B-233155, Feb 21, 1989, 89-1 CPD 177

B-233155: Feb 21, 1989

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Higher technically rated offeror is not objectionable where the solicitation award criteria made technical considerations more important than cost and the agency reasonably concluded that the awardee's superior proposal was most advantageous to the government. Protest that solicitation improperly failed to establish quantifiable criteria for judging "substantially equal" proposals is untimely. Where the protest was filed after the closing date for receipt of initial proposals. The procurement was a total small business set-aside to provide on- site support for the operations and facility management for the Automated Research Technical Information Center of the Army Research Institute. the course of its protest.

B-233155, Feb 21, 1989, 89-1 CPD 177

PROCUREMENT - Competitive Negotiation - Contract awards - Administrative discretion - Cost/technical tradeoffs - Technical superiority DIGEST: 1. In a negotiated procurement, award to a higher priced, higher technically rated offeror is not objectionable where the solicitation award criteria made technical considerations more important than cost and the agency reasonably concluded that the awardee's superior proposal was most advantageous to the government. PROCUREMENT - Bid Protests - GAO procedures - Protest timeliness - Apparent solicitation improprieties 2. Protest that solicitation improperly failed to establish quantifiable criteria for judging "substantially equal" proposals is untimely, where the protest was filed after the closing date for receipt of initial proposals.

Sigma Information Management Corporation:

Sigma Information Management Corporation protests the award of a cost- plus-fixed-fee contract to MGR Enterprises, Inc., under request for proposals (RFP) No. MDA903-88-R-0008, issued by the Department of the Army. The procurement was a total small business set-aside to provide on- site support for the operations and facility management for the Automated Research Technical Information Center of the Army Research Institute. the course of its protest, SIMCO has raised a number of issues, chief among which is that the Army's selection decision was inconsistent with the evaluation scheme set forth in the solicitation.

We deny the protest in part and dismiss it in part.

The RFP provided that award would be made to the responsible offeror whose offer was determined most advantageous to the government, cost and other factors contained in section M of the RFP considered. Section M provided that technical proposals would be evaluated on the basis of five evaluation factors which, in descending order of importance, were: (a) experience of proposed personnel with similar systems; (b) company experience with similar hardware/software systems; (c) company experience with research support and operations; (d) proposed management plan for implementing the contract, thoroughness and quality assurance methodology, and degree to which plan meets contract requirements; and (e) satisfactory performance on similar projects, i.e., company references. The RFP further provided that in the event two or more competing technical proposals were substantially equal, the lowest estimated realistic cost proposal would be selected for award. According to the RFP, "substantially equal" proposals are those which would not demonstrate any clear and convincing evidence of technical superiority relative to each other. Costs, which were stated to be "subordinate to technical considerations," were to be evaluated to determine whether they: (1) reflected an adequate understanding of the project; (2) were realistic; and (3) were reasonable.

The Army received proposals from nine firms including SIMCO and MGR. The offerors' technical proposals were forwarded to a Technical Evaluation Panel for review based on the evaluation factors set forth in the RFP. The panel ranked MGR's proposal the highest overall while SIMCO's was fourth. The consensus of the panel members as related in its April 14, 1988, report was that MGR's proposal was technically superior to any of the other proposals, but that three other offerors, including SIMCO, were technically acceptable and should be included in the competitive range for purposes of discussions. Although the panel rated SIMCO's proposal technically acceptable, it noted "serious concerns" about it. For example, the panel had reservations about the stability of SIMCO's personnel for this project because two proposed personnel were overqualified, and was concerned that the firm has limited corporate experience and that its proposal appeared to be a "mirror reflection" of the RFP, essentially promising to do what the solicitation required, raising doubts as to its capability to perform at a satisfactory level.

The contracting officer decided, however, that all nine offerors should be given an opportunity to improve their scores through discussions. Consequently, discussions were held with all offerors and they were allowed to submit revised proposals which were evaluated. All nine firms improved their scores. Even though SIMCO's score improved, its technical ranking fell from fourth to fifth; MGR retained the highest overall ranking.

Because of budgetary constraints, the procurement was suspended from June until September 1988, when funds became available. On September 7 an RFP amendment was issued in which the basic contract period was changed to October 1, 1988 to September 30, 1989, with two 1-year options, and best and final offers (BAFOs) were requested. Four of the offerors elected not to further participate in the procurement. Only five firms, including SIMCO and MGR, responded to the request for BAFOs. These offerors made only cost revisions; their technical proposals and numerical scores remained unchanged. Subsequent to the evaluation of BAFOs, the contracting officer reviewed the results of the technical and cost evaluation and concurred with the evaluation panel that MGR had submitted a clearly superior technical proposal and made award on September 30 to MGR on the basis of its 3-year cost plus fee of $640,786.79. SIMCO, which ranked third technically, was evaluated at $555,007. /1/ SIMCO's protest to this Office was filed on October 12 and its debriefing was held on October 14.

SIMCO's essential ground of protest is that it was improper for the contracting officer to award the contract to MGR on the basis of its technical superiority since, in its view, the "top three" of the five competing firms had submitted substantially equal technical proposals. Therefore, under the express terms of the solicitation, SIMCO argues, cost became the determinative factor and it should have received the award because it proposed the lowest cost of the three. /2/ In support of its argument SIMCO relies on the fact that its proposal was included in the competitive range; that discussions were held with it; and that of the five offerors responding to the second request for BAFOs, its technical proposal was ranked third.

The Army states that this argument is contradicted by the record. As set forth in the evaluation panel's initial and final reports, MGR's proposal evidenced significant technical superiority relative to the other proposals which, in the judgment of the contracting officer, made award to MGR most advantageous to the government notwithstanding SIMCO's lower proposed cost. The agency points out that because SIMCO's proposal was considered technically acceptable it was properly included in the competitive range and the contracting officer was therefore required to request a BAFO from the firm. The Army argues, however, that it is illogical to assume, as the protester does, that "technically acceptable" equates with "substantially equal."

The determination of the relative merit of a proposal is the responsibility of the procuring agency and procurement officials have broad discretion in making that determination. Sigma Systems, Inc., B-225373, Feb. 24, 1987, 87-1 CPD Para. 205. We have consistently upheld awards to offerors with higher technical scores and higher costs where it was determined that the cost premium was justified considering the significant technical superiority of the awardee's proposal and the result is consistent with the evaluation criteria. McShade Government Contracting Services, B-232977, Feb. 6, 1989, 89-1 CPD Para. 118.

After reviewing the evaluation record, we find that the agency's award selection was reasonable and consistent with the evaluation and award criteria set forth in the solicitation. The record clearly shows that although SIMCO's proposal was judged as meeting the minimum needs of the agency, there were significant technical differences between the two proposals which justified the finding that the two proposals were not substantially equal from a technical standpoint. Stated differently, the protester, with its emphasis on lower cost, has failed to show that there was any technical equality between the two proposals.

In this regard, we note that SIMCO's fourth-ranked initial proposal was the lowest-scored one considered to be acceptable by the evaluation panel, and even that rating was qualified by certain reservations. Although after discussions (which focused on SIMCO's experience and its management plan) and the first round of BAFOs, SIMCO's numerical score improved, so did those of other offerors, as a result of which the protester's ranking fell to fifth place. Only because two other higher ranked offerors subsequently withdrew from the competition did SIMCO's fifth-ranked proposal become the third-highest one after the second and final round of BAFOs. To speak as SIMCO does of the "top three" offerors is to imply a relatively close technical ranking. In fact, MGR's technical proposal was scored almost one-third higher than SIMCO's after receipt of initial proposals and more than one-fourth higher after discussions. There was, therefore, a significant disparity in numerical scoring between the two offerors, consistent with the narrative comments of the evaluators who unanimously regarded MGR's proposal as technically superior. Even though SIMCO's proposed cost was about 13 percent less than MGR's, the government is not required to make an award to the low, technically acceptable offeror in a negotiated procurement unless the solicitation so specifies. McShade Government Contracting Services, B-232977, supra. In this case, offerors were on notice that technical superiority was more important than cost and cost became a determinative factor only if two or more proposals were deemed to be substantially equal, which was not the case here. This ground of protest is therefore denied.

With regard to the solicitation requirement that offerors furnish with their proposals evidence of satisfactory performance on similar projects in the form of company references, SIMCO argues that the agency improperly evaluated this factor because the agency did not take the initiative to contact its references. Satisfactory performance on similar projects was only one of five factors in the RFP's evaluation scheme and was the least important factor. The record shows that the evaluators did consider the information presented in the proposals and downgraded SIMCO's proposal in this respect because of a lack of detailed information and because the one reference described in detail appeared to involve a dissimilar project. Assuming that the agency should have called the references provided, we find that the agency's failure to check references would not have affected the award decision because even if SIMCO's proposal received full credit in this area, the technical differences remaining between its proposal and MGR's would have been substantial and thus it still would not have been successful. See Western Medical Personnel, Inc., B-227991, Sept. 28, 1987, 67 Comp.Gen. 699, 87-2 CPD Para. 310 at 3.

A few issues remain. SIMCO alleges that the solicitation should have, but did not, establish quantifiable criteria to determine "substantially equal" proposals. This basis for protest is untimely under our Bid Protest Regulations, which require that protests based upon alleged solicitation improprieties which are apparent prior to the closing date for receipt of initial proposals shall be filed prior to the closing date, 4 C.F.R. Para. 21.2(a)(1) (1988). In any event there is no requirement for such quantifiable criteria. Determinations concerning "technically equal" proposals are to be based on reasonable judgment, and our standard of review is simply whether the record shows a reasonable basis for a contracting agency's determination that competing proposals were or were not technically equal.

In its comments on the agency report, SIMCO also raises three objections based on the evaluation documentation, none of which has merit.

SIMCO objects to the Army's provision of a statement prepared by the chairperson of the technical evaluation panel in response to the protest, on the basis that the statement was not contemporaneous with the evaluation itself. We agree with the Army that there is nothing objectionable in its submission or our consideration of such a statement which summarizes what occurred in the evaluation process and accurately reflects the consensus of the panel as shown in the evaluation documents themselves.

Based on a chronology of events provided by the chairperson of the technical evaluation panel, SIMCO alleges that the evaluation criteria and procedures were not agreed upon before the RFP was released and proposals received. In response, the Army has submitted documentation which convincingly shows that the evaluation criteria and their relative weights were determined a month before the RFP was issued and the events on which the protester bases its argument relate to an amendment to section M of the RFP, and a corresponding change to certain evaluation criteria, which resulted from a request for clarification from another offeror.

Finally, SIMCO speculates that since the evaluators specifically expressed reservations about SIMCO's proposal, the panel's report actually may have been prepared not in April 1988 as dated, but in October after SIMCO had filed its protest. The Army has provided an affidavit from the evaluation panel's chairperson attesting to the document's authenticity and we have no reason to doubt it.

The protest is denied in part and dismissed in part.

/1/ The second-ranked offeror's proposed costs were higher than the awardee's.

/2/ SIMCO does not claim to have submitted the lowest-cost proposal in this procurement, only the lowest cost among the "top three" in technical merit. In fact, an offeror rated below SIMCO submitted the lowest cost proposal.