TITLE: B-310535, Utility Tool & Trailer, Inc., January 3, 2008
BNUMBER: B-310535
DATE: January 3, 2008
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B-310535, Utility Tool & Trailer, Inc., January 3, 2008

   Decision

   Matter of: Utility Tool & Trailer, Inc.

   File: B-310535

   Date: January 3, 2008

   Joe Weiland, Utility Tool & Trailer, Inc., for the protester.

   Jeffrey I. Kessler, Esq., and Christopher Van der Waerden, Esq., U.S. Army
   Materiel Command, for the agency.

   Linda C. Glass, Esq., and Ralph O. White, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Protest challenging an agency's selection of an offeror with lower-rated
   delivery schedule and lower-priced proposal is denied where the agency
   reasonably decided that the price premium involved in selecting the
   protester's higher-priced proposal to obtain the benefit of that
   proposal's slightly more favorable delivery schedule was not justified.

   DECISION

   Utility Tool & Trailer, Inc. (UTT) protests the award of a
   requirements-type contract to Schutt Industries, Inc. under request for
   proposals (RFP) No. W56HZV-07-R-G094, issued by the United States Army
   Tank-Automotive and Armaments Command (TACOM) for 5-ton dual axle
   trailers. UTT argues that the agency abandoned the stated evaluation
   criteria (and made an unreasonable best value decision) when it failed to
   select UTT's higher-priced proposal offering shorter delivery times and
   applied unreasonable calculations for freight costs to portions of its
   proposals.

   We deny the protest.

   BACKGROUND

   The RFP, issued on April 13, 2007, provided for the award of a 3-year
   requirements contract for delivery of 5-ton dual-axle trailers for use in
   Iraq and Afghanistan, and for potential foreign military sales. The RFP
   included an estimated first-year quantity of 75 trailers destined for
   Afghanistan (to be priced FOB Origin) and 6 trailers destined for Iraq (to
   be priced FOB Destination). The RFP also included an estimated second-year
   quantity of 33 trailers (FOB Origin) and 6 trailers (FOB Destination), and
   an estimated third-year quantity of 11 trailers (FOB Origin) and 6
   trailers (FOB Destination).

   The RFP provided for a two-phased evaluation process. Under phase I,
   proposals were to be evaluated as either acceptable, or not acceptable,
   based on the proposal's compliance with the terms of the RFP. An
   acceptable proposal was defined as one "where there is essentially no
   doubt" that the offered trailers would "meet each of the specification
   requirements." RFP at 73.

   Under phase II, the proposals found to be acceptable were to be evaluated
   using a tradeoff procedure considering the evaluation factors of delivery,
   small business participation and price. The RFP explained that the
   delivery factor would be more important than price, and price would be
   more important than small business participation. RFP at 74.

   With respect to the delivery factor, the RFP provided that the agency
   would evaluate on the basis of the offeror's proposed Days After Receipt
   of Order (DARO) for deliveries FOB Origin, and the proposed DARO for
   deliveries FOB Destination (to Umm Qasr, Iraq). The evaluation of the
   delivery factor was limited to an analysis of the government's total
   estimated initial order of 81 trailers (75 of which were FOB Origin, for
   use in Afghanistan, and 6 of which were FOB Destination, for use in Iraq).
   RFP at 74. The RFP further stated that the delivery evaluation would
   assess the extent to which the deliveries would satisfy the RFP's
   objective delivery schedules for FOB Origin and FOB Destination (which
   were set forth in the RFP at 74), as well as the level of risk associated
   with the proposed delivery schedule.

   Under the guaranteed shipping characteristics, offerors were required to
   provide, among other things, the size and weight of shipping containers
   and the size and type of shipping trailers. RFP para. K.2. The RFP
   provided that the total evaluated price would include the sum of all the
   hardware (and miscellaneous parts) identified in section B of the RFP, and
   transportation costs, as determined by the TACOM Transportation Office,
   for all FOB Origin items. RFP para. M.2.2.3. The RFP also included a
   detailed explanation of the way in which it would calculate the
   transportation costs for FOB Origin items. RFP at 72-73.

   Five proposals were received, including those from UTT and Schutt, by the
   closing date for receipt of proposals. After initial review of the
   proposals, two proposals were eliminated from the competitive range based
   on unreasonably high prices. Discussions were held with the remaining
   three offerors, including UTT and Schutt and final proposals revisions
   were received and evaluated. UTT's and Schutt's final revised proposals
   were evaluated under phase II as follows:

   +------------------------------------------------------------------------+
   |Offeror                     | Delivery  |     Price      |Small Business|
   |                            |Rating/Risk|                |Participation |
   |(with delivery terms offered|           | + Transp. Cost |              |
   |in DARO)                    |           |                |              |
   |                            |           |Total Eval. Cost|              |
   |----------------------------+-----------+----------------+--------------|
   |Schutt                      |   Good/   |   $2,166,602   |     Good     |
   |                            |           |                |              |
   |140 days-FOB Origin         | Low Risk  |    +190,339    |              |
   |                            |           |                |              |
   |230 days-FOB Destination    |           |   $2,356,941   |              |
   |----------------------------+-----------+----------------+--------------|
   |UTT                         |   Good/   |   $2,207,819   |     Good     |
   |                            |           |                |              |
   |140 days-FOB Origin         | Low Risk  |   + 361,868    |              |
   |                            |           |                |              |
   |210 days-FOB Destination    |           |   $2,569,687   |              |
   +------------------------------------------------------------------------+

   Agency Report (AR), Tab 17, Source Selection Decision, at 3.

   Schutt's total evaluated price was $212,746 lower than UTT's evaluated
   price. While Schutt and UTT offered the same delivery schedule for the 75
   FOB Origin trailers, the source selection authority (SSA) recognized that
   UTT was offering a slightly better delivery schedule for the 6 FOB
   Destination trailers than Schutt, but nonetheless concluded that the
   Schutt proposal was the most advantageous because of its lower price. In
   the SSA's view, it was not worth paying the significant premium (when
   calculated per vehicle) for the 20-day delivery advantage offered by UTT
   for the six FOB Destination trailers. Id. at 4. Award was made to Schutt
   and this protest followed.

   DISCUSSION

   As mentioned above, UTT argues that the agency abandoned the stated
   evaluation criteria (and made an unreasonable best value decision) when it
   failed to select UTT's higher-priced proposal offering shorter delivery
   times and applied unreasonable calculations for freight costs to portions
   of its proposal.[1]

   In the agency report, the Army addresses these issues and, for the most
   part, UTT does not rebut the Army's analysis, or offer any explanation
   about why the Army's answers are unreasonable. Instead, UTT simply affirms
   its initial protest--essentially asking that our Office decide the protest
   issues based on the record as it stands--and reiterates its initially
   stated concerns--that the solicitation here should not have included both
   FOB Origin and FOB Destination approaches to shipping costs.

   With respect to UTT's challenge to the SSA's tradeoff decision, we think
   selection officials have considerable discretion in making price/technical
   tradeoffs. Their judgments in these tradeoffs are by their nature
   subjective; nevertheless, the exercise of these judgments must be
   reasonable and must bear a rational relationship to the announced criteria
   upon which competing offers are to be selected. Award may be made to a
   firm that submitted a lower-rated, lower-priced proposal where the
   decision is consistent with the evaluation criteria and the agency
   reasonably determines that the premium involved in awarding to the offeror
   with the higher-rated, higher-priced proposal is not justified. Computer
   Tech. Servs., Inc., B-271435, June 20, 1996, 96-1 CPD para. 283 at 5.

   Here, the SSA recognized UTT's slight delivery advantage with respect to
   the six FOB Destination trailers and concluded that the advantage was not
   worth the price premium. In making this decision, the SSA appropriately
   recognized the relative importance of the solicitation's evaluation
   factors, in particular that the delivery factor was more important than
   the price factor. AR, Tab 17, Source Selection Decision at 4. Although UTT
   believes that its shorter delivery schedule for the six FOB Destination
   trailers should have resulted in an award to UTT, the protester's
   disagreement with the SSA's business judgment does not show that that
   judgment is unreasonable. See ACS State Healthcare, LLC et al., B-292981
   et al., Jan. 9, 2004, 2004 CPD para. 57 at 44. Rather, we find that the
   decision reflects a price/technical tradeoff assessment that is within the
   realm of discretion given selection officials on these matters. [2]

   With respect to the evaluation of transportation costs, the analysis was
   consistent with the approach stated in the solicitation. In essence, the
   Army explained that the differing shipping costs applied to the items
   provided by UTT and Schutt--despite the close proximity of their
   locations--is due to the different approaches the two companies have taken
   to packaging their items for shipment. Given this explanation, which
   appears reasonable, and given UTT's failure to offer any analysis about
   why the Army's explanation is flawed, we have no basis to reach a
   different conclusion.

   The protest is denied.

   Gary L. Kepplinger
   General Counsel

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

   [1] UTT's contention that the RFP should have required only FOB Origin
   pricing--a contention which constitutes much of UTT's comments filing--is
   untimely at this juncture. This argument involves a solicitation
   impropriety that should have been raised prior to the closing time for
   receipt of proposals. 4 C.F.R. sect. 21.2(a)(1) (2007).

   [2] UTT, in its comments to the agency report, also argues that Schutt
   should not have been included in the phase II tradeoff decision because
   Schutt allegedly had previous performance issues. As a preliminary matter,
   we note that an assessment of past performance was not part of the initial
   phase I determination of an offeror's acceptability. Instead, past
   performance was part of the phase II delivery evaluation. In this regard,
   the RFP stated that the government would assess the offeror's delivery
   risk by reviewing, among other things, timeliness on prior efforts. RFP at
   74. In rating Schutt "good/low risk" under the delivery factor, the agency
   specifically noted that Schutt had a history of satisfactory performance
   on previous TACOM contracts. AR, Tab 14, Delivery Area Evaluation, at 2.
   We have no basis to question the reasonableness of the agency's
   determination in this regard. We also note that UTT offers no evidence
   regarding why its performance challenge--which was not based on
   information provided in the agency's report--was timely when first raised
   in its comments. See 4 C.F.R. sect. 21.2(a)(2).