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1. USA Jet Airlines, Inc.; Active Aero Group, Inc., B-404666, April 28, 2011
Link: GAO Opinion
Agency: Department of Energy
Disposition: Protest sustained on one issue; denied on all others.
Keywords: Terms of the Solicitation
General Counsel P.C. Highlight: Where a protester challenges a specification as unduly restrictive of competition, GAO will review the record to determine whether the restrictions imposed are reasonably related to the agency's needs. The adequacy of the agency's justification is ascertained through examining whether the agency's explanation is reasonable, that is, whether the explanation can withstand logical scrutiny
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USA Jet Airlines, Inc. (USA Jet) and Active Aero Group, Inc. (AAG) protest the terms of a request for proposals (RFP), issued by the Department of Energy (DOE), National Nuclear Security Administration (NNSA), for aircraft support and maintenance services.
The DOE issued the RFP as an unrestricted solicitation and amended it several times. As amended, the performance work statement (PWS) provides for the contractor to maintain (or oversee maintenance) and provides related services for multiple aircraft that the DOE is purchasing. Initially, the contract requires services for one Boeing 737‑400 aircraft, followed by options for up to two more 737s, and additional options for other aircraft. The RFP contemplates a cost plus fixed fee contract for a base year and up to four option years. The RFP provides for the contract to be awarded on a best value basis, considering technical approach, past performance, and evaluated cost. The RFP explains that the technical evaluation will consider whether "the offeror thoroughly described how the work will be accomplished," including the technical risks, their impact, and the measures to avoid or minimize those risks. The RFP also explains that the technical approach evaluation will review the offeror's technical capabilities, key personnel qualifications and availabilities, corporate experience, management plan, and phase-in plan.
The RFP provides basic information about the aircraft for offerors to use in preparing their proposals, including the expected age of each aircraft at the time of acquisition, and advises that each aircraft is expected to have an annual flight time of 500 hours. The RFP also specifies that each offeror must "provide evidence in its proposal that the contractor is ISO 9001, ISO 9100 or AS 9110 certified on or before the proposal due date," and explain how the certification will be maintained throughout the contract.
In providing services, the RFP provides that offerors will be required to follow a variety of manuals and directives that were not included in the RFP. Although offerors requested copies of the manuals and procedures identified in the RFP, the DOE responded that they would be provided after award.
USA Jet argues first that the solicitation restricts competition by requiring offerors to hold ISO 9001, ISO 9100, or AS 9110 certification at the time of proposal submission. Second, USA Jet argues that the DOE should accept FAA Part 121 certification as an alternative to ISO or AS certification. And third, USA Jet argues that the RFP is ambiguous by failing to provide manuals and policies, which the PWS requires the contractor to follow in performing the work, and thus lacks information necessary to prepare a proposal. AAG joins in the arguments that the absence of manuals and policies renders the RFP defective, but AAG does not join the challenges to the requirement for ISO or AS certification.
GAO states that with respect to the requirement for ISO or AS certification at the time of proposal submission, the determination of a contracting agency's needs and the best method for accommodating them are matters primarily within the agency's discretion. However, where a protester challenges a specification as unduly restrictive of competition, GAO will review the record to determine whether the restrictions imposed are reasonably related to the agency's needs. The adequacy of the agency's justification is ascertained through examining whether the agency's explanation is reasonable, that is, whether the explanation can withstand logical scrutiny. An agency's otherwise legitimate requirements regarding an offeror's demonstrated ability to meet contract requirements may not generally be applied at a point in time prior to when such qualifications become relevant.
The DOE states that offerors must possess an ISO or AS certification at the time of proposal submission because the certification process "could take several months to several years to complete depending on the maturity and motivation of the organization," and because the DOE is unwilling to waive the requirement to allow performance to begin without a certification. The reasons provided by the DOE do not support requiring ISO or AS certification at the time of proposal submission. The fact that a diligent prospective offeror could face a lengthy process to obtain an ISO or AS certification raises exactly the prospect that USA Jet claims exists here--that the firm can obtain ISO or AS certification in time for performance to be consistent with the certificate, even though it cannot do so by the proposal due date. The fact that the DOE is unwilling to waive the requirement does not mean that the requirement must be met when proposals are due. GAO sustains the protest to the extent that USA Jet objects to the requirement that offerors possess an ISO 9001, ISO 9100, or AS 9110 certificate at the time of proposal submission.
Next the protesters argue that the solicitation is ambiguous; that is, that the RFP does not provide information necessary for offerors to prepare proposals, or for the DOE to evaluate those proposals on an equal basis.
Even though GAO accepts the protesters' premise that the actual maintenance and service requirements for each particular aircraft cannot be known in advance, for purposes of preparing and evaluating proposals for a cost reimbursement contract, the DOE has provided a reasonable basis from which to assess offeror technical understanding and costs. The protest by USA Jet is sustained in part. AAG's protest, and the remaining grounds of the protest by USA Jet, are denied. GAO recommends that the DOE amend the RFP to represent its actual needs concerning when ISO or AS certification is required, and that the DOE reopen the competition and allow offerors to submit new or revised proposals.
2. AWS Convergence Technologies, Inc., B-404002.2; B-404002.3, April 20, 2011
Link: GAO Opinion
Agency: Department of Commerce
Disposition: Protest denied.
Keywords: Technical Evaluation; Cost Evaluation
General Counsel P.C. Highlight: In reviewing protests challenging an agency's evaluation of quotes, GAO will not conduct a new evaluation or substitute our judgment for that of the agency; rather it will examine the record to determine whether the agency's judgment was reasonable and consistent with the solicitation's evaluation criteria
AWS Convergence Technologies, Inc. (AWS) protests the award of a contract by the Department of Commerce, National Oceanic and Atmospheric Administration (NOAA) to Global Science & Technology, Inc. (GSTI), under a request for quotes (RFQ), for expanding the National Mesonet Pilot Project of 2009 by building an infrastructure in urban and non-urban areas throughout the United States capable of collecting environmental data.
The agency issued the RFQ pursuant to Federal Supply Schedule (FSS) procedures via the GSA e-Buy website. The RFQ provided that award would be made to the vendor with acceptable past performance whose quote was found to represent the best value to the government, based on the evaluation of technical/management quotes and price.
With regard to the network operator relationships subfactor (subfactor 8), which was one of the most important subfactors, AWS's quote was rated marginal. The TET found that AWS's quote did not include a definition of the vendor's interpretation of urban and non-urban areas, which was a "significant detractor" to understanding how AWS's approach satisfied the fiscal year 2010 appropriation language that required 75% of the funds to be used to expand urban areas. In contrast, GSTI's quote was rated excellent under the network operator relationships subfactor, because the quote "offered a current and vetted definition of urban" from a recent National Academy of Sciences publication and identified a procedure to apply this definition to the allocation of sites, to ensure that 75% of the funds would be spent on expansion in urban areas.
The contracting officer determined that AWS's price did not demonstrate an understanding of the 75/25% distribution of funds requirement, and that AWS's quoted price was therefore unreasonable. In contrast, GSTI's lower price was found to be reasonable.
AWS argues that GSTI's quote failed to comply with the solicitation's 75% funding requirement; failed to comply with a solicitation requirement concerning spatial and temporal resolution; exceeded page limits; was not submitted through the E-Buy portal; and included services that were not on the firm's FSS contract. AWS also asserts that the agency conducted unequal discussions. GAO states that in reviewing protests challenging an agency's evaluation of quotes, it will not conduct a new evaluation or substitute our judgment for that of the agency; rather it will examine the record to determine whether the agency's judgment was reasonable and consistent with the solicitation's evaluation criteria, and with procurement statutes and regulations.
AWS first asserts that GSTI's quote should have been evaluated as technically unacceptable "for its failure to comply with mandatory NOAA requirements for 75% of data acquisitions from urban geographical areas." However, AWS's argument misinterprets the solicitation. The RFQ did not require that 75% of "data acquisition" come from urban areas; rather, the solicitation required only that 75% of the appropriated "funds" be allocated to urban areas. The record confirms that GSTI's quote complied with this requirement.
AWS also objects to GSTI's reliance on Census data to define what constitutes urban areas, contending that this essentially "eliminates any distinction between 'Urban' and 'Rural'" and defeats the Congressional mandate that 75% of the funding be used for expansion of the pilot program in urban areas. The RFQ did not define the term "urban," but left the definition to the vendors to explain when describing how they were going to meet the expansion requirement. The protester has not shown that its preferred definition was required by the RFQ, or that GSTI's definition was prohibited or unreasonable. To the extent that the protester asserts that the agency's failure to define the term "urban" created an ambiguity in the RFQ, the ambiguity was patent and is untimely raised.
AWS next contends that GSTI's quote should have been disqualified because it did not provide for a spatial resolution of less than five kilometers every 15 minutes or less, which the protester claims was required by the RFQ. As the agency explains, spatial and temporal resolution parameters were provided on the first page of the RFQ as background information regarding the long term goals of the National Mesonet Pilot Project and were not requirements of the RFQ. Reading the RFQ section as a whole, GAO finds that it was reasonable for the agency to interpret this RFQ provision as a statement of long term goals, and not as an expression of a formal solicitation requirement.
The protester also contends that GSTI's quote exceeded the 25-page limit set forth in the solicitation, because it included a 26th page containing price information. However, the contracting officer explains that GSTI's quote complied with the 25-page limit; the additional page was provided in response to the agency's request for supplemental information and was not included in the page count. Since AWS also provided supplemental information that was not included in the page count, the protester was not prejudiced by the agency's actions.
AWS contends that the award was improper because GSTI's FSS contract does not specifically include preparing implementation reports, which is a required CLIN here. GAO states that an agency may not use FSS procedures to purchase items that are not listed on a vendor's GSA schedule. When a concern arises that a vendor is offering services outside the scope of its FSS contract, the relevant inquiry is whether the services offered are actually included on the vendor's FSS contract, as reasonably interpreted. Here, GSTI stated that it would satisfy the solicitation's requirements using its GSA schedule 871 contract for professional engineering services. This contract includes special item numbers (SINs) for, among other things, strategic planning for technology programs and activities (SIN 871-1); concept development and requirements analysis (SIN 871-2); and system design, engineering and integration (SIN 871-3). As the agency explains, and GAO agrees, these SINs provide for the performance of various analysis and studies that implicitly include drafting and submitting reports, including implementation reports of the type required here. Since the preparation of implementation reports is within SINs listed on GSTI's FSS contract, GAO denies this aspect of AWS's protest.
AWS also contends that the agency should have rejected GSTI's quote because it was not properly submitted through the E-Buy portal. However, the protester does not cite to any provision in the solicitation requiring that vendors submit their quotes only through the e‑Buy portal. In fact, the RFQ requires only that vendors submit one original and 10 copies of their technical quotes, and is silent on the method of delivery. Because the protester has not sufficiently alleged that the awardee's method of submission was prohibited by the terms of the solicitation or by any procurement law or regulation, GAO denies this protest ground.
Finally, the protester contends that the agency conducted improper discussions only with GSTI. GAO states that where, as here, a competition is conducted among FSS vendors pursuant to Federal Acquisition Regulation (FAR) Part 8, there is no requirement for agencies to conduct discussions in accordance with FAR § 15.306. However, exchanges with vendors in a FAR Part 8 procurement, like all other aspects of an FSS evaluation, must be fair and equitable. The record confirms that the agency engaged in nearly identical exchanges with AWS and GSTI on these issues. In this regard, the protester was asked both to separately price each sub-CLIN, and to discuss how a possible reduction in CLIN 1 funding would affect performance. Therefore, GAO finds no basis to conclude the exchanges were other than fair and equitable. The protest is denied.
3. Analytic Strategies, B-404840, May 5, 2011
Link: GAO Opinion
Agency: Department of Defense
Disposition: Protest denied.
Keywords: Price Realism; Fixed Price Contract
General Counsel P.C. Highlight: An agency may, in its discretion, provide for a price realism analysis for the purpose of assessing whether an offeror's price is so low as to evince a lack of understanding of the contract requirements or for assessing risk inherent in an offeror's approach. However, offerors competing for award of a fixed-price contract must be given reasonable notice that a business decision to submit a low-priced proposal will be considered as reflecting on their understanding or risk associated with their proposal.
Analytic Strategies protests the award of a contract under a request for proposals (RFP), issued by the Department of Defense, for analytical and information technology support services.
The RFP, issued as a total small business set-aside, provided for the award of a fixed‑price contract, with a base period of one year and four one-year option periods. Award would be made to the offeror submitting the proposal determined to represent the best value to the government based upon the following evaluation factors: technical approach, personnel, past performance, organizational capacity, management approach, and price.
Analytic Strategies' proposal was evaluated as "confidence" under the past performance factor, "acceptable" under the technical approach, personnel, organizational capacity and management approach factors, and "acceptable" overall, at a proposed price of $4,616,475. The contracting officer noted in the source selection decision that Analytic Strategies' "low price was the result of very low labor rates which were determined to be unrealistic for the approach proposed."
Analytic Strategies argues that the solicitation did not provide for a price realism evaluation, and that the agency's evaluation of the protester's proposed price for realism was thus inconsistent with the solicitation's terms. GAO states that before awarding a fixed-price contract, an agency is required to determine whether the price offered is fair and reasonable. An agency's concern in making this determination in a fixed-price environment is primarily whether the offered prices are too high, as opposed to too low, because it is the contractor and not the government that bears the risk that an offeror's low price will not be adequate to meet the costs of performance. An agency may, in its discretion, provide for a price realism analysis for the purpose of assessing whether an offeror's price is so low as to evince a lack of understanding of the contract requirements or for assessing risk inherent in an offeror's approach. However, offerors competing for award of a fixed-price contract must be given reasonable notice that a business decision to submit a low-priced proposal will be considered as reflecting on their understanding or risk associated with their proposal. Where a solicitation for a fixed-price contract omits a provision for realism but requests detailed cost or pricing information, GAO has found that an agency may properly consider whether an unreasonably low price poses proposal risk if the solicitation, in either the technical or price factors, provides for the evaluation of an offeror's understanding of the requirements. Conversely, where the solicitation lacks either a technical or price evaluation factor that provides for the offerors' understanding of the requirements, and the solicitation also does not require detailed cost or pricing information, then the agency may not consider whether unreasonably low prices pose proposal risk.
The RFP required that price proposals include price information as well as considerable direct and indirect cost information. The solicitation also provided that the proposals would be evaluated under the price factor for understanding and consistency with the offeror's proposed approach to contract performance. Accordingly, the RFP provided adequate notice to the offerors that low prices could be considered as reflecting on their understanding or risk associated with their proposals. In evaluating price proposals, the agency analyzed "the proposed labor mix and skill associated with the provided labor rates and fixed unit prices . . . to determine if the prices proposed" were "reasonable and realistic for the type of work proposed." In doing so, the agency calculated a blended labor rate for each offeror, and compared each offeror's blended labor rate to the blended rates of the other offerors and the agency's independent government cost estimate (IGCE). The record reflects that the blended labor rates of all of the offerors, other than Analytic Strategies, were relatively close to each other and to the IGCE. Analytic Strategies' proposed blended labor rate was significantly less than those proposed by the other offerors and the IGCE. The record reflects that the agency did not select Analytic Strategies' proposal for award because of the performance risk posed by its low pricing, a determination which GAO has found to be reasonably based. The protest is denied.
