Hanley Industries, Inc., B-295318, February 2, 2005

B-295318 Feb 02, 2005 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Hanley Industries, Inc. protests the award of a contract to Capco, Inc. under request for proposals (RFP) No. N00104-04-R-K081, issued by the Department of the Navy for impulse cartridges used to release aircraft-mounted detonating projectiles. Hanley, which received a contract under the RFP for a lesser quantity than that awarded to Capco, contends that the agency improperly evaluated its past performance and unreasonably concluded that the performance risk associated with an award to Hanley for the larger quantity of units outweighed the cost advantage associated with such award. We deny the protest. View Decision B-295318, Hanley Industries, Inc., February 2, 2005 Decision Matter of: Hanley Industries, Inc. File: B-295318 Date: February 2, 2005 T. Gaynor Blake for the protester. Gary Van Osten, Esq., Department of the Navy, for the agency. Susan K. McAuliffe, Esq., and Christine S. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest of agency's past performance evaluation and price/past performance tradeoff is denied where record shows evaluation and source selection were reasonable and consistent with evaluation criteria; mere disagreement with agency's evaluation and award is insufficient to show they were unreasonable. DECISION Hanley Industries, Inc. protests the award of a contract to Capco, Inc. under request for proposals (RFP) No. N00104-04-R-K081, issued by the Department of the Navy for impulse cartridges used to release aircraft-mounted detonating projectiles. Hanley, which received a contract under the RFP for a lesser quantity than that awarded to Capco, contends that the agency improperly evaluated its past performance and unreasonably concluded that the performance risk associated with an award to Hanley for the larger quantity of units outweighed the cost advantage associated with such award. We deny the protest. The RFP, issued on July 16, 2004, contemplated the award of two fixed-price contracts to different contractors in order to increase the industrial base for the item and enhance competition; one contract was for 16,000 units and the other was for 9,396 units. RFP at 2. The awards were to be made based on the agency's determination of which combination of offers was most advantageous to the agency in terms of two approximately equal evaluation factors, price and past performance; past performance was to be rated under two subfactors, quality and delivery. Id. at47. All offerors were advised that the past performance evaluations would be based upon the offerors' quality and delivery records reported under the Red/Yellow/Green (RYG) Program. [1] The offerors were also advised that they could submit additional past performance information for consideration, such as explanations of delivery problems and the corrective actions taken by the contractor. Id. at 45. Four proposals were received by the scheduled closing time. Hanley, which submitted the lowest price for each of the two quantities, submitted no additional past performance information for review by the agency. Consequently, its past performance evaluation was based on its RYG performance ratings. Under the quality subfactor of the past performance factor, all four offerors received low risk ratings for quality. Under the second subfactor, delivery, Hanley received a high risk rating for delivery based upon its RYG red delivery rating; the RYG records for the firm demonstrated a 32-percent delivery delinquency rate for similar items. The other three offerors received low risk ratings for delivery. Ranking each of the possible combinations of offers for the two awards in terms of total cost to the agency, the evaluators recognized that the lowest-priced combination of offers involved Hanley's lowest proposed price for the 16,000-unit award, and another firm's second lowest-priced offer for the 9,396-unit award. The evaluators expressed concern about an award of such a large number of units to Hanley, however, since the firm had been late in its deliveries of similar units in the past. Consequently, the agency determined that the second lowest-priced combination of offers (involving Capco's second lowest-priced offer for the 16,000 units, and Hanley's lowest-priced offer for the 9,396 units) at a combined price that was only 3.4percent higher than the lowest-priced combination, offered the best value to the agency. The agency determined that this combination was most advantageous because an award of 16,000 units to Capco would provide the agency with a sufficient number of units to absorb any potential late delivery of the additional 9,396 units from Hanley. The agency did not conduct discussions with the offerors; awards were made to Capco and Hanley on September 30.