TITLE: B-298975, Stewart Distributors, January 17, 2007
BNUMBER: B-298975
DATE: January 17, 2007
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B-298975, Stewart Distributors, January 17, 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: Stewart Distributors

   File: B-298975

   Date: January 17, 2007

   James B. Lieber, Esq., and Thomas M. Huber, Esq., Lieber & Hammer, PC, for
   the protester.

   Phillipa L. Anderson, Esq., Dennis Foley, Esq., and Philip Kauffman, Esq.,
   Department of Veterans Affairs, for the agency.

   Linda C. Glass, Esq., and Glenn G. Wolcott, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Agency properly rejected proposal for bulk laundry/linen services as
   technically unacceptable where proposal did not clearly indicate the
   protester's intention to comply with the solicitation's quality standards.

   DECISION

   Stewart Distributors protests the rejection of its proposal and the award
   of a contract to Balfurd, Inc. under request for proposals (RFP) No.
   244-06-01362 REV issued by the Department of Veterans Affairs (VA) for
   bulk laundry/linen services at the VA Medical Center in Pittsburgh,
   Pennsylvania. Stewart contends that rejection of its proposal was
   improper.

   We deny the protest.

   BACKGROUND

   The RFP was issued on May 12, 2006 and contemplated award of a fixed-price
   contract for a 1-year base period and three 1-year option periods. As
   amended, the RFP provided for a "best value" award. The RFP listed the
   following evaluation factors--past performance, technical/management
   approach to performance, personnel, and price--and advised offerors that
   past performance, technical/management, and personnel, when combined, were
   significantly more important than price. The RFP also advised offerors
   that the agency intended to evaluate offers and make award without
   discussions, but reserved the right to conduct discussions if the
   contracting officer determined that to be necessary. RFP at 90.

   As noted above, the solicitation sought proposals to provide bulk
   laundry/linen services for the VA Medical facility in Pittsburgh,
   Pennsylvania, stating:

     Contractor shall furnish all clean linen items, labor, equipment,
     supervision, management, supplies, soiled linen carts and liners, bulk
     delivery carts, transportation, and facilities . . . necessary to
     perform complete and all-inclusive contractor owned/contractor operated
     bulk laundry linens services for the Department of Veterans Affairs. . .
     . All services are to be performed in accordance with standard industry
     practices and quality control measures and all requirements herein.

   RFP at 4.

   More specifically, with regard to quality of performance, the solicitation
   established an "Acceptable Quality Level" or "AQL" for each of various
   aspects of contract performance; in this regard, the RFP expressly defined
   AQL as "the maximum percent of defective work, or number of defects that
   will be allowed before work is considered unsatisfactory." RFP at 31,
   50-51. Specifically, under the heading "Performance Requirements Summary,"
   the solicitation contained a table that identified various quality
   standards applicable to various contract requirements. RFP at 50-51. For
   example, the solicitation provided that the performance standard for
   cleaning laundry was: "Laundry is clean, dry, free of lint and odor, spots
   and stains removed." RFP at 50. Directly next to this standard the
   solicitation provided that the "AQL Maximum Allowable Degree of Deviation"
   is "5% per month." Id. Similarly, with regard to damaged items, the
   solicitation established the following standard: "Laundered items are not
   physically damaged due to improper processing or carelessness." Directly
   next to this standard, the solicitation provided that the "AQL Maximum
   Allowable Degree of Deviation" for this requirement was "2.5% per month."
   RFP at 51.

   Four proposals, including one submitted by Stewart, were submitted by the
   August 4, 2006 closing time. In its proposal, Stewart provided a table
   under the heading "Quality Standards," in which Stewart listed various
   performance standards to be applied to particular items to be laundered.
   Agency Report (AR), Tab 15, Stewart Technical Proposal,[1] at 37-39. With
   regard to the solicitation requirements related to stained and damaged
   items, Stewart's proposal contained quality standards that varied from,
   and were less restrictive than, the standards established in the
   solicitation. For example, with regard to items identified as "Patient
   Gown," "Scrub," "Mattress Pad," "Bibs," "Adult Briefs," and "Bath Mats,"
   Stewart's proposal stated: "No dark stains. Not more than one light stain,
   no larger than a quarter."[2] Id.

   Similarly, with regard to damage to (that is, holes in) "Pad/Briefs" and
   "Adult Briefs," Stewart's proposal stated, "Cotton side: Not more than one
   hole, no larger than a dime. No holes on the barrier side." Id. at 37-39.
   Similarly, with regard to the item identified as "Thermo," Stewart's
   proposal stated, "Not more than 2 holes, each no bigger than a quarter,"
   id. at 38, and with regard to "Bath Mats," Stewart's proposal stated, "Not
   more than one hole, no larger than a dime." Id. at 39.

   Upon review and evaluation of Stewart's proposal, the agency concluded
   that it did not offer to meet the performance requirements specified in
   the solicitation; accordingly, the agency rejected Stewart's proposal as
   technically unacceptable.[3] Upon evaluation of the proposal submitted by
   Balfurd, next in line for award under the RFP award procedures, the agency
   determined that it contained no deficiencies, proposed to meet the
   solicitation's performance standards, and that its price was fair and
   reasonable. Consequently, a contract was awarded to Balfurd in the amount
   of $4,932,864. Stewart subsequently received a debriefing, after which,
   this protest was filed.

   DISCUSSION

   Stewart argues that the agency misinterpreted its proposal and
   unreasonably determined that it was technically unacceptable. We disagree.

   Where a protester challenges an agency's evaluation of a proposal's
   technical acceptability, our review is limited to considering whether the
   evaluation is reasonable and consistent with the terms of the RFP and
   applicable procurement statutes and regulations. National Shower Express,
   Inc.; Rickaby Fire Support, B-293970, B-293970.2, July 15, 2004, 2004 CPD
   para. 140 at 4-5. As with any evaluation review, our chief concern is
   whether the record supports the agency's conclusions. Innovative Logistics
   Techniques, Inc., B-275786.2, Apr. 2, 1997, 97-1 CPD para. 144 at 9.
   Clearly stated RFP technical requirements are considered material to the
   needs of the government, and a proposal that fails to conform to such
   material terms is technically unacceptable and may not form the basis for
   award. National Shower Express, Inc.; Rickaby Fire Support, supra. An
   offeror is responsible for affirmatively demonstrating the merits of its
   proposal and risks the rejection of its proposal if it fails to do so. HDL
   Research Lab, Inc., B-294959, Dec. 21, 2004, 2005 CPD para. 8 at 5.

   Here, as discussed above, the solicitation defined the acceptable level of
   performance in terms of the maximum percent of defective work that will be
   allowed. RFP, Performance Work Statement, at 31. More specifically, the
   solicitation provided that "[l]aundry is clean, dry, free of lint and
   odor, spots and stains removed," and that the acceptable level of
   deviation from this standard was limited to "5% per month." Similarly,
   with regard to damaged items, the solicitation's "Performance Standard"
   specified that, "[l]aundered items are not physically damaged due to
   improper processing or carelessness," and that the acceptable deviation
   from this standard was limited to "2.5% per month." RFP at 50-51.

   The agency concluded that, contrary to the solicitation's specified
   requirements, Stewart's proposal effectively provided that virtually every
   laundered item could permissibly contain holes and stains[4]--provided the
   holes were limited in size and number to the alternative standards that
   Stewart identified, and provided the stains were similarly limited in size
   and number and/or were sufficiently "light." Accordingly, the agency
   concluded that Stewart's proposal did not offer to meet the solicitation's
   stated performance requirements.

   Stewart complains that the agency should have interpreted the quality
   standards identified in its proposal as applying only to the portion of
   items that the solicitation permitted to deviate from the stated
   requirements--that is, 5 percent per month with regard to stained items
   and 2.5 percent per month with regard to damaged items. However, nothing
   in its proposal advised the agency regarding this purported interpretation
   and intent to comply with the solicitation's specified quality
   standards.[5]

   Here, Stewart's inclusion of quality standards that conflicted with the
   solicitation's stated standards--even if viewed in a light most favorable
   to Stewart--created an ambiguity regarding Stewart's intention to comply
   with the RFP's requirements. Since the agency selected Balfurd's proposal
   for award without discussions, as contemplated by the solicitation, the
   agency properly rejected Stewart's proposal as technically unacceptable
   for failure to clearly meet the solicitation's stated requirements. On the
   record here, we have no basis to question the agency's actions.

   Alternatively, Stewart protests that, because two other offerors'
   proposals were similarly determined to be technically unacceptable, the
   agency had an obligation to open discussions.[6] We disagree.

   Where, as here, an RFP provides for award on the basis of initial
   proposals without discussions, an agency may make award without
   discussions, unless discussions are determined to be necessary. 41 U.S.C.
   sect. 253b(d)(1)(B) (2000). An agency may dispense with discussions where
   there is a reasonable basis to conclude that the proposal of the intended
   awardee represents the best overall value to the government. See Sierra
   Military Health Servs., Inc.; Aetna Gov't Health Plans, B-292780 et al.,
   Dec. 5, 2003, 2004 CPD para. 55 at 6-7 n.5.

   Here, as discussed above, the solicitation specifically defined the
   performance standards and the maximum allowable degree of deviation from
   those standards; accordingly, there was no ambiguity with regard to the
   solicitation's requirements.[7] Further, the record shows that the agency
   clearly had a reasonable basis to conclude that Balfurd's proposal
   represented the best overall value to the government. That is, Balfurd
   submitted a low-priced, technically acceptable proposal, that contained no
   deficiencies requiring discussions. Accordingly, on this record, the
   agency had no obligation to conduct discussions.

   The protest is denied.

   Gary L. Kepplinger
   General Counsel

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

   [1] Stewart's technical proposal was prepared by its proposed
   subcontractor, Clean Textile Systems, Inc. (CleanCare).

   [2] Similarly, with regard to an item identified as "Thermo," Stewart's
   proposal stated: "No dark stains. No more than two light stains, no larger
   than 3 inches." Id. at 38. With regard to an item identified as
   "Pad/Briefs," Stewart's proposal stated: "Not more than one light stain,
   no larger than a quarter." Id.

   [3] The agency similarly concluded that two other offerors' proposals
   failed to comply with the solicitation's performance requirements and,
   consistent with the action taken regarding Stewart's proposal, rejected
   those proposals as technically unacceptable.

   [4] With regard to a very limited number of items--specifically, items
   identified as "Bath Towels," "Wash cloth," and "Baby"--Stewart's proposal
   stated "No stains" and "No holes." Id. at 37-38.

   [5] Stewart complains that its proposal contained a blanket assertion that
   it would abide by the terms and conditions of the RFP; however such
   statement is insufficient to supersede the specific conflicting provisions
   of its proposal, discussed above. See, e.g., National Shower Express,
   Inc.; Rickaby Fire Support, supra, (offeror is responsible for including
   sufficient information in its proposal to establish compliance with
   solicitation requirements, and blanket statements of compliance are
   insufficient to meet this obligation).

   [6] One of the other rejected proposals was submitted by CleanCare,
   Stewart's proposed subcontractor, on CleanCare's own behalf.

   [7] To the extent Stewart's protest is challenging the solicitation
   provisions as being overly restrictive, its protest is not timely filed.
   Bid Protest Regulations, 4 C.F.R. sect. 21.2(a)(1) (2006).