Link: GAO Opinion
Agency: Department of Energy
Disposition: Protest denied.
In a procurement for liquid waste remediation, agency reasonably selected technically superior but higher priced proposal for award, where awardee’s technical approach for tank cleaning was significantly superior to the protester’s less feasible approach, the awardee’s proposal exceeded the requirements of the solicitation to a much larger degree than did the protester’s in several technical areas, and the awardee demonstrated proposal superiority under nearly all of the evaluation factors.
General Counsel P.C. Highlight:
STC contends that the agency’s evaluation of proposals under the non-price evaluation factors was unreasonable and unequal. GAO states the office reviews challenges to an agency’s evaluation of proposals only to determine whether the agency acted reasonably and in accord with the solicitation’s evaluation criteria and applicable procurement statutes and regulations. A protester’s mere disagreement with the agency’s judgment is not sufficient to establish that an agency acted unreasonably.
STC asserts that its proposal was undeserving of a significant weakness for offering to use the mini mantis as its primary tank cleaning approach. A review of the record, including the video clips, confirms the reasonableness of the agency’s conclusions. While the mantis technology has been successfully used on tanks without obstructions, the agency found that it had never been successfully used on tanks with obstructions, as is proposed here. The testing performed by STC’s subcontractor, the agency found, did not adequately simulate Type I and II tank conditions or demonstrate the feasibility of the mini mantis as a cleaning approach for these tanks. As depicted in STC’s proposal, the testing occurred in an open vessel that contained far fewer, less condensed, and less intertwined coils and obstructions than exist in Type I and II tanks. Also, during testing, the mini mantis was operated from above the vessel with adequate day light and visibility, and it was not remotely operated in a closed tank with cameras and lighting as the only visual guide as would occur with actual operations. Even under the less restrictive testing conditions, the video clips show the mini mantis having difficulty maneuvering over and around obstructions, which “reinforc[ed],” “validated”, and “heightened” the agency’s concerns. Based on this record, GAO finds the agency’s concerns about the mini mantis’ feasibility to be reasonable.
STC complains that the agency unfairly assessed its proposal a significant weakness for the impact of melter assumptions on canister production. As discussed above, SRR’s proposal included a number of innovations and enhancements that increased canister production to a far greater degree and earlier in contract performance than STC’s proposal. In fact, SRR proposed to produce 50 percent more canisters than STC. As reasonably determined by the agency, SRR’s production capability exceeded “end state” requirements to such a significant extent that there was little risk that SRR would fail to meet “end state” requirements, even if faced with unplanned DWPF outages or early melter failure. In contrast, STC’s projected canister production only slightly exceeded the “end state” requirements when STC’s melter assumptions are taken into account; thus, unplanned DWPF outages of just 4 days would result in STC not meeting the “end state” requirement to produce 1,100 canisters during the base period of the contract. Given the differences in proposed canister production, GAO finds the agency’s determination that SRR’s proposal was superior to STC’s to be reasonable and not the result of unequal treatment.
STC challenges the agency’s assessment of a weakness in its proposal under the technical approach factor relating to its proposed ETF operations. As noted above, the weakness was assessed because the agency determined that STC’s proposal’s was based on a reduction in ETF processing volume that was three to four times lower than the current volume flowing through the ETF. STC asserts that it did not assume volume reductions and complains that the agency misinterpreted its proposal.
According to the SEB report, the current ETF processing volume ranges from 11 to 24 million gallons per year. The agency concedes that, consistent with this report, STC’s cost proposal states that the “current utilization of ETF is . . . estimated at 15-20 [million gallons] per year throughput.” However, STC’s proposal included other statements that suggested to the agency that STC was assuming significant reductions in ETF processing volumes. For example, STC priced its ETF chemical treatment costs “based on a treated flow of 5.7 [million gallons] per [y]ear,” and proposed in its technical approach to deactivate ETF processing “trains” and reduce staffing from three shifts to one, which the agency concluded was insufficient to process the current ETF volume. STC was specifically informed during discussions about the agency’s concerns with the 5.7 million gallon assumption and the reduction in processing trains, was asked to substantiate its volume assumptions and the train reductions in its final proposal revision, and advised that current “ETF requirements may be 3 to 4 times that assumed by STC.” STC failed to address this issue in response to discussions, and based on GAO’s review, the agency reasonably assessed a weakness to the proposal as a result.
STC complains that DOE misevaluated the offerors’ key personnel. The record supports the agency’s basis for distinguishing between SRR’s and STC’s proposed key personnel. With regard to STC, the two individuals had only managed staff of no more than half of what they would be responsible for here. That is, STC’s proposed operations manager, who would be responsible for the overall project, would be responsible for approximately 1,000 core, matrix and subcontractor personnel here, but had previously only managed 500 personnel for a limited period of time. Similarly, STC’s proposed operations and maintenance support manager would be responsible for 365 full time equivalents plus additional subcontractor support personnel, but had only previously supervised, at most, 95 personnel. In contrast, SRR’s proposed project manager, who would be responsible for 1,772 personnel, had managed workforces as large as 2,000; and SRR’s tank farm manager had previously managed both tank farms separately so managing both tank farms together was not considered a proposal risk. Based on GAO’s review, it finds the agency’s evaluation to be reasonable.
STC contends that SRR’s proposal should have received a lower past performance rating due to the poor performance of its team members or subcontractors. Most significantly, STC contends that the agency misevaluated the past performance of WSRC in assessing it as a strength in the evaluation. As noted above, WSRC is a wholly owned subsidiary of URS Washington Division (an SRR team member) that performed tank closure activities at the SRS. STC contends that WSRC had “repeated instances of poor performance” under the SRS contract. According to STC, the firm has not closed any tanks since 1997, missed regulatory commitments for closing Tanks 18 and 19, faced two allegations of False Claims Act violations (including an allegation of fraud), and committed other acts of poor performance.
The record shows that the agency reasonably considered all of the adverse information that has been cited by STC. For example, with regard to WSRC’s failure to close tanks and meet deadlines, the agency noted that this was not due to the poor performance of WSRC. Rather, delays were due to the “complex regulatory framework” governing this work, the numerous legal challenges from outside entities to DOE’s tank closure activities, and the often changing decisions of DOE and other regulatory authorities to alter tank closure requirements and timetables for closure, all of which were outside of WSRC’s control. Moreover, the alleged False Claims Act violation was resolved by the parties and the contracting officer for that contract ultimately determined that it would not be reported as adverse past performance. SRR addressed these and other areas of past performance during discussions, and its responses alleviated the agency’s concerns.
The record shows considerable favorable past performance references for WSRC, which the SEB also took into account. The SEB considered all the allegations of adverse performance pointed out by the protester, and reasonably determined that the negative performance issues did not increase the risk of performance when balanced against the many instances of positive past performance. Taken as a whole, the SEB assessed WSRC’s performance to be a strength, and, based on our review, we find this conclusion to be reasonable. In any case, the SEB and SSA found STC’s past performance to be superior to SRR’s, primarily because of the negative past performance discussed above, and the SSA considered STC’s superior past performance in making the source selection decision.
STC asserts that the agency’s source selection decision is unreasonable and does not support the agency’s conclusion that SRR’s proposal was worth the additional $550.6 million in cost over STC’s proposal. However, as discussed above, we find that the agency performed a comprehensive evaluation that was reasonable and consistent with the evaluation criteria and applicable procurement laws and regulations. This record is well-documented and shows that the SSA made a reasoned judgment, based on all of the information before him, that SRR’s proposal was the best value to the government and was worth the additional cost. The protest is denied.