TITLE: B-298872.3, Frontier Systems Integrators, LLC, February 28, 2007
BNUMBER: B-298872.3
DATE: February 28, 2007
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B-298872.3, Frontier Systems Integrators, LLC, February 28, 2007
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: Frontier Systems Integrators, LLC
File: B-298872.3
Date: February 28, 2007
T. Michael Guiffre, Esq., James N. Schwarz, Esq., and Elizabeth M. Gill,
Esq., Patton Boggs LLP, for the protester.
David B. Dempsey, Esq., Kristen E. Ittig, Esq., David J. Craig, Esq., and
Stuart W. Turner, Esq., Holland & Knight LLP, for Chenega Security and
Protection Services, LLC, an intervenor.
Damon Martin, Esq., and David Nimmich, Esq., Naval Facilities Engineering
Command, for the agency.
Edward Goldstein, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Agency reasonably decided not to attribute to the awardee the past
performance information of its parent company where awardee's proposal
indicated that parent's role was limited to providing administrative
support functions and reflected that it would have no role in performing
the actual security guard functions required by the agency.
2. Protest that awardee's proposal should have been rated "unacceptable"
for failing to comply with solicitation requirement that offerors submit
"at least" three relevant past performance questionnaires is denied where
past performance was evaluated according to a pass/fail evaluation scheme
and was therefore ultimately a matter of responsibility and the protester
did not challenge the agency's affirmative determination of responsibility
with respect to the awardee.
DECISION
Frontier Systems Integrators, LLC protests the award of a contract to
Chenega Security and Protection Services, LLC (CSPS) under request for
proposals (RFP) No. N40085-06-R-1126, issued by the Department of the
Navy, Naval Facilities Engineering Command, for security guard services.
Frontier argues that the Navy improperly evaluated CSPS's proposal.
We deny the protest.
The RFP, issued as a competitive set-aside under section 8(a) of the Small
Business Act, contemplated the award of a "combination firm-fixed
price/indefinite quantity contract" for security guard and patrol services
at the Naval Station Newport Complex, Newport, Rhode Island, with a 1-year
base period of performance and four 1-year options.
As amended, the RFP provided that "[t]he Government will select the lowest
price technically acceptable offer whose proposed approach provides a high
degree of confidence that the contractor is capable of meeting or
exceeding the performance objectives and standards at a realistic and
reasonable cost to the Government." RFP at 55. Technical acceptability was
to be determined with respect to three technical evaluation factors: (1)
technical approach/management; (2) corporate experience; and (3) past
performance.[1] As it relates to the protest issues raised, the corporate
experience factor provided as follows:
Offerors shall provide information on a maximum of twenty (20)
guard/security services contracts completed within the past five years,
including current (on-going) contracts. Contracts must be similar in
size, scope, and complexity as the current requirement. Include a short
description, contract number, title, location, and a list of clients and
points of contact on individual contracts with accurate telephone
numbers. Offerors may include past experience information regarding
predecessor companies and key personnel who have relevant experience.
RFP at 57.
The past performance factor provided as follows:
Offerors shall clearly demonstrate a history of performance on contracts
of similar scope, size, and complexity to this requirement. The
Government will consider any 1) information supplied by the offeror, 2)
information obtained by references provided by the offeror, 3) other
relevant past performance and experience obtained from other sources and
date bases known to the Government. The Government will use this
information to determine if the record indicates accomplishing
performance objectives, any problems and corrective actions taken on
prior contracts, standards of good workmanship, foreseeing and
controlling costs, adhering to schedules, a reputation for reasonable
behavior, and generally a business-like concern to the customer's
interest.
Offerors shall be responsible for ensuring that the references submit
completed questionnaires of at least three similar projects performed
within the last five years.
RFP at 57.
By the RFP's closing date, the Navy had received several proposals,
including those from CSPS and Frontier. The Navy initially rated CSPS as
unacceptable under the past performance factor because none of CSPS'
references returned their past performance questionnaires and the agency,
therefore, did not have any past performance information for CSPS. As a
consequence, Frontier was determined to have submitted the lowest priced
technically acceptable proposal.[2]
On September 14, the Navy notified all offerors that Frontier had been
selected for award. Subsequently, however, the Navy concluded that it had
erred in evaluating CSPS as unacceptable under the past performance factor
and determined that CSPS should have received a "neutral" rating under
this factor instead. With a "neutral" rating, CSPS became the lowest
priced technically acceptable offeror, and the Navy notified Frontier that
CSPS would receive the award.
Upon learning of the agency's revised award decision, Frontier filed a
protest with our Office. In response to Frontier's protest, the Navy
represented that it intended to reevaluate proposals and make a new award
decision. Based on the agency's representations, we dismissed the protest
as academic.
In its reevaluation, the Navy rated CSPS as acceptable under all of the
technical evaluation factors. With regard to the corporate experience
factor, the Navy concluded that CSPS did not itself have any relevant
experience and declined to attribute to CSPS, the experience of its parent
company, Chenega Corporation, which CSPS had indicated in its proposal
would play a role in its performance of the contract. The agency decided
not to attribute Chenega's experience to CSPS because Chenega was going to
perform a limited administrative role in performance of the prospective
contract, specifically, accounting, payroll support, and certain quality
control certification functions. Agency Report (AR) at 8; AR, exh. 14,
Second Source Selection Board Report at 4-5. In rating CSPS as acceptable
under the corporate experience factor, the Navy did, however, consider the
experience of CSPS' proposed key personnel and major subcontractor,
Wackenhut Services, Inc., which was to provide 49 percent of the direct
labor costs under the contract. AR at 11; AR, exh. 14, supra. In its
proposal, CSPS detailed the experience of its three top corporate officers
as well as the experience of Wackenhut, and the Navy concluded that CSPS'
key personnel and Wackenhut had extensive experience in the security field
with contracts of similar or greater size, scope, and complexity as
compared to the prospective contract. Id.
The Navy also did not attribute information concerning Chenega to CSPS in
its evaluation of CSPS' past performance, and determined that CSPS did not
have any relevant past performance of its own. However, the Navy did
receive four past performance questionnaires regarding Wackenhut's past
performance and found two of the four to be relevant. Based on these two
questionnaires for Wackenhut, which reflected excellent past performance
ratings, the Navy revised its prior "neutral" past performance rating for
CSPS to a rating of "acceptable." Because CSPS had submitted the lowest
priced technically acceptable proposal, the Navy affirmed its prior award
decision to CSPS. This protest followed.
Frontier maintains that CSPS should have been rated as unacceptable under
the past performance factor. According to Frontier, because CSPS relied on
its parent corporation, Chenega, to establish its corporate experience and
past performance, it was improper for the agency to disregard "a wealth of
information in the public record concerning [Chenega's] poor performance
on substantially similar contracts." Protest at 9. Assuming that the
agency reasonably did not impute Chenega's information to CSPS, Frontier
argues in the alternative that CSPS could not have been found acceptable
under the past performance factor because the Navy received and considered
only two relevant past performance questionnaires, not three as required
by the RFP.
As an initial matter, even assuming that the Navy acted improperly in
deciding not to consider information relating to CSPS' parent corporation,
Chenega, in its evaluation of CSPS' past performance, Frontier has failed
to provide any evidence to suggest that had the Navy considered Chenega's
past performance, CSPS would have received a rating of "unacceptable"
under the past performance factor. Rather, Frontier simply relies on its
bald assertion that there is a "wealth" of public information concerning
Chenega's poor performance on similar contracts, which would have led to a
rating of unacceptable. Such unexplained, unsupported, and undocumented
assertions fail to provide sufficient evidence for a finding by our Office
that the Navy's evaluation was materially and prejudicially unreasonable
or inconsistent with procurement laws or regulations. See 4 C.F.R.
sections 21.1(c)(4) and (f) (2006); Bella Vista Landscaping, Inc.,
B-291310, Dec. 16, 2002, 2002 CPD para. 217 at 5 n.4.
In any event, we see nothing improper in the Navy's decision not to
consider the past performance information of CSPS' parent corporation in
its evaluation of CSPS's past performance. An agency may attribute the
experience or past performance of a parent or affiliated company to an
offeror where the firm's proposal demonstrates that the resources of the
parent or affiliate will affect the performance of the offeror.
Perini/Jones, Joint Venture, B-285906, Nov. 1, 2000, 2002 CPD para. 68 at
4. The relevant consideration is whether the resources of the parent or
affiliated company--its workforce, management, facilities, or other
resources--will be provided or relied upon for contract performance, such
that the parent or affiliate will have meaningful involvement in contract
performance. Id. at 5.
In challenging the agency's decision not to attribute the past performance
information of CSPS' parent company, Chenega, Frontier points to numerous
sections of CSPS' proposal referencing the experience and capabilities of
Chenega. Frontier also highlights the fact that the relevant experience of
CSPS' key employees involved work they had performed on behalf of Chenega,
as well as the fact that CSPS intended to rely on a personnel database
maintained by Chenega for recruiting purposes.[3] When taken together,
Frontier contends that CSPS' proposal shows that Chenega will maintain a
significant role in performing the required guard and security services
contract. CSPS' proposal, however, clearly identified Chenega's role under
the contract as limited to providing support type functions, i.e.,
accounting, invoicing, payroll, and quality control certification, and
clearly explained that CSPS and Wackenhut personnel were to manage and
perform all of the required guard and security services. CSPS Proposal at
39. Based on these clear and unequivocal representations in CSPS's
proposal, the Navy reasonably determined that Chenega would not have a
meaningful role in performing the primary services required by the agency
and therefore acted properly in not attributing to CSPC the experience or
past performance history of its parent corporation.
Frontier also argues that CSPS should have received a rating of
"unacceptable" under the past performance factor because CSPS provided
only two past performance questionnaires, not three as Frontier contends
was required by the RFP. In support of its argument, Frontier points to
the section of the RFP stating that offerors were responsible for ensuring
that the agency receive completed past performance questionnaires for "at
least three similar projects performed within the last five years." RFP at
57. The record reflects that, while the agency found that CSPS had no
record of past performance itself, the Navy received four past performance
questionnaires concerning CSPS' major subcontractor, Wackenhut, and found
two of the four to be relevant. AR, exh. 14, Second Source Selection Board
Report, at 5. Based on these two references regarding Wackenhut's past
performance, which reflected excellent ratings, the Navy rated CSPS' past
performance as "acceptable."
The Navy does not challenge the assertion that it received only two
relevant past performance questionnaires when it evaluated CSPS as
acceptable under the past performance factor; rather, the Navy contends
that the solicitation requirement for three relevant questionnaires was
not a material requirement since it did not affect the price, quantity,
quality, or delivery of the services required and, as a consequence, CSPS'
failure to provide three relevant past performance questionnaires did not
compel a past performance rating of "unacceptable." In this regard, the
Navy notes that the questionnaires were merely one tool with which to
assess an offeror's past performance. The Navy also contends that failing
to provide the requisite number of relevant questionnaires at most should
result in CSPS receiving a past performance rating of "neutral," since,
under Federal Acquisition Regulation (FAR) sect. 15.305(a)(2)(iv), an
offeror without a record of past performance, or for whom past performance
information is not available, may not be rated favorably or unfavorably.
Thus, with its neutral rating, CSPS would still have been the awardee.
We conclude that the informational defect alleged by Frontier concerning
CSPS' past performance does not, by itself, provide a basis for sustaining
Frontier's protest, since, as discussed below, the agency's acceptability
determination with respect to CSPS' past performance was ultimately a
matter of CSPS' responsibility. As a consequence, the Navy retained the
discretion to find CSPS' past performance acceptable, notwithstanding the
language in the RFP concerning the number of questionnaires offerors were
to submit as part of their past performance evaluation.
Where an agency utilizes a lowest price technically acceptable source
selection process, the FAR provides that past performance need not be an
evaluation factor at all. However, when it is included, it cannot be
utilized for the purpose of making a "comparative assessment"; rather,
past performance is to be determined solely on a pass/fail basis. FAR
sect. 15.101-2. Our Office has long held that pass/fail evaluations of
capability issues, such as past performance, are tantamount to
responsibility determinations, with the result that a rating of
"unacceptable" in these areas is the same as a determination of
nonresponsibility. See, e.g., Phil Howry Co., B-291402.3, B-291402.4, Feb.
6, 2003, 2003 CPD para. 33. Consistent with this premise, in the context
of a lowest price technically acceptable evaluation scheme, where the
contracting officer determines that a small business' past performance is
not acceptable, "the matter shall be referred to the Small Business
Administration for a Certificate of Competency determination."[4] FAR
sect. 15.101-2(b)(1).
By including past performance as an evaluation factor in the RFP's lowest
price technically acceptable evaluation scheme here, the Navy essentially
carved out one element of a responsibility determination and utilized it
as an evaluation factor in this set-aside. This, however, did not alter
the fact that the pass/fail past performance evaluation in this context
remained a matter of responsibility since, if the Navy had found CSPS'
past performance "unacceptable," it would have been required to submit
that determination to the Small Business Administration for a certificate
of competency (COC) review. Since past performance ultimately is a matter
of responsibility, the agency could look beyond an offeror's compliance
with the informational requirements set forth in the RFP, and therefore
retained the discretion to find CSPS' past performance acceptable despite
CSPS' failure to submit three past performance questionnaires. Because
Frontier has not in any way challenged the Navy's affirmative
determination of responsibility with respect to CSPS, but instead only
challenged CSPS' failure to comply with the informational requirements
under the past performance evaluation factor, there is no basis for our
Office to conclude that the award to CSPS was improper.
Citing our decisions in Prudent Techs., Inc., B-297425, Jan. 5, 2006, 2006
CPD para. 16 and Menendez-Donnell & Assocs., B-286599, Jan. 16, 2001, 2001
CPD para. 15 at 3 n.1, Frontier suggests that CSPS' past performance
evaluation was not a matter of responsibility but rather a question of
technical acceptability and, as a consequence, the Navy would not have
been required to refer CSPS to SBA for a COC review. Prudent Techs., Inc.
and Menendez-Donnell & Assocs. are distinguishable, however, since, unlike
the case at hand, the protesters in those cases disregarded the
solicitation regarding the submission of specific information required by
the agency for the purpose of evaluating experience or past performance
and, based on this failure, their proposals were found to be technically
unacceptable. In these cases, the agency did not have any basis to assess
or judge the protesters' capabilities because of their failure to comply
with solicitation requirements. Here, in contrast to the cited cases where
the protesters did not submit the required information, CSPS made an
effort to comply with all of the RFP's informational requirements, and in
fact submitted four past performance questionnaires. It was only as a
result of the Navy's assessment of the information provided by CSPS that
CSPS was deemed to have submitted only two "relevant" questionnaires.
Notwithstanding this conclusion, however, the Navy determined that CSPS
was capable of performing the work and its past performance acceptable--a
determination ultimately regarding CSPS' responsibility.
The protest is denied.
Gary L. Kepplinger
General Counsel
------------------------
[1] The RFP also indicated that the technical factors were of equal weight
and that when combined they were equal in weight to price. RFP at 55.
Including information concerning the relative "weights" of the evaluation
factors suggested that the agency intended to perform a price/technical
tradeoff in selecting the awardee and was therefore inconsistent with the
language in the RFP indicating that award was to be made to the lowest
priced technically acceptable offer. This apparent inconsistency, however,
was never challenged and the record demonstrates that the agency did not
conduct a tradeoff but rather made award to the lowest priced technically
acceptable offeror.
[2] Frontier's price was $26,171,375.07 and CSPS' price was
$25,430,927.67.
[3] Frontier also asserts that the workforce proposed by CSPS will
actually be employees of Chenega, relying on two phrases in CSPS' proposal
concerning supervision of Chenega and Wackenhut employees. Those phrases
are taken out of context and fail to establish that Chenega will be the
actual employer.
[4] As an aside, at least in the context of set-asides for small business
concerns, we question the purpose of including past performance as a
separate evaluation factor where a pass/fail rating scheme is utilized
since the past performance evaluation is ultimately reduced to a matter of
the firm's responsibility. This is particularly so given the difficulties
associated with how to consider a "neutral" rating in the context of a
pass/fail evaluation, which, as noted above, is the rating required for
firms without any past performance record or where the record is not
available. FAR sect. 15.305(a)(2)(iv).