The METEC Group, B-290073; B-290073.2, May 20, 2002
B-290073,B-290073.2: May 20, 2002
Who received one of the awards and who alleges that it is entitled to the other two awards under the terms of the solicitation. Was not prejudiced. SBA will conduct three separate sales of "assets. The due diligence contractors are to perform critical functions in preparing the loan files for bidder review and for the asset sales. The estimated dates for initial due diligence set-up to begin for each sale (subject to change by SBA) were as follows: Sale No. 6 December 17. The offerors were to propose a project plan with a timeline identifying all major tasks and individual steps required to complete performance. Each of which was more important than price. Were point scored. METEC alleges that its proposal is the highest rated under each of the three sales.
The METEC Group, B-290073; B-290073.2, May 20, 2002
The METEC Group protests the award of task orders to Carter & Associates and Delclos/Walsh Associates, Inc. under request for proposals (RFP) No. SBA-HQ-01-R-0018, issued by the Small Business Administration (SBA), Asset Sales Program, for "due diligence" services associated with the sales of SBA loans.
We deny the protest.
SBA will conduct three separate sales of "assets," consisting of loans originated under various SBA programs, identified as sale numbers 6, 7 and 8. The RFP, issued October 19, 2001, contemplated the award of three task orders to due diligence service contractors on the General Services Administration Federal Supply Schedule for Financial Asset Services, 621-3, Due Diligence and Support Services. The due diligence contractors are to perform critical functions in preparing the loan files for bidder review and for the asset sales, including such tasks as loan data review, data collection, verification and analysis, database management support, preparation and maintenance of asset review files, preparations of due diligence updates and sales support.
The estimated dates for initial due diligence set-up to begin for each sale (subject to change by SBA) were as follows:
Sale No. 6 December 17, 2001 to January 11, 2002 Sale No. 7 April 15 to May 10, 2002 Sale No. 8 August 19 to September 13, 2002
In response to the RFP, the offerors were to propose a project plan with a timeline identifying all major tasks and individual steps required to complete performance. The offerors generally proposed performance periods of approximately 6 to 12 months. /1/
The RFP provided that the awards would be made considering past performance, project plan, and management plan and staffing as technical evaluation factors, each of which was more important than price. All of the evaluation factors, including price, were point scored.
Four offerors submitted proposals. METEC's proposal received the highest technical score and second-highest price score for each sale and the highest total score for each sale. The agency awarded the task orders under sale 6 to METEC, sale 7 to Carter, and sale 8 to Delclos/Walsh. /2/ Following a debriefing, METEC filed an agency-level protest challenging the awards for sales 7 and 8. SBA denied the agency-level protest. METEC then protested to our Office.
Essentially the protester contends that the solicitation requires each award to be based on the highest-rated proposal considering all proposals submitted for each sale. METEC alleges that its proposal is the highest rated under each of the three sales, and thus it must receive all three awards.
Conversely, the agency, citing the RFP provisions quoted below, contends that the terms of the solicitation contemplate three separate awards to three different contractors. The referenced RFP provisions state:
. . . . .
B. Any Contractor, subcontractor(s), or teaming partner(s)[,] who was a winning bidder or advisor to a winning bidder on any other sales transaction conducted by the SBA, will not be awarded a contract or task order in any capacity on any other SBA asset sale for 180 days from the Closing Date of the previous sale.
. . . . .
19. Organizational Conflict of Interest Solicitation and Contract Provision
. . . . .
E. The Contractor, subcontractors, or partners will not be awarded a contract or task order in any capacity on any other SBA asset sale, unless all assets sold in SBA Asset Sale 6, 7 and 8 have closed with the bidding bidders, or this task order has been cancelled.
. . . . .
21. Multiple Award
SBA intends to make a separate due diligence award for each Asset Sale -- 6, 7 and 8; a total of three awards. However, SBA reserves the right to not make all three awards depending on the technical capability of offerors, price reasonableness, or other reasons allowed by the Federal Acquisition Regulations.
RFP at 32-34.
In addition, the agency states that it made it clear during the pre-proposal conference that an offeror would be eligible for the award of no more than one of the three task orders contemplated. The protester vehemently disagrees that this was communicated at the pre-proposal conference. On the other hand, the intervenors agree with the agency's version. The pre-proposal conference was not recorded or contemporaneously documented in this respect.
As a general rule, the statement in the RFP that the agency intends to make multiple awards does not preclude the agency from awarding all the work solicited under a solicitation to the same offeror. McNeil Techs., Inc., B-278904.2, Apr. 2, 1998, 98-1 CPD Para. 96 at 5; Allied-Signal Aerospace Co., B-240938.2, Jan. 18, 1991, 91-1 CPD Para. 58 at 3. However, we need not resolve the issues of whether the solicitation as written provided for awards to three separate contractors and what was said at the pre-proposal conference because, as discussed below, the protester was not prejudiced by the protested awards. /3/
The record shows, as discussed below, that the agency's actual needs were for three separate contractors to perform the three solicited sales. If the RFP did not sufficiently indicate that three awards to three separate contractors was contemplated, it would be defective, in that multiple awards to the same contractor under the RFP would not satisfy the agency's actual need to limit each awardee to a single task order. However, under an amended RFP with this defect eliminated, METEC could not receive any additional task orders beyond the one that it already has. Accordingly, the protested awards under this RFP did not prejudice METEC. See Plum Run, B-256869, July 21, 1994, 94-2 CPD Para. 38 at 6-7 (protester was not prejudiced by an award under a defective solicitation where the award would remain the same if the agency amended the solicitation and the protester revised its proposal); see also Recon Optical, Inc.; Lockheed-Martin Corp., Fairchild Sys., B-272239, B-272239.2, July 17, 1996, 96-2 CPD Para. 21 at 3-4 (protesters do not have the direct economic interest necessary to protest awards to each other where the solicitation provides for multiple awards, the protesters received the fullest awards possible, and it would not be able to obtain an additional stake in the procurement, even if their protests were sustained).
The agency states that it always intended to limit the awards under the RFP to preclude a single offeror from receiving more than one of the three task orders contemplated by the RFP. The agency states that precluding firms from receiving multiple task orders under consecutive sales is required to preserve for SBA the flexibility to adjust the schedule under one sale without concern for adversely affecting a contractor's performance under another sale, and to further SBA's goals of developing small disadvantaged businesses. Agency Report at 7.
SBA's Asset Sales Program started several years ago as part of a government-wide effort to reduce the amount of debt owned and serviced by federal agencies, and ever since, there has been pressure on SBA to increase the frequency of asset sales. Agency Report at 4. Most recently, the Office of Management and Budget (OMB) requested SBA to accelerate asset sales from two to three per year. Agency Report, Tab 6, Letter from the Director of OMB to the Acting Administrator of SBA (June 18, 2001). As a result, SBA has had to schedule either concurrent or proximate performance of due diligence services under multiple sales.
SBA has previously attempted to have a single contractor perform under consecutive sales and, due to problems with the approach, has rejected that strategy. Agency Report at 5. According to SBA, among the problems with this approach is the adverse impact that schedule delays under the one sale will have on the contractor's ability to perform under another sale. Specifically, METEC was selected to perform the pilot project under sales 2 and 3, and its performance suffered for this very reason; METEC was also selected to perform sale 4, and a similar problem arose under sales 3 and 4. Agency Report at 4-5; Tab 12, SBA E-mail (Sept. 21, 2001). A recommendation to have a separate due diligence contractor for each sale was made over a year before the present solicitation was issued. Agency Report, Tab 7, Memorandum (July 17, 2000). The agency implemented this recommendation in sale 5 with a "conflict of interest" provision (identical to section 19.E of the RFP (quoted above), except that sales 6, 7 and 8 are designated instead of sale 5), which was intended to prohibit a contractor from receiving an award for performance in any capacity under another sale until either performance under the solicited sale was completed or the sale was canceled. Agency Report at 6. The agency intended to again implement this restriction in the present RFP, inasmuch as the frequency of sales was increasing at OMB's request, and thus the potential for disruption to schedules and performance under multiple task orders awarded to the same firm was even greater. Agency Report, Tabs 12 and 13, SBA E-mail (Sept. 20-21, 2001).
The agency also states that the restriction is consistent with the responsibility imposed on SBA by 15 U.S.C. Sec. 644(g) (2000) to provide the maximum practicable opportunity for participation of small disadvantaged businesses in federal contracting. As part of this responsibility, SBA has designated the acquisition of due diligence services for its asset sales as a small disadvantaged business development program. To ensure continuing development of competition from qualified small disadvantaged businesses, SBA states that it needs to distribute multiple task orders among a number of qualified firms. According to SBA, award of multiple task orders to a single firm is not an efficient or effective means for developing small disadvantaged businesses to the maximum extent practicable. /4/ SBA states that it needs to provide opportunities for small disadvantaged business to develop their due diligence services experience, which in turn will enhance competition for future procurements and ensure availability of qualified small disadvantaged businesses from which SBA can procure due diligence services. Agency Report at 8-10.
The determination of the agency's needs and the best method of accommodating them are primarily within the agency's discretion and, therefore, we will not question such a determination unless the record shows that such a determination was without a reasonable basis. U.S. Defense Sys., Inc., B-251544 et al., Mar. 30, 1993, 93-1 CPD Para. 279 at 5; RMS Indus., B-247233, B-247234, May 1, 1992, 92-1 CPD Para. 412 at 2. As discussed below, the protester has not shown that the agency's determination was unreasonable.
METEC primarily alleges that the agency fabricated these alleged needs in response to the protest and does not have a formal policy that reflects these needs. As shown above, the record shows that the agency considered these needs prior to issuing the solicitation and intended that the terms of the RFP reflect these needs. The agency has unequivocally stated that if the RFP does not do this effectively, then the agency will have to amend the RFP so that it does.
The protester also essentially asserts that the current terms of the RFP must prevail over the agency's actual needs. This is incorrect. If award under the terms of the RFP will not satisfy an agency's minimum needs, it should amend the RFP to reflect those terms and complete the procurement under the amended terms. Canberra Indus., Inc., B-271016, June 5, 1996, 96-1 CPD Para. 269 at 4. Since the agency's needs are reasonable here, the agency should have conducted the procurement to properly express and accomplish those needs. Thus, were this protest sustained, we would recommend that the agency amend the RFP, not that it comply with the terms of a defective solicitation.
The protester also alleges that, even if the need to preclude a contractor from performing under two sales at once is reasonable, its proposed performance under sales 6 and 8 do not overlap, so METEC should receive award under sales 6 and 8. However, even apart from the agency's legitimate need to develop multiple small disadvantaged business sources, /5/ the agency's needs include preserving flexibility for the agency to amend sales schedules without adversely affecting performance under another sale. Since performance under sales 6 and 8 are scheduled to occur close in time to each other, schedule changes could result in overlapping performance even if the overlap is not anticipated at the time of award, so the stated need for separate contractors under all three sales is reasonable.
In sum, since the agency's actual need is for three separate contractors to receive awards for these three sales, METEC was not prejudiced by the agency's actions, even assuming the RFP did not adequately express this requirement.
METEC also challenges the award to Carter as improper, alleging that Carter's proposal contained material misrepresentation about the availability of, or Carter's intent to use, certain key personnel or subcontractors, and that the agency unreasonably evaluated Carter's proposal. Given that the agency has reasonable needs to limit a contractor to award of one task order under this RFP, and that METEC has already received one task order, the protester is not in line to receive the task order awarded to Carter, even if that award were found to be unreasonable or improper. A protester is not an interested party to protest an award to another offeror where the protester would not be in line to receive that award were its protest sustained. ECS Composites, Inc., B-235849.2, Jan. 3, 1990, 90-1 CPD Para. 7.
The protest is denied.
Anthony H. Gamboa General Counsel
1. For example, METEC's timeline identified specific dates for separate performance periods under each sale; each performance period was approximately 6 months long and overlapped the proposed performance period under one or both of the other sales by 2 months. METEC's Proposal at 8.
2. For Sale 7, Carter had the next-highest total score behind METEC. For Sale 8, Delclos/Walsh had the third-highest total score behind METEC and Carter.
3. Even if a protester's allegations are true, our Office will not sustain the protest unless the protester demonstrates a reasonable possibility that it was prejudiced by the agency's actions, that is, unless the protester demonstrates that, but for the agency's actions, it would have had a substantial chance of receiving award. McDonald-Bradley, B-270126, Feb. 8, 1996, 96-1 CPD Para. 54 at 3; see Statistica, Inc. v. Christopher, 102 F.3d 1577, 1581 (Fed. Cir. 1996).
4. Prior to this RFP, METEC received all but one of the awards under the first five asset sales. This accentuates the agency's need to develop other small disadvantaged businesses under the program.
5. Although the protester disagrees with the agency's determination that awarding task orders to multiple firms is needed to further the goals of the SBA's small disadvantaged business development program, METEC has failed to show that SBA's methods for developing as many eligible businesses as possible through awards of multiple task orders to multiple firms is an unreasonable method of accomplishing the agency's needs under the program.