TITLE: B-299322.3, Optimum Management Systems, LLC, May 23, 2007
BNUMBER: B-299322.3
DATE: May 23, 2007
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B-299322.3, Optimum Management Systems, LLC, May 23, 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: Optimum Management Systems, LLC
File: B-299322.3
Date: May 23, 2007
Randall H. Miller, Esq., and James N. Phillips, Esq., Holme Robert & Owen,
LLP, for the protester.
Mike Lebofsky for SofTec Solutions, Inc., an intervenor.
Sherry Kinland Kaswell, Esq., Department of Interior, for the agency.
Jennifer D. Westfall-McGrail, Esq., and Christine S. Melody, Esq., Office
of the General Counsel, GAO, participated in the preparation of the
decision.
DIGEST
Protest of award to offeror with lower-rated, lower-priced proposal is
denied where agency reasonably determined that premium involved in
awarding to offeror with higher-rated, higher-priced proposal was not
justified.
DECISION
Optimum Management Solutions, LLC protests the decision by the Department
of the Interior to terminate its contract and instead make award to SofTec
Solutions, Inc. under request for proposals (RFP) No. NBC07003, issued by
the Department of the Interior for financial systems support for its
National Business Center (NBC). The protester argues that the agency's
selection of SofTec for award was inconsistent with the RFP's evaluation
scheme.
We deny the protest.
The RFP, which was issued on November 9, 2006 as an 8(a) set-aside,
contemplated the award of a fixed-price,
indefinite-quantity/indefinite-delivery contract for a base and 4 option
years. The solicitation provided for award to the offeror whose proposal
was determined to be most advantageous to the government, with proposals
to be evaluated on the basis of the following factors: management approach
and technical capabilities, personnel qualifications, organizational
experience, past performance, and price. The solicitation advised that the
technical and past performance factors, when combined, were significantly
more important than price.
Ten firms submitted proposals by the December 1, 2006 closing date. Each
of four evaluators rated each proposal on a scale of 1-4 under each of the
four non-price factors;[1] these points were then totaled to yield the
offeror's overall technical score.[2] The evaluators determined only the
following three proposals to be technically acceptable:
+------------------------------------------------------------------------------+
|Offeror |Technical Score |Price |
|----------------------+---------------------------+---------------------------|
|OMS |59 |$9,450,410 |
|----------------------+---------------------------+---------------------------|
|SofTec |56 |$7,249,312 |
|----------------------+---------------------------+---------------------------|
|Offeror A |56 |$9,069,406 |
+------------------------------------------------------------------------------+
The contracting officer determined that OMS's proposal represented the
best value to the government based on its having received the highest
technical score. On December 22, the agency awarded a contract to OMS and
posted notice of the award on the Federal Business Opportunities
(FedBizOpps) website.
SofTec, the incumbent contractor, learned of the award to OMS on December
26 and requested a debriefing the following day. SofTec also filed a
protest with our Office on December 27, alleging that the award to OMS was
improper because OMS had not proposed, and did not intend, to meet the
solicitation requirement for a quality assurance (QA) manager working
on-site at the NBC 20 hours per week. In a supplemental submission to our
Office dated January 15, 2007, SofTec further argued that the proposed
hourly rate for OMS's QA manager was unrealistically low.
While SofTec's initial protest was pending, SofTec again contacted the
agency and renewed its request for a debriefing. In reviewing the request,
the contract specialist realized that she had overlooked SofTec's December
27 debriefing request and agreed to furnish SofTec a debriefing. The
debriefing was held on January 24. On January 29, SofTec filed a second
protest, objecting to the evaluation of its own proposal. This protest was
based on information learned by SofTec at the debriefing.
By decision dated January 30, we dismissed SofTec's initial protest,
finding that its allegations concerning OMS's QA manager were unsupported
and concerned a matter of contract administration not subject to our
review. Eight days later, on February 7, the agency notified us that it
was taking corrective action in response to SofTec's second protest.
Specifically, the agency informed us that the contracting officer had
terminated for convenience the contract awarded to OMS and that she
planned to award to SofTec. The agency explained that it was taking this
corrective action because it had concluded that the procurement record did
not support a defense against SofTec's second protest. By decision dated
February 9, we dismissed SofTec's protest as academic. OMS requested a
debriefing on February 9, which the agency provided on February 14. On
February 26, OMS protested to our Office.
OMS raises two preliminary challenges to the agency's decision to take
corrective action in response to SofTec's second protest. OMS first
asserts that the agency should not have taken corrective action because
SofTec's protest was untimely filed. We disagree. It was within the
agency's discretion to take corrective action in connection with the
procurement regardless of whether SofTec's protest was timely; all that is
required is that the agency have reasonable concerns that errors in the
procurement occurred.[3] Alfa Consult S.A., B-298164.2, B-298288, Aug. 3,
2006, 2006 CPD para. 127 at 2, 3 n.1.
OMS next asserts that even if the agency's procurement record did not
support a defense against SofTec's second protest, termination of the
contract previously awarded to it and award of a contract to SofTec were
not necessarily the appropriate corrective measures since the conclusion
that the agency erred in its evaluation of SofTec's proposal does not
necessarily lead to the conclusion that SofTec's proposal represents the
best value to the government.[4]
The agency responds that it took the corrective action that it did because
the contracting officer determined, after reexamining the evaluation
record in response to SofTec's second protest, that "the record could not
support a rational cost/technical tradeoff justifying award based on a
proposal that was rated only slightly higher technically, but was over $2
million . . . higher in price." Agency Report at 2. That is, the
contracting officer determined that OMS's proposal did not offer technical
advantages sufficient to outweigh its higher price. Thus, contrary to the
protester's assertion, the agency did not decide to terminate OMS's
contract and award to SofTec simply because it concluded that it had erred
in its initial evaluation; it took this action because, after reexamining
the record, it concluded that SofTec's combination of technical merit and
price represented the best value to the government.
With regard to the selection of SofTec, OMS argues that it was
inconsistent with the evaluation scheme set forth in the RFP, which
provided that technical factors would be significantly more important than
price in the determination of best value, for the agency to have selected
SofTec's lower-rated proposal for award on the basis of SofTec's lower
price.
This argument is without merit. Even where price is the least important
evaluation criterion, an agency may properly award to an offeror with a
lower-rated, lower-priced proposal if the agency reasonably determines
that the premium involved in awarding to an offeror with a higher-rated,
higher-priced proposal is not justified. Computer Tech. Servs., Inc.,
B-271435, June 20, 1996, 96-1 CPD para. 283 at 5. Here, the record clearly
demonstrates the reasonableness of the contracting officer's conclusion
that OMS's proposal did not offer technical advantages over SofTec's
sufficient to justify its higher price.
The agency reports that, in reviewing its source selection decision in
response to SofTec's second protest, it reconsidered whether the large
disparity between OMS's and SofTec's proposed prices could be justified by
specific advantages in OMS's technical proposal. It found that while the
technical evaluators had credited OMS for its plan to retain the incumbent
staff since this would minimize the transition effort, [deleted]. Further,
while the technical evaluators described OMS's experience on similar
contracts as a strength, SofTec was performing as the incumbent on the
project in question. In other words, these grounds did not furnish a
reasonable basis for preferring OMS's proposal over SofTec's. The agency
further noted that the major discriminator between the two proposals
appeared to be in the area of past performance, where SofTec's proposal
was perceived as weaker than OMS's due to difficulties that NBC officials
had encountered in dealing with SofTec's project manager under the
predecessor contract. In reexamining the record, however, the agency found
that the contract file did not contain documentation demonstrating a basis
for the negative perceptions regarding the performance of SofTec's project
manager.[5]
OMS contends that in her initial best value tradeoff determination in its
favor, the contracting officer identified an additional advantage in its
technical proposal, i.e., its low staff turnover, which she then
improperly ignored in her second tradeoff determination in favor of
SofTec. The protester cites the following excerpt from the initial price
analysis of proposals as its basis for this argument:
OMS has a history of hiring, and retaining highly skilled personnel. It
is believed that this is due to OMS' decision to pay its employees
slightly higher (but reasonable) labor rates. Low staff turnover is
extremely important for this requirement, therefore, the Government
considers OMS' proposed prices to be fair and reasonable.
Price Analysis Attachment to Price Negotiation Memorandum.
We do not think that OMS's low staff turnover was cited in the foregoing
excerpt as an advantage justifying the selection of OMS's proposal over
SofTec's; rather, it appears to have been cited as a justification for
finding OMS's prices, which were substantially higher than SofTec's,
reasonable. We note in this connection that the excerpt concludes by
finding OMS's proposed prices fair and reasonable. Moreover, there is no
mention of SofTec's rate of staff turnover or comparison of SofTec's rate
to OMS's rate anywhere in the evaluation documentation.
In sum, we think that the contracting officer reasonably concluded after
reexamining the evaluation record that OMS's proposal did not offer
sufficient advantages over SofTec's to make it worth a considerably higher
price.[6]
The protest is denied.
Gary L. Kepplinger
General Counsel
------------------------
[1] The evaluation worksheet defined the ratings to be used by the
evaluators as follows:
4: Outstanding--Exceptionally Meets the Requirement
3: Good--Meets the Requirement
2: Marginal--Minimally Meets the Requirement
1: Unacceptable--Does Not Meet the Requirement
[2] Since there were four evaluators assigning points under four factors
and the maximum possible score under each factor was four, the maximum
possible overall technical score was 64.
[3] In any event, we note that SofTec's protest was timely filed. OMS
premises its argument that SofTec's protest was untimely on the fact that
SofTec failed to request a debriefing within 3 days after it was
constructively placed on notice of the award via publication on
FedBizOpps, and the debriefing it ultimately received thus was not a
"required" debriefing. See Federal Acquisition Regulation sect.
15.506(a)(1), (3). As a consequence, the protester maintains, SofTec's
10-day period for filing a protest should have started to run on the date
of the award and not on the date of its debriefing. The provision in our
timeliness rules cited by the protester, 4 C.F.R. sect. 21.2(a)(2) (2007),
extends the time period for filing a protest based on information known to
a protester prior to a debriefing beyond the usual 10-day period in the
situation in which a debriefing is both requested and required. However,
even where a disappointed offeror does not secure a required debriefing,
it retains its right to file a protest within 10 days after it learns, as
here, or should have learned, of the basis for its protest, provided it
has diligently pursued the matter. This includes the right to file a
timely protest based on information obtained during a debriefing that was
not required. Raith Eng'g and Mfg. Co., W.L.L., B-298333.3, Jan. 9, 2007,
2007 CPD para. 9.
[4] OMS also asserts that the agency should have "reopened the bidding"
because "there has been a defect in the solicitation identified after the
agency" made award to SofTec. Comments at 11. There is no basis to
conclude that the agency should have called for submission of revised
proposals given that the flaws identified by the agency related to the
evaluation of proposals, not any terms of the RFP.
[5] We note in this connection that while the protester speculates that
the agency's concerns regarding SofTec's project manager were eliminated
through discussions that the agency improperly held with SofTec only, we
find no support in the record for this speculation.
[6] With regard to the protester's complaint that the agency failed to
disclose required information to it at its debriefing, our Office will not
review a protester's contention that the debriefing it received was
inadequate because the adequacy of a debriefing is a procedural matter
concerning an agency's actions after award, which are unrelated to the
validity of the award itself. Symplicity Corp., B-297060, Nov. 8, 2005,
2005 CPD para. 203 at 4 n.4.