B-220856, FEB 3, 1986, 86-1 CPD 120

B-220856: Feb 3, 1986

Additional Materials:

Contact:

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

 

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

PROTEST IS TIMELY AND FOR CONSIDERATION BY GAO WHEN FILED 10 DAYS AFTER PROTESTER LEARNED HOW EVALUATION CRITERIA IN REQUEST FOR PROPOSALS WERE APPLIED BY THE PROCURING AGENCY NOTWITHSTANDING THAT PROTESTER MAY HAVE KNOWN THAT AWARD WOULD NOT BE MADE TO IT MORE THAN 10 DAYS BEFORE THE PROTEST WAS FILED. ALTHOUGH RFP EVALUATION CRITERIA STATED THAT TECHNICAL FACTORS WERE MORE IMPORTANT THAN PRICE. WHERE THE OFFERORS WERE ADVISED OF THE AGENCY'S PRICE GOAL AND THUS WERE ON NOTICE THAT PROPOSALS EXCEEDING THE PRICE GOAL WOULD NOT BE FAVORABLY CONSIDERED. HIGHER COST OFFER IS JUSTIFIED. FIXED-PRICE CONTRACT WAS ISSUED ON APRIL 1. PROPOSALS WERE RECEIVED FROM PAXSON. ONE OF THE OTHER FIRMS WITHDREW ITS PROPOSAL AND THE OTHER WAS EXCLUDED FROM THE COMPETITIVE RANGE.

B-220856, FEB 3, 1986, 86-1 CPD 120

CONTRACTS - PROTESTS - GENERAL ACCOUNTING OFFICE PROCEDURES - TIMELINESS OF PROTEST - DATE BASIS OF PROTEST MADE KNOWN TO PROTESTER DIGEST: 1. PROTEST IS TIMELY AND FOR CONSIDERATION BY GAO WHEN FILED 10 DAYS AFTER PROTESTER LEARNED HOW EVALUATION CRITERIA IN REQUEST FOR PROPOSALS WERE APPLIED BY THE PROCURING AGENCY NOTWITHSTANDING THAT PROTESTER MAY HAVE KNOWN THAT AWARD WOULD NOT BE MADE TO IT MORE THAN 10 DAYS BEFORE THE PROTEST WAS FILED. CONTRACTS - NEGOTIATION - AWARDS - PRICE DETERMINATIVE FACTOR 2. ALTHOUGH RFP EVALUATION CRITERIA STATED THAT TECHNICAL FACTORS WERE MORE IMPORTANT THAN PRICE, WHERE THE OFFERORS WERE ADVISED OF THE AGENCY'S PRICE GOAL AND THUS WERE ON NOTICE THAT PROPOSALS EXCEEDING THE PRICE GOAL WOULD NOT BE FAVORABLY CONSIDERED, AGENCY DECISION TO AWARD TO THE LOWEST PRICED, TECHNICALLY ACCEPTABLE OFFER WHICH CAME CLOSEST TO MEETING AGENCY'S PRICE GOAL, RATHER THAN SELECTING TECHNICALLY SUPERIOR, HIGHER COST OFFER IS JUSTIFIED.

PAXSON ELECTRIC COMPANY:

PAXSON ELECTRIC COMPANY (PAXSON) PROTESTS THE AWARD OF A CONTRACT TO ENGINEERING DESIGN GROUP, INC. (EDG), UNDER REQUEST FOR PROPOSALS (RFP) NO. N68248-82-R-2029 ISSUED BY THE NAVAL FACILITIES ENGINEERING COMMAND (NAVY) FOR THE ACQUISITION OF SEVERAL SUPERVISORY CONTROL AND DATA ACQUISITION (SCADA) SYSTEMS FOR THE NAVAL SUBMARINE BASE AT KINGS BAY, GEORGIA. /1/ PAXSON CONTENDS THAT THE NAVY DID NOT FOLLOW THE EVALUATION PLAN OUTLINED IN THE RFP BECAUSE IT GAVE TOO MUCH WEIGHT TO PRICE AS A CONSIDERATION WHEN THE NAVY MADE AWARD TO EDG.

WE DENY THE PROTEST.

ON DECEMBER 18, 1985, SUBSEQUENT TO FILING THIS PROTEST, PAXSON FILED A CIVIL ACTION (NO. 285-257) IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF GEORGIA, BRUNSWICK DIVISION, SEEKING INJUNCTIVE RELIEF. BY ORDER DATED DECEMBER 31, 1985, THE COURT REQUESTED AN ADVISORY OPINION ON PAXSON'S PROTEST FILED WITH OUR OFFICE.

THE RFP FOR A FIRM, FIXED-PRICE CONTRACT WAS ISSUED ON APRIL 1, 1985. PROPOSALS WERE RECEIVED FROM PAXSON, EDG AND TWO OTHER FIRMS. ONE OF THE OTHER FIRMS WITHDREW ITS PROPOSAL AND THE OTHER WAS EXCLUDED FROM THE COMPETITIVE RANGE. BEST AND FINAL OFFERS, THEREFORE, WERE SUBMITTED ONLY BY PAXSON AND EDG. AWARD WAS MADE TO EDG ON SEPTEMBER 30; PAXSON WAS NOTIFIED BY LETTER DATED OCTOBER 1 THAT, ALTHOUGH PAXSON'S PROPOSAL WAS TECHNICALLY ADEQUATE IN ALL RESPECTS, THE PRIMARY REASON FOR AWARD TO EDG WAS THE SUBSTANTIAL DIFFERENCE IN PRICE BETWEEN THE PAXSON AND EDG PROPOSALS.

AS A PRELIMINARY MATTER, THE NAVY ARGUES THAT PAXSON'S PROTEST SHOULD BE DISMISSED AS UNTIMELY UNDER OUR BID PROTEST REGULATIONS BECAUSE, ACCORDING TO THE NAVY, PAXSON LEARNED THAT IT WOULD NOT RECEIVE THE AWARD ON OR BEFORE OCTOBER 3, 1985, YET ITS PROTEST WAS NOT FILED UNTIL OCTOBER 21, MORE THAN 10 DAYS AFTER IT KNEW OR SHOULD HAVE KNOWN THE BASIS OF ITS PROTEST. SEE 4 C.F.R. SEC. 21.2(A)(2) (1985). SINCE THE COURT HAS REQUESTED AN ADVISORY OPINION CONCERNING PAXSON'S PROTEST, WE WOULD PROVIDE OUR VIEWS ON THE MERITS EVEN IF THE PROTEST WERE UNTIMELY. NEVERTHELESS, AS DISCUSSED BELOW, WE FIND THE PROTEST TIMELY.

WHILE THE RECORD INDICATES THAT BY OCTOBER 3, THE DATE ON WHICH PAXSON REQUESTED A DEBRIEFING, IT KNEW THAT AWARD WAS NOT GOING TO BE MADE TO PAXSON, IT WAS NOT UNTIL THE NEXT DAY, OCTOBER 4, THAT PAXSON RECEIVED THE OCTOBER 1 LETTER FROM THE NAVY INDICATING THE PRIMARY REASON THAT PAXSON WAS NOT SELECTED FOR AWARD. PAXSON'S PROTEST WAS TIMELY FILED ON OCTOBER 21, EXACTLY 10 WORKING DAYS AFTER OCTOBER 4. /2/ SEE FABRICS PLUS, INC., B-218546, JULY 12, 1985, 85-2 CPD PARA. 46.

THE RFP AT SECTION M PROVIDED THAT "AWARD WILL BE MADE TO THAT OFFEROR WHOSE PROPOSAL IS DEEMED TO BE THE MOST FAVORABLE TO THE GOVERNMENT." THE CRITERIA FOR EVALUATION OF PROPOSALS WERE SET FORTH AS FOLLOWS IN THE RELATIVE ORDER OF IMPORTANCE: (1) TECHNICAL, (2) PRICE, AND (3) MANAGEMENT. IN ADDITION, THE RFP STATED THAT THE ESTIMATED COST RANGE FOR THE CONTRACT SHOULD NOT EXCEED $5 MILLION. THE NAVY'S ACTUAL ESTIMATE FOR THE CONTRACT WAS $4,435,111.

OFFERORS WERE REQUIRED TO SUBMIT TECHNICAL, COST, AND MANAGEMENT PROPOSALS WHICH WERE POINT SCORED BY A PANEL OF EVALUATORS. THE POINT SCORING SYSTEM APPLIED IN THE EVALUATION, BUT NOT ANNOUNCED IN THE RFP, WAS BASED ON A MAXIMUM 10,000-POINT POSSIBLE SCORE AS FOLLOWS: (1) TECHNICAL: 4,500 POSSIBLE POINTS; (2) PRICE: 4,500 POSSIBLE POINTS; AND (3) MANAGEMENT: 1,000 POSSIBLE POINTS.

THE FIRM THAT WAS RATED THE HIGHEST IN EACH CATEGORY WAS GIVEN THE MAXIMUM POSSIBLE POINTS FOR THAT CATEGORY AND THE OTHER OFFEROR WAS GIVEN POINTS BASED ON THE RATIO OF THAT FIRM'S RAW SCORE TO THE RAW SCORE OF THE OFFEROR WITH THE MAXIMUM POINTS. THE SCORES OF THE TWO FIRMS AFTER SUBMISSION OF BEST AND FINAL OFFERS WERE AS FOLLOWS:

TECHNICAL PRICE MANAGEMENT TOTAL PRICE OFFERED

PAXSON 4,500 3,488 702 8,690 $7,737,934

EDG 2,615 4,500 1,000 8,115 $5,998,170

THE SOURCE SELECTION OFFICIAL AWARDED THE CONTRACT TO EDG BECAUSE ITS PROPOSAL WAS TECHNICALLY ADEQUATE, IT HAD A HIGH MANAGEMENT SCORE AND HAD THE LOWEST PRICE BY APPROXIMATELY 28 PERCENT. HENCE, ACCORDING TO THE NAVY, AWARD TO EDG WAS DEEMED TO BE MOST FAVORABLE TO THE GOVERNMENT.

PAXSON ARGUES THAT THE NAVY DEVIATED FROM THE STATED EVALUATION PLAN BY IGNORING PAXSON'S OVERALL HIGH RANKING AND CLEAR TECHNICAL SUPERIORITY AND MAKING AWARD BASED ON THE LOWEST PRICE. PAXSON STATES THAT THIS AMOUNTS TO DOUBLE-COUNTING THE PRICE FACTOR UNDER AN RFP WHICH STATES THAT TECHNICAL FACTORS ARE OF GREATER IMPORTANCE THAN PRICE.

INITIALLY, WE NOTE THAT PAXSON HAS NOT BEEN PROVIDED WITH THE NAVY'S DOCUMENTS DEALING WITH THE EVALUATION OF PROPOSALS BUT, INSTEAD, THEY WERE PROVIDED ONLY TO GAO FOR OUR IN CAMERA REVIEW. BECAUSE GAO MAY NOT DISCLOSE INFORMATION PROVIDED TO IT STRICTLY FOR IN CAMERA REVIEW, GAO WILL REVIEW THE DOCUMENTS SUPPLIED IN LIGHT OF THE PROTEST ISSUES RAISED, BUT OUR DISCUSSION OF THE DOCUMENTS IS NECESSARILY LIMITED. SEE RAYTHEON SUPPORT SERVICES CO., B-219389.2, OCT. 31, 1985, 85-2 CPD PARA. 495; HECKLER & KOCH, INC., B-216484.2, MAR. 12, 1985, 85-1 CPD PARA. 303.

IN A NEGOTIATED PROCUREMENT, THE CONTRACTING AGENCY'S SELECTION OFFICIALS HAVE BROAD DISCRETION IN DETERMINING THE MANNER AND EXTENT TO WHICH THEY WILL MAKE USE OF THE TECHNICAL AND COST EVALUATION RESULTS. COST/TECHNICAL TRADEOFFS MAY BE MADE, AND THE EXTENT TO WHICH ONE MAY BE SACRIFICED FOR THE OTHER IS GOVERNED ONLY BY THE TESTS OF RATIONALITY AND CONSISTENCY WITH THE ESTABLISHED EVALUATION FACTORS. STEWART & STEVENSON SERVICES, INC., B-213949, SEPT. 10, 1984; 84-2 CPD PARA. 268. WHERE THE CONTRACTING AGENCY HAS MADE A COST/TECHNICAL TRADEOFF, THE ESSENTIAL QUESTION IS WHETHER THE DETERMINATION TO MAKE AN AWARD TO A PARTICULAR CONTRACTOR WAS REASONABLE IN LIGHT OF THE RFP'S EXPRESSED EVALUATION SCHEME. HAGAR, SHARP & ABRAMSON, INC., B-201368, MAY 8, 1981, 81-1 CPD PARA. 365. IN THIS CONNECTION, WE HAVE RECOGNIZED THAT IT IS PROPER TO MAKE AWARD TO THE OFFEROR WITH THE LOWEST PRICE TECHNICALLY ACCEPTABLE PROPOSAL WHEN TO DO SO IS CONSISTENT WITH THE RFP.

HERE, THE SOURCE SELECTION OFFICIAL DETERMINED THAT BASED ON HIS REVIEW BOTH OFFERS WERE TECHNICALLY ACCEPTABLE AND THAT, ALTHOUGH PAXSON'S OFFER WAS TECHNICALLY SUPERIOR, EDG'S TECHNICALLY ACCEPTABLE OFFER AT A SIGNIFICANTLY LOWER PRICE WAS MOST ADVANTAGEOUS TO THE GOVERNMENT.

WE RECOGNIZE THAT WHERE, AS HERE, AN AGENCY USES A NUMERICAL EVALUATION FORMULA WHICH INCLUDES COST/PRICE FOR THE PURPOSE OF DETERMINING HIGHEST SCORED OFFEROR FOR AWARD, AND FINDS THAT THE PROPOSALS ON THE BASIS OF TOTAL POINTS ARE ESSENTIALLY EQUAL, THE CONTRACTING OFFICER SIMPLY CANNOT AGAIN USE PRICE AS THE DETERMINING FACTOR FOR AWARD. THIS WOULD AMOUNT TO IMPROPER DOUBLE-COUNTING OF PRICE SINCE PRICE WAS ALREADY POINT SCORED. SEE HARRISON SYSTEMS, LTD., 63 COMP.GEN. 379 (1984), 84-1 CPD PARA. 572. HOWEVER, HERE, WE DO NOT THINK A DOUBLE-COUNTING OF PRICE OCCURRED, BUT, RATHER, THE SOURCE SELECTION OFFICIAL, AFTER EXAMINING THE POINT SCORES, PERFORMED A TECHNICAL/COST TRADEOFF CONSISTENT WITH THE POSITION TAKEN BY THE AGENCY IN DISCUSSIONS WITH PAXSON AND EDG THAT THE OFFERORS' PRICES WERE HIGH.

THE RECORD SHOWS THAT THE OFFERORS WERE CLEARLY NOTIFIED THAT THE NAVY WAS SOLICITING OFFERS WITH A SPECIFIED MAXIMUM PRICE GOAL OF $5 MILLION. THE NAVY ADVISED OFFERORS OF THE ESTIMATED COST FOR THE PROCUREMENT. THE RECORD SHOWS THAT IN RESPONSE TO A QUESTION BY ANOTHER FIRM AT THE PRE- PROPOSAL CONFERENCE THE $5 MILLION FIGURE WAS STATED AS THE BUDGET. INDICATED, THIS QUESTION AND ANSWER WAS INCORPORATED BY AMENDMENT IN THE RFP.

FURTHER, THE RECORD INDICATES THAT DISCUSSIONS WERE HELD WITH PAXSON REGARDING ITS PRICE. PAXSON WAS ADVISED THAT THE NAVY BELIEVED PAXSON'S TOTAL PRICE "APPEARED HIGH" AND IN FACT, PAXSON REVISED ITS PRICE. WHILE DISAGREEING THAT IT WAS TOLD THAT ITS PRICE WAS "TOO HIGH" OR UNREALISTIC, PAXSON ADMITS THE NAVY COMMUNICATED TO PAXSON SEVERAL TIMES STATEMENTS WHICH DID, IN FACT, RESULT IN PRICE REDUCTIONS BY PAXSON.

SINCE PAXSON WAS TOLD ITS PRICE APPEARED HIGH AND WAS ALSO ADVISED OF THE NAVY'S BUDGET AND PRICE GOAL, IN OUR VIEW, PAXSON REASONABLE WAS APPRISED OF THE NAVY'S CONCERN REGARDING THE PRICE THE NAVY WAS WILLING TO PAY FOR THIS CONTRACT. THE BURDEN IS THEN ON OFFERORS TO FURNISH SATISFACTORY RESPONSES AFTER DISCUSSIONS ARE CONDUCTED. SEE PHOENIX SAFETY ASSOCIATES, LTD., B-216504, DEC. 4, 1984, 84-2 CPD PARA. 621.

THUS, WHILE WE RECOGNIZE THAT THE RFP EVALUATION CRITERIA STATED THAT TECHNICAL FACTORS WERE MORE IMPORTANT THAN PRICE, THE OFFERORS WERE ADVISED THAT THE NAVY WAS SOLICITING PROPOSALS IN THE $5 MILLION RANGE, AND WE THINK, UNDER THE CIRCUMSTANCES, OFFERORS WERE ON NOTICE THAT PROPOSALS BEYOND THAT PRICE, NOTWITHSTANDING THEIR TECHNICAL SUPERIORITY, MIGHT NOT BE FAVORABLY CONSIDERED. IN FACT, BOTH OFFERS EXCEEDED THE NAVY'S PRICE GOAL, HOWEVER, THE PROTESTER'S PRICE WAS CONSIDERABLY HIGHER THAN THE AWARDEE'S PRICE. WE THINK THE NAVY ACTED REASONABLY IN AWARDING TO THE PROPOSAL THAT CAME CLOSEST TO ITS BUDGETARY LIMITATIONS AND WHICH WAS TECHNICALLY ACCEPTABLE.

PAXSON ALSO ARGUES THAT THE AGENCY IMPROPERLY ASSIGNED AN EQUAL NUMBER OF POINTS (4,500) TO BOTH TECHNICAL AND PRICE, ALTHOUGH THE RFP PROVIDES THAT TECHNICAL WAS MORE IMPORTANT THAN PRICE. WE NOTE IN THIS CONNECTION THAT THE RFP DID NOT INDICATE IN TERMS OF POINTS HOW TECHNICAL WOULD BE COMPARED TO PRICE, AND THUS, UNDER THE RFP, IT WOULD HAVE BEEN PERMISSIBLE TO WEIGHT TECHNICAL SLIGHTLY MORE THAN PRICE WITHOUT VIOLATING THE RFP EVALUATION FACTORS. IN ANY EVENT, GIVEN THE AGENCY'S RELIANCE ON THE GREAT DIFFERENCE IN PRICE BETWEEN THE TWO OFFERS, THERE IS NO INDICATION THAT AWARD WOULD NOT HAVE BEEN MADE TO EDG EVEN IF PRICE WAS WEIGHTED LESS HEAVILY THAN IT WAS. SEE BDM CORPORATION, B-202707, OCT. 28, 1981, 81-2 CPD PARA. 354.

ACCORDINGLY, THE PROTEST IS DENIED.