B-173674, NOV 8, 1971, 51 COMP GEN 272

B-173674, NOV 8, 1971, 51 COMP GEN 272

CONTRACTS - NEGOTIATION - EVALUATION FACTORS - FACTORS OTHER THAN PRICE MINORITY SUBCONTRACTING UNDER A REQUEST FOR PROPOSALS FOR INSTITUTIONAL SUPPORT SERVICES AT THE GEORGE C. MARSHALL SPACE FLIGHT CENTER TO BE EVALUATED ON FIVE MAIN CRITERIA - EXPERIENCE; STAFFING; MANAGEMENT; POLICIES, PROCEDURES, AND FINANCIAL CAPABILITY; AND FACILITIES AND EQUIPMENT - WITH NO PROVISIONS FOR THE FORMAL SCORING OF SUBCRITERIA THAT INCLUDED SUBCONTRACTING WITH SMALL BUSINESS CONCERNS OR MINORITY OWNED ENTERPRISES, AND THE ASSIGNMENT OF NUMERICAL VALUE TO COST ESTIMATES, THE SELECTION OF THE OFFEROR THAT RANKED BEHIND ITS COMPETITORS ON THE BASIS OF SUBCONTRACTING WITH AN INEXPERIENCED MINORITY CUSTODIAL FIRM IS WITHIN THE AUTHORITY OF THE SOURCE SELECTION OFFICIAL, IN THE ABSENCE OF STATUTORY OR REGULATORY DIRECTION, EVEN THOUGH THE SELECTION WAS A DEPARTURE FROM SOUND PROCUREMENT POLICY FROM A COMPETITIVE STANDPOINT SINCE THE OFFICIAL SHOULD HAVE INFORMED OFFERORS WHEN THE RELATIVE IMPORTANCE OF THE MINORITY SUBCONTRACTING FACTOR WAS CHANGED.

TO THE ADMINISTRATOR, NATIONAL AERONAUTICS AND SPACE ADMINISTRATION, NOVEMBER 8, 1971:

WE REFER TO REPORTS DATED AUGUST 26 AND OCTOBER 12, 1971 (REFERENCE KDA- 2), CONCERNING THE PROTEST OF RCA SERVICE COMPANY, AND SEVERAL OF ITS PROSPECTIVE SUBCONTRACTORS, UNDER REQUEST FOR PROPOSALS (RFP) NO. 3 1-14- 00001, ISSUED ON OCTOBER 23, 1970, BY THE GEORGE C. MARSHALL SPACE FLIGHT CENTER. THE RFP COVERED THE FURNISHING OF CERTAIN INSTITUTIONAL SUPPORT SERVICES AT THE FLIGHT CENTER CONSISTING OF TELECOMMUNICATIONS, PHOTOGRAPHIC AND REPRODUCTION EQUIPMENT REPAIR, GRAPHIC ARTS, MODELS AND EXHIBITS, TECHNICAL PUBLICATIONS, DOCUMENTATION REPOSITORY, PROTECTIVE SERVICES, CUSTODIAL SERVICES, AND LAUNDRY AND REFUSE COLLECTION SERVICES FOR A PERIOD OF 1 YEAR, WITH AN OPTION TO EXTEND THE PERIOD OF PERFORMANCE FOR A MAXIMUM OF TWO 1-YEAR PERIODS.

THE RFP STATED THAT A COST-PLUS-AWARD-FEE (CPAF) TYPE OF CONTRACT WAS CONSIDERED MOST DESIRABLE FOR THIS PROCUREMENT BUT THAT IF ANY FIRM DESIRED ANOTHER TYPE OF CONTRACT, OR INCENTIVE PLAN, ITS ALTERNATE PROPOSAL WOULD BE CONSIDERED BUT ONLY AS A SECONDARY APPROACH TO THE SPECIFIED TYPE.

SECTION IV, EVALUATION OF PROPOSALS, OF THE RFP ESTABLISHED FIVE CRITERIA FOR EVALUATING PROPOSALS AND SET FORTH THE RELATIVE IMPORTANCE OF THESE CRITERIA AS FOLLOWS:

B. EVALUATION CRITERIA - PROPOSALS WILL BE EVALUATED AND RANKED AGAINST THE FOLLOWING CRITERIA AND A NUMERICAL SCORE ASSIGNED. THE TOTAL WEIGHTS OF THE FIRST THREE CRITERIA ARE APPROXIMATELY FIVE TIMES GREATER THAN THE WEIGHT OF THE FOURTH CRITERIA. IN EVALUATING THE FIRST THREE CRITERIA, PRIMARY CONSIDERATION WILL BE GIVEN INFORMATION RECEIVED UNDER THE FIRST TWO CRITERIA (MANAGEMENT PLAN AND PREVIOUS EXPERIENCE), WHICH ARE APPROXIMATELY EQUAL TO EACH OTHER. INFORMATION RECEIVED UNDER THE THIRD CRITERION (STAFFING PLAN) WILL BE GIVEN SOMEWHAT LESS CONSIDERATION THAN EITHER OF THE FIRST TWO CRITERIA. IN EVALUATING THE LAST TWO CRITERIA, PRIMARY CONSIDERATION WILL BE GIVEN INFORMATION RECEIVED UNDER THE FOURTH CRITERION (POLICIES, PROCEDURES AND FINANCIAL CAPABILITY). SIGNIFICANTLY LESS CONSIDERATION WILL BE GIVEN THE FIFTH CRITERION (FACILITIES AND EQUIPMENT).

1. MANAGEMENT PLAN - UNDER THIS CRITERION THE PROPOSER WILL BE EVALUATED ON THE OVERALL QUALITY OF THE MANAGEMENT OPERATIONS, WHETHER PRIME CONTRACTOR OR SUBCONTRACTOR, ENVISIONED TO PROPERLY PLAN, IMPLEMENT AND CONTROL THE TECHNICAL AND BUSINESS PERFORMANCE OF THE SUPPORT CONTRACT. RESPONSIVENESS TO THE REQUIREMENTS OF THE RFP, I.E., THE NUMBER AND EXTENT OF DEVIATIONS OR EXCEPTIONS WILL BE CONSIDERED TO DETERMINE THE DEGREE OF ANY NON-COMPLIANCE. EVALUATION WILL INCLUDE THE FOLLOWING ASPECTS OF YOUR PLAN:

A. ORGANIZATION

B. PROCESSING AND CONTROL OF WORK

C. MANAGEMENT INFORMATION SYSTEMS

D. PHASE-IN

E. MAKE-OR-BUY PLAN

F. SMALL AND MINORITY BUSINESS UTILIZATION PLAN - SPECIAL CONSIDERATION WILL BE GIVEN TO PROPOSALS CONTAINING FIRM COMMITMENTS TO SMALL BUSINESS SUBCONTRACTORS OR MINORITY OWNED ENTERPRISES. (SEE PART A, SECTION I, PARAGRAPHS Q. AND R.)

2. PREVIOUS EXPERIENCE - EVALUATION OF YOUR EXPERIENCE WILL INCLUDE THE EXTENT TO WHICH DIRECTLY RELATED SERVICES HAVE BEEN SUCCESSFULLY PERFORMED AND MANAGED DURING THE PAST SEVERAL YEARS.

3. STAFFING PLAN

4. POLICIES, PROCEDURES AND FINANCIAL CAPABILITY

(A) POLICIES, PROCEDURES AND PRACTICES.

(B) FINANCIAL CAPABILITY.

5. FACILITIES AND EQUIPMENT

SECTION I, GENERAL INFORMATION, AND SECTION II, PROPOSAL CONTENT, OF THE RFP PROVIDED FURTHER INSTRUCTIONS REGARDING THE EVALUATION CRITERIA FOR THE REQUIREMENT AS FOLLOWS:

I. GENERAL INFORMATION

Q. PARTICIPATION BY SMALL BUSINESS FIRMS

A. IT IS NATIONAL POLICY THAT A REASONABLE PROPORTION OF NASA PURCHASES BE PLACED WITH SMALL BUSINESS FIRMS AND THAT THE NUMBER OF FIRMS ENGAGED IN RESEARCH AND DEVELOPMENT WORK BE EXPANDED TO INCLUDE COMPETENT SMALL BUSINESS. ACCORDINGLY, ANY CONTRACT AWARDED AS A RESULT OF THIS SOLICITATION SHALL FULLY COMPLY WITH THE INTENT OF THIS POLICY, AND SUCCESSFUL PROPOSERS SHALL AGREE TO USE THEIR BEST EFFORTS IN PLACING SUBCONTRACTS AND PURCHASES IN ACCORDANCE WITH ITS OBJECTIVES.

C. IN FOSTERING STATED SMALL BUSINESS POLICY OBJECTIVES THE SOURCE EVALUATION BOARD WILL FAVOR THOSE PROPOSALS CONTAINING FIRM COMMITMENTS WHICH ESTABLISH SET-ASIDES FOR SMALL BUSINESS SUBCONTRACTS. ACCORDINGLY, PROPOSERS SHALL INDICATE THE PARTICULAR FUNCTIONS, IF ANY, IN THE SCOPE OF WORK THAT WOULD BE PERFORMED BY SUBCONTRACT UNDER A SET ASIDE OR SIMILAR ARRANGEMENT RESERVED FOR PARTICIPATION ONLY BY FIRMS CLASSIFIED AS SMALL BUSINESS CONCERNS. IN THE EVENT A PROPOSER DOES NOT OFFER A SET-ASIDE OF FUNCTIONS FOR SUBCONTRACTING TO SMALL BUSINESS FIRMS, THE REASONS THEREFOR SHALL BE INCLUDED IN HIS PROPOSAL.

R. PARTICIPATION BY MINORITY BUSINESS FIRMS

A. CONSISTENT WITH THE NATIONAL INTEREST, IT IS NASA POLICY TO INCREASE THE TOTAL MINORITY BUSINESS PARTICIPATION AND THE NUMBER OF MINORITY FIRMS PARTICIPATING IN NASA PROCUREMENTS. ANY CONTRACT AWARDED AS A RESULT OF THIS SOLICITATION SHALL FULLY COMPLY WITH THE INTENT OF THIS POLICY, AND SUCCESSFUL PROPOSERS SHALL AGREE TO ACTIVELY SEEK OUT AND PLACE CONTRACTS WITH MINORITY FIRMS AND OTHERWISE USE THEIR BEST EFFORTS IN PLACING SUBCONTRACTS AND PURCHASES IN ACCORDANCE WITH THESE OBJECTIVES, AND CONSISTENT WITH EFFICIENT PERFORMANCE OF THE CONTRACT WORK.

B. IN FOSTERING MINORITY BUSINESS POLICY OBJECTIVES, THE SOURCE EVALUATION BOARD WILL FAVOR THOSE PROPOSALS CONTAINING FIRM COMMITMENTS TO AWARD CONTRACTS TO MINORITY BUSINESS FIRMS. ACCORDINGLY, PROPOSERS SHALL INDICATE THE PARTICULAR FUNCTIONS, IF ANY, IN THE SCOPE OF WORK THAT WOULD BE PERFORMED BY SUBCONTRACT TO MINORITY FIRMS. IN THE EVENT A PROPOSER DOES NOT OFFER TO SUBCONTRACT TO, OR PROCURE FROM, MINORITY FIRMS, THE REASONS THEREFOR SHALL BE INCLUDED IN HIS PROPOSAL.

II. PROPOSAL CONTENT

F. PROPOSAL DATA

1. MANAGEMENT PLAN

F. SMALL AND MINORITY BUSINESS UTILIZATION PLAN - PROPOSALS SHALL INDICATE THE EXTENT TO WHICH THE SCOPE OF WORK COVERED BY THIS REQUEST FOR PROPOSALS WILL BE PERFORMED BY SMALL BUSINESS AND MINORITY OWNED CONCERNS (EITHER AS A PRIME OR SUBCONTRACTOR). FURTHER, THE PROPOSER SHALL INCLUDE HIS PLAN FOR THE FULFILLMENT OF THE OBJECTIVES OF THE NATIONAL SMALL BUSINESS AND MINORITY OWNED ENTERPRISE PROGRAM.

2. PREVIOUS EXPERIENCE

A. THE PROPOSER SHALL PROVIDE A LISTING OF RELATED TECHNICAL EXPERIENCE AND CONTRACTS HE AND PROPOSED SUBCONTRACTORS HAVE PERFORMED DURING THE PAST SEVERAL YEARS. THE LISTING SHOULD IDENTIFY THE CONTRACT, PROJECT AND NAMES, ADDRESSES AND TELEPHONE NUMBERS OF RESPONSIBLE GOVERNMENT TECHNICAL PERSONNEL AND CONTRACTING OFFICERS WHO HAVE KNOWLEDGE OF THE CONTRACTOR'S PERFORMANCE. IN ORDER TO ASSIST THE GOVERNMENT'S QUALITATIVE EVALUATION IN THIS AREA, THE PROPOSER IS ENCOURAGED TO FURNISH A SELF-ANALYSIS OF SUCH PREVIOUS EXPERIENCE BY RANKING HIS PERFORMANCE OF THESE PROJECTS AS ABOVE-AVERAGE, AVERAGE, AND BELOW-AVERAGE. EXPERIENCE DATA SHOULD COVER THE PROPOSER'S QUALIFICATIONS IN CRITICAL AREAS OF THE STATEMENT OF WORK AS WELL AS PROVIDE A VERIFIABLE INDICATION OF ABILITY TO PERFORM THIS PROPOSED PROCUREMENT.

THE RFP WAS ISSUED TO 93 FIRMS ON OCTOBER 23, 1970. SUBSEQUENTLY, 60 ADDITIONAL FIRMS REQUESTED AND WERE ALSO FURNISHED COPIES OF THE RFP.

ON DECEMBER 9, 1970, PROPOSALS FOR THE PROCUREMENT WERE RECEIVED FROM HAYES INTERNATIONAL CORPORATION (HAYES), RCA SERVICE COMPANY (RCA), AND THE FEDERAL ELECTRIC CORPORATION (FEC).

THE RECORD INDICATES THAT THESE PROPOSALS WERE SUBSEQUENTLY ANALYZED IN ACCORDANCE WITH AN EVALUATION PLAN ESTABLISHED PRIOR TO ISSUANCE OF THE RFP. THAT PLAN ESTABLISHED PROCEDURES FOR A DETAILED EVALUATION OF PROPOSALS BY A SOURCE EVALUATION BOARD (SEB) IN ACCORDANCE WITH THE CRITERIA SET FORTH IN THE RFP AND SPECIFIED NUMERICAL WEIGHTS FOR THOSE CRITERIA AS FOLLOWS:

SEB EVALUATION CRITERIA, WEIGHTS, AND FACTORS

CRITERIA FACTORS

I. PREVIOUS EXPERIENCE (300) A. EXTENT OF TECHNICAL

EXPERIENCE

B. APPLICABILITY OF

TECHNICAL EXPERIENCE

C. VERIFIABILITY OF

TECHNICAL EXPERIENCE

D. BUSINESS EXPERIENCE

II. STAFFING PLAN (200) A. INITIAL STAFF

B. BUILD-UP PLAN

C. SOURCES OF MANPOWER

D. KEY PERSONNEL

QUALIFICATIONS

III. MANAGEMENT PLAN (300) A. ORGANIZATION

B. PROCESSING AND

CONTROL OF WORK

C. MANAGEMENT INFORMATION

SYSTEMS

D. PHASE-IN

E. MAKE-OR-BUY PLAN

F. SMALL AND MINORITY

BUSINESS UTILIZATION

PLAN

IV. POLICIES, PROCEDURES (150) A. POLICIES, PROCEDURES

AND FINANCIAL AND PRACTICES

CAPABILITY B. AVAILABILITY

V. FACILITIES AND (50) A. ADEQUACY

EQUIPMENT B. FINANCIAL CAPABILITY

C. LOCATION

TOTAL (1000)

IN THIS CONNECTION THE PLAN DID NOT PROVIDE FOR SCORING BY THE SEB AT THE SUBCRITERION OR FACTOR LEVEL, THAT IS, THOSE EVALUATION STANDARDS INDICATED BY THE ALPHABETICAL DESIGNATIONS UNDER EACH OF THE FIVE MAIN CRITERIA. HOWEVER, THE PLAN DID PROVIDE THAT PROPOSALS WERE TO BE INFORMALLY SCORED AT THE SUBCRITERION LEVEL BY COMMITTEES WHICH WERE ESTABLISHED TO ASSIST THE SEB. ALSO, COST ESTIMATES WERE NOT TO BE ESTABLISHED TO ASSIST THE SEB. ALSO, COST ESTIMATES WERE NOT TO BE USED IN EVALUATING AN OFFERORS UNDERSTANDING OF THE SERVICES TO BE PERFORMED.

THE RECORD SHOWS THAT THE SEB COMMENCED ITS EVALUATION OF THE QUOTATIONS ON DECEMBER 10, 1970, THE DAY FOLLOWING THE CLOSING DATE SET FOR RECEIPT OF PROPOSALS. THE INITIAL SCORES AND RANKING ON THE BASIC PROPOSALS WERE:

MAX RCA HAYES FEC

CRITERIA SCORE SCORE SCORESCORE

PREVIOUS EXPERIENCE 300 270 240 240

STAFFING PLAN 200 180 150 150

MANAGEMENT PLAN 300 270 230 180

POL., PROC. & FIN. CAP. 150 110 120 120

FACILITIES & EQUIP. 50 50 50 40

TOTAL SCORE 1000 880 790 730

THE SCORES WERE ACCOMPANIED BY NARRATIVE STATEMENTS SETTING FORTH THE STRENGTHS AND WEAKNESSES OF THE QUOTATIONS, UPON WHICH BASIS THE SCORES WERE ASSIGNED.

IN THIS REGARD, THE RECORD SHOWS THAT THE SEB GAVE HAYES 240 POINTS OUT OF 300 FOR PREVIOUS EXPERIENCE AND NOTED THAT THE CONTRACTOR HAD LIMITED EXPERIENCE IN TELECOMMUNICATIONS, REPAIR OF PHOTOGRAPHIC AND REPRODUCTION EQUIPMENT, CUSTODIAL SERVICES AND LAUNDERING OF CLEAN ROOM GARMENTS.

THE SEB FURTHER REPORTED THAT HAYES PROPOSED TO SUBCONTRACT THE CUSTODIAL SERVICES TO A NEWLY ORGANIZED MINORITY FIRM AND THAT THE PROPOSED COST OF THIS SUBCONTRACT WAS IN EXCESS OF $4 MILLION.

WITH RESPECT TO HAYES' STAFFING PLAN THE BOARD NOTED THAT ITS KEY PERSONNEL IN THE AREAS OF TELECOMMUNICATIONS, INDUSTRIAL RELATIONS, SUBCONTRACT OPERATIONS, AND CUSTODIAL SERVICES LACKED EXPERIENCE.

BASED ON THE POINT SCORES, ALL OF THE BASIC PROPOSALS WERE DETERMINED TO BE IN THE COMPETITIVE RANGE FOR THE PROCUREMENT, SINCE THEIR OVERALL APPROACHES WERE EITHER ACCEPTABLE OR CORRECTABLE TO THE EXTENT THAT THEY HAD A REASONABLE POTENTIAL FOR SELECTION FOR FINAL CONTRACT AWARD. SUBSEQUENTLY, ORAL DISCUSSIONS WERE CONDUCTED WITH THE CONCERNS ON MARCH 23, 1971. IN THIS REGARD, THE RECORD INDICATES THAT THESE DISCUSSIONS WERE LIMITED TO CLARIFICATION OF AMBIGUITIES OR UNCERTAINTIES IN THE PROPOSAL, BUT IN ACCORD WITH NASA PROCUREMENT REGULATION DIRECTIVE NO. 70- 15, DATED DECEMBER 1, 1970, DEFICIENCIES IN THE PROPOSALS WERE NOT DISCUSSED.

AFTER FINAL OFFERS WERE RECEIVED BY THE COMMON CUTOFF DATE ESTABLISHED ON APRIL 2, 1971, THE SEB FINALLY SCORED AND RANKED THE FINAL PROPOSALS OF RCA AND HAYES AS FOLLOWS:

CHANGES IN INITIAL SCORES

MAX RCA SVC CO HAYES BASIC SCORE INITIAL FINAL INITIAL FINAL

PREV EXP 300 270 270 240240

STAFF PLAN 200 180 180 150 150

MGMT 300 270 280 230 240

POL, PROC & FIN CAP 150 110 110 120 120

FAC & EQUIP 50 50 50 50 50

TOTAL 1000 880 890 790 800

THE PROPOSAL SUBMITTED BY FEC RECEIVED A TOTAL POINT SCORE OF 840.

WITH RESPECT TO THE COSTS PROPOSED BY RCA AND HAYES, THE BOARD STATED THAT NEITHER THE GOVERNMENT ESTIMATE NOR THE PROPOSERS COST ESTIMATES WERE MORE ACCURATE THAN OR - 5 PERCENT. INASMUCH AS THERE WAS ONLY A COST DIFFERENTIAL BETWEEN HAYES AND RCA'S PROPOSALS OF 3.8 PERCENT, THE DIFFERENCE IN THE SEB ESTIMATED COSTS FOR THESE PROPOSALS WAS CONSIDERED NEGLIGIBLE.

THE RECORD INDICATES THAT THE SEB'S EVALUATION OF THE PROPOSALS WAS PRESENTED TO THE SOURCE SELECTION OFFICIAL ON JUNE 7, 1971, WHO SUBSEQUENTLY CONCLUDED THAT THE COMPETITION AMONG THE CONTENDERS WAS CLOSE; THAT THERE WAS NO ASSURANCE OF ANY DIFFERENTIAL IN COST BETWEEN THE OFFERORS, BUT THERE WAS A POSSIBLE SLIGHT DIFFERENTIAL IN FAVOR OF HAYES; THAT HE WAS PARTICULARLY IMPRESSED BY THE EFFORTS OF HAYES IN LOCATING AND ASSISTING A NEGRO-OWNED FIRM CAPABLE OF TAKING ON THE IMPORTANT CUSTODIAL SUBCONTRACT; THAT HE DISCOUNTED THE REPORTED WEAKNESS OF HAYES FLOWING FROM THE SUBCONTRACTOR'S LACK OF EXPERIENCE, AS AN UNAVOIDABLE CONSEQUENCE OF INCREASING MINORITY BUSINESS PARTICIPATION IN NASA'S WORK; THAT, ALTHOUGH HAYES WAS RANGED BEHIND BOTH RCA AND FEC IN THE BOARD'S EVALUATION, THE DIFFERENCES WERE NOT GREAT; AND THAT THE WEAKNESSES IN HAYES' PROPOSAL APPEARED TO BE CORRECTABLE IN THE FINAL CONTRACT NEGOTIATIONS. ACCORDINGLY, HAYES INTERNATIONAL CORPORATION WAS SELECTED FOR THE AWARD. HOWEVER, THE SOURCE SELECTION OFFICIAL DIRECTED THAT SPECIAL ATTENTION BE GIVEN IN THE CONTRACT NEGOTIATIONS TO OVERCOMING THE REPORTED WEAKNESS OF THE CORPORATION IN THE AREA OF TELECOMMUNICATIONS WORK AND ITS PROPOSED KEY PERSONNEL IN THAT AREA. THE SOURCE SELECTION OFFICIAL ALSO DIRECTED THAT CEILINGS ON INDIRECT COSTS BE NEGOTIATED PRIOR TO AWARD.

ON JUNE 30, 1971, RCA WAS GIVEN A FORMAL DEBRIEFING TO DISCUSS THE WEAK POINTS OF ITS PROPOSAL. IN THIS REGARD RCA'S PROPOSAL WAS CRITICIZED, AMONG OTHER THINGS, FOR TOKEN UTILIZATION OF MINORITY OWNED CONCERNS, SINCE ITS ONLY MINORITY GROUP SUBCONTRACT WAS FOR $127,964 AND INVOLVED FIVE EMPLOYEES. RCA WAS FURTHER ADVISED THAT IF IT HAD BEEN SELECTED FOR NEGOTIATIONS THAT IT COULD HAVE CHANGED ITS PROPOSAL TO INCLUDE ADDITIONAL MINORITY OWNED FIRMS, PROVIDED THAT SUCH CONCERNS WERE "CAPABLE AND ECONOMICAL." HOWEVER, THE DEBRIEFER STATED THAT THE SEB DID NOT REGARD RCA'S PROPOSAL AS DEFICIENT IN THE MINORITY BUSINESS AREA.

THE PROTESTING CONCERNS MAINTAIN, AMONG OTHER THINGS, THAT THE SELECTION OF HAYES WAS NOT BASED ON ADHERENCE TO THE RELATIVE IMPORTANCE OF THE EVALUATION CRITERIA SET FORTH IN THE RFP. IN THIS REGARD IT IS STATED THAT RCA WAS INFORMED IN THE DEBRIEFING THAT ITS PROPOSAL RATED MUCH HIGHER THAN HAYES IN ITS APPROACH TO ACCOMPLISH THE TELECOMMUNICATIONS SERVICES OF THE RFP; THAT THE STATEMENT OF THE SELECTION OFFICIAL REGARDING THE IMPORTANCE OF HAYES' MINORITY SUBCONTRACTING EFFORT AS A BASIS FOR SELECTING THAT CONCERN FOR AWARD INDICATES THAT THE SELECTION OFFICIAL GAVE GREATER WEIGHT TO THE SMALL AND MINORITY BUSINESS SUBCRITERION OF THE RFP THAN WAS OTHERWISE INDICATED BY THE FACT THAT SUCH SUBCRITERION WAS PLACED LAST UNDER THE GENERAL CRITERION "MANAGEMENT PLAN"; AND THAT THE DECISION OF THE SELECTION OFFICIAL TO DISCOUNT THE REPORTED WEAKNESS OF HAYES FLOWING FROM THE LACK OF EXPERIENCE OF THAT COMPANY'S MINORITY BUSINESS SUBCONTRACTOR WAS IN CONTRAVENTION OF THE STATEMENT OF THE RFP THAT AN OFFEROR'S PREVIOUS EXPERIENCE, INCLUDING THE EXPERIENCE OF HIS SUBCONTRACTORS IN FURNISHING DIRECTLY RELATED SERVICES WAS AN IMPORTANT EVALUATION CRITERION. ACCORDINGLY, RCA REQUESTS THAT NEGOTIATIONS SHOULD BE CONDUCTED WITH THAT FIRM WHOSE PROPOSAL "MOST SATISFIED THE REQUIREMENTS OF THE PROCURING ACTIVITY IN CONFORMITY WITH THE TERMS OF THE RFP," OR ALTERNATIVELY, THAT THE REQUIRED SERVICES BE RECOMPETED.

IT IS THE POSITION OF YOUR ADMINISTRATION THAT ALL OFFERORS WERE ADEQUATELY ADVISED IN THE RFP THAT THEIR PLANS TO UTILIZE SMALL AND MINORITY BUSINESSES WOULD BE CONSIDERED IN SELECTING A SUCCESSFUL OFFEROR FOR THE AWARD; THAT THE SEB EVALUATED THE PROPOSAL STRICTLY IN ACCORDANCE WITH THE CRITERIA ESTABLISHED IN THE RFP, UTILIZING A SCORING SYSTEM FOR THE PURPOSE OF FACILITATING THE ACHIEVEMENT OF OBJECTIVITY AND IMPARTIALITY; AND THAT THE DISCRIMINATING FACTORS, NOTED ABOVE, WHICH WERE USED BY THE SELECTION OFFICIAL IN SELECTING ONE OF FIVE CLOSELY RANKED PROPOSALS WERE REASONABLE, IN ACCORDANCE WITH BROAD NASA OBJECTIVES AND NATIONAL GOALS, AND CONSISTENT WITH THE RFP.

IT HAS BEEN THE CONSISTENT POSITION OF OUR OFFICE THAT OFFERORS SHOULD BE PLACED IN A POSITION TO MAKE ACCURATE AND REALISTIC PROPOSALS BY INFORMING THEM IN THE SOLICITATION OF THE RELATIVE IMPORTANCE TO BE ATTACHED TO EACH EVALUATION FACTOR. 44 COMP. GEN. 439, 442 (1965). ACCORDINGLY, WE HAVE HELD THAT EACH EVALUATION FACTOR AND ITS RELATIVE IMPORTANCE SHOULD BE DISCLOSED TO OFFERORS. B-167867, JANUARY 20, 1970; B-167508, DECEMBER 8, 1969; 48 COMP. GEN. 314, 318 (1968).

IN THIS REGARD, THE NASA SOURCE EVALUATION BOARD MANUAL, NPC 402, AS AMENDED, PARAGRAPH 512, SECTION (G), PROVIDES THAT THE RFP SHOULD INCLUDE "A GENERAL INDICATION OF THE RELATIVE IMPORTANCE OF THE AREAS OF INTEREST," WHICH "WILL HAVE THE BENEFICIAL EFFECT OF FOCUSING THE CONCERN'S MAJOR ATTENTION TO THE MORE SIGNIFICANT AREAS TO BE COVERED IN THE EVALUATION PROCESS."

WITH RESPECT TO THE ACTION OF THE SELECTION OFFICIAL IN DISCOUNTING THE INEXPERIENCE OF HAYES' MINORITY GROUP SUBCONTRACTOR, IT APPEARS THAT SUCH DECISION REFLECTED A DIFFERENT INTERPRETATION OF THE "PREVIOUS EXPERIENCE" CRITERION WITH RESPECT TO THE EVALUATION OF THE EXPERIENCE OF THIS SUBCONTRACTOR THAN THE SEB HAD ADOPTED AND APPLIED. IN THIS REGARD IT IS CLEAR THAT THE SEB INTERPRETED THE PREVIOUS EXPERIENCE CRITERION TO APPLY EQUALLY TO ALL PROSPECTIVE SUBCONTRACTORS, WHETHER THE CONCERNS WERE MINORITY OWNED OR NOT. IT IS OUR OPINION THAT THIS IS THE ONLY INTERPRETATION WHICH CAN REASONABLY BE DERIVED FROM THE PREVIOUS EXPERIENCE PORTION OF THE RFP.

IN THIS CONNECTION YOUR ADMINISTRATION'S SOURCE EVALUATION BOARD MANUAL, NPC 402, AS AMENDED, CHAPTER 5, SOURCE EVALUATION PROCEDURES, PROVIDES THAT THE SOURCE EVALUATION BOARD IS CHARGED WITH ESTABLISHING THE PROPOSED EVALUATION CRITERIA FOR A REQUEST FOR PROPOSALS; THAT THE CHAIRMAN OF THE BOARD IS DIRECTED TO FURNISH SUCH CRITERIA TO THE COGNIZANT PROCUREMENT OFFICE FOR USE IN THE RFP; AND THAT THE RFP WILL NOT BE ISSUED TO PROSPECTIVE SOURCES UNTIL IT HAS BEEN REVIEWED AND APPROVED BY THE BOARD.

IN VIEW OF THE ABOVE, IT IS CLEAR THAT THE BOARD WAS RESPONSIBLE FOR ESTABLISHING THE "PREVIOUS EXPERIENCE" CRITERION AND THE "SMALL AND MINORITY BUSINESS UTILIZATION PLAN" SUBCRITERION UNDER THE SUBJECT RFP. IT FOLLOWS THAT THE SEB'S INTERPRETATION OF THE INTERRELATIONSHIP OF THOSE CRITERIA, NOTED ABOVE, AS REQUIRING THE EQUAL EVALUATION OF THE EXPERIENCE OF ALL SUBCONTRACTORS, WITHOUT REFERENCE TO WHETHER THE SUBCONTRACTOR QUALIFIED AS A MINORITY GROUP SUBCONTRACTOR, MUST BE CONSIDERED TO BE WHAT WAS MEANT BY THE LANGUAGE USED. IT IS OUR OPINION THAT THE INTERPRETATION WHICH THE SEB PLACED UPON THE LANGUAGE SET OUT IN THE PREVIOUS EXPERIENCE PORTION OF THE RFP IS REASONABLE AND IS THE INTERPRETATION WHICH PROSPECTIVE CONTRACTORS WERE INTENDED TO USE IN FORMULATING THEIR PROPOSALS.

IN VIEW THEREOF, IT IS APPARENT THAT THE DECISION OF THE SELECTION OFFICIAL TO MAKE A DISTINCTION IN EVALUATING THE EXPERIENCE OF HAYES' CUSTODIAL SUBCONTRACTOR BASED ON ITS MINORITY OWNERSHIP WAS CONTRARY TO THE ADVICE WHICH THE SEB INTENDED TO FURNISH TO ALL OFFERORS IN THE RFP.

WITH RESPECT TO THAT PORTION OF THE PROTEST WHICH IS DIRECTED TO WHETHER THE RFP ADEQUATELY ADVISED OFFERORS OF THE IMPORTANCE WHICH THE SOURCE SELECTION OFFICIAL PLACED UPON UTILIZATION OF MINORITY GROUP SUBCONTRACTS, AS CONTEMPLATED UNDER THE MANAGEMENT PLAN EVALUATION CRITERION IN THE RFP, WE NOTE THAT THIS PORTION OF THE RFP ADVISED OFFERORS SPECIAL CONSIDERATION WOULD BE GIVEN TO PROPOSALS CONTAINING FIRM COMMITMENTS TO SMALL BUSINESS SUBCONTRACTORS OR MINORITY OWNED ENTERPRISES. HOWEVER, NO INDICATION WAS GIVEN TO OFFERORS RELATIVE TO THE EXTENT OF SUCH SPECIAL CONSIDERATION, OR THAT MORE CONSIDERATION WOULD BE GIVEN TO A PROPOSAL WHICH INCLUDED A FIRM COMMITMENT TO USE A MINORITY OWNED ENTERPRISE THAN WOULD BE GIVEN TO A PROPOSAL WHICH INCLUDED A FIRM COMMITMENT TO USE A NONMINORITY OWNED SMALL BUSINESS CONCERN. NOR WERE OFFERORS ADVISED THAT THE AMOUNT OF CONSIDERATION GIVEN TO PROPOSALS WHICH INCLUDED FIRM COMMITMENTS TO USE MINORITY OWNED SMALL BUSINESS CONCERNS WOULD BE DIRECTLY PROPORTIONATE TO THE SIZE OF THE SUBCONTRACTUAL COMMITMENT, COMPUTED ON EITHER A DOLLAR OR EMPLOYEE BASIS. MOREOVER, NO INDICATION WAS GIVEN IN THE RFP THAT THE USE OF EITHER SMALL OR LARGE BUSINESS MINORITY OWNED SUBCONTRACTORS WAS TO BE CONSIDERED MORE IMPORTANT THAN ANY OF THE OTHER FIVE SUBCRITERIA LISTED AHEAD OF SUBCRITERION B UNDER THE MANAGEMENT PLAN EVALUATION CRITERION.

IN THIS REGARD IT IS THE APPARENT POSITION OF YOUR ADMINISTRATION THAT INFORMATION REGARDING THE RELATIVE IMPORTANCE OF THE SMALL AND MINORITY BUSINESS UTILIZATION SUBCRITERION NEED NOT HAVE BEEN CONVEYED TO OFFERORS, SINCE THE SEB PLAN DID NOT PROVIDE FOR WEIGHTING OR SCORING AT THE SUBCRITERION LEVEL DURING THE BOARD'S EVALUATION. ALTHOUGH THIS STATEMENT APPEARS TO BE CORRECT, THE RECORD INDICATES THAT SUBCRITERIA WERE WEIGHTED DURING THEIR CONSIDERATION AT THE COMMITTEE LEVEL.

WE WOULD AGREE THAT THERE IS NO OBLIGATION TO ADVISE BIDDERS OF THE RELATIVE IMPORTANCE OF EVALUATION SUBCRITERIA, OR TO LIST SUCH SUBCRITERIA IN DESCENDING ORDER OF IMPORTANCE, IF THEY ARE TO BE CONSIDERED OF EQUAL, OR APPROXIMATELY EQUAL IMPORTANCE. HOWEVER, WHERE ONE SUBCRITERION IS TO BE CONSIDERED OF OUTSTANDING OR OVERRIDING IMPORTANCE, OFFERORS SHOULD BE SO ADVISED, AND IN THE ABSENCE OF SPECIFIC ADVICE TO THE EFFECT THAT ONE OR MORE SUBCRITERIA WILL BE GIVEN SUBSTANTIALLY MORE WEIGHT IN THE EVALUATION THAN OTHERS, IT IS OUR OPINION THAT OFFERORS ARE ENTITLED TO ASSUME THAT ALL SUBCRITERIA WILL BE CONSIDERED OF EQUAL, OR APPROXIMATELY EQUAL, IMPORTANCE. IN THE INSTANT CASE, HOWEVER, THE STATEMENT OF THE SOURCE SELECTION OFFICIAL CLEARLY INDICATES THAT THE EFFORTS OF HAYES IN UTILIZING A MINORITY OWNED CONCERN TO ACCOMPLISH THE CUSTODIAL SERVICES REQUIREMENT WAS A PRIMARY FACTOR IN HIS DETERMINATION THAT HAYES SHOULD BE SELECTED FOR AWARD, NOTWITHSTANDING HAYES WAS SCORED ALMOST 11 PERCENT LOWER THAN RCA BY THE SEB.

WHILE WE DO NOT QUESTION THE RIGHT OF THE SELECTION OFFICIAL TO EXERCISE HIS REVIEW AUTHORITY BY CHANGING THE WEIGHTS OR RELATIVE IMPORTANCE OF EVALUATION FACTORS, OR BY DETERMINING THAT THE NARRATIVE DEFINITIONS SHOULD CONVEY A MEANING DIFFERENT FROM THAT INTENDED BY THE DRAFTERS OF SUCH DEFINITIONS, WE BELIEVE THAT WHEN THIS OCCURS OFFERORS SHOULD BE INFORMED OF SUCH REVISIONS, AND BE AFFORDED AN OPPORTUNITY TO SUBMIT PROPOSAL REVISIONS REFLECTING SUCH CHANGES FOR FURTHER CONSIDERATION.

IN ANY EVENT, IT IS OUR INFORMAL UNDERSTANDING THAT THE "SELECTING OUT" PROCEDURE IS UTILIZED IN ORDER TO PREVENT THE DIFFIUSION OF TECHNICAL APPROACHES DURING NEGOTIATIONS AND, CONSEQUENTLY, A LEVELING OF THE TECHNICAL QUALITY OF PROPOSALS FOR THE AWARD OF PROCUREMENTS WHICH REQUIRE TECHNICALLY SOPHISTICATED SERVICES OR PRODUCTS. HOWEVER, IN THE SUBJECT CASE, IT IS APPARENT THAT TECHNICAL APPROACH WAS NOT CONSIDERED TO BE OF PARAMOUNT IMPORTANCE IN DETERMINING THE SUCCESSFUL OFFEROR, SINCE IT IS ADMITTED THAT HAYES WAS RELATIVELY WEAK IN THE TELECOMMUNICATIONS AREA. IN VIEW THEREOF, IT WOULD APPEAR THAT THE STATED BASIS FOR INITIATING THE "SELECTING OUT" PROCEDURE, THAT IS, THE NEED TO PREVENT THE DIFFIUSION OF TECHNICAL APPROACHES AMONG THE OFFERORS, MAY NOT BE APPLICABLE TO THE SUBJECT PROCUREMENT.

IN THIS CONNECTION, WE BELIEVE THE STATEMENT, NOTED ABOVE, GIVEN TO RCA AT ITS DEBRIEFINY THAT IT COULD HAVE CHANGED ITS PROPOSAL TO INCLUDE ADDITIONAL MINORITY FIRMS, IF IT HAD BEEN SELECTED FOR NEGOTIATIONS, SHOWS THAT DISCUSSIONS WITH THAT CONCERN PRIOR TO THE SELECTION OF THE SUCCESSFUL OFFEROR WOULD HAVE BEEN FEASIBLE, AS WELL AS DESIRABLE FROM THE STANDPOINT OF ENCOURAGING MAXIMUM UTILIZATION OF SMALL OR MINORITY BUSINESSES BY NASA CONTRACTORS.

WE CANNOT STATE AS A MATTER OF LAW AS DISTINGUISHED FROM SOUND PROCUREMENT POLICY, THAT YOUR ADMINISTRATION IS WITHOUT AUTHORITY TO MAKE AN AWARD OF THIS CONTRACT TO HAYES. THE RFP DID SPECIFY THAT SPECIAL CONSIDERATION WOULD BE GIVEN TO PROPOSALS EVIDENCING FIRM COMMITMENTS FOR MINORITY SUBCONTRACTING, ALBEIT IN TERMS THAT WERE NOT SUFFICIENTLY PRECISE TO WARRANT CLEARLY THE ACTION TAKEN. ALL OF THE PROPOSALS WERE METICULOUSLY AND FAIRLY EVALUATED BY THE SEB ACCORDING TO THE PRECISE TERMS OF THE RFP. ON THE BASIS OF SUCH EVALUATION RCA WAS DETERMINED TO HAVE SUBMITTED THE SUPERIOR PROPOSAL AND APPARENTLY WOULD HAVE BEEN SELECTED FOR AWARD APART FROM CONSIDERATION OF MINORITY SUBCONTRACTING. THE QUESTION OF THE SOURCE SELECTION OFFICIAL'S LEGAL AUTHORITY TO RELY ON THE EXTENT OF MINORITY SUBCONTRACTING IN SELECTING HAYES FOR AWARD ON THE BASIS OF A PROPOSAL SCORED INFERIOR TO RCA'S, TURNS ON WHETHER THERE EXISTS A MANDATE, STATUTORY OR OTHERWISE, THAT THE SOURCE SELECTION OFFICIAL MUST EITHER SELECT A SUPERIOR PROPOSAL OR CONDUCT FURTHER NEGOTIATIONS TO COVER ANY CHANGES IN CONCEPTS FROM THOSE UPON WHICH PROPOSALS WERE INITIALLY SUBMITTED. ASSUMING AN AFFIRMATIVE CONCLUSION ON THIS ISSUE, IT IS OUR VIEW, DESPITE THE ABSENCE OF ANY STATUTORY OR REGULATORY PROVISION SPECIFICALLY DIRECTED TOWARD THE POINT, THAT THE DICTATES OF THE OVERALL COMPETITIVE NEGOTIATION PROCESS REQUIRE AN AFFIRMATIVE CONCLUSION, EXCEPT WHERE AN OVERRIDING LEGITIMATE GOVERNMENT NEED OR PURPOSE SUPPORTS A CONTRARY RESULT. IN THIS CONNECTION, WE BELIEVE THAT THERE ARE THREE BASIC ASPECTS TO BE CONSIDERED - THE COMPETITIVE ASPECT OF THE NEGOTIATION PROCESS, INCLUDING THE AVOIDANCE OF ARBITRARY ACTIONS; THE OPENNESS OF THE PROCESS TO AVOID THE AWARD OF GOVERNMENT CONTRACTS ON THE BASIS OF IMPROPER FAVORITISM; AND THE CONCEPT THAT THE RIGHTS OF BIDDERS ON ADVERTISED PROCUREMENTS AND NEGOTIATED PROCUREMENTS ARE NOT THE SAME.

THERE CAN BE NO QUESTION BUT THAT THE BASIS UPON WHICH AN AWARD TO HAYES IS BEING PROPOSED HAS BEEN OPENLY STATED, WITH NO IMPLICATION THAT THE SOURCE SELECTION OFFICIAL IN MAKING HIS CHOICE IS PROCEEDING IN OTHER THAN A STRAIGHT-FORWARD MANNER AFTER FULL AND FAIR EVALUATION OF ALL PROPOSALS. WHILE THERE MAY BE GROUNDS FOR DISAGREEMENT WITH THE REASONING BY WHICH THE SOURCE SELECTION OFFICIAL CHOSE TO SELECT HAYES OVER THE OTHER OFFERORS, WE CANNOT CONCLUDE THAT SUCH SELECTION WAS ARBITRARY. VIEW THEREOF, AND RECOGNIZING THE ABSENCE OF EITHER A STATUTORY OR REGULATORY DIRECTION RELATIVE TO AWARDS IN NEGOTIATED PROCUREMENTS OF THIS TYPE, WE CANNOT CONCLUDE THAT THE DEPARTURE FROM WHAT WE CONSIDER TO BE SOUND PROCUREMENT POLICY FROM A COMPETITIVE STANDPOINT IS SUFFICIENT IN ITSELF TO PRECLUDE THE SOURCE SELECTION OFFICIAL FROM MAKING HIS SELECTION ON THE BASIS STATED.

THE FILES FORWARDED WITH THE REPORTS OF AUGUST 26 AND OCTOBER 12 ARE RETURNED.