TITLE: B-297168, Bernard Cap Company, Inc., November 8, 2005
BNUMBER: B-297168
DATE: November 8, 2005
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B-297168, Bernard Cap Company, Inc., November 8, 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: Bernard Cap Company, Inc.
File: B-297168
Date: November 8, 2005
Scott P. Pavelle, Esq., for the protester.
Jeffrey P. Hildebrant, Esq., and William T. Welch, Esq., Barton, Baker,
McMahon, Hildebrant & Tolle, for Kingform Cap Company, Inc., an
intervenor.
Isaac Johnson, Jr., Esq., Department of Homeland Security, United States
Coast Guard, 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 denied where the agency's evaluation of the protester's
proposal was reasonable and consistent with the terms of the solicitation,
and where the solicitation provided that the technical evaluation factors,
when combined, were significantly more important than price, the agency
reasonably selected for award a firm submitting a higher technically
rated, higher priced proposal.
DECISION
Bernard Cap Company, Inc. protests the award of a contract to Kingform Cap
Company, Inc. under request for proposals (RFP) No. HSCG23-04-R-PUD626,
issued by the Department of Homeland Security, United States Coast Guard
(USCG), Uniform Distribution Center, for quantities of officer and
enlisted combination hats/caps and covers for males and females. Bernard,
which submitted a significantly lower priced proposal for the male items
only, challenges the evaluation of its proposal and the agency's "best
value" determination that resulted in the award to Kingform, which
submitted a higher technically rated, higher priced proposal for the male
items.
We deny the protest.
The RFP was issued on December 17, 2004 as a small business set-aside and
stated that the agency "reserve[d] the right to award multiple . . .
fixed[-]price Indefinite-Delivery, Indefinite[-]Quantity contracts for
one, varied or all items" listed in the schedule for a 5-year period to
the offeror(s) whose proposal(s) represented the best value to the
government, considering technical evaluation factors and price. RFP sect.
B.1. The RFP advised offerors that they could submit proposals "for all
items or select items" listed in the schedule. Id. The RFP advised that
the agency intended to make the award(s) on the basis of initial proposals
without conducting discussions.
The RFP listed the following technical evaluation factors and subfactors:
(1) manufacturing approach/capability (existing manufacturing process,
existing facilities and equipment, and manufacturing plan); (2) relevant
past performance (product quality, timeliness, business practices, cost
control, and customer satisfaction); (3) relevant experience (evidence of
at least 5 years of demonstrated relevant experience in manufacturing
uniform items from standard specification documents); and (4) quality
control plan (receiving and components, cutting room operations, assembly
area operations, final inspections, and packaging, shipping, and handling
operations). (The technical evaluation factors were listed in descending
order of importance and the subfactors were of equal importance.) With
respect to price, the RFP stated that an offeror's price would be
evaluated for reasonableness in accordance with Federal Acquisition
Regulation sect. 15.404-1(b) and that adequate price competition was
expected. The RFP further stated that all technical evaluation factors,
when combined, were significantly more important than price. RFP sect.
M.2.
The RFP advised offerors that their proposals "shall clearly and
concisely" describe the offeror's response to the RFP requirements,
noting, for example, that the use of general or vague statements such as
"standard procedures will be used" or "good engineering practices will be
employed" would not be acceptable. RFP sect. L.6.
With respect to the male items, three firms, including Bernard (the
incumbent contractor for the male items) and Kingform, submitted
proposals. As relevant here, the proposals of Bernard and Kingform for the
male items were evaluated as follows:
+------------------------------------------------------------------------+
| | Bernard | Kingform |
|---------------------------------+---------------------+----------------|
|Manufacturing Approach/Capability| Green/Satisfactory | Blue/Superior |
| | | |
| | Low Risk | Low Risk |
|---------------------------------+---------------------+----------------|
| Relevant Past Performance | Blue/Superior | Blue/Superior |
| | | |
| | Low Risk | Low Risk |
|---------------------------------+---------------------+----------------|
| | Blue/Superior | Blue/Superior |
| Relevant Experience | | |
| | Low Risk | Low Risk |
|---------------------------------+---------------------+----------------|
| | Blue/Superior | Blue/Superior |
| Quality Control Plan | | |
| | Low Risk | Low Risk |
+------------------------------------------------------------------------+
Negotiation Memorandum at 6-7.[1]
For the male items, Kingform's price ($1,603,852.50) was approximately
48 percent (or $521,690.30) higher than Bernard's price ($1,082,162.20).
Negotiation Memorandum at 11.
The contemporaneous evaluation and source selection record shows that the
agency concluded that for the most important technical evaluation
factor--manufacturing approach/capability--Kingform's proposal, as
compared to Bernard's proposal, merited a blue/superior rating because
Kingform's proposed manufacturing approach offered multiple strengths.
More specifically, the agency noted that both Bernard and Kingform
demonstrated their manufacturing capabilities based on their existing
manufacturing processes and systems from the receipt of materials through
the shipping of the finished items and that both firms demonstrated their
capabilities in employing table of operations in their existing
manufacturing facilities, including all subassembly and assembly
operations used in the manufacturing of combination caps. The agency noted
one additional strength for Bernard, that is, that the firm had
state-of-the-art, computerized equipment to assist in the manufacturing of
male combination caps. In contrast, for Kingform, the agency noted five
additional strengths. For example, the agency concluded that Kingform
demonstrated that final steaming of the brim and final blocking are
inspected 100 percent of the time for the required items; that Kingform
addressed the difference between officer and enlisted chinstraps and
mounts; and that Kingform included an explicitly detailed and completely
correct plan for the blocking of cap covers and hats, which demonstrated
Kingform's complete technical understanding of the agency's requirements.
Id. at 6-7, 13.
The agency also determined that despite the fact that the proposals of
Bernard and Kingform each received blue/superior ratings for the quality
control plan evaluation factor, Kingform's proposal contained many more
strengths for this evaluation factor than did Bernard's proposal. Id. at
7-9, 13-14.
Finally, with respect to price, the agency determined that for the male
items, the prices submitted by Bernard and Kingform were fair and
reasonable. For the male items, the agency noted the percentages by which
Bernard's price was lower than the government estimate and Kingform's
price was higher than the government estimate. Id. at 11.
The agency concluded that Kingform's higher priced proposal for the male
items represented the best value to the government. In this regard, the
agency noted that under the RFP, the combination of technical evaluation
factors was significantly more important than price. The agency concluded
that although Kingform's price for the male items was higher than
Bernard's price, the benefits derived from Kingform's multiple strengths
for the manufacturing approach/capability and quality control plan
evaluation factors, as described above, were worth the increased price for
higher quality products. The agency specifically recognized that while the
difference in the total prices as proposed by Bernard and Kingform for the
male items was not nominal, this price difference was not unreasonable
given the technical differences in the proposals of these firms. The
agency stated that given the numerous benefits associated with Kingform's
proposed items, as compared to Bernard's proposed items, the agency
believed it was "reasonable to presume that an informed consumer would pay
[a price premium] for an item of superior technical quality." Id. at
14.[2]
Bernard complains that its proposal for the male items should have
received an overall blue/superior rating for the manufacturing
approach/capability evaluation factor, in which case the proposals of
Bernard and Kingform would have been rated technically equal, so that as
the offeror submitting the lower price, Bernard would have received the
award. Protester's Comments at 4-5.
In reviewing an agency's evaluation of proposals, our Office will question
the agency's evaluation only where it violates a procurement statute or
regulation, lacks a reasonable basis, or is inconsistent with the stated
evaluation criteria for award. B. Diaz Sanitation, Inc., B-283827,
B-283828, Dec. 27, 1999, 2000 CPD para. 4 at 6. Here, we conclude, based
on our review of the contemporaneous evaluation and source selection
record, that the agency reasonably evaluated Bernard's proposal.
More specifically, under the RFP, an offeror was required to clearly
describe its response to the RFP requirements. The record shows, and
Bernard does not meaningfully demonstrate otherwise, that for the
manufacturing approach/capability evaluation factor, Kingform, in
comparison to Bernard, furnished a more detailed proposal that provided
the agency with a better understanding of Kingform's manufacturing
approach and that firm's ability to satisfy the agency's requirements.
For example, as Bernard notes in its comments on the agency report, under
the manufacturing plan evaluation subfactor, Kingform used 57 words to
describe how it manufactures the inner bands for the required items, while
Bernard used only 18 words. Protester's Comments at 5. Bernard continues
that "[i]f there is a difference [in the written proposal descriptions of
the Bernard and the Kingform manufacturing plans,] it is one of form
rather than substance." Id. However, it is the substance of an offeror's
proposal that an agency evaluates in order to establish an offeror's
understanding of, and compliance with, the terms of an RFP.
In this regard, using the inner band example cited by Bernard, Bernard
states in its proposal that "[t]he inner band is molded in one size and
then cut and stapled to meet the size requirement." Bernard's Proposal at
5. In contrast, Kingform states that "[t]he black polyethylene for the
inner band is purchased and received in sheet form and we cut it to 2-1/8"
strips. These strips are brought to our perforating machine, which
perforates the holes required by the specification. These perforated
strips are brought to another cutting machine that cuts these strips to
the correct lengths for individual sizes." Kingform's Proposal at 5. As
can be seen from these proposal excerpts, Kingform's proposal, as compared
to Bernard's proposal, contained not only more words, but also, and most
importantly, more substantive details. It is these details that the agency
considered in its evaluation of the Bernard and Kingform proposals. In our
view, Bernard's protest constitutes nothing more than mere disagreement
with the agency's technical evaluation. However, a protester's mere
disagreement with the agency's judgment in its determination of the
relative merits of competing proposals does not establish that the
evaluation was unreasonable. SDS Int'l, Inc., B-291183.4, B-291183.5, Apr.
28, 2003, 2003 CPD para. 127 at 6. On this record, we have no basis to
object to the reasonableness of the agency's evaluation of Bernard's
proposal for the manufacturing approach/capability evaluation factor.
Regarding the agency's evaluation of each offeror's quality control plan,
Bernard takes exception to the agency's statement that "Kingform's Quality
Control rating of Blue/Superior is based on a host of strengths not
evident in other offerors' proposals . . . [Kingform's] rating is a much
stronger Blue/Superior than Bernard['s]." Negotiation Memorandum at 14;
Protester's Comments at 7. While Bernard objects to the agency's use of
the "much stronger" language in terms of the blue/superior rating assigned
to Kingform's proposal for the quality control plan evaluation factor, we
point out that it is well established that ratings, be they numerical,
color, or adjectival, are merely guides for intelligent decision-making in
the procurement process. Citywide Managing Servs. of Port Washington,
Inc., B-281287.12, B-281287.13, Nov. 15, 2000, 2001 CPD para. 6 at 11.
Here, while assigning the proposals of Bernard and Kingform the same
blue/superior rating for the quality control plan evaluation factor, the
agency identified many more qualitative strengths in Kingform's proposal
than in Bernard's proposal for this evaluation factor. We believe that
Bernard has not meaningfully shown that the agency failed to reasonably
assess the qualitative differences in the quality control plans proposed
by both of these offerors. In this respect, the following example is
illustrative.
The agency noted as a strength in Kingform's proposal the firm's
demonstration that cross-training of personnel in sewing and assembly
operations would permit these personnel to better identify defects during
the final inspection of items. Negotiation Memorandum at 8, 13. The agency
noted no strengths in Bernard's proposal for cross-trained personnel. In
its supplemental comments on the agency's supplemental report, Bernard
states that cross-training is "implied" in a training procedure manual
that "was available on request[,] but [was] not enclosed with" its
proposal. Bernard states that the agency could have asked for a copy of
the referenced manual. Protester's Supplemental Comments, app. II.
However, consistent with the RFP direction that an offeror, like Bernard,
clearly describe its response to the RFP requirements, if Bernard expected
the agency to give it credit for cross-trained personnel, Bernard was
required to provide this information, in the first instance, in its
proposal; it was not the responsibility of the agency to ask Bernard for
this information. See, e.g., Chek F. Tan & Co., B-277163, Sept. 8, 1997,
97-2 CPD para. 66 at 5. On this record, we believe the agency reasonably
could conclude that even though both Bernard and Kingform proposed
superior quality control plans, Kingform's plan offered more qualitative
benefits to the agency than did Bernard's plan.
Bernard also complains that as the offeror submitting the lower priced
proposal for the male caps, it should have received the award for these
requirements, contending that the substantial price premium associated
with Kingform's higher technically rated proposal was not justified.
In a negotiated procurement, where the solicitation does not provide for
award on the basis of the lowest priced, technically acceptable proposal,
an agency has the discretion to make an award to an offeror with a higher
technical rating and a higher price where it reasonably determines that
the price premium is justified and the result is consistent with the
stated evaluation criteria. Bevilacqua Research Corp., B-293051, Jan. 12,
2004, 2004 CPD para. 15 at 10.
Here, the RFP stated that the technical evaluation factors, when combined,
were significantly more important than price in determining which proposal
represented the best value to the government. Since Bernard does not
meaningfully challenge the evaluation of technical proposals and since
there is no basis in the record to question the blue/superior ratings
assigned to Kingform's proposal for each of the technical evaluation
factors, we have no basis to question, consistent with the terms of the
RFP, the reasonableness of the agency's decision to pay a price premium to
Kingform, which demonstrated, among other things, that it has a superior
manufacturing approach and quality control plan. Again, while Bernard
disagrees with the agency's decision in this regard, the fact remains that
the agency affirmatively considered, as discussed above, the technical and
price differences in the Bernard and Kingform proposals for the male items
and reasonably concluded that a price premium was justified in these
circumstances.
Finally, to the extent that Bernard's protest can be read to constitute a
complaint that the agency failed to quantify the technical advantages in
Kingform's proposal in justifying the payment of a price premium, an
agency need not base a price/technical tradeoff on a mathematical
calculation whereby an additional dollar will be paid only if there is a
corresponding discrete technical advantage. Marion Composites, B-274621,
Dec. 20, 1996, 96-2 CPD para. 236 at 8 n.5. On this record, and consistent
with the terms of the RFP, we have no basis to object to the award to
Kingform, a firm submitting a higher technically rated, higher priced
proposal.
The protest is denied.[3]
Anthony H. Gamboa
General Counsel
------------------------
[1] According to the RFP, which required the assignment of an overall
color/adjectival rating for each technical evaluation factor, a
green/satisfactory rating meant that an offeror's proposal met all
requirements; that the proposal offered no significant benefits beyond the
stated requirements; and that the proposal contained no significant
weaknesses or deficiencies. A blue/superior rating meant that an offeror's
proposal exceeded the requirements, yielding significant benefits to the
government; that proposal weaknesses, if any, were of small impact; and
that the proposal contained no significant weaknesses or deficiencies. RFP
sect. M.1. The overall color/adjectival rating for each technical
evaluation factor was required to be supported by narratives of the
strengths, weaknesses, significant weaknesses, deficiencies, and risks in
an offeror's proposal as these items corresponded to each subfactor
comprising each technical evaluation factor. However, contrary to
Bernard's position, there was no requirement that a color/adjectival
rating be assigned to each technical evaluation subfactor.
[2] Since Bernard did not submit a proposal for the female items, it is
not an interested party to challenge the award to Kingform for these
items. Bid Protest Regulations, 4 C.F.R. sect. 21.0(a) (2005).
Nevertheless, with respect to Bernard's concern that the agency's source
selection for the male items was unduly influenced by the fact that
Kingform proposed to provide both male and female items, the record shows
that the agency made two separate source selections--one for the male
items and one for the female items. (Kingform and one other firm submitted
a proposal for the female items; the other firm received a
red/unacceptable rating for the manufacturing approach/capability
evaluation factor.) The agency determined that Kingform's proposal
represented the best value for both the male and female items and,
accordingly, awarded a single contract to Kingform for all requirements.
This outcome was consistent with the terms of the RFP, which provided that
the agency could award either one contract or multiple contracts. The fact
that the agency noted that one contract award would result in cost savings
to the government in the areas of travel and administrative expenses
simply reflects the reality of awarding one contract, as opposed to
multiple contracts. There is no credible evidence in the record to support
Bernard's allegation of bias on the part of the agency in making a single
award to Kingform for all requirements.
[3] Bernard has raised a number of collateral issues that we have
considered and find to be without merit; these collateral issues do not
warrant detailed analysis or discussion.