TITLE: B-309869, KIC Development, LLC, September 26, 2007
BNUMBER: B-309869
DATE: September 26, 2007
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B-309869, KIC Development, LLC, September 26, 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: KIC Development, LLC

   File: B-309869

   Date: September 26, 2007

   William K. Walker, Esq., Walker Reausaw, for the protester.

   Daniel L. Winand, Esq., Department of Homeland Security, U.S. Coast Guard,
   for the agency.

   Peter D. Verchinski, Esq., and John M. Melody, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Allegation that awardee's prior contracts were not sufficiently similar in
   dollar value to work being solicited to be deemed relevant under past
   performance evaluation factor is denied where solicitation did not contain
   dollar threshold for relevance and past performance evaluation was
   otherwise reasonable and consistent with solicitation.

   DECISION

   KIC Development, LLC protests the award of a contract to Sergent
   Mechanical Systems, Inc. under request for proposals (RFP) No.
   HSCG88-07-R-623221, issued by the Department of Homeland Security, U.S.
   Coast Guard, for construction services. KIC asserts that the agency
   improperly determined that the awardee had relevant past performance.

   We deny the protest.

   The RFP, issued on March 30, 2007 as a small business set-aside, sought
   proposals for all labor, materials, and equipment necessary to
   rehabilitate six buildings, design and construct a seventh building, and
   demolish and reconstruct an eighth building at the Coast Guard facility on
   Yerba Buena Island, San Francisco, California. Award was to be made to the
   offeror whose proposal provided the "best value," with the evaluation to
   be based on two equally-weighted factors--"price and relevant past
   performance." RFP at 37 (emphasis in original). The past performance
   evaluation factor was further broken down into seven subfactors (of equal
   importance): relevant experience, timeliness, quality of project
   execution, quality of construction services, management/business
   relations, effective subcontractor coordination, and customer
   satisfaction. RFP at 37. While the RFP defined "relevant experience" under
   the subfactor as similar services and "comparability of dollar value,"
   id., it did not provide a similar definition of relevance under the
   relevant past performance evaluation factor; rather, the solicitation
   included only a general statement that "... the source selection authority
   shall determine the relevance of similar past performance information."
   RFP at 36.

   Under section L of the RFP, offerors were to identify past or current
   contracts for "efforts similar" to those being procured here and were to
   submit with their proposals a past performance evaluation--to be filled
   out by the company providing the reference--for each contract. RFP at 36.
   This form consisted of a general introductory paragraph explaining the
   work to be performed, and then listed the seven past performance
   subfactors, providing space for the reference to rate the offeror and
   provide comment. Under the first subfactor, the form stated "Relevant
   Experience: Contract involve[s] construction work: rehabilitate facilities
   and construct new pre-engineered facilities. $1mil-$5mil." Agency Report
   (AR), Past Performance Survey, Tabs 15, 16. The reference was to explain
   the design and/or construction services the offeror had provided, and to
   list the contract dollar value.

   The agency received five proposals in response to the solicitation. In
   evaluating KIC's proposal, the agency found its past performance sources
   to be not relevant (on the basis that the contracts, for elevator
   maintenance work, were unrelated to the work here) and so evaluated its
   past performance as neither favorable nor unfavorable (i.e., neutral).
   Sergent's past performance was evaluated as acceptable based on four prior
   contracts for related work, valued at $707,000, $535,000, $317,000, and
   $148,000,[1] as well as on comments from a Coast Guard contracting officer
   technical representative regarding his experience with Sergent's
   performance. KIC's proposed price was $4.5 million, and Sergent's
   $4.6 million. The Coast Guard subsequently selected Sergent for award,
   concluding that its proven past performance, quality work, and cooperation
   under previous contracts (based on the comments the agency received)
   warranted paying its $85,719 higher price.

   KIC challenges the agency's determination that the awardee had relevant
   past performance.[2] Specifically, KIC asserts that the awardee's four
   past performance contracts should not have been found to be relevant,
   since the value of each was not sufficiently similar to the work being
   solicited here. In support of this argument, the protester asserts that
   the solicitation established a $1 million relevance threshold, which the
   awardee's past performance contracts failed to meet.

   In reviewing a protest challenging an agency's past performance
   evaluation, we will examine the record to determine whether the agency's
   judgment was reasonable and consistent with the stated evaluation criteria
   and applicable statutes and regulations. Ostrom Painting & Sandblasting,
   Inc., B-285244, July 18, 2000, 2000 CPD para. 132 at 4.

   We find nothing unreasonable in the agency's evaluation here. First,
   contrary to the protester's assertion, the RFP did not establish a $1
   million value as necessary for prior contracts to be considered relevant
   under the past performance factor. Rather, as noted above, the
   solicitation stated with regard to past performance only that the
   determination of what was "relevant past performance" would be made by the
   source selection authority; it established no specific requirements for a
   contract to be found relevant. RFP at 36. As also noted above, the rating
   forms for contract references did include a $1-$5 million range; however,
   this was solely in reference to the "relevant experience" subfactor, not
   the past performance factor. Thus, under this scheme, while contract value
   would be considered under the past performance evaluation through the
   relevant experience subfactor, the agency nevertheless reasonably could
   evaluate an offeror's past performance as relevant even in the absence of
   similarly valued prior contracts.

   As for the evaluation itself, as noted above, Sergent's four prior
   contracts were valued at approximately $150,000 to $700,000. While the
   total cost of the work here was approximately $5,000,000, this was divided
   among eight different line items for various buildings, and Sergent
   proposed line item pricing of approximately $40,000 to $2 million. AR,
   Sergent's Proposal, Tab 14, at 2-3. Finding that Sergent's prior contracts
   were similar in magnitude (and scope) to many of the line items here (for
   example, there were line items priced at approximately $250,000, $370,000,
   $119,000, $725,000, $113,000, and $44,000), the agency concluded that
   those contracts were sufficiently similar to the current requirements to
   be deemed relevant. In this regard, the agency noted that

     the [total project] consisted of multiple smaller projects
     ("rehabilitate portions of six separate buildings, design/construct a
     4,800 square foot, concrete boat maintenance/public works building and
     demolish/construct a new pre-engineered buoy paint storage
     building..."). The magnitude and similarity of services of many of the
     distinct parts of the entire [project] closely approximated projects for
     which the SSA [source selection authority] had found excellent and
     outstanding past performance evaluations [for Sergent].... The SSA's
     consideration of the known facts and evaluation under the appropriate
     criteria clearly meets the standards of "reasonableness[ ]" and
     "rationality[ ]" required by the GAO.

   Agency Letter to GAO, Sept. 10, 2007, at 5. We think the agency's approach
   in determining relevance--considering the comparabilty of the magnitude
   and similarity of Sergent's prior contracts to the significant component
   parts of the current project--was reasonable. Since this approach also was
   not prohibited by the RFP, there is no basis for us to question the
   agency's evaluation conclusion.

   The protest is denied.

   Gary L. Kepplinger
   General Counsel

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

   [1] We note that the protest submissions state that the awardee's prior
   contracts were valued at $561,500, $481,543, $275,000, and $114,400,
   respectively. It appears that the lower amounts were the value of the
   original contract awards, while the higher amounts are the net amount paid
   to the contractor after contract modifications. AR, Tab 21. Since the
   source selection memorandum identifies the net amounts, including
   modifications, those are the amounts relevant here.

   [2] KIC raised additional arguments in its initial protest (e.g., that the
   agency unreasonably discounted the relevance of KIC's prior contracts, and
   improperly relied upon personally-known information in assessing the
   awardee's past performance). The agency responded to these arguments in
   its agency report. Since KIC did not then rebut the agency's position in
   its comments on the report, we consider these arguments to be abandoned.
   Planning Sys., Inc., B-292312, July 29, 2003, 2004 CPD para. 83 at 6.