B-170633(1), MAY 3, 1971

B-170633(1): May 3, 1971

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

ALTHOUGH PROTESTANT'S PROPOSAL WAS TECHNICALLY ACCEPTABLE AND RANKED ONLY EIGHT POINTS BEHIND THE SUCCESSFUL PROPOSER'S. CONTRACTING OFFICER'S DETERMINATION THAT THE TECHNICAL DIFFERENCES WERE SIGNIFICANT. JUSTIFIED ACCEPTANCE OF THE HIGHER PRICED OFFER AND DISTINGUISHED THIS CASE FROM B- 169148 WHERE AWARD WAS REQUIRED TO BE GIVEN TO LOWER PRICED OFFEROR WHOSE TECHNICAL RATING WAS SIX POINTS BELOW THE ORIGINAL AWARDEE BUT WHOSE TECHNICAL CAPACITY WAS CONSIDERED ESSENTIALLY EQUAL TO THAT OF THE HIGHER RATED OFFEROR. INCORPORATED: REFERENCE IS MADE TO YOUR LETTERS OF AUGUST 17. THE CONTRACTOR WAS TO PROVIDE ALL MANAGEMENT. THE CONTRACT WAS TO BE AWARDED FOR A ONE-YEAR PERIOD FROM AUGUST 1.

B-170633(1), MAY 3, 1971

BID PROTEST - NEGOTIATED AWARD - PRICE V QUALITY DENYING PROTEST OF SYNERGY, INC., AGAINST THE AWARD TO TECHNICAL SCIENTIFIC SERVICE OF A NEGOTIATED CONTRACT UNDER AN RFP ISSUED BY WRIGHT- PATTERSON AFB, OHIO, FOR LABOR AND MATERIALS REQUIRED TO PERFORM PREVENTIVE MAINTENANCE ON CERTAIN ELECTRONIC EQUIPMENT. ALTHOUGH PROTESTANT'S PROPOSAL WAS TECHNICALLY ACCEPTABLE AND RANKED ONLY EIGHT POINTS BEHIND THE SUCCESSFUL PROPOSER'S, CONTRACTING OFFICER'S DETERMINATION THAT THE TECHNICAL DIFFERENCES WERE SIGNIFICANT, JUSTIFIED ACCEPTANCE OF THE HIGHER PRICED OFFER AND DISTINGUISHED THIS CASE FROM B- 169148 WHERE AWARD WAS REQUIRED TO BE GIVEN TO LOWER PRICED OFFEROR WHOSE TECHNICAL RATING WAS SIX POINTS BELOW THE ORIGINAL AWARDEE BUT WHOSE TECHNICAL CAPACITY WAS CONSIDERED ESSENTIALLY EQUAL TO THAT OF THE HIGHER RATED OFFEROR.

TO SYNERGY, INCORPORATED:

REFERENCE IS MADE TO YOUR LETTERS OF AUGUST 17, 1970, AND JANUARY 5, 1971, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANOTHER CONCERN UNDER REQUEST FOR PROPOSALS NO. F 33601-71-R-0002, ISSUED JUNE 22, 1970, BY THE PROCUREMENT DIVISION, WRIGHT-PATTERSON AIR FORCE BASE, OHIO.

THE CONTRACTOR WAS TO PROVIDE ALL MANAGEMENT, LABOR, MATERIALS, PARTS AND EQUIPMENT AS REQUIRED TO PERFORM PREVENTIVE MAINTENANCE ON CERTAIN ELECTRONIC EQUIPMENT AND R&D FACILITIES UNDER THE JURISDICTION OF VARIOUS AIR FORCE LABORATORIES. THE CONTRACT WAS TO BE AWARDED FOR A ONE-YEAR PERIOD FROM AUGUST 1, 1970, THROUGH JULY 31, 1971, WITH TWO OPTION PERIODS OF ONE YEAR EACH.

SUBPARAGRAPH A ON PAGE 22 OF THE RFP PROVIDED THAT TECHNICAL PROPOSALS WOULD BE EVALUATED FOR TECHNICAL ACCEPTANCE UNDER THE CRITERIA LISTED UNDER TECHNICAL PROPOSAL, SECTION C. SUBPARAGRAPH B PROVIDED THAT COST PROPOSALS WOULD BE EVALUATED EXCLUSIVE OF OPTIONS. SEPARATE TECHNICAL AND COST PROPOSALS WERE CONTEMPLATED. SUBPARAGRAPH C ON PAGE 22 OF THE RFP STATED THAT AWARD WOULD BE PREDICATED ON NEGOTIATIONS CONDUCTED AFTER COMPLETION OF TECHNICAL EVALUATIONS, THAT NEGOTIATIONS WOULD BE CONDUCTED ONLY WITH THOSE OFFERORS CONSIDERED TO BE TECHNICALLY QUALIFIED AND WITHIN A COMPETITIVE PRICE RANGE AND THAT THE GOVERNMENT RESERVED THE RIGHT TO AWARD A CONTRACT WITHOUT NEGOTIATION AND WITHOUT DISCUSSION OF OFFERS RECEIVED.

SECTION C, TECHNICAL PROPOSAL, ON PAGE 20 OF THE RFP, ADVISED OFFERORS THAT THE TECHNICAL PROPOSAL SHOULD NOT MAKE REFERENCE TO COST OR PRICE DATA AND THAT THE EVALUATION OF THAT PORTION WOULD BE STRICTLY ON THE BASIS OF TECHNICAL MERIT. OFFERORS WERE ALSO ADVISED OF CERTAIN MINIMUM INFORMATION TO BE INCLUDED WITH THE TECHNICAL PROPOSAL. THIS MINIMUM INFORMATION INCLUDED A STATEMENT REGARDING THE PERSONNEL TO BE ASSIGNED TO EACH POSITION INCLUDING RESUMES. OFFERORS WERE ADVISED THAT SINCE ALL PERSONNEL HAD TO BE ON-SITE AT THE TIME OF CONTRACT AWARD, THEY HAD TO BE CURRENTLY EMPLOYED BY THE OFFEROR, OR THE OFFEROR HAD TO HAVE A FIRM AND IRREVOCABLE WRITTEN AGREEMENT, DISCLOSED IN THE TECHNICAL PROPOSAL, TO OBTAIN QUALIFIED PERSONNEL NOT CURRENTLY IN HIS EMPLOY. ALSO REQUIRED WERE EVIDENCE OF THE OFFEROR'S BACKGROUND AND EXPERIENCE IN ALL FIELDS RELATED TO WORK UNDER THE CONTRACT, A DESCRIPTION OF THE ORGANIZATIONAL STRUCTURE AND A DISCUSSION OF THE OFFEROR'S APPROACH TO ADMINISTERING THE PROGRAM. PAGES 12 THROUGH 19 GAVE DETAILED INFORMATION WITH RESPECT TO THE EXPERIENCE REQUIREMENTS FOR THE VARIOUS EMPLOYEES AND ALSO DESCRIBED THE ASSIGNMENTS OF SUCH EMPLOYEES.

SIX PROPOSALS WERE RECEIVED BY THE CLOSING DATE OF JULY 8, 1970, AND THE TECHNICAL PROPOSALS WERE EVALUATED BY A PANEL OF PERSONNEL DRAWN MAINLY FROM LABORATORIES WHO WERE FAMILIAR WITH THE REQUIREMENTS OF THE RFP. THE TECHNICAL SCIENTIFIC SERVICES (TSS) PROPOSAL RECEIVED 88 POINTS AND YOUR PROPOSAL RECEIVED 80 POINTS. ALL OF THE OTHER PROPOSALS WERE FOUND TO BE TECHNICALLY UNACCEPTABLE AND WERE NOT CONSIDERED FURTHER.

THE TECHNICAL EVALUATION REPORT ON THE RFP DATED JULY 24, 1970, RECOMMENDED AN AWARD TO TSS BASED ON THE FOLLOWING CONSIDERATIONS:

"(A) TSS (88 POINTS) THIS WAS THE ONLY ACCEPTABLE PROPOSAL WHICH PRESENTED A COMBINATION OF CAREFUL COMPLIANCE WITH ALL REQUIREMENTS, GOOD CONTRACT HISTORY, GOOD COMPANY EXPERIENCE WITH EXCELLENT PERSONNEL AND FACILITIES. THEIR STREAMLINED MANAGEMENT OF THE PROGRAM WITH A MINIMUM OF 'RED TAPE' ON ORDERING SUPPLIES TOGETHER WITH THE NEARBY AVAILABILITY OF EXTENSIVE SENIOR ENGINEERING TALENT (IF NECESSARY) AND SHOP FACILITIES ARE CONSIDERED THE STRONG POINTS OF THIS PROPOSAL. 'SPEED OF RESPONSE' IS VERY IMPORTANT IN HANDLING MAINTENANCE OF CRITICAL EQUIPMENT; THIS COMPANY IS WELL ORGANIZED FOR THIS TYPE OF BUSINESS. THE AWARD OF THIS CONTRACT TO THIS COMPANY IS STRONGLY RECOMMENDED TO BE IN THE BEST INTEREST OF THE GOVERNMENT.

"(B) SYNERGY (80 POINTS) ALTHOUGH OVERALL THIS PROPOSAL RATED ACCEPTABLE, IT WAS QUITE NOTICEABLY WEAK IN PERSONNEL QUALIFICATIONS. FEW, IF ANY, DEGREE LEVEL PEOPLE WERE AVAILABLE AND A NUMBER OF PEOPLE WERE NOT YET EMPLOYED BY THE COMPANY. OTHERWISE, THIS ORGANIZATION IS CONSIDERED WELL QUALIFIED FOR THIS WORK."

THE PRICE PROPOSALS FROM TSS AND YOUR CONCERN COMPARED AS FOLLOWS:

PERIOD SYNERGY TSS

FIRST YEAR $268,700.80 $285,777.60

SECOND YEAR OPTION $282,428.80 $311,403.20

THIRD YEAR OPTION $294,451.20 $339,233.60

AIR FORCE'S REPORT STATES AS FOLLOWS WITH RESPECT TO THE PRICE EVALUATION:

"THE ABOVE ARE BASED UPON A TIME AND MATERIAL AND LABOR HOUR TYPE OF CONTRACT ASSUMING BOTH FIRMS WOULD REQUIRE AN EQUAL AMOUNT OF TIME TO ACCOMPLISH THE SAME WORK ORDERS. HOWEVER, THE INCUMBENT CONTRACTOR COULD BE EXPECTED TO COMPLETE MANY OF THE VARIOUS JOBS MORE QUICKLY, AND THEREFORE AT LESS EXPENSE TO THE GOVERNMENT, THAN A NEW FIRM WITH PERSONNEL WHO WERE UNFAMILIAR WITH THE SPECIAL EQUIPMENT. FURTHERMORE, MANY OF THE LABORATORY R&D PROJECTS ARE HIGHLY CRITICAL AND COULD BE PLACED IN SERIOUS JEOPARDY BY GAPS OR DELAYS IN THE WORK TO BE DONE ON THE EQUIPMENT INVOLVED."

A CONTRACT WAS AWARDED TO TSS ON AUGUST 10, 1970, FOR A ONE-YEAR PERIOD. THE AIR FORCE CONTENDS THAT AWARD WAS MADE, WITHOUT CONDUCTING WRITTEN OR ORAL DISCUSSIONS, ON THE BASIS OF THE PROPOSAL AS SUBMITTED. AS IS FURTHER INDICATED BELOW, YOU DISPUTE THE POSITION THAT NO DISCUSSIONS WERE HELD BEFORE AWARD. ESSENTIALLY, IT IS YOUR POSITION THAT AWARD SHOULD HAVE BEEN MADE TO YOUR FIRM AS TECHNICALLY ACCEPTABLE, CAPABLE OF PERFORMING THE CONTRACT AND RESULTING IN THE LOWEST COST TO THE GOVERNMENT.

WHILE PRICE IS ALWAYS A FACTOR IN GOVERNMENT PROCUREMENT, IT IS NOT NECESSARILY THE DOMINANT FACTOR IN NEGOTIATION. SEE 44 COMP. GEN. 439 (1965). IT IS PROPER TO CONSIDER TECHNICAL AND OTHER FACTORS IN ADDITION TO PRICE WHICH ARE SET OUT IN THE SOLICITATION. WHILE THE RELATIVE ORDER OF IMPORTANCE OF THE EVALUATION FACTORS SHOULD HAVE BEEN INCLUDED IN THE SOLICITATION, OFFERORS WERE ADVISED OF THE IMPORTANCE ATTACHED TO THE EVALUATION OF TECHNICAL PERSONNEL.

YOUR SUPPLEMENTAL LETTER OF JANUARY 5, 1971, HAS RAISED THE FOLLOWING POINTS WITH RESPECT TO YOUR PROTEST:

"1. NEGOTIATIONS WERE CONDUCTED WITH SYNERGY WITHOUT QUESTION.

"2. TECHNOLOGY/SCIENTIFIC DID NOT RECEIVE A CONTRACT BEFORE PROTEST WAS MADE.

"3. THE TECHNICAL EVALUATION TEAM OR MEMBERS WERE 'FULLY COGNIZANT OF THE PRICING DATA'.

"4. THE PRICING DIFFERENCE WAS A TECHNICAL EVALUATION FACTOR IN SELECTION.

"5. UNIQUENESS OF THE EQUIPMENT HAS NOT IN PAST YEARS BEEN A SIGNIFICANT FACTOR IN AWARDING THIS PROCUREMENT COMPETITIVELY.

"6. SYNERGY PROPOSAL WAS CONSIDERED TECHNICALLY ACCEPTABLE AND CAPABLE OF REQUIRED PERFORMANCE.

"7. PERSONNEL PROPOSED DO MEET THE QUALIFICATIONS OF THE SOLICITATION.

"8. RECENT GAO DECISION B-169148 RULED IN FAVOR OF THE LOW BIDDER IN A SIMILAR CASE." THE LETTER OF JANUARY 5 HAS ALSO FURNISHED OUR OFFICE WITH INFORMATION ON CERTAIN EMPLOYEES OF YOUR CONCERN.

WITH RESPECT TO POINT 1, THERE IS NOTHING IN THE RECORD TO INDICATE THAT NEGOTIATIONS WERE CONDUCTED WITH EITHER YOUR CONCERN OR TSS OR THAT AWARDS WERE NOT MADE ON THE BASIS OF INITIAL PROPOSALS.

IN REGARD TO POINT 2, THE CONTRACTING OFFICER'S STATEMENT ADVISES THAT A VERBAL PROTEST FROM YOUR CONCERN WAS RECEIVED ON AUGUST 10, 1970, WHICH APPARENTLY WAS ALMOST SIMULTANEOUS WITH THE AWARD TO TSS. IT IS AIR FORCE'S CONTENTION THAT AWARD WAS MADE BEFORE YOUR PROTEST. IN THE CIRCUMSTANCES, WHETHER YOUR PROTEST WAS BEFORE OR AFTER AWARD DOES NOT SEEM TO HAVE A MATERIAL EFFECT ON THE RESOLUTION OF THE ISSUES BEFORE OUR OFFICE; CONSEQUENTLY, WE DO NOT FIND IT NECESSARY TO GIVE FURTHER CONSIDERATION TO THIS CONTENTION.

CONCERNING POINT 3, THE CONTRACTING OFFICER'S "MEMO FOR FILE" ADMITS THIS CONTENTION. THE CONTRACTING OFFICER'S "MEMO" GOES ON TO STATE THAT IT WAS THE BEST ENGINEERING JUDGMENT OF THE TECHNICAL PERSONNEL THAT "AWARD TO SYNERGY WOULD NOT BE IN THE BEST INTEREST OF THE GOVERNMENT FROM A COST STANDPOINT AND WOULD IN FACT COST IN EXCESS OF THIS FIGURE IN TERMS OF DELAYS TO SENSITIVE R&D PROGRAMS." WHILE THE TECHNICAL PERSONNEL WERE AWARE OF THE COST DIFFERENCE THERE IS NO INDICATION THAT SUCH KNOWLEDGE WAS PREJUDICIAL TO YOUR CONCERN.

THERE IS NOTHING IN THE RECORD TO SUPPORT CONTENTION 4. A LETTER FROM THE TECHNICAL SUPPORT DIVISION DATED JULY 24, 1970, SEEMS TO ESTABLISH THAT THE PRICING DIFFERENCE WAS NOT CONSIDERED IN THE TECHNICAL EVALUATION.

WE HAVE NO SPECIFIC INFORMATION ON CONTENTION 5. HOWEVER, EVEN CONCEDING THIS CONTENTION WOULD NOT REFUTE THE VIEW IN THE CONTRACTING OFFICER'S "MEMO" THAT CURRENT CHANGES HAD BEEN MADE TO ADAPT THE EQUIPMENT TO CHANGING LABORATORY REQUIREMENTS AND GIVING IT UNIQUE FEATURES.

WITH REGARD TO CONTENTION 6, THE RECORD INDICATES THAT THE EVALUATION PANEL FOUND SYNERGY'S OVERALL PROPOSAL ACCEPTABLE BUT NOTICEABLY WEAK IN PERSONNEL QUALIFICATIONS.

IN CONTENTION 7, YOU HAVE TAKEN ISSUE WITH AIR FORCE'S DETERMINATION REGARDING THE QUALIFICATIONS OF YOUR PERSONNEL IN TERMS OF THE CRITERIA SET FORTH IN THE RFP. WE ASSUME ALL OF THE INFORMATION IN YOUR LETTER OF JANUARY 5, 1971, HAD BEEN FURNISHED TO THE AIR FORCE AT THE TIME OF ITS DETERMINATION REGARDING THE QUALIFICATIONS OF YOUR PERSONNEL. SUCH JUDGMENTAL DETERMINATIONS ARE NOT QUESTIONED BY OUR OFFICE UNLESS SHOWN TO BE ARBITRARY OR WITHOUT A REASONABLE BASIS. WE DO NOT FIND THESE FACTORS IN THIS CASE.

REGARDING B-169148, OCTOBER 6, 1970, 50 COMP. GEN. , WHICH YOU HAVE CITED IN CONTENTION 8, IN SUPPORT OF THE POSITION THAT AWARD SHOULD HAVE BEEN MADE TO YOUR CONCERN, WE FIND THAT THIS CITED DECISION IS DISTINGUISHABLE FROM THE FACTS PRESENTLY UNDER CONSIDERATION.

THE CITED CASE INVOLVED A SOLICITATION OF COST-PLUS-A-FIXED-FEE PROPOSALS FOR MAINTENANCE OF A HYPERSONIC WIND TUNNEL FACILITY. ONE OFFER WAS $742,486 AND ANOTHER WAS $719,800. IN THAT CASE THE AWARD WAS MADE TO THE HIGHER OFFEROR AND THE OFFEROR SUBMITTING THE LOWER PRICE PROTESTED THE AWARD. PURSUANT TO THE TECHNICAL EVALUATION IN THAT CASE, THE HIGHER PRICED PROPOSAL WAS GIVEN 84 POINTS AND THE LOWER WAS GIVEN 78 POINTS EVEN THOUGH IT WAS DETERMINED THAT THE TWO OFFERORS WERE ESSENTIALLY EQUAL AS TO TECHNICAL ABILITY.

IN SUCH CIRCUMSTANCES, IT WAS HELD THAT THE LOWER OFFER REPRESENTED AN ADVANTAGE TO THE GOVERNMENT WHICH COULD NOT BE IGNORED AND THAT THE CONCEPTS EXPRESSED IN ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3 805.2 AND 4-106.5(A), THAT PRICE IS NOT THE CONTROLLING FACTOR IN THE AWARD OF COST-REIMBURSEMENT AND RESEARCH AND DEVELOPMENT CONTRACTS RELATE TO SITUATIONS WHERE THE FAVORED OFFEROR IS SIGNIFICANTLY SUPERIOR IN TECHNICAL ABILITY OVER LOWER PRICED, LESS QUALIFIED OFFERORS.

WE AGREE THAT THE POINT RANGES IN THE TWO SITUATIONS ARE NOT RADICALLY DIFFERENT. HOWEVER, IN THE EARLIER CASE THE CONTRACTING ACTIVITY SPECIFICALLY DETERMINED THAT THE DIFFERENCES IN THE TECHNICAL PROPOSALS, WHICH WERE REGARDED AS INSIGNIFICANT, DID NOT JUSTIFY PAYING A PRICE DIFFERENTIAL. IT WAS FURTHER STATED THAT THE FIRM RECEIVING THE 78 POINT SCORE WAS QUITE CAPABLE OF PERFORMING THE REQUIRED WORK AND THAT TO PLACE UNDUE EMPHASIS ON THE HIGHER SCORE "WOULD HAVE BEEN SUPERFLUOUS" TO THE AGENCY'S REQUIREMENTS AND "DID NOT WARRANT THE EXPENDITURE OF ADDITIONAL FUNDS." IN CONTRAST, THE FINDINGS IN THIS CASE WERE THAT YOUR PROPOSAL AND THE TSS PROPOSAL WERE NOT EQUAL AND THAT ACCEPTANCE OF THE HIGHER PRICED OFFER WAS MORE ADVANTAGEOUS TO THE GOVERNMENT.

UNDER ASPR 3-805.1(A)(V), IMPLEMENTING 10 U.S.C. 2304(G), THE CONTRACTING OFFICER HAS AUTHORITY TO MAKE AN AWARD ON THE BASIS OF INITIAL PROPOSALS RECEIVED WITHOUT FURTHER DISCUSSION WHERE IT CAN BE SHOWN FROM THE EXISTENCE OF ADEQUATE COMPETITION OR ACCURATE PRIOR COST EXPERIENCE THAT ACCEPTANCE OF THE MOST FAVORABLE INITIAL PROPOSAL WITHOUT DISCUSSION WOULD RESULT IN FAIR AND REASONABLE PRICES, PROVIDED THE REQUEST FOR PROPOSALS NOTIFIES ALL OFFERORS OF THIS POSSIBILITY. AS INDICATED, THE RFP ADVISED OFFERORS THAT AWARD MIGHT BE MADE ON THE BASIS OF INITIAL PROPOSALS AND SINCE THE OTHER REQUIRED ELEMENTS WERE FOUND TO EXIST, WE FIND NO BASIS TO OBJECT TO THE AWARD FOR FAILURE TO CONDUCT WRITTEN OR ORAL DISCUSSIONS WITH THE OFFERORS. SEE B-168085, DECEMBER 29, 1969.

FOR THESE REASONS YOUR PROTEST IS DENIED.