B-245573, Jan 16, 1992, 71 Comp.Gen. 152
B-245573: Jan 16, 1992
Was improper since the agency's decision was not based on a relative assessment of the proposal but effectively constituted a finding of nonresponsibility. The RFP was issued on December 20. The solicitation's proposal instructions stated that offerors "shall provide evidence of a minimum of 3 years of experience that falls within the scope of this contract." written technical evaluation plan (TEP) was prepared for this procurement to aid the evaluation of offers received. FSC's proposal was evaluated by the Technical Evaluation Team (TET). As well as his own determination that FSC did not have adequate financial resources to perform the contract and did not have a satisfactory performance record.
B-245573, Jan 16, 1992, 71 Comp.Gen. 152
PROCUREMENT - Competitive Negotiation - Offers - Technical acceptability PROCUREMENT - Socio-Economic Policies - Small businesses - Competency certification - Applicability Although an agency may use a traditional responsibility factor, such as corporate experience, as a technical evaluation factor where its needs warrant a comparative evaluation of proposals, an agency's rejection of a small business concern's proposal as technically unacceptable based solely on the offeror's lack of the specified minimum number of years of experience, without referring the matter to the Small Business Administration for consideration under the Certificate of Competency procedures, was improper since the agency's decision was not based on a relative assessment of the proposal but effectively constituted a finding of nonresponsibility.
Federal Support Corporation:
Federal Support Corporation (FSC) protests the rejection of its proposal as technically unacceptable under request for proposals (RFP) No. F49642- 91-R-0503, issued by the Department of the Air Force for the operation of the civil engineering supply store at Andrews Air Force Base, Maryland.
We sustain the protest.
The RFP was issued on December 20, 1990, pursuant to Office of Management and Budget (OMB) Circular No. A-76, in order to provide the Air Force with a cost comparison for the purpose of determining whether it would be more economical to perform the required work in-house or by contract. /1/
The RFP provided that if the result of the cost comparison favored operation of the store by contract, award would be made to the responsible offeror submitting the lowest priced, technically acceptable proposal. The RFP listed the following as the technical evaluation criteria:
(1) Statement of Work requirements;
(2) Contract Management;
(4) Personnel Qualifications and Experience;
(5) Quality Control; and
(6) Corporate Experience and Past Performance.
With regard to corporate experience, the solicitation's proposal instructions stated that offerors "shall provide evidence of a minimum of 3 years of experience that falls within the scope of this contract." written technical evaluation plan (TEP) was prepared for this procurement to aid the evaluation of offers received.
FSC submitted the only proposal by the RFP's March 7, 1991, closing date. FSC's proposal was evaluated by the Technical Evaluation Team (TET), which found that the "proposal met all the `Standards and Criteria' listed" in the TEP. The agency requested and received a best and final offer (BAFO) from FSC, and, on July 24, compared FSC's offer with the estimated costs of government performance. The cost comparison favored award to FSC.
On July 26, the contracting officer found FSC nonresponsible based on a negative pre-award survey received from Defense Contract Management Area Office, San Antonio, as well as his own determination that FSC did not have adequate financial resources to perform the contract and did not have a satisfactory performance record. Inasmuch as FSC is a small business concern, the contracting officer referred his nonresponsibility determination to the Small Business Administration (SBA) for consideration under the Certificate of Competency (COC) procedures, as required by 15 U.S.C. Sec. 637(b)(7) (1988).
On August 9, the SBA notified the Air Force that it would be issuing a COC to the protester. At that time, the Air Force informed the SBA that it was reviewing its evaluation of FSC's proposal and would notify SBA by August 12 of the results of this review. The agency explains here that in response to a telephone call it received on August 8, it had discovered that FSC's technical proposal had not been evaluated in accordance with the TEP. The agency immediately reconvened the TET and reevaluated FSC's proposal, finding it technically unacceptable because FSC, which was incorporated in November 1990, lacked the 3 years of corporate experience required by the RFP.
On August 12, the agency notified SBA that it was withdrawing its COC referral, and by letter dated August 14 notified FSC that its proposal had been rejected as technically unacceptable. The agency informed FSC that its offer had been found technically unacceptable because FSC "as a corporate entity does not meet the 3-year minimum experience requirement." This letter also listed "several other technical deficiencies."
FSC filed an agency-level protest on August 20, which the agency denied on August 22. In its decision, the agency stated that while it "agreed that certain deficiencies in FSC's proposal could have been resolved in the discussion phase," the "proposal had to be found technically unacceptable and incapable of being made acceptable" because FSC lacked the required 3 years of corporate experience. FSC then filed this protest with our Office. /2/
The technical factor on which FSC's proposal was judged technically unacceptable-- corporate experience-- traditionally is considered a responsibility factor, that is, a matter relating to FSC's ability to perform the contract. See Federal Acquisition Regulation Secs. 9.104 1(c), (e); Apex Envtl., Inc., B-241750, Feb. 25, 1991, 91-1 CPD Para. 209. While traditional responsibility factors may be used as technical evaluation criteria in a negotiated procurement, see, e.g., CORVAC, Inc., B-244766, Nov. 13, 1991, 91-2 CPD Para. 454; and Pacific Computer Corp., B-224518.2, Mar. 17, 1987, 87-1 CPD Para. 292, the factors may be used only if circumstances warrant a comparative evaluation of those areas. Flight Int'l Group, Inc., 69 Comp.Gen. 741 (1990), 90-2 CPD Para. 257; Sanford and Sons Co., 67 Comp.Gen. 612 (1988), 88-2 CPD Para. 266. Otherwise, an agency effectively would be determining the responsibility of an offeror under the guise of making a technical evaluation of proposals. Under the Small Business Act, agencies may not find that a small business is nonresponsible without referring the matter to the SBA, which has the ultimate authority to determine the responsibility of small business concerns. See Clegg Indus., Inc., 70 Comp.Gen. 679 (1991), 91-2 CPD Para. 145; 52 Comp.Gen. 47 (1972); Antenna Prods. Corp., B-227116.2, Mar. 23, 1988, 88-1 CPD Para. 297.
Here, the Air Force did not use the responsibility-related technical evaluation criterion "corporate experience" for the purpose of making a comparative evaluation of proposals received; rather, it determined technical acceptability solely on a "go-no go" basis, and the record shows that FSC's proposal was found technically unacceptable and incapable of being made acceptable solely because of the firm's purported lack of 3 years of corporate experience in the area of operating civil engineering supply stores. Thus, regardless of how the corporate experience criterion was characterized in the RFP or the evaluation, /3/ the determination that FSC was technically 0unacceptable was, in effect, a determination by the contracting officer that FSC was not a responsible contractor and the rejection of FSC's proposal without a referral to SBA for complete consideration under the COC procedures was improper. Modern Sanitation Sys. Corp., B-245469, Jan. 2, 1992, 92-1 CPD Para. 9; PHE/Maser, Inc., 70 Comp.Gen. 689 (1991), 91-2 CPD Para. 210; Clegg Indus., Inc., supra; Detyens Shipyards, Inc., B-244918; B-244918.2, Dec. 3, 1991, 71 Comp.Gen. 101, 91-2 CPD Para. 500.
We recommend that the agency again evaluate FSC's proposal and, in light of the other deficiencies noted by the contracting officer in FSC's proposal that reportedly are resolvable through discussions, conduct whatever discussions are appropriate. If FSC's responsibility is still questioned, the issue should be referred to SBA for a final determination under the COC procedures. We find FSC entitled to the ***** urred in pursuing this protest, including attorneys fees. 4 C.F.R. Sec. 21.6(d)(1) (1991).
/1/ The solicitation was issued in response to a federal court order, which required that the Air Force comply with the provisions of OMB Circular No. A-76 prior to converting its contractor-operated civil engineering supply stores to operation by the agency. OMB Circular No. A- 76 establishes federal policy regarding commercial activities and sets forth procedures for determining whether commercial activities should be operated under contract by commercial sources or in-house by the government.
/2/ The Air Force initially argues that FSC's protest is essentially a challenge to the 3-year corporate experience requirement and is thus untimely filed under our Bid Protest Regulations, since it was not protested prior to the receipt of proposals. We agree with FSC asserted that it satisfied the corporate experience requirement with its personnel experience, and its complaint concerns the Air Force's interpretation and application of this requirement in rejecting FSC as technically unacceptable.
/3/ In its report on the protest, the Air Force in one place concedes that "corporate experience," as used here, is a "definitive responsibility criterion."