Link: GAO Opinion
Agency: Department of Defense
Disposition: Protest sustained.
Keywords: Technical Evaluation
General Counsel P.C. Highlight: GAO has recognized that judgments made during a technical evaluation are often subjective by nature, but the exercise of these judgments in the evaluation of proposals must be documented in sufficient detail to show that they are not arbitrary. When an agency fails to document or retain evaluation materials, it bears the risk that there may not be adequate supporting rationale in the record for GAO to conclude that the agency had a reasonable basis for its source selection decision.
Northeast Military Sales, Inc. (NEMS) protests the award of a contract under a request for proposals (RFP), issued by the Department of Defense, Defense Commissary Agency (DeCA), for deli and bakery resale operations.
The RFP provided for the award of a requirements-type, fixed-price-award-term contract for deli and bakery resale operations at six commissaries for a two-year base period with two one-year option periods and four one-year award term periods. Award would be made on a best value basis considering technical capability, past performance, and price. The technical capability factor included customer satisfaction, increasing sales, continuing customer savings, quality assurance program, and transition approach. The past performance factor included quality history/overall customer satisfaction, and business relations. For past performance, offeror’s currently performing contracts for DeCA were permitted, but not required, to provide references from outside the agency. Non-DeCA contractors were required to provide past performance information on three to five contracts and/or subcontracts completed during the last three years, or currently in progress, that are similar in nature to the requirements of the solicitation and that demonstrate the offerors’ ability to perform the services sought.
DeCA awarded the contract to an offeror other than NEMS and NEMS contends that the agency ignored adverse past performance information concerning the awardee’s performance at a number of DeCA commissaries.
GAO’s review of the record shows that the technical evaluation team received past performance information from DeCA commissaries and from two other federal agencies. Although there were a number of favorable comments, there were also several e-mails from DeCA commissaries indicating that the awardee had a number of performance problems including, staff and product shortages, unsanitary conditions, employee tardiness and cleanliness, and problems with sushi, including use of expired products and pre-dating products.
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. While GAO has recognized that such judgments are often subjective by nature, the exercise of these judgments in the evaluation of proposals must be documented in sufficient detail to show that they are not arbitrary. Where a protester challenges the past performance evaluation and source selection, GAO will review the evaluation and award decision to determine if they were reasonable and consistent with the solicitation’s evaluation scheme and procurements statutes and regulations, and to ensure that the agency adequately documented the basis for the selection. When an agency fails to document or retain evaluation materials, it bears the risk that there may not be adequate supporting rationale in the record for us to conclude that the agency had a reasonable basis for its source selection decision.
The record shows no consideration by the technical evaluation team or the contracting officer of the awardee’s recent performance problems identified in these e-mails. Rather, the evaluation team rated the awardee’s proposal “exceptional” for each of the two past performance subfactors, despite the team’s receipt of numerous e-mails and reports of problems with the awardee’s performance. Moreover, the record shows that several of the e-mails were addressed to the contracting officer here, and, during a hearing held by GAO on this matter, the contracting officer testified that she reviewed all of the information. GAO finds that the past performance rating is inconsistent with the agency’s stated rating scheme, which provided that an “exceptional” rating would only be assigned for past performance reflecting a few minor problems. Based on the record, GAO concludes that the agency ignored adverse past performance information and, in assigning a past performance rating of exceptional to the awardee, deviated from the agency’s evaluation scheme. The protest is sustained and GAO recommends that the agency reevaluate the awardee’s proposal and make a new source selection decision.