SAN Business Consultants LLP

B-408400,B-408400.2: Sep 11, 2013

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SAN Business Consultants LLP, of North Potomac, Maryland, protests the Department of Housing and Urban Development's (HUD) award of a contract to Integrated Financial Engineering, Inc. (IFE), of Rockville, Maryland, under request for proposals (RFP) No. DU100R-12-R-0008, for performing the annual actuarial study of the financial soundness of the Federal Housing Administration's Mutual Mortgage Insurance Fund, single family forward loan program, and home equity conversion mortgage program. SAN challenges the evaluation of its proposal.

We deny the protest.

Decision

Matter of: SAN Business Consultants LLP

File: B-408400; B-408400.2

Date: September 11, 2013

Sharon Casertano, SAN Business Consultants LLP, for the protester.
Blythe I. Rodgers, Esq., Department of Housing and Urban Development, for the agency.
Mary G. Curcio, Esq., and David A. Ashen, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Challenge to evaluation of protester’s proposal is denied where record demonstrates that evaluation was reasonable and in accordance with the solicitation.

DECISION

SAN Business Consultants LLP, of North Potomac, Maryland, protests the Department of Housing and Urban Development’s (HUD) award of a contract to Integrated Financial Engineering, Inc. (IFE), of Rockville, Maryland, under request for proposals (RFP) No. DU100R-12-R-0008, for performing the annual actuarial study of the financial soundness of the Federal Housing Administration’s Mutual Mortgage Insurance Fund, single family forward loan program, and home equity conversion mortgage program. SAN challenges the evaluation of its proposal.

We deny the protest.

BACKGROUND

Under the contemplated contract, the contractor will “build the next generation actuarial study models” for both the single family forward loan and home equity conversion mortgage programs; produce an actuarial review regarding the financial soundness of the mortgage market for each program; and provide associated analyses that use the actuarial models to answer various policy questions. Statement of Work (SOW), RFP at 9. Award was to be made on a best value basis considering the following evaluation factors: technical approach; substantially similar experience; qualifications of key personnel and personnel management; demonstrated ability to effectively and efficiently manage the proposed contract; past performance; and price. RFP at 102-103.[1] Proposals were assigned an adjectival and risk rating for each factor and for the overall proposal.[2]

IFE, the incumbent, and SAN responded to the solicitation. IFE’s proposal was rated overall excellent, with ratings of excellent for technical approach, substantially similar experience, and ability to manage, as well as a rating of low risk for past performance. IFE’s proposal was assigned an overall risk rating of excellent. Final Technical Evaluation Panel Report (FTEPR) at 19. SAN’s proposal was rated overall unacceptable, with ratings of unacceptable for technical approach, unacceptable for ability to manage, minimally acceptable for substantially similar experience, and neutral for past performance. SAN’s proposal was assigned an overall risk rating of unacceptable. Id. at 36. Although SAN’s price ($4,302,000) was significantly lower than IFE’s ($12,556,928), the agency determined that, given the above evaluation results, IFE’s proposal represented the best value. Summary of Award at 9. Upon learning of the ensuing award to IFE, SAN submitted this protest challenging the evaluation of proposals.

In reviewing challenges to an agency’s proposal evaluation we do not reevaluate proposals, but, rather, review the agency’s evaluation to ensure that it was reasonable, and consistent with the terms of the solicitation, and applicable statutes and regulations. Phillips Med. Sys. of N. Am. Co., B-293945.2, June 17, 2004, 2004 CPD ¶ 129 at 2. Here, we have considered all of SAN’s allegations and find that none provide a basis for questioning the award. We discuss several examples below.

DISCUSSION

SAN challenges the evaluation of its proposal under the technical approach factor. In this regard, the solicitation generally provided with respect to technical approach as follows:

The Government will evaluate the extent to which the technical approach proposed demonstrates a full understanding of the requirements and viable methodologies and processes performing Actuarial Reviews.

The Offeror shall provide a narrative describing [its] approach and understanding of services required in the SOW. The proposal shall demonstrate how the offeror is going to address all requirements specified in the SOW. RFP at 102.

The agency evaluated SAN’s proposal as unacceptable under technical approach, assigning it 6 deficiencies, 2 significant weaknesses, and 6 weaknesses. FTEPR at 20-33. SAN has challenged some, but not all of the evaluated deficiencies, significant weaknesses and weaknesses, arguing either that the agency unreasonably evaluated its proposal or that the agency treated it differently than IFE.

Programming Language

For example, the agency assigned a weakness to SAN’s proposal because it devoted more than four pages to discussing the advantages and disadvantages of possible programming languages to use in its computer model, but never proposed which it would use, instead leaving it for HUD to decide. Specifically, instead of specifying the language it would use in its model, SAN in its proposal mentions three languages it is considering. SAN Technical Proposal at 12-17. SAN discusses its preference as between two of the languages, but does not take a position as to which of the three languages it will use in its model. Id. at 12-17; FTEPR at 20. According to the agency, SAN should have proposed which language it would use in the model it was to develop to produce an independent actuarial review. Id.

SAN asserts that this weakness was not reasonably assigned to its proposal. According to SAN, “[t]here is nothing in the solicitation to indicate that the presentation of two options for the programming language (as opposed to a single option) should be viewed unfavorably.” SAN Comments, July 22, 2013, at 12. The solicitation, however, required the offeror to demonstrate how it planned to address all requirements in the SOW. RFP at 102. Offerors were instructed to provide a narrative describing their approach and understanding of services required in the SOW. Id. Since SAN failed to adequately define its approach to the SOW requirements by specifying which programming language it would use, the agency reasonably assigned the proposal a weakness. In this regard, even if, as noted by the protester, the agency ultimately has input regarding the language used, it was SAN’s responsibility to propose a specific language in the first instance.

Actuarial Model

As noted above, one purpose of the solicitation was to select a contractor to build the next generation actuarial study models. SOW, RFP at 9. The agency assigned a deficiency to SAN’s proposal under the technical approach factor because it was concerned that SAN did not understand that it would be required to build its own model to use in conducting the actuarial review, but instead believed that it would have access to the model developed by the incumbent IFE during the prior procurement, and would be able to refine and expand that model. FTEPR at 22.

As an initial matter, SAN challenges the assigned deficiency on the basis that SAN did not misunderstand the solicitation requirements regarding the actuarial model; according to the protester, nothing in the solicitation indicated that offerors would have to build their own system from scratch.

The evaluation in this regard was unobjectionable. In its proposal, SAN stated its understanding that HUD “has developed a modeling system for projecting the operation of the FHA Mutual Mortgage Insurance Fund,” and the agency was “seeking a contractor to refine and expand the Model.” SAN Proposal at 3. SAN further stated in its proposal that during the transition period, “information regarding the design and operation of the Model, as well as the preparation of the Actuarial Review, must be transferred from the current contractor to the new contractor.” SAN Proposal at 8. These statements reasonably indicated to the agency that SAN believed it would have access to the incumbent model as well as information regarding the design and operation of that model, and that it planned to approach the project by building on the incumbent model. Indeed, in its initial protest, SAN argued that it believed it would have access to the incumbent model, and indicated that its model would be an outgrowth of the existing model. Protest at 7-9, 11.

As noted by the agency, however, the solicitation required the contractor to build its own model. Thus, the solicitation provided that, “[w]hile this contractor is expected to learn from the efforts of past actuarial studies, it will build its own model for estimating economic net worth.” SOW, RFP at 8. Likewise, the SOW indicated that “[t]he purpose of this procurement is to choose a contractor to build the next generation actuarial study models.” Id. at 9. Further, while the SOW provided that during the transition period “[t]he new contractor shall work closely with the existing contractor…. [and] shall gain a firm understanding of all the programs,” Id. at 13, nothing in the solicitation stated that HUD will transfer the current contractor’s model to the new contractor. In these circumstances, the agency reasonably assigned a deficiency on the basis of SAN’s failure to clearly indicate that it understood the solicitation requirement for the contractor to build its own model, and not simply revise the incumbent IFE’s model.

SAN asserts that both SAN and IFE used language in their proposals indicating that they would build upon past modeling efforts, but that only SAN’s proposal was downgraded for this approach. However, insofar as IFE proposed to build upon past efforts, the agency recognized that IFE, as the company which had developed the current model, possessed information about the design and structure of the model; in contrast, while information about the model results was to be transferred to the new contractor, nothing in the solicitation indicated that the design and structure of the current model would be transferred to a new, different contractor. Supplemental Agency Report (SAR) at 4. In these circumstances, it was not a matter of unequal treatment for the agency to consider that the incumbent IFE would build upon what it had already developed in creating the next generation model, at the same time as it questioned the protester’s apparent intention to revise a model for which information about the design and structure would not be available to SAN.

In addition to the weakness and deficiency discussed above, there were a number of other evaluated deficiencies (at least 3), significant weaknesses (2), and weaknesses (at least 4) in its proposal which SAN either did not timely challenge, or subsequently abandoned by failing to respond to the agency’s report in this regard.[3] Given the number of the unchallenged deficiencies, significant weaknesses and weaknesses, there is no basis for concluding that SAN would have been rated as anything other than unacceptable under the technical approach factor even if SAN had been unreasonably assigned the weakness and deficiency discussed above.

In addition, the record shows that the agency rated SAN’s proposal unacceptable under the management factor, assigning 6 deficiencies and 2 weaknesses and SAN failed to timely challenge 4 of the deficiencies or either of the weaknesses. Thus, there is no basis in the record for questioning SAN’s unacceptable rating under the management factor. Moreover, given SAN’s overall unacceptable rating, and IFE’s overall excellent rating--with IFE’s underlying ratings of excellent for technical approach, substantially similar experience and ability to manage--there simply is no basis to question the source selection made here.

The protest is denied.

Susan A. Poling
General Counsel



[1] While the solicitation provided that the agency would evaluate the qualifications of key personnel and personnel management, the record indicates that the agency did not evaluate this factor. Summary of Award at 5. Since SAN does not protest this failure, we will not address it further.

[2] The agency assigned a rating of excellent, highly acceptable, acceptable, minimally acceptable, or unacceptable to each of the non-price factors, except for past performance which was rated with a risk rating of high, medium, low, or unknown. Final Technical Evaluation Panel Report at 1 and 6. In addition, the agency assigned an overall risk rating to each factor and to the overall proposal of excellent, highly acceptable, acceptable, minimally acceptable, or unsatisfactory. Id. at 2.

[3] For the record, we note SAN submitted additional comments to our Office on August 21, in which it discussed its approach to the home equity conversion mortgage program; the agency evaluators had concluded that SAN’s proposal provided only minimal information related to this program. To the extent that this discussion could be construed as a protest against the agency’s determination that SAN did not adequately address the home equity conversion program, the protest is untimely, since SAN did not raise this issue within 10 days of May 30, when the agency initially informed SAN of this evaluated proposal deficiency. 4 C.F.R. § 21.2(a)(2) (2013).

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