B-173951, FEB 8, 1972

B-173951: Feb 8, 1972

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ESTIMATED COST IS NOT CONSIDERED AS CONTROLLING IN THE AWARD SELECTION. WILL NOT SUBSTITUTE HIS JUDGEMENT FOR THAT OF THE AGENCY CONCERNING BIDDER EVALUATION. THE PROTEST IS DENIED. JULBER AND REINHARDT: FURTHER REFERENCE IS MADE TO YOUR PROTEST ON BEHALF OF PACIFIC ARCHITECTS AND ENGINEERS. SEVEN PROPOSALS WERE RECEIVED. SIX OF WHICH WERE FROM UNITED STATES FIRMS. WERE REVIEWED BY A CONTRACTOR EVALUATION PANEL CONVENED FOR THE PURPOSE OF REVIEWING AND RANKING THE PROPOSALS IN ACCORDANCE WITH THE CRITERIA AND WEIGHTS SET FORTH ABOVE. EACH PERCENTAGE POINT OF THE WEIGHT WAS THE EQUIVALENT OF TEN POINTS. WITH THE CONCURRENCE OF THE AID CONTRACTS OFFICE A CPFF CONTRACT WAS AWARDED AAI ON AUGUST 12.

B-173951, FEB 8, 1972

BID PROTEST - METHOD OF EVALUATION DECISION DENYING PROTEST OF PACIFIC ARCHITECTS AND ENGINEERS, INC., AGAINST AWARD OF A COST-PLUS-FIXED-FEE CONTRACT TO AMERICAN-ASIAN INTERNATIONAL CORPORATION UNDER AN RFP ISSUED BY THE AGENCY FOR INTERNATIONAL DEVELOPMENT FOR A TRAINING PROGRAM. IN NEGOTIATED PROCUREMENTS, ESTIMATED COST IS NOT CONSIDERED AS CONTROLLING IN THE AWARD SELECTION. FURTHER, IN THE ABSENCE OF EVIDENCE TO INDICATE LACK OF GOOD FAITH, THE COMP. GEN. WILL NOT SUBSTITUTE HIS JUDGEMENT FOR THAT OF THE AGENCY CONCERNING BIDDER EVALUATION. ACCORDINGLY, THE PROTEST IS DENIED.

TO BODLE, FOGEL, JULBER AND REINHARDT:

FURTHER REFERENCE IS MADE TO YOUR PROTEST ON BEHALF OF PACIFIC ARCHITECTS AND ENGINEERS, INC. (PA&E) AGAINST THE AWARD OF A CONTRACT TO AMERICAN- ASIAN INTERNATIONAL CORPORATION (AAI) UNDER REQUEST FOR PROPOSAL (RFP) NO. 9190823-1, ISSUED ON APRIL 16, 1971, BY THE AGENCY FOR INTERNATIONAL DEVELOPMENT (AID), DEPARTMENT OF STATE.

THE RFP REQUESTED OFFERS FOR A COST-PLUS-FIXED-FEE (CPFF) CONTRACT FOR A TRAINING PROGRAM FOR THE VIETNAM POWER COMPANY, PROVINCIAL OPERATIONS, SOUTH VIETNAM. ON THE AMENDED CLOSING DATE OF MAY 31, 1971, SEVEN PROPOSALS WERE RECEIVED, SIX OF WHICH WERE FROM UNITED STATES FIRMS.

PARAGRAPH 4 OF THE "INSTRUCTIONS TO OFFERORS" LISTED THE FOLLOWING CRITERIA WHICH WOULD BE CONSIDERED IN THE EVALUATION OF PROPOSALS, WITH THE CORRESPONDING WEIGHTS TO BE ALLOCATED TO EACH CRITERIA:

WEIGHT

"A. COMPLETENESS AND THOROUGHNESS OF

THE PROPOSAL 10

B. OFFEROR'S UNDERSTANDING OF THE

STATEMENT OF WORK20

C. EVIDENCE OF GOOD ORGANIZATION

AND MANAGEMENT PRACTICES 10

D. QUALIFICATIONS OF PERSONNEL 20

E. EXPERIENCE IN SIMILAR OR RELATED FIELDS 20

F. RECORD OF PAST PERFORMANCE IN VIETNAM 10

G. COST ESTIMATE 10

100"

THE PROPOSALS SUBMITTED BY PA&E AND AAI, AS WELL AS THE PROPOSALS OF THE FIVE OTHER OFFERORS, WERE REVIEWED BY A CONTRACTOR EVALUATION PANEL CONVENED FOR THE PURPOSE OF REVIEWING AND RANKING THE PROPOSALS IN ACCORDANCE WITH THE CRITERIA AND WEIGHTS SET FORTH ABOVE. EACH PERCENTAGE POINT OF THE WEIGHT WAS THE EQUIVALENT OF TEN POINTS. THE FINAL SCORES TABULATED BY THE PANEL MEMBERS RESULTED IN THE FOLLOWING SCORES AND RANKINGS:

FIRM NAME SCORE RANK

AMERICAN-ASIAN INTERNATIONAL 839 1

PHILCO-FORD CORPORATION 800 2

PACIFIC ARCHITECTS & ENGRS. 795 3

VINNEL CORPORATION 768 4

LYON ASSOCIATES, INC. 766 5

QUINTON-BUDLONG, INC. 737 6

LOTUS COMPANY, LTD. 463 7

ON THE BASIS OF THE ABOVE TABULATED SCORES THE PANEL RECOMMENDED AWARD TO AAI, AND WITH THE CONCURRENCE OF THE AID CONTRACTS OFFICE A CPFF CONTRACT WAS AWARDED AAI ON AUGUST 12, 1971, UPON THE FOLLOWING AGREED TERMS:

TOTAL ESTIMATED COST - DOLLARS U.S. $245,000

FIXED FEE - DOLLARS U.S. $17,000

TOTAL ESTIMATED COST - PIASTERS VN $7,016,300

FIXED FEE - PIASTERS VN $500,000

THE UNSUCCESSFUL OFFERORS WERE NOTIFIED OF THE AWARD TO AAI BY LETTER DATED AUGUST 17, 1971, WITH AN INDICATION THAT CONTRACT PERFORMANCE WOULD COMMENCE ON OR ABOUT AUGUST 20, 1971. IT IS REPORTED THAT AT THE REQUEST OF PA&E A DEBRIEFING MEETING WAS HELD WITH AID REPRESENTATIVES ON AUGUST 24, 1971. AT THE MEETING THE PROCEDURES FOLLOWED IN EVALUATING THE PROPOSALS WERE DESCRIBED IN DETAIL, AND YOUR CLIENT WAS ADVISED THAT ALTHOUGH ITS PROPOSAL WAS ACCEPTABLE THE PROPOSAL OF AAI HAD BEEN DETERMINED TO BE SUPERIOR, AND THE AWARD WAS NOT MADE ON THE BASIS OF COST ALONE BUT UPON THE OTHER FACTORS SET FORTH IN THE EVALUATION CRITERIA.

ON AUGUST 26, 1971, PA&E SENT A LETTER TO THE CONTRACTING OFFICER PROTESTING THE AWARD, AND BY TELEGRAM OF AUGUST 25 AND 26, 1971, YOUR FIRM SUBMITTED PA&E'S PROTEST TO OUR OFFICE, FOLLOWED BY YOUR LETTER OF SEPTEMBER 13, 1971, SETTING FORTH IN DETAIL THE ALLEGATIONS UPON WHICH PA&E'S PROTEST IS BASED.

YOUR LETTER OF SEPTEMBER 13 RAISES SEVEN DIFFERENT GROUNDS IN SUPPORT OF PA&E'S PROTEST WHICH YOU SUBMIT INDICATES ARBITRARY AND IMPROPER ACTION BY THE AID CONTRACTING OFFICER. YOUR FIRST CONTENTION, THAT PA&E SHOULD HAVE BEEN AWARDED THE CONTRACT BECAUSE ITS PROPOSAL WAS LOWER BY APPROXIMATELY $15,000 THAN THE PRICE SUBMITTED BY AAI, LOSES SIGHT OF THE WELL ESTABLISHED PRINCIPLE IN GOVERNMENT PROCUREMENT LAW THAT IN NEGOTIATED PROCUREMENTS ON A COST-PLUS-FIXED-FEE BASIS ESTIMATED COST IS NOT CONSIDERED AS CONTROLLING IN THE AWARD SELECTION. THE PRIMARY CONSIDERATION IN SELECTING THE CONTRACTOR FOR A CPFF CONTRACT IS WHICH CONTRACTOR CAN PERFORM THE CONTRACT IN A MANNER MOST ADVANTAGEOUS TO THE GOVERNMENT. THUS, WE HAVE FREQUENTLY FOUND THAT USE OF A POINT EVALUATION SYSTEM BY THE AGENCY FOR THE PURPOSE OF SELECTING THE SOURCES FOR NEGOTIATION OF THIS TYPE OF CONTRACT IS NOT CONTRARY TO STATUTE OR REGULATION. B-147394, SEPTEMBER 4, 1962; B 149330, OCTOBER 10, 1962.

CONCERNING YOUR CONTENTION THAT AAI DOES NOT HAVE THE EXPERIENCE OF PA&E IN POWER OPERATION OR TRAINING OF PERSONNEL IN THE FIELDS OF ENDEAVOR REQUIRED HERE, IT IS OUR UNDERSTANDING THAT THE EVALUATION PANEL RECOGNIZED PA&E'S SUPERIOR EXPERIENCE IN THE ACTUAL OPERATION OF SIMILAR POWER FACILITIES, BUT IT FELT THAT AAI HAD CONSIDERABLY MORE EXPERIENCE IN TRAINING PROGRAMS OF VARIOUS TYPES. IN SPITE OF THE FACT THAT THE INSTANT CONTRACT WAS HEAVILY DIRECTED TOWARDS TRAINING, THE PANEL TABULATED 174 POINTS FOR PA&E ON THE "EXPERIENCE" CRITERIA WHILE AAI RECEIVED 169. THUS WE FAIL TO FIND IN THIS AREA ANY EVIDENCE OF ARBITRARY OR CAPRICIOUS ACTION BY PROCUREMENT PERSONNEL.

YOUR ASSERTION THAT AAI'S ADVERTISEMENT IN THE AUGUST 23, 1971, SAIGON POST FOR PERSONNEL FOR A POWER TRAINING PROGRAM INDICATES, AT THE WORST, "A LACK OF TRAINED PERSONNEL IN THE EMPLOYMENT OF AAI AT OR ABOUT THE TIME OF AWARD, CAPABLE OF PERFORMING THE CONTRACT; AND AT THE BEST, A LACK OF SUCH PERSONNEL FOR THE KNOWN FUTURE NEEDS UNDER SUCH CONTRACT," IS TOO CONJECTURAL TO ESTABLISH THE CORRECTNESS OF YOUR ASSERTIONS, ESPECIALLY SINCE THERE IS NO EVIDENCE TO INDICATE THAT AT THE TIME OF PROPOSAL EVALUATION AAI LACKED A SUFFICIENT NUMBER OF TRAINED PERSONNEL TO SUCCESSFULLY PERFORM THIS CONTRACT. WE ARE THEREFORE INCLINED TO ACCEPT AID'S INTERPRETATION OF THE ADVERTISEMENT WHICH IS:

" *** THAT AAI AS A CONSERVATIVE MEASURE WAS ENDEAVORING TO PROVIDE FOR POSSIBLE FUTURE PERSONNEL CONTINGENCIES. THIS IS A MOST COMMON PRACTICE AMONG CONTRACTORS AND OTHER BUSINESSES."

WE ALSO FAIL TO FIND ANY EVIDENCE OF DISCRIMINATORY ACTION BY THE AGENCY AGAINST PA&E CONCERNING PRIOR CONTRACT AWARDS, OR A LACK OF FORTHRIGHT DEALINGS WITH PA&E RELATIVE TO THE TIMING OF THE NOTICE OF AWARD TO AAI, SO AS TO PREVENT PA&E FROM ENTERING AN EARLIER PROTEST.

YOU ALSO ASSERT THAT AAI SUBMITTED IN SUPPORT OF ITS PROPOSAL THE RESUME OF ONE ANTHONY G. BICKREST, AN EMPLOYEE OF PA&E SINCE OCTOBER 1968, WITHOUT MR. BICKREST'S PERMISSION, AND WITHOUT THE KNOWLEDGE OF PA&E. THIS YOU CONTEND, "NOT ONLY RAISES QUESTIONS AS TO THE CAPABILITY OF AAI ITSELF TO PERFORM THE CONTRACT, BUT ALSO RAISES SERIOUS QUESTIONS AS TO THE OVERALL PROPRIETY OF THE AWARD."

THE UNDISPUTED FACTS IN THIS REGARD DISCLOSE THAT AT THE INITIAL PROPOSAL STAGE AAI DID SUBMIT THE NAME OF MR. BICKREST AS ITS PROPOSED LINEMAN INSTRUCTOR, WITH AN INDICATION THAT HIS "PRESENT COMPANY POSITION" WAS "POWER PRODUCTION SUPERVISOR, AMPAC (A SUBSIDIARY OF PA&E) THAILAND." PA&E'S TECHNICAL PROPOSAL DID NOT SUBMIT THE RESUME OF MR. BICKREST WITH OTHER PROPOSED PERSONNEL. HOWEVER, ON JULY 28, 1971, A DAY AFTER YOUR CLIENT LEARNED OF THE SUBMISSION OF MR. BICKREST'S RESUME BY AAI, PA&E DID OFFER THE SERVICES OF MR. BICKREST.

IT IS CLEAR THEREFORE THAT THE EVALUATION PANEL WAS FULLY AWARE OF THE FACT THAT MR. BICKREST WAS TO REMAIN AN EMPLOYEE OF PA&E AND THEIR EVALUATION OF AAI'S "QUALIFICATION OF PERSONNEL" WAS MADE WITH SUCH KNOWLEDGE. IN THIS REGARD, WE HAVE BEEN INFORMALLY ADVISED THAT AAI'S FINAL PROPOSAL OFFERED A NEW "LINEMAN INSTRUCTOR" IN LIEU OF MR. BICKREST, AND THE RESULTING CONTRACT REVEALS THIS REPLACEMENT. WE FAIL TO FIND THAT THERE WAS AN IMPROPER EVALUATION OF THE "QUALIFICATION OF PERSONNEL" CRITERIA BY THE SELECTION PANEL, OR THAT THE SUBMISSION OF MR. BICKREST'S NAME BY AAI, WHICH WAS LATER WITHDRAWN, CONSTITUTES A CLEAR AND CONVINCING DEMONSTRATION OF LACK OF BUSINESS INTEGRITY ON THE PART OF AAI. 39 COMP. GEN. 868, 872 (1960).

LASTLY, YOU STRONGLY COMPLAIN ABOUT THE EVALUATION PANEL'S USE OF AN INTERIM AUDIT REPORT PREPARED BY THE DCAA, DATED JUNE 8, 1971, AND RELATING TO AID/PA&E CONTRACT NO. 730-3180, IN EVALUATION OF PA&E'S "RECORD OF PAST PERFORMANCE IN VIETNAM" AND "EVIDENCE OF GOOD ORGANIZATION AND MANAGEMENT PRACTICES." SPECIFICALLY YOU ASSERT THAT USE OF THE INTERIM AUDIT REPORT BY THE EVALUATION PANEL INDICATES "A DISCRIMINATORY ATTITUDE AND COURSE OF ACTION AGAINST PA&E" AND "THE CIRCUMSTANCES STRONGLY SUGGEST THAT USAID REPRESENTATIVES SOUGHT OUT AN EXTRANEOUS GROUND UPON WHICH TO CAUSE THE REJECTION OF PA&E'S LOW QUALIFIED PROPOSAL." PERHAPS THE MORE SIGNIFICANT REASON PA&E OBJECTED TO THE USE OF THE AUDIT REPORT IS REVEALED IN YOUR LETTER OF SEPTEMBER 13, 1971, WHERE AT PAGE FOUR YOU STATED:

"WE ARE INFORMED THAT SUBSEQUENT TO THE TIME THAT THE USAID EVALUATION BOARD HAD EVALUATED THE THREE ACCEPTABLE PROPOSALS (AND, WE BELIEVE, FOUND IN FAVOR OF P.A.&E.), THE BOARD WAS RECONVENED AND COPIES OF THE INTERIM AUDIT REPORT WERE MADE AVAILABLE TO THE BOARD MEMBERS. FOLLOWING THIS RECONVENING OF THE BOARD, THE AWARD WAS MADE TO AAI."

HOWEVER, BY AFFIDAVIT DATED NOVEMBER 18, 1971, THE CONTRACTING OFFICER STATES:

" *** THE USAID EVALUATION BOARD MADE ONLY ONE SELECTION OF A CONTRACTOR AFTER EVALUATING AND RANKING ALL PROPOSALS BY CONTRACTORS PURSUANT TO THE CRITERIA SET FORTH IN THE RFP. AAI WAS AWARDED THE CONTRACT. THE EVALUATION PANEL DID NOT AT ANY TIME FIND IN FAVOR OF PA&E. THE EVALUATION PANEL WAS NEVER AT ANY TIME RECONVENED FOR PURPOSES OF MAKING AVAILABLE TO THE PANEL THE SAID INTERIM AUDIT REPORT NOR FOR ANY OTHER REASON. AAI WAS THE ONLY CONTRACTOR SELECTED BY THE EVALUATION PANEL.

"THE AFOREMENTIONED INTERIM AUDIT WAS FREELY AVAILABLE TO THE PANEL WITHOUT ANY RESTRICTION WHATEVER DURING THE ENTIRE PERIOD OF THE EVALUATION OF CONTRACTORS BY THE PANEL UNDER RFP NO. 9190823-1."

WHILE WE ARE OF THE VIEW THAT THE AUDIT REPORT COULD PROPERLY BE USED IN EVALUATING PA&E'S PAST PERFORMANCE UNDER THE EARLIER CONTRACT, EVEN THOUGH IT WAS INTERIM IN NATURE, THE MORE SIGNIFICANT FACTOR USED BY THE PANEL APPEARS TO BE THE FEBRUARY 11, 1971, FINAL EVALUATION OF PA&E'S PERFORMANCE BY AID UNDER THE EARLIER REFERENCED CONTRACT WHICH INDICATED AN UNSATISFACTORY RECORD IN SEVERAL AREAS OF PERFORMANCE BY PA&E UNDER THAT CONTRACT.

THE VARIOUS FACTORS WHICH ARE PROPERLY FOR CONSIDERATION IN THE POINT EVALUATION OF CPFF TYPE PROPOSALS AND THE RELATIVE WEIGHTS WHICH ARE TO BE ASSIGNED TO EACH FACTOR ARE MATTERS PRIMARILY FOR CONSIDERATION BY THE CONTRACTING AGENCY, AND OUR OFFICE WILL NOT SUBSTITUTE ITS JUDGMENT FOR THAT OF THE AGENCY UNLESS THERE IS EVIDENCE OF LACK OF GOOD FAITH IN ESTABLISHING AND APPLYING SUCH FACTORS AND WEIGHTS. BASED UPON OUR REVIEW OF THE RECORD OF THE INSTANT PROCUREMENT IT WOULD APPEAR THAT THE EVALUATION FACTORS WERE WEIGHED AND APPLIED IMPARTIALLY IN ACCORDANCE WITH THE ESTABLISHED PROCEDURES OF THE CONTRACTING AGENCY WHICH WERE SPELLED OUT IN THE SOLICITATION.

IN VIEW OF THE FOREGOING, YOUR REQUEST THAT THE CONTRACT AWARD TO AAI BE SET ASIDE AND AWARDED TO PA&E MUST BE DENIED.