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.