OSI Collection Services, Inc., B-286597; B-286597.2, January 17, 2001

OSI Collection Services, Inc., B-286597; B-286597.2, January 17, 2001 TITLE: OSI Collection Services, Inc., B-286597; B-286597.2, January 17, 2001 BNUMBER: B-286597; B-286597.2 DATE: January 17, 2001 ********************************************************************** OSI Collection Services, Inc., B-286597; B-286597.2, January 17, 2001 Decision Matter of: OSI Collection Services, Inc. File: B-286597; B-286597.2 Date: January 17, 2001 Joseph J. Petrillo, Esq., and Karen D. Powell, Esq., Petrillo & Powell, for the protester. Jeffrey C. Morhardt, Esq., and Jose Otero, Esq., Department of Education, for the agency. Tania Calhoun, Esq., and Christine S. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protests against award of federal supply schedule task order contracts for private collection agency services are sustained where the record shows that the contracting agency's evaluation of offerors' past performance, which largely relied upon a mechanical comparison of past performance scores for incumbent contractors, was unsupported and unreasonable. DECISION OSI Collection Services, Inc. protests the decision by the Department of Education to award federal supply schedule (FSS) task order contracts to numerous other firms under a request for task order proposal (RFTOP) for private collection agency (PCA) services. OSI contends that the agency's evaluation of offerors' past performance was inconsistent with the solicitation's stated evaluation terms, unsupported, and unreasonable. We sustain the protests. BACKGROUND The agency's Office of Student Financial Assistance performs collection and administrative resolution activities on debts resulting from nonpayment of student loans made under numerous federal programs, and on debts resulting from a student's failure to fulfill grant requirements under other federal programs. At the time this solicitation was issued, 17 PCA contractors, including OSI, were performing these services for the agency under a contract that commenced in 1997 and runs through September 2001. The RFTOP was issued in July 2000 to obtain the services of PCAs with contracts under the General Services Administration's Financial Asset Management Services Schedule, Special Item Number (SIN) 621-4, "Loan and Other Asset Services/Management." Task order contracts were to be issued to 10-12 FSS contractors, with at least two awarded under a small business set-aside. The agency announced that it had about two million accounts, worth about $9 billion, to place under this award. It planned to conduct an initial transfer of 20,000 accounts to each successful contractor, each of whom was to locate and contact the borrowers to demand payment of their debts or to otherwise resolve the account through such measures as wage garnishment, litigation, or other administrative resolutions. Additional account transfers were to occur throughout the life of the contract. Firms could compete for the task order contracts only if they were specifically invited to do so. Incumbent contractors, such as OSI, were to be invited to compete only if they had performed "consistently well" for the agency based upon its Competitive Performance and Continuous Surveillance (CPCS) evaluation. The CPCS evaluation, performed every 4 months, measures the relative performance of each contractor on all accounts transferred under various performance indicators and is used to determine bonus payments and the transfer of new accounts. Under the CPCS methodology, the contractor ranked the highest under a particular performance indicator receives the maximum number of points available for that indicator, and the remaining contractors receive points in proportion to their standing relative to the leading contractor. Each contractor's overall CPCS score for each 4-month period is the sum of its scores for all of the performance indicators for that period. Offerors were required to propose a commission or fee for each type of service to be performed under the contract. Since the RFTOP established target rates for these commissions or fees, "quality factors" and the commitment to small business were to be more important than price in making the award selection decision. Section M.1.b. of the RFTOP stated that evaluation factors were to be considered in the following order of importance: past performance, including the past performance of key personnel; technical evaluation; commitment to small business; and price. The past performance evaluation is the critical issue in these protests. Section M.2.