Link: GAO Opinion
Agency: Department of Homeland Security
Disposition: Protest denied.
- Protester’s proposal submitted in response to a solicitation issued by the Coast Guard for Fast Response Cutters, B-Class (FRC-B) was reasonably evaluated under an evaluation subfactor as “unsatisfactory,” and subsequently determined to be ineligible for award, where the “unsatisfactory” rating was due to the proposed FRC-B, as set forth in the proposal, failing to meet a material solicitation requirement regarding the stability of the vessel.
- Awardee’s proposal submitted in response to a solicitation issued by the Coast Guard for Fast Response Cutters, B-Class (FRC-B) was reasonably evaluated under an evaluation subfactor as “satisfactory” where certain evaluated weaknesses concerning the structure of the vessel were reasonably found by the agency not to materially affect the compliance of the proposal with the solicitation’s requirements.
- Agency reasonably evaluated the awardee’s past performance as “marginal” with “low risk,” notwithstanding the awardee’s unsatisfactory performance on a relevant contract, where the awardee’s past performance on contracts that were reasonably found to be more relevant was “excellent” or “very good,” and the agency reasonably accounted for the contract with the unsatisfactory past performance in the evaluation and award selection.
Page 2 B-400697 et al.
- Price reasonableness evaluation conducted under a solicitation for the design and construction of a vessel is unobjectionable where the agency’s evaluation took into account the specifics of the vessels being offered in determining that the awardee’s proposed price was reasonable.
- Assistance provided to the awardee during the proposal preparation process by an entity that also assisted the contracting agency in the evaluation of proposals did not create a significant “impaired objectivity” organizational conflict of interest that had to be avoided, neutralized, or mitigated, where the record reflects that the entity also provided advice to the protester during the proposal preparation process; any potential benefit to the entity is speculative and too remote to establish a significant conflict of interest; and the record otherwise reflects that there is no reasonable possibility of prejudice, as evidenced by the fact that the entity, in evaluating proposals, was more critical of the awardee’s proposal than it was of the protester’s proposal.
General Counsel P.C. Highlight:
The protester first challenges the agency’s evaluation of its proposal, under the transition from parent craft to FRC’B subfactor to the technical evaluation factor, as “unsatisfactory” with “high risk,” and the agency’s consequent determination that its proposal was ineligible for award because of its failure to meet certain intact stability requirements set forth in the solicitation and as evaluated under this subfactor. GAO states that the evaluation of proposals is a matter within the discretion of the contracting agency, and in reviewing protests against allegedly improper evaluations, it is not GOA’s role to reevaluate proposals. Rather, GAO examines the record to determine whether the agency’s judgment was reasonable, in accord with the evaluation factors set forth in the RFP, and whether the agency treated offerors equally in its evaluation of their respective proposals and did not disparately evaluate proposals with respect to the same requirements. The protester’s mere disagreement with the agency’s judgment does not render the evaluation unreasonable. It is well-settled that in a negotiated procurement, a proposal that fails to conform to one or more of the solicitation’s material requirements is technically unacceptable, and cannot form the basis for an award. As such, the issue here is one of materiality, that is, whether the agency reasonably determined that the degree to which MMC’s proposed FRC’B failed to meet the intact stability requirements under the topside icing criterion was material, such that it justified the evaluation of MMC’s proposal as “unsatisfactory” with “high risk” under the transition from parent craft to FRC’B subfactor, and whether the agency reasonably determined that because of this failure and the degree of this failure, MMC’s proposal was ineligible for award.
According to the RFP, among the matters to be addressed in the section of the proposals addressing the transition from parent craft to FRC’B technical evaluation subfactor was a detailed discussion of the stability of the proposed FRC’B in a variety of ship, sea, and weather conditions. The solicitation provided specific parameters for these conditions, and referred offerors to a Department of Navy manual for certain required information. The practical effect of this was that the RFP required that each proposal provide detail as to the relative stability of the proposed FRC’B in a number of different “load conditions,” at different times during the FRC’B’s service life, and with regard to a number of different stability criteria. Given the failure of MMC’s proposal to meet the RFP’s intact stability requirements with regard to topside icing, the potential effect of that failure on the FRC’B’s mission, as well as the agency’s view that a major revision of MMC’s proposed FRC’B as set forth in its proposal would be required to satisfy the intact stability requirements, the agency evaluated MMC’s proposal as “unsatisfactory” with “high risk” under the relevant transition from parent craft to FRC’B evaluation subfactor to the technical factor. The SSA agreed that the practical effect of MMC’s proposal’s failure here would “place Coast Guard personnel at risk when operating in cold conditions where icing could be encountered,” and determined that this failure rendered MMC’s proposal “ineligible for award.” GAO states that it has no basis to object to the agency’s determinations, that the RFP’s intact stability requirements under the topside icing criterion, as well as the degree that MMC’s FRC’B, as set forth in its proposal, failed to comply with those requirements, were material. In this regard, the agency, in both the contemporaneous evaluation record and during the course of this protest, has reasonably explained its view that the topside icing stability criterion was a material requirement of the solicitation, and that the degree by which MMC’s proposed FRC’B exceeds the RFP’s requirements was material in that it poses an increased risk to Coast Guard personnel. Although the protester disagrees with the agency’s explanation and ultimate conclusions, GAO finds MMC’s contentions here to constitute nothing more than the protester’s mere disagreement with the agency.
MMC argues that Bollinger’s proposal should have been found “ineligible for award” because its proposed FRC’B suffers from certain “structural inadequacies.” The protester argues here that in designing its FRC’B, Bollinger, as reflected in its proposal, “stripp[ed] steel from the hull of the Parent Craft,” resulting in a “weakened hull” that will “most certainly risk premature fatigue, buckling and failure” during performance of its anticipated missions. In evaluating Bollinger’s second FPR, the agency found that should increases to the FRC’B’s structure be needed to meet the ABS HSNC Guide requirements, the risk posed by the additional weight to Bollinger’s proposed FRC’B was further mitigated by Bollinger’s explanation regarding the weight margins. However, the agency continued to assess as a “weakness” its view that the structures and scantlings of Bollinger’s proposed FRC’B may “need to be increased.”
The protester’s argument that Bollinger’s proposal should have been found “ineligible for award” because its proposed FRC-B suffers from certain “structural inadequacies” fails for a number of reasons. First, MMC’s argument here is based entirely on the findings of ABS. However, as set forth above, the ABS findings that certain of Bollinger’s proposed FRC’B’s structures were inadequate were made without consideration of the proposed ride control system in Bollinger’s FRC-B, and without consideration of the explanations and drawings provided by Bollinger in its responses to discussion questions and first and second FPRs. The record reflects that while considering ABS’s evaluation of Bollinger’s initial proposal, the agency recognized that ABS had qualified its concerns, and reasonably considered them in this manner.
With regard to the agency’s evaluation of Bollinger’s second FPR, GAO does not find unreasonable the agency’s conclusion, given the additional information provided by Bollinger in responses to the discussion questions and first and second FPRs, that this aspect of Bollinger’s proposal continued to represent no more than a “weakness,” rather than an issue of material noncompliance with the RFP’s requirements. That is, the agency’s evaluation reflects the agency’s reasonable view that certain of Bollinger’s proposed FRC’B’s structures may or may not have to be increased, and the risk that any possible increase in the FRC-B’s structures that may be necessary and that this would result in an increase in weight, was mitigated by Bollinger’s weight margins and its proposed ride control system. Thus, the record evidences that the agency had a reasonable basis for not regarding this problem as one that involved a material noncompliance with RFP requirements requiring a major revision of Bollinger’s proposal.
The protester argues that the agency’s evaluation of Bollinger’s proposal under the past performance subfactor to the management factor was unreasonable. The protester asserts that the Bollinger’s proposal, which was evaluated by the agency under the past performance subfactor as “marginal” with “low risk,” should have been evaluated by the agency as “unsatisfactory” with “high risk.” GAO states that as a general matter, the evaluation of an offeror’s past performance is within the discretion of the contracting agency, and GAO will not substitute its judgment for reasonably based past performance ratings. In determining whether a particular evaluation conclusion is reasonable, GAO examines the record to determine whether the judgment was reasonable, adequately documented, and in accord with the solicitation’s evaluation criteria.
GAO reviewed the agency’s evaluation record and concludes that the agency’s consideration of Bollinger’s past performance, including Bollinger’s performance on the 123-Foot WPB program, was adequately documented, consistent with the terms of the solicitation, and provided a reasonable basis for the agency’s rating of Bollinger’s proposal under the past performance subfactor. With regard to Bollinger’s performance on the 123-Foot WPB program, the record demonstrates that the agency had access to and considered input from Coast Guard personnel who had first-hand experience with Bollinger on the 123-Foot WPB program and who documented that Bollinger’s performance on the program was materially deficient. Although the protester cites to numerous examples of documented poor performance by Bollinger on the 123-Foot WPB program that it states the agency did not consider or improperly discounted, the record shows that the agency thoughtfully and reasonably reviewed all pertinent past performance information on the 123-Foot WPB program. Additionally, the record reflects that the agency, in considering this adverse past performance information, also considered the relative relevance of that past performance to the FRC-B contract, while also considering the other past performance information received regarding Bollinger on contracts that the agency reasonably considered more relevant, which, as set forth in the evaluation documents, would if considered alone have resulted in Bollinger’s proposal receiving an evaluation of “superior.”
Consistent with the principle that the evaluation of an offeror’s past performance is properly within the discretion of the contracting agency, and that GAO will not substitute its judgment for that of the agency, it is similarly well-settled that a protester’s mere disagreement with the agency’s judgment is insufficient to establish that an evaluation was improper. As such, while the protester argues at length and in considerable detail why, in its view, Bollinger’s failings on the 123-Foot WPB program should have resulted in a past performance rating here of “unsatisfactory” with “high risk,” GAO cannot find, based upon this record, that the agency’s evaluation of Bollinger’s proposal as “marginal” with “low risk” under the past performance subfactor to be unreasonable. In any case, regardless of the ratings assigned the proposals, the record shows that the SSA was fully apprised of, and specifically and appropriately accounted for, Bollinger’s adverse past performance on the 123-Foot WPB program in making his source selection.
MMC next argues that the agency improperly and unreasonably determined that Bollinger’s proposed price was reasonable. Specifically, the protester contends that because Bollinger’s proposed price was $245 million higher than MMC’s proposed price, Bollinger’s proposed price should have been found to be unreasonably high. GAO states that where, as here, a fixed-price contract is contemplated, the government may use various price analysis techniques and procedures to ensure a fair and reasonable price, including the comparison of proposed prices received in response to the solicitation; adequate price competition can establish price reasonableness, as can a comparison of proposed prices with an IGCE.A price reasonableness determination is a matter of administrative discretion involving the exercise of business judgment by the contracting officer that GAO will question only where it is unreasonable.
Here, the RFP expressly provided that “[p]rice reasonableness will be established by competition and determined primarily by comparison with other offers submitted,” and that “[t]he prices may also be compared with the [IGCE].” The record reflects that the agency evaluated price reasonableness based upon a comparative assessment of the prices received, and determined that the prices proposed by both Bollinger and MMC were fair and reasonable. The agency noted during its price reasonableness evaluation that “[t]he values of tonnage, length, speed and horsepower are significant cost drivers needed to determine realistic costs for the FRC’B,” and that the proposed FRC’Bs “vary in length from 146.0 to 153.54 feet, 324.00 to 353.20 metric tons, [and] 8,949.98 to 11,532.79 horsepower with theoretical speeds ranging from 28.6 to 29.50 knots.” The record reflects that because of this the agency created an IGCE “using a 220 metric ton theoretical FRC‘B,” and used this data “extensively to parametrically determine the IGCE . . . for each variation of proposed craft.” The agency found, after performing its calculations, that Bollinger’s proposed price was fair and reasonable based upon a comparison with the IGCE, as adjusted to account for the size of Bollinger’s proposed FRC’B. In examining the offerors’ proposed prices, the agency also found that when MMC’s proposed price per FRC’B “was adjusted for the higher tonnage and horsepower” of Bollinger’s proposed FRC’B, the price of an MMC FRC’B was “within $1.1 [million] of the actual price proposed” for a Bollinger FRC’B.
The record reflects that the agency performed a detailed and relatively extensive price reasonableness analysis, which considered a comparison of the offerors’ proposed prices, as well as a comparison of the offerors’ proposed prices as adjusted to account for the differences in the FRC’Bs. Although MMC objects to the methodology used by the agency, wherein it adjusted its IGCE to conform to each offeror’s proposed FRC’B in order to determine whether the price for the particular FRC’B proposed was fair and reasonable, GAO does note that MMC has provided no authority to support its disagreement with the agency’s methodology, and that GAO has found that an agency in performing a price reasonableness analysis should consider price relative to the particular approach taken by the offeror. Accordingly, GAO finds no basis to object to the methodology used by the agency in the performance of its price reasonableness analysis, or the agency’s conclusion that Bollinger’s proposed price was reasonable.
Finally, the protester argues that the agency improperly failed to consider that Bollinger has an impermissible organizational conflict of interest (OCI) that “possibly gave [Bollinger] an advantage in this procurement and potentially prejudiced [MMC].” GAO states that when the facts of a procurement raise a concern that a potential awardee might have an OCI, the FAR requires the agency to determine whether an actual or apparent OCI will arise, and whether the firm should be excluded from the competition. The specific responsibility to avoid, neutralize or mitigate a potential significant conflict of interest lies with the cognizant contracting officer. As relevant here, one of the situations that creates a potential OCI is where a firm’s work under a government contract entails evaluating itself or its own products. The concern in such situations is that a firm’s ability to render impartial advice to the government will be undermined or impaired by its relationship to the product or services being evaluated; as a result, such situations are often referred to as “impaired objectivity” conflicts of interest.
GAO states that no significant conflict of interest exists here. With regard to Bollinger’s pre-award relationship with ABS, although Bollinger received some advice from ABS during the proposal preparation process, ABS clearly was not part of Bollinger’s “team” and there was no financial relationship between Bollinger and ABS. Moreover, both MMC and Bollinger obtained advice from ABS during the proposal preparation process. There is no evidence or claim that the post-award relationship between ABS and Bollinger as the result of Bollinger’s status as the awardee is any different than would be the relationship between ABS and MMC had MMC been awarded the contract. That is, as recognized by the protester, the RFP required that during the performance of the contract awarded here, the awardee must contract with ABS for classification of the FRC’B and structural analysis, and that “all offerors, including [MMC], were required to demonstrate in their proposals that they had arranged with ABS to provide post-award classification services.” Given the lack of any financial relationship between ABS and Bollinger prior to the award, and the fact that the relationship of ABS with the awardee would be the same or similar whether Bollinger or MMC were the awardee, GAO finds that the potential benefit to ABS here, if any, is speculative and too remote to establish a significant conflict of interest that the contracting agency had to avoid, neutralize, or mitigate pursuant to FAR subpart 9.5. The protest is denied.