B-227921, Oct 27, 1987

B-227921, Oct 27, 1987

PROCUREMENT - Competitive Negotiation - Discussion - Adequacy - Criteria DIGEST: 1. Protest that agency failed to conduct meaningful discussions is without merit where the agency questioned the protester both in writing and during oral discussions with regard to its proposed approach and provided the protester an opportunity to revise its proposal. An agency generally is not required to advise an offeror when requesting best and final offers that the agency continues to have concerns regarding the offeror's proposed approach. PROCUREMENT - Competitive Negotiation - Offers - Evaluation - Downgrading Propriety 2. Where the solicitation specified the type of approach to be used performing the contract, the agency properly downgraded a proposal that did not commit the offeror to using the specified approach. PROCUREMENT - Competitive Negotiation - Contract Awards - Administrative Discretion - Cost/Technical Tradeoff - Technical Superiority 3. An agency properly may award a contract to other than the lowest priced acceptable offeror where the solicitation so provides and the contracting officer determines that a significant difference in technical merit justifies award to the higher-rated offeror despite its higher price. PROCUREMENT - Bid Protests - Non-Prejudicial Allegation - GAO Review 4. Protest that agency did not comply with regulations concerning preaward and postaward notices to unsuccessful offerors is without merit where the protester fails to show that it was prejudiced by the agency's failure to provide the required preaward notice and the record show that the agency in fact provided the required postaward notice without undue delay.

Strategica, Inc.:

Strategica, Inc., protests the award by the National Archives and Records Administration of a contract for management studies to Management Analysis, Inc. (MAI), under request for proposals (RFP) No. NASP-N8-P- 0030. We deny the protest.

The RFP provided for award of a firm, fixed-price contract to the offeror whose proposal the agency determined to be in the best interest of the government. The solicitation listed the technical evaluation factors and their respective weights, and stated that price would be a major factor in selecting from among substantially equal technical proposals. In the event of a significant technical difference between acceptable proposals, the agency would determine whether the difference in technical merit justified an award to other than the lowest-priced offeror.

The agency received four timely proposals. An evaluation committee reviewed and scored the proposals and determined that three were acceptable and one was unacceptable. The committee compiled a list of questions and concerns regarding each of the acceptable proposals and, by letters of March 6, 1987, the agency sent the lists to the respective offerors and invited responses by March 27. In response to the letter, Strategica requested a meeting with the agency, which was held on March 25. The agency reports that all of the weaknesses identified in Strategica's proposal, including the firm's proposed performance measurement system (PMS), discussed at the meeting. In this regard, the solicitation provided that the contractor would develop work performance standards at a number of the agency's branches, and required the use of a pre-determined time system methodology in addressing this requirement. After the meeting, Strategica responded in writing to concerns and questions raised in the agency's March 6 letter.

The agency conducted a further evaluation of the proposals in light of the offerors' responses to the March 6 letters. As a result, the technical evaluation committee revised upward the ratings for all of the proposals, including Strategica's, under several of the evaluation factors. The committee noted, however, that as a result of the discussions it now was clear to the committee that Strategica would not use the required pre-determined time systems and time measurement methods. The committee noted further that the agency in the past had found these systems and methods to be successful and that it was doubtful that Strategica's proposed approach, which involved the development of work performance standards based on existing standards in private industry, would be an improvement. Strategica's proposal received a technical rating of 50.7 (out of a possible 75 points) while the proposal from MAI received a technical rating of 66.2. The committee concluded by nothing that MAI had submitted a "superior" technical proposal.

The contracting officer decided not to conduct further discussions, and the agency requested that the offerors submit best and final offers. Both Strategica and MAI lowered their prices. Strategica's aggregate price was $294,785; MAI's price was $343,827. The contracting officer reviewed the best and final offers and advised the technical evaluation committee that additional information would be required in order to justify an award to MAI despite the difference in prices of more than $53,000. By memorandum dated April 27, the chairman of the committee described in detail the concerns over Strategica's proposed approach for the development of time standards and recommended that award be made to MAI. The contracting officer concurred in this recommendation and awarded a contract to MAI on May 18. By letters dated May 20, the agency notified both MAI and Strategica of the award.

Strategica contends that the agency failed to conduct meaningful discussions with the firm, as required by the Federal Acquisition Regulation (FAR), 48 C.F.R. Sec. 15.610 (1986). The basis for this contention is that after receiving and evaluating Strategica's written response to the agency's letter of March 6, the contracting officer did not advise the firm that its PMS approach continued to be considered a weakness. Strategica argues that an agency may not lead an offeror to believe that a perceived weakness in a proposal has been resolved when in fact that is not the case.

The protester also contends that the agency's evaluation and source selection were not consistent with the terms of the solicitation. Specifically, Strategica complains that the agency apparently downgraded the firm's proposal for failure to propose use of pre determined time systems for purposes of PMS even though, Strategica contends, the RFP did not require this approach. Further, the protester argues that the agency selected the higher-priced MAI proposal for award without justifying, as required, the payment of a premium in excess of $53,000.

Finally, the protester contends that the agency failed to provide the firm with notice prior to award that the agency intended to contract with MAI. Such a notice is required under the FAR, 48 C.F.R. Sec. 15.1001(b)(2), to allow unsuccessful offerors an opportunity to challenge the small business size status of the proposed awardee. The protester also complains that the agency did not provide it with prompt postaward notice of the contract, thus depriving Strategica of an opportunity to file a protest in time to force the suspension of contract performance. In this regard, if within 10 working days after the award of a contract we notify an agency that a protest of the award has been filed with this Office, the agency must direct the contractor to cease performance of the contract. 31 U.S.C. Sec. 3553(d)(1) (Supp. III 1985).

The content and extent of discussions conducted with offerors are primarily matters for the contracting agency to determine. Northwest Regional Educational Laboratory, B-222591.3, Jan. 21, 1987, 87-1 CPD Para. 74. We will review an agency's determinations in this area, however, to ascertain whether the agency complied with statutory and regulatory requirements and otherwise acted reasonably. See Education Development Center, Inc., B-224205, Jan. 30, 1987, 87-1 CPD Para. 99; TIW Systems, Inc., B-222585.8, Feb. 10, 1987, 87-1 CPD Para. 140. As a general rule, the requirement to conduct meaningful discussions is satisfied when an agency directs an offeror's attention to areas of its proposal considered deficient in some respect and affords the offeror an opportunity to revise the proposal. Telecommunications Specialists, Inc., B-224842.2, Feb. 26, 1987, 87-1 CPD Para. 221.

Here, the agency posed to Strategica in its letter of March 6 several specific questions regarding the firm's proposed approach in the PMS area. The record indicates that this area also was discussed at the meeting held on March 25. The protester subsequently submitted additional information to the agency, and had a final opportunity to revise its proposal in response to the request for best and final offers. In our view, the agency thus met its obligation to conduct meaningful discussions with Strategica. Although the protester takes the position that the agency was obligated to advise the firm prior to the submission of best and final offers that the agency continued to have concerns regarding the firm's approach to PMS, we are not aware of any such requirement. recognize that an agency should not lead an offeror to believe incorrectly that a perceived deficiency has been resolved as a result of discussions, Checchi and Co., 56 Comp.Gen. 473 (1977), 77-1 CPD Para. 232, but there is no indication in the record in this case that the agency said or did anything that would have led Strategica reasonably to believe that concerns in the PMS area no longer existed.

There also is no merit to the protester's contention that the agency's evaluation and source selection were not consistent with the terms of the RFP. Contrary to the protester's assertion, the RFP required the use of a particular type of approach in the PMS area. For each of the six agency branches at which work would be performed, the RFP provided: "The contractor shall use Standard Data and Pre Determined Time Systems methodology based on Methods-Time Measurement (MTM) and/or recognized Pre- determined Systems." The protester does not contend that it offered to comply with this requirement.

With respect to the selection of MAI for award, the RFP provided for award to other than the low offeror if the agency determined that the technical superiority of a higher-cost proposal warranted the payment of a premium. After receipt of best and final offers, the technical evaluation committee was specifically requested to consider whether the perceived technical superiority of MAI's proposal justified the payment of a price premium of $53,000. The contracting officer considered the committee's response /l/ and, aware of the price difference between the proposals, determined that the protester's proposal did not offer the greatest value to the government. We conclude that the selection of MAI for award was consistent with the criteria for selection contained in the RFP.

Finally, the agency's actions with respect to announcing the award to MAI provide no basis for disturbing the award. The contracting officer admits a failure to comply with the requirement in the FAR that unsuccessful offerors in small business set-aside procurements be given preaward notice of the name and location of the apparent successful offeror, and attributes it to an unintentional oversight. We find no prejudice to Strategica, however, since the purpose of the notice requirement is to permit timely size status protests, and Strategica does not allege that it had any basis before award for protesting the size status of MAI. /2/ With respect to the postaward notice, the record indicates that the agency mailed the requisite notice to Strategica on May 20, 2 days after award, and that the firm received the notice on the 8th day after award, which was the first working day after a 3-day holiday weekend. We find no indication that the agency intentionally delayed the postaward notice to Strategica.

The protest is denied.

/1/ Strategica argues that since the memorandum dated April 2i from the chairman of the evaluation committee was not discussed or made available at the postaward debriefing, the memorandum may have been written after Strategica filed its protest with this Office in July. There is nothing in the record, however, to support Strategica's speculation.

/2/ In a postaward letter to the contracting officer, Strategica's attorney stated that the firm was in possession of a report indicating that MAI in fact was a small business. For this reason, and based on the contracting officer's representation that MAI's proposal did not evidence an intent to subcontract with a large business, Strategica said it would refrain from protesting MAI's size status.