TITLE: B-295836; B-295836.2, Hospital Klean of Texas, Inc., April 18, 2005
BNUMBER: B-295836; B-295836.2
DATE: April 18, 2005
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B-295836; B-295836.2, Hospital Klean of Texas, Inc., April 18, 2005

   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: Hospital Klean of Texas, Inc.

   File: B-295836; B-295836.2

   Date: April 18, 2005

   Johnathan M. Bailey, Esq., and Theodore M. Bailey, Esq., Bailey & Bailey,
   for the protester.

   Katherine S. Nucci, Esq., Thompson Coburn, for Integrity Management
   Services, Inc., the intervenor.

   Lt. Col. Joseph C. Fetterman and Maj. Frank A. March, Department of the
   Army, for the agency.

   Henry J. Gorczycki, Esq., and James A. Spangenberg, Esq., Office of the
   General Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   1. Agency properly considered late proposal revision because agency action
   was paramount cause of late delivery of the revision and acceptance would
   not compromise the integrity of the competitive process, where agency
   extended the closing date for receipt of proposals to Saturday (not a
   business day of agency) from Friday after issuing a material amendment on
   Thursday; a commercial carrier unsuccessfully attempted delivery of the
   proposal revision on Saturday, but the agency's doors were locked and the
   agency had not posted delivery instructions for that day to advise that
   agency personnel were on-site to accept deliveries; and the proposal
   revision was delivered to agency by commercial carrier on Monday, the next
   business day.

   2. Agency's decision in a "best value" negotiated procurement selecting
   for award a higher-priced proposal that offered a superior quality control
   program was reasonable and consistent with the solicitation.

   DECISION

   Hospital Klean of Texas, Inc. protests the award of a contract to
   Integrity Management Services, Inc. under request for proposals (RFP) No.
   W81K04-04-R-0009, issued by the Department of the Army for hospital
   housekeeping services at Fort Polk, Louisiana. The RFP contemplated the
   award of an indefinite-delivery, indefinite-quantity, fixed unit-price
   contract for a base period with 4 option years.

   We deny the protest.

   The due date and time for submission of written proposals was originally
   stated to be May 14 at 1 p.m. The agency issued five amendments prior to
   the scheduled closing, none of which changed the closing time. Amendment
   No. 0005, issued on Thursday, May 13, included revisions in the quantity
   of work under several contract line items numbers. On Friday, May 14,
   following several requests from potential offerors, the agency extended
   the closing date to Saturday, May 15, at 1 p.m. Supplemental Agency
   Report, Tab 19, E-mail Message to Potential Offerors.

   The agency's office was closed on May 15, although agency personnel were
   there to assist in completing a move within the building that had begun on
   May 13. The contracting officer states that although the agency's doors
   were locked on May 15, "someone was supposed to be listening for the
   expected FedEx deliveries, but never heard the knock"; one proposal was
   delivered on that date, however. Contracting Officer's Supplemental
   Statement at 2. The contracting officer states that when agency personnel
   exited the building on Saturday, a note was found stating that Federal
   Express had attempted delivery that morning.[1] Id.

   On May 14, Integrity had submitted to Federal Express for delivery on
   Saturday, May 15, a proposal revision that acknowledged amendment No. 0005
   and amended the terms of its proposal.[2] The agency received Integrity's
   proposal revision (and submissions from two other offerors) from Federal
   Express at 8:28 a.m. on Monday, May 17. The agency determined that, given
   the circumstances that occurred at the agency's office on May 15, all of
   the submissions received on May 17 would be considered as timely proposals
   or proposal revisions. Contracting Officer's Supplemental Statement at 2.

   The RFP provided for award on a "best value" basis considering four
   technical factors and past performance and price. The technical
   factors--on-site work execution, quality control, business experience, and
   technical management transition--were of equal in importance to each
   other. The on-site work execution and quality control factors each
   contained three equally weighted subfactors. The technical factors, when
   combined, were slightly more important than past performance; the
   technical factors and past performance, when combined, were significantly
   more important than price. Written proposals were to include material
   related to the on-site work execution factor, past performance, and price.
   Oral presentations addressing the remaining technical factors were to be
   held following submission of written proposals.

   The agency evaluated six proposals. The ratings for the proposals of
   Hospital Klean and Integrity were as follows:

   +------------------------------------------------------------------------+
   |             Factor/Subfactor              |Hospital Klean|  Integrity  |
   |-------------------------------------------+--------------+-------------|
   |1. On-site Work Execution                  |     Good     |Satisfactory |
   |-------------------------------------------+--------------+-------------|
   |a. Work Execution (management, staffing,   |     Good     |Satisfactory |
   |task and frequency chart)                  |              |             |
   |-------------------------------------------+--------------+-------------|
   |b. Supply Management (supply and equipment |     Good     |  Marginal   |
   |provisioning)                              |              |             |
   |-------------------------------------------+--------------+-------------|
   |c. Procedures Manual                       |     Good     |    Good     |
   |-------------------------------------------+--------------+-------------|
   |2. Quality Control                         | Satisfactory |    Good     |
   |-------------------------------------------+--------------+-------------|
   |a. Inspection Techniques/Control Documents | Satisfactory |    Good     |
   |-------------------------------------------+--------------+-------------|
   |b. Corrective Action Program               | Satisfactory |    Good     |
   |-------------------------------------------+--------------+-------------|
   |c. Safety, Security and Training Plan(s)   | Satisfactory |    Good     |
   |-------------------------------------------+--------------+-------------|
   |3. Business Experience                     | Satisfactory |Satisfactory |
   |-------------------------------------------+--------------+-------------|
   |4. Technical and Management Transition     | Satisfactory |    Good     |
   |-------------------------------------------+--------------+-------------|
   |Overall Technical Rating                   |     Good     |    Good     |
   |-------------------------------------------+--------------+-------------|
   |Past Performance                           |   Low Risk   |  Low Risk   |
   |-------------------------------------------+--------------+-------------|
   |Price                                      |$3,923,943.83 |$4,010,557.24|
   +------------------------------------------------------------------------+

   Agency Report, Tab 11, Price Negotiation Memorandum, at 4.

   Based on the foregoing evaluation, the source selection authority found:

   After reviewing the technical factor ratings assigned to these two
   offerors it is determined that Integrity's technical proposal illustrated
   more detail and strengths than Hospital Klean's, especially on Factor 2
   (Quality Control). Although Hospital Klean and Integrity both received an
   overall Good technical rating, the technical proposals were not determined
   to be equal. Under Subfactor 1B Integrity received a marginal rating due
   to it submitting a list of supplies where the quantities appeared to be
   short, and the equipment exceeded the requirement. However, the shortage
   in supplies and the excess equipment were determined not to be significant
   issues as this would be rectified once the offeror commenced performance.
   Hospital Klean provided a list of supplies and equipment, with no
   quantities. Being this offeror is the incumbent, it was determined a
   complete list could have been provided. The rating of Good was a result of
   its good Contingency Plan.

   Integrity presented a more comprehensive, innovative Quality Control
   program. This will benefit the government by implementing new innovative
   methods to provide better services with less performance issues and these
   benefits are worth the additional $86,613.41. This trade off benefits the
   government as it results in better standard of services and less time
   spent on re-works. The proposal submitted by Integrity presents the best
   value in meeting the requirements, with an acceptable risk, at a
   realistic, fair and reasonable price based on adequate price competition,
   the [independent government estimate] and comparison of its pricing with
   the other offerors. It is clear that Integrity's proposal offers the best
   value to the government in terms of technical quality offered for the
   price.

   Id. at 9.

   On December 22, the agency awarded the contract to Integrity. Following a
   debriefing provided by the agency by letter of January 26, 2005, Hospital
   Klean filed this protest.

   Hospital Klean first alleges that Integrity's offer should have been
   rejected as late because it failed to acknowledge amendment No. 0005 by
   May 15 as required by the solicitation.[3] We disagree.

   It is an offeror's responsibility to deliver its proposal to the proper
   place at the proper time, and late delivery generally requires rejection
   of the proposal. Federal Acquisition Regulation (FAR) sect. 15.208; O.S.
   Sys., Inc., B-292827, Nov. 17, 2003, 2003 CPD para. 211 at 3. However, a
   hand-carried proposal that arrives late may be considered if improper
   government action was the paramount cause for the late submission, and
   where consideration of the proposal would not compromise the integrity of
   the competitive procurement process; improper government action in this
   context is affirmative action that makes it impossible for the offeror to
   deliver the proposal on time. O.S. Sys., Inc., supra.

   Integrity's proposal revision acknowledging amendment No. 0005 was
   received on May 17, and therefore was late. However, the note on the
   locked door left by Federal Express, which was noticed later that day by
   the agency, evidences that delivery of the revised proposal was attempted
   on May 15, but could not be achieved. Moreover, Integrity has submitted a
   letter from Federal Express stating that its courier attempted delivery to
   the agency "on May 15, 2004 at 8:47 a.m., but nobody was in to accept
   delivery." Integrity's Supplemental Submission (Mar. 31, 2005), encl.,
   Letter from Federal Express. While, as noted by the protester, we have
   held that records of private commercial carriers cannot be the sole
   evidence that a submission was timely received by the proper contracting
   office prior to closing, Hausted, Inc., B-257087, July 28, 1994, 94-2 CPD
   para. 49 at 3; Stewart & Stevenson Servs., Inc., B-219618, Nov. 8, 1985,
   85-2 CPD para. 531 at 4-5; Qualimetrics, Inc., B-213162, Mar. 20, 1984,
   84-1 CPD para. 332 at 3-4, here the private commercial carrier records are
   not being offered to show when delivery was actually made.[4]

   We find the agency's action was the paramount cause for the late delivery
   of the proposal revision on Monday, May 17. In this regard, the agency
   extended closing to Saturday, May 15, but failed to establish adequate
   procedures to ensure that reasonable attempts to deliver hand-carried
   proposals prior to closing would be received at the place designated for
   delivery. Specifically, Saturday was not a normal business day for the
   agency and the doors to the agency were locked. The agency did not post
   instructions outside the locked door stating that agency personnel would
   be present to receive deliveries, or how to contact them. Therefore, when
   a courier attempted to enter the locked doors and received no response
   from within, it was reasonable for the courier to assume that delivery at
   that address on Saturday was not possible. While the record shows that
   Saturday delivery was possible at other times on that day (as evidenced by
   the single proposal that the agency did receive on that day), delivery was
   impossible at the time Federal Express attempted to deliver Integrity's
   proposal revision (as evidenced by the note left on the locked door by
   Federal Express), and the circumstances of the locked door and lack of
   posted instructions regarding delivery of proposals did not create a
   reasonable basis upon which the courier should have concluded that
   delivery would be possible later that day. But for the agency's action
   here, Integrity's hand-carried proposal revision would have been delivered
   prior to the required closing date, and we therefore conclude that the
   agency's action was the paramount cause of the late delivery. See Palomar
   Grading & Paving, Inc., B-274885, Jan. 10, 1997, 97-1 CPD para. 16 at 3-4
   (agency's incorrect delivery instructions was the reason for a failed
   timely hand-carried delivery of bid and the paramount cause of late
   delivery); Richards Painting Co., B-232678, Jan. 25, 1989, 89-1 CPD
   para. 76 at 2-4 (agency failure to staff room designated for receipt of
   bids up to the exact time specified for bid opening was the paramount
   cause of late delivery); Sun Int'l, B-208146, Jan. 24, 1983, 83-1 CPD
   para. 78 at 2-4 (agency failure to apply reasonable procedure for
   accepting delivery of bids on weekends was the paramount cause of late bid
   delivery); cf. Bergen Expo Sys., Inc.; Techniarts Eng'g, B-236970,
   B-236970.2, Dec. 11, 1989, 89-2 CPD para. 540 at 2-3 (where courier failed
   to wait a reasonable time for agency personnel to respond to security
   guard's call and courier did not attempt re-delivery later that same
   business day, agency's action--restricting access and delay in responding
   to call--was not the paramount cause of late delivery).

   We also find that consideration of the late proposal revision did not
   compromise the integrity of the competitive procurement process. The
   proposals were not publicly opened and Integrity's proposal remained in
   the possession of Federal Express during the time between the attempted
   delivery on Saturday and the actual delivery by that carrier the following
   Monday; therefore, there is no evidence that Integrity had an opportunity
   to alter its submission after closing. See Palomar Grading & Paving, Inc.,
   supra, at 4; Sun Int'l, supra, at 4.

   The protester also alleges that the agency's evaluation of proposals and
   best-value tradeoff decision supporting the award selection were
   unreasonable. In reviewing protests challenging an agency's evaluation, we
   will not substitute our judgment for that of the agency regarding the
   merits of proposals; we will review the evaluation only to determine
   whether it was reasonable and consistent with the stated evaluation
   criteria, and with applicable procurement laws and regulations. A
   protester's disagreement with the agency does not render the evaluation
   unreasonable. Mechanical Equip. Co., Inc. et al., B-292789.2 et al.,
   Dec. 15, 2003, 2004 CPD para. 192 at 5.

   Here, the source selection decision examined the bases for the ratings for
   both Integrity's and Hospital Klean's proposals under each factor and
   subfactor before determining that Integrity's proposal, particularly the
   benefit attributed to its more comprehensive and innovative quality
   control program, offered greater value to the government that was worth
   the small price premium. Agency Report, Tab 11, Price Negotiation
   Memorandum, at 5-9. While the protester complains that the agency never
   quantified the value of the evaluated superiority of Integrity's quality
   control program and that the agency could not show that any added value
   would result in savings sufficient to offset the protester's lower price,
   there is no requirement that the agency's selection decision quantify the
   best-value tradeoff. See FAR sect. 15.308; TeKONTROL, Inc., B-290270, June
   10, 2002, 2002 CPD para. 97 at 14. Indeed, the judgments made in tradeoff
   decision are by their nature subjective; the agency tradeoff determination
   need only be reasonable and bear a rational relationship to the stated
   evaluation criteria, as the source selection decision did here. See ACS 
   State Healthcare, LLC et al., B-292981 et al., Jan. 9, 2004, 2004 CPD
   para. 57 at 44; Preferred Sys. Solutions, Inc., B-292322 et al., Aug. 25,
   2003, 2003 CPD para. 166 at 11.

   Hospital Klean also alleges that the agency's evaluated superiority of
   Integrity's quality control program was not reasonable because, although
   Integrity proposed [DELETED] and Hospital Klean did not, the agency did
   not identify any benefits that the government would receive as a result of
   this difference. This is not correct. The source selection decision stated
   that the benefit of [DELETED] was that the contractor could more easily
   track trends and resolve potential hazards. Agency Report, Tab 11, Price
   Negotiation Memorandum, at 7. Moreover, the benefit of [DELETED] was not
   the only benefit identified under the quality control factor. For example,
   Integrity proposed [DELETED] reports and tracking of deficiencies, which
   the agency determined ensured identification and correction of deficient
   work and avoidance of re-work, and the agency identified [DELETED] that
   employees had to accomplish in training before Integrity would permit them
   to begin work under the contract. Id. While Hospital Klean contends that
   Integrity did not address some details in its quality control program, we
   find, based on our review, that the agency reasonably determined
   Integrity's quality control plan was superior to Hospital Klean's.

   The protester also argues that the evaluation of the supply management
   (supply and equipment provisioning) subfactor of the on-site work
   execution factor was unreasonable and not properly considered in the award
   selection. The proposal preparation instructions for this subfactor stated
   that written proposals were to describe the supplies and materials to be
   acquired and used under the contract. The description did "not need to be
   all exhaustive," but it was to be in "sufficient detail to demonstrate a
   firm understanding of the types and quantities of supplies and materials
   required." RFP at 58. As observed by the agency, Integrity's technical
   proposal identified types and quantities of supplies and equipment, and
   Hospital Klean's technical proposal only identified types of supplies and
   equipment, but did not identify quantities. Integrity's Proposal, vol. V,
   at 42; Hospital Klean's Proposal, vol. V, Subfactor 1B, at 7, 24. The
   technical evaluators determined that Integrity's description understated
   supplies and overstated equipment, resulting in a "marginal" rating for
   the subfactor; however, the overall evaluation concluded that this would
   not create either a degradation of service or disruption of schedule, and
   that Integrity's proposal demonstrated an acceptable understanding of the
   requirements applicable to the on-site work execution factor. Agency
   Report, Tab 9, Evaluation Worksheets for Integrity's Proposal, at 2-4, 6,
   13, 21. Although Hospital Klean's technical proposal did not identify any
   quantities, the technical evaluation did not identify this as a
   consideration in Hospital Klean's rating,[5] but rather gave Hospital
   Klean a "good" rating based on its contingency plan. Agency Report, Tab 9,
   Evaluation Worksheets for Hospital Klean's Proposal, at 2-3, 5, 13, 21.
   The source selection decision identified this aspect of both proposals and
   essentially determined that this was not a significant issue for either
   offeror. Agency Report, Tab 11, Price Negotiation Memorandum, at 9.

   The protester alleges that it was unreasonable to make award to Integrity
   at a higher price when Integrity had a marginal rating under this
   subfactor and Hospital Klean did not. We find the agency could reasonably
   determine that this issue was not a discriminator between the proposals
   because it was an issue that did not affect either offeror's commitment to
   provide whatever supplies and equipment would ultimately be required to
   perform the contract and Integrity's proposal otherwise provided detailed
   information sufficient to show the evaluators that it understood the
   requirements. Moreover, while Integrity's proposal was downgraded under
   this subfactor because the agency was concerned about the quantities
   proposed, the agency could not evaluate the realism of Hospital Klean's
   unstated quantities.

   The protester also alleges that the selection of Integrity's proposal at a
   higher price is unreasonable because Integrity proposed a lower level of
   service than Hospital Klean. This, too, is incorrect. Integrity did
   propose fewer personnel than Hospital Klean, which the technical
   evaluators duly noted. Agency Report, Tab 9, Evaluation Worksheets for
   Integrity's Proposal, at 5, 12. However, Integrity actually proposed more
   labor hours than Hospital Klean. Compare Integrity's Written Proposal,
   vol. V, at 7, with Hospital Klean's Proposal, vol. V, Subfactor 1A, at 10.
   Thus, the protester's contention that Integrity proposed less work at a
   higher price is not supported by the record.

   In sum, the agency's source selection decision showed that the agency
   reasonably considered all significant aspects of the protester's and the
   awardee's proposals, and made award at a slightly higher price for a
   superior quality control plan, which was consistent with the stated
   evaluation plan. The protester's allegations do not rise above mere
   disagreement with the agency's judgment.

   The protest is denied.

   Anthony H. Gamboa

   General Counsel

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

   [1] The agency states that the note was not retained.

   [2] Integrity initially submitted a proposal prior to receiving amendment
   No. 0005 (although it was received by the agency on May 14, after the
   amendment was issued).

   [3] The protester also alleged that Integrity's offer was extended after
   it had expired and was thus not a valid offer on which to make an award,
   given that Hospital Klean's proposal had not expired. In response, the
   agency, citing relevant case law and regulations, demonstrated that the
   extension was neither prohibited nor prejudicial to Hospital Klean, since
   Integrity initially offered the minimum acceptance period required by the
   RFP. Rentfrow, Inc., B-243215, July 5, 1991, 91-2 CPD para. 25 at 4. In
   response, the protester conceded that Integrity's offer had not expired
   prior to award, and did not provide any argument showing that the agency's
   actions were improper. Protester's Supplemental Comments at 9-10.

   [4] The cited cases involve situations where the commercial carrier
   evidence was offered to show that the government timely received a bid or
   offer, whereas in this case timely delivery was clearly not accomplished.

   [5] Only one evaluator noted this omission in Hospital Klean's technical
   proposal and initially assigned a "marginal" rating. Following consensus
   review with the other evaluators, this evaluator increased his rating to
   good. Agency Report, Tab 9, Evaluation Worksheets for Hospital Klean's
   Proposal, at 13. The other evaluators did not identify the omission, nor
   did the overall evaluation. Id. at 2, 5, 21.