Agency Unreasonably Overlooked Serious Design Flaw in Awardee’s Proposal; GAO B-413389, Jacobs Technology Inc.

Protest challenging the agency’s past performance evaluation of the awardee is denied, where the agency was not required to consider work elements in past performance references separately to determine whether the discrete effort could be considered recent; and protest challenging the agency’s technical evaluation of the awardee’s proposal is sustained, where the protester’s response to a design and installation scenario proposed a significantly lower level of service than contemplated by the solicitation and indicated a lack of technical understanding, which the agency failed to consider.

Jacobs Technology Inc. protested the Air Force’s award of a contract for aerospace systems technical research and operations services to AS and D, LLC, challenging the agency’s past performance evaluation and technical evaluation.

JTI first protested the agency’s past performance evaluation of AS&D, arguing that the Air Force improperly considered non-recent past performance references for AS&D and its subcontractors. The solicitation directed offerors to submit past performance references for work that was ongoing or completed within five years of the date of the RFP, but JTI argued three of the awardee’s references were not recent with regard to the phase-in plan aspect of the work. According to JTI, because the referenced work began before July 1, 2010, the phase-in plan aspect of each was necessarily performed more than 5 years prior to the RFP’s issuance date. In relation, JTI argued that the RFP phrase “the effort” referred to each specific aspect of prior contract performance individually. According to the protester, because the agency was required to determine whether each aspect of offerors’ past performance was ongoing or had occurred within 5 years of the RFP’s issuance date, but failed to do so, the evaluation of AS&D’s past performance was unreasonable. In response, the agency explained that the term “effort” referred to the offerors’ reference as a whole, not to each discrete work element, and therefore if any part of the reference had been performed within five years of the RFP date, the agency considered the entire reference recent. GAO found the agency’s interpretation reasonable. Even assuming JTI’s interpretation was also reasonable, the protester was required to challenge this ambiguity for the deadline for proposals.

JTI also argued that the two references submitted by AS&D subcontractor AES AK did not demonstrate past performance consistent with the subcontractor’s planned role in the contract. Although the subcontractor’s stated role was to provide “engineering design and drawings, operations and maintenance,” JTI argued its references did not reflect operations and maintenance experience, and therefore it was improper for the agency to find these references relevant or very relevant with regard to the various technical subfactors. GAO disagreed, finding that the subcontractor’s references involved all areas that it would be performing on the contract at issue. While the protester also alleged that the kind of operations and maintenance work previously performed by AES AK is somehow different from the work to be performed under the contract, it provided no support for such an assertion. JTI also argued the agency’s past performance evaluation was unreasonable because none of the awardee’s references were considered “very relevant” for the most important subfactor, but GAO found this without merit, noting that there was no requirement that an offeror have very relevant past performance under the scenario subfactor in order to receive a substantial confidence rating. Given that the awardee’s references were generally considered excellent or very good quality and relevant or very relevant, GAO found it reasonable for the agency to assign its proposal a substantial confidence rating.

JTI then challenged the agency’s technical evaluation of AS&D. Under the scenario subfactor, offerors were required to respond to a hypothetical installation scenario, which included 11 specific elements upon which responses would be evaluated. AS&D’s response to the scenario described how it would design and install piping for Category D Fluid Service, which is basic, relaxed design. However, the proper service for the agency’s requirement was a Category M Fluid Service, which indicates the potential for serious harm should the fluids being transported be exposed. Although evaluators identified the awardee’s use of Category D as a weakness, they concluded the awardee’s reference to this level of service was an administrative error because other calculations and assumptions in the scenario response exceeded the requirements for the correct service. However, during GAO’s proceedings, the evaluation board chair testified the awardee’s reference to the lower level service was not an administrative error, because there were at least three separate instances in the scenario response where AS&D referenced capabilities not allowed under Category M service, but are allowed under the basic Category D service. Because the agency failed to consider areas of the awardee’s proposal that utilized an incorrect service level for the toxic fluids to be transported by its piping work, thereby overlooking a significant design shortcoming under the most important evaluation factor, GAO found the evaluation unreasonable and sustained the protest on these grounds.

The agency argued that JTI was not prejudiced by this error, given AS&D’s advantages under the technical and cost/price factors, and the relative importance of the evaluation criteria. The agency argued that none of the strengths assigned the awardee’s proposal were affected by the evaluation error, and that it already considered JTI’s response under the scenario subfactor to be superior. Accordingly, an error in the evaluation of scenario subfactor would not change the agency’s conclusion that AS&D’s proposal was technically superior and provided the best value.

However, GAO concluded that the significant deficiencies in the agency’s evaluation of AS&D’s proposal under the scenario subfactor made it impossible to determine what AS&D’s correct rating should have been. While this was one aspect of the agency’s evaluation, appropriate design standards was clearly a significant element under the most important subfactor, under the most important factor. Moreover, the agency already recognized that JTI’s past performance was superior to AS&D’s both as to relevance and quality, and that the cost difference between offerors was extremely small. Consequently, as GAO could not determine that AS&D’s proposal would remain technically superior, or the best value overall, it concluded that the agency’s actions were prejudicial to the protester.

Jacobs Technology Inc. is represented by Brian P. Waagner, Hal J. Perloff, Steven A. Neeley, Jr., Michelle L. Caton, and Charles M. Fleischmann of Husch Blackwell LLP. AS and D, LLC is represented by Amy Laderberg O’Sullivan, Olivia L. Lynch, and Sarah A. Hill of Crowell & Moring LLP. The government is represented by Maj George M. Ebert, Department of the Air Force. GAO attorneys Louis A. Chiarella, and Peter H. Tran participated in the preparation of the decision.