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.