Crown Title Corporation
B-298426, Sep 21, 2006
Crown Title Corporation protests the award of a contract to Lawyers Advantage Title Group, Inc. under request for proposals (RFP) No. R-PHI-00948, a small business set-aside issued by the Department of Housing and Urban Development (HUD) for real estate closing agent services for HUD properties located in Maryland. Crown primarily contends that, since the RFP provided that technical merit was significantly more important than price, the agency should have awarded the contract to Crown based on its higher-rated, higher-priced proposal.
We deny the protest.
B-298426, Crown Title Corporation, September 21, 2006
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.
Agency's award to offeror that submitted lower-rated, lower-priced proposal in a best value procurement is proper where the source selection was based on a reasonable determination that the substantial price premium associated with protester's higher-rated, higher-priced proposal was not justified given the level of technical competence available at the lower price.
Crown Title Corporation protests the award of a contract to Lawyers Advantage Title Group, Inc. under request for proposals (RFP) No. R-PHI-00948, a small business set-aside issued by the Department of Housing and Urban Development (HUD) for real estate closing agent services for HUD properties located in
The RFP, issued on
Eleven proposals were received by the August 15 closing date; six of the proposals were included in the competitive range. Discussions were conducted and final proposal revisions were submitted by November 28. Crown, the incumbent contractor, submitted a proposal rated excellent overall with the fourth low total evaluated price of $[deleted]; Crown proposed a price of $[deleted] per closing for the base year [deleted]. Lawyers' proposal was rated good overall; the firm proposed the lowest evaluated price of $[deleted], reflecting a proposed price of $[deleted] for each closing [deleted].
Both firms' proposals received favorable technical evaluations. The technical evaluation panel (TEP) rated the Crown proposal excellent under all four evaluation factors, reflecting subfactor ratings of mostly excellent with some ratings of good; the proposal was also assessed as having very low risk. The Lawyers proposal received one rating of excellent and three ratings of good under the four equally weighted evaluation factors, reflecting ratings of excellent and good under the subfactors; the proposal was assessed as having low risk. While the TEP concluded that both firms can perform the work satisfactorily, the TEP had concerns that Lawyers' low price for this fixed-price contract did not reflect the level of effort the firm detailed in its technical proposal. TEP Report,
Upon review of the TEP report, the contracting officer took note of the technical strengths cited for the Lawyers proposal as well as its substantially lower price, which is less than one-fifth of Crown's evaluated price. The contracting officer also noted that Lawyers reported that it has been performing similar closing agent services for HUD for the last 15 years, and that it is currently performing closings for HUD at low prices similar to those proposed here. The contracting officer had her staff contact the HUD contracting personnel administering some of Lawyers' current closing agent contracts to confirm the reasonableness of the firm's prices under the current RFP and, in effect, to also assess the firm's understanding of the requirements by reviewing the quality of its performance at those prices. The contracting officer learned that the firm has been successfully performing similar closing agent services, for a similarly high volume of HUD properties in
After reviewing the TEP's comparative assessment of the proposals, and the contracting officer's list of comparative strengths of the two firms compiled from the TEP report, including the confirmation that Lawyers is performing similar HUD contracts successfully at similarly low prices, the SSA concluded that the technical distinctions between the proposals were not significant and that an award to Crown would not be worth the significant price premium associated with its proposal. Source Selection Decision Document, undated; Declaration of SSA,
Crown challenges the reasonableness of the agency's source selection. The protester contends that the contracting officer and SSA improperly converted the procurement to one based on low price among technically acceptable offers instead of following the RFP's provision that technical superiority was to be significantly more important than price. As explained below, we conclude that the record shows that the evaluation and selection decision here were reasonable and consistent with the RFP.
In reviewing a protest against an agency's evaluation of proposals and award, including tradeoff determinations, we examine the record to determine whether the agency's judgment was reasonable and consistent with the solicitation's evaluation criteria and applicable statutes and regulations. Ostrom Painting & Sandblasting, Inc., B-285244,
Based on the record here, we find the tradeoff determination and award reasonably based. Our review, as discussed further below, confirms not only the SSA's view of the comparable technical merit of the proposals, but also the reasonableness of the determination that, given the level of technical merit available at a significantly lower price, an award to Crown based on its slightly higher-rated proposal was not warranted.
The evaluation record here is clear. As the contracting offficer points out in her analysis of the TEP report, both firms' proposals presented comparable strengths under each evaluation factor. For instance, under the prior experience factor, where both firms were rated excellent, each was credited for extensive experience with HUD and other property closings at similar volumes and in similar geographic areas. For the technical and management factor, both firms met state licensing requirements, provided comprehensive quality control plans, set out detailed work strategies, and have several offices in the area. Given the similarity in the noted strengths for both proposals, we find reasonable the contracting officer's conclusion that the difference in technical ratings assigned for the factor (excellent for Crown and good for Lawyers) does not reflect any material difference in technical merit.
For past performance, Crown's proposal was rated excellent and Lawyers' was rated good. While there is little explanation of the difference in past performance ratings in the record, our review shows that at least two past performance references rated Lawyers excellent under each subfactor. Additionally, while one evaluator apparently noted some negative performance information for the firm, the same evaluator also cited numerous strengths for the firm. For the final technical factor, personnel qualifications, the record also supports the SSA's conclusion that the two firms' proposals were comparable in technical merit. Both firms' staff resumes and biographies showed that all proposed key personnel met or exceeded the RFP's experience requirements and that the level of effort proposed was satisfactory for successful performance of the work. While Crown was credited (and rated excellent) for having personnel committed solely to this project, it is also clear in the evaluation record that Lawyers (rated good for the personnel factor) was found to have fully staffed the effort with qualified, experienced personnel, for which its proposal was rated favorably.
It is well-established that adjectival ratings are merely guides to intelligent decisionmaking; they do not mandate automatic selection of a particular proposal. See Calspan Corp., B-255268,
Crown argues that the agency failed to perform an adequate evaluation of the realism of Lawyers' low price. We disagree. There is no requirement that a realism analysis be performed when award of a fixed-price contract is contemplated. McDonnell Douglas Corp., B-259694.2, B'259694.3,
We recognize, as noted above, that the RFP states that prices were to be reviewed to determine whether they were necessary and reasonable, reflected a clear understanding of the requirements, and were consistent with the methods described in the offeror's proposal. RFP at 48. Consistent with this provision, the TEP and the contracting officer fully considered the issues raised by Lawyers' low price. Accordingly, we see no basis to conclude that the agency's consideration of the firm's understanding of the work based on the firm's successful performance of similar services at similar prices was unreasonable or was otherwise inconsistent with the price review provision of the RFP.
The protest is denied.
Gary L. Kepplinger
 Lawyers reports that its low pricing for its closing agent services contracts reflects its anticipation of additional revenue [deleted].
 To the extent the protester alleges that during discussions it was misled to believe that its price was too low, we find nothing in the record to support the contention. Rather, like the other offerors, Crown was asked to explain how it intended to perform at prices well below the government estimate and those of other offerors; we do not agree with the protester that such inquiry conveyed, as Crown contends, that the firm should not reduce its price in its final proposal revision. The protester was simply given the opportunity to review and explain its pricing; the decision to leave its prices unchanged reflects the exercise of the firm's business judgment, not improper conduct by the agency. Professional Landscape Mgmt. Servs., Inc., B-286612,