Matter of: Suncoast Associates, Inc. File: B-265920; B-265920.3 Date: December 7, 1995

Matter of: Suncoast Associates, Inc. File: B-265920; B-265920.3 Date: December 7, 1995

Source selection decision is unobjectionable where record supports agency determination that protester's technical point score advantage--2 points out of 100 total--did not represent any meaningful advantage in terms of performance, and source selection authority reasonably determined that awardee's higher readiness level would minimize performance risk and therefore be advantageous, even though the awardee received the same technical score under the readiness factor as did the protester. Where evaluation record provides sufficient basis to judge the reasonableness of the agency's decision and its compliance with procurement statutes and regulations, agency met Federal Acquisition Regulation requirement that documentation supporting selection decision show the relative differences among proposals and the basis and reasons for its decision. Decision to award to large business, where two proposals are essentially equal in technical merit and price, does not contravene national policy to encourage and develop small business.

Attorneys

DECISION

Suncoast Associates, Inc. protests the award of a contract to Computer Sciences Corporation (CSC) under request for proposals (RFP) No. EMW-95-R-INSPECT, issued by the Federal Emergency Management Agency (FEMA) for housing inspection services. Suncoast contends that the evaluation of proposals and selection of CSC for the second of two awards under the solicitation was unreasonable and inconsistent with the criteria listed in the solicitation.

We deny the protests.

On January 17, 1995, the agency issued the solicitation for two fixed-price indefinite quantity contracts to gather information and inspect housing damaged by presidentially declared disasters, for a 2-year base period plus three 1-year option periods. The successful contractors were to conduct phase-in activities and maintain readiness sufficient to be capable of completing 5,000 inspections a day within 1 week of receiving a task order and 10,000 inspections a day within 2 weeks of receiving the order. Offerors were to propose a fixed price for phase-in, as well as an annual fixed price for maintaining readiness, and a separate price for each inspection that the agency ordered.

The solicitation provided for award based on technical and price factors, with technical merit of greater importance than price. The agency evaluated technical merit based on six factors, including the phase-in (5 points) and readiness level plans (10 points), corporate experience (15 points), past performance (30 points), key personnel (10 points), and the offeror's plans for responding to two hypothetical scenarios (30 points). The two scenarios involved a hurricane striking Norfolk, Virginia, requiring 120,000 inspections, and an earthquake in Los Angeles, California, requiring 500,000 inspections. The agency would evaluate price by adding prices for performing 620,000 inspections to prices for phase-in and readiness. The RFP advised offerors that total evaluated price could be the determining factor for award if there were no significant technical, financial, or management differences among proposals.

The agency received 15 proposals on March 21 and referred them to three technical evaluation panels (TEP). [1] On June 8, the technical evaluation board advised the source selection board (SSB) of the results from the three panels. The agency initiated discussions with six offerors [2] on June 26 and received best and final offers on July 21. The three panels reevaluated the responses and identified the four offerors who had submitted the highest-rated proposals as Pilot Catastrophe, Parsons Brinckerhoff, Suncoast, and CSC, in that order.

Although Pilot Catastrophe's proposal had received the highest technical score, 98 points, its price--more than $100 million--was significantly higher than those of the other offerors. Parsons Brinckerhoff's proposal, with 95 points, was priced at $8 million less than either Suncoast's or CSC's, and was selected for one of the awards. After review of the TEP and PRAG reports and a briefing by the technical panels, the SSB concluded that although Suncoast's proposal had received a slightly higher technical score, 95 points versus CSC's technical score of 93 points, the two proposals were essentially equal in technical merit. Further, although CSC proposed a slightly lower evaluated price, $79,341,395 versus Suncoast's evaluated price of $79,416,941, the difference was not considered significant.

The SSB advised the source selection authority (SSA) that the two proposals were equivalent in technical score and price. Nevertheless, the SSB pointed out to the SSA that there was a significant difference in technical approach between the two offerors. Suncoast proposed a much lower readiness level and a correspondingly lower readiness price, with a higher price for inspections. CSC proposed to maintain a higher readiness level, with a lower price for individual inspections. Despite the substantial equivalence of the two proposals, the SSB advised the SSA that selection of CSC, with its higher readiness level, would minimize performance risk. CSC, a larger business, also offered more back-up capability in the event of catastrophic disaster. The SSB therefore recommended award of the second contract to CSC; the SSA agreed, awarding the second contract to CSC on August 21. This protest followed.

Suncoast argues that the choice of CSC was inconsistent with the evaluation and selection scheme of the RFP. The protester contends that FEMA unreasonably determined that the protester's advantage in the technical scoring was not significant. The protester also asserts that the agency failed to document adequately its basis for this determination. Even if the proposals were technically equivalent, Suncoast argues, consideration of the lower performance risk of award to the offeror with more in-house resources reflects an improper bias against small businesses unrelated to valid performance considerations.

In a negotiated procurement, contracting officials have broad discretion in determining the manner and extent to which they will make use of technical and cost evaluation results. TRW, Inc., 68 Comp.Gen. 511 (1989), 89-1 CPD Para. 584. The manner in which the source selection official uses the results of technical and cost evaluations, and the extent, if any, to which one is sacrificed for the other are governed only by the tests of rationality and consistency with established evaluation factors. BDM Corp., B-211129, Aug. 23, 1983, 83-2 CPD Para. 234. In other words, the selection official must determine the significance of any difference in technical point scores in terms of performance. Grey Advertising, Inc., 55 Comp.Gen. 1111 (1976), 76-1 CPD Para. 325. Whether a given point spread between two competing proposals indicates a significant superiority of one proposal over another depends upon the facts and circumstances of each procurement. See RCA Serv. Co., B-208871, Aug. 22, 1983, 83-2 CPD Para. 221. Here, we find that the record supports the agency's determination that the proposals of Suncoast and CSC were essentially equal in technical merit.

The two proposals received the same score for four of six evaluation factors--57 of 60 available points under the factors of phase-in, readiness level plan, scenario responses, and corporate experience. The 2-point difference arose under the factors of past performance, where Suncoast's proposal received 28 of 30 points available, versus CSC's 27 points, and key personnel, where the protester's proposal received all 10 points available, versus CSC's score of 9 points. In terms of what this difference in score meant, the record shows that the evaluators rated Suncoast's proposal slightly higher because, as the incumbent, it had more relevant experience. With respect to CSC's proposal, CSC's responses during discussions raised a question regarding the commitment of its key personnel past the phase-in period. [3]

After reviewing the evaluators' reports, the SSB concluded [4] that Suncoast's proposal offered no appreciable advantage in either area. Suncoast's advantage in prior experience, the SSB concluded, was tempered by the agency's change from specification-based to performance-based contracting. That is, whereas Suncoast's prior contracts set forth specific requirements for performance, the instant solicitation represented an effort to improve timeliness, accuracy, and customer service by providing contractors with no more than broad objectives for accomplishment. Thus, the SSB was not convinced that Suncoast's prior experience represented a real technical advantage. Further, according to the SSB, any uncertainty regarding CSC's commitment of key personnel past the phase-in period was minimized by the contract clauses that required the contractor to provide replacement personnel of equal or higher qualifications and allowed the agency to approve or disapprove replacement personnel. Overall, the SSB advised the SSA, Suncoast's 2-point advantage in score did not represent any meaningful advantage to the agency in terms of performance.

The record contains no basis for considering the protester's 2-point advantage in the technical scoring indicative that its proposal was significantly superior to the proposal submitted by CSC, as Suncoast argues. On the contrary, the agency's explanations of its rationale--specifically, its analysis of the limited applicability of Suncoast's past performance and its conclusion that CSC's commitment of key personnel was not a serious concern--are supported by the record and are reasonable. Under these circumstances, we see no basis to object to the SSB's recommendation and the SSA's decision to discount the 2-point difference in technical scores.

Suncoast contends that, because FEMA provided no written explanation for its determination that the two proposals were technically equivalent until its report responding to the protest, the agency failed to document adequately the basis for its selection decision. We disagree.

Agencies are required to document their selection decisions so as to show the relative differences among proposals, their weaknesses and risks, and the basis and reasons for the selection decision. Federal Acquisition Regulation (FAR) Sec. 15.612(d)(2); Department of the Army--Recon., B-240647.2, Feb. 26, 1991, 91-1 CPD Para. 211. As is evident from the protester's own submissions, there is no question that the relative strengths and weaknesses of the proposals here can be discerned by reviewing the evaluation documents. Further, the agency's explanation of why it determined the two proposals to be technically equivalent, despite Suncoast's 2-point advantage in the technical scoring, while provided after award, appears reasonable and consistent with the other documentation in the record. That documentation therefore serves the purpose of providing a basis to judge the reasonableness of the selection decision, and, ultimately, its compliance with procurement statutes and regulations. Contract Management, Inc., B-251791.3, May 11, 1993, 93-1 CPD Para. 376. Under these circumstances, the lack of more detailed contemporaneous documentation provides no basis to conclude that the agency's actions were unreasonable.

As noted above, both the SSB and the SSA recognized the significant difference in technical approach between the two offerors--Suncoast proposed a much lower readiness level. The determinative factor for award was CSC's higher readiness level which, in the judgment of the SSB and the SSA, would minimize performance risk. Suncoast contends that it was unreasonable for the agency to conclude that CSC's proposal offered less risk in this area and asserts that, if anything, Suncoast proposed a superior approach to readiness.

Although it argues that its proposal was superior to CSC's, Suncoast offers nothing other than a repetition of the evaluators' findings that Suncoast had demonstrated its capability to maintain a readiness level and staffing in complete compliance with the RFP requirements. As the agency points out, however, the SSA reexamined the proposals in this area and concluded that, despite the equivalence in point scores, CSC's approach offered a lower performance risk based on its different approach in this area. The record shows that Suncoast chose to structure its proposal based on a lean staffing approach, with corresponding price advantages. We see no basis to object to the agency's conclusion that such an approach is inherently riskier compared with CSC's approach of maintaining a larger staff.

Suncoast contends that by considering the lower risk posed by CSC's greater resources, FEMA exhibited an improper bias against small businesses unrelated to valid performance considerations. We disagree. To the extent that Congress has established a national policy to encourage and develop small business, that policy is implemented through specific statutes and programs created to benefit small businesses. See 15 U.S.C. Secs. 631 et seq. (1994); FAR part 19. (In this instance, for example, CSC assumed certain obligations regarding subcontracting with small and disadvantaged businesses that the solicitation did not require of Suncoast.) The somewhat greater relative risk of Suncoast's approach--a lean standby staff, with resources committed to a rapid buildup in the event of emergency--is obvious enough, regardless of the protester's status as a small business. We see no requirement for the agency, consistent with the RFP evaluation scheme, to disregard the possibility, however remote, that CSC's greater resources could be of value in the event of a major disaster.

In its initial protest, Suncoast asserted that FEMA's technical evaluation was unreasonable and inconsistent with the factors listed in the solicitation. Specifically, Suncoast asserted that CSC did not possess the specific capabilities and experience required to merit its proposal's high technical rating. The agency's response to the protest both defended its evaluation of CSC and pointed out that, although Suncoast's proposal itself contained little to support a high rating under past performance, the agency nevertheless gave it a high rating based on its knowledge of Suncoast's performance under its current FEMA contract. The protester has not directly responded on this point, and it is clear that, in view of its proposal's high rating under the technical factors, Suncoast does not challenge the evaluation so much as the selection decision. We therefore need not address this issue further. See Datum Timing, Div. of Datum Inc., B-254493, Dec. 17, 1993, 93-2 CPD Para. 328.

The protests are denied.

Comptroller General of the United States

1. TEP No. 1 evaluated scenario responses, phase-in plans, and readiness levels. TEP No. 2 reviewed corporate experience and key personnel. The third panel, the performance risk assessment group (PRAG), rated past performance.

2. The agency included in the competitive range all initial proposals that were found technically acceptable.

3. Seeking information on CSC's history of providing key personnel proposed under prior contracts, FEMA directed a discussion question to CSC, the first part of which asked for CSC's corporate policy on the use of key personnel. CSC's response satisfied the agency's original concern, by pointing out its record under its flood insurance contract with FEMA. CSC had replaced none of 10 key personnel during its 2 years of performance; 7 of the 10 employees exceeded 5 years of service in their positions. However, CSC described corporate policy as a commitment to provide "candidates proposed as Key at the start-up of a new contract." Based on this response, the evaluators questioned whether CSC's policy extended past the start-up phase.

4. The SSB report states in conclusory fashion that the two proposals were technically equivalent. In its report on the protest, the agency explains that there were two SSB meetings discussing this determination and that the SSB briefed the SSA on its recommendation. There was no contemporaneous documentation regarding the significance of Suncoast's 2-point advantage; FEMA first provided a written explanation for the SSB's determination in its report responding to the protest.