Link: GAO Opinion
Agency: Department of the Navy
Disposition: Protest denied.
____________________________________________________________________________________________________
GAO Digest:
1. Agency reasonably evaluated protester’s proposal as good, rather than excellent, under technical approach factor where offer contained weaknesses indicating a lack of understanding including proposal of services under incorrect work area, start of services in base year when not required until option years, and lack of clarity on required inspections.
2. Evaluation of protester’s past performance as neutral was reasonable where only past performance information submitted concerned protester’s parent firm and affiliates, and agency reasonably found that proposal failed to demonstrate that resources of those entities would affect contract performance.
3. Agency reasonably assigned risk to protester’s proposal based on low fixed burden rate for indefinite-quantity items, where it determined that proposed rate was insufficient to profitably perform the work, and proposal failed to explain how protester could realize sufficient revenue by performing work more efficiently than estimated standards.
4. In fixed-price procurement, awardee’s failure to provide price information called for by solicitation for purposes of assessing offerors’ understanding of requirement did not preclude award, where agency was able to calculate the missing information from other aspects of awardee’s price proposal and reasonably concluded the awardee understood contract requirements.
General Counsel P.C. Highlight:
BSTS first challenges the agency’s consensus rating of its proposal as good, rather than excellent, under the technical approach factor, citing the fact that three of the four evaluators rated its proposal as excellent and only one rated it good on their individual worksheets. However, GAO finds that BSTS’s argument is without merit. It is not unusual for individual evaluator ratings to differ from one another, or to differ with the consensus ratings eventually assigned; a score reasonably may be determined after discussions among the evaluators. The overriding concern for purposes of GAO’s review is not whether the final ratings are consistent with earlier, individual ratings, but whether they reasonably reflect the relative merits of the proposals. While BSTS asserts that its proposal deserved an excellent rating rather than the good rating it received, it does not challenge any evaluated weaknesses. Therefore, GAO concludes that there is no basis for questioning the evaluation of BSTS’s proposal as good in this area.
BSTS next asserts that the agency’s evaluation of its past performance as neutral was improper because its proposal included past performance information on contracts performed by its affiliated companies, which, it claims, should have been attributed to BSTS in the evaluation. BSTS cited the performance of Inuit Services, Inc. (ISI) on a dormitory/temporary lodging maintenance/management contract at Elmendorf Air Force Base (rated excellent) and two Navy installation support contracts (rated good to very good) performed by a joint venture that included Bering Straits Aerospace Services (BSAS).GAO states that an agency properly may consider the experience or past performance of an offeror’s parent or affiliated companies where the firm’s proposal demonstrates that the resources of the parent or affiliated company will affect the performance of the offeror. The relevant consideration is whether the resources of the parent or affiliated company–its workforce, management, facilities or other resources–will be provided or relied upon for contract performance, such that the parent or affiliate will have meaningful involvement in contract performance.
While BSTS claims credit for the past performance of its affiliated companies, the agency found that its proposal did not demonstrate how these companies would be involved in a way that would affect performance of the contract. BSTS’s proposal stated that it was a wholly-owned subsidiary of Bering Straits Native Corporation (BSNC) and that the BSNC family of companies held some 50 federal contracts, including some covering family housing maintenance and base operations support services. However, apart from including experience and past performance descriptions for BSAS’s prior contracts, the proposal did not otherwise specifically identify these companies as providing workforce, management, facilities or other resources for the performance of this contract; indeed, the proposal was silent on any connection between BSAS and BSTS as it applied to this contract. Further, although BSTS proposed a deputy project manager who had been the project manager on ISI’s Elmendorf contract, there was no explanation or description of this employee’s duties on the former contract, how long he had performed, or how his involvement under the former contract warranted past performance credit for BSTS. In any event, that contract was valued at less than $2 million per year–below the $5 million threshold the agency established for a contract to be deemed relevant in the evaluation–and thus would not have been considered relevant for past performance purposes. In view of the small size of the Elmendorf contract and the limited information provided in BSTS’s proposal regarding the application of resources and personnel from its affiliated companies, the agency reasonably concluded that there was no basis to credit BSTS with the past performance of either of those companies.
BSTS asserts that the agency failed to meaningfully analyze its price proposal, specifically, that the agency unreasonably ignored the possibility that BSTS could perform more efficiently than applicable estimating standards, and thus perform profitably. The evaluation was unobjectionable. Payment for indefinite-quantity work, including the change of occupancy maintenance (COOM), was to be based on the contractor’s proposed labor rate and fixed burden rate (FBR), multiplied by the government’s estimated number of labor hours, rather than actual hours worked; an FBR too low to cover all required expenses thus represented a risk that the contractor would not be able to cover its labor costs. The agency’s evaluation was based on a comparison of BSTS’s rates with the independent government estimate (IGE) of 38.5% and other offerors’ rates. This comparison showed that BSTS’s FBR was 26% below the next lowest offeror’s, and 36% below the mean of all offerors’ rates. BSTS’s proposed FBR also was significantly lower than the combined rate of FICA, unemployment insurance, and worker’s compensation, which exceeded 18%. Given that BSTS’s proposal identified its FBR as including applicable labor burdens, fringe benefits, taxes, and overhead expenses, the agency reasonably could question the sufficiency of the FBR. Under these circumstances, the agency reasonably found that BSTS’s low proposed FBR was risky and made it questionable whether the firm could profitably perform the indefinite-quantity items. The protest is denied.