Link: GAO Opinion
Agency: Department of the Army
Disposition: Protest sustained.
Protest is sustained where the agency evaluated the awardee and the protester unequally by crediting the awardee with the experience of its subcontractor, but not similarly crediting the protester with the experience of its subcontractor, even though the agency viewed both subcontractors as having relevant experience.
General Counsel P.C. Highlight:
Ahtna argues that the agency misevaluated past performance, and treated the protester and the awardee unequally in evaluating their experience operating a government motor pool. The evaluation of proposals is a matter within the discretion of the contracting agency. GAO will question the agency’s evaluation only where it lacks a reasonable basis or conflicts with the stated evaluation criteria for award. The record must reasonably support the evaluation of the proposals. It is also fundamental that the contracting agency must treat all offerors equally, and therefore it must evaluate offers evenhandedly against common requirements and evaluation criteria.
In its initial agency report answering this protest, the Army argued that its evaluation of past performance was reasonable and consistent with the stated evaluation criteria. The Army also contended that it was not required to credit Ahtna fully for the experience of its subcontractor. Since the initial agency report did not address the argument of unequal treatment, GAO asked for a supplemental report. The Army responded that Goldbelt’s proposal, unlike Ahtna’s, showed experience in performing work “closely related” to motor pool services, particularly Goldbelt’s experience in dispatching its own vehicles to provide supplies for its Dahlgren contract. Therefore, the Army argued, Goldbelt’s proposal provided a valid basis for the Army’s evaluation of Goldbelt as superior to Ahtna. Since, in GAO’s view, the record lacked sufficient information to reach a conclusion about this issue, GAO convened a hearing to understand better how the agency had assessed the experience of each offeror and its subcontractors. During the hearing, the Army’s evaluation panel chair testified about the criticality of the motor pool services to CCAD’s mission, and the complexity of keeping the motor pool equipment in operation. The panel chair also testified that both of the incumbents being proposed as subcontractors here, ICI and All Star, were considered to be equally outstanding and experienced in the evaluation.
With respect to Goldbelt’s evaluation, the panel chair explained that the three evaluated strengths attributed to “[b]oth [Goldbelt] and ICI,” were intended to reflect the strengths of the two firms together, as a team. When cross-examined on whether each of the three strengths was equally valid if applied to Goldbelt alone (exclusive of ICI), he acknowledged that Goldbelt’s experience did not include operation of a motor pool as a prime contractor. Nonetheless, the evaluation panel chair maintained that Goldbelt’s Dahlgren contract for supply services operations was “remarkably similar” to the operation of the CCAD motor pool. He explained that this conclusion was based on Goldbelt’s representations, in its proposal, that it was required to dispatch and maintain its own vehicles, and that the Dahlgren contract also involved licensing forklift operators. Although Goldbelt’s proposal did not describe how many vehicles or forklift operators were managed at Dahlgren, the chair of the evaluation panel acknowledged that the evaluators had not sought more information from either Goldbelt or the Navy–the agency for whom Goldbelt performed the Dahlgren contract.
With respect to Ahtna’s evaluation, the panel chair testified that he had viewed Ahtna separately from its subcontractor. When asked to characterize the meaning of the weakness assessed to Ahtna, he testified that Ahtna’s lack of experience in operating a motor pool was “extremely significant” to the evaluation because “[i]f the prime contractor doesn’t have that experience, that is a significant risk.”
During the hearing GAO also heard the testimony of the CO, who explained that the difference in Goldbelt’s and Ahtna’s evaluation under the motor pool experience subfactor was a significant factor in her award decision. She also testified that she concurred in the evaluators’ judgment that Goldbelt’s experience on its Dahlgren contract was relevant to the CCAD scope of work. In addition, the CO testified that all three of Goldbelt’s past performance contracts–including those for maintenance and repair of research laboratory equipment, and for shipping and related services–were “very relevant” to the services here. In contrast, she testified that, in her view, Ahtna’s four prior contracts were “not very relevant.”
In assessing the evaluation here, GAO first notes that the Federal Acquisition Regulation (FAR) sect. 15.305(a)(2)(iii) directs agencies to take into account past performance information regarding subcontractors that will perform major or critical aspects of the requirement. On the other hand, the significance of, and the weight to be assigned to, a subcontractor’s past performance is a matter of contracting agency discretion. The weight to be assigned a prime contractor’s past performance–or lack thereof–is also a matter of contracting agency discretion. Nevertheless, while an agency may reasonably emphasize one firm’s lack of a particular type of relevant experience, it cannot then ignore another firm’s similar lack of experience.
The record here demonstrates that the Army did not treat these offerors equally under the motor pool experience subfactor within the past performance evaluation factor. Rather, the agency combined the experience of Goldbelt and its subcontractor, ICI, for purposes of that evaluation, and, in certain respects, assessed strengths for both companies that are based on the subcontractor’s (ICI’s) experience. In contrast, when the Army evaluated Ahtna, the agency focused separately on Ahtna’s lack of motor pool experience, without similarly considering its subcontractor, All Star (the incumbent subcontractor for the CCAD motor pool), even though the record shows that the evaluators viewed the experience of ICI and All Star as essentially equal. There is no reasonable basis for this disparate treatment in the record. To the extent that the agency’s evaluation was based on its conclusion that Goldbelt’s Dahlgren contract was “remarkably similar,” to the operation of the CCAD motor pool, GAO finds that conclusion lacked significant support in the record. Instead, the record indicates that Goldbelt’s Dahlgren contract involved–according to the description in Goldbelt’s proposal–providing 8.5 of 16.5 full time equivalent workers, primarily for managing supply operations, not for providing motor pool services to the Navy. There appears to be a significant difference in the apparent scope of the effort at Dahlgren and the work here, which, as described above, involves over 390 vehicles, and numerous other activities, including training and licensing 2,000 to 3,000 vehicle operators.
While GAO concluded above that the evaluation of past performance here was unreasonable, it will not sustain a 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 the award. Both the contemporaneous documentation and the hearing testimony show that the evaluation of past performance played a significant role in the agency’s decision to select the Goldbelt proposal, despite its higher evaluated price. Given that the difference between these proposals under the technical capability evaluation factor is not great, GAO finds that, but for the unequal evaluation of past performance, Ahtna’s lower-priced proposal would have had a substantial chance of receiving the award. Accordingly, GAO concludes that Ahtna has established the requisite competitive prejudice to prevail in a bid protest. The protest is sustained.