TITLE: B-310902, Ceres Environmental Services, Inc., March 3, 2008
BNUMBER: B-310902
DATE: March 3, 2008
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B-310902, Ceres Environmental Services, Inc., March 3, 2008

   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: Ceres Environmental Services, Inc.

   File: B-310902

   Date: March 3, 2008

   Karl Dix, Jr., Esq., and John S. Tobey, Esq., Smith, Currie & Hancock LLP,
   for the protester.

   Amy Pereira, Esq., U.S. Army Corps of Engineers, for the agency.

   Paula J. Haurilesko, Esq., and Ralph O. White, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Protest that the agency improperly used negotiated procedures instead of
   sealed bidding procedures to solicit proposals to construct a drainage
   canal is denied where the agency reasonably concluded that the importance
   of completing the project justified an accelerated construction schedule
   and, as a consequence, necessitated consideration of non-price factors in
   selecting a proposal.

   DECISION

   Ceres Environmental Services, Inc., protests the use of negotiated
   procedures by the U.S. Army Corps of Engineers in soliciting offers to
   construct an intake canal as part of the Southeast Louisiana Urban Flood
   Control Project (SELA) under request for proposals (RFP) No.
   W912P8-07-R-0103.

   We deny the protest.

   The intake canal project is the final phase of the Dwyer Road project, a
   three-phase project under SELA.[1] Agency Report (AR), Tab A, Legal
   Memorandum, at 1. The first phase involved construction of a larger canal
   to discharge water from the pumping station to Lake Pontchartrain via the
   Inner Harbor Navigation Canal and was completed in 2003. Id. at 1-2. The
   second phase involves construction of a new pumping station to triple the
   pumping capacity of the old station. AR, Tab O, Affidavit of SELA Senior
   Project Manager, at 2. The pumping station project was disrupted by
   Hurricane Katrina and is still under construction. Comments on the AR,
   exh. 4, at 1. The final phase, and the subject of this protest, involves
   the construction of an intake canal under Dwyer Road to move water to the
   pumping station. AR, Tab O, Affidavit of SELA Senior Project Manager, at
   2. The construction of the intake canal will complete the entire project.

   On October 26, 2007, the Corps issued the RFP for a fixed-price contract
   to construct the intake canal. RFP at 1, 6. The RFP contemplates awarding
   to the offeror whose proposal provides the best value to the government
   based on a trade-off between price and non-price factors. RFP sect. 00130,
   at 1. The RFP provides that non-price factors--past performance, technical
   approach, duration, personnel experience, project management, and small
   business subcontracting plan--combined, would be approximately equal to
   price. Id. at 1, 3-4; RFP amend. 2 at 2. Among the non-price factors, past
   performance and technical approach are approximately equal in value and
   are significantly more important than the other four non-price factors.
   Id. Under the technical approach evaluation factor, the RFP anticipates an
   assessment of each offeror's methodology for construction in proximity to
   power lines and the offeror's ability to manage multiple work crews. RFP
   sect. 00130, at 4. Under the duration evaluation factor, the RFP advises
   that proposals reducing the 1,172-day period of performance by 180 days or
   more will receive a higher rating under this evaluation factor than
   proposals that simply offer to meet the schedule. Id.; RFP amend. 1 at 2.

   The RFP also anticipates establishing a competitive range, and requiring
   offerors within that range to provide an oral presentation detailing their
   technical approach. In addition, the RFP advises that the agency could
   elect to hold discussions. RFP sect. 00130, at 5.

   Ceres contends that the Corps' decision to conduct this procurement using
   negotiated procedures, instead of using sealed bidding procedures,
   violates the Competition in Contracting Act (CICA). In this regard, Ceres
   disputes the agency's conclusion that the complexity of this procurement
   requires the agency to use non-price evaluation factors. Ceres also
   asserts that discussions are not needed for this procurement, and that the
   Corps failed to sufficiently document its decision to use negotiated
   procedures instead of sealed bidding.

   CICA requires the use of sealed bidding when: (1) time permits; (2) award
   will be based on price and other price-related factors; (3) discussions
   are not necessary; and (4) more than one bid is expected. 10 U.S.C.
   sect. 2304(a)(2)(A); Federal Acquisition Regulation (FAR) sect. 6.401(a);
   Specialized Contract Servs., Inc., B-257321, Sept. 2, 1994, 94-2 CPD para.
   90 at 4. When an agency determines that these conditions are not met, CICA
   requires the use of negotiated procedures. 10 U.S.C. sect. 2304(a)(2)(B).
   The determination as to whether circumstances support the use of
   negotiated procedures is largely a discretionary matter within the purview
   of the contracting officer. FAR sect. 6.401; Military Base Mgmt., Inc.,
   B-224115, Dec. 30, 1986, 86-2 CPD para. 720 at 3. However, an agency must
   reasonably conclude that the conditions requiring use of sealed bidding
   are not present. F&H Mfg. Corp., B-244997, Dec. 6, 1991, 91-2 CPD
   para. 520 at 3.

   As an initial matter, there is no dispute that the RFP here anticipates an
   evaluation that will include non-price factors. On this basis alone, this
   procurement is different from those that CICA requires to be conducted
   using sealed bidding.[2] In addition, the RFP anticipates a best value
   procurement, and anticipates a possible price/technical tradeoff; neither
   of these options would be appropriate in a sealed bid environment.

   Given that the RFP, on its face, anticipates the use of non-price
   evaluation factors and a possible price/technical tradeoff, Ceres'
   remaining arguments essentially challenge the reasonableness of the
   agency's stated needs. Specifically, Ceres argues that previous canal
   construction projects have been awarded without using non-price evaluation
   factors, and that the agency has improperly concluded that it needs to
   assess technical merits and possibly perform a trade-off analysis to
   determine which proposal constitutes the best value to the government.

   The record here shows that, in making this determination, the contracting
   officer cited the complexity of the project and the need for an
   accelerated schedule to complete the project. AR, Tab B, Contracting
   Officer's (CO) Statement, at 10. In addition, the Corps' Lead Structural
   Engineer submitted an affidavit explaining that the awardee must, among
   other activities, coordinate multiple crews within a narrow space, keep
   the main evacuation route out of New Orleans open throughout construction,
   schedule work to avoid interfering with completion of the pumping station,
   and maintain existing structures while building new ones in close
   proximity. AR, Tab N, Affidavit of Corps Lead Structural Engineer, at 2.
   The Lead Engineer also explains that the contractor will have to do all of
   these things while operating under a compressed time schedule. Id. at 5.
   Because of the need to mitigate the risk of further flooding in an area
   that was so recently devastated by Hurricane Katrina, and to encourage
   redevelopment, the Corps decided to shorten the construction timeframe by
   almost 9 months, and to include a duration evaluation factor to encourage
   offerors to propose even shorter timeframes. AR, Tab B, CO Statement, at
   10-12; RFP amend. 1 at 2.

   Under these circumstances and as explained below, we find that the Corps
   reasonably concluded that selection of a contractor here requires the use
   of negotiated procedures. First, we note that the fact that previous canal
   construction projects have been awarded without using non-price evaluation
   factors is not dispositive on the issue of whether the agency can properly
   use non-price evaluation factors now. See Comfort Inn South, B-270819.2,
   May 14, 1996, 96-1 CPD para. 225 at 3. In addition, the need to move
   quickly to restore and improve flood-control capabilities in a
   hurricane-stricken area, the relatively complex coordination and
   scheduling requirements of doing so, coupled with the compressed time
   frames in which the work is to be completed, provide reasonable support
   for the agency's determination to consider non-price factors in evaluating
   proposals for award. See TLT Constr. Corp., B-286226, Nov. 7, 2000, 2000
   CPD para. 179 at 3 (complex coordination and scheduling requirements
   provided reasonable support for negotiated procurement); W.B. Jolley,
   B-234490, May 26, 1989, 89-1 CPD para. 512 at 4-5 (decision to consolidate
   numerous, diverse services into one contract created a complex procurement
   justifying use of negotiated procurement procedures).[3]

   To the extent that Ceres argues that the Corps failed to provide an
   adequate legal analysis for its decision to use negotiated procurement
   procedures, Ceres correctly noted that the Corps did not explicitly
   mention the requirements of 10 U.S.C. sect. 2304(a)(2) in its acquisition
   plan. Nonetheless, the Corps sufficiently addressed the factors that
   influenced its decision to use negotiated procurement procedures in its
   acquisition plan and other documentation provided with the agency report,
   which satisfies the CICA requirements.

   The protest is denied.

   Gary L. Kepplinger
   General Counsel

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

   [1] SELA was established in 1996, in response to severe flooding the year
   before, to improve flood control and drainage within three parishes in and
   around New Orleans.

   [2] For example, we have sustained challenges to an agency's use of
   negotiated procedures where the procurement did not anticipate the use of
   non-price evaluation factors. See, e.g., Northeast Constr. Co., B-234323,
   B-234406, Apr. 24, 1989, 89-1 CPD para. 402 at 3.

   [3] To the extent that Ceres also argues that the procurement does not
   require the Corps to engage in discussions with offerors and thus is not a
   reason for the agency to use negotiated procedures, we need not consider
   this issue given our conclusion that the Corps reasonably decided that
   circumstances here require the evaluation of non-price factors and thus
   the use of negotiated procedures for this work. See Enviroclean Sys.,
   Inc., B-278261, Dec. 24, 1997, 97-2 CPD para. 172 at 3.