TITLE: B-310971; B-310971.2; B-310971.3, Colson Services Corporation, March 21, 2008
BNUMBER: B-310971; B-310971.2; B-310971.3
DATE: March 21, 2008
*****************************************************************************
B-310971; B-310971.2; B-310971.3, Colson Services Corporation, March 21, 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: Colson Services Corporation

   File: B-310971; B-310971.2; B-310971.3

   Date: March 21, 2008

   Scott E. Pickens, Esq., Craig S. Burkhardt, Esq., and Richard H. Streeter,
   Esq., Barnes & Thornburg LLP, for the protester.

   Philip J. Davis, Esq., Nicole P. Wishart, Esq., and Tracye Winfrey Howard,
   Esq., Wiley Rein LLP, for Retirement System Group, Inc., an intervenor.

   Laura Mann Eyester, Esq., Small Business Administration, for the agency.

   Jennifer D. Westfall-McGrail, Esq., and Christine S. Melody, Esq., Office
   of the General Counsel, GAO, participated in the preparation of the
   decision.

   DIGEST

   1. Protest challenging source selection decision is denied where source
   selection authority recognized that solicitation requirements not
   addressed by protester in its technical proposal had been satisfactorily
   addressed in protester's business proposal.

   2. Request for clarification of whether proposed rebate amounts had been
   offered on a monthly or an annual basis did not constitute discussions
   where offerors were not given the opportunity to revise their rebate
   amounts.

   DECISION

   Colson Services Corporation protests the award of a contract to Retirement
   System Group, Inc. (RSG) under request for proposals (RFP) No.
   SBAHQ-07-R-0010, issued by the Small Business Administration (SBA) for
   Fiscal and Transfer Agent (FTA) services for the secondary market program
   of SBA's 7(a) Guaranteed Loan program. Colson argues that the agency's
   evaluation of proposals was unreasonable and that the agency improperly
   failed to conduct discussions with the firm.

   We deny the protest.

   BACKGROUND

   SBA's 7(a) Guaranteed Loan program is the primary federal lending program
   devoted to small businesses. The program extends a full faith and credit
   guarantee of the U.S. government to lenders that make small business loans
   pursuant to SBA rules and regulations. The program currently provides
   guarantees on loans up to $2 million, and a maximum guarantee amount of
   $1.5 million. At present, the 7(a) portfolio of loans exceeds 300,000
   accounts with an outstanding gross principal balance of $46.5 billion. RFP
   at 6.

   The purpose of the RFP at issue here is to facilitate the receipt and
   recording of guaranteed interests in loan payments from lending
   institutions participating in the 7(a) Guaranteed Loan program and to
   conduct a primary and secondary market in the individual loans and
   certificates guaranteed by the SBA. To this end, the contractor is to
   develop, implement, and operate an interactive, electronic fiscal and
   transfer payment system. The contractor is also to furnish custodial care
   and safekeeping services for documents relating to structured credit
   facilities and loan portfolio securitization instruments. Id.

   The RFP authorizes the contractor to collect various service fees from
   lenders as compensation for the services that it furnishes under the
   contract; it also authorizes the contractor to collect and retain float
   income on any loan payment funds in its possession. RFP at 4-5. In lieu of
   prices, the RFP asks offerors for proposed "rebate" amounts--that is, it
   asks offerors for the amounts (of the income that they make under the
   contract) that they will remit to the government.[1]

   The solicitation contemplated the award of a contract for a 4-month
   phase-in period, an 8-month base period, and four 1-year option periods.
   The RFP provided for award to the responsible offeror whose proposal
   represented the best value to the government, price and other factors
   considered, with the non-price factors of significantly greater importance
   in the determination of best value than price. Non-price factors consisted
   of technical approach, management approach, personnel, and past
   performance; the first two factors were of equal importance and of greater
   significance than the second two, which were also of equal weight. The
   solicitation advised offerors of the possibility that the agency might
   choose to award on the basis of initial proposals.

   Two offerors, RSG and Colson, submitted proposals by the RFP's October 24,
   2007 closing date. The agency's technical evaluators assigned the
   proposals the following ratings:

   +------------------------------------------------------------------------+
   |Offeror  |Tech. Appr.  |Mgmt. Appr.  |Personnel  |Past Perf.  |Overall  |
   |---------+-------------+-------------+-----------+------------+---------|
   |Colson   |Green        |Green        |Green      |Blue        |Green    |
   |---------+-------------+-------------+-----------+------------+---------|
   |RSG      |Blue         |Blue         |Green      |Green       |Blue     |
   +------------------------------------------------------------------------+

   Agency Report (AR) Tab 32, Award Determination at 1.[2]

   The evaluators furnished a detailed explanation as to the basis for each
   rating (which we will discuss, as relevant, below.) After reviewing the
   proposals and the findings of the technical evaluation team and
   determining that RSG had offered a significantly higher rebate than Colson
   for each FFR range during each period of performance, the contracting
   officer (who was serving as the source selection authority) selected RSG's
   proposal for award.[3]

   Prior to making the award, however, the contracting officer determined
   that she should clarify with each offeror whether the rebate amounts that
   it had proposed were on a monthly or an annual basis. As a consequence,
   she sent identical e-mail messages to the two offerors requesting this
   information.[4] Both offerors responded (via e-mail on November 28) that
   their rebate amounts were on an annual (or full period of performance), as
   opposed to a monthly, basis.[5]

   The agency awarded a contract to RSG on November 30 and notified Colson of
   the award the following working day. On the same day that it received
   notification, Colson requested a debriefing. The debriefing was held on
   December 18. Colson filed an initial protest with our Office on December
   18 and a supplemental protest on December 27. Colson filed a second
   supplemental protest on January 25, 2008.

   DISCUSSION

   Colson takes issue with the agency's evaluation of its own proposal under
   the technical approach and personnel factors and with the evaluation of
   RSG's proposal under the past performance factor. The protester also
   argues that the contracting officer's communications with it regarding the
   basis for its "rebate" pricing constituted discussions, and that because
   the agency initiated discussions with it concerning one aspect of its
   proposal, the agency had an obligation to hold discussions with it
   regarding all areas of weakness in its proposal.

   Turning first to the protester's complaints regarding the evaluation of
   proposals, in reviewing a protest challenging an agency's evaluation, we
   will not evaluate the proposal(s) anew or substitute our judgment for that
   of the agency; rather, we will examine the record to determine whether the
   agency's judgment was reasonable and in accord with the RFP evaluation
   criteria and with applicable procurement statutes and regulations.
   Cooperativa Muratori Riuniti, B-294980, B-294980.2, Jan. 21, 2005, 2005
   CPD para. 21 at 3. As explained below, based on our review of the record
   here, we find no basis to question the agency's evaluation under the
   factors in question.

   Technical Approach

   The RFP advised offerors that their proposals would be evaluated under the
   technical approach factor to determine the extent to which their proposed
   approaches, including phase-in and phase-out plans, demonstrated the
   ability to meet or exceed the requirements of the solicitation. RFP at 58.
   The agency evaluation team found both strengths and weaknesses in the
   protester's proposed technical approach. Strengths identified by the
   agency at Colson's debriefing included the protester's demonstration of
   its complete understanding of the current project requirements, its
   presentation of a well-defined and well-supported project plan, and its
   well-written phase-out plan, while weaknesses included the following:

     Colson defined operational processes, but did not tie them to specific
     functional units within the organization and did not assign them to
     specific individuals. Colson did not mention reconciliation of purchased
     loans . . . . Colson discussed sending notices on fees, but did not
     discuss follow-up on collection of fees (reference Section C-7.3.8 of
     the Solicitation). [6] Colson did not address the new requirement to
     reconcile lender balances with its balance on secondary market
     purchases. Colson did not identify the senior leader within its
     organization who is responsible for providing general direction during
     the phase-out period of the contract.

   Colson Post-Award Debriefing, Dec. 13, 2007, at 2. Additional weaknesses
   identified by the evaluators in their evaluation report (but not mentioned
   at the debriefing) were the protester's failure to demonstrate compliance
   with the RFP's bonding requirements (sect. H-1), its failure to indicate
   its intention to undergo a required audit (sect. H-6), and its failure to
   demonstrate that it would adhere to all of the solicitation's information
   technology (IT) security regulations (sect. H-8). Evaluation Plan for
   Colson at 6.

   In its first supplemental protest, the protester disputed the findings of
   weakness identified at the debriefing. Colson maintained that the RFP did
   not ask offerors to tie operational processes to functional units or
   specific individuals (but that it had nevertheless done so); similarly,
   the protester argued that the RFP did not request identification of the
   senior leader responsible for phase-out. In response to the criticism that
   it had failed to address the reconciliation of purchased loans, Colson
   argued that its proposal made clear that all procedures would be fully
   compliant with the requirements of the statement of work. Further, in
   response to the criticism that it had not discussed follow-up on
   collection of fees, the protester asserted that sect. C-7.3.8 of the RFP
   did not require any follow-up on collection of fees, and that, indeed, it
   was not "a function or responsibility of the FTA contractor to collect
   unpaid fees." Supplemental Protest at 11.

   The agency addressed these arguments in a detailed manner in its report,
   explaining the basis for each of the findings that the protester disputes.
   In commenting on the agency report, the protester did not take issue with
   or attempt to rebut the agency's explanations (although it did raise a new
   argument, which we address below, in response to the criticism that it had
   failed to discuss follow-up on collection of fees); thus, we consider it
   to have abandoned these arguments. CM Mfg., Inc., B-292370, Mar. 2, 2004,
   2004 CPD para. 69 at 3.

   In commenting on the agency report, Colson failed to pursue its argument
   that sect. C-7.3.8 did not require follow-up on collection of fees, but
   instead argued that it had addressed follow-up reporting on fees in its
   proposal, as required by sect. C-7.3.9. [7] Colson further argued that the
   evaluators had treated the two proposals unequally by finding that its
   proposal had failed to address follow-up on collection of fees, while
   failing to make such a finding with regard to RSG's proposal when,
   according to the protester, RSG had in its proposal merely committed to
   following the reporting process that Colson had described in its proposal.

   The foregoing argument fails to acknowledge the distinction between the
   requirements in sect. C-7.3.8 that the contractor collect and account for
   the guarantee fees, as well as issue, and keep records for all activities
   relating to, invoices for unpaid and underpaid fees, and the requirement
   in sect. C-7.3.9 that the contractor furnish quarterly reports to the
   agency on delinquent unpaid and underpaid fees. The agency explained in
   its report that although Colson had addressed the reporting of unpaid fees
   to the SBA (i.e., the sect. C-7.3.9 requirement) and the invoicing of
   underpayments (one of the sect. C-7.3.8 requirements), it had not
   addressed the sect. C-7.3.8 requirement for invoicing and collection of
   unpaid fees--that is, it was the protester's failure to address invoicing
   and collection of unpaid fees that was the weakness in its proposed
   approach. Because it was not the protester's failure to address the
   reporting requirement in sect. C-7.3.9 that the agency found to be a
   weakness, the protester's argument that it did address the reporting
   requirement (and that RSG merely committed to following its approach to
   satisfying the requirement) neither addresses nor rebuts the agency's
   finding of weakness.

   In its second supplemental protest, Colson further argued with regard to
   the evaluation of its proposal under the technical approach factor that
   the evaluators had incorrectly determined in their evaluation report that
   its proposal had failed to demonstrate compliance with the bonding, audit,
   and IT security requirements set forth in section H of the RFP. The
   protester also argued that the agency had treated the proposals of the two
   offerors unequally in failing "to fully credit Colson for its voluntary
   initiative to implement at its expense a transformation initiative to
   upgrade, automate and modernize the 7(a) FTA system . . . , while giving
   RSG exceptional credit for a similar system upgrade proposal . . . ."
   Second Supplemental Protest at 5.

   Regarding the former argument, the contracting officer explained that she
   reviewed and considered the contents of both offerors' proposals, as well
   as the evaluation team's reports, in arriving at her source selection
   decision, and thus was aware at the time she made her decision that while
   Colson had not addressed the bonding and audit requirements in its
   technical proposal, leading to the finding of weakness by the technical
   evaluation team, Colson had in fact addressed them in its business
   proposal. That is, according to the contracting officer, she was aware at
   the time of her source selection decision that the weaknesses attributed
   to Colson's proposal by the technical evaluation team in these two areas
   were not in fact weaknesses, and did not take them into consideration in
   her trade-off determination. The contracting officer's position is
   supported by the contemporaneous source selection document, in which she
   makes no mention of Colson's non-compliance with the bonding and audit
   requirements in summarizing the proposal's strengths and weaknesses. See
   AR Tab 32, Award Determination at 1.

   The protester asserts that even though the contracting officer was aware
   that Colson had in fact addressed the bonding and audit requirements in
   its business proposal and took this information into consideration in
   making her award decision, her decision was nevertheless flawed in that it
   was based on a defective technical evaluation. Thus, we understand the
   protester to be arguing that although the contracting officer was aware
   that two of the weaknesses identified by the technical evaluation team
   were not in fact weaknesses and did not consider them in making her source
   selection decision, her determination was nonetheless flawed because it
   also took into consideration the rating of green under the technical
   approach factor assigned by the technical evaluators, which rating the
   evaluators had arrived at taking the two weaknesses into consideration. We
   disagree with the protester's reasoning. It is clear from the contracting
   officer's source selection decision that she considered the underlying
   basis for the evaluators' rating of green, i.e., the strengths and
   weaknesses in Colson's technical approach, and not simply the color rating
   assigned by the evaluators, in making her tradeoff determination;
   accordingly, we see no reasonable basis for the argument that her
   trade-off determination was flawed.

   Regarding the protester's argument that it addressed the RFP's IT security
   regulations, the agency explained that the evaluation team's criticism of
   Colson's proposal was that it failed to demonstrate adherence to all of
   the security regulations. In particular, the agency noted that while the
   RFP required a System Security Officer (SSO), who would be responsible for
   ensuring that an appropriate level of physical, operational, and technical
   security is maintained to protect the computers and facility that process
   SBA information and the information processed, RFP at 34, Colson had
   proposed an individual who would be devoting only 30 percent of his time
   to the contract effort. The SBA further noted that it "believe[d] that
   such part time devotion to the contract's IT requirements [was] a failure
   by Colson to address how it would adhere to all IT security requirements."
   Supplemental Agency Report at 4. In its comments responding to the
   supplemental agency report, the protester did not seek to rebut the
   agency's argument that it had not adequately responded to the requirements
   of the solicitation pertaining to the SSO by offering a part-time employee
   to perform the job responsibilities; accordingly, we consider it to have
   abandoned this argument as well.

   Turning then to the protester's complaint that the evaluators gave the two
   proposals unequal credit for similar system upgrade proposals, the
   protester did not pursue this argument in its comments responding to the
   second agency report; moreover, the record does not support the
   protester's allegation of unequal treatment in any event. In this
   connection, the evaluators identified Colson's proposed improvements as a
   strength in Colson's technical approach, noting that "the proposed
   improvements are innovative next steps in the development of SBA's fiscal
   and transfer system." Evaluation Report for Colson at 4. Similarly, the
   evaluators identified RSG's proposed improvements as a strength, observing
   that "[t]he proposal includes a number of ways the Bidder plans to
   modernize and streamline the existing processes in order to get SBA up to
   and beyond industry standard." Evaluation Report for RSG at 4. Since each
   offeror's approach to upgrading the system was recognized as a strength in
   the evaluation of its proposal, we do not think that the record supports
   the protester's allegation of unequal treatment.

   Personnel

   The RFP furnished the following guidance regarding the evaluation of
   offerors' proposals under the personnel factor:

     Each Offeror will be evaluated on the qualifications of its key
     personnel as related to requirements of the Solicitation. For the
     cognizant business unit, each Offeror will also be evaluated on:

        * Its personnel resources, with emphasis placed on the education and
          professional certifications obtained by the work force in relation
          to the number of personnel in the business unit, and the average
          length of employee service.
        * Its ability to effectively train personnel, including retraining
          and training for new requirements and systems.
        * Its ability to recruit and retain high quality personnel, including
          the turnover rate experienced by the business unit for the last
          three (3) year period. The turnover rate is defined as the number
          of personnel who departed (regardless of reason) divided by the
          average number of personnel during the period.

   RFP at 58.

   In its evaluation under the personnel factor, the agency's technical
   evaluation team recognized as strengths in Colson's proposal the advanced
   education, expertise, and experience of the protester's proposed key
   personnel; the protester's well-defined organizational structure; its
   multi-faceted approach to training; and its ability to recruit and retain
   qualified personnel. AR, Tab 37B at 12-13. The evaluators also identified
   the following weaknesses in the proposal, however, which resulted in the
   assignment of a rating of green for the factor:

        * The proposal does not address how staffing for the new requirements
          of this solicitation will be handled . . . . We expect the Bidder
          to describe how it plans to fill positions needed for these new
          requirements while successfully managing the existing requirements
          for this fiscal and transfer agent function.
        * The Bidder has not described what type of training needs the
          current and new staff will need to undergo in order to successfully
          implement the new requirements stated in this solicitation. The
          proposal also lacks the detail associated with just how many
          additional employees will be needed to handle the new requirements
          of this solicitation . . . .

   Id.

   In its first supplemental protest, the protester argued that there was "a
   mismatch" between the evaluation scheme set forth in the RFP and the
   evaluation actually conducted in that the RFP did not specifically ask how
   staffing would be achieved for the new requirements. The protester also
   argued that its proposal did address recruitment and training/retraining
   to meet the new RFP requirements, and that while the solicitation did not
   specifically ask for detail regarding the number of additional employees
   that would be needed to handle the new requirements, Colson "plainly
   projected its staffing levels" in its business proposal.[8] Supplemental
   Protest, Dec. 27, 2007, at 10. In its second supplemental protest, Colson
   further argued that the evaluators had treated RSG's proposal and its own
   "disparately and unequally" by failing to downgrade RSG's proposal, which
   also failed to address staffing and training for the new requirements,
   under the personnel factor. Second Supplemental Protest, Jan. 25, 2008, at
   5.

   In response to the protester's argument that the solicitation did not
   specifically request information about staffing for the new requirements,
   the agency points out that the RFP provided for the evaluation of each
   offer based on the qualifications of the proposed key personnel as related
   to the requirements of the solicitation. The agency maintains that it
   should have been obvious that the requirements of the RFP included the new
   requirements and thus that offerors needed to explain how they would staff
   the new requirements. We agree with the agency that the RFP language was
   sufficient to place offerors on notice that the evaluators would consider
   in their evaluation the qualifications of an offeror's proposed staff to
   meet all of the requirements--existing and new ones. Regarding the
   protester's assertion that it did address recruitment and training to meet
   the new requirements, the agency maintains that Colson's training plan did
   not address training to meet the new requirements or updates to the
   system, except to note that Colson employees would take SBA's Computer
   Security Awareness Training. In commenting on the agency report, the
   protester did not dispute the agency's position--and indeed, appeared to
   concede its correctness by arguing that RSG had also failed to address
   staffing and training for the new requirements in its proposal;
   accordingly, we will not consider the argument further.

   With regard to the protester's argument that the evaluators treated the
   two proposals unequally by failing to identify RSG's approach to staffing
   and training for the new requirements as a weakness under the personnel
   factor, even assuming for the sake of argument that this allegation is
   correct, we fail to see how it resulted in prejudice to Colson. We note in
   this connection that RSG's proposal was already rated green under the
   personnel factor based on the evaluators' recognition that the proposal
   contained both strengths and weaknesses pertaining to the factor, and the
   protester has not argued--nor, based on the record before us, do we think
   that it reasonably could have argued--that the attribution of an
   additional weakness to RSG's proposal would have resulted in a lowering of
   the proposal's rating under the factor to below green.

   Past Performance

   The protester argues that the agency should have assigned RSG a rating of
   neutral, rather than a rating of green (signifying acceptable), under the
   past performance factor because RSG lacks relevant past performance.[9]

   This argument does not provide a basis for sustaining Colson's protest
   because, as with regard to the previous argument pertaining to staffing
   and training for the new requirements, there is no evidence that Colson
   was prejudiced by the allegedly improper rating. That is, there is no
   reasonable basis to believe that RSG's proposal, which received ratings of
   blue under each of the two most significant technical evaluation factors,
   technical approach and management approach, and a rating of green under
   the personnel factor, would have received an overall technical rating of
   other than blue had the proposal received a rating of neutral, rather than
   green (acceptable), for past performance. We note in this connection that
   in our view, it would be inconsistent with the concept of a neutral rating
   for an agency to lower a proposal's overall technical rating as a result
   of a neutral rating for past performance. See Inlingua Schools of
   Languages, B-229784, Apr. 5, 1988, 88-1 CPD para. 340 at 5-6 (evaluation
   scheme that penalizes offeror for neutral past performance ratings is
   improper).

   Exchanges Regarding Rebate Amount

   The protester argues that the agency's request for clarification of the
   basis for the offerors' rebate amounts constituted discussions because
   this information was necessary to determine their proposed prices, and
   that the SBA's initiation of discussions in one area obligated the agency
   to conduct discussions regarding all significant weaknesses in offerors'
   proposals.

   As previously noted, the contracting officer asked both offerors to
   clarify whether their rebate amounts were on a monthly or an annual basis,
   but did not otherwise communicate with them regarding the content of their
   proposals. The contracting officer sought clarification of the basis for
   the rebate amounts after being advised by the chairperson of the technical
   evaluation team that since the RFP included language providing that "[t]he
   rebate will be made to SBA monthly," RFP at 3, the rebate amounts entered
   by the offerors on their price schedules should be considered monthly
   amounts. The contracting officer apparently questioned whether the two
   offerors had indeed interpreted the RFP in this manner.[10]

   Section 15.306 of the FAR describes a spectrum of exchanges that may take
   place between an agency and an offeror during negotiated procurements.
   Clarifications are "limited exchanges" between the agency and offerors
   that may allow offerors to clarify certain aspects of proposals or to
   resolve minor or clerical errors. FAR sect. 15.306(a)(2). Discussions, on
   the other hand, occur when an agency indicates to an offeror significant
   weaknesses, deficiencies, and other aspects of its proposal that could be
   altered or explained to enhance materially the proposal's potential for
   award. FAR sect. 15.306(d)(3); IPlus, Inc., B-298020, B-298020.2, June 5,
   2006, 2006 CPD para. 90 at 3. The "acid test" for deciding whether
   discussions have been held is whether it can be said that an offeror was
   provided the opportunity to modify or revise its proposal Computer
   Sciences Corp. et al., B-298494.2 et al., May 10, 2007, 2007 CPD para. 103
   at 9.

   In our view, the exchanges here did not constitute discussions because
   neither offeror was given the opportunity to revise its proposal; rather,
   each was merely given the opportunity to clarify the basis on which it had
   understood the RFP to be requesting pricing. Regarding the protester's
   argument that either offeror could have revised its proposal by
   "offer[ing] a response that was a change from the originally submitted
   approach," Protester's Comments, Jan. 25, 2008, at 4 n.3, this is
   essentially an argument that either offeror could have revised its price
   by misrepresenting the basis for its original pricing--that is, by
   representing that its rebate amounts had been offered on an annual basis
   when it had in fact intended them to be on a monthly basis (or
   vice-versa). Presumably, the protester is not arguing that it would have
   engaged in such a misrepresentation, and, in any event, we do not think
   that the opportunity to increase or decrease a price 12-fold, which is the
   only revision that could have been achieved through such a
   misrepresentation, represents a meaningful opportunity to revise pricing.

   Preaward Equal Opportunity Compliance Evaluation

   The solicitation incorporated by reference FAR sect. 52.222-24, which
   provides as follows:

     If a contract in the amount of $10 million or more will result from this
     solicitation, the prospective Contractor and its known first-tier
     subcontractors with anticipated subcontracts of $10 million or more
     shall be subject to a preaward compliance evaluation by the Office of
     Federal Contract Compliance Programs (OFCCP), unless, within the
     preceding 24 months, OFCCP has conducted an evaluation and found the
     prospective Contractor and subcontractors to be in compliance with
     Executive Order 11246.

   The protester argues that the agency violated FAR sect. 52.222-24 by
   failing to seek a preaward equal opportunity compliance evaluation by the
   Office of Federal Contract Compliance Programs prior to awarding to RSG.
   The agency responded that it did not seek a preaward evaluation by the
   OFCCP because it does not believe that FAR sect. 52.222-24 applies because
   the contract awarded here is at no cost to the government.

   As the agency states, because the solicitation authorizes the contractor
   to collect fees from lenders to compensate it for the services that it
   provides, SBA will not be paying the contractor directly for its services,
   and in fact will be receiving rebates from the contractor. In this regard,
   the agency points out that the contract document itself lists the award
   amount as "$0.00." In any event, Colson has failed to demonstrate that it
   was prejudiced by the agency's failure to seek a preaward compliance
   evaluation by the OFCCP. In particular, the protester has failed to allege
   (or offer any support for the argument) that if a compliance evaluation
   had been conducted, RSG would have been found in violation.

   The protest is denied.

   Gary L. Kepplinger
   General Counsel

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

   [1] The solicitation permitted offerors to propose different rebate
   amounts based on the prevailing Federal Funds Rate (FFR) in place at the
   inception of each period of performance. That is, each offeror was asked
   for a separate rebate amount for each period of performance for each of
   the following five FFR ranges: 0.01%-3.00%, 3.01%-5.00%, 5.01%-7.00%,
   7.01%-9.00%, and 9.01% and greater.

   [2] The RFP provided for the rating of proposals under the non-price
   factors as blue, green, yellow, or red. Ratings of blue, green, and yellow
   were defined as follows:

     Blue: Clearly meets and exceeds the requirements of the Factor being
     evaluated. Demonstrates an exceptional understanding of goals and
     objectives of the acquisition. No significant weaknesses exist. One or
     more significant strengths exist.

     Green: Meets the requirements of the Factor being evaluated.
     Demonstrates an acceptable understanding of goals and objectives of the
     acquisition. There may be strengths and weaknesses, but strengths either
     balance or outweigh any weaknesses.

     Yellow: Marginally meets the requirements of the Factor being evaluated
     or presents significant performance risks. Weaknesses have been found
     that outbalance any strengths that exist, and these weakness[es] may be
     difficult to correct.

   RFP at 59.

   [3] The "rebate" amounts proposed by the two offerors were as follows:

   +-----------------------------------------------------------------------+
   |Federal   |Colson  |Colson  |Colson  |RSG     |RSG     |RSG Opt. Yr. 1/|
   |Funds Rate|4-month |8-month |Option  |4-month |8-month |Yrs. 2-4       |
   |          |phase-in|base    |Yrs. 1-4|phase-in|base    |               |
   |----------+--------+--------+--------+--------+--------+---------------|
   |0.01-3.00%|$150,000|$300,000|$450,000|$400,000|$800,000|$1.2/.9 M      |
   |          |        |        |        |        |        |(million)      |
   |----------+--------+--------+--------+--------+--------+---------------|
   |3.01-5.00%|$300,000|$600,000|$900,000|$1.3 M  |$2.6 M  |$3.9/3.6 M     |
   |----------+--------+--------+--------+--------+--------+---------------|
   |5.01-7.00%|$400,000|$800,000|$1.2 M  |$1.6 M  |$3.2 M  |$4.8/4.5 M     |
   |----------+--------+--------+--------+--------+--------+---------------|
   |7.01-9.00%|$500,000|$1 M    |$1.5 M  |$2.4 M  |$4.8 M  |$7.2/6.9 M     |
   |----------+--------+--------+--------+--------+--------+---------------|
   |9.01% and |$600,000|$1.2 M  |$1.8 M  |$3.2 M  |$6.4 M  |$9.6/9.3 M     |
   |higher    |        |        |        |        |        |               |
   +-----------------------------------------------------------------------+

   [4] The text of each message was as follows:

     I wanted to clarify the rebate amount in your proposal. Is it on a
     monthly or an annual basis? Thanks!

   AR, Tabs 34 and 35.

   [5] Colson responded that its rebate amount was on an annual basis, while
   RSG--recognizing that the phase-in and base periods were for periods of
   performance of less than a year--responded that each of its rebate amounts
   was for the entire corresponding period of performance. Given that the
   phase-in and base periods together constitute an annual period of
   performance, and that Colson's rebate amounts for the two periods, added
   together, equal its rebate amounts for each of the option years, we think
   it clear that the offerors intended the same thing by their responses.

   [6] Section C-7.3.8 provides in relevant part as follows:

     The contractor shall collect and account for the basis point ongoing
     guarantee fee for all loans approved after October 12, 1995 and all
     loans whose guarantee portion was sold in the secondary market. . . .
     The Contractor shall issue invoices for unpaid and underpaid basis point
     ongoing guarantee fees and shall be responsible for keeping records for
     all activities related to the invoices.

   RFP at 21.

   [7] Section C-7.3.9 provides:

     In the course of reconciling ongoing guarantee fee payments, the
     Contractor shall accumulate data on delinquent ongoing guarantee fees by
     lender. The Contractor shall be responsible for establishing lender fee
     receivable balances and for providing a report to the COTR on delinquent
     unpaid and underpaid basis point ongoing guarantee fees on no less than
     a quarterly basis.

   [8] In its initial protest to our Office, Colson also alleged that the SBA
   had failed to conduct a meaningful evaluation of the proposals under the
   personnel factor and had instead improperly "normalized the field for this
   factor" by assigning both proposals the same rating of green. Protest at
   6. The agency explained in its report that each proposal had received a
   rating of green under the personnel factor because each contained both
   strengths and weaknesses pertaining to the factor. In responding to the
   agency report, the protester did not pursue the argument that the agency
   failed to conduct a meaningful evaluation of the proposals under the
   personnel factor.

   [9] Consistent with Federal Acquisition Regulation (FAR) sect.
   15.305(a)(2)(iv), which instructs that an offeror without relevant past
   performance or for whom information on past performance is not available
   "may not be evaluated favorably or unfavorably on past performance," sect.
   M-3.3 of the RFP advised offerors that a lack of relevant past performance
   would result in assignment of a neutral past performance rating indicating
   neither a favorable nor unfavorable evaluation. RFP at 58.

   [10] While the contracting officer does not explain the basis for her
   decision to seek clarification of the rebate amounts, we think that she
   reasonably might have questioned whether the offerors shared the
   chairperson's understanding of the basis on which rebate amounts were
   requested given the format of the price schedule itself, which appears to
   request rebate amounts corresponding to the entire periods of performance.