Link: GAO Opinion
Agency: Department of the Navy
Disposition: Agency Tender Official’s protest sustained in part and denied in part; Designated Employee’s protest denied.
Keywords: Evaluation record
General Counsel P.C. Highlight: An agency that fails to adequately document its evaluation of proposals in writing bears the risk that its determinations will be considered unsupported, and absent such support, our Office may be unable to determine whether the agency had a reasonable basis for its determinations.
In 2006, the Navy decided to conduct a competition under OMB Circular A-76 to compare the cost of continued in-house performance of certain bulk fuel storage and distribution services compared to obtaining those services from an outside contractor. As part of this competition, the Navy issued a request for proposals (RFP), which required the successful offeror to provide all personnel, equipment, tools, and materials necessary to perform bulk fuel storage and distribution services at the Marine Corps Air Station, Miramar, California. The solicitation provided historical estimates for workload, including hours and staffing needs based on statistics from the preceding three years. Award of the contract was to be made to the public or private entity whose proposal represented the lowest-priced, technically acceptable offer to the government. Six offerors submitted proposals by the 2007 closing date, including Phoenix Management, Inc. (PMI) and the Agency Tender Official (ATO).
After its initial evaluation, the Navy established a competitive range (including the PMI and ATO proposals) and conducted discussions with the offerors related to weaknesses and deficiencies. In particular, the Navy’s technical evaluation board (TEB) discussed with PMI deficiencies related to its quoted time and staffing requirements for the fuel sampling and testing tasks, which varied widely from the historical numbers provided by the Navy. PMI revised its proposal by changing its proposed figures, however, these were still drastically different than those quoted by the Navy. Despite this continued discrepancy, the TEB reviewed the revised proposals and, without written explanation, determined that PMI had adequately corrected its deficiencies. The contract was then awarded to PMI, after which the ATO and Designated Employee Agent (DEA) filed a series of protests with GAO. The Navy announced its intent to take certain corrective action including amending the RFP and holding additional discussions with the offerors, leading GAO to dismiss the initial ATO and DEA protests.
During these discussions, the ATO attempted to revise its estimates related to the fuel sampling and testing tasks, but the TEB determined that their proposed hours were inadequate to meet the stated requirements of the solicitation. PMI was again awarded the contract leading the ATO and DEA to again protest GAO, arguing that, among other things, the Navy’s evaluation was unreasonable and that its discussions were not meaningful.
GAO disagreed with several of the Navy TEB’s assertions, especially those in which it seemed that their analysis of PMI’s responses differed steeply from their analysis of the ATO’s responses, despite both offerors sharing similar deficiencies. Additionally, the Navy’s evaluation record was found to be inadequate in its support of its determinations related to PMI. The Navy argued that not much needs to be documented where the proposal allegedly meets (as opposed to failing to meet) the RFP requirements. GAO stated that an agency’s evaluation of proposals must be adequately documented in order to establish the reasonableness of its determinations. GAO then sustained the ATO’s protest
In an instance where such a protest is sustained, the GAO would normally recommend that the procuring agency reopen discussions and reevaluate the proposals. However, the current defense appropriations act prevents continuation beyond 30 months of any A-76 cost study of the sort at issue here. Since that time has lapsed, and any re-evaluation would violate the A-76 time limitation, the GAO recommended terminating PMI’s contract and that no further action be taken.