TITLE: B-297838.3, The Arora Group, Inc., September 12, 2006
BNUMBER: B-297838.3
DATE: September 12, 2006
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B-297838.3, The Arora Group, Inc., September 12, 2006

   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: The Arora Group, Inc.

   File: B-297838.3

   Date: September 12, 2006

   Edward J. Tolchin, Esq., and Robyn Guilliams, Esq., Fettmann, Tolchin &
   Majors, P.C., for the protester.

   Daryle A. Jordan, Esq., Patrick Henry LLP, for STG International, Inc., an
   intervenor.

   Julia P. Hatch, Esq., Department of the Navy, for the agency.

   Linda S. Lebowitz, Esq., Office of the General Counsel, GAO, participated
   in the preparation of the decision.

   DIGEST

   Where the agency reasonably evaluated proposals in accordance with the
   terms of the solicitation and where the solicitation provided for award on
   the basis of the most advantageous proposal, the agency reasonably
   selected for award a higher technically rated, lower priced proposal.

   DECISION

   The Arora Group, Inc. protests the award of a contract to STG
   International, Inc. under request for proposals (RFP) No.
   N62645-05-R-0021, issued by the Department of the Navy, Naval Medical
   Logistics Command, for radiology support services[1] for the Naval Medical
   Center in Portsmouth, Virginia. Arora challenges the agency's evaluation
   of the offerors' past performance.

   We deny the protest.

   BACKGROUND

   Solicitation and Evaluation Results

   The RFP, issued on June 10, 2005 as a total small business set-aside,
   contemplated the award of a fixed-price,
   indefinite-delivery/indefinite-quantity contract for a base period and
   four 1-year option periods to the offeror whose proposal was determined to
   be most advantageous to the government, technical evaluation
   factors (past performance and management planning and market research) and
   price considered. With respect to past performance, the RFP required an
   offeror to provide information about not more than five of its previous or
   current contracts that were relevant to the RFP requirements, that is,
   those contracts performed within the last 5 years "that demonstrate the
   prior experience of corporate officials or subcontractors/teaming partners
   who will be performing in support of the contract resulting from this
   solicitation; such contracts shall be clearly notated to show the
   relationship of the past performance entry to the offeror." RFP amend. 2,
   sect. L.2.2.a(1), at 202.[2] More specifically, in terms of whether an
   offeror's past performance information was relevant, the RFP stated that
   the agency would consider the "age of the previous/current contracts, the
   range of labor categories provided, the clinical settings in which the
   past performance occurred, and the numbers of personnel provided." RFP
   amend. 2, sect. L.3.1.a(1), at 205. Based on the "quantity and quality" of
   the offeror's past performance, and giving greater consideration to past
   performance that was more relevant to the RFP requirements, the RFP stated
   that the agency would assess the risk to the government of non-performance
   of the requirements by the offeror. The RFP advised that the agency would
   not restrict its past performance evaluation to information submitted by
   the offeror, but would consider "any other relevant information in its
   possession" or information obtained from past performance references. RFP
   amend. 2, sect. L.3.1.a(2), (3), at 205.

   The RFP stated that the past performance evaluation factor would be
   considered significantly more important than the management planning and
   market research evaluation factor,[3] and that the combination of
   technical evaluation factors would be considered significantly more
   important than price (which would be evaluated for completeness,
   reasonableness, and realism). RFP amend. 2, sect. M.1.b, at 206. The RFP
   explained that as the technical merit of proposals became closer, price
   would become more important in making the award determination; in the
   event that proposals were determined to be technically equal, the RFP
   provided that the award could be made to the offeror with the lower priced
   proposal.

   Following corrective action in response to an earlier protest filed by
   Arora (the incumbent contractor) and the agency's conduct of discussions,
   eight firms, including Arora and STG, submitted final revised proposals.
   As relevant here, the final revised proposals of Arora and STG were
   evaluated as follows:

+------------------------------------------------------------------------------+
|                                   |         Arora          |       STG       |
|-----------------------------------+------------------------+-----------------|
|         Past Performance          |       [deleted]        |  Very Low Risk  |
|-----------------------------------+------------------------+-----------------|
|Management Planning/Market Research|       [deleted]        |  Very Low Risk  |
+------------------------------------------------------------------------------+

   Proposal Analysis Report, May 10, 2006, at 6.[4]

   Arora's total evaluated price ($[deleted]) was approximately [deleted]
   percent higher than STG's total evaluated price ($43,265,778.03). Id. at
   15. (The agency evaluated the prices proposed by both of these offerors as
   complete, reasonable, and realistic.)

   Arora's Past Performance

   Arora submitted five past performance references--two for services it
   provided and three for services provided by its proposed subcontractor,
   Spectrum Healthcare Resources. With respect to its own past performance,
   Arora's first reference was for an Air Force contract at Wright Patterson
   Air Force Base in Ohio, where Arora, the incumbent contractor, provided
   personnel in 2 of the 10 required labor categories; the reference
   characterized Arora's performance as "excellent," noting that there was no
   personnel turnover. Final Technical Evaluation Report at 9. Arora's second
   reference was for an Army contract at Walter Reed Army Medical Center in
   Washington, DC, where Arora provided, as the prime contractor, personnel
   in four of the required labor categories; the reference reported no
   performance problems and rated the firm as "excellent," noting that Arora
   demonstrated "exceptionally responsive" corporate interaction. The
   reference reported that Arora would definitely be considered for future
   work. Id.

   Arora's third reference was for services provided by Spectrum at Fort
   Campbell in Kentucky in three of the required labor categories. The
   reference reported, among other things, that at the start of contract
   performance, Spectrum submitted incomplete credentialing packages;
   however, as a result of training, the problems were corrected. The
   reference stated that Spectrum was an "average performer" and that he
   would probably recommend the firm for future work. Id. Arora's fourth
   reference was for services provided by Spectrum at Scott Air Force Base in
   Illinois in four of the required labor categories. The reference reported
   that since Spectrum was the incumbent contractor, the firm was able to
   provide timely start-up; however, since then, the reference reported that
   the firm "persistently" submitted incomplete credentialing packages and
   maintained a fill rate of "75-80%," while the requirement was for
   immediate replacement. The reference also reported that corporate
   interactions greatly improved as a result of Spectrum's recent assignment
   of a new regional manager. The reference characterized Spectrum's overall
   performance as "acceptable." Id. at 10. Arora's fifth reference was for
   services provided by Spectrum at Nellis Air Force Base in Nevada in four
   of the required labor categories. The reference stated that the only
   problem under this contract involved a delay by Spectrum in filling a
   physical therapy assistant position, which was vacant for 9 months. The
   reference characterized Spectrum's performance as "very good," noting that
   the firm would be considered for future work. Id.

   As previously stated, Arora is the incumbent contractor for the current
   requirements. The agency noted, however, that Arora did not list in its
   proposal this highly relevant past performance, where Arora has provided
   personnel in all 10 of the required labor categories. Under its incumbent
   contract, Arora successfully developed a cross-training program; it had a
   high retention rate; and, it established an employee recognition program.
   A reference for this contract reported that Arora's start-up of the
   contract was fine, noting that the firm was able to retain many of the
   incumbent personnel. In addition, the reference reported that Arora
   initially [deleted]. The reference indicated that he would work with Arora
   again. Id.

   Finally, the Naval Medical Logistics Command is responsible for the
   clinical support agreements issued in support of the TriCare Management
   Authority (TMA), which provides critical backfill support related to the
   Gulf War on Terrorism at the Naval Hospital in Bremerton, Washington. The
   agency noted that under a specific clinical support agreement, while
   Spectrum (the subcontractor to the TMA contractor) was required to provide
   personnel for a number of positions, the firm had filled only one of these
   positions approximately 4 months after the issuance of a task order.
   Although all of the positions were filled by Spectrum at the time of the
   agency's evaluation here, the agency noted that Spectrum had acknowledged,
   and expressed regret for, the delays in filling all of the positions,
   which the firm attributed to "uncommon working arrangements" and to the
   scarcity of personnel. Id.

   In sum, in assigning the moderate risk (high end) past performance rating
   to Arora's proposal, the agency concluded that between Arora and its
   proposed subcontractor, Spectrum, the firms had demonstrated experience in
   filling all 10 of the required labor categories and demonstrated that they
   were capable of providing significant numbers of personnel covering
   complex requirements. The agency recognized that the references would
   consider Arora for future work, noting, however, that two of the
   references stated that Spectrum was either "acceptable" or only an
   "average performer." The agency commented that, as the incumbent
   contractor with past performance directly relevant to the current
   requirements, Arora initially [deleted]. The agency further commented that
   Spectrum demonstrated "significant non-compliance" in delivering Gulf War
   on Terrorism positions. The agency concluded that the cumulative record of
   past performance for Arora and Spectrum indicated that deficiencies were
   evident, but considering the magnitude of the services that were delivered
   by these firms, successful or unsuccessful performance of the current
   requirements was equally probable. In the agency's view, the absence of
   widely reported high quality past performance precluded the assignment of
   a low risk past performance rating to Arora's proposal for the past
   performance evaluation factor. Id. at 11.

   STG's Past Performance

   STG submitted seven past performance references, but in accordance with
   the terms of the RFP, the agency only considered the first five listed
   references. STG's first reference was for an Air Force contract at
   Lackland Air Force Base in Texas, where its proposed program manager, Mr.
   X, provided radiology support services while employed as a project manager
   for Arora. As the project manager under Arora's Lackland contract, Mr. X
   was involved in providing personnel in 7 of the 10 required labor
   categories. The reference stated that Arora's performance under the
   Lackland contract during Mr. X's tenure was "very good" and the reference
   would have Mr. X provide services in the future. The record reflects that
   the agency attributed Arora's favorable performance under the Lackland
   contract to Mr. X, who is now STG's proposed program manager. The
   reference also stated that Mr. X was "very professional," and that Arora,
   apparently as a result of Mr. X's performance as its project manager, was
   always able to maintain adequate staffing levels for radiology support
   personnel who were, locally, in very high demand. Id. at 27.

   STG's second reference was for a commercial contract to provide radiology
   support services to a commercial company and, under that contract, Ms. Y,
   STG's proposed corporate quality assurance/compliance coordinator,
   recruited and staffed six of the required labor categories when she was
   employed as the chief operating officer at a medical staffing firm. The
   reference at the commercial company reported that Ms. Y was "significantly
   involved" in providing radiology support personnel when she was employed
   at the medical staffing firm. (The agency recognized that the personnel
   provided under the referenced contract were furnished on both a backfill
   basis and a long-term temporary basis, which was not analogous to
   providing long-term, hospital-based personnel as required under the
   current RFP.) The reference rated the quality of the performance of the
   medical staffing firm where Ms. Y was employed as "excellent." Id.

   STG's third reference was for a commercial contract to provide radiology
   support services to a nationally known healthcare provider and, under that
   contract, Mr. Z, STG's proposed recruiter, recruited radiology personnel
   for positions in states in the mid-Atlantic region in five of the required
   labor categories. The reference characterized Mr. Z as an "outstanding
   professional," reporting that while the primary role of Mr. Z when
   employed at the healthcare provider was as a recruiter, he also
   participated in the development of corporate strategies and was noted for
   his contributions in recruiting radiology personnel when the healthcare
   provider was experiencing severe personnel shortages. The reference
   reported that Mr. Z was "very meticulous in assuring that qualifications
   and credentials were verified and up to date." The reference reported that
   while Mr. Z did not maintain staff and fill rates, he was very
   knowledgeable in the area of human relations including, for example, labor
   laws and personnel benefits. Id.

   STG's fourth reference was for a contract to provide radiation therapy
   services at Keesler Air Force Base in Mississippi with STG providing
   personnel in two of the required labor categories. The reference stated
   that contract start-up was timely and that the personnel provided were
   "very well[-]qualified." The reference reported that on the rare occasion
   when there was any kind of administrative issue, STG took aggressive steps
   to resolve any concerns. The reference further reported that credentialing
   packages were submitted in a timely manner and that STG would "do
   everything [it] could to satisfy [its] customers and provide the best
   service possible." The reference characterized STG's overall performance
   as "very good" and "above average," stating that he would very much want
   STG to provide services in the future. Id. at 27-28.

   STG's fifth reference was for a multi-disciplinary healthcare services
   contract at the hospital at the United States Air Force Academy in
   Colorado with STG providing personnel in one of the required labor
   categories. The reference was "pleased and impressed" with STG's
   performance where the positions filled were backfills in support of the
   Global War on Terrorism. The reference reported that after the requirement
   was established, STG recruited, hired, credentialed, and began services
   within less than approximately 2 months. The reference considered STG's
   performance "excellent in all respects." Id. at 28.

   In sum, in assigning the very low risk past performance rating to STG's
   proposal, the agency concluded that STG demonstrated experience in filling
   all 10 of the required labor categories. The agency stated that the
   quality of STG's experience, as reflected by the references, was
   "exemplary" and that there was a high probability of successful
   performance of the current requirements. The agency concluded that STG
   exhibited extensive past performance within required timeframes on
   services relevant or closely matched to those required by the current RFP.
   The agency also commented that STG's expedited response to the Global War
   on Terrorism requirements was a "noteworthy accomplishment." Id.

   In making its source selection decision, the agency considered that both
   Arora and STG demonstrated relevant past performance and experience in
   providing personnel in all of the required labor categories. The agency
   believed that STG had a stronger record of past performance as compared to
   Arora, [deleted]. In addition, the agency noted that Arora's proposed
   subcontractor, Spectrum, has had past performance problems, with
   references characterizing Spectrum's performance as "acceptable" or only
   "average." The agency further considered that both firms were very low
   risk in terms of management planning and market research. With respect to
   price, the agency concluded that both firms submitted prices that were
   complete, reasonable, and realistic, with STG's total evaluated price
   being slightly less than Arora's total evaluated price. The agency pointed
   out, however, that for the base year line items for healthcare workers,
   STG proposed higher overall hourly rates than Arora for approximately
   60 percent of the line items. As a result, the agency concluded that STG's
   higher overall hourly rates would be more favorable in terms of recruiting
   and retaining the incumbent workforce, especially in turnover situations.
   Therefore, in light of STG's stronger record of past performance, its
   higher overall hourly rates for the majority of healthcare worker line
   items, and its lower overall price, the agency determined that STG's
   higher technically rated, lower priced proposal represented the best value
   to the government. Proposal Analysis Report, supra, at 15.

   ISSUES AND ANALYSIS

   In evaluating its record of past performance, Arora contends that the
   agency improperly considered its performance as the incumbent contractor
   at the Naval Medical Center in Portsmouth, Virginia, for the identical
   requirements that are the subject of this protested procurement, as well
   as the performance of its proposed subcontractor, Spectrum, at the Naval
   Hospital in Bremerton, Washington, related to that firm's provision of
   critical backfill support for the Gulf War on Terrorism. Arora maintains
   that it was improper for the agency to consider the Portsmouth and
   Bremerton contracts because these contracts were not listed by Arora in
   its proposal. In any event, Arora maintains that even considering these
   contracts, there was nothing reported by the references that would have
   justified assigning the firm's proposal a moderate risk (high end) rating
   for the past performance evaluation factor. Arora's Supplemental Comments
   at 2.

   In reviewing a protest against an agency's proposal evaluation, we will
   consider whether the evaluation was reasonable and consistent with the
   terms of the solicitation and applicable statutes and regulations. Kira,
   Inc.; All Star Maint., Inc., B-291507, B-291507.2, Jan. 7, 2003, 2003 CPD
   para. 22 at 5. Mere disagreement with an agency's evaluation is not
   sufficient to render the evaluation unreasonable. Bevilacqua Research
   Corp., B-293051, Jan. 12, 2004, 2004 CPD para. 15 at 8 n.8.

   Here, while the RFP required offerors to submit information about not more
   than five previous or current relevant contracts, the RFP specifically
   advised offerors that the agency would not restrict its past performance
   evaluation to information submitted by the offeror, but rather, the agency
   would consider "any other relevant information in its possession."
   Although Arora narrowly reads these provisions to mean that the agency
   could only consider "any other relevant information" to the extent such
   information related to the five contracts the firm listed in its proposal,
   we conclude that there was nothing in the RFP that restricted the agency's
   consideration in this manner. In this regard, in evaluating proposals, an
   agency may properly consider information from sources that are not listed
   in an offeror's proposal. See, e.g., Pearl Props.; DNL Props., Inc.,
   B-253614.6, B-253614.7, May 23, 1994, 94-1 CPD para. 357 at 7. In
   accordance with the terms of the RFP, since the Naval Medical Logistics
   Command had direct knowledge of Arora's and its proposed subcontractor's
   performance under the Portsmouth and Bremerton contracts, respectively, we
   conclude that while Arora did not list these contracts in its proposal,
   the agency nevertheless reasonably considered past performance information
   related to these contracts to be relevant to the evaluation of Arora's
   proposal under the past performance evaluation factor.

   More particularly, with respect to Arora's performance as the incumbent
   contractor under the Portsmouth contract--arguably the most relevant of
   Arora's contracts, despite the fact that the firm did not list this
   contract in its proposal--the record shows, and Arora does not
   meaningfully dispute, that the firm initially [deleted]. While Arora
   characterizes these matters, which ultimately were resolved, as "paperwork
   related," Arora's Supplemental Comments at 2, the fact is that these
   issues involved critical threshold requirements having a direct impact on
   whether Arora's proposed personnel and staff were qualified in the first
   instance to perform the contract requirements.

   With respect to Spectrum's performance of the Bremerton contract, the
   record shows, and Arora again does not meaningfully dispute, that 4 months
   after the task order was issued, Spectrum had filled only one of the
   critically required positions. Although Spectrum filled all of the
   required positions approximately 8 to 9 months after the task order was
   issued, the agency still had to deal with the delays in Spectrum filling
   all of the critically required positions, with the agency expressing
   concerns with Spectrum's "significant non-compliance in delivering [Global
   War on Terrorism] positions." Final Technical Evaluation Report at 11;
   Proposal Analysis Report, supra, at 9.

   On this record, and in our view, there is no basis to question the
   reasonableness of the agency's evaluation of Arora's proposal for the past
   performance evaluation factor.

   Arora also challenges the agency's evaluation of STG's record of past
   performance, contending that in crediting STG with the past performance of
   its proposed key personnel--its proposed program manager (Mr. X), its
   proposed corporate quality assurance/compliance coordinator (Ms. Y), and
   its proposed recruiter (Mr. Z)--the agency failed to "tie [their] work to
   [STG]" so that the "quantity and quality" of STG's past performance was
   evident. Arora's Supplemental Comments at 3. Arora goes on to state that,
   "assuming that the employee[s'] work can be somehow tied to [STG]," the
   agency must, as required by the RFP, "examine the age of the
   previous/current contracts, the range of labor categories provided, the
   clinical settings in which the past performance occurred, and the numbers
   of personnel provided," giving "greater consideration to past performance
   that is more relevant to the RFP" and assessing "the risk to the
   Government of future non-performance of solicitation requirements by the
   offeror." Id.; RFP amend. 2, sect. L.3.1.a(1), at 205.

   Contrary to Arora's position, the record shows that the agency, in fact,
   evaluated STG's past performance in accordance with the terms of the RFP.
   In this regard, for each of the contracts listed by STG, including the
   ones where STG was credited with the past performance of its proposed key
   personnel (where the RFP allowed an offeror to demonstrate its past
   performance based on the "prior experience of corporate officials"),[5]
   the agency considered the age of the contracts, the range of labor
   categories provided, and the number and types of radiology personnel
   provided in each particular clinical setting.[6]

   For example, STG's first reference was for services performed by its
   proposed program manager, Mr. X, at Lackland Air Force Base in Texas from
   1999 until 2003, when this individual was working for Arora as a project
   manager. Under the Lackland contract, Mr. X was involved in providing
   "4 Diagnostic Radiology Technologists, 1 Radiology Registered Nurse, 1 MRI
   Technologist[], 1 Computed Tomography Technologist[], 1 Vascular/Angio
   Technologist, 1 Ultrasound Technologist, 1 Mammography Technologist, and
   an Oncology Data Specialist," personnel who corresponded to 7 of the 10
   labor categories required under the current RFP. Final Technical
   Evaluation Report at 27.[7] Consistent with the above-described
   requirements of the RFP, the agency used this same substantive format to
   evaluate each of STG's (as well as Arora's) listed contracts in the area
   of past performance. In our view, it is clear from the contemporaneous
   evaluation record that STG's proposed key personnel, each of whom gained
   experience while working for firms other than STG, had past performance
   that was relevant to the requirements each would be performing for STG
   under its Portsmouth contract to provide radiology support services, for
   example, requirements involving program management, corporate quality
   assurance and compliance, and recruitment.

   In addition, in assigning a very low risk past performance rating to STG's
   proposal, the agency considered STG's past performance record--both STG's
   own past performance and the past performance of its proposed key
   personnel--and concluded that the firm demonstrated its experience in
   filling all of the required labor categories within the required
   timeframes based on providing services that were relevant or closely
   matched to those services required under the current RFP; the agency also
   favorably commented on STG's expedited response to the Global War on
   Terrorism requirements. On this record, we conclude that the agency
   reasonably evaluated STG's proposal in accordance with the past
   performance requirements of the RFP.

   In conclusion, where the agency reasonably evaluated proposals in
   accordance with the terms of the RFP, we have no basis to question the
   agency's decision to award the contract to STG, the firm whose higher
   technically rated, lower priced proposal was determined to be most
   advantageous to the government.

   The protest is denied.[8]

   Gary L. Kepplinger

   General Counsel

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

   [1] Under the RFP, there were 10 radiology support labor categories, as
   follows: radiology registered nurses, magnetic resonance imaging
   technologists, computed tomography technologists, ultrasound
   technologists, vascular (angiography) technologists, mammography
   technologists, nuclear medicine technologists, diagnostic radiology
   technologists, dosimetrists, and radiation and chief radiation therapists.

   [2] In the event that an offeror listed more than five contracts, the RFP
   stated that the agency would evaluate only the first five contracts
   listed. In addition, we note that while past performance and experience
   are separate concepts, the contemporaneous evaluation and source selection
   record uses these terms interchangeably.

   [3] The management planning and market research evaluation factor required
   the offeror to demonstrate its contract management capabilities, including
   a discussion of its corporate personnel (their qualifications and
   experience and how these things would contribute to successful contract
   operations) and their responsibilities in terms of contract start-up and
   the ongoing administration of key functional areas, for example,
   recruitment, retention, and scheduling.

   [4] The adjectival ratings that could be assigned to the technical
   evaluation factors included the following: very low risk, low risk,
   moderate risk, substantial risk, and unknown risk. As relevant here, and
   as reflected in the contemporaneous evaluation documentation, for past
   performance, the "very low risk" rating assigned to STG's proposal meant
   that the agency believed that there was a high probability of successful
   contract performance by STG. In contrast, the "[deleted]" rating assigned
   to Arora's proposal, i.e., going in the direction of a low risk or very
   low risk rating, meant that the agency believed that there was an equal
   probability of successful or unsuccessful performance by Arora.

   [5] Relying on the "corporate officials" language in the RFP, as quoted
   above, the agency states that the RFP permitted an offeror to submit
   information on its proposed key personnel for the agency's consideration
   in the evaluation of the offeror's past performance. While we think it
   would have been better for the RFP to have used the term "key personnel,"
   see Federal Acquisition Regulation sect. 15.305(a)(2)(iii), rather than
   "corporate officials," the agency explained that it recognizes the
   mobility of the modern day workforce and, with respect to the healthcare
   field in particular, that personnel often relocate due to new contract
   awards, resulting in a former contractor's personnel bringing extensive
   experience to another contractor. Supplemental Agency Report, Aug. 4,
   2006, at 3.

   [6] The contracts listed by Arora and STG, as well as the other relevant
   information considered by the agency, involved efforts performed within
   the relevant timeframe.

   [7] In the course of developing the protest record, our Office requested,
   and the agency provided, a labor category tally for each of STG's listed
   contracts based on the information included in the contemporaneous
   evaluation record. (This tally was consistent with the tally provided by
   the agency in the contemporaneous evaluation record for each of Arora's
   listed contracts.)

   [8] Arora has raised some collateral issues that we have considered and
   find to be without merit; these collateral issues do not warrant detailed
   analysis or discussion.