1. Divakar Technologies, Inc., B-402026, December 2, 2009
Link: GAO Opinion
Agencies: Department of Health and Human Services (DHHS), Office of Applied Science, Substance Abuse and Mental Health Services Administration
Disposition: Protest denied.
Keywords: Experience/past performance; Key personnel
The Department of Health and Human Services (DHHS) issued a request for quotations (RFQ) in August of 2009, describing the scope of work as "reviewing the existing [Office of Applied Science] OAS web site, outlining potential short-term, long-term, and 'sustainable' improvements, implementing the improvements selected by [Substance Abuse and Mental Health Services Administration] SAMSHA, and thereafter maintaining the web site for the 1-year term of the contract." The RFQ advised vendors that quotations would be evaluated on the basis of three factors: experience/past performance, compliance with certain regulatory requirements, and cost, where experience/past performance was significantly more important than cost.
DHHS received quotes from five firms, including Divakar Technologies, Inc. and SKY, LLC. The evaluators criticized Divakar's experience/past performance information as being difficult to trace or match to the evaluation criteria, and disapproved of their use of jargon; in contrast, SKY received all available points under the experience/past performance category. As such, SKY's quote was selected for the award.
Divakar's initial protest stated that the award to SKY was improper because their cost was significantly lower than SKY's. Divakar also claimed that SKY lacked the needed database experience for the project. Divakar then supplemented its protest after an attempt by DHHS to persuade Divakar to withdraw the protest. The supplemental protest claimed that DHHS improperly credited SKY with the experience of SKY's key personnel at times when those individuals were at other firms or assisted by other individuals.
GAO determined that where a solicitation calls for the evaluation of experience, it will examine the record to ensure that the evaluation was reasonable and consistent with the solicitation's evaluation criteria and procurement statutes and regulations. Further, in evaluating a firm's experience and past performance, it is proper for an agency to consider the experience of key personnel, which is what was proffered by SKY in their quotation. As such, GAO determined that the evaluation record provided a reasonable basis for DHHS to consider SKY's experience to be superior to the other potential contractors and that the contracting officer reasonably justified the selection of SKY.
2. The Analysis Group, LLC, B-401726, B-401726.2, November 13, 2009
Link: GAO Opinion
Agencies: U.S. General Services Administration (GSA), Department of the Air Force
Disposition: Protest sustained.
Keywords: Discussions; OCI
An RFQ was issued by the U.S. General Services Administration (GSA) as a negotiated "best value" acquisition, specifying that a task order would be issued under the successful vendor's Federal Supply Schedule (FSS) contract on the basis of price and several non-price considerations, with the non-price considerations being collectively more important than price. GSA received two quotations, from The Analysis Group (TAG) and Science Applications International Corporation (SAIC). After hearing oral presentations from both vendors and evaluating their quotations, the agency determined that SAIC's quotation was the best value. While SAIC's proposed price was higher than TAG's, SAIC was rated excellent overall, whereas TAG was rated acceptable.
TAG asserted that GSA conducted improper discussions with SAIC without providing a similar opportunity for TAG. Although GSA purportedly made the award on the basis of initial quotations, without engaging in discussions with either party, the record showed that, subsequent to the submission of quotations and the oral presentations, GSA and SAIC had an exchange concerning an indemnity provision, which SAIC removed from its proposal. By affording SAIC an opportunity to remove the indemnification clause (which would have made their quotation unacceptable) from its quotation, the agency essentially allowed SAIC to make its quotation acceptable. This was determined to be a material revision (and discussion), and since discussions with SAIC occurred, GSA was obliged to afford TAG a similar opportunity to participate in discussions.
In addition, TAG asserts that SAIC has an "impaired objectivity" organization conflict of interest (OCI). In this regard, the RFQ requires the successful firm to provide expertise to the Air Force (the agency that GSA was acquiring the contract on behalf of) in a number of subject areas. For this claim, the successful contractor was required to provide a broad range of objective advisory and assistance services, technical analysis, and support in the area of counter-proliferation of weapons of mass destruction, specifically, combating chemical, biological, radiological and nuclear (C-CBRN) weapons. According to TAG, this posed an impaired objectivity OCI for SAIC because the firm also sells C-CBRN-related detection and prevention products and services. Thus, TAG felt that SAIC would be unable to provide objective advice in this area because any advice given could affect sales of its products.
GSA responded that it considered whether SAIC might have an impaired objectivity OCI and concluded that it did not. The CO reviewed SAIC's information and determined that there was no reason to conclude that SAIC had an OCI. The agency also maintains that it intended to monitor SAIC during performance to ensure that there were no OCIs. The Federal Acquisition Regulation specifies that an OCI exists where, because of activities or relationships with other person or organizations, a person or organization is unable or potentially unable to render impartial assistance or advice to the government. FAR § 2.101.
COs are required to give meaningful, deliberate consideration to information that may shed light on potential OCIs. An agency may not, in effect, delegate to the contractor itself complete responsibility for identifying potential OCIs, but must take active steps in considering information outside of that provided by the contractor in determining the level of appropriateness.
Here, GSA did nothing to independently consider or evaluate whether SAIC had an OCI, rather the GAO determined that GSA essentially delegated its determination of OCIs to SAIC, which is flatly improper.
In light of the above, GAO recommended the reopening of the acquisition and encouraged GSA to engage in meaningful discussions with TAG and SAIC, and that a full review should be performed to determine whether SAIC has a potential or actual OCI.
3. ESCO Marine, Inc., B-401438, September 4, 2009
Link: GAO Opinion
Agency: Department of the Navy
Disposition: Protest sustained in part and denied in part.
Keywords: Financial responsibility; Task order jurisdiction
ESCO Marine, Inc (ESCO) protested the issuance of a task order to International Shipbreaking Limited LLC (ISL), under a request for proposals (RFP) issued by the Department of the Navy, Naval Sea Systems Command, Supervisor of Shipbuilding, Conversion & Repair, for the towing and dismantling of three decommissioned Navy ships. ESCO claimed that the Navy's evaluation of offerors' proposals and resulting award determination were unreasonable. The RFP set out five evaluation criteria, but established that price was significantly more important than the other factors and that task orders would be issued to those that represented the "best value" to the government. Also, the underlying contracts stated that any scrap or reusable equipment removed by the contractor from the ships were to be sold or disposed of as provided for within the contract, and that estimated proceeds from the sales should be factored into the contractors' proposed prices. The Navy evaluated the proposals that they received and subsequently determined that ISL's proposal was the best value to the government, since, all other aspects being equal, ISL's proposed price was $.06 while ESCO's proposed price was $4,679,726.
ESCO challenged the Navy's evaluation on several grounds, but primarily was concerned with the reasonableness of the Navy's evaluation of ISL's financial ability to perform the task at its proposed price. The other issues and arguments, while considered in the protest, were not detailed in the GAO's final decision.
Before addressing the substantive portion of ESCO's protest, the GAO dealt with the jurisdictional matter raised by the Navy as grounds for dismissing the protest. The Navy claimed that jurisdiction was lacking because GAO's jurisdiction to review task order protests is limited to those valued in excess of $10 million and that the task order in question in this protest was valued at $.06. In response, the GAO stated that its jurisdiction turns on the meaning of the term "valued" as used in the National Defense Authorization Act of Fiscal Year 2008. Following a lengthy discussion of what should be included in the term "valued" the GAO determined that the price of the task order does not represent the task order's entire value, and that consideration must be given to the value of the estimated scrap materials that would result from the disassembly as well. When the amounts for the scrap were included the value of the task orders were well above the $10 million mark, and thus, the GAO retained jurisdiction.
In particular, ESCO argues that the Navy's cash-flow analysis was improperly premised on the assumption that ISL would generally work on only one ship at a time (and thereby incur the estimated upfront costs of performance sequentially), although ISL's own proposed schedule stated otherwise. GAO sustained ESCO's challenge to the Navy's determination that ISL was sufficiently financially responsible. To that point, GAO stated that it will generally not consider a protest that challenges an affirmative determination of financial responsibility, except under limited circumstances - where it is alleged that definitive responsibility criteria in the solicitation were not met or that there are serious concerns raised about a CO unreasonably failing to consider available relevant information. In this protest, the Navy did not take into account specific schedule information provided by ISL, but instead based its determination of financial responsibility on information contradictory to the information contained in ISL's proposal.
In light of this determination, the GAO recommended that the Navy make a new assessment of ISL's responsibility and that ESCO be reimbursed its costs of filing and pursuing the protest.
4. Port of Bellingham, B-401837, December 2, 2009
Link: GAO Opinion
Agencies: Department of Commerce; National Oceanic and Atmospheric Administration (NOAA)
Disposition: Protest sustained.
Keywords: Practicable alternative; Solicitation requirements
Port of Bellingham, Washington, protested the award of a lease by the Department of Commerce, National Oceanic and Atmospheric Administration (NOAA), to Port of Newport, Oregon, pursuant to a solicitation for offers (SFO) to provide office, warehouse, and related space for NOAA's Marine Operations Center-Pacific (MOC-P).
The SFO stated that the lease award would be based on the offer determined to be most advantageous to the government based on the following factors: location of site; site configuration and management; quality of building and pier; availability; past performance and project financing; quality of life; and price. The SFO also provided that: "[a]n award of contract will not be made for a property located within a base flood plain or wetland unless the Government has determined that there is no practicable alternative." Five offers were received, of which four were competitive, including Newport's and Bellingham's. As part of its evaluation, NOAA contracted with an engineering firm to perform an environmental assessment (EA) of the offers, in order to comply with relevant environmental law.
As a result of the EA, NOAA notified Newport during discussions that its proposal and offered site were seemingly in a flood plain and that its final proposal should address this fact. Newport did not alter its final proposal, nor did it provide any meaningful explanation for why its site should be considered to be outside the flood plain. Despite this, Newport's proposal was selected for the award.
Bellingham protested, claiming that Newport's proposed pier was clearly within a designated flood plain area; that the agency had no reasonable basis to conclude otherwise; and that the agency was, therefore, required to make a determination as to whether there was a practicable alternative to Newport's offer. NOAA responded that it "properly concluded that Newport's offered property is not located within the base flood plain," and that, having so concluded, that it "was not required to and properly did not conduct a practicable alternative analysis." In maintaining that Newport did not propose property within the designated flood plain area, the agency refers to the fact that the "finished level" of Newport's proposed pier is projected to be higher than the applicable base flood plain, as provided by Newport.
GAO has previously considered several protests concerning flood plain requirements, and has noted that these requirements flow from Executive Order No. 11988, which precludes an agency from providing direct or indirect support of flood plain development when there is a practicable alternative. Here, there was no doubt that Newport's offer proposed to build its pier structure within the designated flood plain area. Further, Newport's proposed pier construction within the designated flood plain area was expressly presented to NOAA by the engineering firm it retained to, among other things, inform the agency on floodplain matters. With that notification, and in conducting discussions with Newport, NOAA requested that Newport address the flood plain issue in the context of the location of its proposed pier; yet, Newport did not. Finally, the fact that the "finished level" of the pier may be above the base flood plain had no bearing on the clearly apparent fact that the pier structure itself is to be constructed within the designated floodplain area, which will, among other things, require Newport to cause drastic environmental impact.
GAO concluded that there was no reasonable basis for NOAA to conclude that Newport's proposal did not fall within the scope of either the solicitation's express floodplain limitations or EO No. 11988's limitations regarding potential environmental impacts. Thus, NOAA was required to consider the environmental impact of Newport's proposal and to determine whether there was a practicable alternative to its offer, which it did not, and therefore Bellingham's protest is sustained.
In sustaining Bellingham's proposal, the GAO recommends that NOAA comply with the requirements in its solicitation. In particular, if NOAA's analysis identifies a practicable alternative, as contemplated by the solicitation, it should implement such alternative, if otherwise feasible. In the event NOAA's analysis concludes there is no practicable alternative, it should comply with the procedural requirements established in EO No. 11988.
