TITLE: B-310230, Sunrise Medical HHG, Inc., December 12, 2007
BNUMBER: B-310230
DATE: December 12, 2007
******************************************************
B-310230, Sunrise Medical HHG, Inc., December 12, 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: Sunrise Medical HHG, Inc.
File: B-310230
Date: December 12, 2007
Leigh T. Hansson, Esq., Gregory S. Jacobs, Esq., and Steven D. Tibbets,
Esq., Reed Smith LLP, for the protester.
Edward O. Patton, Esq., Mansour, Gavin, Gerlack & Manos Co., LPA, for
Invacare Corp., an intervenor.
Melbourne A. Noel, Esq., Department of Veterans Affairs, for the agency.
Jonathan L. Kang, 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 the agency's evaluation of offerors' technical
proposals and past performance were either reasonable or did not prejudice
the protester.
2. Protest is denied where agency reasonably did not accept protester's
late proposal submission because protester was not the "otherwise
successful offeror."
DECISION
Sunrise Medical HHG, Inc. protests the award of a contract to Invacare
Corp. under request for proposals (RFP) No. VA-797-NC-06-RP-0001, issued
by the Department of Veterans Affairs (VA) for provision of manual
wheelchairs. Sunrise contends that the VA unreasonably evaluated offerors'
technical and past performance proposals, and that the agency improperly
refused to accept the protester's submission of a late proposal
modification that lowered its price.
We deny the protest.
BACKGROUND
The RFP sought proposals to provide manual wheelchairs and accessories for
the VA's Prosthetic Clinical Management Program. The RFP anticipated award
of a contract with a 1-year base term, and four 1-year options. Offerors
were advised that award would be made to the responsible offeror whose
proposal was "most advantageous to the Government, price and other factors
considered." RFP at 46. The RFP identified four factors for consideration
in the award decision, which were listed in decreasing order of importance
as follows: technical, price, quality/past performance, and small
disadvantaged business (SDB) participation. Id. Within the technical
factor, the following subfactors were identified: quality of
materials/design and workmanship, wheelchair performance, portability,
test results in compliance with wheelchair standards issued by the
American National Standards Institute and Rehabilitation Engineering &
Assistance Technology Society of North America (ANSI/RESNA), and warranty
period. Id. at 46. The first two technical subfactors were of equal and
greatest importance, with the remaining subfactors listed in decreasing
order of importance. Id.
The agency received five proposals by the August 17, 2006 due date,
including, as relevant here, a proposal from Invacare for its "Patriot
Plus" wheelchair model, and proposals from Sunrise for its "Sunrise
Quickie 2" (Q2) and "Sunrise LXE" models.
On December 29, 2006, the agency issued RFP amendment 7, requesting that
offerors agree to extend their proposed prices through March 30, 2007. RFP
amend. 7, at 1. Sunrise acknowledged the amendment, but stated that "not
only will we hold the original price but we are also submitting reduced
pricing." Agency Report (AR), Tab 12, Letter from Sunrise to the
Contracting Officer (CO), Jan. 11, 2007, at 1. Sunrise stated that it
believed that the agency could accept the revised proposal because a
Federal Acquisition Regulation (FAR) clause incorporated into the RFP
permitted such submissions. Id. This clause, Instructions to
Offerors--Commercial Items, states that "a late modification of an
otherwise successful offer, that makes its terms more favorable to the
Government, will be considered at any time it is received and may be
accepted." RFP at 37; FAR sect. 52.212-1(f)(2)(ii). The VA, however, did
not consider Sunrise's proposal modification in its evaluation of
offerors' proposals because it was submitted after the proposal due date
and Sunrise was not considered by the agency to be the otherwise
successful offeror. AR, Tab 9B, Price Negotiation Memorandum, at 29; CO
Statement at 5.
As relevant to the protest, the VA evaluated the offerors' test data
demonstrating their compliance with standards promulgated by ANSI/RESNA, a
national testing standards organization. The VA rated the Sunrise LXE
model test data under the AMSI/RESNA subfactor as "poor," based on the
following evaluation:
Testing appears performed and passed. The 11 year old testing report was
unsigned. All testing performed was done by Sunrise QA personnel
(In-house vs. independent lab) which is acceptable but preferred method
of testing would be by independent lab which would have resulted in a
higher score. 11 year old report calls into question whether the current
durability of the LXE can be meaningfully authenticated by model built
this far in the past.
AR, Tab 9B, Price Negotiation Memorandum, at 9.
The agency rated the Sunrise Q2 model test data under the AMSI/RESNA
subfactor as "acceptable," based on the following evaluation:
Testing appears performed and passed. Six year old unsigned report was
submitted. Based on serial numbers, 4 to 5 chairs were tested before
drum and curb drop fatigue tests were passed. All testing performed was
done by Sunrise QA personnel (In-house vs. independent lab) which is
acceptable but preferred method of testing would be by independent lab
which would have resulted in a higher score.
Id. at 7.
The agency rated the Invacare Patriot Plus model test data under the
AMSI/RESNA subfactor as "good," based on the following evaluation:
Testing appears performed and passed. 1 1/2 year old testing report with
signature was submitted. All testing performed was done by Invacare QA
personnel (In-house vs. independent lab) which is acceptable but
preferred method of testing would be by independent lab which would have
resulted in a higher score but because the report was signed Invacare
received a rating higher than acceptable.
Id. at 11.
Also, as relevant to the protest, offerors were required to submit 10 past
performance references, representing an offeror's highest sales of
wheelchairs to VA medical centers for the prior 36 months. RFP at 40.
Invacare submitted 10 past performance references, and the CO sent surveys
to all of the references. AR, Tab 9B, Price Negotiation Memorandum, at 20.
Despite three requests to complete the surveys, the CO did not receive any
responses from Invacare's references. Id. The CO subsequently contacted
program managers at the VA medical centers to request return of the
surveys, and eventually received three completed surveys. Id. These
surveys provided Invacare one overall rating of "very good," and two
ratings of "excellent." Id. Based on these responses, the VA rated
Invacare's past performance as "excellent." Id.
The VA's final evaluation of the offerors' proposals was as follows:
+------------------------------------------------------------------------+
| | SUNRISE Q2 |SUNRISE LXE | INVACARE |
|---------------------------------+------------+------------+------------|
|TECHNICAL | ACCEPTABLE | ACCEPTABLE | GOOD |
|---------------------------------+------------+------------+------------|
|-- Quality Design and Workmanship| Acceptable | Acceptable | Good |
|---------------------------------+------------+------------+------------|
|-- Performance | Good | Acceptable | Good |
|---------------------------------+------------+------------+------------|
|-- Portability | Acceptable | Acceptable | Acceptable |
|---------------------------------+------------+------------+------------|
|-- ANSI/RESNA Testing | Acceptable | Poor | Good |
|---------------------------------+------------+------------+------------|
|-- Warranty | Good | Good | Acceptable |
|---------------------------------+------------+------------+------------|
|QUALITY/PAST PERFORMANCE | VERY GOOD | VERY GOOD | EXCELLENT |
|---------------------------------+------------+------------+------------|
|SDB PARTICIPATION | ACCEPTABLE | ACCEPTABLE | EXCELLENT |
|---------------------------------+------------+------------+------------|
|PRICE |$17,778,402 |$14,535,189 |$14,196,220 |
+------------------------------------------------------------------------+
AR, Tab 9B, Price Negotiation Memorandum, at 5, 14, 16, 18, 23.[1]
Additionally, the CO noted in her responsibility determination that a Dunn
and Bradstreet (D&B) report regarding Invacare identified "8 pending
lawsuits against Invacare," and that "4 of these are employee actions and
4 for product liability." Id. at 30. That report, however, did not address
the Invacare product offered for the procurement, nor did it indicate any
judgments against Invacare. Supplemental (Supp.) AR at 8. The CO's
responsibility determination reviewed the information in the report, and
concluded that the information did not "present an unacceptable risk to
the government." AR, Tab 9B, Price Negotiation Memorandum, at 30.
Based on the evaluation of the offerors' proposals, the CO, who was also
the source selection authority, selected Invacare's proposal for award.
Id. at 29. The CO determined that Invacare's proposal was technically
superior to Sunrise's proposal; in light of Invacare's lower proposed
price, the CO concluded that no price-technical tradeoff was required.
The agency advised Sunrise on August 17, 2007 that it had not been
selected for award. Sunrise requested a debriefing, which was provided in
writing on August 28, 2007. AR, Tab 5, Sunrise Debriefing Letter, Aug. 28,
2007. This protest followed.
DISCUSSION
Sunrise contends that the VA's award determination was flawed for three
reasons: (1) the agency unreasonably evaluated Invacare's past
performance, (2) the agency improperly refused to accept Sunrise's late
proposal submission, which would have lowered its proposed price, and (3)
the agency unreasonably evaluated Sunrise's ANSI/RESNA test results for
both of its proposed wheelchair models.[2] For the reasons discussed
below, we conclude that none of the protester's arguments provides a basis
to sustain the protest.
As a general matter, the evaluation of an offeror's proposal is a matter
within the agency's discretion, since the agency is responsible for
defining its needs and the best method for accommodating them. U.S.
Textiles, Inc., B-289685.3, Dec. 19, 2002, 2002 CPD para. 218 at 2. In
reviewing a protest against an agency's evaluation of proposals, including
technical and past performance evaluations, our Office will examine the
record to determine whether the agency's judgment was reasonable and
consistent with the stated evaluation criteria and applicable procurement
statutes and regulations. See Shumaker Trucking & Excavating Contractors,
Inc., B-290732, Sept. 25, 2002, 2002 CPD para. 169 at 3. A protester's
mere disagreement with the agency's judgment in its determination of the
relative merit of competing proposals does not establish that the
evaluation was unreasonable. C. Lawrence Constr. Co., Inc., B-287066, Mar.
30, 2001, 2001 CPD para. 70 at 4.
Past Performance Evaluation
Sunrise raises two arguments challenging the reasonableness of the VA's
evaluation of Invacare's past performance. First, the protester contends
that because the agency received survey responses from only 3 of the 10
past performance references identified by Invacare, the agency lacked a
basis to rate the awardee as "excellent" under this evaluation factor.
There is no legal requirement, however, that an agency consider all
references in evaluating an offeror's past performance. ITS Servs., Inc.,
B-298941, B-298941.2, Jan. 10, 2007, 2007 CPD para. 23 at 7 n.11. Rather,
an agency is only required to make a reasonable effort to contact a
reference, and where that effort proves unsuccessful, it is
unobjectionable for the agency to proceed with its evaluation without
benefit of that reference's input. Universal Bldg. Maint., Inc., B-282456,
July 15, 1999, 99-2 CPD para. 32 at 8 n.1. Furthermore, absent specific
solicitation language, not present here, there is no minimum number of
past performance survey responses that an agency must receive relative to
the number of references identified by the offeror, nor is there any
requirement that offerors' have the same number of references to receive
equal ratings. See Paragon Sys., Inc., B-299548.2, Sept. 10, 2007, 2007
CPD para. 178 at 11; Data Mgmt. Servs. Joint Venture, B-299702,
B-299702.2, July 24, 2007, 2007 CPD para. 139 at 8.
Here, the VA attempted to contact all 10 references at least three times.
AR, Tab 9B, Price Negotiation Memorandum, at 20. On this record, we
conclude that the agency made a reasonable effort to contact Invacare's
references, and that the number of surveys received did not preclude the
agency from rating Invacare's past performance as "excellent," based on
survey information provided by the references that responded.
Second, Sunrise contends that the VA unreasonably failed to consider
information concerning lawsuits filed against Invacare in the evaluation
of that firm's past performance. As discussed above, the CO reviewed as
part of her responsibility determination a D&B report indicating that
Invacare was the subject of four product liability suits. Sunrise also
contends that certain media reports indicate that Invacare has settled
product liability claims regarding an electric wheelchair and that
lawsuits are pending against the firm regarding other products.[3]
The evaluation of past performance, including the agency's determination
of the relevance and scope of an offeror's performance history to be
considered, is a matter of agency discretion that we will not find
improper unless unreasonable, or inconsistent with the solicitation
criteria or procurement statute or regulation. Standard Comms., Inc.,
B-296972, Nov. 1, 2005, 2005 CPD para. 200 at 5. Here, the agency argues
that the information in the D&B report and news articles cited by Sunrise
concerning the product liability lawsuits against Invacare did not concern
the product offered by that firm for this procurement. The agency also
notes that the information cited does not indicate any court judgments
against Invacare holding it responsible for problems with its products.[4]
Supp. AR at 8. The record supports the agency's view. Furthermore, the
agency did consider this information in its assessment of Invacare's
responsibility, but concluded that the information did not represent "an
unacceptable risk to the government." AR, Tab 9B, Price Negotiation
Memorandum, at 30. On this record, we find no basis to object to the
agency's actions.[5]
Late Proposal Submission
Sunrise argues that the agency should have accepted its late proposal
submission in January 2007, which lowered the protester's proposed price
for both of its proposed wheelchair models. In particular, Sunrise
contends that its modified price for the LXE model would have been lower
than Invacare's proposed wheelchair, and thus eliminates the VA's
rationale for award, i.e., that Invacare's proposal was lower-priced and
more highly rated technically than either of Sunrise's proposals. As
discussed above, the solicitation included the FAR clause, Instructions to
Offerors--Commercial Items, which addresses the submission of late
proposals as follows:
(2)(i) Any offer, modification, revision, or withdrawal of an offer
received at the Government office designated in the solicitation after
the exact time specified for receipt of offers is "late" and will not be
considered . . .
(ii) However, a late modification of an otherwise successful offer, that
makes its terms more favorable to the Government, will be considered at
any time it is received and may be accepted.
FAR sect. 52.212-1(f).[6]
The protester contends that because its late proposal submission lowered
its price below that proposed by Invacare, Sunrise should be considered an
"otherwise successful offeror" from whom the agency should have accepted a
late proposal. We disagree.
Under negotiated procurements, the FAR provides generally that a proposal
received after the time set for receipt shall not be considered. FAR sect.
15.208(b)(1). Our Office has long held that the late proposal rule
alleviates confusion, ensures equal treatment of offerors, and prevents
one offeror from obtaining a competitive advantage as a result of being
permitted to submit a proposal later than the deadline set for all
competitors. Tishman Constr. Corp., B-292097, May 29, 2003, 2003 CPD para.
94 at 3. The FAR provides a limited exception for receipt of late
proposals that are submitted by the "otherwise successful offeror" and
which provide more favorable terms. This exception to the general "late is
late" rule is intended to allow the government to receive the benefit of a
more advantageous proposal from the offeror who has been selected for
award, without offending the general rule that offerors must be treated
equally.
With regard to the protester's arguments, an offeror cannot make itself
the "otherwise successful offeror" by submitting a late proposal
modification; instead the offeror must already be the offeror in line for
award prior to the time the late proposal modification is submitted.
Phyllis M. Chestang, B-298394.3, Nov. 20, 2006, 2006 CPD para. 176 at 5
n.3. In this regard, an offeror cannot avail itself of the late proposal
submission provision where the agency has not already identified an
"otherwise successful offeror." Global Analytic Info. Tech. Servs., Inc.,
B-298840.2, Feb. 6, 2007, 2007 CPD para. 57 at 5-6.
Here, the agency evaluated the timely-submitted proposals and selected
Invacare, and not Sunrise, for award; therefore, the limited exception to
the FAR's general rule for timely submission and consideration of
proposals does not apply.[7] On this record, we conclude that the agency's
determination not to accept Sunrise's late proposal modification was
reasonable.
ANSI/RESNA Test Data
Sunrise raises three arguments that the VA's evaluation of its ANSI/RESNA
test data was unreasonable. Sunrise's proposal for its LXE model
wheelchair received a rating of "poor" under this subfactor, and its Q2
model received a rating of "acceptable." AR, Tab 9B, Price Negotiation
Memorandum, at 5. As discussed below, we find that the first argument
lacks merit, and that the second and third arguments are untimely because
they were disclosed to Sunrise at its debriefing but were not challenged
until the protester filed its comments on the agency report.
First, Sunrise contends that the agency unreasonably determined that the
test data for both its proposed models had a weakness because the tests
were performed in-house by Sunrise personnel, rather than an outside
party. The protester argues that the solicitation did not disclose that
the agency would consider this factor in its evaluation. As the agency
notes, however, this criticism was leveled at the test data submitted by
both Sunrise and Invacare. AR, Tab 9B, Price Negotiation Memorandum, at
11. Thus, even if the agency's evaluation was not consistent with the
solicitation, there was no possibility on this record of prejudice to
Sunrise because the agency assessed the same weakness to Invacare's
proposal.
To succeed in its protest, the protester must demonstrate not only that
the agency failed to evaluate proposals in accordance with the
solicitation and applicable regulations, but also that the failure could
have materially affected the outcome of the competition. McDonald Bradley,
B-270126, Feb. 8, 1996, 96-1 CPD para. 54 at 3; see Statistica, Inc. v.
Christopher, 102 F.3d 1577, 1581 (Fed. Cir. 1996). Because Sunrise and
Invacare had the same weakness, Sunrise cannot demonstrate that, even if
the agency should not have assessed the weakness for in-house testing,
Sunrise's competitive position would have been improved vis-`a-vis
Invacare. See NCR Gov't Sys. LLC, B-297959, B-297959.2, May 12, 2006, 2006
CPD para. 82 at 14.
The second and third arguments raised by Sunrise are that the agency
unreasonably found weaknesses in Sunrise's test data based on the age of
the test reports, and because the test reports were not signed. The VA and
the intervenor argue, however, that both of these arguments are untimely
because although the debriefing provided by the agency disclosed these
issues, the protester did not raise them until it filed supplemental
protest grounds in its comments on the agency report. In this regard,
Sunrise's initial protest challenged only the agency's conclusions
regarding the value of the in-house testing approach; the protester raised
the second and third arguments for the first time in its comments on the
agency report. Protest at 4-5; Protester's Comments on the AR at 2-8. We
agree that these two supplemental protest grounds are untimely raised.
The written debriefing provided by the agency clearly identified the two
grounds of protest that the protester raised for the first time in its
comments on the agency report, as follows:
[Sunrise Q2] The weakness and/or deficiencies found under the factor of
ANSI/RESNA: Six year old unsigned report was submitted. Based on serial
numbers, 4 to 5 chairs were tested before drum and curb drop fatigue
tests were passed. All testing preformed was done by Sunrise QA
personnel (In-house vs. independent lab) which is acceptable but
preferred method of testing would be by independent lab which would have
resulted in a higher score.
[Sunrise LXE] The weakness and/or deficiencies found under the factor of
ANSI/RESNA: 11 year old testing report was submitted. All testing
performed was done by Sunrise QA personnel (In-house vs. independent
lab) which is acceptable but preferred method of testing would be by
independent lab. 11 year old report calls into question whether the
current durability of the LXE can be meaningfully authenticated by model
tested this far in the past.
AR, Tab 5, Sunrise Debriefing Letter, Aug. 28, 2007, at 2-3.
Our Bid Protest Regulations require protests based on other than
solicitation improprieties to be filed within 10 days of when the
protester knew or should have known its bases of protest. Bid Protest
Regulations, 4 C.F.R. sect. 21.2(a)(2). Where a protester initially files
a timely protest, and later supplements it with independent grounds of
protest, the later-raised allegations must independently satisfy the
timeliness requirements, since our Regulations do not contemplate the
unwarranted piecemeal presentation or development of protest issues.
University Research Co., LLC, B-294358.8 et al., Apr. 6, 2006, 2006 CPD
para. 66 at 16. These two supplemental arguments are clearly distinct from
the protester's initial argument that the agency unreasonably determined
that the in-house testing was a weakness. On this record, we conclude that
the two protest grounds regarding the age of Sunrise's ANSI/RESNA test
results and the lack of signature on the Sunrise Q2 model are untimely.[8]
Furthermore, even if we were to agree with the protester that the
signature and test date issues were meritorious, the record does not
demonstrate that Sunrise was prejudiced by the agency's evaluation of the
test results. In this regard, eliminating all three weaknesses assessed
with regard to Sunrise's ANSI/RESNA test results would have resulted in a
similar rating to Invacare. None of the other evaluation ratings would
have been affected, and thus Invacare's proposal still would have higher
ratings than Sunrise's proposal under the more heavily-weighted subfactors
of quality design and workmanship and performance, and Sunrise's and
Invacare's proposals would remain equal under the portability subfactor.
AR, Tab 9B, Price Negotiation Memorandum, at 5. Further, even if Sunrise
were rated equally to Invacare under the technical evaluation factor,
Invacare's proposal remains more highly rated under the Past Performance
and SDB participation evaluation Factors, while also remaining
lower-priced. On this record, we find that there was no possibility of
prejudice to Sunrise by the VA's actions.
The protest is denied.
Gary L. Kepplinger
General Counsel
------------------------
[1] The agency used an evaluation scheme of exceptional, good, acceptable,
and poor. Id. at 4.
[2] The protester also argued in its protest that the VA improperly
determined that the Sunrise wheelchair components were "flimsy," and that
the agency spent more time evaluating Sunrise's products as compared to
Invacare's products. Protest at 5. Although the VA addressed these
allegations in its report on the protest, Sunrise did not comment on the
agency's report regarding this issue. Where, as here, an agency provides a
detailed response to a protester's assertions and the protester either
does not respond to the agency's position or provides a response that
merely references or restates the original allegation without
substantively rebutting the agency's position, we deem the
initially-raised arguments abandoned. Citrus College; KEI Parsons, Inc.,
B-293543 et al., Apr. 9, 2004, 2004 CPD para. 104 at 8 n.4. We conclude
that Sunrise has abandoned this argument regarding the VA's evaluation of
its proposal and therefore we will not consider it further.
[3] Although the protester raised this argument as a supplemental protest
ground in its comments on the agency report, we consider it timely filed
to the extent that it challenges the way in which the VA chose to evaluate
information regarding Invacare, i.e., the decision to consider the product
liability suits in the context of responsibility, rather than past
performance.
[4] The protester notes the solicitation stated that the VA "may use
information from the public domain" in the evaluation of offerors' past
performance. RFP at 47. This statement, however, does not require the
agency to do so, nor does it change the agency's discretion to consider
the relevance of past performance information.
[5] Sunrise also argues that the VA should have considered information
disclosed in Invacare's Securities and Exchange Commission (SEC) annual
filings concerning an investigation by the SEC of what the protester
characterizes a "well-known promotional and rebate programs maintained by
it." Sunrise, however, does not clearly explain why an investigation by
SEC into rebate allegations is relevant to evaluation of Invacare's past
performance. In this regard, the RFP stated that the agency would evaluate
an offeror's record as it pertains to the production of wheelchairs, e.g.,
workmanship and conformance to specifications. RFP at 47. In any event,
this protest allegation was filed as a supplemental ground of protest in
Sunrise's comments on the agency report, and is thus untimely because the
basis for the protester's knowledge, i.e., the publicly-available SEC
filings, was available to the protester at the time its original protest
was filed. Our Bid Protest Regulations applicable here require protests
based on other than solicitation improprieties to be filed within 10 days
of when the protester knew or should have known its bases of protest. Bid
Protest Regulations, 4 C.F.R. sect. 21.2(a)(2) (2007).
[6] The clause at FAR sect. 52.212-1(f)(2)(ii) contains nearly identical
language to the late proposal provisions at FAR sect. 15.208, which is
applicable to negotiated procurements. Although the cases cited herein
primarily address the provision in FAR part 15, we consider the two FAR
provisions to be interchangeable for purposes of this protest allegation.
[7] Sunrise submitted its late proposal modification on January 11, 2007,
in conjunction with the agency's request in RFP amendment 7 to extend
offeror's pricing. The amendment, however, requested that offerors confirm
their existing prices; it did not invite or permit offerors to submit
revised prices. See RFP amend. 7, at 1.
[8] In its response to these allegations, the agency also notes that its
criticism of the age of the Sunrise LXE 11-year-old test data was based on
the fact that the ANSI/RESNA test standards were revised in 1998, thereby
calling into question the validity of the tests conducted under the
earlier test standards. Supp AR at 2-3; Decl. of VA Engineer at 2.