BNUMBER: B-270102; B-270102.2
DATE: February 8, 1996
TITLE: Contrack International, Inc.
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Matter of:Contrack International, Inc.
File: B-270102; B-270102.2
Date: February 8, 1996
Edward J. Tolchin, Esq., Fettmann & Tolchin, for the protester.
John Kennedy for Gulf Housing & Construction, an intervenor.
Bruce H. S. Anderson, Esq., and Ronald W. Breen, Department of the
Army, for the agency.
Mary G. Curcio, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
Procuring agency's decision to award contract to lower-priced, lower
technically rated offeror was reasonable, where the solicitation made
price the most important evaluation factor and the technical
differences between the protester's and awardee's proposal were
reasonably found not significant and the price difference was
considered significant in the circumstances.
DECISION
Contrack International, Inc. protests the award of a fixed-price
contract to Gulf Housing & Construction Co., W.L.L., under request for
proposals (RFP) No. DACA78-95-R-0021, issued by the Army Corps of
Engineers for the construction of warehouse and storage facilities in
Qatar. Contrack asserts that the award was based on an unreasonable
price/technical tradeoff.
We deny the protest.
BACKGROUND
The solicitation provided that proposals would be evaluated against
the following criteria, listed in descending order of importance:
price; experience; past performance; and management and execution
plan. Experience and past performance were to be point-scored and
management/execution plan was to be evaluated on a pass/fail basis.
Prices were to be evaluated for reasonableness. The solicitation
further provided:
"Award will be made to the offeror whose proposal contains the
combination of those criteria offering the best overall value to
the Government. This will be determined by comparing differences
in the value of the technical and management features with
differences in cost to the Government.
"In making this comparison, the Government is more concerned with
making an award at the lowest overall cost to the Government than
with obtaining superior technical or management features.
However, the Government will not make an award based on a
proposal with significantly inferior technical or management
features to achieve a small savings in cost to the Government.
"When making tradeoff decisions during proposal evaluation,
offerors should remember that the Government prefers to obtain
better offeror experience, past performance and better management
execution plan quality rather than to obtain relatively small
price savings."
Eight offers were received. Based on the evaluation of initial
proposals (the technical proposals were evaluated by a technical
evaluation team (TET) and the price proposals were evaluated by a
cost/pricing team (CPT)), four offers, including the protester's and
the awardee's, were included in the competitive range. Both proposals
were rated acceptable for the management/execution plan. The
protester's proposal received 52 out of 60 points for experience and
56 out of 60 points for past performance, for a total technical score
of 108 points. Gulf's proposal received 44 points for experience and
28 points for past performance, for a total technical score of 72.
After discussions were held and best and final offers were submitted,
Gulf had the lowest priced proposal ($4,201,503), and Contrack the
second lowest-priced proposal ($4,394,400). The CPT found that Gulf's
proposed price was reasonable and recommended award to Gulf if it met
all other solicitation requirements. The contracting specialist
performed a pre-award survey of Gulf, during which she contacted
several former customers of Gulf. Based on the information she
received, she also recommended award to Gulf.
The contracting officer reviewed the award recommendation and the
evaluation results, and questioned whether an award to Gulf was in
accordance with the solicitation criteria. Specifically, he was
concerned that Gulf's low past performance score indicated significant
inferiority (compared to Contrack) in this area and that Gulf's price
appeared to only offer a relatively small price savings. The
contracting officer asked the TET to explain the difference in the
past performance scores of Gulf and Contrack. In response, the TET
stated that those scores were based completely on information that was
included in the proposals. Gulf's proposal included relatively little
past performance information, while Contrack's included a number of
congratulatory letters from former customers; Contrack's higher score
was based on these laudatory letters. The contracting officer noted
that the solicitation permitted the evaluators to consider information
which the agency obtained on its own in evaluating past performance.
He also noted that the pre-award survey indicated that Gulf's past
performance was excellent. He therefore raised Gulf's past
performance score by 20 points, to 48, and determined that the
difference in past performance scores--56 for Contrack versus 48 for
Gulf--was not significant. He also determined that while the
4.38-percent price difference between the offers appeared small, the
difference in fact was significant in the circumstances because the
agency had no contingency funds available for change orders. Based on
his conclusions that the difference in the technical scores was not
significant, and that the difference in price was, the contracting
officer selected Gulf for award.
DISCUSSION
Contrack argues that the award to Gulf was improper because it was
based on an unreasonable price/technical tradeoff. Specifically,
Contrack argues that the contracting officer erroneously determined
that the difference in the scores under the experience (44 for Gulf
versus 52 for Contrack) and past performance factors (48 for Gulf
versus 56 for Contrack) was not significant, and that the price
difference ($192,897) was significant.
Experience Factor
Contrack argues that its proposal received a higher score under the
experience factor because it has experience constructing warehouse and
storage facilities for the Corps--work under the RFP here valued at
more than $4 million--and Gulf does not. Contrack concludes that it
was unreasonable for the agency to find that the scoring difference
did not indicate that Gulf's experience was significantly inferior to
Contrack's.
In evaluating Contrack's proposal, the agency recognized that Contrack
had more than adequate experience performing the same kind of work
called for under the solicitation. However, the solicitation did not
require offerors to demonstrate experience performing identical work.
Rather, it provided that the government would evaluate ". . . the
relative depth and breadth of experience in the technical execution of
work experiences similar to that included in this solicitation." In
evaluating Gulf's experience, the agency found that Gulf had adequate
experience performing similar projects. Specifically, the evaluators
stated that, based on the projects Gulf had undertaken, which were
primarily construction of office and commercial buildings, Gulf had
adequate experience, its key personnel had substantial experience, and
Gulf had experience with the Corps on a project in which it
participated as a joint venture partner. In addition, one of the
evaluators, while recognizing that Gulf had no experience constructing
warehouse and storage facilities, determined that the projects Gulf
had completed were technically equivalent to, or more complex, than
the construction called for by the current solicitation. The
evaluators also recognized that Gulf had experience in Qatar. Since
the solicitation did not require experience performing work identical
to that required under the solicitation, and the evaluators
specifically found that Gulf had adequate experience performing
similar work, the contracting officer reasonably determined that the
scoring difference based on Contrak's experience performing identical
projects did not indicate that Gulf's experience was significantly
inferior to Contrack's.
Past Performance
Contrack questions why Gulf's proposal received a score only 16
percent lower than Contrak's, given that Contrak provided many more
examples of past performance on similar projects.
With respect to past performance the solicitation stated that:
"The Government . . . will compare, rank and score competing
offerors on the basis of the relative favorableness of their past
performance. By past performance the Government means an
offeror's reputation for satisfying its customers by delivering
quality work in a timely manner at a reasonable cost. Past
performance also includes an offeror's reputation for integrity,
reasonable and cooperative conduct, and commitment to customer
satisfaction. All other points of comparison being equal, the
Government will place greater weight on performance of work more
closely related to that which is the same as or similar to the
work included in this solicitation."
During the pre-award survey, the contracting specialist spoke with the
project director for a school and sports hall that Gulf constructed in
Qatar. The project officer stated that Gulf was responsible for the
construction, including all mechanical and electrical services and
external work, was one of the best contractors in Doha, and was
professional at all times and performed with no cost or time overruns.
In addition, she stated that Gulf had one of the best labor pools in
Qatar and that she had also worked on a large project in the oil
fields on which Gulf performed extremely well as a subcontractor.
The contracting specialist also contacted the architect on a
residential villa project built by Gulf. The specialist's report
states
". . . [The architect] stated that he has been involved in
business off and on with Gulf Housing over the past 15 years and
it has always been a pleasurable experience. This project was
for the construction of fourteen (14) residential units including
all mechanical, electrical and external works. Stated they are
well organized and performed well. There was an increase in cost
and time on the project but that was due to changes requested by
the owner. . . . [He] also worked on a project with Gulf ten
(10) years ago in which they constructed two large office
buildings and performed well on those also."
A third contact, from Qatar General Petroleum Corporation, informed
the contracting specialist that Gulf had performed similar work for
them on more than one occasion, that all work was completed in
accordance with the corporation's standards, and that Gulf was a good
civil contractor.
This information in the pre-award survey, all provided by customers
for whom Gulf had performed more than one project, gave the
contracting officer a reasonable basis to find that Gulf performed
well, satisfied its customers, completed its work in a cost effective
and timely way, and had integrity. While Contrack provided more
information regarding past performance on similar projects, there is
no basis to conclude that Contrack's proposal should have received a
score more than 16 percent higher than Gulf's for past performance.[1]
Contrack argues that the use of information from the pre-award survey
to raise Gulf's past performance score constituted discussions and
required the Corps to open discussions with all competitive range
offerors. We disagree. Discussions are written or oral
communications between the government and an offeror which concern
information necessary to determine the acceptability of a proposal or
which provide an offeror with the opportunity to modify its proposal.
Federal Acquisition Regulation (FAR) sec. 15.601. Here, the
communication was not between Gulf and the Corps; it was between the
Corps and the contacts Gulf listed in its initial proposal for prior
contracts it performed. (The solicitation permitted the agency to
base the past performance evaluation on information other than that
provided in the proposal.) Such communications do not constitute
discussions. See Professional Safety Consultants Co., Inc.--Recon.,
B-247331.2, Sept. 28, 1992, 92-2 CPD para. 209; Action Serv. Corp.,
B-246413; B-246413.2, Mar. 9, 1992, 92-1 CPD para. 267.
Price Difference
Finally, Contrack challenges the contracting officer's conclusion that
the $192,897 cost difference was significant. Noting that this
conclusion was based on the lack of contingency funds for contract
changes, Contrack maintains that the contracting officer improperly
did not consider that such funds would be unnecessary if award were
made to Contrack, due to its greater experience and superior past
performance.
As discussed above, the contracting officer reasonably determined that
Contrack's experience and past performance were not significantly
superior to Gulf's; it follows, we think, that the contracting officer
was not compelled to determine that the likelihood of changes would be
less likely if award were made to Contrack. In any case, the need for
changes could arise independent of the contractor's capabilities, due
to changes in agency preferences or unforeseen events, so some amount
of contingency funds could be necessary no matter to which offeror the
award were made.
The protest is denied.
Comptroller General
of the United States
1. Contrack also maintains that the contracting officer unreasonably
determined that the 50-percent difference in the total technical
scores--72 for Gulf's proposal, compared to 108 for Contrak's--was not
significant. This argument is based on Gulf's score before it
adjusted upward to 92 points by the contracting officer. As discussed
above, the remaining 16-point difference in the experience and past
performance areas reasonably was determined not to be significant.