TITLE: B-299904, Synergetics, Inc., September 14, 2007
BNUMBER: B-299904
DATE: September 14, 2007
***********************************************
B-299904, Synergetics, Inc., September 14, 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: Synergetics, Inc.

   File: B-299904

   Date: September 14, 2007

   Charles R. Lucy, Esq., Holland & Hart LLP, for the protester.

   John E. Jensen, Esq., Daniel S. Herzfeld, Esq., and Kelly E. Buroker,
   Esq., Pillsbury Winthrop Shaw Pittman LLP, for Vistronix, Inc., an
   intervenor.

   Heather M. Self, Esq., Department of Agriculture, and Kenneth Dodds, Esq.,
   and John W. Klein, Esq., Small Business Administration, for the agencies.

   Paul E. Jordan, Esq., and John M. Melody, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   1. Where solicitation allowed for consideration of past performance of
   services the same or similar to those being procured, agency reasonably
   gave approximately equal evaluation credit to protester for its incumbent
   performance as subcontractor and to non-incumbent awardee based on
   contracts of similar size with procuring agency and other federal
   agencies, and proposal of key personnel with relevant technical expertise
   and knowledge.

   2. In unrestricted competition under Federal Supply Schedule (FSS), vendor
   considered to be small disadvantaged business (SDB) at time of its FSS
   contract award did not misrepresent itself as SDB--even though it had
   since exited from SDB program and had an application pending for
   recertification--where solicitation only contemplated consideration of SDB
   status at the time of award of its FSS contract.

   3. Price evaluation was unobjectionable where agency did not consider
   protester's proposal of additional, but undefined, discounts that were not
   in accordance with solicitation pricing requirements.

   4. Where underlying evaluation record confirms agency's finding of no
   significant difference in technical quality between protester's and
   awardee's equally-rated quotations, source selection authority reasonably
   concluded that awardee's lower-priced quotation represented "best value"
   to the government.

   DECISION

   Synergetics, Inc. protests the establishment of a blanket purchase
   agreement (BPA) with Vistronix, Inc. under request for quotations (RFQ)
   No. AG-3144-S-07-0012, issued by the Department of Agriculture (USDA),
   Natural Resources Conservation Service (NRCS), for information systems
   development, support, and maintenance services. Synergetics challenges the
   technical and price evaluations and the award determination.

   We deny the protest.

   The RFQ contemplated the establishment of a single BPA against the
   successful vendor's Federal Supply Schedule (FSS) contract for a base
   year, with 4 option years. Work under the BPA was to be accomplished
   through issuance of task orders for technology, operations, and management
   support services, primarily in the areas of software and database
   analysis, design, development, integration, deployment, support, and
   maintenance at NRCS in Fort Collins, Colorado and other locations across
   the country.

   Quotations were to be evaluated under five factors--technical approach,
   past performance, socioeconomic business status (small business
   preference), socioeconomic business status of the overall contractor team
   arrangement, if proposed, and price. Under the technical approach factor,
   quotations were to be evaluated on the vendor's BPA master management
   plan, draft task order management and quality control plans, transition
   plan, and technical experience, including key personnel. Past performance
   was to be evaluated on the basis of how well vendors had performed the
   same or similar work, as described in the statement of work (SOW). Price
   was to be evaluated for completeness, realism, and reasonableness based on
   each vendor's BPA skill category listing and a lump sum, fixed-price,
   level-of-effort price for a draft task order.

   The RFQ did not identify the order of importance of the technical factors,
   and warned that there was to be no formal quantitative ranking or scoring
   of quotations. The RFQ also notified vendors that the agency contemplated
   making a "best value" award, that it was more concerned with obtaining a
   superior technical approach than with making an award at the lowest price,
   and that the importance of price would increase with the equality of the
   quotations under the non-price factors.

   The agency received nine quotations, five of which--including
   Synergetics's and Vistronix's--were evaluated as strong, and were included
   in the competitive range. The competitive range vendors were invited to
   make an oral presentation which was evaluated along with final proposal
   revisions (FPR). Synergetics, Vistronix, and a third offeror's quotations
   were evaluated as "strong proposal, few weaknesses." Based on its review
   and the consensus technical strengths and weaknesses of these three
   quotations, the technical evaluation board (TEB) concluded that they were
   technically equal and recommended award to any of the three vendors. In
   making the best value recommendation, the administrative contracting
   officer (ACO) noted that Synergetics had proposed the highest prices of
   any vendor and that the third vendor had proposed the second highest
   prices. She concluded that Vistronix's quotation represented the best
   value based on its technical strength and low pricing, and thus
   recommended it for award. Based upon her own review of the evaluation
   record and the ACO's recommendations, the contracting officer, as source
   selection authority (SSA), awarded Vistronix the BPA. After a debriefing,
   Synergetics filed this protest.[1]

   Synergetics asserts that the agency's technical and price evaluations, as
   well as the source selection, were conducted contrary to the RFQ's
   provisions. In considering a protest of an agency's proposal evaluation,
   our review is confined to determining whether the evaluation was
   reasonable and consistent with the terms of the solicitation and
   applicable statutes and regulations. United Def. LP, B-286925.3 et al.,
   Apr. 9, 2001, 2001 CPD para. 75 at 10-11. The evaluation here was
   unobjectionable.

   PAST PERFORMANCE EVALUATION

   Synergetics asserts that the agency improperly evaluated Vistronix's
   quotation as equal to its own in the area of past performance. In the
   protester's view, the awardee's lack of incumbent experience and its
   "lukewarm at best" past performance references should have resulted in a
   technical rating lower than Synergetics's in these areas.[2] Synergetics
   Initial Comments at 8.

   Synergetics' assertion that its quotation should have been found
   significantly superior to Vistronix's is not supported by the record. The
   RFQ provided that under the past performance factor, evaluation of both a
   vendor's technical experience and technical accomplishment would be based
   on consideration of all available and relevant facts and circumstances
   concerning projects that were the same as or similar to the work described
   in the SOW. RFQ sect. 24.2. In evaluating Synergetics's quotation, the TEB
   noted that the firm was a current incumbent subcontractor with NRCS, with
   extensive working knowledge of agency programs, requirements, and relevant
   computing environments, and with a record of success. Agency Report (AR),
   Tab 11, at 00354. In evaluating Vistronix's past performance, the TEB
   noted that the Vistronix team had been a USDA prime contractor since 1999,
   with some large dollar value contracts; had experience in core NRCS
   technologies; had proposed key personnel and technical experts with
   significant technical knowledge and experience; and had received
   excellence awards from other federal and state agencies in similar work.
   AR, Tab 10, at 00346. Thus, although Synergetics's quotation received
   "additional consideration" for its incumbent past performance, the TEB
   also found that Vistronix's past performance was "strong" based on these
   considerations. TEB Report at 00569.

   While Synergetics characterizes the Vistronix team's past performance
   references as "lukewarm," both references stated that the firms provided
   qualified, experienced, and skilled employees, met or exceeded
   requirements, and would be hired again if the references were given the
   choice. AR, Tab 8, at 00326-328. The agency found the team's past
   performance ratings were uniformly positive and, moreover, noted that the
   past performance evaluation was based on more than the references; it
   included Vistronix's listed experience in NRCS core technologies, numerous
   awards and certifications applied to its experience, accomplishments, and
   schedule/cost savings. Contracting Officer's Supplemental Statement
   para. 9. Based on these and other considerations, the TEB and SSA
   concluded that the two vendors' quotations were essentially equal. In our
   view, the agency reasonably evaluated Vistronix under the past performance
   factor.

   SMALL DISADVANTAGED BUSINESS STATUS EVALUATION

   Synergetics asserts that the agency improperly gave Vistronix evaluation
   credit for being a small disadvantaged business (SDB). In the protester's
   view, because Vistronix is no longer an SDB, it was not entitled to
   represent itself as one and the agency should have discovered the
   awardee's misrepresented status in its evaluation.

   The evaluation in this area was unobjectionable. The RFQ provided that, in
   making the best value determination, preference would be given to small
   business vendors, with "additional preference" given to small businesses
   that were also under additional socioeconomic preference programs. RFQ
   sect. 24.4. The RFQ included a form that requested information from
   vendors, including their business size status under their GSA FSS
   contracts and other socioeconomic programs. RFQ sect. 24.6. No other
   representations or certifications were required. RFQ Question Responses
   No. 9. Even though Vistronix is not currently certified as an SDB, it was
   in the SDB program at the time its FSS contract was awarded, and its
   completed quotation form identified itself as a "small disadvantaged
   business, minority owned."[3] Vistronix Quotation at 00324. In conducting
   the evaluation, the agency relied on this information after verifying the
   awardee's SDB status in its FSS contract. Contracting Officer's
   Supplemental Statement para. 7. Since the RFQ did not require any new or
   additional recertification or representation apart from that contained in
   the vendors' underlying FSS contracts, and Vistronix accurately reported
   its SDB status from its FSS contract, there is no basis to conclude that
   the awardee misrepresented its SDB status. Likewise, in view of the RFQ's
   limited SDB representation requirements, the agency reasonably relied upon
   Vistronix's representation and gave the firm the additional preference in
   the evaluation.[4] (We note that the agency's approach here is consistent
   with Federal Acquisition Regulation (FAR) sect. 19.301-1(b), which
   requires agencies to accept a vendor's small business representation
   absent a challenge by another vendor, or where the contracting officer has
   a reason to question the representation, and FAR sect. 8.405-5, which
   provides that ordering activities should rely on small business
   representations made by schedule contractors at the contract level).[5]

   PRICE EVALUATION

   Synergetics asserts that the agency misevaluated its price quotation.[6]
   In the protester's view, while its draft task order pricing included a
   flexible pricing plan that established a ceiling price, or cap, with the
   opportunity for additional agency price discounts built in, the agency
   improperly failed either to evaluate it or raise the matter in
   discussions.

   This argument is without merit. The RFQ required vendors to provide a
   listing of fixed-price, fully-loaded, hourly labor rates for each of its
   proposed skill categories under the BPA, along with the minimum guaranteed
   discount for each. RFQ sections 8.1 and 24.3.1. In addition, vendors were
   to provide a lump-sum, fixed level-of-effort price for a draft task order
   included as part of the solicitation. RFQ sect. 24.3.2. The draft task
   order pricing was intended to provide a comparison tool for the agency to
   evaluate the potential pricing that would result from different vendor
   decisions on labor category equivalents and resulting differences in task
   order pricing. Id.

   In addition to submitting the required labor rates and draft task order
   pricing, Synergetics' quotation included the following statement regarding
   its task order pricing methodology: [deleted] Synergetics Quotation at
   00247. As explained in the quotation, [deleted][7] However, the quotation
   did not include rates for [deleted]  in the list of fully loaded hourly
   labor rates. While the agency determined that the firm's skill categories
   and draft task order pricing both were reasonable, it concluded that the
   added provision was not in accordance with the RFQ requirements, and thus
   could not be evaluated in accordance with the RFQ's submittal instructions
   which called for firm, fixed labor rates for all proposed skill
   categories.

   We find nothing objectionable in the agency's evaluation decision. Since
   the protester's quotation merely promised a potential savings from use of
   [deleted] that were not even included in the firm's proposed hourly labor
   rates, the agency reasonably evaluated only the pricing actually quoted.

   Synergetics asserts that the agency should have raised its concerns over
   this aspect of its pricing quotation during discussions. Here, since the
   agency found Synergetics's pricing to be complete and reasonable as
   submitted, and had no pricing concerns, it had no responsibility to seek
   additional information regarding the firm's pricing provision.[8] Very
   simply, its total pricing was higher than the awardee's.

   SOURCE SELECTION

   Synergetics asserts that the agency improperly converted the source
   selection from one based on best value, as stated in the RFQ, to one based
   on the low, technically acceptable quotation. In support of this argument,
   it cites the source selection plan, which calls for the TEB to identify
   quotations as being technically acceptable or unacceptable; the ACO's
   statement at Synergetics's debriefing that "technically capable" was the
   highest level that the agency had; and the source selection determination
   that three of the quotations were technically equal. Synergetics Initial
   Comments at 4.

   While an agency may not announce in the solicitation that it will use one
   evaluation plan and then follow another, American Guard Servs., Inc.,
   B-294359, Nov. 1, 2004, 2004 CPD para. 225 at 6, there is no basis in the
   record for finding that the agency did so here. In this regard, the RFQ
   explicitly provided that in making its best value determination, the
   agency was more concerned with obtaining a superior technical approach
   than making the award at the lowest price. RFQ sect. 25.3. However, it
   also provided that the importance of price would increase with the degree
   of equality of the proposals in relation to all other selection factors.
   Id. In accordance with this evaluation scheme, the agency only considered
   the three highest-scored quotations for award, even though there were
   acceptable quotations with lower prices. Of the three that were
   considered, since all were evaluated as technically equivalent, the SSA
   made award to the vendor with the lowest price. In a negotiated
   procurement with a best value evaluation plan, where selection officials
   reasonably regard quotations as being essentially equal technically, price
   properly may become the determining factor in making award,
   notwithstanding that the solicitation assigned price less importance than
   technical factors. M-Cubed Info. Sys., Inc., B-284445, B-284445.2, Apr.
   19, 2000, 2000 CPD para. 74 at 8. Since the record shows that the agency
   determined that the quotations, although different in content, relatively
   were equal under the non-price factors, its decision to make low price the
   deciding factor was fully consistent with the RFQ award criteria, and we
   have no basis to find any error in the source selection.

   Our conclusion is not changed by Synergetics's reliance on the wording in
   the source selection plan and the ACO's debriefing statements. First,
   while the plan mentions technical acceptability determinations, it also
   calls for a best value determination consistent with the language of the
   RFQ. In any event, the source selection plan is merely an internal agency
   guide that does not give the parties any rights; it is the RFQ evaluation
   scheme that the agency is required to adhere to. Islandwide Landscaping,
   Inc., B-293018, Dec. 24, 2003, 2004 CPD para. 9 at 4. With regard to the
   debriefing, the ACO explains that she referred to technical capability in
   the context of that being the highest rating achieved by the three
   technically equal quotations. Contracting Officer's Supplemental Statement
   para. 4. Since the ACO's explanation is consistent with the evaluation
   record, we have no basis to conclude that her debriefing statements
   indicate any violation of the evaluation scheme.

   The protest is denied.

   Gary L. Kepplinger
   General Counsel

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

   [1] Synergetics has raised a number of arguments, all of which we have
   reviewed and found to be without merit or non-prejudicial. This decision
   will address only the more significant arguments.

   [2] Synergetics also asserts that the agency should have taken into
   consideration a 2006 Dun & Bradstreet report on Vistronix's net losses and
   stated failure to submit an updated financial statement. This assertion
   concerns Vistronix's responsibility and is without merit. The initial
   responsibility determination made by the General Services Administration
   in connection with the award of Vistronix's underlying FSS contract
   satisfies the requirement for a responsibility determination regarding
   that vendor; there is no requirement that an ordering agency perform
   separate responsibility determinations when placing orders under
   Vistronix's contract. Advanced Tech. Sys., Inc., B-296493.6, Oct. 6, 2006,
   2006 CPD para. 151 at 5-6.

   [3] In addition, although not reflected in its quotation, Vistronix has
   applied for re-certification as an SDB, and having a pending application
   entitled Vistronix to represent itself as an SDB under Small Business
   Administration (SBA) regulations. 13 C.F.R. sect. 124.1010; see also FAR
   sect. 19.304(a). While these regulations also require a contracting
   officer to seek an expedited SBA decision on the SDB eligibility of
   potential awardees with pending SDB applications, SBA states in its
   comments--in response to a request by our Office--that, since neither the
   agency nor Vistronix relied on its application in asserting its SDB
   status, the agency was not required to follow this procedure with SBA. SBA
   Comments at 3. We have no basis to question SBA's assessment.

   [4] Our conclusion is consistent with SBA's position. In this regard, SBA
   notes that, since the competition was not restricted to small or SDB
   vendors, and the agency intended to rely only on the vendors' FSS contract
   status, Vistronix qualified as an SDB for purposes of this procurement.
   SBA Comments at 2-3.

   [5] To the extent Synergetics, in essence, is challenging Vistronix's
   status as an SDB, the proper forum for such challenges is SBA, not our
   Office. See 4 C.F.R. sect. 21.5(b) (2007); Caltech Serv. Corp., B-234424,
   May 1, 1989, 89-1 CPD para. 414 at 2. Any protest of a firm's SDB status
   must be filed with the contracting officer within 5 business days after
   receiving notice of the prospective awardee's identity. 13 C.F.R.
   sect. 124.1020(b)(c). There is nothing in the record to indicate that
   Synergetics has filed any challenge with the contracting officer. In fact,
   SBA states that since this was not an SDB set-aside, it is doubtful that
   Synergetics could protest Vistronix's SDB status at all. SBA Comments at
   3-4.

   [6] Synergetics also asserts that the agency's price evaluation
   scheme--involving the evaluation of labor category prices and a lump sum,
   draft task order price--was internally inconsistent. The evaluation
   criteria were clearly stated in the RFQ. As this issue concerns a
   solicitation impropriety and was not raised prior to the closing time for
   receipt of proposals, it is untimely. 4 C.F.R. sect. 21.2(a)(1).

   [7] For example, the Synergetics draft task order called for hours for
   [deleted] and [deleted], both of which were [deleted], but the [deleted]
   was paid at a [deleted] rate.

   [8] In any event, the absence of price discussions does not appear to have
   prejudiced Synergetics. See McDonald-Bradley, B-270126, Feb. 8, 1996, 96-1
   CPD para. 54 at 3 (GAO will not sustain a protest unless the protester
   demonstrates a reasonable possibility that it was prejudiced by the
   agency's actions); see Statistica, Inc. v. Christopher, 102 F.3d 1577,
   1581 (Fed. Cir. 1996). In this regard, Synergetics included its [deleted] 
   in its draft task order pricing, which the agency accepted without
   question. Thus, Synergetics got the benefit of its [deleted]  for
   evaluation purposes. The fact that its lump sum pricing, including these
   [deleted], resulted in the highest overall pricing of any vendor, was a
   result of the firm's own pricing methodology, and not due to any failure
   on the part of the agency in its evaluation. Moreover, Synergetics has
   provided nothing to indicate that it would have changed its pricing had
   the agency raised this matter during discussions.