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B-231372.2, Sep 6, 1988, 88-2 CPD 215

B-231372.2 Sep 06, 1988
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A determination was made by Interior that continuation of the contract is in the best interests of the government and that urgent and compelling circumstances exist which would not permit awaiting our decision in the matter. 31 U.S.C. Each offeror in the initial competitive range were given the opportunity to revise its technical and price proposal. The revised technical proposals were evaluated as follows: Points Awarded Out of Offerors Maximum 100 Points A&C 100 Firm A 100 Federal Services 96 Firm B 96 Firm C 96 Although Interior did not evaluate offerors' revised price proposals. BAFOs were requested from these two firms. Federal Services argues that its proposal should have been included in the final competitive range because its proposal would have had a reasonable chance of being selected for award if Interior had requested Federal Services' BAFO and evaluated its price proposal.

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B-231372.2, Sep 6, 1988, 88-2 CPD 215

PROCUREMENT - Competitive Negotiation - Offers - Competitive ranges - Exclusion - Evaluation errors PROCUREMENT - Competitive Negotiation - Offers - Evaluation errors - Prices DIGEST: Agency's exclusion of protester's technically acceptable proposal, without considering price, violated Federal Acquisition Regulation Sec. 15.609(a).

Federal Services, Inc.:

Federal Services, Inc., protests the award of a fixed-price contract to A&C Building and Industrial Maintenance Corp., under request for proposals (RFP) No. 14-01-0001-88-R-10, issued by the Department of the Interior for the procurement of custodial services. Federal Services asserts that Interior improperly excluded its proposal from the competitive range.

Interior has notified us that performance of the contract has continued notwithstanding our notification of the protest within 10 days of the date of the contract award. A determination was made by Interior that continuation of the contract is in the best interests of the government and that urgent and compelling circumstances exist which would not permit awaiting our decision in the matter. 31 U.S.C. Sec. 3553(d)(2) (Supp. IV 1986); 4 C.F.R Sec. 21.4(b) (1988).

We sustain the protest.

The RFP contemplated the award of a contract to the responsible offeror whose proposal, conforming to the solicitation, had the highest overall price and technical point score. The RFP informed offerors that technical factors, firm experience, qualifications of managers/supervisors, and technical approach/plan of operation, would be worth a maximum of 100 points while price would be a maximum of 25 points. The RFP contained a formula for determining the number of points to be awarded to price proposals, with the low price proposal receiving the maximum 25 points and the high price proposal receiving 0 points. The solicitation also stated that Interior would only evaluate price proposals of those offerors in the competitive range after discussion and receipt of best and final offers (BAFO).

Interior received 15 offers in response to the RFP and determined based upon technical proposals that five offers, including those of Federal Services, the incumbent contractor, and of A&C, should be included in the initial competitive range. After discussions, each offeror in the initial competitive range were given the opportunity to revise its technical and price proposal. The revised technical proposals were evaluated as follows:

Points Awarded Out of

Offerors Maximum 100 Points

A&C 100

Firm A 100

Federal Services 96

Firm B 96

Firm C 96

Although Interior did not evaluate offerors' revised price proposals, A&C had submitted the low price proposal and Federal Services had submitted the next lowest price proposal. On the basis of the revised technical proposals, Interior determined that the final competitive range should include only A&C and Firm A, and BAFOs were requested from these two firms. On May 13, 1988, Interior awarded a contract to A&C.

Federal Services protests that Interior improperly excluded its proposal from the competitive range. Specifically, Federal Services argues that its proposal should have been included in the final competitive range because its proposal would have had a reasonable chance of being selected for award if Interior had requested Federal Services' BAFO and evaluated its price proposal.

The evaluation of proposals and determination of whether an offeror is in the competitive range are matters within the discretion of the contracting agency since it is responsible for defining its needs and must bear the burden of any difficulties resulting from a defective evaluation. Kinton, Inc., B-228233, et al., Jan. 28, 1988, 88-1 CPD Para. 86. However, the Federal Acquisition Regulation (FAR), Sec. 15.609(a) (FAC 84-16), required that the competitive range be determined on the basis of cost or price and other factors that were stated in the solicitation and include all proposals that have a reasonable chance of being selected for award. that basis, we have held that an agency may not exclude a technically acceptable offer from the competitive range without consideration of price. Howard Finley Corp., B-226984, 66 Comp.Gen. (1987), 87-2 CPD Para. 4. While Howard Finley concerned the determination of an initial competitive range, we think the FAR requirement to consider cost or price in making competitive range determinations applies equally to subsequent revised competitive range determinations which are based on technical proposals.

As Interior acknowledges, the solicitation's evaluation scheme, which provided for the determination of the competitive range solely based upon the evaluation of technical proposals, and Interior's evaluation thereunder, is in violation of the FAR requirement that an agency must evaluate the price of technically acceptable proposals in establishing the competitive range. Interior, however, argues that Federal Services was not prejudiced by its violation of the FAR because Federal Services would not have had the highest combination point score even if its price proposal had been evaluated.

Interior states that Federal Services and other offerors in the initial competitive range received discussions and were given the opportunity to revise their technical and price proposals, and as a result of this opportunity, Federal Services raised its technical proposal score 13 points to a total technical score of 96 points. /1/ Interior contends that since the only technical area in which Federal Services was downgraded was corporate experience, the protester could not have improved its technical proposal and that, if Federal Services' higher price revised price proposal had been considered, the protester's technical and price score would have been 11 points below A&C's combined score. Interior states that the evaluation of the revised technical and price proposals of A&C, Firm A, and Federal Services would result in the following point scores:

Offeror Technical Price Total

A&C 100 25 125

Federal Services 96 18.35 114.35

Firm A 100 0 100

We do not agree with Interior that Federal Services has not been prejudiced. Federal Services, the incumbent contractor, received perfect scores in all technical areas other than corporate experience, where it received 6 of 10 possible points. Federal Services should have been provided with the opportunity to submit a more competitive price and we have recognized that it is not uncommon for offerors to lower their prices in the later stages of negotiation. Bromma, Inc., B-225663, May 6, 1987, 87-1 CPD Para. 480. If Federal Services submitted the low price in response to the request for BAFOs, under the formula contained in the RFP for determining point scores, Federal Services could have received the highest combined technical and price score and, on that basis, could have been entitled to award.

Furthermore, we have held that even where the RFP contains a numerical evaluation formula which includes price, the contracting officer retains the discretion to examine the point scores to determine what significance a point differential between offerors represents. If there is no significant difference in technical merit, then award may be made to the lower cost or priced proposal, even though its total point score is lower. Lektron, Inc., B-228600 Jan. 25, 1988, 88-1 CPD Para. 69. Here, the difference between Federal Services' technical score and that of A&C was 4 points. There is no indication in the record that Federal Services' reduced score for corporate experience, the only area in which it lost points, was due to anything other than the fact that it had a lower absolute number of years of experience than did A&C. However, Interior was specifically familiar with the quality of Federal Services' experience, since it had been gained in Federal Service's capacity as incumbent, performing the services required under the RFP. Under these circumstances, we find that Federal Services should have been afforded the opportunity to have the contracting officer at least consider the significance of the point score differential relative to the price difference.

The protest is sustained.

The only remaining issue is the appropriate remedy. The contract awarded to A&C was for a basic performance period ending September 30, 1988, and the government has retained the right to exercise up to four 1-year options. We recommend, pursuant to our Bid Protest Regulations, 4 C.F.R. Sec. 21.6(a)(1), that Interior request BAFOs from the five offerors in the initial competitive range. In conducting this new round of BAFOs, Interior should comply with the FAR requirement to evaluate both price and technical proposals. If a firm other than A&C is selected as a result of the agency's evaluation of BAFOs, then Interior should either refrain from exercising the first option, or terminate the contract for convenience if the first option has been exercised, and award the contract to that firm.

We also find the protester to be entitled to its costs of filing and pursuing the protest, including attorneys' fees. 4 C.F.R. Sec. 21.6(d)(1). Federal Services should submit its claim for such costs directly to Interior. 4 C.F.R. Sec. 21.6(e).

/1/ Interior informed Federal Services that its revised price proposal did not constitute a BAFO, but that BAFOs would be requested subsequently.

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