Kropp Holdings, Inc. (SPE608-21-R-0203)

B-420857.8,B-420857.9 Aug 28, 2024 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Kropp Holdings, Inc. (KHI), of Overland Park, Kansas, protests the award of a contract to Associated Energy Group, LLC (AEG), of Miami, Florida, under request for proposals (RFP) No. SPE608-21-R-0203, issued by the Department of Defense, Defense Logistics Agency (DLA), for aviation into-plane (AIR) Card transaction processing services. The protester challenges DLA's consideration of an impaired objectivity conflict of interest (OCI) and contends the agency unreasonably evaluated KHI's and AEG's proposals. We sustain the protest, in part, and deny it, in part. View Decision Decision Matter of: Kropp Holdings, Inc. File: B-420857.8; B-420857.9 Date: August 28, 2024 Craig A. Holman, Esq., Kara L. Daniels, Esq., Thomas A. Pettit, Esq., Roee Talmor, Esq., and Nicole Williamson, Esq., Arnold & Porter Kaye Scholer LLP, for the protester. Todd J. Canni, Esq., Danielle A. A. Richardson, Esq., Kevin T. Barnett, Esq., Stephen E. Ruscus, Esq., Kevin N. Dorn, Esq., and Kaitlyn E. Toth, Esq., Baker & Hostetler LLP, for Associated Energy Group, LLC, the intervenor. Steven M. Sosko, Esq., Defense Logistics Agency, for the agency. Michael P. Grogan, Esq., and Evan D. Wesser, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Protest challenging the agency’s evaluation of the awardee’s organizational conflict of interest mitigation plan is denied where the record demonstrates the agency reasonably concluded the contractor and agency-proposed measures would sufficiently mitigate potential conflicts. 2. Protest is sustained where the record fails to demonstrate the agency reasonably considered the impact of the awardee’s proposed organizational conflict of interest mitigation plan on an aspect of the firm’s underlying non-price proposal. 3. Protest challenging the agency’s evaluation of proposals under various non-price factors is denied where the record demonstrates the agency’s evaluation was reasonable and consistent with the terms of the solicitation. DECISION Kropp Holdings, Inc. (KHI), of Overland Park, Kansas, protests the award of a contract to Associated Energy Group, LLC (AEG), of Miami, Florida, under request for proposals (RFP) No. SPE608-21-R-0203, issued by the Department of Defense, Defense Logistics Agency (DLA), for aviation into-plane (AIR) Card transaction processing services. The protester challenges DLA’s consideration of an impaired objectivity conflict of interest (OCI) and contends the agency unreasonably evaluated KHI’s and AEG’s proposals. We sustain the protest, in part, and deny it, in part. BACKGROUND The agency issued the solicitation on June 22, 2021, pursuant to the procedures of Federal Acquisition Regulation (FAR) parts 12 and 15, seeking contractor support related to DLA’s AIR Card program. Agency Report (AR), Tab 25, Conformed RFP, amend. 14 at 1, 9.[1] This program allows for the procurement of aviation fuel and ancillary ground services at commercial airports across the globe using a charge card--the AIR Card. Id. at 9. The selected contractor will manage DLA’s AIR Card program, which includes transaction processing, customer service, managing a retail merchant network, issuance of charge cards, and operation of an electronic access system. Id. As relevant to this protest and as further described below, the contractor will process two categories of fuel transactions, “contract” and “non-contract.” A contract transaction concerns an AIR Card purchase of fuel (or ancillary services) for a federal aviation asset from a supplier at a commercial airport under an established DLA contract, where the price is set by that DLA-supplier contract. A non‑contract transaction, on the other hand, concerns an AIR Card purchase at a commercial airport at the retail price, which is set by the individual fuel merchant at the time of purchase. Among other tasks, the contractor will be responsible for establishing and maintaining a network of non-contract fuel merchants. The RFP anticipated the award of a fixed-price contract, with a 6‑month transition period, 3‑year base period of performance, and two 1‑year option periods. Id. at 90-91. The solicitation explained that award would be made on a best-value tradeoff basis, considering six factors: (1) technical approach; (2) management approach; (3) AIR Card electronic access system (EAS); (4) merchant acceptance with level III data plan; (5) past performance; and (6) price.[2] Id. at 202. The technical approach factor had six subfactors: (1a) technical capability; (1b) quality management; (1c) transition/risk management; (1d) corporate experience; (1e) security; and (1f) cybersecurity. Id. at 203‑204. The management approach factor had two subfactors: (2a) merchant network; and (2b) key personnel. Id. at 204-205.