Grunley Construction Company, Inc.

DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release.

Decision

Matter of: Grunley Construction Company, Inc.

File: B-407900

Date: April 3, 2013

DIGEST

1. Agency’s evaluation of the protester’s proposal cannot be found reasonable where the record is inconsistent regarding the evaluation, and the agency has not explained the inconsistencies or adequately responded to the protester’s assertions.

2. Agency conducted meaningful discussions with the protester where the agency led the protester into the areas of its proposal requiring amplification or revision by informing the protester that, among other things, the protester’s proposed prices appeared to be materially unbalanced and unrealistically low.

Grunley Construction Company, Inc., Rockville, Maryland, protests the award of a contract to Clark Construction Group, LLC, Bethesda, Maryland, under request for proposals (RFP) No. GS-11P-12-MKC-0037, issued by the General Services Administration (GSA), for the replacement of certain infrastructure at a federal office building in Washington, DC. The protester argues that the agency’s evaluation of its technical proposal was unreasonable, and that the agency failed to conduct meaningful discussions.

We sustain the protest in part and deny it in part.

BACKGROUND

The RFP provided for the award of a fixed-price contract, with certain option items, for the design and construction of improvements to a federal office building in Washington, D.C.; the office building was not identified in the solicitation. The solicitation specified that award would be made to the offeror whose proposal was determined to represent the best value to the government, considering price and the following non-price evaluation factors: (1) experience on similar projects (20% relative weight), (2) past performance (15% relative weight), (3) key personnel (10% relative weight), (4) project management approach (25% relative weight), (5) apprenticeship program (10% relative weight), (6) small disadvantaged business subcontracting plan (10% relative weight), and (7) project labor agreement (10% relative weight). RFP at 32. For purposes of award, the RFP informed offerors that the results of the evaluation under the non-price factors would be considered significantly more important than price. Id.

GSA received proposals from Grunley and Clark. Agency Report (AR), Tab 19, Source Selection Evaluation Board (SSEB) Report, at 21. Following the evaluation of the initial proposals, the offerors provided oral presentations during which the offerors were asked to address three questions “to elucidate crucial information that was perceived as lacking from both offerors.” Id. at 22-23. The agency next emailed the same three questions to the offerors, and requested and received revised proposals. Contracting Officer (CO) Statement at 2; AR, Tab 19, SSEB Report, at 24.

The revised proposals were evaluated, and the agency found that Grunley’s proposal evidenced five “significant deficiencies” with regard to Grunley’s proposed prices. CO Statement at 3; AR, Tab 19, SSEB Report, at 46. Based on its concerns with Grunley’s pricing, the agency requested “bid book information” from both Grunley and Clark “in order to get a full price breakdown.” AR, Tab 20, Email from CO to Grunley (Oct. 24, 2012), at 8; CO Statement at 3. The agency’s request for bid book information stated that the agency had determined that it required “a full price breakdown and backup documentation,” and specified the information that was to be included in the offerors’ bid books. AR, Tab 20, Email from CO to Grunley (Oct. 24, 2012), at 8-9.

Upon review of Grunley’s bid book, GSA concluded that Grunley “did not understand the level of effort required for the project,” and that “Grunley’s total cost was . . . significantly less than the [Independent Government Estimate] which also suggests that Grunley may not have understood the project requirements.” [1] CO Statement at 3-4. The agency’s evaluation of the protester’s price proposal also found that “Grunley [was] loading resources towards the beginning of the project and may not have priced the options for what they are worth.” AR, Tab 19, SSEB Report, at 47.

GSA reopened discussions, and informed Grunley that the agency had found, from its “review of [Grunley’s] price proposal and bid book information,” that Grunley’s “proposal contains significant deficiencies and weaknesses with regard to your pricing.” AR, Tab 20, Email from CO to Grunley (Nov. 21, 2012), at 11. The agency further informed Grunley that

[i]n particular, the price proposal appears to be materially unbalanced so as to reflect an unreasonable and unrealistically low price significantly below the Government’s estimate and reflects poorly upon your understanding of the solicitation’s level of effort requirements.

Id. The agency requested that Grunley submit a final revised proposal, and noted that the agency intended “to make award without obtaining further revisions and without conducting further discussions.” Id.

Grunley submitted its final revised proposal, and in doing so, raised its total proposed price from $53,176,429 to $62,768,836. Protest at 8. Grunley’s proposal received an overall rating under the non-price factors of 5.2 out of 10 points. [2] The agency ultimately determined that Clark’s higher-rated, lower-priced proposal, with an overall rating of 5.4 points at a proposed price of $58,587,000, represented the best value, and selected Clark for award. Protest at 8; AR, Tab 21, Grunley Debriefing, at 1. This protest followed.

PROJECT MANAGEMENT APPROACH EVALUATION

Grunley argues that GSA’s evaluation of its proposal under the project management approach evaluation factor was unreasonable. For the reasons discussed below, we agree.

The evaluation of offerors’ technical proposals, including the determination of the relative merits of proposals, is primarily a matter within the contracting agency’s discretion, since the agency is responsible for defining its needs and the best method of accommodating them. Highmark Medicare Servs., Inc., et al., B-401062.5 et al., Oct. 29, 2010, 2010 CPD ¶ 285 at 12. In reviewing an agency’s evaluation, we will not reevaluate the proposals, but will examine the record of the evaluation to ensure that it was reasonable and consistent with the stated evaluation criteria and procurement statutes and regulations, and to ensure that the agency’s rationale is adequately documented. Carothers Constr., Inc., B-403382, Oct. 28, 2010, 2010 CPD ¶ 268 at 6.

The solicitation provided under the project management approach factor that the agency would evaluate an offeror’s

understanding of the contract requirements including design phase services and the Offeror’s ability to manage the construction including risk management, quality control, scheduling, protection and construction in special spaces, cost control including contingency management, change order management, and “open book accounting.”

RFP at 37-38.

The agency assigned a rating of 5.9 out of 10 points to Grunley’s proposal under the project management approach evaluation factor.[3] In doing so, the agency evaluated Grunley’s proposal as evidencing a number of “strengths,” including its “familiarity with the site and their management and support staff as reflected in the details” provided. The agency also evaluated as strengths Grunley’s inclusion of a “[DELETED],” both of which were considered by the agency to be “critical elements of the design phase services.” AR, Tab 19, SSEB Report, at 32. The agency continued, by noting as strengths, Grunley’s “proposed use of [DELETED] during the design phase,” as well as Grunley’s “philosophy to be willing to work effectively and efficiently with their subcontractors, as well as other contractors on the site.” Id. Finally, the agency noted that “Grunley provided a transition plan for use with [DELETED] and addressed potential [DELETED].” Id.

The agency also evaluated Grunley’s proposal under the project management approach factor as evidencing weaknesses. Specifically, the SSEB report states as follows:

Weaknesses:
Grunley did not discuss within their revised technical proposal a shift transition plan, nor did they specifically explain how [DELETED] within their manpower-loaded schedule would operate. Grunley’s schedule did not include float, which explicitly does not take into account suspensions of work or demonstrate a proactive approach to unforeseen conditions, high project risk, change orders, and project mutability. The overall discussed approach, in conjunction with the schedule, demonstrates a more reactive- than proactive- approach to project management This prevented Grunley from achieving a higher score on this factor.

AR, Tab 19, SSEB Report, at 32. [4]

The protester argues that the agency’s evaluation of Grunley’s proposal under the project management approach factor was unreasonable because, contrary to the finding of the agency, its proposal did provide a shift transition plan and include float in its schedule.[5] In support of its argument, the protester points to specific pages in its proposal addressing its shift transition plan, and points out that its schedule includes float for numerous activities. Protest at 18-19; Protester’s Comments at 9-10; Protester’s Supp. Comments at 7, Exh. A, Schedule, at 1-10; AR, Tab 13, Grunley’s Final Revised Proposal, at 71-72.

With regard to shift transition, GSA’s response to Grunley’s argument notes that the SSEB also found that the protester provided a shift transition plan, and that this aspect of its proposal constituted a strength. The agency also asserts, without further explanation, that “[a]s set forth in the SSEB Report, Grunley’s receipt of a score of 5.9 for [the project management approach factor] was not due to a lack of a transition plan, but rather due to the SSEB’s reasonable determination that Grunley’s proposal suffered from a variety of weaknesses.” AR at 15.

We cannot find this aspect of the agency’s evaluation reasonable. As discussed above, the record shows that while the SSEB noted as a strength that “Grunley provided a transition plan for use with [DELETED],” it also noted as a weakness that “Grunley did not discuss within their revised technical proposal a shift transition plan.” AR, Tab 19, SSEB Report, at 32. Despite the fact that Grunley pursued this issue in detail during this protest, the agency has not meaningfully explained, or even acknowledged, what appears to be an inconsistency in the SSEB Report. In sum, we cannot find this aspect of the agency’s evaluation of Grunley’s proposal to be reasonable, given the apparent inconsistency in the record regarding this aspect of the agency’s evaluation, and the agency’s failure during the course of this protest to meaningfully respond to the protester’s arguments.

In response to Grunley’s assertion that its proposed schedule included float, GSA points to a sentence in Grunley’s proposal, under the section pertaining to the issue of work stoppages, which the agency contends demonstrates a lack of float. This sentence provides as follows:

Work Stoppages: In evaluating the scope of work and period of performance, the Government’s and Grunley’s schedule is void of any free float, or any float at all for that matter.

AR, Tab 13, Grunley’s Final Revised Proposal, at 73-74. The agency concludes, based on this sentence, that “[t]he SSEB’s determination that the schedule lacked float is reasonable because Grunley did not provide any float for the project as a whole and stated so in its proposal.” Supp. AR (Feb. 13, 2013) at 5.

Again, despite the fact that the protester has pointed out that the 10-page schedule in its proposal included float in numerous instances, the agency has made no effort to further explain this aspect of its evaluation. Protester’s Comments, Attach. A, Schedule, at 1-10. That is, the agency, in responding to the protester’s arguments, has simply ignored the fact that the protester’s schedule included float in numerous instances, and has made no effort to explain why the sentence quoted above, in context, was found by the agency to nullify the numerous instances of float in the protester’s schedule. While we recognize that the portion of Grunley’s proposal, cited above, raises a question as to whether its proposal was inconsistent with regard to float, we cannot find the agency’s assessment of a weakness because “Grunley’s schedule . . . did not include float,” to be reasonable, given the agency’s failure to acknowledge or fully respond to the fact that the protester’s schedule clearly included numerous instances of float. AR, Tab 19, SSEB Report, at 32. On this record, we sustain the protest.

MEANINGFUL DISCUSSIONS

Next, Grunley argues that GSA’s discussions regarding its concerns with the protester’s proposed price were not meaningful. The protester points out that, as mentioned above, the agency’s evaluation of Grunley’s initial proposal identified five specific items of concern regarding Grunley’s proposed price. The protester argues that the agency was thus required to specifically raise each of these items during its discussions with Grunley. Grunley contends that had the agency provided meaningful discussions, Grunley would have provided an explanation for certain of its proposed pricing rather than raising its price in its final revised proposal (with its proposal thus remaining lower in price than Clark’s), and that the agency’s concerns “would have very likely been ameliorated.” Protest at 12.

In negotiated procurements, whenever discussions are conducted by an agency, the discussions are required to be meaningful, equitable, and not misleading. The Communities Group, B-283147, Oct. 12, 1999, 99-2 CPD ¶ 101 at 4. To satisfy the requirement for meaningful discussions, the agency need only lead an offeror into the areas of its proposal requiring amplification or revision; all-encompassing discussions are not required, nor is the agency obligated to “spoon-feed” an offeror as to each and every item that could be revised to improve its proposal. ITT Fed. Sys. Int’l Corp., B-285176.4, B-285175.5, Jan. 9, 2001, 2001 CPD ¶ 45 at 7. The scope and extent of discussions with offerors are matters of a CO’s judgment. Federal Acquisition Regulation § 15.306(d)(3).

Here, as set forth above, the agency made Grunley aware of its concerns with its proposed pricing. That is, despite Grunley’s view to the contrary, the agency was not required to identify the specific areas where Grunley’s prices appeared too low. See WorldTravelService, B-284155.3, Mar. 26, 2001, 2001 CPD ¶ 68 at 6. Rather, the agency was only required to lead Grunley into the area of the agency’s concern. GSA’s statement, as set forth above, that Grunley’s “unrealistically low price significantly below the Government’s estimate . . . reflects poorly upon your understanding of the solicitation’s level of effort requirements,” AR, Tab 20, Email from CO to Grunley (Nov. 21, 2012), at 11, met the agency’s obligation to provide meaningful discussions.[6] See WorldTravelService, supra.

CONCLUSION AND RECOMMENDATION

We sustain the protest in part and deny it in part. We recommend that the agency revaluate proposals, consistent with this decision, and make a new source selection. In the event Grunley’s proposal is found to represent the best value to the government, Clark’s contract should be terminated and the contract awarded to Grunley in accordance with the terms of the RFP. We also recommend that the agency reimburse Grunley for its costs of filing and pursuing its protest challenging the evaluation of its proposal as discussed above, including reasonable attorneys’ fees. 4 C.F.R. § 21.8(d)(1). Grunley’s certified claim for costs, detailing the time expended and costs incurred, must be submitted directly to the GSA within 60 days of receiving this decision. 4 C.F.R. § 21.8(f)(1).

The protest is sustained.

Susan A. Poling
General Counsel