TITLE: B-311002; B-311002.2, LEADS Corporation, March 26, 2008
BNUMBER: B-311002; B-311002.2
DATE: March 26, 2008
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B-311002; B-311002.2, LEADS Corporation, March 26, 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: LEADS Corporation

   File: B-311002; B-311002.2

   Date: March 26, 2008

   William L. Walsh, Jr., Esq., J. Scott Hommer, III, Esq., Keir X. Bancroft,
   Esq., Patrick R. Quigley, Esq., and Peter A. Riesen, Esq., Venable LLP,
   for the protester.

   Alexander J. Brittin, Esq., Brittin Law Group, P.L.L.C., for Enterprise
   Information Services, Inc., the intervenor.

   William R. Covey, Esq., and Lisa J. Obayashi, Esq., Department of
   Commerce, for the agency.

   John L. Formica, Esq., Guy R. Pietrovito, Esq., and James A. Spangenberg,
   Esq., Office of the General Counsel, GAO, participated in the preparation
   of the decision.

   DIGEST

   Agency's selection of a lower-rated, lower-priced quotation for the
   issuance of a task order is unobjectionable where the agency reasonably
   determined that the protester's quotation's higher rating under the
   solicitation's experience and transition plan evaluation factors did not
   outweigh the awardee's quotation's lower price.

   DECISION

   LEADS Corporation protests the issuance of a task order to Enterprise
   Information Services, Inc. (EIS) under a request for quotations (RFQ)
   issued by the United States Patent & Trademark Office (USPTO), Department
   of Commerce, for program management support services. LEADS, the incumbent
   contractor, argues that the selection of EIS's lower-rated, lower-priced
   quotation for award was unreasonable and inconsistent with the terms of
   the solicitation.

   We deny the protest.

   The RFQ provided for the issuance of a fixed-price, level of effort task
   order to a vendor holding a General Services Administration Federal Supply
   Schedule contract on the Management, Organizational and Business
   Improvement Services schedule. RFQ at 1. The solicitation provided for the
   issuance of an order with a 1-year base period with 4 option years to the
   vendor submitting the quotation found to represent the best value to the
   government under the following evaluation factors listed in descending
   order of importance: experience; past performance; transition plan; key
   personnel; and price. Id. at 14, 17. The RFQ also informed vendors that
   "[t]he non-price factors when combined are more important than price." Id.
   at 17.

   The agency received quotations from three vendors, including LEADS and
   EIS. LEADS's quotation was evaluated as "excellent" under each of the
   factors at an evaluated price of $16,998,200. Agency Report (AR), Tab 26,
   Technical Evaluation Report, at 1-5; Tab 29, Source Selection Decision, at
   3. EIS's quotation was evaluated as "good" under the experience and
   transition plan factors and "excellent" under the past performance and key
   personnel factors at an evaluated price of $15,243,018. AR, Tab 29, Source
   Selection Decision, at 2-3. In making this source selection, the agency
   noted that, although "LEADS Corp. was higher rated than EIS in the
   categories of Experience and Transition Plan," the "higher rating is due
   to the fact that, as the incumbent, LEADS Corp. has performed the
   identical requirement in the past and transition to a new contract would
   be completely seamless." Id. at 4. The agency concluded that "the higher
   technical rating of the LEADS' [quotation] does not outweigh the
   significant price advantage of the EIS [quotation]," and thus determined
   that EIS's quotation represented the best value to the government.
   Id. at 5.

   LEADS challenges the agency's determination that EIS's quotation
   represents the best value to the government, arguing that in selecting
   EIS's lower-rated, lower-priced proposal for award, the agency placed
   undue emphasis on price and essentially converted the basis for award from
   a determination of "best value" to one of "lowest-cost, technically
   acceptable." Protest at 9, 12. The protester also asserts that the
   agency's source selection decision is not adequately documented, and that
   it misrepresents the relative merits of LEADS's and EIS's quotations.

   Source selection officials have broad discretion in determining the manner
   and extent to which they will make use of the technical and cost/price
   evaluation results; tradeoffs may be made, and the extent that technical
   superiority may be sacrificed for a cost/price advantage is governed by
   the test of rationality and consistency with the established evaluation
   factors. Joppa Maint. Co., Inc., B-281579; B-281579.2, Mar. 2, 1999, 2000
   CPD para. 2 at 7. A protester's mere disagreement with the source
   selection decision does not show that the source selection was not
   reasonably based or was otherwise inconsistent with the solicitation's
   award language. Financial & Realty Servs., LLC, B-299605.2, Aug. 9, 2007,
   2007 CPD para. 161 at 5-6. In addition, our Office has also long
   recognized that an agency, in making a source selection, may properly
   conclude that a technical scoring advantage based primarily on incumbency
   does not indicate an actual technical superiority that would warrant
   paying a cost premium. EDAW, Inc., B-272884, Nov. 1, 1996, 96-2 CPD para.
   213 at 7; Sparta, Inc., B-228216, Jan. 15, 1988, 88-1 CPD para. 37 at 4.

   We disagree with the protester that the agency failed to adequately
   document its source selection, placed undue emphasis on price in selecting
   EIS's quotatation for award, and essentially changed the basis for award
   from "best value" to "lowest-cost, technically acceptable." In this
   regard, the agency's source selection statement (which totals six pages)
   provides a summary of each quotation's strengths and weaknesses, as well
   as the reasoning for the evaluation ratings received under each of the
   evaluation factors. The source selection statement continues by comparing
   the ratings of each of the quotations, providing an overall ranking of the
   quotations as evaluated under the non-price factors, and provides a table
   of the evaluated prices and summary of the agency's review of the prices
   quoted. The source selection statement accurately acknowledges LEADS's
   evaluated technical advantages, but concludes that the protester's higher
   technical rating does not outweigh EIS's price advantage. We find that the
   agency's source selection decision is adequately documented, and given the
   specific price/technical merit tradeoff made in selecting EIS's quotation
   for award, see no indication in the record that the agency, in making its
   source selection, placed undue emphasis on price or made award on a
   "lowest-cost, technically acceptable" basis.

   We also do not agree with the protester that the agency's source selection
   decision misrepresents the relative merits of LEADS's and EIS's
   quotations. In this regard, LEADS primarily complains that the statement
   in the source selection decision that LEADS's quotation's higher technical
   rating under the evaluation factors of experience and transition plan was
   due to LEADS's status as the incumbent, which assertedly indicated that
   the source selection decision failed to reflect the actual advantages of
   LEADS's quotation under these factors. Specifically, the protester
   contends with regard to the experience evaluation factor that its rating
   of "excellent" was not "merely by virtue of its status as the incumbent,"
   but was also, for example and as recognized by the evaluators, due to the
   "relevance, depth and scope of LEADS' experience." Protester's Comments at
   5. The protester also argues that its quotation should have been viewed as
   significantly superior to EIS's under the experience factor (despite EIS's
   "good" rating), given that the evaluators noted that a "chart" provided in
   EIS's quotation "referenced vaguely relevant and similar experience in the
   RFQ." Supplemental Protest at 9.

   We agree with the protester that the agency, in assigning LEADS's
   quotation an "excellent" rating under the experience factor, identified
   numerous strengths with regard to LEADS's "experience," and that these
   strengths are related to the relevance, depth and scope of LEADS's
   experience. However, the agency also found that the vast majority of these
   strengths were in the context of LEADS's 12-year record of performance as
   the incumbent contractor. We find no basis in this record to conclude that
   the agency did not reasonably assess the merits of LEADS's quotation under
   this factor.

   With regard to EIS's quotation, the agency evaluators, in addition to
   commenting on the chart provided, also found that EIS's quotation
   "provided a large amount of data explaining the company's experience" on
   three particular contracts, and found that "though it is a slight weakness
   that EIS has not directly supported USPTO work in the past, EIS does
   possess experience that is quite similar to USPTO work." AR, Tab 26,
   Technical Evaluation Report, at 4. In reaching this conclusion, however,
   the agency also noted numerous strengths with regard to EIS's "experience"
   related to relevance, depth and scope. Id.

   In sum, we find that the source selection statement accurately represents
   the merits of LEADS's and EIS's quotations under the experience factor.

   We similarly find the source selection statement's description of the
   merits of LEADS's and EIS's quotations under the transition plan factor to
   be accurate and not misleading. That is, the agency recognized LEADS's
   advantage under this factor, because LEADS, as the incumbent, would be
   able "to a make a complete transition to the new contract in one day" with
   no break in support is due to its status as the incumbent. See AR, Tab 26,
   Technical Evaluation, at 3. With respect to EIS's quotation, as found by
   the agency and pointed out by LEADS, the success of EIS's transition plan
   depends on, in part, the firm's ability to retain incumbent staff, and
   that this poses some risk. See id. at 5.

   The protester also argues that, although both its and EIS's quotations
   were rated "excellent" under the past performance and key personnel
   factors, these adjectival ratings, as set forth in the source selection
   decision, failed to illustrate what the protester asserts are
   "differences" between LEADS's and EIS's quotations. Supplemental Protest
   at 22-25. The protester argues, for example, that although past
   performance references of LEADS and EIS were similar in that they resulted
   in both of the quotations being evaluated as "excellent" under the past
   performance factor, LEADS's quotation was actually superior in that LEADS
   had performed the evaluated contracts as the prime contractor, whereas
   EIS's evaluated past performance was as a prime contractor and as a
   subcontractor. Supplemental Protest at 23. This argument is without merit.
   As pointed out by the agency, nothing in the RFQ prohibited the agency
   from considering EIS's past performance as a subcontractor, nor did the
   RFQ state that such past performance would be rated as inferior to prime
   contract performance. Rodgers Travel, Inc., B-291785, Mar. 12, 2003, 2003
   CPD para. 60 at 5.

   The protester also argues that "there were differences between the
   offerors that reasonably should have differentiated the quotes under the
   Key Personnel factor." Supplemental Protest at 23. Specifically, the
   protester points out that its proposed program manager (the only
   individual identified as "key personnel") has served as the program
   manager on the incumbent contract for 6 years, was rated as "excellent"
   with no evaluated "weaknesses" or "risks," whereas the agency, while
   evaluating EIS's quotation as "excellent" under the key personnel factor,
   also noted as a "weakness" that the program manager proposed by EIS lacked
   experience in the "direct support for the development and support of major
   patent applications." Supplemental Protest at 24; AR, Tab 26, Technical
   Evaluation Report, at 5.

   In making this argument, the protester ignores the fact that the agency,
   in evaluating EIS's quotation as "excellent" under the key personnel
   factor, also noted, among other things, that EIS's proposed program
   manager has served as a program manager for USPTO on a systems engineering
   and technical assistance program contract with a total value of $70
   million, and was found by the agency to have "23 years of solid
   management, PM [program management] and business consulting experience."
   AR, Tab 26, Technical Evaluation, at 5. Given this, we do not agree that
   the source selection statement, which did not note the specific
   differences between the program managers proposed by LEADS and EIS, but
   rather stated only that the quotations had both been rated as "excellent"
   under the key personnel factor, was somehow misleading or unreasonable.

   In sum, we do not agree with the protester that the source selection
   decision was misleading as to the merits of the vendors' quotations, and
   find reasonable the source selection statement's ultimate finding that
   "the higher technical rating of the LEADS' quote does not outweigh the
   significant price advantage of the EIS [quotation]."[1]

   The protest is denied.

   Gary L. Kepplinger
   General Counsel

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

   [1] LEADs has made a number of other related contentions during the course
   of this protest regarding the propriety of the agency's best value
   determination. Although these contentions may not be specifically
   addressed in this decision, each was carefully considered by our Office
   and found either to be insignificant in view of our other findings, or
   invalid based upon the record as a whole.