TITLE: B-297536, American Material Handling, Inc., January 30, 2006
BNUMBER: B-297536
DATE: January 30, 2006
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B-297536, American Material Handling, Inc., January 30, 2006
Decision
Matter of: American Material Handling, Inc.
File: B-297536
Date: January 30, 2006
A. Sid Goss for the protester.
Vera Meza, Esq., Department of the Army, for the agency.
Guy R. Pietrovito, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
In a negotiated procurement which provided for award on the basis of a
price/technical tradeoff, protest challenging the selection of the
higher-priced proposal is denied, where, consistent with the
solicitation's evaluation factors, the source selection authority found
the awardee's offer of a shorter delivery schedule to outweigh the
protester's price advantage.
DECISION
American Material Handling, Inc. (AMH) protests the award of a contract to
JLG Industries under request for proposals (RFP) No. W56HZV-05-R-D134,
issued by the U.S. Army Tank-automotive and Armaments Command (TACOM) for
forklifts to be delivered to Iraq. AMH argues that its lower-priced
proposal should have been selected for award.[1]
We deny the protest.
The RFP provided for the award of a 2-year, fixed-price,
indefinite-delivery, indefinite-quantity (ID/IQ) contract for the purchase
and delivery of tactical, variable reach, all-wheel drive, rough terrain
forklifts to Iraq. RFP attach. 001, Specification. A quantity of 6
forklifts (to be ordered at the time of contract award) was identified as
the guaranteed minimum quantity, and 46 forklifts as the maximum quantity.
RFP at 6.
The RFP provided for a two-phased evaluation of proposals. Offerors were
informed that, under phase I, the firms' proposals would be evaluated on a
pass/fail basis for compliance with the RFP's specifications. An
acceptable proposal was defined as one "where there is essentially no
doubt" that the offered forklift would "meet each of the specification
requirements." RFP at 68.
Offerors were informed that those proposals found to be acceptable under
the phase I evaluation would be qualitatively evaluated to determine which
proposal was most advantageous under the following phase II evaluation
factors: delivery, price, and small business participation. The delivery
factor was stated to be more important than the price factor, and the
price factor was stated to be more important than the small business
participation factor. Offerors were informed that the basis for award
would be a price/technical tradeoff which considered the "relative
advantages, disadvantages, and risks of each proposal." Id.
With respect to the delivery factor, the RFP provided that the agency
would evaluate the offeror's proposed
single date for completion of delivery of the minimum guaranteed
quantity to the [freight on board] Destination point in Iraq, Umm Qasr.
The Delivery Area evaluation will assess the extent to which contract
hardware deliveries . . . satisfy the objective delivery schedule for
the guaranteed minimum quantity of Indefinite-Delivery Indefinite
Quantity (IDIQ) contract deliverables. The guaranteed minimum quantity
is identified in the CLIN schedule. The Delivery Area will also assess
the level of risk in achieving the objective delivery date. For the
purpose of this RFP, the objective delivery date for the guaranteed
minimum quantity is 180 days after receipt of order (DARO). The Delivery
Area evaluation will be performed using the information provided in the
Delivery Questionnaire and any other validated information gathered by
the Government.
Id. at 68-69.
With respect to the small business participation factor, offerors were
informed that the agency would evaluate "the percentage of total
subcontracted dollars which the Offeror credibly proposes to subcontract
to U.S. small business concerns." Offerors were informed that this
provision applied "to every offeror (U.S. and non-U.S.), regardless of
size-status or location of its manufacturing facility or headquarters."
Id. at 69.
TACOM received proposals from nine firms, including AMH and JLG, by the
closing date for receipt of proposals. Four firms' offers, including those
of AMH and JLG, were determined to be technically acceptable in the phase
I evaluation. Discussions were conducted with the acceptable offerors, and
revised proposals received. AMH's and JLG's final revised proposals were
evaluated under phase II as follows:
+------------------------------------------------------------------------+
| | Delivery | Price |Small Business Participation|
| | | | |
| | (DARO) | | |
|----------+---------------+----------------+----------------------------|
| AMH | 169 | $7,276,478 | Good |
|----------+---------------+----------------+----------------------------|
| JLG | 140 | $7,563,351 | Good |
+------------------------------------------------------------------------+
AR, Tab 17, Source Selection Evaluation Board Briefing to Source Selection
Authority (SSA), at 2.
Following a briefing, the SSA selected JLG's offer for award, based upon
JLG's proposal of a shorter delivery schedule for the guaranteed minimum
and despite the $286,873 price premium associated with that firm's offer.
Specifically, the SSA found
the JLG proposal to be superior overall to the proposal of AMH. In
making this decision, I recognize that the delivery area is more
important than price, and that JLG's proposed delivery is more
advantageous than that of AMH. Coalition personnel in Iraq have made it
clear that faster delivery is better. [Multi-National Security
Transition Command--Iraq] personnel specifically mentioned that early
delivery of this tactical forklift is critical to providing Iraqi troops
with the capability to off-load supplies from containers.
AR, Tab 17, Source Selection Decision, at 5. Award was made to JLG, and
this protest followed.
AMH complains that TACOM unreasonably viewed JLG's offer of a shorter
delivery schedule for the minimum quantity to be a discriminator in the
SSA's price/technical tradeoff award selection decision. In AMH's view,
the RFP only provided that offerors' proposals would be evaluated to
determine whether the proposed schedule was credible and would "beat or
meet the 180 day delivery objective." AMH argues that, because both it and
JLG offered an accelerated delivery schedule, the two firms' proposals
should have received the same evaluation rating for this factor.[2]
Protester's Comments at 1.
We disagree with AMH's view that the solicitation did not allow TACOM to
consider a shorter, credible delivery schedule to be a proposal advantage.
Here, the RFP specifically informed offerors that award would be made on a
price/technical tradeoff basis, considering the evaluated advantages,
disadvantages and risks of each proposal under the delivery, small
business participation, and price factors, and the delivery factor
specifically stated that the offeror's proposed "single date for
completion of delivery of the minimum guaranteed quantity" would be
considered. RFP at 68. We have found that where, as here, a solicitation
provides for award on a best-value basis, an agency may reasonably assess
as a proposal advantage the manner in which a proposal exceeds the minimum
requirements of the solicitation. See, e.g., Preferred Sys. Solutions,
B-291750, Feb. 24, 2003, 2003 CPD para. 56 at 3-4; F2M-WSCI, B-278281,
Jan. 14, 1998, 98-1 CPD para. 16 at 7-8.
AMH also challenges the SSA's price/technical tradeoff determination that
JLG's offer of a 29-day shorter delivery schedule was worth the $286,873
price premium associated with JLG's higher-priced proposal. In this
regard, AMH argues that JLG's accelerated delivery schedule was for only
the minimum guaranteed quantity and that the agency has not explained why
an earlier delivery schedule for the minimum quantity "is better for the
Iraq mission." Protester's Comments at 2.
Selection officials have considerable discretion in making price/technical
tradeoff decisions. Their judgments in these tradeoffs are by their nature
subjective; nevertheless, the exercise of these judgments must be
reasonable and must bear a rational relationship to the announced criteria
upon which competing offers are to be selected. Award may be made to a
firm that submitted a higher-rated, higher-priced proposal where the
decision is consistent with the evaluation criteria and the agency
reasonably determines that the technical superiority of the higher-priced
offer outweighs the price difference. ACS State Healthcare, LLC et al.,
B-292981 et al., Jan. 9, 2004, 2004 CPD para. 57 at 44.
Here, the SSA recognized AMH's price advantage, but concluded that JLG's
shorter delivery schedule was worth the price premium. In making this
decision, the SSA appropiately recognized the relative importance of the
solicitation's evalutation factors, in particular that the delivery factor
(that focused on the guaranteed minimum quantity) was more important than
the price factor. AR, Tab 17, Source Selection Decision, at 2. The SSA
found that JLG's shorter delivery schedule for the guaranteed minimum
quantity provided a real benefit to the government, given that "early
delivery of this tactical forklift is critical to provide Iraqi troops
with the capability to off-load supplies from containers." Id. at 5.
Although AMH does not believe that the 29-day shorter delivery schedule
was worth the additional $286,873, AMH's disagreement with the SSA's
business judgment does not show that that judgment is unreasonable. See
ACS State Healthcare, LLC et al., supra, at 45. Rather, we find that the
decision reflects a reasonable price/technical tradeoff assessment.
AMH also complains that it offered a forklift manufactured by a Canadian
small business and that TACOM did not consider this subcontractor in its
evaluation of AMH's proposal under the small business participation
factor. Protest at 3. As TACOM notes, the RFP informed offerors that the
agency under this evaluation factor would consider only the participation
of domestic small business concerns. RFP at 69. Under our Bid Protest
Regulations, protests of alleged apparent solicitation improprieties are
required to be filed prior to bid opening or the date set for receipt of
initial proposals. See 4 C.F.R. sect. 21.2(a) (2005). AMH's post-award
challenge to this solicitation provision is untimely and is dismissed.
AMH nevertheless argues that its proposal should have received a higher
evaluation rating than JLG under the small business participation factor
because TACOM's evaluators assessed AMH's U.S. small business concern
participation to be 100 percent whereas JLG's domestic small business
participation was evaluated to be only 43 percent. See AR, Tab 16, Small
Business Particpation Evaluation. The record establishes, however, that
AMH is not entitled to a higher evaluation rating than JLG under the small
business participation factor, which was the least important evaluation
factor. In this regard, despite the agency's evaluation assessment, AMH
itself indicated in its Small Business Participation Questionnaire that it
would have significantly less domestic small business participation than
would JLG. See AR, Tab 6, AMH Small Business Participation Questionnaire.
The protest is denied.
Anthony H. Gamboa
General Counsel
------------------------
[1] The protester was not represented by counsel who could be admitted to
a protective order and, therefore, the protester did not have access to
source-selection-sensitive and proprietary information. Accordingly, our
discussion in this decision is necessarily general. Our conclusions,
however, are based on our review of the entire record.
[2] AMH also initially protested that JLG's proposed 140-day delivery
schedule was not credible. Protest at 2. TACOM addressed the credibility
of JLG's proposed schedule in its agency report, see Contracting Officer's
Statement at 3; AR, Tab 14, Delivery Area Evaluation of JLG, and AMH
failed to respond in its comments to the agency's arguments, so we view
this protest ground to be abandoned. See Symplicity Corp., B-297060, Nov.
8, 2005, 2005 CPD para. 203 at 5 n.6.