TITLE:  Satellite Services, Inc., B-295866; B-295866.2, April 20, 2005
BNUMBER:  B-295866; B-295866.2
DATE:  April 20, 2005
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   Decision

   Matter of:   Satellite Services, Inc.

   File:            B-295866; B-295866.2

   Date:           April 20, 2005

   Susan L. Schor, Esq., Laurence Schor, Esq., and Dennis C. Ehlers, Esq.,
McManus, Schor, Asmar & Darden, LLP, for the protester.

   Jennifer M. Miller, Esq., and Benjamin N. Thompson, Esq., Wyrick Robbins
Yates
& Ponton LLP, for Sunny Point Support Services, an intervenor.

   Maj. Robert B. Neil, Department of the Army, for the agency.

   Mary G. Curcio, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   1. Protest that agency performed improper price realism analysis of
awardee's proposal is denied where fixed-price contract was to be awarded
and agency determined that awardee proposed an acceptable technical
approach, sufficient staff to perform, and a price sufficient to cover the
technical approach.

   2. In evaluating protester's past performance, agency reasonably concluded
that protester's proposal represented a moderate rather than a low
performance risk based on fact that protester currently was late on
approximately 11 percent of current contract orders.

   3. Protest that evaluators misunderstood protester's technical proposal
and, as a result, improperly found that proposal had weaknesses in areas
of safety plan and inspections, is denied where, even if protester is
correct that the weaknesses were unwarranted, the weaknesses were not
included in the technical evaluation summary report and were not
considered in award decision.

   DECISION

   Satellite Services, Inc. (SSI) protests the award of a contract to Sunny
Point Support Services, a joint venture comprised of Bering Straits Aki,
LLC and LB&B Associates, Inc., under request for proposals (RFP) No.
W81GYE-04-R-0047, issued by the Department of the Army for the operation,
maintenance, repair and construction of real property facilities at the
Army Military Ocean Terminal in North Carolina. SSI complains that the
award decision was based on an improper evaluation of proposals.

   We deny the protest.

   The RFP called for the award of a fixed-price contract on a "best value"
basis, applying four evaluation factors:  past performance, safety and
environmental performance record, management approach, and price
(including realism).  The past performance factor was the most important,
having the same weight as the safety and environmental performance record
and management approach factors (which were equal in weight) combined. 
The non-price factors combined were significantly more important than
price.  The RFP further advised that the Army intended to make award
without holding discussions.

   The Army received five proposals, including those of SSI and Sunny Point. 
A past performance evaluation team assigned past performance risk ratings
of high, moderate or low; a technical evaluation team rated the technical
proposals excellent, good, satisfactory or unsatisfactory; and a price
evaluation team reviewed the prices.  SSI offered a price of $8,155,191.12
and its proposal received final ratings of moderate risk for past
performance, satisfactory for safety and environmental performance
record,[1] and excellent for management approach.  Sunny Point offered a
price of $6,063,661.68 and its proposal was rated moderate risk for past
performance and good for both safety and environmental performance record
and management approach.  The source selection authority (SSA) reviewed
the evaluation record and determined that, notwithstanding the ratings,
and based on the identified risk areas and advantages:  SSI and Sunny
Point were equal with respect to past performance, Sunny Point's proposal
had a slight advantage under the safety and environmental performance
record factor, and SSI's proposal had a slight advantage under the
management approach factor.  Source Selection Decision (SSD) at 2.  The
SSA concluded that the technical proposals were essentially equal and
awarded the contract to Sunny Point based on its lower price.  Id.  This
protest followed.

   SSI challenges the evaluation of its and Sunny Point's proposals on a
number of bases.[2]  We have reviewed all of these allegations and find
them to be without merit.  We discuss several of SSI's allegations below.

   PRICE EVALUATION

   SSI asserts that the Army did not adequately evaluate the realism of Sunny
Point's

   price proposal.[3]

   Cost realism is not considered in the evaluation of proposals for the
award of a fixed-price contract, because these contracts place the risk of
loss upon the contractor.  However, when awarding a fixed-price contract,
an agency may provide, as it did here, for a price realism analysis for
the purpose of measuring an offeror's understanding of the solicitation
requirements, or of assessing the risk inherent in an offeror's proposal. 
Consolidated Eng'g Servs., Inc., B-279565.5, Mar. 19, 1999, 99-1A CPD P 76
at 10.[4]  The nature and extent of an agency's price realism analysis are
matters within the sound exercise of the agency's discretion; we will
review such analyses under the same standard applicable to evaluation
challenges generally--for reasonableness and consistency with applicable
laws and regulations.  Science & Mgmt. Resources, Inc., B-291803, Mar. 17,
2003, 2003 CPD PA 61 at 3; see Philips Med. Sys. of North Am. Co.,
B-293945.2, June 17, 2004, 2004 CPD P 129 at 2.

   The realism analysis here was unobjectionable.  The Army evaluated Sunny
Point's proposal and determined that the proposed labor mix and hours were
consistent with its technical proposal and acceptable to perform the
contract.  SSD at 3.  The Army also reviewed Sunny Point's price proposal
and found that it was complete and adequate, Price Analysis Worksheet at
1, and also determined that it complied with the Service Contract Act wage
determination with respect to both rates and fringe benefits.  Price
Analysis Report at 1.  The Army noted that Sunny Point's price was lower
than the government estimate, but attributed this to the fact that Sunny
Point proposed a labor mix and staffing level different--but acceptable to
perform--than that on which the government estimate had been based.  SSD
at 3.  The agency also concluded that the government estimate was
overstated.  Id.  Given this analysis, we have no basis to question the
Army's realism evaluation.[5]  Science & Mgmt. Resources, Inc., supra. 

   PAST PERFORMANCE

   The RFP instructed offerors to provide information regarding up to five
relevant contracts completed within the past 10 years by the contractor,
and by each subcontractor proposed to perform at least 25 percent of the
contract effort.  The solicitation went on to provide as follows:

   The Government will conduct a performance risk assessment based upon the
quality of the offeror's past performance as well as that of its proposed
subcontractors as it relates to the probability of successful
accomplishment of the required effort.

   . . . . .

   Each performance risk assessment will consider the number and severity of
negative findings, the effectiveness of corrective actions taken, and the
overall work record.  The assessment of performance risk is not intended
to be the product of a mechanical or mathematical analysis of an offeror's
performance on a list of contracts, but rather the product of subjective
judgement of the evaluation team after it considers all available,
relevant and recent information.

   SSI listed five contracts and Sunny Point listed four contracts performed
by Bering Straits and four performed by LB&B.  The agency received one
completed reference questionnaire for SSI and two for Sunny Point.  Based
on the information received from the references and the information
submitted by the offerors in their proposals, the agency rated both SSI
and Sunny Point moderate risk. 

   SSI complains that the agency did not make a reasonable attempt to contact
its references.  However, the solicitation did not state that the agency
would contact all, or for that matter any, of the offerors' references. 
Rather, the solicitation required only that offerors provide detailed
information on the contracts they listed, including a summary pertaining
to the specified work in the performance work statement (PWS), past
ratings, examples specific to the PWS regarding the quality and timeliness
of performance, and cure notices or show cause letters received in the
last 3 years.  This information was sufficient to allow the agency to
evaluate past performance; there is no legal requirement that all, or any,
references be contacted in order for a past performance evaluation to be
deemed reasonable.  ROCA Mgmt. Educ. & Training Inc., B-293067, Jan. 15,
2004, 2004 CPD P 28 at 5.[6]   

   SSI asserts that, since the one completed past performance questionnaire
the Army received rated SSI's performance very good in six categories and
excellent in two categories and gave SSI high praise for its competence
and professionalism, the Army should have rated SSI as a low rather than
moderate risk under the past performance factor.

   The evaluation in this area was reasonable.  In evaluating SSI's past
performance, the Army considered the response from the reference, as well
as the information SSI provided in its proposal.  While the proposal
information showed that SSI had performed in all nine functional areas
covered by the RFP, and the reference provided SSI with an overall
positive rating, the reference also reported that SSI was currently
delinquent on 11 percent of its orders and had been behind on up to
35A percent of its orders.[7]  Past Performance Assessment Report--SSI. 
We find nothing unreasonable in the agency's assigning SSI a less
favorable past performance rating based on information showing performance
delinquencies.  SSI's view that its past performance nevertheless does not
warrant downgrading is not sufficient to show that the evaluation was
unreasonable.  Entz Aerodyne, Inc., B-293531, Mar. 9, 2004, 2004 CPD P 70
at 3.

   SAFETY AND ENVIRONMENTAL PERFORMANCE RECORD

   With respect to the safety and environmental performance record factor,
offerors were to submit detailed information on their safety and
environmental program as it pertains to the requirements outlined in the
performance work statement, including programs and manuals, awards,
certifications, violations, citations, accidents and fines.  RFP, amend.
2, at 13-14.  The solicitation provided that "[t]he Government will
evaluate the adequacy of the Offeror's safety and environmental program
plans and the degree to which the offeror can demonstrate successful
implementation as indicated by the number of awards and the frequency and
severity of violation (Notice of Violations), citations, accidents or
fines."  RFP at 43. 

   SSI asserts that the agency unreasonably downgraded its proposal for
failing to indicate whether its pest control subcontractor would work
under its own or SSI's safety plan, and for proposing to use an
environmental consultant who would inspect the work of the pest control
subcontractor only two times per year.  SSI maintains that the Army
misunderstood its proposal.  Specifically, SSI asserts that its proposal
actually indicated that the pest control subcontractor would be held to
the same safety and inspection requirements as SSI, and that an SSI
quality control inspector would perform inspections as work was completed,
with the consultant proposed simply to assist SSI in reviewing its safety
plan.

   While the technical evaluation team listed the above two concerns as
weaknesses in SSI's proposal, these weaknesses did not have any impact on
the award decision.  Specifically, these weaknesses were not included in
the consensus ranking and rating summary report that the evaluation team
prepared to justify the good rating it assigned SSI under this factor. 
More importantly, the SSA did not identify the two concerns as weaknesses
in SSI's proposal, and there is no indication that the SSA considered them
in making the award decision.  In this regard, in discussing SSI's
proposal under the safety and environmental performance record factor in
the preobjective and negotiation memorandum, the SSA states that "[t]he
offeror had three advantages and no deficiencies noted."  Preobjective and
Negotiation Memorandum at 7.  Nor did the SSA identify these weaknesses in
the source selection decision document.  Thus, as these weaknesses were
not considered in the award decision, even if SSI is correct that they
were unwarranted, the protester was not prejudiced by the fact that they
were identified by the technical evaluation team.  Ouachita Mowing, Inc.,
B-276075, B-276075.2, May 8, 1997, 97-1 CPD P 167 at 4-5.

   SSI also complains that the evaluation team noted that SSI's proposal did
not list any awards, and that the SSI's proposal was rated satisfactory
rather than good or excellent for this reason.  SSI maintains that this
"awards received" criterion constitutes an undisclosed evaluation factor
and thus did not provide a proper basis for downgrading its proposal.  We
disagree.  The solicitation specifically advised offerors that the agency
would consider the number of awards received in evaluating proposals under
this factor.  RFP at 43.  Thus, this was not an undisclosed evaluation
factor.  The Army was not required to disclose how awards or the lack of
awards

   would affect the rating given to the proposals.  ABB Power Generation,
Inc.,

   B-272681, B-272681.2, Oct. 25, 1996, 96-2 CPDP 183 at 4 (agency is not
required to disclose guidelines that indicate how certain features will
effect evaluation).  

   The protest is denied.

   Anthony H. Gamboa

   General Counsel  

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

   [1] The technical evaluation team rated SSI good for safety and
environmental plan, but the source selection authority (SSA) reduced the
rating to satisfactory.

   [2] SSI also asserts that, to the extent the Army had concerns, it should
have allowed SSI to clarify its technical and past performance proposals. 
However, where, as here, a procuring agency plans to award a contract
without holding discussions, the agency may, but is not required to, give
offerors an opportunity to clarify aspects of their technical proposals. 
See  AIA-Todini-Lotos, B-294337, Oct. 15, 2004, 2004 CPD P 211 at 12. 
This is also true regarding past performance information on which an
offeror has not had a chance to comment, unless the agency has reason to
question the validity of the information, which is not alleged here.  NMS
Mgmt., Inc., B-286335, Nov. 24, 2000, 2000 CPD P 197 at 3.  

   [3] SSI also asserts that the Army did not properly evaluate the
reasonableness of Sunny Point's low proposed price.  Since a price
reasonableness evaluation is intended to determine whether offered prices
are higher than warranted, not lower, this allegation provides to basis no
question the award decision.  Efficiency Mgmt. & Eng'g Co., Norcor Techs.
Corp., B-292626.2, Oct. 31, 2003, 2003 CPD P __ .

   [4] The solicitation provided that price would be evaluated for
reasonableness and completeness.  RFP S 4.1.4.  It also stated that a
proposal that is unrealistic in terms of approach or price may be deemed
reflective of a lack of technical competence or a failure to comprehend
the complexity and risks of the government's requirements.  RFP S 4.1.

   [5] SSI argues that Sunny Point's price is unrealistic when compared to
SSI's and the incumbent's proposed prices.  However, there is no
requirement that an agency base its determination of price realism on a
comparison with other offered prices; in particular, the mere fact that
the awardee's price is lower than the protester's is not a basis for
questioning the agency's determination that the awardee's price is
realistic.  Science & Mgmt. Resources, Inc., supra.  Moreover, the Army
found that SSI's and the incumbent's prices for a number of line items
were substantially higher than the average prices proposed by the other
offerors.  Price Analysis Report at 3-4. 

   [6]We note that the contract specialist who worked on the past performance
evaluation reports states that she either faxed or e-mailed the past
performance questionnaires to each reference that the offerors listed,
received confirmation that they were received, and left voice mail
messages with those who did not respond.  Statement of Contract
Specialist.  These efforts evidence a reasonable attempt to contact the
references.

   [7]The reference also reported that the SSI corporate office was slow to
submit cost proposals and often provided incomplete information.  The
agency discounted this information because the current solicitation is for
a fixed-price contract.