TITLE: B-299369.2; B-299369.3, M&M Investigations, Inc., October 24, 2007
BNUMBER: B-299369.2; B-299369.3
DATE: October 24, 2007
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B-299369.2; B-299369.3, M&M Investigations, Inc., October 24, 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: M&M Investigations, Inc.

   File: B-299369.2; B-299369.3

   Date: October 24, 2007

   Alison L. Doyle, Esq., and Kara M. Klaas, Esq., McKenna Long & Aldridge,
   for the protester.

   Jennifer L. Longmeyer-Wood, Esq., Department of Homeland Security,
   Immigration and Customs Enforcement, for the agency.

   Susan K. McAuliffe, Esq., and Christine S. Melody, Esq., Office of the
   General Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Protest challenging agency's exclusion of protester's proposal from
   competitive range is denied where record shows that evaluation was
   reasonable and consistent with solicitation's evaluation terms, and that
   agency reasonably determined that protester did not have a reasonable
   chance for award based on its proposal's lower technical rating and
   significantly higher price.

   DECISION

   M&M Investigations, Inc. protests the exclusion of its proposal from the
   competitive range and the proposed award to Eagle Technologies, Inc. under
   request for proposals (RFP) No. PIADC-07-01, issued by the Department of
   Homeland Security for security guard services at Plum Island Animal
   Disease Center. The protester contends that, to the extent there were
   weaknesses in its proposal, they are minor and could have been cured
   during discussions. M&M contends that excluding its proposal from the
   competitive range was unreasonable, especially because it resulted in a
   competitive range of only one proposal.

   We deny the protest.

   The RFP, issued on December 6, 2006 as a small business set-aside,
   contemplated the award of a fixed-price
   indefinite-delivery/indefinite-quantity contract for a base year and four
   1-year option periods for security guard services. RFP at 2. The
   evaluation of proposals was to be conducted in two phases; Phase I
   involved an evaluation of the minimum qualifications of each offeror's
   proposed Program Manager. Id. at 122. Offerors with acceptable Phase I
   submissions were to submit proposals for a Phase II evaluation under the
   following factors: demonstrated technical/management capability (including
   evaluation of quality control plan, key personnel, management plan, and
   relevant experience); past performance; and price. Id. at 123-25. Award
   was to be made to the firm submitting the proposal deemed to offer the
   best value to the agency, with demonstrated technical/management
   capability slightly more important than past performance; both factors
   combined were significantly more important than price. Id. at 126. The RFP
   advised that an award would not be made at a significantly higher price to
   achieve only slightly superior technical capability. Id.

   Four of the 12 offerors' submissions passed the Phase I evaluation; each
   of those firms then submitted a technical and price proposal for the Phase
   II evaluation. Eagle's proposal (which offered the second lowest price, at
   $14,594,037.69) was rated highest technically, with adjectival ratings of
   good for demonstrated technical/management capability and outstanding for
   past performance. M&M's proposal, which at $21,209,617.95 offered the
   highest price of all of the Phase II proposals, was approximately 28
   percent higher than the agency's cost estimate for the work, and more than
   30 percent higher than the prices proposed by the other offerors,
   including Eagle. The protester's proposal, rated second highest
   technically, received ratings of acceptable for demonstrated
   technical/management capability and good for past performance.[1]

   The protester's proposal was found to have weaknesses under the
   demonstrated technical/management capability factor; one major weakness
   concerned the firm's failure to provide sufficient information about its
   proposed quality control plan. The firm's price proposal was also cited
   for weaknesses relating to its failure to include transition costs or a
   high enough escalation rate over the 5 years of the contract. As discussed
   below, the agency reports that the firm's proposal was excluded from the
   competitive range due to its significantly higher price and lower
   technical ratings. Source Selection Decision at 2; Amended Agency Report
   at 7 and 9. Compared to the Eagle proposal's significantly lower price and
   higher technical merit, the agency determined that the M&M proposal did
   not have a reasonable chance for receiving the award. The two lower-rated
   proposals were also excluded from the competitive range. Discussions were
   held with Eagle, the only firm in the competitive range; however, neither
   the firm's proposal rating nor its price changed as a result of the
   discussions. This protest followed a pre-award debriefing provided to the
   protester upon its exclusion from the competitive range.

   The protester, which is currently providing security guard services at the
   Plum Island facility as a subcontractor, challenges the propriety of the
   agency's exclusion of its proposal, contending that the cited technical
   weaknesses are minor and did not render the proposal technically
   unacceptable. M&M generally contends that its proposal should have been
   included in the competitive range because it was technically acceptable
   and discussions with the firm would have cured the evaluators' concerns;
   in terms of price, the protester generally asserts that it may have been
   able to support its higher price with a superior technical approach during
   discussions, or that it could have adjusted its price in response to the
   agency's concerns. M&M, which does not challenge the agency's price
   analysis, further contends that its proposal should be included in the
   competitive range despite its significantly higher price.

   As a preliminary matter, while M&M challenges the agency's decision to
   limit the competitive range here to one firm, we have held that there is
   nothing inherently improper in a competitive range of one. Cobra Techs.,
   Inc., B-272041, B-272041.2, Aug. 20, 1996, 96-2 CPD para. 73 at 3.
   Contrary to M&M's suggestion, agencies are not required to retain in the
   competitive range a proposal that the agency reasonably concludes has no
   realistic prospect of award compared to a substantially lower priced and
   higher technically rated proposal, even if that proposal is, as here, the
   second highest-rated. See SDS Petroleum Prods., Inc., B-280430, Sept. 1,
   1998, 98-2 CPD para. 59 at 5-6.

   The determination of whether a proposal is in the competitive range is
   principally a matter within the discretion of the procuring agency. Dismas
   Charities, Inc., B-284754, May 22, 2000, 2000 CPD para. 84 at 3. Our
   Office will review an agency's evaluation of proposals and determination
   to exclude a proposal from the competitive range for reasonableness and
   consistency with the terms of the solicitation. Novavax Inc., B-286167,
   B-286167.2, Dec. 4, 2000, 2000 CPD para. 202 at 13. Here, as explained in
   greater detail below, we conclude that the evaluation of M&M's proposal
   and its elimination from the competitive range was reasonable and
   consistent with the solicitation.

   As an initial matter, we note that M&M has not challenged its lower past
   performance rating (M&M was rated good for past performance and Eagle was
   rated outstanding); the firm instead challenges the acceptable rating
   assigned to its proposal under the demonstrated technical/management
   capability factor, arguing that both proposals were found to have some
   degree of weakness in some of the same subject areas, such as quality
   control plan. In this regard, M&M basically alleges that it was treated
   unequally because the Eagle proposal (which received a rating of good) was
   included in the competitive range for discussions and its proposal was
   not.

   Our review of the record supports the reasonableness of the agency's
   evaluation ratings for the two firms' proposals and we find nothing in the
   record to support M&M's claim of unequal treatment. Rather, our review
   confirms that while both offerors may have had a weakness in the same
   subject area, their weaknesses varied in degree. For instance, the
   weakness cited for the quality control plan in Eagle's proposal was minor;
   a weakness was noted because the firm's comprehensive quality control plan
   exceeded requirements (and could easily be scaled back regarding
   inspections, for instance). M&M's proposal, on the other hand, was cited
   for a major weakness for its critical lack of detail regarding its quality
   control plan; the agency found that the protester failed to provide
   sufficient detail about its intended quality control methodologies and
   procedures. While the agency allowed the protester's prior experience as
   the incumbent subcontractor of the services to mitigate much of its
   concern, the evaluators also noted that the past contract did not
   emphasize quality control; consequently, the evaluators found a
   significant performance risk in the protester's failure to clearly detail
   its proposed quality control methodologies and plans.[2]

   Our review confirms that while the protester generally noted in its
   proposal that it has a set of quality control procedures to guarantee high
   quality services, including, for instance, hiring qualified personnel,
   conducting inspections, analyzing performance data and conducting
   equipment tests, no comprehensive description is provided to explain the
   methodologies used to complete them. M&M Investigations, Inc. Proposal at
   sect. 3.1. A detailed quality control plan was required for evaluation
   here, and, in our opinion, the protester's proposal was reasonably found
   to lack sufficient detail in this critical area. Accordingly, our review
   of the record provides no basis to question the reasonableness of the
   lower rating of acceptable assigned to M&M's demonstrated
   technical/management capability. The Eagle proposal, on the other hand,
   was reasonably cited with only a minor weakness for in fact exceeding the
   RFP's requirements for a detailed quality control plan.

   Regarding the price proposal evaluations, M&M points out that similar
   weaknesses were cited in both the M&M and Eagle proposals, for instance,
   concerning the firms' failure to include transition costs or escalation
   rates that are as high as those anticipated by the agency. Again, however,
   there is a distinct difference in the degree of weakness cited for each
   firm's proposal. For instance, regarding the escalation rates, the record
   shows that since Eagle's proposed escalation rate is closer to the
   agency's, it was considered only a minor weakness, while M&M's very low
   escalation rate was considered a more serious weakness as it varied from
   the agency's rate considerably more than Eagle's.

   The M&M proposal was excluded from the competitive range due to its
   significantly higher price, which was more than 30 percent higher than
   Eagle's price and approximately 28 percent higher than the agency's
   estimate for the work, and its lower technical ratings. Our review of the
   record confirms that in accordance with the best value evaluation terms of
   the solicitation, it was wholly reasonable for the agency to conclude that
   M&M had no reasonable chance for award here in light of its lower
   technical ratings and significantly higher price and to exclude M&M's
   proposal from the competitive range.[3] See Intown Props., Inc., B-272524,
   Oct. 21, 1996, 96-2 CPD para. 149 at 4-5. Accordingly, the protest is
   denied.

   Gary L. Kepplinger
   General Counsel

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

   [1] In its supplemental protest, the protester contends that a
   typographical error in a chart of proposal ratings in the source selection
   documentation at tab 5 of the agency report (listing the protester's
   proposal's past performance rating as acceptable instead of good) may have
   negatively affected the firm's chances for award. Our review of the
   record, however, squarely supports the agency's position that the
   erroneously recorded rating did not influence the exclusion determination.
   The document at issue itself confirms that the findings therein were based
   on the selection authority's review of the properly recorded proposal
   ratings listed in the technical evaluation panel's report (at tab 6 of the
   agency's report). Likewise, while a similar transcription error (showing
   an acceptable rather than a good rating for the protester's past
   performance) is evident in a chart in the competitive range documentation
   at tab 8 of the agency report, that document's detailed narrative
   explanation for the exclusion of the M&M proposal accurately identifies
   the protester's proposal's past performance rating as good.

   [2] We have reviewed all of the protester's evaluation challenges to each
   weakness cited for the firm's proposal, and we do not find any basis to
   question the evaluation of the protester's proposal. We discuss here, as
   an example of our review of the proposal evaluations, the quality control
   plan evaluations.

   [3] M&M also contends that the agency treated the firms unequally in
   excluding M&M's proposal from the competitive range but including Eagle's
   for purposes of conducting discussions about similar weaknesses. Our
   review of the evaluation record, however, confirms that while both Eagle
   and M&M were cited with some similar weaknesses (e.g., no transition costs
   and a low escalation rate), contrary to M&M's position, it did not
   constitute unequal treatment for the agency to hold discussions with
   Eagle, but not M&M, as M&M's proposal already had been reasonably excluded
   from the competitive range based on its significantly higher price and
   lower technical ratings. M&M also has not shown in any persuasive way that
   had discussions been held with the firm, it would have lowered its price
   more than 30 percent to be competitive with Eagle's price. The protester's
   general contention that it might have adjusted its price during
   discussions is insufficient to show competitive prejudice to the firm. See
   Myers Investigative and Sec. Servs., Inc., B-286971.2, B-286971.3, Apr. 2,
   2001, 2001 CPD para. 59 at 3. Competitive prejudice is an essential
   element of a viable protest; where the protester fails to demonstrate
   that, but for the agency's actions, it would have had a substantial chance
   of receiving the award, there is no basis for finding prejudice, and our
   Office will not sustain the protest. Trauma Serv. Group, B-254674,
   B-254674.2, Mar. 14, 1994, 94-1 CPD para. 199 at 6; see Statistica, Inc.
   v. Christopher, 102 F.3d 1577 (Fed. Cir. 1996).