TITLE: B-299806, AHNTECH, Inc., August 15, 2007
BNUMBER: B-299806
DATE: August 15, 2007
****************************************
B-299806, AHNTECH, Inc., August 15, 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: AHNTECH, Inc.
File: B-299806
Date: August 15, 2007
Leigh T. Hansson, Esq., and Gregory S. Jacobs, Esq., Reed Smith, LLP, for
the protester.
Brent Curtis, Esq., Department of the Air Force, for the agency.
Kenneth Kilgour, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protest challenging agency's evaluation of technical proposals is
denied where the record establishes that the evaluation was reasonable and
consistent with the evaluation criteria.
2. Agency did not rely on unstated evaluation criteria when it excluded
protester's proposal from further consideration for award based on
deficiencies found under one technical subfactor and where the
solicitation expressly provided that proposals would be rejected in this
circumstance.
DECISION
AHNTECH, Inc. protests the agency's evaluation of its proposal under
request for proposals (RFP) No. F38604-07-R-C022-01, issued by the
Department of the Air Force for base operations support (BOS) services to
Manas Air Base (AB), Kyrgyzstan. AHNTECH alleges that the Air Force
improperly evaluated AHNTECH's proposal as not technically acceptable
under one of the evaluation subfactors; treated offerors unequally by
attributing deficiencies to AHNTECH's proposal for concerns that were
identified as weaknesses in more highly rated proposals; and relied on
unstated evaluation criteria by excluding AHNTECH's proposal from further
consideration because it was assessed a deficiency under one technical
subfactor.
We deny the protest.
BACKGROUND
On March 24, 2007, the agency issued the RFP for the provision of BOS
services, including dining services, at Manas AB, Kyrgyzstan.[1] The RFP
is for performance-based, fixed-price services with
indefinite-delivery/indefinite-quantity line items for a transition
period, a 1-year base period, and four 1-year options. The RFP calls for
award to be made "to the responsible offeror whose offer conforms to
solicitation requirements, is considered technically acceptable, and will
provide the best value to the Government considering past performance and
price." RFP at 93.
The performance work statement (PWS) describes the conditions under which
the contract will be performed. Contractors are required to live and work
"in the harsh environment of Kyrgyzstan, to include living off base and
working in [tents]." RFP, PWS para. 1.4.3. Contractors will be "operating
at a military location with a heightened level of threat," and the
"government assumes no security liabilities for Contractor personnel
traveling off base." Id. para. 1.4.4. The PWS further advises that
"[p]ersonnel should anticipate working as effectively and efficiently as
possible, but there may be extended periods of high pressure and stress
which could negatively impact effectiveness and efficiency." Id. para.
1.4.5.
The PWS notes that the "Manas AB Appropriated Fund food service operation
. . . [is] dedicated to providing full meal service." RFP, PWS para.
2.1.1, Program Overview. The government will place the order for the food
to be served with the prime vendor, with the labor to be supplied by the
contractor. Meals are to be provided at the main "Ala Too" and the smaller
"Ops Town" dining facilities. The RFP calls for "contingency services" to
augment the "around-the-clock" dining services: "The contractor will
provide service during military exercises, emergencies, natural disasters
and other contingency operations . . . by extending serving hours as
requested." Id. para. 2.1.13, Contingency Services.
The primary customers are "Essential Station Messing (ESM) recipients,"
that is, "military and civilian personnel who are allotted rations in
government dining facilities at the expense of the government." Id. para.
2.1.2 Customer Eligibility. The agency states that it does not utilize
cashiers in forward deployment situations such as Manas, Agency Report
(AR), Contracting Officer's Statement of Facts at 6, and that instead the
contractor is required to track the number of meals served. In this
regard, the RFP states that the government will provide and maintain Air
Force (AF) Form 79, used for determining customer headcount, and that the
forms are to "be placed on the cashier stands at the front entrance 24
hours a day." Id. para. 2.1.3.15, Food Service Accounting. That form
states that "[d]isclosure of [Social Security Number (SSN)] is voluntary.
However, members otherwise entitled to Subsistence-in-Kind will not be
provided a meal at no cost without the SSN." Protester's Comments on AR,
attach. 2, AF form 79 at 1. In addition, the definitions section of the
RFP states that the term "food handlers" does not include "cashiers." RFP
app. A-1.
The RFP contains three evaluation factors--past performance, technical,
and price. The RFP states that the "[w]ritten technical proposal[s] shall
be specific, detailed, and clearly demonstrate that the offeror has a
thorough understanding of the requirements for the accomplishment of this
effort." RFP at 91. The technical factor has three subfactors: subfactor
1, organizational structure and manpower; subfactor 2, quality control
program; and subfactor 3, phase-in plan.
The RFP indicated that proposals were to be evaluated under each technical
subfactor as either pass/technically acceptable (TA), neutral/reasonably
susceptible of being made technically acceptable (RSTA), or fail/not
technically acceptable (NTA). The RFP further provides that
if an offeror's proposal demonstrates a failure to mention or meet a
Government requirement, this is a deficiency in the offeror's proposal.
All proposals considered NTA will be eliminated from competition and
will NOT be evaluated for past performance. The (3) technical
sub-factors are considered equal in importance. The assessment criteria
used will be understanding of the requirements/soundness of approach.
RFP at 95. The RFP further provides that
[o]fferors are required to meet all solicitation requirements, such as
terms and conditions, representations and certifications, and technical
requirements, in addition to those identified as factors and subfactors,
to be eligible for award. Failure to comply with the terms and
conditions of the solicitation may result in the offeror being removed
from consideration for award.
Id. at 96. The RFP states that "[f]ailure of an offeror's proposal to meet
ANY given requirement of the RFP may result in the entire proposal being
found to be unacceptable and eliminated from further competition." Id. at
97.
The agency received six timely proposals, including those from the
protester and the awardee, and conducted technical evaluations of all six.
For subfactor 1, two proposals were rated RSTA, received no NTA ratings
for the other technical subfactors, and were further considered for award.
Four proposals, including AHNTECH's, were rated NTA for subfactor 1 and
were not further considered for award.
+------------------------------------------------------------------------+
| Offeror | TA/RSTA/NTA |
|-----------------------+------------------------------------------------|
| |Subfactor 1 |Subfactor 2 |Subfactor 3 |
|-----------------------+---------------+----------------+---------------|
|Offeror A |NTA |NTA |NTA |
|-----------------------+---------------+----------------+---------------|
|Offeror B |NTA |RSTA |RSTA |
|-----------------------+---------------+----------------+---------------|
|Offeror C |NTA |RSTA |RSTA |
|-----------------------+---------------+----------------+---------------|
|AHNTECH |NTA |TA |RSTA |
|-----------------------+---------------+----------------+---------------|
|Offeror D |RSTA |TA |TA |
|-----------------------+---------------+----------------+---------------|
|Offeror E |RSTA |TA |TA |
+------------------------------------------------------------------------+
The source selection evaluation team (SSET) identified four deficiencies
in AHNTECH's proposal that it felt demonstrated a lack of understanding
regarding the government's requirements and justified the proposal's NTA
rating.
First, the proposal stated that "[b]reakfasts and lunches will be served
during normal operations. To support contingency operations, AHNTECH will
also provide dinner and midnight meals, as required." AR, Tab 5, AHNTECH
Proposal, vol. III, para. C.1.2, Food Preparation. The proposal also
stated that "[d]uring contingency operations, our personnel will be
augmented, as required, to ensure timely and efficient service for our
customers." Id. para. C.1.4, Service of Food. The agency inferred from
this language that the protester was only offering dinner during
contingency operations. The agency asserts that its reading of AHNTECH's
proposal was reinforced by proposed staffing levels that the agency
maintains are clearly inadequate to accommodate the service of three meals
a day.[2]
Second, the proposal stated that "[c]ashier personnel will not be assigned
other duties during meal service periods to ensure timely service to our
customers. In addition, our cashiers will remain on duty until fifteen
minutes after the end of the serving period to collect cash or to verify
identification numbers from patrons." Id. para. C.1.5, Cashier Services.
The proposal further stated that, when a customer comes to the cash
register, the cashier will identify and record the menu items for sale,
obtain the customer's signature, collect payment and make change, and
provide a cash register receipt. The proposal included procedures for
tracking funds throughout change of shifts and the general safekeeping of
funds. The agency here read the protester's proposal as providing services
not stated as a requirement in the PWS, and not needed. The agency
determined that offering "extraneous" and "unnecessary" services indicated
both "a lack of understanding of the [Dining Facilities Administration
Center (DFAC)] requirement and not meeting the DFAC requirement." Agency
Rebuttal, Decl. of Contracting Officer, para. 3.
Third, the proposal stated that the monthly "inventory will be reconciled
against the [Air Force's Services Information Management System (SIMS)]
count and any variance will be reported, in writing, to the government
representative." AR, Tab 5, AHNTECH Proposal, vol. III, para. C.1.8.2,
Inventory Control. The RFP did not call for the offeror to supply SIMS or
any other software. The SSET expressed concern that the protester would
propose what the SSET regarded as obsolete software, whose use was phased
out by the agency in 2002. Agency Rebuttal, Decl. of Contracting Officer,
para. 4. In addition, the SIMS software, no longer available at Manas AB,
would be incompatible with the software by which the agency is linked to
the prime vendor. The agency evaluation concluded that providing this
inventory service "with an incompatible antiquated software [reflected]
both a lack of understanding of the DFAC requirement and not meeting the
DFAC requirement." Id.
Lastly, the proposal stated that an "Administrative Clerk will be assigned
to [the front desk] function and will also be responsible for: inventory
control and purchasing for the lodging and dining facilities. The Clerk
will utilize the Subsistence Total Order and Receipt Electronic Systems
(STORES) program for all subsistence purchases." AR, Tab 5, AHNTECH
Proposal, vol. III, para. C.3.1, Front Desk. As noted above, the
government, not the contractor, was to place the subsistence order. The
SSET concluded that "this provision purporting to provide an extraneous
service . . . [showed] both a lack of understanding of the DFAC
requirement and not meeting the DFAC requirement." Agency Rebuttal, Decl.
of Contracting Officer, para. 5.
While the SSET noted no deficiencies in the protester's proposal for
subfactors 2 or 3, it did identify weaknesses under subfactors 1 and 3.
Those weaknesses included: the failure to state the personnel, management
and organization needed to meet the requirements for the drop-arm barrier
maintenance and washer and dryer maintenance; insufficient staffing in the
dining facility function; a lack of clear demonstration of the
qualifications of key personnel; failure to make mention of the hoods and
ducts requirement; and an unclear understanding of the Ops Town DFAC site
manager position.[3] AR, Tab 7, Source Selection Decision Memorandum, at
14.
The proposals of offerors D and E, which were rated RSTA for subfactor 1,
had no deficiencies for that subfactor and shared two weaknesses. Of both
of their proposals, the SSET said that they were "not clear on the
proposed manning and the quantity of personnel assigned" and that the SSET
would like to know how those two firms would "increase [the] manning if
needed." Id. at 15, 19. The SSET identified one further weakness in
offeror E's proposal, requesting that offeror E "clarify the DFAC
Maintenance requirement personnel." Id. at 19.
DISCUSSION
The agency maintains that the four deficiencies in the protester's
proposal--the failure to offer dinner (except as a contingency option) and
the three defects that reflected a lack of understanding of the
requirements--rendered the proposal NTA. The protester challenges each of
these four findings of deficiencies.
An offeror must submit a proposal that is adequately written and that
affirmatively establishes its merits or run the risk of having the
proposal rejected as technically unacceptable. Source AV, Inc., B-234521,
June 20, 1989, 89-1 CPD para. 578 at 3. In reviewing whether a proposal
was properly rejected as technically unacceptable for informational
deficiencies, we examine the record to determine, among other things,
whether the RFP called for detailed information and the nature of the
informational deficiencies, for example, whether they tended to show that
the offeror did not understand what it would be required to do under the
contract. BioClean Med. Sys., Inc., B-239906, Aug. 17, 1990, 90-2 CPD
para. 142 at 3; DRT Assocs., Inc., B-237070, Jan. 11, 1990, 90-1 CPD para.
47 at 3. The evaluation of technical proposals is a matter within the
discretion of the contracting agency. Marine Animal Prods. Int'l, Inc.,
B-247150.2, July 13, 1992, 92-2 CPD para. 16 at 9. We will not reevaluate
a proposal but, rather, will consider whether the agency's evaluation was
reasonable and consistent with the evaluation scheme in the RFP.
Communications Int'l, Inc., B-238810, B-238810.2, July 3, 1990, 90-2 CPD
para. 3 at 3.
The RFP here clearly states that the "assessment criteria used will be
understanding the requirement/soundness of approach," and the agency
maintains that the aspects of the protester's proposal that it identified
as deficiencies indicate a failure to address a requirement or a lack of
understanding of the requirement. The protester disagrees, arguing that,
in each case, the proposal defects identified by the agency cannot
reasonably be considered deficiencies because the protester either
obligated itself to meet the government's requirements or was offering to
supplement the RFP requirements. As discussed below, the record shows that
the agency reasonably concluded that AHNTECH's proposal had deficiencies
in the four areas identified.
Evening Meals
The protester disputes the agency's reading of AHNTECH's proposal as
offering to supply dinner on a contingency basis only, asserting that the
"plain meaning of Ahntech's statement that other meals will be provided
`as required' should have been sufficient to overcome any question
regarding whether [AHNTECH] will meet the DFAC meal requirements," Protest
at 6, and that use of the phrase "as required" obligated the protester to
meet the terms of the RFP. The agency argues that the protester, not the
agency, created a distinction between breakfasts and lunches that "will be
served during normal operations," and dinner and midnight meals that will
be provided "to support contingency operations. . . as required." Together
with a staffing level that the agency asserts would not have supported
full meal service for the evening meals, the agency argues that it
reasonably concluded from the language in the protester's proposal that it
was offering limited evening meal service. We agree with the agency.
The protester could easily have worded its proposal so as to make clear
that it offered breakfast, lunch, and dinner and midnight meals during
normal operating hours, and dinner and midnight meals as required by
contingency operations. Instead, the protester's proposal offered to
provide, without qualification, breakfasts and lunches, and "[t]o support
contingency operations . . . [to] provide dinner and midnight meals, as
required." Moreover, the agency concluded that AHNTECH's proposed staffing
levels were clearly inadequate to accommodate the service of three meals a
day. Based on the record here, we think that the agency reasonably
concluded that the protester's proposal failed to clearly offer full
evening meal service.
Because the agency cites as support for its reading of the proposal the
fact that the agency considered the proposed staffing to be inadequate,
and because the agency assessed weaknesses, not deficiencies, for staff
shortcomings, the protester argues that on this issue the agency should
have assessed the protester's proposal a weakness rather than a
deficiency. We disagree. As discussed above, the agency noted a deficiency
in AHNTECH's proposal not, as the protester argues, because the staffing
levels were judged insufficient, but because the agency considered the
inadequate staffing levels, together with the proposal language, an
indication that the protester misunderstood the scope of food service
required under the RFP and failed to offer all of the required food
services. The population that the contractor will serve is dependent on
the base dining services for meals, and is entitled to receive them. The
agency thus reasonably determined that a failure to clearly offer full
meal service to them warranted the assessment of a deficiency against the
protester's proposal.
Understanding the Requirements
The protester asserts that the other three elements of its proposal
identified as deficiencies--use of cashiers, obsolete software, and the
contractor placing the food order with the prime vendor--merely constitute
offers to supplement the requirements of the RFP. As discussed below, we
think that the agency reasonably concluded that these areas of the
protester's proposal reflected a lack of understanding of the RFP's
requirements and constituted deficiencies.
With respect to the issue of cashiers, the protester argues that the
reference in the PWS to cashier stands--as the location on which the
headcount forms will be placed--and the definition of food handlers as
excluding cashiers "demonstrate that the inclusion of Cashiers as a labor
category does not indicate a lack of understanding regarding DFAC
requirements." Protester's Comments on AR at 9. The protester also argues
that the language in AF Form 79 (quoted above) indicates that some
customers in fact are paying for meals. However, the fact that customers
will not be served free meals without disclosing their SSNs does not
necessarily mean, as the protester has concluded, that those customers
would then have the option of paying. In addition, as noted above, the
agency has asserted, without challenge, that it does not utilize cashiers
in forward deployment situations such as Manas and that no cashiers were
in evidence during the site inspection, which the protester attended. In
any event, the protester's proposal tasks cashiers with taking payment and
making change, and suggests that the cashiers will do this for every
customer. The proposal also includes processes for tracking money
collected from customers. These functions are unnecessary and not called
for in the PWS, which makes clear that the customers in the dining halls
are entitled to the dining services, without charge, and the contractor's
only responsibility is to ensure that headcount forms are available and
accurately filled out. In our view, the agency reasonably concluded that
the offer of cashiers to serve in a cashless operation reflected a lack of
understanding of the RFP requirements.
With respect to the software, the protester's proposal, the agency argues,
offered an obsolete software system, the use of which would have hindered
the agency's ability to use that inventory to place food orders
efficiently. Even if the SIMS software it proposed is outdated, the
protester argues, the agency improperly deemed the offer to use SIMS a
deficiency without showing "that any particular system is required and
Ahntech failed to propose its use." Protester's Comments on AR at 10.
Moreover, AHNTECH asserts that it "could have easily developed a revised
information management system or purchased a commercially-available system
with no hindrance to contract performance or cost." Id. In our view, the
protester's argument ignores the agency's central concern--that proposing
outdated and incompatible software at a minimum reflects a lack of
familiarity with the performance requirements under the RFP.
Lastly, AHNTECH challenges the agency's assessment of a deficiency for
AHNTECH's proposed use of a lodging clerk for "inventory control and
purchasing for the lodging and dining facilities." While the protester
asserts that even if it assigned work to contract personnel that the PWS
assigns to the government, "there has been no allegation that Ahntech
failed to address any requirement in the Solicitation," id., we agree with
the agency that the assignment of the food purchasing function to the
contractor clearly represents a lack of understanding of the requirements.
We find unpersuasive the protester's argument that each of these three
defects results from the protester's supplementing the RFP requirements,
and that therefore the proposal shortcomings do not meet what the
protester asserts is the RFP's only definition of deficiency: a proposal
that demonstrates a failure to mention or meet a government requirement.
The evaluation criterion was "understanding the requirements/soundness of
approach." As the PWS makes clear, conditions on the ground at the site of
contract performance will be harsh. Contract personnel will be working in
tents in a remote location, and the customers of the dining facilities
will require around-the-clock food service, with the food provided by the
government at no charge. A high percentage of those meals will be consumed
outside of normal operating hours, which will include scheduled times for
breakfast, lunch, and dinner. The protester's proposal, which might be
appropriate for more routine dining services procurements, does not
reflect an understanding of the conditions at Manas AB. Even when
performance risk is not specifically listed in the solicitation as an
evaluation criterion, an agency may always consider risk that arises from
an offeror's demonstrated lack of understanding. Ridoc Enter., Inc.,
B-292962.4, July 6, 2004, 2004 CPD para. 169 at 7. On the record here, we
conclude that the agency reasonably found deficiencies in the protester's
proposal under subfactor 1, based on the protester's failure to offer
evening meals and to otherwise demonstrate an understanding of the
requirements of the RFP.
The protester argues that because the deficiencies in its proposal are
similar to weaknesses in the proposals that were rated RSTA under
subfactor 1, AHNTECH's proposal also should have been rated RSTA under
subfactor 1. The agency's failure to rate the protester's proposal RSTA,
the protester argues, reflects unequal treatment of offerors. We disagree.
The record supports the finding that the weaknesses in the proposals from
offerors D and E are similar in nature not to the deficiencies in
AHNTECH's proposal, but to the weaknesses. Offeror D's and offeror E's
proposals shared weaknesses concerned staffing levels--the agency sought
clarity on the level of staffing and the means to increase staffing if
necessary--as did the weakness unique to offeror E--the need for
clarification of the DFAC personnel maintenance requirement. These
weaknesses are similar in nature to the weaknesses identified in AHNTECH's
proposal, specifically: the failure to state the personnel for the
drop-arm barrier maintenance requirement; insufficient staffing in the
dining facility function; a lack of clear demonstration of the
qualifications of key personnel; and an unclear understanding of the Ops
Town DFAC site manager position. Each of these weaknesses involved
personnel qualifications or other staffing issues. None of these
weaknesses reflects the potential that an offeror has failed to understand
the essential elements of any required service. Given the nature of all of
these concerns, it was reasonable for the agency to identify each of them
as weaknesses in the respective proposals, and, as a result, we see no
basis on which to conclude that the agency engaged in unequal treatment of
the offerors.
The protester also asserts that the agency used unstated evaluation
criteria to find AHNTECH's entire proposal technically unacceptable based
on an assessed deficiency under subfactor 1, because "[n]owhere in the
solicitation was it established, implied, or stated that the evaluation of
one subfactor as NTA would or could render the entire proposal as
unacceptable." Protest at 7. Rather, the protester argues that because
"all subfactors were to be evaluated as equal in importance, there was no
indication in the Solicitation that the evaluation of any one subfactor as
NTA would or could then render the entire proposal as NTA." Id. at 8.
Moreover, the protester argues that even if the agency properly found
AHNTECH's proposal NTA for the one operational area of DFAC, that was but
one of 14 operational areas included in the RFP. Because the RFP does not
provide for any operational area to assume a higher level of importance
than any other, the protester asserts that the emphasis placed on the DFAC
operational approach amounts to application of an unstated evaluation
criterion. Id. at 7.
An agency may properly find that a deficiency in one non-price evaluation
factor is critical enough to render an entire proposal technically
unacceptable. Pacifica Servs., Inc., B-280921, Dec. 7, 1998, 98-2 CPD
para. 137 at 8; All State Boiler, Inc., B-277362, Oct. 3, 1997, 97-2 CPD
para. 144 at 6. Likewise, a proposal that contains numerous material
deficiencies which indicate that the offeror does not understand the
solicitation requirements may properly found to be unacceptable. SWR,
Inc., B-286229, B-286299.2, Dec. 5, 2000, 2000 CPD para. 196 at 6.
The protester's claim is essentially summed up in its reading of this RFP
statement (quoted above without the protester's emphasis): ". . . if an
offeror's proposal [emphasis added] demonstrates a failure to mention or
meet a Government requirement, this is a deficiency in the offeror's
proposal. All proposals [emphasis added] considered NTA will be eliminated
from competition and will NOT be evaluated for past performance . . ."
Protest at 8. According to the protester, every aspect of a proposal would
need to be rated NTA before the agency could properly eliminate it from
further competition. This reading is wholly inconsistent with the RFP's
explicit statement that the failure of an offeror's proposal to meet "ANY"
requirement of the RFP could result in the proposal's elimination from the
competition. Given that the RFP included a clear statement that a
proposal's failure to meet any requirement could result in its exclusion
from further competition, we find that the agency reasonably excluded the
protester's proposal from further competition after finding it NTA for
subfactor 1.
The protest is denied.
Gary L. Kepplinger
General Counsel
------------------------
[1] Other operational areas include, for example, laundry services,
transportation services, lodging and linen exchange services, and fitness
center maintenance.
[2] The agency report provides additional explanations as to why the
protester was assessed the four deficiencies for subfactor 1. Although the
explanation for the evaluation provided by the agency in the report is
more detailed than the evaluation summaries in the contemporaneous record,
we conclude that they are consistent with the contemporaneous evaluation
and the protester's proposal. Therefore we do not conclude, as AHNTECH
suggests we should, that the agency has provided improper post-hoc
information that should be excluded from the record. NCR Gov't Sys. LLC,
B-297959, B-297959.2, May 12, 2006, 2006 CPD para. 82 at 10 n.5.
[3] The record shows that the protester had, in fact, addressed the
personnel, management, and organization relating to the drop-arm barrier
maintenance and washer and dryer maintenance requirements, as well as the
hoods and ducts requirement. AR, Tab 5, AHNTECH Proposal, vol. III, paras.
C.2.12, Drop-Arm Barriers Maintenance; C.2.3, Washer/Dryer Repair and
Maintenance; C.2.2, Hoods and Ducts. The protester was not prejudiced by
the agency's evaluation error here, however, given that proposals were
rendered NTA based on assessed deficiencies, not weaknesses. See Kearney &
Co., B-298436.2, Oct. 4, 2006, 2006 CPD para. 149 at 3-4.