TITLE: B-298102; B-298102.3, GC Services Limited Partnership, June 14, 2006
BNUMBER: B-298102; B-298102.3
DATE: June 14, 2006
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B-298102; B-298102.3, GC Services Limited Partnership, June 14, 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
Decision
Matter of: GC Services Limited Partnership
File: B-298102; B-298102.3
Date: June 14, 2006
James J. McCullough, Esq., Deneen J. Melander, Esq., and Steven A.
Alerding, Esq., Fried, Frank, Harris, Shriver & Jacobson LLP, for the
protester.
Charles R. Marvin, Jr., Esq., Sharon A. Jenks, Esq., and Carol F.
Westmoreland, Esq., Venable LLP, for The CBE Group, Inc.; Scott M.
Heimberg, Esq., Thomas P. McLish, Esq., and Andrea T. Vavonese, Esq., Akin
Gump Strauss Hauer & Feld, LLP, for Linebarger Goggan Blair & Sampson,
LLP; and William L. Walsh, Jr., Esq., Scott Hommer III, Esq., Peter A.
Riesen, Esq., and Keir X. Bancroft, Esq., Venable LLP, for Pioneer Credit
Recovery, Inc., the intervenors.
Richard M. Sudder II, Esq., H.R. Roberson, Esq., and Lori R. Larson, Esq.,
Internal Revenue Service, and Thedlus L. Thompson, Esq., General Services
Administration, for the agencies.
Edward Goldstein, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protester's challenge to agency's technical evaluation of its quotation in
response to solicitation for private debt collection services is denied
where the record shows that the agency's evaluation was reasonable and
consistent with the terms of the solicitation.
DECISION
GC Services Limited Partnership protests the issuance of task orders to
The CBE Group, Inc., Pioneer Credit Recovery, Inc., and Linebarger Goggan
Blair & Sampson, LLP under request for quotations (RFQ) No.
TIRNO-05-Q-00187, by the Department of the Treasury, Internal Revenue
Service (IRS), for private debt collection services. GC Services
challenges the IRS's evaluation of its quotation, the evaluation of
Linebarger's quotation, as well as the IRS's alleged failure to make a
proper affirmative determination of responsibility for Linebarger.
We deny the protest in part and dismiss it in part.
BACKGROUND
On October 22, 2004, Congress enacted the American Jobs Creation Act (the
"Act"), which, in relevant part, authorizes the IRS to contract with
private debt collection firms to assist with the recovery of outstanding
federal tax debts. See Pub. L. No. 105-357, Title VIII, Sec. 881(a),
codified at 26 U.S.C. sect. 6306. Towards this end, the Act provides that
the IRS may allow private debt collection firms to retain, as a fee for
their services, up to 25 percent of the amounts that they collect for the
government. Id. In implementing the provisions of the Act, the IRS has
adopted a two-phase approach. The first phase, the "limited implementation
phase," provides for placing only a small number of tax debt accounts with
a limited number of private debt collection agencies--effectively a pilot
program. Agency Report (AR) at 2. Provided this limited phase proves
successful, the IRS "will launch into full implementation of its program."
Id. At issue in this case is the IRS's issuance of debt collection task
orders to three firms for the first phase of its private debt collection
program.
On October 15, 2005, the IRS issued the subject RFQ for private debt
collection services, which limited the field of competition to vendors
holding Federal Supply Schedule (FSS) contracts under the General Services
Administration's (GSA) "Financial and Business Solutions" schedule, Debt
Collection Services schedule (GSA FABS Schedule 520, Special Item Number
(SIN) 4, Debt Collection). RFQ at 2. The RFQ contemplated the issuance of
"fee-for-service" task orders to three vendors, each for a base period of
1 year, plus 1 option year. Id. The IRS indicates that the combined
contract value for the three task orders is between $20 million and
$25 million. Contracting Officer's (CO) Statement at 1.
Under the terms of the RFQ, vendors were required to submit quotations
with two separate volumes. Volume 1, which was limited to 45 double-spaced
pages, was to contain information addressing three technical evaluation
factors, listed in descending order of importance: (1) relevant experience
and past performance, (2) technical approach, and (3) management plan. RFQ
at 56-57. In addressing these factors, vendors were cautioned that their
quotations "SHALL NOT MERELY OFFER TO PERFORM WORK IN ACCORDANCE WITH THE
STATEMENT OF WORK, BUT SHALL OUTLINE THE ACTUAL WORK PROPOSED AS
SPECIFICALLY AS PRACTICAL." RFQ at 55.
Volume 2 was reserved for vendors' completed pricing schedules, which
divided pricing between debt collection commission fees--based on dollars
actually collected---and administrative resolution fees. RFQ at 20.
Vendors were to specify their commission fees for tax debt accounts (1)
under $1,500; (2) between $1,501 and $5,000; (3) between $5,001 and
$10,000; and (4) greater than $10,000. Id. They were further required t o
specify a fee for handling administrative resolutions, which involves
closing a collection case without payment for reasons such as death of the
taxpayer, and for handling administrative resolutions due to an
installment agreement exceeding 60 months. Id.
Regarding the first four fee categories, the RFQ provided the following
"target rates" that the IRS believed to be realistic commission fees: (1)
24 percent; (2) 23 percent; (3) 22 percent; and (4) 21 percent. AR at 3;
RFQ at 20. Vendors quoting fees other than the target rates were required
to provide supporting rationale "as to why a rate other than the target
rate was proposed." RFQ at 55.
The RFQ further explained that the selection process would be comprised of
three steps. Under the first step, the IRS would confirm whether vendors
had existing FSS contracts. Under the second step, the IRS would evaluate
vendors based on the technical evaluation factors, rank the vendors, and
determine the "most highly qualified." RFQ at 55. As the third step, which
included only the vendors determined to be the most highly qualified, the
IRS would negotiate with the selected vendors the same commission and
administrative resolution fees--"the same fee for all awardees for each
line item." Id. If the IRS was unable to reach agreement on a vendor's
fee, the RFQ indicated that the vendor would be eliminated from further
consideration. Id.
Under the relevant experience and past performance factor, vendors were to
demonstrate their "relevant experience (i.e., similar in nature, scope and
size) in the collection of debt owed . . . a wide variety of collection
experience, on a nationwide basis," as well as "a level of accomplishment
in a competitive environment." RFQ at 56. Within this information, each
vendor was required to identify a minimum of five projects/customers,
within the past 5 years, demonstrating its "nationwide ability to collect
debt," "its ability in collecting a broad range (various types) of debt,
and its success in a competitive collection environment." Id. Debt
recovery rates were also to be evaluated under this factor; vendors
therefore were required to include the recovery rates for each project
cited. Moreover, the RFQ indicated that "[p]roposed key personnel" would
be evaluated based on "their recent experience in managing collection
contracts/projects similar in nature, scope and size, and on the success
of those projects, based on personnel turnover rates and recovery rates."
In this regard, the RFQ stated: "Note. The Project Manager is the key
personnel position." Id.
With regard to the technical approach factor, the RFQ provided for
evaluation of a vendor's approach to meeting the requirements of the IRS's
debt collection program and required each vendor to specifically address
its "use of new versus experienced collectors; its monitoring and
compliance programs, and its ability to provide for Federal Government
monitoring of its systems." RFQ at 57. Vendors were required to describe
how they intended to "meet and maintain the requirements for physical
security and data integrity standards for taxpayer information" and how
they would "meet and maintain physical security, data integrity,
communications security, and personnel security." Id. The RFQ also stated
that the IRS would evaluate the vendors' " approach to meeting privacy and
safeguard requirements," and required vendors to provide "specific
examples of implemented [Federal Information Security Management Act
(FISMA)] compliant security controls" as well as "compliance with Federal
Privacy Act requirements." Id.
Under the third factor, management plan, the RFQ indicated that the IRS
would evaluate how vendors proposed to "organize, staff, and manage" the
requirements, as well as their approach to "the Complaint Process." RFQ at
57. Vendors were required to describe their training plan, which was
required to include "training of staff on all applicable Federal, State
and local laws and regulations, the Taxpayer Bill of Rights, and IRS
Policies and Procedures, and training provided for interaction with
taxpayers." Id. The RFQ also indicated that the IRS intended to evaluate
each vendor's approach to "initial training versus refresher training."
Id.
The IRS received 33 responsive quotations by the November 15 RFQ closing
date. In evaluating vendors' quotations, the IRS developed "Evaluation
Scoring Sheets" for the purpose of allowing evaluators to score each
quotation under the three evaluation factors. AR, Tab K, Evaluation Plan.
The scoring sheets subdivided the three evaluation factors into various
discrete subfactors. Under the "relevant experience and past performance"
factor, the scoring sheet included seven subfactors, "technical approach"
was comprised of seven subfactors, and "management approach" was divided
into five subfactors. Evaluators assigned one of the following adjectival
ratings for each subfactor:
Adjectival Definition
Rating
Exceptional Proposal demonstrates a good understanding of the
Government's objectives and contains an approach that
Low Risk exceeds the solicitation requirements. Has one or more
strengths that will benefit the Government. High probability
of success with an overall low degree of risk in meeting the
Government's requirements
Acceptable Proposal demonstrates an acceptable understanding of the
Government's objectives and contains an approach that meets
Moderate/High the solicitation requirements. Fair probability of success
Risk with overall acceptable degree of risk in meeting the
Government's requirements.
Marginal Proposal demonstrates a minimal understating of the
Unknown Risk Government's objectives. Overall quality of approach cannot
be determined because of errors and/or omissions which may
be capable of being corrected without a major rewrite or
revision of the proposal
Unacceptable Proposal fails to demonstrate an understanding of the
High Risk Government's objectives [and] contains major errors and/or
omissions that cannot be corrected without a major rewrite
or revision of the proposal. Presents an unacceptably high
degree of risk in meeting the Government's requirements.
Proposal is not acceptable for award.
AR, Tab K, Evaluation Plan, Evaluation Scoring Sheets.[1]
Under the IRS's evaluation scheme, each adjectival rating had a point
value: exceptional (low risk) -- 4 points; acceptable (moderate risk) -- 3
points; marginal (unknown risk) -- 2 points; and unacceptable (high risk)
-- 0 points. Based on this system, the highest raw score a vendor could
receive was 76 points.[2] To account for the differing relative weights of
the evaluation factors, the IRS applied the following weighting multiple
for each technical evaluation factor: relevant experience and past
performance -- weighted by a factor of 4.5, technical approach -- weighted
by a factor of 3.0, and management approach -- weighted by a factor of
2.5. Thus, 260 points was the highest total score a vendor could receive,
assuming it received an exceptional rating under each subfactor.[3]
After reaching consensus in evaluating the 33 vendors' quotations under
the technical factors and then ranking the vendors by their technical
scores, the IRS evaluated the proposed fees of the three vendors with the
highest overall technical scores: The CBE Group, Pioneer Credit Recovery,
Inc., and Linebarger, which had [deleted] (250 points). These firms
accepted the IRS's target fees for general collection activities and the
IRS was further able to negotiate the same proposed fee of $100 per
administrative resolution with each of these firms.[4] As a consequence,
the IRS issued task orders to these firms under their respective FSS
contracts on March 8, 2006.
Based on the IRS's evaluation of its quotation, GC Services was ranked
ninth overall with a total score of 219.5 points. [Deleted]. After
learning of the agency's decision, GC Services filed this protest.
ANALYSIS
In its protest, GC Services challenges the IRS's evaluation of its
quotation in every instance where it received other than an "exceptional"
rating for a technical evaluation subfactor under each of the three
technical evaluation factors -- relevant experience and past performance,
technical approach, and management plan. GC Services also argues that the
IRS's evaluation of Linebarger's quotation was unreasonable where the IRS
rated Linebarger as equal or superior to GC Services under numerous
technical evaluation subfactors, and that the evaluation record reflects
disparate treatment in the IRS's evaluation of Linebarger and GC
Services.[5] As a final matter, GC Services contends that the IRS failed
to make a proper affirmative determination of responsibility for
Linebarger.
I. Technical Evaluation of GC Services
The FSS program, directed and managed by GSA, gives federal agencies a
simplified process for obtaining commonly used commercial supplies and
services. FAR sect. 8.402(a). Where, as here, an agency issues an RFQ
under FAR Subpart 8.4 and conducts a competition (see FAR sect. 8.405-2),
we will review the record to ensure that the agency's evaluation is
reasonable and consistent with the terms of the solicitation. See RVJ
Int'l, Inc., B-292161, B-292161.2, July 2, 2003, 2003 CPD para. 124 at 5.
In a competitive FSS procurement, it is the vendor's burden to submit a
quotation that is adequately written and establishes the merits of the
quotation. Verizon Fed., Inc., B-293527, Mar. 26, 2004, 2004 CPD para. 186
at 4; Godwin Corp., B-290291, June 17, 2002, 2002 CPD para. 103 at 4. In
reviewing an agency's technical evaluation of vendor submissions under an
RFQ, we will not reevaluate the quotations; we will only consider whether
the agency's evaluation was reasonable and in accord with the evaluation
criteria listed in the solicitation and applicable procurement statutes
and regulations. American Recycling Sys., Inc., B-292500, Aug. 18, 2003,
2003 CPD para. 143 at 4. The protester's mere disagreement with the
agency's judgment does not establish that an evaluation was unreasonable.
Hanford Envtl. Health Found., B-292858.2, B-292858.5, Apr. 7, 2004, 2004
CPD para. 164 at 4. Based on our review of the record here, GC Services'
challenges to the IRS's evaluation of its quotation amount to little more
than disagreement with the agency's judgments and thus fail to establish
that the IRS's evaluation was unreasonable.
As a preliminary matter, we note that, although challenged by GC Services,
we need not address the IRS's evaluation of each subfactor for which GC
Services received other than a rating of "exceptional" since GC Services
was not prejudiced by any alleged errors in the evaluation under the
subfactors not addressed in our decision. Based on the point scoring
system employed by the IRS, five vendors in addition to the three awardees
had total scores higher than GC Services, and GC Services has only
challenged the IRS's evaluation of one of the awardees, Linebarger. Of the
three awardees, Linebarger received [deleted] score of 250 points. The
total evaluated point scores for the vendors ranked fourth through eighth,
between Linebarger and GC Services, were as follows: (4) 241 (5) 240, (6)
234.5, (7) 233.5, and (8) 223.5. AR, Tab L, Source Selection Statement at
3. Even assuming that GC Services received the highest ratings for every
subfactor not addressed by our Office, the highest possible total score GC
Services could have received would have been 233.5 points.[6] With a total
score of 233.5 points, GC Services would have been tied with the seventh
ranked vendor--not one of the "most highly qualified" firms for
consideration by the IRS--and thus, without a reasonable possibility of
award. See Joint Mgmt. & Tech. Servs., B-294229, B-294229.2, Sept. 22,
2004, 2004 CPD para. 208 at 7; Citrus College; KEI Pearson, Inc., B-293543
et al., Apr. 9, 2004, 2004 CPD para. 104 at 7 (prejudice is an essential
element of every viable protest, and where none is shown or otherwise
apparent, protest will not be sustained, even if the agency's actions may
arguably have been improper).
The specifics of the IRS's technical evaluation of GC Services' quotation
are discussed below.
A. Relevant Experience and Past Performance Factor
Under this factor, GC Services received "exceptional" ratings for four
subfactors and ratings of "acceptable" for three of the subfactors. GC
Services challenges each of its "acceptable" ratings, arguing that it
should have received "exceptional" ratings under these subfactors as well.
We discuss below, and deny, GC Services' challenge to its "acceptable"
rating under the subfactor relating to the experience of proposed key
personnel.[7]
The subfactor at issue provided as follows:
Proposed key personnel have recent experience in managing collection
contracts/projects similar in nature, scope and size, and on the success
of those projects, based on personnel turnover rates and recovery rates.
(resumes and proposal).
AR, Tab K, Evaluation Plan, Evaluator Scoring Sheets. In evaluating
vendors' submissions under this subfactor, the IRS considered the
experience of vendors' key personnel "based on personnel turnover rates
and recovery rates."[8] Id. GC Services argues that in evaluating its
quotation as only "acceptable" under this subfactor, the IRS improperly
downgraded its quotation for not providing personnel turnover and recovery
rate information for its alternate project manager and for not providing
recovery rate information for its project manager. As to the first issue,
GC Services maintains that the RFQ required personnel turnover and
recovery rate information only for the key personnel, which, according to
GC Services, did not include the alternate project manager but rather was
limited solely to the project manager. In support of this contention, GC
Services cites the section of the RFQ outlining the evaluation of key
personnel, which states, "Note: The Project Manager is the key personnel
position." RFQ at 56. Regarding the second issue, GC Services asserts that
its quotation did in fact contain recovery rate information for its
project manager in connection with one of its past performance
projects--specifically, its [deleted] project.
The record reflects that the IRS's technical evaluators considered the
resumes submitted by GC Services for both its project manager and
alternate project manager and credited their many years of experience as
strengths. The evaluators also identified the fact that GC Services did
not provide any "specific information . . . on recovery rates or staff
turnover rates for either the [project manager or alternate project
manager]" as a weakness, noting the section of the RFQ stating that the
"`key personnel will be evaluated based on their recent experience . . .
based on personnel turnover rates and recovery rates (emphasis added). '"
AR, Tab M, GC Services - Consensus Evaluation Scoring Sheet, Relevant
Experience and Past Performance, Subfactor 1g. Notwithstanding the lack of
information provided by GC Services, the record further reflects that the
evaluators did in fact attribute recovery rate information to its project
manager based on his involvement with the [deleted] project, which GC
Services discussed in its quotation. Id.
With regard to GC Services' principal argument, that it was not required
to provide recovery rate or personnel turnover rate information for its
alternate project manager since the alternate project manager was not the
key personnel, GC Services misapprehends the weakness attributed to its
quotation. It was not downgraded for failing to provide required
information solely for its alternate project manager. Rather, the IRS
faulted GC Services for failing to include personnel turnover and recovery
rate information for either its project manager or its alternate project
manager. The record reflects, and GC Services has not disputed, that it
did not provide any information regarding its project manager's personnel
turnover rate, despite the fact that such information was clearly required
by the RFQ. Moreover, while the record reflects that the IRS did in fact
credit its project manager with recovery rate information based on his
work under the [deleted] project, rendering GC Services' second contention
factually erroneous, the IRS had to "extrapolate" a recovery rate based on
the [deleted] project owing to GC Services' failure to discuss or specify
a recovery rate for the particular project manager in its quotation. CO
Statement at 6. Despite GC Services' omissions, the IRS rated its
quotation as "acceptable" under this factor and we can find nothing
unreasonable with the IRS's decision in this regard.[9]
B. Technical Approach Factor
Under this factor, the IRS evaluated GC Services as "acceptable" under
four of the seven subfactors and "exceptional" under the remaining three
subfactors. GC Services challenges each of its "acceptable" ratings,
arguing that it should have instead received a rating of "exceptional"
under these subfactors as well. In the discussion below, we first list
each of the four subfactors under which GC Services received an acceptable
rating (quoting from the evaluation plan in the evaluator scoring sheets),
followed by our analysis of the protester's contentions. For the reasons
discussed, we deny GC Services' protest with regard to this factor.
1. Subfactor c -- "Offeror clearly describes how the vendor will meet
and maintain the physical security requirements, personnel security,
Federal Privacy Act requirements and safeguard requirements."
In evaluating GC Services' quotation as acceptable under this subfactor,
the IRS determined that GC Services' quotation did not provide sufficient
information regarding the salient characteristics of its "data center" for
storing taxpayer information. Specifically, the IRS noted as a weakness
the fact that GC Services did not indicate whether the data center would
be "slab-to-slab" or alarmed above false ceilings. AR, Tab M, GC Services
-- Consensus Evaluation Scoring Sheet, Technical Approach, Subfactor 2c.
GC Services contends that the weakness attributed to its quotation for
failing to identify whether its data center would be "slab-to-slab" or
alarmed above false ceilings was unreasonable. According to GC Services,
the IRS should have recognized that it would meet these security
requirements since its quotation indicated that it intended to use a
facility in [deleted], which it currently uses to collect state taxes, and
that "[e]xternal auditors, experienced in federal & IRS security
requirement, tested GCS security." GC Services' Quotation at 2. The IRS,
however, had no knowledge or reason to know the security features of GC
Services' [deleted] facility, which was used to collect state taxes, not
federal debts, nor did GC Services identify the "external auditors" or
elaborate on the testing performed in connection with its security. As a
consequence, GC Services' references to these aspects of its quotation do
not support a conclusion that the agency's evaluation was
unreasonable.[10]
GC Services also argues that the IRS improperly downgraded its quotation
under this subfactor after concluding that GC Services should have
included greater detail in its quotation. Specifically, GC Services takes
issue with the evaluation comments indicating that GC Services would have
benefited from including "information on how they monitor all entryways,
reception areas, loading and shipping entrances, variations for
after-hours security, intrusion monitoring, security agency for
surveillance etc.," and "additional details " regarding its plans for
preserving taxpayer privacy. AR, Tab M, GC Services -- Consensus
Evaluation Scoring Sheet, Technical Approach, Subfactor 2c. According to
GC Services, such information was not required, and, in any event, its
quotation included such detail.
It is important to note that the IRS rated GC Services as acceptable under
this subfactor. While GC Services maintains that the evaluator comments
concern information that was not required, the question at hand is whether
GC Services deserved a rating of "exceptional" under this subfactor, which
required GC Services to exceed the IRS's requirements. In support of its
assertion that it did in fact provide the level of detail which the IRS
indicated was absent from its quotation, GC Services cites the following
section of its quotation regarding its physical security measures:
[deleted]
AR, Tab F, GC Services Quotation, at 26-27.
While this information does provide information regarding the security
planned for its facility, it does not provide, as noted by the evaluators,
"information on how they monitor all entryways, reception areas, loading
and shipping entrances, variations for after-hours security, intrusion
monitoring, security agency for surveillance etc." AR, Tab M, GC Services
-- Consensus Evaluation Scoring Sheet, Technical Approach, Subfactor 2c.
GC Services also contends that its quotation contained the level of detail
sought by the IRS regarding its plans for preserving taxpayer privacy. In
support of this contention, GC Services cites sections of its quotation
primarily pertaining to various information security measures, which the
IRS did not view as germane to additional detail regarding preserving
taxpayer privacy. We view GC Services' challenges under this subfactor as
presenting nothing more than its disagreement with the agency's assessment
of its quotation; this disagreement does not render the agency's
evaluation unreasonable.
2. Subfactor e -- "Proposed labor mix is sufficient to provide required
services (i.e., new versus experienced collectors assigned to the IRS
task)."
With regard to this subfactor, GC Services disagrees with its "acceptable"
rating, alleging that it was unreasonably downgraded for not including
sufficient detail regarding how many personnel it would use to staff the
IRS project or its staffing of "new" versus "experienced" debt collectors.
GC Services argues the level of detail desired by the IRS was unreasonable
since staffing could not be known until after award "when the IRS
discloses the number of accounts and frequency of payments." Protest, Mar.
17, 2006, at 10.
In evaluating GC Services as acceptable under this subfactor, the IRS
evaluators noted that GC Services planned to assign current experienced
employees and recruit new employees for the IRS project, and that it
intended to use experienced personnel from among the ranks of individuals
working on state tax collection matters for its "front-line staff." AR,
Tab M, GC Services -- Consensus Evaluation Scoring Sheet, Technical
Approach, Subfactor 2e. The evaluators also commented that GC Services
"did not disclose the total staff that will be dedicated to the IRS
office" but indicated that it planned to staff the project with an "intact
team," utilizing the employees and managers of its [deleted]. Id.
As an initial matter, it does not appear, as GC Services suggests, that
the IRS downgraded GC Services for failing to identify its "total staff."
Rather, the comment regarding GC Services' nondisclosure of its total
staff appears merely to describe the information contained in GC Services'
quotation. The IRS's primary concern under this subfactor related to the
limited information provided by GC Services regarding its intended mix of
new versus experienced collectors in performing the debt collection
requirements--the critical information required under the subfactor. Based
on the limited information it provided, the IRS concluded that GC Services
did not warrant an "exceptional" rating under the subfactor.
Specifically, the IRS noted that GC Services did not "address the labor
mix as a ratio or otherwise quantify use of new versus experienced
collectors," nor did GC Services describe the qualifications of what it
considered to be an "experienced" collector " in terms of average tenure
or other qualifications such as minimal or no complaints, etc." AR, Tab M,
GC Services -- Consensus Evaluation Scoring Sheet, Technical Approach,
Subfactor 2e. Since, contrary to GC Services' argument, this type of
information did not require specific numbers or identities of individuals,
the information sought by the IRS was not dependent on knowing the "number
of accounts and frequency of payments," and the IRS's evaluation of GC
Services' quo tation in this regard as acceptable was reasonable and
consistent with the terms of the RFQ.
GC Services also cites to various statements in its quotation to
demonstrate that it provided relevant detail regarding its staffing.
Specifically, GC Services cites a "staffing chart" in its quotation, which
reflected "representative" staffing. Protester's Comments at 28. The chart
upon which GC Services relies, however, does not address the mix of new
versus experienced collectors; rather, it provides nothing more than its
management organization. In rebuttal of the agency's contention that it
did not define what it considered to be an "experienced" collector, GC
Services cites the fact that it planned to use its staff of collectors who
have "experience with the [deleted]," as well as "the skills that will be
demanded from potential new employees, including customer acumen,
excellent listening skills, helpful and resourceful problem solving, and
procedure orientation." AR, Tab F, GC Services Quotation at 13;
Protester's Comments at 30. The first comment, however, does not identify
the tenure of the collectors and the second speaks to new employees; as a
consequence, the information does not aid in understanding GC Services'
staffing mix or particularly indicate the experience of its collectors.
Thus, the information upon which GC Services relies does not suggest that
the agency's evaluation was unreasonable.[11]
3. Subfactor f -- "Offer outlines the proposed [private collection
agency] quality control (monitoring) of employee actions as well as how
they intend to provide the ability for the IRS to monitor their systems
and employee actions on IRS accounts."
As indicated by the agency, evaluation under this subfactor focused on two
elements: (1) internal quality control - how the vendors monitor their
employees, and (2) how the vendors provide for the IRS to monitor their
systems and employees' actions. Supplemental CO Statement at 11. In
evaluating GC Services under this factor, the IRS commented that "[t]hey
fail to provide number of cases and process for their monitoring" and
"they fail to describe how they will equip (computer system) and train the
IRS at our site of choice." AR, Tab M, GC Services -- Consensus Evaluation
Scoring Sheet, Technical Approach, Subfactor 2f. With regard to the second
concern, the evaluators noted sections of the RFQ providing that the
contractor "shall provide IRS access to accounts maintained on the
Contractor's computer system. The Contractor shall provide a system at the
IRS['s] designated site, which shall be set-up and maintained by the
Contractor," that the contractor shall provide "view access to data
elements outlined by IRS," and requiring the contractor to provide
training on how to use the contractor's system. AR, Tab M, GC Services --
Consensus Evaluation Scoring Sheet, Technical Approach, Subfactor 2f; RFQ
sections J.7.4, J.7.4.1, J.7.4.2.
In attempting to rebut the evaluators' comments, GC Services argues that
identifying the number of cases monitored was not possible because the
volume and frequency of accounts could not be known until after award. The
IRS, however, explained that it was not seeking a specific number of
cases, but rather some insight regarding the scale of the cases that GC
Services would monitor, such as "one out of ten calls or one out of twenty
calls" or some "percentage" of accounts reviewed. Supplemental CO
Statement at 11. By way of example, the IRS notes that Linebarger provided
that it would [deleted]. Linebarger's Quotation at 22. While GC Services
contends that Linebarger's representation was meaningless, since it does
not define "[deleted]," and argues that Linebarger similarly did not
identify the number of cases that it would monitor, the agency reasonably
viewed the information provided by Linebarger as identifying the process
by which cases would be culled for monitoring as well as the frequency,
while GC Services' quotation was silent regarding these issues.
GC Services also contends that it did in fact provide a detailed account
of its process for monitoring its own employees. Specifically, GC Services
notes several sections of its quotation stating that it "will institute a
[deleted]," it "will [deleted]" and it "will [deleted]." AR, Tab F, GC
Services Quotation, at 13-14.
The record reflects that the IRS specifically considered these elements of
GC Services' quotation, (e.g., the evaluators noted that GC Services
"[deleted]"), but noted that GC Services' quotation would have been
strengthened by a clearer explanation of "the process for monitoring." AR,
Tab M, GC Services - Consensus Evaluation Scoring Sheet, Technical
Approach, Subfactor 2f. In this regard, the contracting officer explained
that while GC Services provided for a "[deleted]," GC Services did not
address how it "would approach this work, nor did it provide their process
or methodology for monitoring the quality of its employees." Supplemental
CO Statement at 11. Given the agency's consideration of the information
relied upon by GC Services, there is nothing to suggest that the agency's
evaluation was unreasonable, other than GC Services' assessment of its own
quotation. We view this as mere disagreement with the agency's evaluation.
GC Services further asserts that it also provided detail regarding how the
IRS will be equipped and trained on the GC Services system. Specifically,
GC Services cites sections in its quotation regarding two software
applications, one which would "[deleted]" and the other, a "[deleted]." GC
Services' Quotation at 14. These software applications, however, do not
address the agency's specific concern--the lack of information regarding
how GC Services would provide the IRS with the ability to monitor accounts
maintained on GC Services' computer systems. The evaluators specifically
noted the RFQ requirements in this regard. Moreover, GC Services'
quotation did not cite any information regarding how it intended to train
the IRS on its monitoring system.[12] Given the evaluation record, there
was nothing unreasonable with the IRS's decision to rate GC Services as
acceptable under this subfactor.
4. Subfactor g -- "Offer demonstrates a clear understanding of the
Statement of Work, relevant to meeting and maintaining the work
performance in a secure environment."
Under this subfactor, the IRS considered vendors' ability to meet the
RFQ's security requirements. GC Services disagrees with its "acceptable"
rating under this subfactor, challenging the IRS's conclusion that its
quotation would have benefited "from additional specificity and details
regarding personnel security and disaster recovery." AR, Tab M, GC
Services -- Consensus Evaluation Scoring Sheet, Technical Approach,
Subfactor 2g. According to GC Services, its quotation provided greater
detail regarding its personnel security and disaster recovery than did
Linebarger's, which received a rating of "exceptional " under this
subfactor.
Our review of the record confirms the reasonableness of GC Services' and
Linebarger's ratings. In this regard, the record shows that Linebarger's
quotation had several characteristics which were considered strengths by
the IRS, and were absent from GC Services' quotation. In fact, GC Services
has not identified any strengths in its quotation under this subfactor
which would have warranted a rating higher than acceptable; rather, GC
Services merely identifies details of its quotation, which the IRS
considered and noted in its evaluation. For example, the IRS noted that GC
Services provided for a "[deleted]." AR, M, GC Services -- Consensus
Evaluation Scoring Sheet, Subfactor 2g. With regard to Linebarger,
however, the IRS identified numerous aspects of its quotation as notable
strengths. For example, the IRS highlighted Linebarger's [deleted]
certification, which one of the evaluators described "as one of the most
stringent security certifications," the fact that Linebarger would
[deleted], and its "additional advantage" of an "[deleted]" which would
"[deleted]." AR, Tab M, Linebarger -- Consensus Evaluation Scoring Sheet,
Technical Approach, Subfactor 2g. Although GC Services believes that its
quotation was superior to that of Linebarger, it has not shown the
agency's judgments to be unreasonable.
C. Management Plan Factor
The IRS evaluated GC Services as "marginal" under two of the five
subfactors under this factor, "acceptable" under two of the subfactors,
and "exceptional" under the remaining subfactor. GC Services challenges
each of its "marginal" and "acceptable" ratings, arguing that it should
have instead received ratings of "exceptional." We discuss the two
subfactors under which GC Services received a rating of "marginal" and
deny GC Services' challenges with regard to these subfactors.
1. Subfactor b -- "The proposal describes the vendor's management plan
compliance controls for training their employees in applicable Federal,
State and local laws and regulations -- both initial and refresher."
Under subfactor b, the IRS considered vendors' plans for initial and
refresher training of employees "in applicable Federal, State and local
laws and regulations." Id. GC Services received a rating of "marginal"
under this subfactor. In evaluating GC Services under this subfactor, the
IRS noted that GC Services' training plan did not discuss "passing scores
or satisfactory training standards, [Fair Debt Collection Procedures Act]
testing, [or] length and depth of the training." AR, Tab M, GC Services -
Consensus Evaluation Scoring Sheet, Management Plan, Subfactor 3b. Due to
these omissions, the evaluators concluded that " [t]he lack of specificity
equates to an unknown risk level and a marginal rating." Id. GC Services
argued in its comments that its "marginal" rating was unreasonable since
the RFQ only required vendors to "describe" their training plans, that it
had dedicated 3-1/2 pages of its quotation to its plan, and that the level
of detail expected by the IRS could not be provided because the IRS's
training curriculum would not be available until after award. GC Services
also argued that the IRS' s evaluation of Linebarger as "exceptional"
under this factor was premised upon a misunderstanding of information in
its quotation, and that the IRS did not similarly downgrade Linebarger for
failing to provide information on passing scores or satisfactory training
standards.
The RFQ required each vendor to describe its training plan, "which shall
include training of staff on all applicable Federal State, and local laws,
and regulations, the Tax Payer Bill of Rights, and IRS Policies and
Procedures, and training provided for interaction with taxpayers." RFQ at
57. While GC Services concludes that it could not provide the level of
detail sought by the IRS, it has not explained why the information sought
by the IRS could not be provided absent the IRS curriculum information. In
fact, the IRS was concerned about the degree to which vendors addressed
the applicable laws and regulations in their training plans. Thus, "the
more directly a vendor addressed these laws and regulations indicate[d] to
the IRS how well the vendor understood the importance of these laws and
regulations to the program." RFQ at 57; Supplemental CO Statement at 14.
In the IRS's view, GC Services' quotation evidenced a " general lack of
acknowledgment of the importance of these laws, particularly the Fair Debt
Collection Practices Act," "the principal federal law governing the
Private Collection industry," CO Statement at 9, which "demonstrated a
minimal understanding of the Government's objective's objectives in this
area." Supplemental CO Statement at 15. In this regard, the IRS evaluators
commented, and the record reflects, that GC Services' quotation makes only
a passing reference to the Fair Debt Collection Practices Act, regarding
the issue of appropriate calling times. Thus, while GC Services may
disagree with the agency's evaluation of its training plan, there is
nothing to suggest that the IRS's evaluation was unreasonable.
With regard to GC Services' arguments challenging the IRS's evaluation of
Linebarger as "exceptional" under this factor, we need not address GC
Services' arguments in this regard since, as discussed below, we conclude
that GC Services would not have been in line for award and therefore lacks
standing to challenge the evaluation of Linebarger.[13]
2. Subfactor c -- "The proposal describes the vendor's management plan
and compliance controls for training their employees in Taxpayer Bill of
Rights, IRS policies and procedures, interaction with taxpayers -- both
initial and refresher."
GC Services challenges its "marginal" rating under this subfactor. In
evaluating GC Services' quotation under this subfactor, the IRS noted
generally that additional information regarding the "length and depth" of
training would have strengthened GC Services' quotation. AR, Tab M, GC
Services -- Consensus Evaluation Sheet, Management Plan, Subfactor 3c. As
a specific weakness the evaluators highlighted the fact that GC Services
did not mention the Taxpayer Bill of Rights in describing its training
plan. While acknowledging that "the taxpayer service message does
permeate" GC Services' quotation, the evaluators concluded that GC
Services did not adequately describe its training plan and that it
demonstrated "a minimal understanding of the Government's objectives and
raises an unknown degree of risk in meeting solicitation requirements."
Id. In addition, the evaluators noted that GC Services did not make
specific reference to refresher training on "[the Taxpayer Bill of
Rights], IRS Policies and Procedures, or interactions with taxpayers" and
failed to describe the frequency or duration of refresher training. Id.
GC Services principally challenges the IRS's decision to downgrade its
quotation for failing to mention the Taxpayer Bill of Rights.[14]
According to GC Services, the IRS has unreasonably elevated "form over
substance" in this regard. Protester's Comments at 44; Protester's
Supplemental Comments at 24. While it did not specifically identify the
Taxpayer Bill of Rights in its training plan, GC Services maintains that
it did in fact address the Taxpayer Bill of Rights since its training plan
generally describes the "concerns raised by these laws" and provides for
"training as to `relevant laws, rules, and regulations.'" Protester's
Comments at 44.
As explained by the contracting officer, however, the RFQ specifically
required vendors to describe their training of staff on the Taxpayer Bill
of Rights, and the IRS viewed how directly a vendor addressed training
pertaining to the Taxpayer Bill of Rights and IRS policies and procedures
as an indication of how well the vendor understood the importance the IRS
placed on these issues. Supplemental CO Statement at 15-16. By failing to
mention the Taxpayer Bill of Rights, GC Services, in the IRS's view,
demonstrated its lack of understanding of the requirements. Id.
It was GC Services' obligation to include sufficient information in its
quotation for the agency to determine whether the quotation would meet its
needs; it was not the IRS's obligation during the evaluation process to
fill in the gaps or to perform a "leap of faith" based on generalized
statements contained in GC Services' quotation. G&M Indus., B-290354, July
17, 2002, 2002 CPD para. 125 at 4; Robotic Sys. Tech., B-278195.2, Jan. 7,
1998, 98-1 CPD para. 20 at 9. Since GC Services had the burden of
submitting a quotation which discussed its proposed training on the
Taxpayer Bill of Rights, yet did so in only the most general terms, we
have no basis to question the reasonableness of the agency's concerns
regarding GC Services' understanding of the requirements.
GC Services also maintains that contrary to the agency's assertions, it
described the frequency and duration of refresher training. Specifically,
GC Services cites sections of its quotation stating that "[m] anagement
holds monthly complaint avoidance seminars as well as training for other
salient topics," and a section of its quotation regarding inspections,
stating that "[s]afeguard Inspections as scheduled by the IRS . . . will
ensure that . . . employees and any affected officers will receive initial
and annual disclosure and safeguards awareness training." GC Services
Quotation at 42, 34. The IRS, however, reasonably replies that the monthly
training appeared to only address management, not all employees, as
required by the RFQ, and the record reflects that GC Services' statements
regarding training of non-management employees are general in nature
(e.g., "[e]very [GC Services] Tax Assistant receives . . . ongoing
training throughout their tenure with the company," and "[r]etraining
occurs in response to any performance or quality issues and also to
disseminate newly promulgated laws, rules, or regulations"). GC Services
Quotation at 42. Based on this record, GC Services has failed to establish
that the agency's conclusions in this regard were unreasonable.[15]
II. IRS's Evaluation of and Responsibility Determination for Linebarger
GC Services raises numerous arguments challenging the IRS's technical
evaluation of Linebarger's quotation and also challenges the IRS's
responsibility determination in connection with Linebarger. Regarding the
latter basis of protest, GC Services argues that the IRS failed to make a
proper affirmative determination of responsibility in connection with the
award to Linebarger based on the erroneous assumption that it was not
required to make a responsibility determination since it was merely
placing an order under Linebarger's FSS contract.
Based on our conclusions regarding the IRS's evaluation of GC Services'
quotation, we dismiss these bases of protest since GC Services lacks
standing to challenge the award to Linebarger. In order to have standing
to protest a federal procurement, a protester must be an interested party,
that is, an actual or prospective offeror whose direct economic interest
would be affected by the award of, or the failure to award, a contract.
Bid Protest Regulations, 4 C.F.R. sect. 21.0(a) (2006). A protester is not
an interested party where it would not be in line for contract award if
its protest were sustained. Durocher Dock & Dredge/Black & Veatch, A Joint
Venture, B-280853, Nov. 24, 1998, 98-2 CPD para.149 at 8. As noted above,
several other firms would be in line for award if we found the award to
Linebarger improper. Accordingly, GC Services is not an interested party
to challenge Linebarger's evaluation or the affirmative determination of
responsibility.[16] See IAP World Servs., Inc., B-297084, Nov. 1, 2005,
2005 CPD para. 199 at 4-5; JAVIS Automation & Eng'g. Inc., B-290556.2,
Aug. 9, 2002, 2002 CPD para. 145 at 6.
CONCLUSION
In sum, we deny GC Services' arguments challenging the agency's evaluation
of its quotation with regard to the following factors and subfactors: (1)
relevant experience and past performance, subfactor g; (2) technical
approach, subfactors c, e, f, and g; and (3) management plan, subfactors b
and c. Moreover, as a result of denying GC Services' protest with regard
to these issues, we dismiss its bases of protest challenging the agency's
evaluation of Linebarger's quotation and the responsibility determination
in connection with Linebarger since GC Services would not have been in
line for award and therefore is not an interested party for the purpose of
challenging the IRS 's issuance of a task order to Linebarger.
The protest is denied in part and dismissed in part.
Anthony H. Gamboa
General Counsel
------------------------
[1] Here, and in many other instances, the record refers to the vendors'
responses to the request for quotations as proposals, rather than
quotations.
[2] The 76 maximum score is based on the following: relevant experience
and past performance - 7 subfactors multiplied by 4 points (maximum number
of points for exceptional rating) for 28 points, technical approach - 7
subfactors multiplied by 4 points for 28 points, and management approach -
5 subfactors multiplied by 4 points for 20 points.
[3] The 260 maximum score is the sum of the following: 126 points for
relevant experience and past performance (28 maximum raw score multiplied
by the 4.5 weighting factor); 84 points for technical approach (28 maximum
raw score multiplied by the 3.0 weighting factor); and 50 points for
management approach (20 maximum raw score multiplied by the 2.5 weighting
factor).
[4] The administrative resolution fees quoted by the three firms were
[deleted]: (1) The CBE Group quoted [deleted] per resolution; Pioneer also
quoted [deleted] per resolution; and Linebarger quoted [deleted] per
resolution. AR, Tab L, Source Selection Statement.
[5] During the development of the protest, our Office dismissed GC
Services' protest of the IRS's evaluation of The CBE Group and Pioneer for
failing to state a valid basis of protest. GC Services had argued that it
was not possible for these vendors to have submitted quotations with the
level of detail that the IRS required of GC Services and that the
evaluation was therefore unequal. Protest, Mar. 17, 2006, at 14. Because
GC Services failed to provide any evidence or details supporting its
contentions, we concluded that GC Services' bare allegations were nothing
more than speculation, which did not meet the standard for a legally
sufficient protest. Science Applications Int'l Corp., B-265607, Sept. 1,
1995, 95-2 CPD para. 99 at 2-3.
[6] The score of 233.5 represents GC Service's total score based upon our
decision denying its protests with regard to seven subfactors.
Specifically, by denying GC Services' challenge to its acceptable rating
for one of the subfactors under the relevant experience and past
performance, the highest possible raw score GC Services could have
received under this factor was 27 points, for a total score of 121.5 when
multiplied by the applicable weighting factor (4). Under the second
factor, technical approach, we deny each instance (a total of four) where
GC Services challenges its "acceptable" rating as being too low, thus its
raw score of 24 points, and total score of 72 points when multiplied by
the weighting factor (3), remained unchanged for this factor. Under the
third factor, management plan, we deny GC Services' challenges to its
"marginal" ratings under two subfactors; thus the highest possible raw
score GC Services could have received under this factor was 16 points,
which, when multiplied by the weighting factor (2.5), resulted in a total
score of 40 points. When the total scores of the three factors are added
together, they equal 233.5 points.
[7] The RFQ instructed each vendor to identify a minimum of five
projects/customers for the purpose of providing references and provided
for the references to submit questionnaires addressing the vendor's past
performance. When more than five reference questionnaires were received
for a vendor, the IRS "randomly selected five references." Supplemental AR
at 11. The IRS indicates that it received 12 references for GC Services
and randomly selected 5. However, the record reflects that of the five
references selected, two were submitted by the same company, [deleted],
for the same project, 4 days apart, with the second [deleted] reference
indicating that it "revised" and "supersedes" the first. Thus, it appears
that the IRS mistakenly considered only four references in its evaluation
of GC Services. This error, however, could not have prejudiced GC Services
because, as more fully discussed in the decision, even if it had received
the highest rating under those experience and past performance subfactors
to which its references were relevant--the subfactor addressed in our
decision under the experience and past performance factor did not involve
a consideration of vendors' references--its total point score would still
not have placed it among the most highly rated vendors.
[8] It is apparent from the record that the phrase "recovery rate"
concerns the percentage of recovery of an outstanding debt.
[9] GC Services also argued that there was disparate treatment in the
evaluation since it received a rating of "acceptable" while Linebarger
received the higher rating of "exceptional." According to GC Services, its
project manager is "significantly more qualified" than Linebarger's
project manager and Linebarger failed to provide key information in order
to properly evaluate the personnel turnover and recovery rates identified
for Linebarger's project manager. Protester's Comments at 22. The record
reflects that the IRS evaluated the merits of each quotation on its own
and GC Services concedes that the IRS identified the experience of its
project manager as a strength under this subfactor. Protester's Comments
at 20-21. Thus, there is nothing to suggest that the IRS misevaluated GC
Services' quotation in this regard. In addition, regarding the key
information which GC Services complains was missing from Linebarger's
quotation, the record reflects that Linebarger provided specific turnover
and recovery rates for its project manager.
[10] GC Services also contends that the IRS did not downgrade Linebarger
for failing to indicate whether its data facility was "slab-to-slab" or
had alarmed ceilings. The record reflects, however, that unlike GC
Services, Linebarger indicated that its facility was certified under the
[deleted], and provided an explanation of the certification process. The
IRS reasonably viewed this certification as addressing security concerns
in connection with its data facility.
[11] GC Services also argues that Linebarger did not provide any greater
level of detail in addressing this subfactor despite its higher rating of
"exceptional." The record, however, reflects that the IRS credited
Linebarger's quotation for providing a detailed [deleted], which was
derived from information provided in the RFQ. In addition, the IRS
reasonably credited Linebarger for addressing its mix of new versus
experienced staffing given that Linebarger indicated that [deleted]. AR,
Supplemental CO Statement at 10. Again, while GC Services may disagree
with the IRS's evaluation of Linebarger's quotation, which utilized a
different approach than did GC Services, the record does not support a
finding that the IRS's evaluation of these quotations was unreasonable.
[12] GC Services argues that Linebarger's quotation provided "very few"
details regarding IRS monitoring and training. The record, however,
reflects that, unlike GC Services, Linebarger indicated that its
information technology system provides the IRS with "[deleted]," that
"[deleted]," and that it would provide the IRS with training. Linebarger's
Quotation at 24.
[13] To the extent GC Services indirectly challenges its own evaluation by
continuing to maintain that the IRS failed to assign the same weaknesses
to Linebarger it had assigned to GC Services--specifically, GC Services'
failure to discuss "passing scores" or "satisfactory training standards"
in its training plan--GC Services fails to challenge the IRS's primary
concern that its training plan fundamentally failed to acknowledge the
importance of various federal and state laws, particularly the Fair Debt
Collection Practices Act. As a consequence, GC Services has not
established that the IRS acted unreasonably in assigning its quotation a
rating of "marginal" under this subfactor.
[14] GC Services also restates the argument that the level of detail
expected by the IRS could not have been provided because the IRS's
training curriculum was not available until after award. Again, however,
while GC Services concludes that it could not provide the level of detail
sought by the IRS, the RFQ nonetheless required GC Services to describe
its Training Plan "which shall include training of staff on all applicable
Federal State, and local laws, and regulations, the Tax Payer Bill of
Rights, and IRS Policies and Procedures, and training provided for
interaction with taxpayers," and GC Services does not explain why the
training information sought by the IRS could not have been provided absent
the curriculum information. RFQ at 57.
[15] GC Services also raises numerous arguments challenging the IRS's
evaluation of Linebarger's quotation. For example, GC Services contends
that Linebarger was not similarly downgraded by the IRS for failing to
detail the duration of its refresher training. The IRS, however, explains
that the duration of Linebarger's training was not an issue because it was
satisfied by the "depth" of Linebarger's training plan. Supplemental
Agency Report at 42. We view these challenges to Linebarger's evaluation
as little more than disagreement with the IRS's conclusions under this
subfactor, which does not render the agency's evaluation unreasonable. In
any event, as discussed below, GC Services does not have standing to
challenge the IRS's evaluation of Linebarger's quotation since GC Services
would not be in line for award even assuming those challenges were found
to have merit.
[16] In response to our request, GSA, the agency responsible for
administering the FSS, submitted comments regarding whether the IRS was
required to make an affirmative determination of responsibility for
Linebarger before it placed a task order under Linebarger's FSS contract.
In its response, GSA affirmatively stated that "GSA is tasked with making
determinations of responsibility pertaining to FSS contractors, thus
ordering agencies are not required to make an affirmative responsibility
determination prior to placing a FSS order." GSA Letter, May 17, 2006 at
1.