TITLE: B-311265, Hogar Crea, Inc., May 27, 2008
BNUMBER: B-311265
DATE: May 27, 2008
****************************************
B-311265, Hogar Crea, Inc., May 27, 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: Hogar Crea, Inc.

   File: B-311265

   Date: May 27, 2008

   Jose R. Olmo-Rodrguez, Esq., Olmo & Rodriguez Matias, for the protester.

   Joseph Summerill, Esq., and David P. Goodwin, Esq., Greenberg Traurig LLP,
   for Volunteers of America, Inc., an intervenor.

   Carl Jorgensen, Esq., and Bradley J. Breslin, Esq., Bureau of Prisons,
   Department of Justice, for the agency.
   Jonathan L. Kang, Esq., and Ralph O. White, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   1. Protest challenging agency's evaluation of offerors' technical
   proposals is denied where record supports reasonableness of the
   evaluations.

   2. Protest challenging the reasonableness of the agency's source selection
   decision is denied where the record supports the agency's determination
   that protester's high-priced proposal did not merit award despite offering
   certain strengths as compared to awardee's proposal.

   DECISION

   Hogar Crea, Inc. (HCI) protests the award of a contract to Volunteers of
   America, Inc. (VOA) under request for proposals (RFP) No. 200-0951-SE,
   issued by the Bureau of Prisons (BOP) for residential reentry center (RRC)
   services for federal offenders in the San Juan, Puerto Rico metropolitan
   area. HCI contends that the BOP's evaluation of the offerors' proposals
   was unreasonable, and that the source selection decision was flawed.

   We deny the protest.

   BACKGROUND

   The RFP sought proposals to provide RRC services through a comprehensive
   community-based program for offenders who are in the custody of the BOP,
   the U.S. Attorney General, or under the supervision of the U.S. Probation
   Office. The RRC program seeks services to provide employment, residence
   development, and other self-improvement opportunities to assist federal
   offenders in becoming law-abiding citizens. Offerors were required to
   propose all personnel, management, equipment, supplies, and services to
   operate an RRC, along with the facility where the RRC will be located. The
   RFP anticipated award of an indefinite-delivery/requirements-type contract
   with fixed unit prices, with a 2-year base term and three 1-year options.

   Offerors were advised that proposals would be evaluated on the basis of
   the following factors: past performance, technical/management, and price.
   The technical/management evaluation factor had the following
   equally-weighted subfactors: site location (which had two sub-criteria:
   site validity and suitability, and community relations program),
   accountability, programs, facility, and personnel. The RFP stated that for
   purposes of award, the past performance factor was more important than the
   technical/management factor, and that those two factors, when combined,
   were "significantly more important than price." RFP sect. M.5. As relevant
   here, offerors were required to submit plans demonstrating their ability
   to provide an RRC facility within 120 days of contract award. Id. sect. J,
   Compliance Matrix, at 9. Offerors were also required to submit letters of
   support from members of the community where the RRC will be located, to
   notify local government and law enforcement officials of the proposed
   location, and to document any known concerns or potential opposition from
   the community to the placement of the RRC. Id. at 5-6.

   HCI and VOA were the only offerors to submit proposals by the closing date
   of April 6, 2007. As relevant here, HCI proposed to perform the contract
   at a location owned by the company, where it currently provides RRC
   services to the BOP. VOA proposed to perform the contract at a site that
   required renovations to comply with the solicitation requirements.

   The agency sent discussions notices to each offeror on July 19, 2007, to
   address deficiencies and concerns regarding their proposals. Among the
   concerns identified for VOA were its lack of a final lease agreement, and
   its lack of evidence that it had received zoning approval for its proposed
   facility. Agency Report (AR), Tab 3, VOA Discussions Questions, July 19,
   2007, at 1-2. Among the concerns identified for HCI were deficiencies in
   its response to various elements of the compliance matrix, including under
   the technical subfactors of programs, facility, and personnel. AR, Tab 4,
   HCI Discussions Questions, July 19, 2007, at 2-3.

   Following discussions and requests for final proposals, the BOP concluded
   that both offerors' proposals were technically acceptable, and that all
   concerns and deficiencies had been addressed. The agency's final
   evaluation of the offerors' proposals was as follows:

   +------------------------------------------------------------------------+
   |                          |         HCI          |         VOA          |
   |--------------------------+----------------------+----------------------|
   |Past Performance          |         Blue         |         Blue         |
   |--------------------------+----------------------+----------------------|
   |Technical Management      |    Green/Low Risk    |    Green/Low Risk    |
   |--------------------------+----------------------+----------------------|
   |-- Site Location          |   Green / Low Risk   |   Green / Low Risk   |
   |--------------------------+----------------------+----------------------|
   |-- Accountability         |   Blue / Low Risk    |   Blue / Low Risk    |
   |--------------------------+----------------------+----------------------|
   |-- Programs               |   Green / Low Risk   |   Green / Low Risk   |
   |--------------------------+----------------------+----------------------|
   |-- Facility               |   Green / Low Risk   |   Green / Low Risk   |
   |--------------------------+----------------------+----------------------|
   |-- Personnel              |   Green / Low Risk   |   Green / Low Risk   |
   |--------------------------+----------------------+----------------------|
   |Price                     |     $12,287,492      |     $11,266,261      |
   +------------------------------------------------------------------------+

   AR, Tab 8, Source Selection Decision (SSD), at 1-5. [1]

   In its award determination, the BOP recognized that although the offerors'
   proposals had received equal adjectival ratings, HCI's proposal "has
   several strengths that VOA does not (such as a fenced-in facility, and
   back-up generator), and has fewer and less significant weaknesses in their
   past performance." Id. at 5. Despite these differences between the
   proposals, the agency concluded that the additional strengths provided in
   HCI's proposal "were not considered significant, and . . . do not warrant
   paying a premium of $1,021,230.50 over the potential 5 year contract
   period." Id. The agency therefore selected VOA's proposal for award.

   The agency advised HCI on January 31, 2008, that VOA's proposal had been
   selected for award. HCI filed an agency-level protest with the BOP on
   February 6. The agency denied the protest on February 11, and HCI timely
   filed this protest with our Office on February 19.

   DISCUSSION

   HCI argues that the BOP's evaluation of the offerors' technical proposals
   was unreasonable, and that the agency's source selection decision was
   flawed based on the results of the technical evaluation and an
   unreasonable tradeoff determination.

   As a preliminary matter, the protester raised several new protest issues
   in its comments on the agency report. Under our Bid Protest Regulations, a
   protest based on other than alleged improprieties in a solicitation must
   be filed no later than 10 calendar days after the protester knew, or
   should have known, of the basis for protest, whichever is earlier. 4
   C.F.R. sect. 21.2(a)(2) (2008). This 10-day rule applies to all
   supplemental protest grounds arising from the agency report. See Exelon
   Servs. Fed. Group, B-291934, Apr. 23, 2003, 2003 CPD para. 86 at 7 n.4. An
   extension of time to file comments does not toll our timeliness
   requirements for the filing of new protest grounds. Id.

   Here, after receiving the agency report on March 24, HCI requested an
   extension of time for filing its comments. We granted an extension of
   time, but advised the protester that while we could grant an extension to
   file comments, we could not waive the requirement that all supplemental
   protest grounds be timely filed. Letter from GAO to parties, Apr. 1, 2008,
   at 2. The protester subsequently filed its comments on the agency report,
   along with several new arguments not raised in its initial protest, on
   April 10--17 days after receiving the agency report. Therefore, all
   protest arguments that were first raised in the protester's comments on
   the agency report are untimely.

   Evaluation of HCI's Technical Proposal

   HCI first argues that the BOP's evaluation of its proposal was
   unreasonable because the (1) the assignment of evaluation ratings for
   HCI's proposal was not in accordance with the terms of the solicitation,
   and (2) the agency unreasonably assigned HCI and VOA equal adjectival
   ratings, despite recognizing that HCI's proposals had strengths in areas
   where VOA's proposal either lacked the same strength, or had no identified
   strengths.

   The evaluation of an offeror's proposal is a matter within the agency's
   discretion, since the agency is responsible for defining its needs and the
   best method for accommodating them. U.S. Textiles, Inc., B-289685.3, Dec.
   19, 2002, 2002 CPD para. 218 at 2. In reviewing a protest against an
   agency's evaluation of proposals, including technical evaluations, our
   Office will examine the record to determine whether the agency's judgment
   was reasonable and consistent with the stated evaluation criteria and
   applicable procurement statutes and regulations. See Shumaker Trucking &
   Excavating Contractors, Inc., B-290732, Sept. 25, 2002, 2002 CPD para. 169
   at 3. A protester's mere disagreement with the agency's judgment in its
   determination of the relative merit of competing proposals does not
   establish that the evaluation was unreasonable. C. Lawrence Constr. Co.,
   Inc., B-287066, Mar. 30, 2001, 2001 CPD para. 70 at 4.

   First, HCI argues that because the agency recognized certain strengths in
   its proposal, the solicitation required the agency to assign its proposal
   a rating of "blue." We think that the protester's argument is based on an
   incorrect interpretation of the solicitation. In this regard, the RFP
   explained that only those proposals that have "significant strengths"
   would be eligible for a rating of "blue," whereas acceptable proposals
   without significant strengths would be rated "green":

     BLUE -- Very Good: Offeror's proposal meets and exceeds the requirements
     of the solicitation. Their proposal shows that they have a very good
     solution for meeting the needs and objectives of the program. One or
     more significant strengths exists. Weaknesses may exist, but none are
     considered significant and are easily correctable.

     GREEN -- Acceptable: Offeror's proposal meets the [] minimum
     requirements of the solicitation. Their proposal shows they have an
     acceptable solution for meeting the needs and objectives of the program.
     Strengths and weaknesses may exist. The weaknesses are correctable.

   RFP sect. M.5.

   The BOP's evaluation of HCI's proposal under the site location, programs,
   facilities, and personnel subfactors concluded that although HCI's
   proposal had several strengths, they were not "significant strengths" that
   merited a rating of blue/very good. For example, under the site location
   evaluation subfactor, HCI argues that its proposal should have received an
   adjectival rating of "blue" rather than "green." The agency determined
   that HCI's proposal had no weaknesses, and had strengths based on its
   proposal to provide a backup generator. AR, Tab 8, SSD, at 2. The agency
   did not, however, identify any "significant strengths" that would warrant
   a "blue" rating.

   HCI does not address why its proposal provided significant strengths that
   exceeded the minimum requirements of the solicitation and thereby merited
   a higher rating. Rather, the protester merely argues that the BOP was
   required under the terms of the solicitation to assign a higher rating
   based on the identification of any strength. Protester's Comments on AR,
   at 6. On this record, we find no basis to question the reasonableness of
   the agency's evaluation.

   Second, the protester challenges the BOP's assignment of ratings to VOA's
   proposal that were equal to those assigned to HCI's proposal, despite
   differences recognized by the agency between those proposals. For example,
   HCI's and VOA's proposal were each rated "green" under the programs
   evaluation subfactor. The agency recognized that HCI's proposal had a
   strength for proposing a good ratio of monitors and case managers to
   inmates, and that it had no weaknesses. AR, Tab 8, SSD, at 3. In contrast,
   VOA's proposal had no strengths or weaknesses. Id. at 4. The agency's
   assignment of a "green" rating to VOA's proposal was consistent with the
   solicitation, which stated that "green" is an "acceptable" rating, where
   "[s]trengths and weaknesses may exist," and that therefore the rating
   reasonably encompassed a proposal that was technically acceptable, but had
   no strengths or weaknesses under the evaluation criterion. RFP sect. M.5.
   Thus, contrary to HCI's arguments, the solicitation clearly anticipated
   that the agency could, as it did here, assign the same adjectival ratings
   to proposals that had differing numbers of strengths and weaknesses. On
   this record, we find no basis to conclude that the BOP's evaluation of
   offerors' proposals under this evaluation criterion was unreasonable.

   Moreover, as discussed below, the BOP's source selection determination did
   not rely solely on the adjectival scores assigned to each offerors'
   proposal; rather, the agency noted that HCI's proposal offered more
   strengths and fewer weaknesses as compared to VOA's proposal, but
   concluded that HCI's proposal was ultimately not worth the price premium
   of over $1 million, or 8.3 percent. In this regard, agencies' use of
   evaluation ratings for offerors' proposals, whether numeric, color or
   adjectival, are but guides to, and not substitutes for, intelligent
   decisionmaking; they do not mandate automatic selection of a particular
   proposal. Jacobs COGEMA, LLC, B-290125.2, B-290125.3, Dec. 18, 2002, 2003
   CPD para. 16 at 31.

   Evaluation of VOA's Technical Proposal

   The protester argues that the BOP's evaluation of VOA's technical proposal
   was unreasonable because the agency failed to recognize several areas
   where VOA's proposal was unacceptable or had weaknesses. As discussed
   below, we conclude that the agency's evaluation of VOA's proposal was
   reasonable and consistent with the solicitation.

   The protester first argues that VOA's proposal should have received a
   lower rating under the site location and facilities subfactors because,
   while HCI currently owns and operates an RRC facility, VOA does not own a
   site, and instead proposed to lease and renovate an unoccupied building
   that is not currently operating as an RRC. The RFP, however, did not
   require offerors to propose to locate their RRC in an occupied or
   completed building, nor did the RFP require offerors to propose a site
   that was currently operating as an RRC. Rather, the solicitation required
   only that the successful offeror submit documentation showing that it has
   the right to use its proposed facility, and that the facility would be
   ready for contract performance within 180 days from contract award. RFP
   sect. J, compliance matrix, at 5, 9. The BOP determined that VOA's
   proposal was acceptable because it had "submitted a Final Lease Agreement
   [and], documentation stating a residential reentry center was an allowable
   use of the proposed site." AR, Tab 5, Technical Management Evaluation,
   Dec. 3, 2007, at 3. We think the record shows that the agency reasonably
   evaluated VOA's proposal and concluded that it met the solicitation
   requirements.[2]

   HCI next argues that the agency's evaluation of VOA's proposal under the
   site location subfactor failed to consider a letter from a member of the
   Puerto Rico House of Representatives which expressed concern regarding the
   placement of an RRC in the area proposed by VOA. The agency states,
   however, that it was unaware of this letter at the time it conducted its
   evaluation. Supp. AR at 2. Furthermore, HCI does not allege that either
   the BOP or VOA knew or should have known of the letter. In this regard,
   the letter itself does not indicate that it was provided to either the BOP
   or VOA, or was otherwise made public. On this record, we find no merit to
   HCI's argument that the agency's evaluation was defective for not
   considering this letter.[3]

   Finally, HCI argues that the BOP should have assigned a lower rating to
   VOA's proposal because of alleged asbestos problems in VOA's proposed
   facility. The record here, however, shows that VOA addressed the asbestos
   concerns in its proposal by providing for an assessment of lead and
   asbestos issues for the building. AR, Tab 3, VOA Response to Discussions
   Questions, Aug. 8, 2007, attachs. 8-11; Tab 5, Technical Evaluation
   Consensus Working Papers, at 12. The protester does not explain why the
   agency's evaluation here was unreasonable. On this record, we conclude
   that HCI's arguments lack merit.

   Source Selection Decision

   HCI argues that the BOP's source selection decision was flawed based on
   the agency's evaluation of the offerors' technical proposals. For the
   reasons discussed above, we conclude that the BOP's evaluations of the
   offerors' proposals were reasonable, and that they provide no basis to
   challenge the reasonableness of the source selection decision.

   HCI also argues that its proposal was superior to VOA's, and that the
   difference in the offerors' proposed price should not have been the basis
   for the award to VOA. Source selection officials in negotiated
   procurements have broad discretion in determining the manner and extent to
   which they will make use of the technical and price evaluation results;
   price/technical tradeoffs may be made, and the extent to which one may be
   sacrificed for the other is governed only by the test of rationality and
   consistency with the solicitation's evaluation criteria. Atteloir, Inc.,
   B-290601, B-290602, Aug. 12, 2002, 2002 CPD para. 160 at 5. Even where, as
   here, cost is the least important evaluation factor, an agency may
   properly select a lower-cost, lower-rated proposal if it reasonably
   decides that the cost premium involved in selecting a higher-rated,
   higher-cost proposal is not justified. Yang Enterprises, Inc.; Santa
   Barbara Applied Research, Inc., B-294605.4 et al., April 1, 2005, 2005 CPD
   para. 65 at 11-12.

   Here, the record shows that the BOP assigned the same adjectival ratings
   to the offerors' proposals, but also recognized that HCI's proposal
   provided several strengths and advantages as compared to VOA's proposal.
   AR, Tab 8, SSD, at 5. The agency concluded, however, that the strengths in
   HCI proposal "were not considered significant, and . . . they do not
   warrant paying a premium of $1,021,230.50 over the potential 5 year
   contract period." Id. The protester's disagreement with agency's judgment
   that the additional strengths in HCI's proposal did not merit its higher
   price provides no basis to sustain the protest.

   The protest is denied.[4]

   Gary L. Kepplinger
   General Counsel

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

   [1] The agency used an evaluation scheme of Blue/Very Good,
   Green/Acceptable, Yellow/Poor, and Red/Unacceptable. The technical
   management factor and subfactors were also evaluated for proposal risk.

   [2] HCI also raises an untimely protest ground here, alleging in its
   comments on the agency report that VOA's proposed facility will be located
   in an area that does not have the proper zoning. HCI's argument concerning
   the zoning of VOA's proposed site is untimely because it was not raised
   within 10 days of when the protester knew or should have known of the
   basis for this argument. 4 C.F.R. sect. 21.2(a)(2). In this regard, HCI's
   protest identified the building proposed by VOA for its RRC, arguing that
   it was not an adequate facility; HCI did not, however, challenge the
   zoning of the area in which the building was located. In any event, the
   record shows that VOA submitted adequate documentation showing that the
   zoning was acceptable for the proposed RRC use, and that the agency
   reasonably relied upon these documents. AR, Tab 3, VOA Response to
   Discussions Questions, Aug. 8, 2007, attach. 2; Tab 5, Technical
   Management Evaluation, Dec. 3, 2007, at 3.

   [3] HCI also raises two untimely protest arguments regarding this
   evaluation criterion: (1) the letters submitted by VOA from the community
   did not show sufficient support for VOA's proposal, and (2) VOA did not
   submit letters of support from local government officials. Both of these
   allegations are untimely because they were raised for the first time in
   HCI comments on the agency report, which were filed more than 10 days
   after the protester received the report. In any event, HCI's arguments
   concerning the required letters of support from community members
   submitted by VOA merely express disagreement as to whether they were
   sufficiently strong or independent in their support of VOA, and thus
   provide no basis to sustain the protest. HCI's second argument, that VOA
   did not submit letters of support from local government officials, lacks
   merit because this was not an RFP requirement. In this regard, the RFP
   required offerors to notify local government officials of their plans to
   run an RRC, but did not require letters of support from those officials.
   RFP sections L.6, J, Compliance Matrix, at 5.

   [4] The protester raises numerous collateral arguments in its protest that
   we do not address here. For example, HCI argues that VOA's initial
   proposal did not include letters of support from community members that
   were required under the site location subfactor of the technical
   evaluation factor. This argument lacks merit because the record shows that
   both offerors were provided an opportunity during discussions to correct
   weakness and deficiencies in their proposals, and that VOA subsequently
   provided the required letters. We have reviewed all of the protest grounds
   raised by HCI and find that they are all either untimely or lack merit.