Technical Support Services, Inc., B-279665; B-279665.2, July

Technical Support Services, Inc., B-279665; B-279665.2, July BNUMBER: B-279665; B-279665.2 DATE: July 8, 1998 TITLE: Technical Support Services, Inc., B-279665; B-279665.2, July 8, 1998 ********************************************************************** DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release. Matter of:Technical Support Services, Inc. File:B-279665; B-279665.2 Date:July 8, 1998 Jonathan M. Bailey, Esq., Theodore M. Bailey Law Office, for the protester. Rexford T. Bragaw, III, Esq., Defense Commissary Agency, for the agency. Peter A. Iannicelli, Esq., and Michael R. Golden, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest is sustained where the agency disregarded the solicitation's stated best value evaluation scheme and awarded the contract to the offeror of the lowest-priced, technically acceptable proposal without weighing the awardee's low price against the benefits potentially associated with the protester's higher-rated proposal. DECISION Technical Support Services, Inc. (TSSI) protests the Defense Commissary Agency's (DCA) award of a contract for commissary services to Ace Services, Inc., pursuant to request for proposals (RFP) No. DECA01-98-R-0005. TSSI contends that the agency failed to inform it, either in the RFP or during discussions, that the contract was going to be awarded to the offeror of the lowest-priced, technically acceptable proposal. TSSI also contends that DCA did not evaluate proposals and select the awardee in accord with the RFP's stated evaluation scheme, and that DCA unreasonably induced it to increase its staffing levels and its associated prices during discussions and then improperly awarded the contract to Ace on the basis of its lowest-priced proposal. TSSI also alleges that the agency failed to conduct a meaningful price realism analysis of Ace's offer.[1] Initial Protest at 4; Supplemental Protest at 1, 11-12. We sustain the protests. Issued on November 18, 1997, as a total small business set-aside procurement, the RFP solicited fixed-price proposals for performing shelf-stocking, custodial, and receiving/storage/holding area services at the Offutt Air Force Base commissary. RFP section C; RFP sec. L.14. The RFP contemplated a 1-year contract and included options for 4 additional years. RFP section B. Fifteen offerors timely submitted initial proposals, and six offers were determined to be in the competitive range. Discussions were held with all competitive-range offerors. During three successive rounds of discussions with TSSI, the agency raised concerns regarding low staffing levels in the firm's proposal. In response, TSSI increased proposed staffing, resulting in an increase in its proposed price. Best and final offers (BAFO) were received and Ace's BAFO [deleted] was the lowest-priced, while TSSI's [deleted] was the fifth-lowest.[2] Contracting Officer (CO) Statement at 4; Agency Report at para. I.2. On March 20, 1998, the contracting officer notified TSSI that he intended to award the contract to Ace based upon its lowest price; on March 28, the contract was awarded to Ace. TSSI filed its initial protest on March 30, and, after receiving the agency's protest report, TSSI filed a supplemental protest on May 11. Finding performance to be in the best interests of the government, the agency authorized Ace to perform the contract notwithstanding TSSI's protests. The protester contends that DCA did not evaluate proposals in accord with the RFP's evaluation scheme. TSSI asserts that the RFP required the agency to make award to the offeror whose proposal represented the best value to the government, and emphasized that technical merit--particularly proposed staffing--was more important than price. The protester also contends that DCA misled it during discussions by repeatedly telling it to raise its staffing levels, causing TSSI to increase its price as a result, and then awarding the contract to Ace on the basis of its lowest-priced, technically acceptable proposal. The agency reports that it always intended to award the contract to the offeror of the lowest-priced, technically acceptable proposal, but concedes that "the solicitation inadvertently omitted the language that award would be made to the lowest technically acceptable offeror." Agency Report at para. I.3 and para. III.5. The agency reports, however, that the award decision was consistent with the agency's internal technical evaluation plan, which indicated that the contract was to be awarded to the "lowest technically acceptable offeror." Id. at para. I.3.