TITLE: B-299817; B-299817.2, S4, Inc., August 23, 2007
BNUMBER: B-299817; B-299817.2
DATE: August 23, 2007
***********************************************
B-299817; B-299817.2, S4, Inc., August 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: S4, Inc.
File: B-299817; B-299817.2
Date: August 23, 2007
David M. Pronchick, Esq., and Seth Cowell, Esq., BlueLaw LLP, for the
protester.
Daniel B. Abrahams, Esq., Shlomo D. Katz, Esq., and Pamela A. Reynolds,
Esq., Epstein Becker & Green, P.C., for Croop-LaFrance Inc., an
intervenor.
Maj. Jeffrey Branstetter, Maj. John G. Terra, and Bradley S. Adams, Esq.,
Department of the Air Force; and Kenneth Dodds, Esq., Small Business
Administration, for the agencies.
Paul N. Wengert, Esq., and Ralph O. White, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protest is denied where agency evaluation of past performance, and
ultimate selection of awardee's lower-priced proposal was reasonable, and
consistent with stated evaluation criteria.
2. Protest is denied where agency properly proceeded with award
notwithstanding absence of applicable North American Industry
Classification System (NAICS) code from awardee's entries in the Online
Representations and Certifications Application (ORCA) system because other
information posted there confirmed that awardee represented itself to be
small under applicable size standard.
DECISION
S4, Inc., a small business, protests the award of a contract to
Croop-LaFrance Inc. by the Department of the Air Force under request for
proposals (RFP) No. FA8530-07-R-10248 for information technology desktop
management services. S4 argues that the Air Force misevaluated the
awardee's past performance, improperly conducted discussions only with the
awardee, disregarded the basis for award stated in the RFP, and
disregarded the awardee's failure to list the applicable North American
Industry Classification System (NAICS)[1] code in its proposal
representations and certifications.
We deny the protest.
BACKGROUND
The Air Force issued the RFP on December 13, 2006 as a competitive 8(a)
set-aside procurement. The RFP referenced NAICS code 541513, which
provides a size standard of $23.0 million. RFP at 1. The RFP described the
services desired in a performance-based work statement (PBWS). The RFP
specified that award would be based on a "technically acceptable-risk/past
performance/price tradeoff," which the RFP explained as follows:
For those Offerors who are determined to be technically acceptable,
tradeoffs will be made between proposal risk, past performance and
price. Proposal risk and past performance are of equal importance, and
when combined, are considered significantly more important than price.
RFP at 39.
The RFP provided that the Air Force would use the proposal risk factor to
evaluate "the risk associated with the Offeror's proposed approach as it
relates to accomplishing the requirements of the solicitation, and
includes an assessment of the potential for increased cost, disruption of
schedule, degradation of performance, the need for increased Government
oversight, and the likelihood of unsuccessful contract performance." RFP
at 40. Risk was to be rated adjectivally as low, medium or high.
Past performance was to be first reviewed for relevance, and then rated
(in descending order) as high confidence, significant confidence,
satisfactory confidence, unknown confidence, little confidence, or
no confidence. RFP at 41-42. The evaluation of past performance was to
assess the confidence in the Offeror's ability (which includes, if
applicable, the extent of its critical subcontractors' or teaming
partners' involvement) to successfully accomplish the proposed effort
based on the Offeror's demonstrated present and past work record. A
critical subcontractor is defined as an entity (subcontractor, teaming
contractor and/or joint venture partner), other than the Offeror itself,
that will perform the following tasks that are considered critical:
+----------------------------------------------------------------------------+
|Ref[erence to] PBWS Para[graph]|Critical Task Description |
|-------------------------------+--------------------------------------------|
|1.2.1.2 |Inventory Management |
|-------------------------------+--------------------------------------------|
|1.2.1.3 |Desktop Systems Configuration Management |
|-------------------------------+--------------------------------------------|
|1.2.1.4 |Deployment of Desktop Systems |
|-------------------------------+--------------------------------------------|
|1.2.2.1 |Client Support Administration and Protection|
|-------------------------------+--------------------------------------------|
|1.2.2.3 |Information Assurance and Protection |
|-------------------------------+--------------------------------------------|
|1.2.2.4 |Customer Service |
|-------------------------------+--------------------------------------------|
|1.2.3 |Program Management Services |
+----------------------------------------------------------------------------+
RFP at 40.
By comparing these seven "critical tasks" from the PBWS to an offeror's
past performance, the Air Force would determine the relevance of the
offeror's references. The ratings were outlined in the RFP as follows:
VERY RELEVANT: Present/past performance efforts involved essentially the
same magnitude of effort and complexities this solicitation requires.
Must include programs that demonstrate capability in IT desktop
management services by containing five (5) of the seven (7) critical
tasks referenced in paragraph 2(c) above [of which the critical tasks
table was part].
RELEVANT: Present/past performance efforts involved much of the
magnitude . . . . Must include . . . four (4) of the seven (7) critical
tasks . . . .
SOMEWHAT RELEVANT: Present/past performance efforts involved some of the
magnitude . . . . Must include . . . three (3) of the seven (7) critical
tasks . . . .
Id. (emphases in original).
Consequently, "[i]n order to obtain a `Very Relevant' rating, the prime
and its subcontractors/team members had to demonstrate past performance in
five of the seven critical functions." Contracting Officer's (CO)
Statement at 4. The RFP also provided that cost for each offeror would be
evaluated on the basis of pricing for individual subtasks within a sample
task. RFP at 42.
The Air Force received 20 proposals. The proposal from Croop-LaFrance did
not contain completed representations and certifications, but instead
indicated that the agency should use the Online Representations and
Certifications Application (ORCA)[2] system to retrieve Croop-LaFrance's
representations and certifications. Agency Report (AR), Tab 10,
Croop-LaFrance Proposal, at 28 (response to FAR sect. 52.204-8(b)(2)).
Croop-LaFrance did not list NAICS code 541513 in its size status
representations in the ORCA system. Nevertheless, the firm's
representations specify that its average annual revenues were between five
and ten million dollars, and several other NAICS codes listed in its
representations apply size standards less than or equal to the $23.0
million standard applicable under NAICS code 541513. AR, Tab 26, ORCA
Printout, at 8, 15.
The Air Force reviewed all 20 proposals for technical acceptability, and
found that 16 proposals were acceptable, after which the evaluators turned
to the evaluation of risk and past performance.
During the course of the evaluation, the Air Force sent an e-mail to each
of the offerors seeking clarification of various issues. Each of those
e-mails also made the following request:
Please confirm that if awarded the contract, you will work with the
Government Program Manager during the transition period to jointly
review and assess implementation of your proposed processes and
procedures as contained in your technical proposal . . . and develop a
process guide for jointly agreed upon processes and procedures.
AR, Tab 24, E-mail from CO to Croop-LaFrance, Apr. 16, 2007, at 1;
CO Supplemental Statement, attach. 1, E-mail from CO to S4, Apr. 16, 2007,
at 1.
S4's response stated that "S4 DOES confirm that we will work with the
Government Program Manager during the transition period to jointly review
and assess . . . ." CO Supplemental Statement, attach. 1, E-mail from S4
to CO, Apr. 17, 2007, at 1.
In contrast, the response from Croop-LaFrance began with a statement that
the firm ". . . will perform as stated in the Government's question."
However, the response then continued for approximately 1 more page,
providing additional discussion of the firm's intentions to cooperate with
the Air Force throughout contract performance. AR, Tab 24, Letter from
Croop-LaFrance to CO, Apr. 18, 2007, at 1-2.
At the conclusion of the evaluation, the Air Force rated eight of the 16
technically acceptable offerors as low risk under the risk factor, three
as moderate risk, and five as high risk. Under the past performance
factor, 15 of the 16 technically acceptable offerors were rated high
confidence, while one was rated significant confidence. S4 and
Croop-LaFrance both received the highest ratings under both factors: low
risk and high confidence. The evaluators then briefed the source selection
authority (SSA) on the results of the evaluation.[3]
With respect to Croop-LaFrance, the evaluators reviewed seven
characteristics that supported the evaluation of the firm's technical
approach as low risk. AR, Tab 27, Evaluation Briefing, at 14 (slide 27).
Under the past performance factor, the evaluators indicated that
Croop-LaFrance's references ranged from relevant to somewhat relevant[4]
(with one reference deemed "not relevant"), its subcontractor, Rome
Research Corporation, had multiple highly-relevant references (with one
reference deemed "not relevant"). The evaluators stated that they had
received 12 responses to questionnaires for Croop-LaFrance and its
subcontractor, and had conducted eight interviews, which revealed that the
firm and its subcontractor had a satisfactory history of performance, and
experience in performing all seven of the critical tasks. AR, Tab 27,
Evaluation Briefing, at 31-32 (slides 62-64). On that basis, the
evaluators described Croop-LaFrance's past performance as "Very Relevant,
High Confidence." Id.
With respect to S4, the evaluators listed eight characteristics to support
rating its approach low risk. AR, Tab 27, Evaluation Briefing, at 19
(slide 37). Under the past performance factor, the evaluators indicated
that S4 had submitted three very relevant references and one relevant
reference, and that each of S4's three subcontractors had submitted four
very relevant references. The evaluators had received 34 questionnaires
and had conducted ten interviews. The references confirmed that S4 and its
team members had a satisfactory performance record, and experience
performing all seven of the critical tasks. AR, Tab 27, Evaluation
Briefing, at 46-47 (slides 92-94). Accordingly, the evaluators also rated
the S4's past performance as "Very Relevant, High Confidence." Id.
The three lowest-priced offerors were Croop-LaFrance, S4, and a third
firm. The ratings and evaluated prices were as follows:
+------------------------------------------------------------------------------+
| Team | Proposal Risk | Past Performance | Total Evaluated Price |
|-----------------+----------------+-------------------+-----------------------|
|Croop-LaFrance | Low | High Confidence | $30,772,813.20 |
|-----------------+----------------+-------------------+-----------------------|
|S4 | Low | High Confidence | $30,907,730.72 |
|-----------------+----------------+-------------------+-----------------------|
|Offeror A | High | High Confidence | $29,813,739.97 |
+------------------------------------------------------------------------------+
AR, Tab 27, Briefing Slides, at 61 (slide 122).
In summary, Croop-LaFrance was one of the eight firms with the highest
ratings under both the risk and past performance factors, while its
evaluated price was second-lowest overall. After receiving the briefing,
the SSA determined that he could find "no measurable differences" among
the eight offerors with low risk and high confidence past performance
assessments--other than price. AR, Tab 28, Source Selection Decision, at
6. The SSA then considered whether the advantage of Croop-LaFrance's low
risk outweighed the lower price offered by Offeror A under its high risk
approach. He concluded that the low risk was worth the additional cost,
and selected Croop-LaFrance for award.
In order to implement the SSA's selection, the CO sent an e-mail to the
Small Business Administration (SBA), informing it of the selection of
Croop-LaFrance, and requested coordination with SBA before awarding the
contract. The CO's e-mail stated that the award relied on representations
and certifications, retrieved from ORCA on May 4, 2007. The SBA
representative responded by e-mail, stating that "Croop[-]LaFrance is in
full compliance with SBA 8(a) eligibility requirements[.] They are in good
standing and have the prerequisites necessary to perform on this award."
AR, Tab 29, E-mail from SBA to CO, May 14, 2007, at 1. The CO then
announced the award to Croop-LaFrance, and notified the other offerors
that they were unsuccessful. S4 received a debriefing, and then filed this
protest.
DISCUSSION
In its initial protest, S4 argued that the Air Force generally
misevaluated past performance, changed the basis for award to lowest cost
technically acceptable, and should have disqualified Croop-LaFrance
because the firm did not list the proper NAICS code in its representations
and certifications. After receiving the agency report, S4 filed a
supplemental protest to further argue that the agency misevaluated the
past performance of Croop-LaFrance, and improperly conducted discussions
with Croop-LaFrance.
The Air Force responds that its past performance evaluation was reasonable
and consistent with the RFP, and that S4 mischaracterizes a clarification
question sent to all offerors as discussions. The Air Force also maintains
that its source selection decision properly considered risk and past
performance in addition to price, and that Croop-LaFrance was properly
determined to be eligible for award regardless of the fact that it had not
listed the applicable NAICS code in its online (ORCA) representations. We
will first address the allegation that the Air Force conducted discussions
with Croop-LaFrance, then the past performance evaluation and the source
selection decision, and finally the NAICS code issue.
S4 argues that the Air Force conducted discussions with Croop-LaFrance by
allowing it to submit a substantive response to the Air Force's April 16
clarification request. S4 alleges that the Air Force used that response to
determine that Croop-LaFrance was technically acceptable and low risk, and
hence improperly conducted discussions with the eventual awardee.
Protester's Comments at 17.
The Air Force responds that S4 was provided essentially the same
clarification inquiry as Croop-LaFrance. Additionally, even though some
offerors, including Croop-LaFrance, provided more information in their
responses, the CO withheld the actual responses from the evaluators, and
only told them that the offerors had responded in the affirmative. CO
Supplemental Statement at 10. Thus, the Air Force argues that no
discussions occurred since the Air Force did not give Croop-LaFrance an
opportunity to modify its proposal, and the firm's more extensive response
had no effect on the evaluation.
We note that the agency's clarification request appears to be no more than
a confirmation that the firm will cooperate during the transition period,
which is a duty already encompassed by the contract. See generally RFP
amend. 9, PBWS rev. 4, at 3, 13, 16. Further, the "acid test" for deciding
whether discussions have been held is whether it can be said that an
offeror was provided the opportunity to modify its proposal. National Beef
Packing Co., B-296534, Sept. 1, 2005, 2005 CPD para. 168 at 11; Park Tower
Mgmt. Ltd., B-295589, B-295589.2, Mar. 22, 2005, 2005 CPD para. 77 at 7.
The record here clearly confirms that the Air Force did not provide any
competitor an opportunity to modify its proposal. Moreover, even if
Croop-LaFrance's more extensive submission could be characterized as an
effort to supplement its proposal, it had no effect on the evaluation
because the evaluators did not review it.
With respect to the evaluation of past performance, S4 raises a number of
arguments. While we have reviewed all of them, we find none to be
meritorious. For example, S4 argues that the Air Force should have
discounted Croop-LaFrance's past performance because the company's own
references (as opposed to the references provided by its primary
subcontractor) demonstrated experience with only five of the seven
critical tasks. S4 also argues that references for Croop-LaFrance's
subcontractor should have been given less weight, and that the reference
provided from a recently-initiated contract (which S4 terms less "mature")
should not have been considered at all. Additionally, according to S4,
Croop-LaFrance should have been downgraded because it failed to establish
that it had any experience providing two of the critical tasks.[5] For
these reasons, S4 argues that its past performance should have been viewed
as superior to that of Croop-LaFrance. Protester's Supplemental Comments
at 1-10.
The Air Force responds that, as provided in the RFP, the evaluators
properly treated overall past performance involving five or more of the
critical tasks as meeting the definition of "very relevant." The agency
states that, in making that assessment, the evaluators properly considered
the past performance of both the prime contractor and significant
subcontractors, and reasonably considered recently-initiated efforts. In
short, the agency submits that its evaluation was both reasonable and
consistent with the past performance evaluation scheme described in the
RFP.
Determining the relative merits of an offeror's past performance
information is primarily a matter within the contracting agency's
discretion; we will examine an agency's evaluation only to ensure that it
was reasonable and consistent with the solicitation's evaluation criteria
and procurement statutes and regulations. Hanley Indus., Inc., B-295318,
Feb. 2, 2005, 2005 CPD para. 20 at 4. Here, the RFP did not commit the Air
Force to evaluating past performance only in the more selective manner
that S4 desires. Rather, based on our review of the record, we find that
the Air Force's approach was consistent with the RFP, and the overall
rating of Croop-LaFrance as "high confidence" under the past performance
factor was reasonable.
Next, S4 argues that the source selection decision improperly ignored
significant distinctions, which S4 alleges differentiate its past
performance from that of Croop-LaFrance. S4 argues that by overlooking the
differences, the SSA improperly selected Croop-LaFrance on a technically
acceptable-lowest-price basis, contrary to the award basis stated in the
RFP. Protester's Comments at 9.[6]
The Air Force responds that the SSA was extensively briefed on the basis
of the risk and past performance ratings for each offeror, after which the
SSA reasonably concluded that "none of the technically acceptable, low
risk proposals were superior to any of the other technically acceptable,
low risk proposals" and they were thus "considered to be equal." CO
Statement at 10-11. The Air Force states that the selection of
Croop-LaFrance was therefore proper, because it offered a lower evaluated
price. Legal Memorandum at 10. To the extent that S4 argues that the
agency should have drawn more detailed distinctions in the past
performance evaluations when an offeror had performed more than five of
the critical tasks, we disagree. Where, as here, both offerors have
relevant past performance, an agency is not required to further
differentiate the past performance ratings given each offeror based on a
more refined assessment of the relative relevance of the offeror's prior
contracts, beyond the scheme set forth in the RFP. See University Research
Co., B-294358.6, B-294358.7, Apr. 20, 2005, 2005 CPD para. 83 at 16. Here,
as indicated, the RFP specified that offerors with experience in five or
more of the seven critical tasks would receive a rating of "very
relevant." As the agency reasonably concluded that Croop-LaFrance and its
subcontractor established that they had past performance references to
meet this standard, there was no requirement that the agency draw further
distinctions.
Where a protester challenges the selection rationale, we will review
whether the award decision was reasonable in light of the RFP evaluation
scheme, and whether the selection official adequately documented the basis
for the selection. Dayton T. Brown, Inc., B-229664, Mar. 30, 1988, 88-1
CPD para. 321 at 5; DynCorp, B-245289; B-245289.2, Dec. 23, 1991, 91-2 CPD
para. 575 at 7. When a selection official has determined that proposals
are equal, it means that overall there is no meaningful difference in what
the proposals have to offer. It does not mean that the proposals are
identical in every respect. Northern Virginia Serv. Corp., B-258036.2,
B-258036.3, Jan. 23, 1995, 95-1 CPD para. 36 at 9.
S4 has provided no basis on which to question the SSA's conclusion that
none of the differences in the past performance of S4 and Croop-LaFrance
were meaningful. Where a selection official reasonably regards proposals
as being essentially equal under non-price factors, as the SSA did here,
price can become the determining factor in making award notwithstanding
that the evaluation criteria assigned price less importance than non-price
factors. Parks Co., B-249473, Nov. 17, 1992, 92-2 CPD para. 354 at 4. A
protester's mere disagreement with the agency's determinations as to the
relative merit of competing proposals, and its judgment as to which
proposal offers the best value to the agency, does not establish that the
evaluation or source selection was unreasonable. Weber Cafeteria Servs.,
Inc., B-290085.2, June 17, 2002, 2002 CPD para. 99 at 4. On this record,
we conclude that the selection of Croop-LaFrance was reasonable.
Finally, S4 argues that since Croop-LaFrance did not list NAICS code
541513 in its ORCA certifications, it was ineligible for award. In this
regard, S4 is not arguing that Croop-LaFrance is not eligible for award
under the size standard here. Rather, S4's complaint is simply that an
offeror is ineligible for award in a set-aside procurement where the firm
has not listed the applicable NAICS code in its ORCA representations. The
Air Force responds that the omission was insignificant, and the agency
therefore proceeded to make the award after confirming with the SBA that
Croop-LaFrance was eligible and in good standing in the SBA's 8(a)
program.
We requested the SBA provide its views on this aspect of the protest. In a
conference call with all parties, SBA confirmed that notwithstanding the
missing NAICS code, Croop-LaFrance effectively represented that it was a
small business. In particular, SBA noted that the upper end of each of the
general size range representations in Croop-LaFrance's ORCA statement was
below the applicable size standard of $23.0 million under the applicable
NAICS code here.[7] By submitting its proposal, Croop-LaFrance was
representing that it was clearly smaller than the $23.0 million average
annual revenues standard under the applicable NAICS code.
On the narrow issue that it raises,[8] S4 has been unable to point to any
requirement in statute or regulation that mandates listing in ORCA the
precise NAICS code applicable to a procurement. We note that the preamble
to the regulation implementing ORCA suggests that--particularly since ORCA
limits the number of NAICS codes that an offeror may list--the contracting
officer may use other representations to supply the necessary information
where the relevant NAICS code is not listed. 69 Fed. Reg. 76341, 76343
(daily ed. Dec. 20, 2004) ("Contracting officers can use that information
to calculate size status for NAICS not provided"). Here, in addition to a
representation of average annual revenues between five and ten million
dollars, the ORCA printout also lists several other NAICS codes with
standards equal to or smaller than the applicable standard here. AR, Tab
26, ORCA Printout, at 8, 15. In short, it is not clear why the absence of
a specific NAICS code in this context would have the critical importance
that S4 claims. Cf. Cal-Tex Lumber Co., B-277705, Sept. 24, 1997, 97-2 CPD
para. 87 at 3 n.1 (absence of size certification is normally waivable and
may be made after bid opening because it pertains only to bidder's status
and eligibility for award); Insinger Mach. Co., B-234622, Mar. 15, 1989,
89-1 CPD para. 277 at 2 (in formally advertised procurement, bidder's
failure to submit certificate of size status did not render bid
nonresponsive; failure could waived as a minor informality). On this
record, and in the absence of any reason for the CO to conclude that
Croop-LaFrance was ineligible for award at this size threshold, we
conclude that the Air Force properly proceeded with the award to
Croop-LaFrance.
The protest is denied.
Gary L. Kepplinger
General Counsel
------------------------
[1] The NAICS code scheme is used by the federal government to identify
and classify specific categories of products or services corresponding to
lines of business of firms supplying them. See FAR sect. 19.102; Rochester
Optical Mfg. Co., B-292247, B-292247.2, Aug. 6, 2003, 2003 CPD para. 138
at 2 n.2.
[2] ORCA was established as part of the Business Partner Network, an
element of the Integrated Acquisition Environment, which is implemented
under the auspices of White House Office of Management and Budget, Office
of Federal Procurement Policy, and the Chief Acquisition Officers Council.
ORCA is "the primary Government repository for contractor submitted
representations and certifications required for the conduct of business
with the Government." Federal Acquisition Regulation (FAR) sect. 2.101.
[3] Since the protest issues relate only to Croop-LaFrance and S4--and to
a limited extent, a third offeror--we omit details and further discussion
of the remaining offerors.
[4] The agency emphasizes that even though no single reference covered
five of the seven critical tasks by itself, when taken together
Croop-LaFrance's own references did cover five critical tasks.
[5] S4 notes that the evaluators downgraded some offerors because they
failed to describe what proportion of the work would be performed by
subcontractors, and argues that Croop-LaFrance should have been similarly
downgraded. Protester's Comments at 8. To the contrary, the record here
shows that Croop-LaFrance plainly stated the proportion of work to be
performed by its primary subcontractor. AR, Tab 8, Croop-LaFrance
Proposal, vol. IV, at 4.
[6] While the protester had originally argued that the award rationale had
been abandoned in favor of award to the technically acceptable
lowest-priced offeror, the record confirms that the CO actually selected
Croop-LaFrance over a lower-priced technically acceptable, but
less-highly-rated, offeror. We therefore address the argument as refined
in the protester's comments on the agency report: that the agency should
have considered S4's proposal to be worth its higher evaluated cost.
[7] Specifically, Croop-LaFrance checked the boxes for "51-100" for the
number of employees, and "$5,000,001-$10 million" for average annual gross
revenues under the representations at FAR sections 52.212-3(c)(8)(ii)(B),
52.219-19(c), and 52.219-21. AR, Tab 26, ORCA Printout, at 10, 18-19.
[8] We note our Office does not review protests against the size status of
an offeror, nor of the selection of an appropriate NAICS code. Bid Protest
Regulations, 4 C.F.R. sect. 21.5(b) (2007).