TITLE: B-298259, Southwest Educational Development Laboratory, July 10, 2006
BNUMBER: B-298259
DATE: July 10, 2006
*********************************************************************
B-298259, Southwest Educational Development Laboratory, July 10, 2006
Decision
Matter of: Southwest Educational Development Laboratory
File: B-298259
Date: July 10, 2006
Wesley A. Hoover for the protester.
Jeffrey C. Morhardt, Esq., Department of Education, for the agency.
Jeanette M. Soares and James A. Spangenberg, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest of evaluation of small business subcontracting plan as not
consistent with the solicitation is denied where protest is premised upon
misinterpretation of the solicitation.
DECISION
Southwest Educational Development Laboratory (SEDL) protests the award of
a contract under request for proposals (RFP) No. ED-05-R-0006 to Edvance
Research Inc. by the Department of Education for the operation of the
Southwestern Regional Educational Laboratory.
We deny the protest.
The RFP, issued on July 15, 2005, was for a 5-year fixed-price, award fee
contract to operate the laboratory. The evaluation factors were price,
past performance and technical merit. The technical merit factor had three
subfactors: soundness and responsiveness of technical plan to statement of
work and expertise, experience, availability and commitment of relevant
personnel (90 points); management and organizational experience and
capability (10 points); and small business subcontracting plan (25
points). Although price was said to be a substantial factor in the source
selection, the quality factors, including technical merit and past
performance, when considered together were significantly more important
than price.
On September 20, 2005, the agency issued amendment No. 4 which added the
following with regard to the small business subcontracting plan subfactor:
In order to be eligible for contract award, an offeror must propose a
subcontracting plan with a minimum of 15% of the total contract dollars
to small business, small disadvantaged business, woman-owned small
business, HUBZone small business or Service-Disabled Veteran-Owned Small
Business. An award will not be made to an offeror without a
subcontracting plan that proposes, at a minimum, 15% of total contract
dollars going to small businesses by time of award.
All offerors considered eligible for contract award shall have until
time of award to finalize small business subcontracting partnerships.
A subcontracting plan that proposes work in excess of 15% of the total
contract dollars subcontracted to a small business, small disadvantaged
business, woman-owned small business, HUBZone small business or
Service-Disabled Veteran-Owned Small Business will receive up to 25
points. These points will be added to a technical score to arrive at a
total evaluated score for purposes of award decision.
The Department will establish a competitive range based on Technical
merit and cost, without scoring the subcontracting plan. However, a
subcontracting plan must be negotiated by time of award, at which time
the additional points for the subcontracting plan will be added.
RFP amend. 4, at 6 (emphasis in original).
The protester and awardee submitted proposals by the October 3, 2005
closing date. The agency evaluated these proposals and included both
proposals in the competitive range. The agency opened negotiations with
both offerors by sending technical and business negotiation questions. In
one of the questions SEDL received concerning its small business
subcontracting plan, the agency notified SEDL that its proposed major
subcontractor was not a small business concern as claimed in the proposal
and in order to be credited under this subfactor a small business concern
must be proposed. AR, Tab 22, SEDL First Round of Technical and Business
Negotiation Questions.
The offerors' responses to the written negotiation questions and
corresponding revisions to the proposals became their interim revised
proposals. In its interim
revised proposal, SEDL changed its small business subcontracting plan to
remove the ineligible large business and increase the portion of work
subcontracted to small businesses to 18.72 percent. AR, Tab 26, SEDL
Interim Revised Business Proposal, at 7.
On December 1, 2005, the agency issued amendment No. 5 to the RFP.
Amendment No. 5 altered the evaluation scheme so that small businesses
would automatically receive the full 25 points allotted for the small
business subcontracting plan subfactor and large businesses would receive
3 points for every percentage point above the 15-percent minimum
requirement up to the maximum of 25 points. The remainder of the
evaluation scheme of the small business subcontracting plan subfactor was
identical to that set forth in Amendment No. 4. RFP amend. 5, at 6.
Following the agency's evaluation of the interim revised proposals, the
protester and awardee received a final round of negotiation questions on
December 6. The instructions accompanying these questions told offerors to
submit their responses to the questions as well as final revised technical
and cost proposals by December 19, 2005. AR, Tab 42, E-mails to/from SEDL,
at 11. The same day it received the final round of negotiation questions,
SEDL sought clarification about how fractions of a percentage point would
be evaluated for the small business subcontracting plan subfactor and
indicated that it might revise its plan depending on the agency's
response. AR, Tab 42, E-mails to/from SEDL, at 17.
The next day SEDL sent the contracting officer a lengthy e-mail expressing
several concerns with amendment No. 5. The concerns relevant to this
protest included SEDL's expressed belief that the amendment's evaluation
scheme unfairly favored small business offerors and that the amendment's
introduction at this juncture of the competitive process would irreparably
jeopardize SEDL's opportunity for award. AR, Tab 42, E-mails to/from SEDL,
at 18. The agency responded by holding a conference call with SEDL on
December 12. Both parties agree that during this conference call the
agency confirmed that SEDL would receive 25 points if it increased its
small business subcontracting plan to 23 percent of the contract dollar
work.[1] AR at 7; Protest at 2.
The agency evaluated the final revised proposals and found the protester's
and awardee's proposals to be essentially equal under the technical merit
and past performance factors (notwithstanding that SEDL's point score for
these factors was slightly higher), not counting the small business
subcontracting plan factor. The offerors also proposed identical prices
but different award fees; the agency considered these differences
insignificant.[2] AR, Tab 38, Negotiation Memorandum, at 31. SEDL's
proposal received 12 of the 25 points allotted for the small business
subcontracting plan, 3 points for each of the 4 percentage points in small
business subcontracting that SEDL proposed above 15 percent, while the
awardee received 25 points because it was a small business concern. Id. at
32-33. The record indicates that this subfactor was the ultimate award
discriminator among the proposals.
SEDL learned about the agency's evaluation of both proposals at its
debriefing and protested the award to the agency. Following the agency's
denial of the protest, SEDL filed this protest.
SEDL alleges that the agency did not follow the evaluation procedure
delineated in amendment No. 5 to the RFP in evaluating the small business
subcontracting plans. SEDL contends that under amendment No. 5 the agency
should have established the competitive range based on the technical and
past performance ratings without regard to scoring the small business
subcontracting plan subfactor, then negotiated "the best small business
subcontracting plan with the top-ranked proposal" and made the award at
the conclusion of that negotiation.[3] Protest at 2. SEDL asserts that as
the offeror with the highest-ranked proposal prior to evaluation of the
small business subcontracting plan, it was prejudiced by the agency's
failure to hold further negotiations about its plan because that failure
prevented SEDL from reaching the small business contracting figure of 23
percent necessary to retain its position as the top-ranked proposal.
We find the protester's interpretation of the RFP is unreasonable. To be
reasonable, an interpretation of the solicitation must be consistent with
the solicitation when read as a whole and in a reasonable manner. M & M
Ret. Enters., LLC, B-297282, Dec. 15, 2005, 2005 CPD para. 224 at 3. Here,
the RFP clearly indicates that at the time of award decision (or time of
award) the agency would evaluate the small business subcontracting plans
in the offerors' final proposals as part of the total evaluation and would
then select an awardee based on this evaluation. This is unambiguously
indicated by the final sentence in the penultimate paragraph of Amendment
No. 4 (quoted above), which was restated in amendment No. 5 as follows,
"These points [assigned for the small business subcontracting plan
subfactor] will be added to a technical score to arrive at a total
evaluated score for purposes of award decision." The final paragraph in
amendment No. 4 (quoted above), which was restated in amendment No. 5,
creates some confusion, given that it suggests that the evaluation points
for this subfactor would only be added "by time of award." However, that
final paragraph only indicated that the subcontracting plan would not be
considered in establishing the competitive range, which in this case was
already established at the time amendment No. 5 was issued. Consistent
with that final paragraph, the agency then again provided SEDL with the
opportunity to amend its small business subcontracting plan to maximize
its possible points under this subfactor.
SEDL's actions during the procurement demonstrate that it understood, or
in any event should have understood, the RFP in this respect. The record
shows that SEDL knew that the agency permitted and expected changes in its
subcontracting plan between the submission of initial and final proposals.
In fact, SEDL's interim revised proposal contained changes to its
subcontracting plan, and amendment No. 5 caused SEDL to consider making
more changes. See AR, Tab 42, E-mails to/from SEDL, at 17.
Moreover, the concerns SEDL expressed to the agency about amendment No. 5
reveal that SEDL knew the subcontracting plan would be evaluated to
determine which offeror within the competitive range received the award.
As indicated, SEDL complained to the agency because the amendment's
evaluation scheme for the subcontracting plan assertedly gave small
businesses an unfair advantage over SEDL. SEDL's expressed concerns about
being unable to offer a competitive small business subcontracting plan
vis-`a-vis a small business is essentially an acknowledgment that the
agency would evaluate the small business subcontracting plans of all final
proposals before making an award decision.
SEDL also challenges Edvance's past performance rating based on the past
performance rating of Edvance's predecessor company and key personnel,
because the predecessor company "became a defunct company soon after the
creation of Edvance Research" and both companies are apparently being
pursued for "financial and management issues." Protest at 2. This protest
ground is untimely raised under our Bid Protest Regulations. SEDL learned
about Edvance's past performance evaluation at its debriefing and,
presumably, knew about Edvance's financial and management issues at that
time but did not raise this allegation in its agency-level protest. Thus,
in order to be timely, SEDL was required to assert this protest ground
within 10 days of when the basis for protest was known, and SEDL's failure
to raise this protest ground within 10 days of the debriefing in its
agency-level protest renders untimely the subsequent raising of this
protest ground in its protest to our Office.[4] 4 C.F.R. sect. 21.2(a)(2)
(2006); Foundation Eng'g Scis., Inc., B-292834, B-292834.2, Dec. 12, 2003,
2003 CPD para. 229 at 3 n.2.
The protest is denied.
Gary L. Kepplinger
General Counsel
------------------------
[1] While the agency also maintains that it encouraged SEDL to increase
its proposal's competitiveness by changing its small business
subcontracting plan, AR at 7, the protester denies receiving any such
encouragement. Protester's Comments at 1. We need not resolve this
dispute.
[2] Amendment No. 2 to the RFP included a price range for the total value
of the contract based on projected Congressional appropriations. The
agency felt that the offerors' initial price proposals did not adequately
consider this price range and, in the first round of negotiation
questions, directed their attention to it. Consequently, in their interim
revised proposals, both offerors proposed the same price within this
range, which was also identical to the independent government cost
estimate. AR, Tab 38, Negotiation Memorandum, at 22.
[3] SEDL maintains that the agency confirmed this interpretation in the
December 12 conference call. Nothing in the agency record substantiates
SEDL's recollection. To the extent SEDL's allegation relies on advice
given during the conference call, we note that oral advice from an agency
that is inconsistent with the unambiguous terms of the solicitation is not
binding on the government, and an offeror relies on oral advice that is
inconsistent with solicitation terms at its peril. Delphinus Eng'g, Inc.,
B-296902, B-296906.2, Sept. 20, 2005, 2006 CPD para. 7 at 5.
[4] In any case, this allegation is without merit. Information regarding
predecessor companies and key personnel who have relevant experience
should be taken into account in the past performance evaluation. FAR sect.
15.305(a)(2)(iii); Trailboss Enters., Inc., B-297742, Mar. 20, 2006, 2006
CPD para. 64 at 4. Moreover, upon receiving Edvance's protest, the agency
investigated the protester's allegation and did not find it valid. AR, Tab
40, Edvance Past Performance Evaluation Report at 8^th -10^th unnumbered
pages.