B-280,430, 98-2 CPD ¶ 59

Matter of:
SDS Petroleum Products, Inc.
September 1, 1998

DIGEST

Exclusion of protester's proposal from competitive range was not improper where agency reasonably concluded that the proposal failed to demonstrate the ability to purchase and transport natural gas at certain rates and terms, as required by the solicitation.

DECISION

SDS Petroleum Products, Inc. protests the exclusion of its proposal from the competitive range, and the subsequent award of a contract to Tiger Natural Gas, Inc., under request for proposals (RFP) No. 693-16-98, issued as a competitive section 8(a) set-aside by the Department of Veterans Affairs for the supply and delivery of natural gas to 91 facilities nationwide.

We deny the protest.

The RFP was issued on February 24 and, as amended, contemplated award of an indefinite-delivery, indefinite-quantity (ID/IQ) contract for a base period of 1 year, with four 1-year options.

Seven proposals were received by the May 11 closing time. The evaluators initially found that SDS's proposal was technically deficient because it contained no past performance delivery information and failed to show an ability to procure natural gas below the index price or natural gas transportation below the tariff rate. SDS's proposal received 35 of the 90 available technical points (price was worth 10 points), and under the index factor, only 3 of 30 possible points. In contrast, Tiger's proposal was found to contain detailed and extensive documentary evidence of its ability to procure gas below the index price and transportation below the tariff rate. Tiger's proposal received all 90 available technical points. (The other proposals scored very low technically and are not relevant here.)

Despite the serious technical deficiencies in its proposal, SDS's proposal was retained in the competitive range for purposes of discussions. By letter dated May 18, the contracting officer advised SDS that its proposal was deficient under the past performance and index factors. Revised proposals were due on May 26. In the meantime, on May 21, amendment No. 7 was issued, making certain changes to RFP sections C, G, and H, and clarifying the minimum and maximum order quantities.On May 23, SDS submitted additional information in a revised technical proposal, specifically, two signed natural gas contracts containing prices below-index price and letters purportedly demonstrating its ability to obtain below-tariff rate transportation under similar contracts. On May 28, the evaluators reviewed the revised proposal. SDS's score for the past performance factor increased from 12 to 32 (out of 40 possible points). However, its score for the index factor was unchanged, the evaluators concluding that, although SDS had submitted additional information in this area, it was not sufficient to establish the ability to obtain gas and gas transportation prices below the index price and tariff rate. The results of the evaluation of Tiger's and SDS's revised proposals were as follows:

 

Offeror	Technical  Score	Price for Base Load Gas
Tiger	90	$6.6 million
SDS	55	[Deleted]

 

Based on these results--SDS's proposal's technical score still was considered extremely low and it was the highest-priced--the contracting officer determined that SDS had no reasonable chance for award. Consequently, by letter dated June 1, the contracting officer advised SDS that its proposal no longer was in the competitive range. The contracting officer determined that Tiger was the only offeror whose proposal was within the competitive range, provided only that firm the opportunity to submit a best and final offer (BAFO), evaluated the BAFO, and made award to Tiger. This protest followed a debriefing provided to SDS by the agency.

Noting that the RFP did not specify that a certain amount of evidence was required to meet the index factor requirements, SDS asserts that its revised proposal included adequate evidence of its ability to purchase natural gas below the index price and transportation below the tariff rate. SDS concludes that, had its proposal been evaluated properly, the proposal would have been retained in the competitive range, and it would have had the opportunity to submit a BAFO. [FN3]

In reviewing competitive range determinations, our Office will not independently reevaluate proposals; rather, we will examine the record to ensure that the evaluation was reasonable and in accordance with the solicitation's evaluation criteria. Cobra Techs., Inc., B-272041, B- 272041.2, Aug. 20, 1996, 96-2 CPD ¶73 at 3

Here, the evaluation and the agency's decision to exclude SDS's proposal from the competitive range were reasonable.

SDS seems to argue that, no matter how low its proposal's evaluation rating relative to Tiger's, the agency was required to retain its proposal in the competitive range since it was the second-highest rated. We find no merit in this argument, which is apparently based on the recent rewrite of Part 15 of the Federal Acquisition Regulation (FAR) that changed the language governing competitive range determinations. The earlier language, FAR § 15.609 (a) (June 1997), stated that the competitive range "shall include all proposals that have a reasonable chance of being selected for award" and that "[w]hen there is doubt as to whether a proposal is in the competitive range, the proposal should be included." The current language, which governs this procurement, states, "Based on the ratings of each proposal against all evaluation criteria, the contracting officer shall establish a competitive range comprised of all of the most highly rated proposals, unless the range is further reduced for purposes of efficiency pursuant to paragraph (c)(2) of this section." [FN4] FAR § 15.306 (c)(1) (FAC 97-02). We do not read the revised language to require agencies to retain in the competitive range a proposal that the agency reasonably concludes has no realistic prospect of award, even if that proposal is, as here, the second-highest rated proposal.

The explanatory preamble published at the time the final version of the FAR Part 15 rewrite was issued makes clear that the intent of the revised language was to permit a competitive range more limited than under the prior "reasonable chance of being selected for award" standard. That preamble states that the drafters had elected to require contracting officers to retain in the competitive range "only" the most highly rated offers rather than include in that range the potentially broader range of proposals that could be viewed as having a reasonable chance of award. 62 Fed.Reg. 51,224, 51,226 (1997). Specifically, the preamble stated that the new language would "ensure[] that offerors with little probability of success . . . are advised early on that their competitive position does not merit additional expense in a largely futile attempt to secure the contract." Id.

Accordingly, we conclude that the Part 15 rewrite does not require that agencies retain in the competitive range a proposal that is determined to have no reasonable prospect of award simply to avoid a competitive range of one. We have long held that there is nothing inherently improper in a competitive range of one, Cobra Techs., Inc., supra, at 3, and we do not view the Part 15 rewrite as effecting a change in that regard; conducting discussions and requesting BAFOs from an offeror with no reasonable chance of award would benefit neither the offeror nor the government. See 62 Fed. Reg. 51,226 (retaining marginal offers in competitive range imposes additional and largely futile effort and cost on government and industry).

The protest is denied.