on the usage
of SBM in your production?' [4]  Id.

   In its response, Poly-Pacific provided its projections for sales of
plastic lumber for its California facility for 2004 to 2006, which were
prepared in 2003 based on Poly-Pacific's `assum[ption] the plastic lumber
operation will start in 2004, and sales will increase steadily for the
next three years.'  AR, Tab 8, Second Discussions Responses, at 4. 
Poly-Pacific stated it would only produce plastic lumber to be used above
ground, and that it believed the market for such products `is likely to
grow exponentially over the coming decade.'  Id.

   Following Poly-Pacific's response to the second round of discussions, the
agency concluded that although the data addressed projected sales for the
California facility, Poly-Pacific did not provide data in terms of pounds
and types of products produced as requested, and did not address the
effect on the projected market by the shift in the type of the product to
be produced (from 5 inch round to 4x4 inch dimensions) or the effect of
the decision to produce products that will not be applied to the land. 
AR, Tab 8, Second Discussions Evaluation, at 4.

   We conclude that the agency reasonably determined that Poly-Pacific failed
to address the agency's concerns that its proposal did not demonstrate a
market for its recycled product.  The agency was concerned that
Poly-Pacific's historical sales data pertained only to 5 inch round
plastic lumber produced in its Canada facility, and there was no
historical data demonstrating a market for the 4x4 inch plastic lumber
material to be produced at the California facility.  AR, Tab 8, E-mail
from Technical Evaluator to Contracting Officer, June 10, 2004.  As the
agency points out, whereas the plastic lumber produced at the Canadian
facility under the `Everwood' product line is advertised and promoted as
fence posts, Poly-Pacific's response to the discussions questions did not
address the potential effect on the market for its product from compliance
with the prohibition on producing products as fence posts.[5]  As
Poly-Pacific acknowledges, it has limited sales data for its California
facility because its current production there is small.  Comments at 8
(`At this time we are producing a very limited amount of lumber due to the
limited amount of contracts at the California facility.')  Thus, the
agency reasonably found that Poly-Pacific's statement that there is demand
for its product was speculative and did not clearly meet the requirement
to identify a viable market for non-fence post plastic lumber.

   In light of the agency's material concerns with Poly-Pacific's technical
proposal and the failure of Poly-Pacific to adequately address those
concerns, we find nothing unreasonable in the agency's determination that
Poly-Pacific's proposal was technically unacceptable. [6]

   The protest is denied.

   Anthony H. Gamboa

   General Counsel

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

   [1] The agency has stated that it had not made an award at the time of the
protest, and does not intend to make an award prior to our decision. 
Contracting Officer's Statement at 1.

   [2] Poly-Pacific makes several additional allegations in its comments and
supplemental comments that we do not address here, such as challenges to
the responsibility of the remaining offeror.  We have reviewed all of
Poly-Pacific's additional grounds and do not find any merit to them.

   [3] Poly-Pacific's initial proposal stated that it intended to follow
recycling method (i), by using SBM `as in ingredient in an industrial
process to make a product.'  AR, Tab 4, Poly-Pacific Proposal, S M.  However, 
in its discussions with the agency, Poly-Pacific demonstrated that it in fact 
intended to rely on method (ii) because it was treating SBM as a substitute
for a commercial product, namely a substitute for coloring and HDPE, reducing
the need for each in the production of plastic lumber. Poly-Pacific confirms
this understanding in its comments on the agency report, stating that
Poly-Pacific `accepts the premise that the SBM is a `spent material' ' and
confirm[s] that Poly-Pacific uses method number (ii) (40[ ]CFR
261.2(e)(1)).'  Comments at 3.  Poly-Pacific's responses to the
discussions questions and its comments during this protest make clear that
it understood that the agency was evaluating its proposal under the method
(ii) `effective substitute' standard. 

   [4] The RFP stated that products made from recycled SBM could not be items
that are `applied to the land,' meaning `without limitation such items as
fence posts, blocks or concrete block like products or other items that
are used underground and/or that are used in contact with the earth.'  RFP
at 37, P 4.2.3.j(i).

   [5] The agency observed that the Poly-Pacific website for recycled plastic
lumber manufactured by its Everwood subsidiary promotes the plastic lumber
as suitable for fence posts, and contains several pictures of the product
used as fence posts.  AR, Tab 8, Second Discussions Evaluation.  We note
that this promotional material is still posted on Poly-Pacific's website. 
See Everwood website, available at http://www.poly-pacific.com/everwood.htm.

   [6] In addition to its challenges to the technical evaluation,
Poly-Pacific also alleges that the agency was biased against its proposal,
as evidenced by the agency's refusal to accept what Poly-Pacific believes
was adequate evidence of its technical acceptability.  Protest at 2.  As
discussed above, we conclude that the evaluation was reasonable and
supported by the record and we find no evidence of bias in the record and,
accordingly, deny this aspect of the protest.  Paraclete Armor & Equip.,
Inc., B-293509, Feb. 24, 2004, 2004 CPD P 67 at 7.
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