B-178887(1), APR 10, 1974

B-178887(1): Apr 10, 1974

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UNSUCCESSFUL OFFEROR'S PROTEST ON GROUNDS THAT ITS PROPOSAL WAS NOT EVALUATED IN ACCORDANCE WITH WEIGHTED CRITERIA ESTABLISHED IN RFP. THAT ITS PROPOSAL WAS WITHIN COMPETITIVE RANGE ARE MATTERS COMING WITHIN PRIMARY JURISDICTION OF THE CONTRACTING AGENCY AND AGENCY'S DETERMINATIONS IN THESE RESPECTS WILL NOT BE QUESTIONED ABSENT EVIDENCE DEMONSTRATING ARBITRARY OR UNREASONABLE ACTIONS. 2. OFFEROR'S CLAIM THAT ITS PROPOSAL WAS ARBITRARILY DOWNGRADED BECAUSE IT IS A MINORITY-OWNED SMALL BUSINESS FIRM. THAT IT WAS NOT NOTIFIED THAT THERE HAD BEEN A REDUCTION IN SCOPE OF CONTRACT EFFORT PRIOR TO AWARD ARE NOT FACTUALLY SUPPORTED BY RECORD WHICH REFLECTS THAT PROCUREMENT WAS NOT CONDUCTED UNDER SMALL BUSINESS ACT AND SUCCESSFUL OFFEROR WAS A MINORITY-OWNED SMALL BUSINESS CONCERN.

B-178887(1), APR 10, 1974

1. UNSUCCESSFUL OFFEROR'S PROTEST ON GROUNDS THAT ITS PROPOSAL WAS NOT EVALUATED IN ACCORDANCE WITH WEIGHTED CRITERIA ESTABLISHED IN RFP, AND THAT ITS PROPOSAL WAS WITHIN COMPETITIVE RANGE ARE MATTERS COMING WITHIN PRIMARY JURISDICTION OF THE CONTRACTING AGENCY AND AGENCY'S DETERMINATIONS IN THESE RESPECTS WILL NOT BE QUESTIONED ABSENT EVIDENCE DEMONSTRATING ARBITRARY OR UNREASONABLE ACTIONS. 2. OFFEROR'S CLAIM THAT ITS PROPOSAL WAS ARBITRARILY DOWNGRADED BECAUSE IT IS A MINORITY-OWNED SMALL BUSINESS FIRM, AND THAT IT WAS NOT NOTIFIED THAT THERE HAD BEEN A REDUCTION IN SCOPE OF CONTRACT EFFORT PRIOR TO AWARD ARE NOT FACTUALLY SUPPORTED BY RECORD WHICH REFLECTS THAT PROCUREMENT WAS NOT CONDUCTED UNDER SMALL BUSINESS ACT AND SUCCESSFUL OFFEROR WAS A MINORITY-OWNED SMALL BUSINESS CONCERN; ALSO, SLIGHT REDUCTION IN SCOPE OF EFFORT WAS REINSTATED IN CONTRACT AFTER FUNDING WAS OBTAINED FOR ENTIRE CONTRACT EFFORT.

TO THE BLK GROUP, INC.:

REQUEST FOR PROPOSALS (RFP) MA/OPER 7304 WAS ISSUED ON APRIL 16, 1973, BY THE MANPOWER ADMINISTRATION, UNITED STATES DEPARTMENT OF LABOR. THE RFP SOLICITED PROPOSALS FOR A THOROUGH EVALUATION OF THE WORK INCENTIVE PROGRAM (WIN) IN ORDER TO MEASURE THE EFFECTIVENESS OF THE WIN LEGISLATION AND THE WIN II PROGRAM INVOLVING STATISTICAL SAMPLING, RESEARCH DESIGN, FIELD MANAGEMENT, DATA EVALUATION AND ANALYSIS, AND REPORT PREPARATION. PROSPECTIVE OFFERORS WERE ADVISED BY THE RFP THAT A COST-REIMBUSEMENT TYPE CONTRACT WAS ANTICIPATED.

PROPOSALS WERE RECEIVED FROM 13 OFFERORS AND EACH ONE WAS EVALUATED AND RANKED BY THE PROPOSAL EVALUATION PANEL IN ACCORDANCE WITH WEIGHTED CRITERIA STATED IN THE RFP. EACH OF THE SEVEN PANEL MEMBERS FIRST SCORED EACH OF THE PROPOSALS ON FOUR TECHNICAL CRITERIA, ASSIGNING FOR EACH CRITERION A SCORE OF EITHER 0, 25, 50, 75, OR 100. THE TECHNICAL CRITERION AND THE WEIGHT ASSIGNED TO EACH WERE DESCRIBED AS FOLLOWS IN THE RFP:

"WEIGHT

"A. THE CLARITY AND SPECIFICITY WITH WHICH THE OFFEROR DETAILS THE WORK TO BE PERFORMED AND THE EXTENT TO WHICH THE PROPOSAL DISPLAYS AN UNDERSTANDING OF THE PURPOSE OF THIS EVALUATION

50

"B. EXPERIENCE AND QUALIFICATIONS OF KEY STAFF: EXPERIENCE IN ADMINISTRATION OF COMPLEX PROJECTS - QUALIFICATION IN SUBJECT AREAS OF ANALYSIS IN TERMS OF THE OBJECTIVES OF THIS STUDY 50

"C. LEVEL OF EFFORT PROPOSED AND SOUNDNESS OF THE PROPOSED METHOD FOR ACCOMPLISHMENT

30

"D. COMPANY'S PREVIOUS RECORD AND CURRENT RESOURCES INDICATING CAPABILITY FOR ORGANIZING STUDIES OF THIS SCOPE AND CONDUCTING THEM EFFECTIVELY AND EFFICIENTLY 20"

IF A PROPOSAL AVERAGED LESS THAN 50 FOR ANY OF THE FOUR CRITERION IN STEP 1 OF THE EVALUATIVE PROCESS, IT WAS DISQUALIFIED FROM CONSIDERATION IN STEP 2 INVOLVING A COST ANALYSIS OF THE QUALIFYING PROPOSALS DESCRIBED IN THE RFP IN THE FOLLOWING MANNER:

"WEIGHT

"E. ACCEPTABILITY OF PROPOSED BUDGET 40"

THE TECHNICAL PROPOSAL SUBMITTED BY THE BLK GROUP, INC. (BLK) RANKED NINTH OUT OF THE 13 PROPOSALS SUBMITTED. IN ADDITION, BLK'S PROPOSAL RECEIVED A MEAN SCORE OF LESS THAN 50 ON THREE OF THE FOUR TECHNICAL CRITERIA. THE EVALUATING PANEL CONSIDERED THIS LOW SCORE SUFFICIENT JUSTIFICATION TO DISQUALIFY BLK FROM FURTHER CONSIDERATION. CONSEQUENTLY, BLK'S COST PROPOSAL WAS NOT EVALUATED AND BLK WAS EXCLUDED FROM ALL SUBSEQUENT NEGOTIATIONS.

SEVEN PROPOSALS QUALIFIED UNDER THE STEP 1 TECHNICAL SCORING SYSTEM FOR CONSIDERATION IN STEP 2 (THE COST ANALYSIS) OF THE RANKING PROCESS. UPON COMPLETION OF THE COST ANALYSIS, THE EVALUATION PANEL CONCLUDED THAT FOUR PROPOSALS WERE WITHIN THE COMPETITIVE RANGE AND NEGOTIATIONS WERE CONDUCTED WITH THE FOUR RESPECTIVE OFFERORS. ON JUNE 29, 1973, THE CONTRACT WAS AWARDED TO PACIFIC TRAINING AND TECHNICAL ASSISTANCE CORP. (PTTA), THE FIRM THAT HAD ATTAINED THE HIGHEST SCORE ON BOTH THE TECHNICAL AND COST ANALYSIS AND HAD PROPOSED THE LOWEST CONTRACT PRICE OF THE FOUR COMPANIES WITHIN THE COMPETITIVE RANGE.

BY LETTERS OF JUNE 12, 1973, JUNE 18, 1973, AND JULY 6, 1973, COUNSEL PROTESTED ON BEHALF OF BLK, PROCEDURES FOLLOWED BY THE DEPARTMENT OF LABOR. THE CONTENTIONS RAISED ARE BEING DISCUSSED BELOW.

THE LETTER OF JUNE 12 PROTESTED AWARD TO AN OFFEROR OTHER THAN BLK, CLAIMING THAT BLK HAD BEEN IMPROPERLY AND UNLAWFULLY EXCLUDED FROM NEGOTIATIONS. ALTHOUGH THE DETAILS OF THIS ALLEGATION WERE NOT FORTHCOMING UNTIL THE JUNE 18 LETTER, WE WERE ALSO REQUESTED TO INSTRUCT THE COGNIZANT CONTRACTING OFFICER TO WITHHOLD AWARD UNDER THE SOLICITATION UNTIL OUR OFFICE HAD AN OPPORTUNITY TO RENDER A DECISION. IN SUPPORT OF THIS REQUEST, COUNSEL CITED 4 CFR 20.4 AND FPR 1-2.407 8(B).

DESPITE THE PENDENCY OF THE PROTEST, THE DEPARTMENT OF LABOR PROCEEDED TO COMPLETE THE PROCUREMENT PROCESS AND, AS STATED EARLIER, THE CONTRACT WAS AWARDED TO PTTA ON JUNE 29, 1973. THIS PROCEDURE COMPLIED WITH APPLICABLE REGULATIONS. THE GENERAL ACCOUNTING OFFICE INTERIM BID PROTEST PROCEDURES PUBLISHED IN 4 CFR 20.4 PROVIDE THAT AFTER A PROTEST IS MADE, ANY AWARD SHALL BE DELAYED PENDING A RULING BY THE COMPTROLLER GENERAL "*** UNLESS THERE HAS FIRST BEEN FURNISHED TO THE GENERAL ACCOUNTING OFFICE A WRITTEN FINDING BY THE HEAD OF THE AGENCY, HIS DEPUTY, OR AN ASSISTANT SECRETARY (OR EQUIVALENT), SPECIFYING THE FACTORS WHICH WILL NOT PERMIT DELAY OF THE AWARD ***." IN ACCORDANCE WITH THESE PROCEDURES, THE APPROPRIATE FINDINGS WERE MADE BEFORE THE CONTRACT WAS AWARDED. THE DEPARTMENT OF LABOR ALSO MET THE REQUIREMENTS OF FPR 1-2.407-8(B)(4) WHICH STATES THAT A CONTRACT MAY BE AWARDED PENDING THE RESOLUTION OF A PROTEST IF THE CONTRACTING OFFICER DETERMINES THAT THE ITEMS TO BE PROCURED ARE URGENTLY REQUIRED OR THAT PERFORMANCE WILL BE UNDULY DELAYED IF THE AWARD IS NOT MADE PROMPTLY OR THAT A PROMPT AWARD WILL OTHERWISE BE ADVANTAGEOUS TO THE GOVERNMENT. FURTHERMORE, NOTICE OF INTENT TO MAKE AWARD WAS FURNISHED OUR OFFICE PURSUANT TO THE PROVISIONS OF FPR 1-2.407-8(B)3. CONSEQUENTLY, OUR OFFICE CANNOT OBJECT TO AN AWARD MADE UNDER THESE CIRCUMSTANCES.

IN THE LETTER OF JUNE 18, WHICH STATED SEVERAL GROUNDS OF PROTEST, COUNSEL FIRST ALLEGED THAT THE EVALUATION PROCESS DID NOT FOLLOW THE CRITERIA SET FORTH IN THE SOLICITATION. MORE SPECIFICALLY, COUNSEL ASSERTS THAT SINCE SOME 70 OF THE 190 EVALUATION POINTS PERTAIN TO AN OFFEROR'S (NOT EMPLOYEES') EXPERIENCE WITH COMPARABLE EFFORTS, THE EVALUATION PANEL SHOULD HAVE MADE AN INDEPENDENT EFFORT TO VERIFY THE ACTUAL EXTENT OF EACH OFFEROR'S PAST EXPERIENCE. INSTEAD, COUNSEL MAINTAINED THAT THIS ASPECT OF THE EVALUATION PROCESS "WAS BASED SOLELY UPON THE SELF-SERVING VERBIAGE CONTAINED IN THE VARIOUS PROPOSALS."

THE ADMINISTRATIVE REPORT CONCEDES THAT NO EXTENDED INDEPENDENT INVESTIGATIONS WERE CONDUCTED TO DETERMINE THE ACCURACY OF EACH OFFEROR'S CLAIM CONCERNING PRIOR COMPARABLE EXPERIENCE, BUT ADDS THAT INFORMAL EFFORTS TO DO SO WERE MADE. OUR OFFICE HAS HELD THAT THE CONTRACTING AGENCY IS PRIMARILY RESPONSIBLE FOR ESTABLISHING THE VARIOUS FACTORS TO BE CONSIDERED DURING POINT EVALUATION OF A COST REIMBURSEMENT TYPE PROPOSAL AS WELL AS THE MANNER IN WHICH THE EVALUATION IS TO BE CONDUCTED. IN VIEW OF THIS, WE GENERALLY WILL NOT SUBSTITUTE OUR JUDGMENT FOR THAT OF THE AGENCY UNLESS THERE IS EVIDENCE OF A LACK OF GOOD FAITH IN ESTABLISHING AND APPLYING SUCH FACTORS. SEE B-173951, FEBRUARY 8, 1972. BASED UPON OUR REVIEW OF THE RECORD, WE CONCLUDE THAT THE DEPARTMENT OF LABOR CONSISTENTLY APPLIED ITS INTERPRETATION OF THE EXPERIENCE CRITERIA IN THE EVALUATION OF PROPOSALS ON AN EQUAL BASIS.

THE LETTER OF JUNE 18 ALSO ALLEGED THAT BLK'S PROPOSAL WAS ERRONEOUSLY AND ARBITRARILY DOWNGRADED SOLELY BECAUSE BLK IS A MINORITY OWNED SMALL BUSINESS CONCERN. IN SUPPORT OF THIS ALLEGATION COUNSEL REFERRED TO A TELEPHONE CONVERSATION WITH A MANPOWER ADMINISTRATION OFFICIAL WHO ADVISED A REPRESENTATIVE OF BLK THAT BLK SHOULD NOT BOTHER SUBMITTING A PROPOSAL BECAUSE ONLY A LARGE COMPANY OF SUBSTANCE COULD HANDLE THE JOB. THUS IT IS MAINTAINED THAT THIS "ANNOUNCED BIAS" AGAINST SMALL BUSINESS CONCERNS IS CONTRARY TO THE CONCEPT OF FAIRNESS INHERENT IN ALL GOVERNMENT CONTRACTING AND VIOLATES THE SMALL BUSINESS ACT AND IMPLEMENTING REGULATIONS.

THE LABOR DEPARTMENT'S REPORT ON THIS POINT DIFFERS SIGNIFICANTLY FROM THE ACCOUNT OF COUNSEL. THE ONLY CONVERSATION REVEALED IN THE REPORT THAT WAS POSSIBLY RELEVANT TO THIS ISSUE CONCERNED A TELEPHONE INQUIRY FROM BLK ASKING WHETHER THE PROCUREMENT WAS GOING TO BE UNDER SECTION 8(A) OF THE SMALL BUSINESS ACT. BLK WAS INFORMED AT THAT TIME THAT THE PROCUREMENT WAS NOT BEING CONDUCTED UNDER THE SMALL BUSINESS ACT. THIS EXPLANATION SEEMS REASONABLE AND IS SUPPORTED BY THE RECORD, SINCE PTTA TO WHOM THE CONTRACT WAS AWARDED IS A MINORITY-OWNED SMALL BUSINESS CONCERN.

THE FINAL CONTENTION CONTAINED IN THE LETTER OF JUNE 18, WAS THAT BLK'S PROPOSAL, COST AND OTHER FACTORS CONSIDERED, WAS WITHIN THE COMPETITIVE RANGE AND, THEREFORE, THE MANPOWER ADMINISTRATION WAS REQUIRED TO NEGOTIATE WITH BLK. VARIOUS DECISIONS OF OUR OFFICE, AS WELL AS A PROVISION OF THE FEDERAL PROCUREMENT REGULATIONS, WERE CITED IN SUPPORT OF THIS CONTENTION. HOWEVER, THE CLAIM THAT BLK'S TECHNICAL PROPOSAL WAS RATED "AS ACCEPTABLE OR SUSCEPTIBLE OF BEING MADE ACCEPTABLE" CANNOT BE SUPPORTED BY THE RECORD. AFTER THE TECHNICAL EVALUATION WAS COMPLETED, BLK'S PROPOSAL RECEIVED 7,580 POINTS CAUSING IT TO BE RANKED NINTH OUT OF THE THIRTEEN PROPOSALS THAT WERE RECEIVED. FURTHERMORE, ON THREE OF THE FOUR TECHNICAL CRITERIA BLK RECEIVED AN AVERAGE SCORE BELOW 50, WHICH HAD PREVIOUSLY BEEN JUDGED BY THE EVALUATING PANEL TO BE THE MINIMUM ACCEPTABLE SCORE. IN SUPPORT OF COUNSEL'S POSITION ON THIS POINT, THE FOLLOWING LANGUAGE FROM FPR 1 3.805-1(A) IS RELIED UPON:

"AFTER RECEIPT OF INITIAL PROPOSALS, WRITTEN OR ORAL DISCUSSIONS SHALL BE CONDUCTED WITH ALL RESPONSIBLE OFFERORS WHO SUBMITTED PROPOSALS WITHIN A COMPETITIVE RANGE, PRICE AND OTHER FACTORS CONSIDERED ***."

COUNSEL THEN QUOTED THE FOLLOWING DEFINITION OUR OFFICE HAD APPLIED TO THE TERM "COMPETITIVE RANGE," CITING 50 COMP. GEN. 16 (1970), 45 COMP. GEN. 417 (1966), AND 47 COMP. GEN. 252 (1967):

"IN CONNECTION WITH WHAT CONSTITUTES A COMPETITIVE RANGE THE RULE IS THAT A PROPOSAL MUST BE CONSIDERED TO BE WITHIN A COMPETITIVE RANGE UNLESS IT IS SO TECHNICALLY INFERIOR OR OUT OF LINE WITH REGARD TO PRICE THAT MEANINGFUL NEGOTIATIONS ARE PRECLUDED."

WHILE THE CITED CASES STAND FOR THE PROPOSITION STATED, THERE IS ALSO FOR APPLICATION DECISIONS OF OUR OFFICE CONCERNING THE PRIMARY RESPONSIBILITY FOR DETERMINING THE ACCEPTABILITY OF TECHNICAL PROPOSALS.

IT IS OUR VIEW THAT THE DETERMINATION OF WHETHER A PROPOSAL IS TECHNICALLY ACCEPTABLE, AND HENCE WITHIN THE COMPETITIVE RANGE, IS A MATTER OF ADMINISTRATIVE JUDGMENT THAT WILL NOT BE QUESTIONED BY OUR OFFICE IN THE ABSENCE OF AN ABUSE OF DISCRETION. SEE 48 COMP. GEN. 314 (1968), 52 COMP. GEN. 382 (1972), B-163024, AUGUST 27, 1968, AND B 171905, JULY 20, 1971. WE DO NOT BELIEVE THAT COUNSEL'S STATEMENT THAT "BLK BELIEVES ITS TECHNICAL PROPOSAL IS RATED AS ACCEPTABLE OR SUSCEPTIBLE OF BEING MADE ACCEPTABLE" ESTABLISHES AN ABUSE OF DISCRETION.

FURTHERMORE, WE HAVE RECOGNIZED THAT THE USE OF A POINT RATING SYSTEM, SUCH AS WAS EMPLOYED IN THIS PROCUREMENT, IS AN APPROPRIATE METHOD FOR DETERMINING WHICH PROPOSALS ARE WITHIN A COMPETITIVE RANGE. SEE 47 COMP. GEN. 252 (1967) AND B-174589, MARCH 28, 1972. WHILE WE HAVE OBJECTED TO THE USE OF A PREDETERMINED CUTOFF SCORE TO DETERMINE COMPETITIVE RANGE, 50 COMP. GEN. 59 (1970), IN VIEW OF BLK'S LOW SCORE IN COMPARISON TO THE ARRAY OF SCORES ACHIEVED BY OTHER OFFERORS, IT DOES NOT APPEAR THAT THE DECISION TO EXCLUDE BLK FROM NEGOTIATIONS WAS UNWARRANTED. SEE 52 COMP. GEN. 382 (1972).

ADDITIONALLY, WE DO NOT BELIEVE THAT OFFERED PRICE ESTIMATES NEED BE CONSIDERED IN DETERMINING WHETHER AN OFFER IS WITHIN THE COMPETITIVE RANGE WHEN AN UNACCEPTABLE TECHNICAL PROPOSAL IS SUBMITTED. SEE 52 COMP. GEN. 382 (1972) AND 49 COMP. GEN. 309 (1969). SINCE THE DEPARTMENT OF LABOR DETERMINED THAT BLK'S PROPOSAL DID NOT MEET THE ESTABLISHED MINIMUM TECHNICAL CRITERIA, THERE WAS NO REQUIREMENT THAT ITS PRICE ESTIMATE BE TAKEN INTO CONSIDERATION. THIS IS ESPECIALLY TRUE CONCERNING A COST- REIMBURSEMENT TYPE NEGOTIATED PROCUREMENT WHERE THE CONTRACTOR IS REIMBURSED NOT ON THE BASIS OF HIS COST ESTIMATE, BUT FOR ACTUAL COSTS INCURRED IN PERFORMING THE CONTRACT. FPR 1-3.805-2 SPECIFICALLY STATES THAT PROPOSED FEES SHOULD NOT BE CONSIDERED AS CONTROLLING BECAUSE THE MAKING OF AN AWARD OF A COST-REIMBURSEMENT TYPE CONTRACT PRIMARILY ON THE BASIS OF ESTIMATED COSTS MAY ENCOURAGE THE SUBMISSION OF UNREALISTICALLY LOW ESTIMATES, THEREBY INCREASING THE LIKLIHOOD OF COST OVERRUNS.

THE DECISIONS OF OUR OFFICE CITED IN SUPPORT OF THIS ASPECT OF BLK'S PROTEST, B-163024(1), AUGUST 27, 1968, 47 COMP. GEN. 29 (1967), AND 51 COMP. GEN. 431 (1972), ARE FACTUALLY INAPPLICABLE TO THE CIRCUMSTANCES GENERATING THIS PROTEST AND THUS HAVE NO PERTINENCY HERE.

THE FINAL ALLEGATION MADE IN SUPPORT OF THE PROTEST IS THAT BLK WAS NEVER INFORMED THAT THE MANPOWER ADMINSTRATION INTENDED TO REDUCE THE CONTRACTUAL SCOPE OF EFFORT, WHICH REDUCTION WAS IN FACT ACCOMPLISHED AND AGREED TO BY PTTA. THIS ALLEGATION IS APPARENTLY BASED ON THE FACT THAT THE CONTRACT WAS AWARDED TO PTTA AT A PRICE OF $1,467,897 WHICH WAS $128,208 LESS THAN PTTA'S FINAL OFFER FOR THE ENTIRE CONTRACT OF $1,596,105.

THE ESTIMATED COST FOR THE ENTIRE CONTRACTUAL EFFORT AS DESCRIBED IN THE RFP WAS ESTABLISHED DURING PREAWARD NEGOTIATION AT A TOTAL SUM OF $1,596,105. HOWEVER, WHEN THE END OF THE 1973 FISCAL YEAR NEARED THE ONLY FUNDS AVAILABLE FOR THIS PROJECT TOTALED $1,467,897. THEREFORE ON JUNE 29, 1973, THE WORK STATEMENT OF THE CONTRACT WAS SLIGHTLY REVISED TO REDUCE THE ESTIMATED COST TO $1,467,897. FOLLOWING THE END OF THE FISCAL YEAR, THE MANPOWER ADMINISTRATION AGAIN MODIFIED THE CONTRACT, REINTRODUCING THE DELETED WORK AND INCREASING THE PROPOSED CONTRACT PRICE TO THE ORIGINAL AMOUNT OF $1,596,105. CLEARLY A "REDUCTION IN THE CONTRACTUAL SCOPE OF EFFORT PRIOR TO AWARD," WAS NOT EFFECTED. IN VIEW OF THE FOREGOING THE PROTEST IS DENIED.