B-309982.3, Master Lock Company, LLC, December 10, 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: Master Lock Company, LLC
William
M. Weisberg, Esq., Joyce L. Tong, Esq., Angela L. Nadler, Esq., Bryan Cave LLP,
for the protester.
Gail L. Booth, Esq., Defense Logistics Agency, for the agency.
Jonathan L. Kang, Esq., and Ralph O. White, Esq., Office of
the General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest arguing that an agency’s rationale for making a split award was improperly based on an undisclosed criterion of demand for the solicited items--or, alternatively, giving disproportionate weight to a single criterion--is denied where the solicitation stated that past performance in delivering similar quantities of items would be considered, and the evaluation was consistent with the terms of the solicitation.
DECISION
Master Lock Company, LLC, of
BACKGROUND
This protest involves the second challenge to DLA’s rationale
for splitting between Master Lock and Evergreen the awards to provide 35
separate types of locks, and arises after the agency’s reevaluation of
proposals in response to our decision sustaining the earlier protest. Although the protester initially received an
award for 22 of the lock types solicited, it argues for the second time that it
should have received award for all of the remaining 13 lock types as well. For the reasons set forth below, we conclude
the agency award decisions had a reasonable basis.
The RFP was initially issued on
The RFP stated that proposals would be evaluated on the
basis of the following non-price factors, in descending order of
importance: past performance,
socio-economic considerations, and Javits-Wagner-O’Day (JWOD) Act
considerations. RFP at 64-65. The past performance evaluation factor had
three equally-weighted subfactors:
delivery, business relations/customer satisfaction, and quality.
The agency convened a technical evaluation team (TET) to
evaluate the offerors’ proposals. As
relevant here, the TET found that Evergreen’s initial proposal did not address
the socio-economic or JWOD considerations evaluation factors, and rated the
proposal as “poor” under these factors, the lowest rating under the agency’s
source selection plan (SSP).[1] Following discussions, the contracting
officer (CO) and source selection authority (SSA) each concluded that
Evergreen’s proposal should be rated “neutral” under the socio-economic and
JWOD evaluation factors because, as a small business, Evergreen had fewer
opportunities to enter into subcontracts with other small businesses or JWOD
entities. The ratings for the offerors
were as follows:
MASTER LOCK |
EVERGREEN |
|
PAST PERFORMANCE |
OUTSTANDING |
GOOD |
Delivery |
Good |
Good |
Business relations/ customer
satisfaction |
Outstanding |
Outstanding |
Quality |
Outstanding |
Good |
SOCIO-ECONOMIC CONSIDERATIONS |
GOOD |
NEUTRAL |
JWOD CONSIDERATIONS |
GOOD |
NEUTRAL |
OVERALL RATING |
OUTSTANDING |
GOOD |
AR, Initial Source Selection Authority Decision (SSAD), at
2.
In the tradeoff decision, the SSA noted that Master Lock
and Evergreen proposed prices that ranged in difference from 1% to 17%, with
“the majority of items averaging an 8% or less (+/-) difference.”
8% higher.
DLA advised each offeror of the award decisions, and
provided Master Lock a debriefing regarding the portion of the requirements it
was not awarded. Master Lock filed a
protest with our Office on
Following our decision sustaining the protest, DLA
reevaluated the offerors’ proposals for the 13 lock types challenged in Master
Lock’s first protest. The offerors were
not permitted to revise their proposals.
As relevant here, the agency changed Evergreen’s rating for the
socio-economic considerations and JWOD considerations factors from “neutral”
ratings to the original ratings of “poor.”
The final ratings for the offerors were as follows:
MASTER LOCK |
EVERGREEN |
|
PAST PERFORMANCE |
OUTSTANDING |
GOOD |
Delivery |
Good |
Good |
Business relations/ customer
satisfaction |
Outstanding |
Outstanding |
Quality |
Outstanding |
Good |
SOCIO-ECONOMIC CONSIDERATIONS |
GOOD |
POOR |
JWOD CONSIDERATIONS |
GOOD |
POOR |
OVERALL RATING |
OUTSTANDING |
GOOD |
AR, Tab 10, Revised SSAD, at 2.
In its revised selection decision, DLA noted that Master
Lock’s proposed prices for each of the lock types was between 11 and 21 percent
higher than Evergreen’s proposed prices.
The agency stated that, as part of its price/technical tradeoff, it
considered the relative demand for each of the lock types, as follows:
In making the price/technical trade off decision for the 13 [lock types] in question where the price offered by Master Lock is more than 8% higher than the price offered by Evergreen, an evaluation of the Annual Demand Quantity (ADQ) was completed. The ADQ is used as a method of determining for which items the government has the most critical needs.
AR, Tab 10, Revised SSAD, at 5.
In this second selection decision, DLA selected Master
Lock for award of the 2 lock types with the highest demands, and selected
Evergreen for award of the remaining 11 lock types. The RFP stated that the estimated demand for
the 2 lock types awarded to Master Lock was 480,000 locks per year; the
estimated quantity for the 11 lock types awarded to Evergreen was 40,219 locks per
year. RFP at 37-47. DLA stated Master Lock’s past performance record
provided a high degree of confidence that Master Lock could meet the contract
requirements for the two highest-demand lock types. The agency concluded that the protester’s
higher ratings under the past performance factor, and to a lesser extent its
higher rating under the other two factors merited the price premium of 11 and 13
percent for the two lock types, as compared to Evergreen’s proposal.
In selecting Evergreen for award of the remaining 11 lock
types, the agency concluded that although Evergreen’s past performance ratings
were lower than Master Lock’s, and thus provided a lower confidence of successful
performance, the agency could accept a “slightly higher performance” risk in
light of the fact that the lock types had a lower demand.
DLA advised each offeror of the award decisions, and
provided Master Lock a debriefing regarding the portion of the requirements it
was not awarded. This protest
followed.
DISCUSSION
Master Lock challenges the award of 11 of the 13 remaining
lock types to Evergreen during the reevaluation. The protester argues that the agency improperly
considered the anticipated “demand” for each lock type in its price/technical
tradeoff. The protester also argues, in
the alternative, that if demand was a proper evaluation criterion, the agency’s
selection decision elevated its importance in a manner inconsistent with the
solicitation’s stated evaluation scheme.
We disagree with both of the protester’s arguments.
Use of “Demand” as an Evaluation Criterion
First, Master Lock argues that DLA’s consideration of anticipated
demand for each lock type constituted an undisclosed evaluation criterion. For the reasons discussed below, we disagree.
Agencies are required to evaluate proposals based solely
on the factors identified in the solicitation, and must adequately document the
bases for their evaluation conclusions. Intercon
Assocs., Inc., B-298282, B-298282.2,
As discussed above, DLA’s selection decision considered the
anticipated volume of orders for each lock type, as identified in the RFP. Specifically, the selection decision
considered whether offerors’ past performance demonstrated that they could meet
the “demand” for the higher-volume lock types.
AR, Tab 10, Revised SSAD, at 5. Master
Lock argues that the solicitation did not state that DLA would consider
“demand” as an evaluation factor, and that the agency had therefore departed
from the evaluation scheme.
The RFP stated that the agency would consider the overall
relevance of offerors’ past performance as follows: “Past performance information will be used in
the determination of the best value to the Government. This evaluation process will focus on
information that demonstrates quality of performance relative to the type, size
and complexity of this acquisition.” RFP
at 66. The RFP also stated that the
delivery subfactor of the past performance factor would evaluate offerors’
performance record to assess their ability to deliver the required volumes of
locks. Specifically, the delivery subfactor
stated as follows:
The Government will evaluate the offeror’s Delivery. We will review the offeror’s record of on-time performance. Accordingly, the offeror’s past performance record will be evaluated to ensure its ability to handle the volume of sales similar to the solicitation’s estimated requirements with on-time delivery and to assess its experience in complex contracting with an emphasis on Stock Delivery.
With regard to the two lock types for which the RFP anticipated
the highest demand, DLA concluded that Master Lock’s past performance record
provided the agency a high degree of confidence that the offeror would be able
to meet the requirements for providing the high-demand lock types.
We think the solicitation advised offerors that their past
performance records would be evaluated based on relevance, thereby making the
offeror’s performance of higher and lower-demand requirements relevant. We further think that the agency’s
consideration of the demand for each lock type and the offerors’ delivery
records was reasonably and logically encompassed within the express terms of
the delivery subfactor. On this record
we find no merit to the protester’s argument that the agency used an
undisclosed evaluation criterion.
Weight of “Delivery” Subfactor in the Selection Decision
Next, Master Lock argues that even if DLA properly
considered demand for each lock type in its evaluation of offerors’ past
performance, the agency placed an improper emphasis on this criterion in a way
that was inconsistent with the stated evaluation scheme. For the reasons discussed below, we disagree.
As discussed above, the RFP stated that past performance
was the most important non-price evaluation factor. The RFP also stated that the three past
performance subfactors of delivery, business relations/customer satisfaction,
and quality were of equal importance. Master
Lock argues that DLA improperly treated delivery as more important than the
other past performance subfactors, and thereby departed from the solicitation’s
stated evaluation scheme. Specifically,
the protester contends that although the selection decision discusses the
offerors’ delivery records, the agency did not address the offerors’
evaluations under the other two subfactors. We find these arguments without merit.
The record does not show, as the protester argues, that
DLA considered only the delivery subfactor, and ignored the business relations/customer
satisfaction and quality subfactors. Instead,
the selection decision discussed the degree to which the ratings under all
three subfactors demonstrated confidence in the offeror’s ability to meet the
solicitation requirements.
As discussed above, we think the agency’s consideration of
“demand” was reasonably related to both the overall evaluation of the relevance
of the offerors’ past performance, and to the specific subfactor of delivery. We do not agree with the protester that because
more words were devoted to the discussion of the delivery subfactor than to the
specific ratings under the business relations/customer satisfaction and quality
subfactors, the agency departed from the evaluation scheme. In this regard, the selection decision shows
that DLA considered the overall past performance evaluation in a tradeoff
between the price and non-price evaluation factors. The record further shows that for each lock
type, the agency weighed Evergreen’s lower price against Master Lock’s higher
ratings under the past performance, socio-economic considerations and JWOD
considerations factors. In light of
Master Lock’s higher prices, the agency determined that the protester’s
advantage under the non-price evaluation factors merited award to the protester
only for those lock types where the high volume of orders decreased the
confidence in Evergreen’s ability to perform.
In sum, we think the record shows that DLA considered all
of the evaluation factors and made its selection decision in a manner
consistent with the solicitation.
The protest is denied.
Gary L. Kepplinger
General Counsel
[1]
For the past performance evaluation, the agency used an evaluation scheme of
outstanding, good, no record, fair and poor.
AR, Tab 8, SSP at 4. For the
socio-economic and JWOD considerations evaluations, the agency used an
evaluation scheme of outstanding, good, fair and poor.