B-311321; B-311321.2, Guam Shipyard, June 9, 2008

B-311321; B-311321.2, Guam Shipyard, June 9, 2008 TITLE: B-311321; B-311321.2, Guam Shipyard, June 9, 2008 BNUMBER: B-311321; B-311321.2 DATE: June 9, 2008 ************************************************* B-311321; B-311321.2, Guam Shipyard, June 9, 2008 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. Decision Matter of: Guam Shipyard File: B-311321; B-311321.2 Date: June 9, 2008 David J. Taylor, Esq., William J. Spriggs, Esq., Katherine A. Allen, Esq., and Rachel W. McGuane, Esq., Spriggs & Hollingsworth, for the protester. Robert E. Korroch, Esq., Francis E. Purcell, Jr., Esq., and Khaliah Wrenn, Esq., Williams Mullen, for Gulf Copper Ship Repair, Inc., the intervenor. Jeff Mansfield, Esq., and Bruce Potocki, 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 evaluation and award decision is denied where record shows they were reasonable and consistent with the terms of the solicitation and applicable procurement rules. DECISION Guam Shipyard protests the evaluation of proposals and the award of a contract to Gulf Copper Ship Repair, Inc. under request for proposals (RFP) No. N55236-08-R-0006, issued by the Department of the Navy, Southwest Regional Maintenance Center, for alterations to sanitary spaces (low maintenance, sensor-operated washroom facilities) on Barge YRBM-25 in Guam. The protester challenges the reasonableness of the agency's evaluation of proposals and determination to make the award to Gulf Copper, which received a higher past performance rating and offered a higher price than the protester. We deny the protest. The RFP, set aside for small businesses, anticipated the award of a fixed-price contract to the firm that submitted the technically acceptable proposal deemed to offer the best value to the agency considering two evaluation factors approximately equal in importance, price reasonableness and performance risk. RFP at 45, 48. The performance risk factor was comprised of two subfactors also of approximately equal importance, past performance (including technical quality, schedule, and management) and price realism. Id. The RFP advised that the evaluation of past performance would be subjective and based mainly on performance evaluations available in the agency's automated Past Performance Information Retrieval System (PPIRS), information obtained from the offeror's past performance references, and information available in local files. Id. Each offeror was to submit past performance reference information for relevant contracts (ongoing or completed within the last 3 years) that the firm wanted to be considered. The RFP advised that the agency might not contact all of the references, and emphasized that the offeror was to ensure that references could be readily contacted, would be cooperative, and would provide performance information for evaluation. Id. at 44. For the price realism subfactor of the performance risk evaluation factor, offerors were advised that their proposed prices would be compared to the other prices proposed and the independent government estimate (IGE), that low prices could increase the firm's overall performance risk, and that a "contract price is realistic if it is high enough to preclude the [c]ontractor from enduring a significant financial loss in performing the requirements of the contract." Id. at 49. The RFP noted that unrealistically low prices increase an agency's risk of performance, since, in an effort to cut losses, a contractor may "cut corners" on quality, deliver late, or default, often requiring additional agency involvement as well as reprocurements which consequently may increase the agency's cost of performance. The source selection was to be based on the difference in performance risk and price between proposals; if one offeror's proposal presented lower performance risk but a higher price, then the agency was to decide whether the difference in performance risk was worth the difference in price, and if so, then the higher-priced offer was to be deemed the best value for award. Id. Four proposals were received by the scheduled closing time. Discussions were conducted and revised proposals were submitted and evaluated. The protester's revised proposal was the lowest-priced offer received, it was found to be reasonably priced, and its technical proposal was found acceptable.