TITLE:  SKJ & Associates, Inc., B-291533, January 13, 2003
BNUMBER:  B-291533
DATE:  January 13, 2003
**********************************************************************
SKJ & Associates, Inc., B-291533, January 13, 2003

   Decision
    
    
Matter of:   SKJ & Associates, Inc.
    
File:            B-291533
    
Date:              January 13, 2003
    
Joseph M. Jankite for the protester.
Mike Colvin, Department of Health & Human Services, for the agency.
Charles W. Morrow, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
Agency did not have a reasonable basis to reject the protester's quotation
under request for quotations (RFQ) for training services where the RFQ
required submission of a technical proposal but gave no guidance as to its
content or how it would be evaluated; the protester submitted a technical
proposal; and the agency then rejected the proposal as *unresponsive*
because it was too short and too general and failed to provide evidence
that the firm understood how to perform the work or to include a plan
showing how the firm would implement the substance of the work.
DECISION
    
SKJ & Associates, Inc. protests the award of a purchase order to Policy
Research Associates, Inc. under request for quotations (RFQ) No.
02M000077, issued by the Department of Health and Human Services (HHS),
for intensive training in the social security income application process. 
SKJ contends that the agency's evaluation was not in accordance with the
evaluation criteria.
    
We sustain the protest.
    
The Substance Abuse and Mental Health Services Administration (SAMHSA),
an agency within HHS, provides funding (under the Projects for Assistance
in the Transition from Homelessness (PATH) program) to states and
territories to offer community-based services for people who have serious
mental illness who are homeless or at risk of imminent homelessness.   One
of the services provided to these individuals is to assist in obtaining
social security income (SSI) and social security disability income
benefits for which they are eligible.  This responsibility is performed by
various case managers associated with PATH-funded programs and other
federal agency programs. 
    
The RFQ, issued August 28, 2002, under simplified acquisition procedures
as a total small business set-aside, represented a collaborative effort
between SAMHSA and the Social Security Administration.  The basic purpose
of the RFQ was to obtain intensive training for case managers assisting in
the SSI and social security disability income application process. 
    
In the statement of work, the RFQ listed the specific requirements of the
work under nine separate tasks.  These tasks included (1) *post-award
telephone conference call and memorandum,* (2) *submit quarterly progress
reports,* (3) *coordination with other agencies,* (4) *propose preferred
methods of training,* (5) *develop toolkit,* (6) *develop teaching guide
and training material,* (7) *assess the toolkit and teaching materials,*
(8) *conduct training,* and (9) *submit material and documents for formal
SAMHSA approval.*  RFQ at 2-4.  The RFQ also included a schedule of
deliverables and payments, which required the contractor to satisfy
various requirements by certain specified times over a 200-day period. 
    
The cover letter to the RFQ stated that *proposals will be evaluated on
price and price related factors.*  It further advised vendors that they
were required to *submit an original and three (3) copies of their
technical proposal and cost proposal.*  Id. 
    
The agency answered several questions about the evaluation scheme, of
which the following are relevant here:
    
What is the technical proposal based on?  Is it based on the nine
(9) tasks or some other basis?  The proposal is based on the 9 tasks. 
.     .     .     .
    
Can you provide any guidance on the evaluation criteria and relative
weights that will be used to review proposals?  The criteria and weight
are to be determined. 
.     .     .     .
    
[D]o you have any other requirements for the proposal, such as client
references, resumes, etc.?  No.
RFQ, Questions and Answers, at 2, 4.  No other advice as to the expected
contents of the technical proposal or how it would be evaluated was
provided. 
    
HHS received three quotations in response to the RFQ, including SKJ's and
Policy Research's.  SKJ's quoted price ($83,620) was the lowest and Policy
Research's quoted price ($99,501) was next low.  After evaluating the
quotations, the project officer determined that SKJ's quotation was
*unresponsive* and that Policy Research should receive the award because
it submitted a *technically sound* quotation.  See Agency Report, Tab 7,
Project Officer's Letter.  With regard to SKJ's quotation, we quote the
project officer's findings in their entirety:
    
The proposal for [SKJ], the lowest bidder, indicates that the firm has
experience in developing policy and procedure manuals.  While this is
tangentially related to the development of a toolkit, the proposal
submitted by [SKJ] is unresponsive to the RF[Q].
SKJ has provided no plan, other than to list the tasks, indicating how it
will implement the substance of the work.  Its *Technical Proposal*
consists of only three pages, containing 21 paragraphs.  About half of the
paragraphs laud, in general terms, the capabilities, business principles
and energy of the firm and its leader.  There is no explanation on how the
firm will carry out each task of the statement of work.
There is no evidence that the offeror understands how to develop a toolkit
and training material, and provide training to case managers assisting
homeless clients with serious mental illnesses apply for SSI benefits. 
Only two paragraphs on page two refer obliquely to the content of the
task.  The firm indicates that it has visited the Social Security
Administration web site, reviewed information on how to qualify for SSI
benefits, and downloaded forms.  *This background work,* SKJ claims,
*provides a solid foundation, enabling [SKJ] to begin immediately.[*] 
There is no mention of mental health, homelessness or case managers.
The SKJ proposal indicates that a project manager and manager will be
performing most of the work.  And, the firm indicates how their time will
be allocated to each task.  But, there is no statement on the
qualifications needed for each position or any indication who will fill
the positions and his/her experience.
Id.  On September 24, HHS made award to Policy Research.  A debriefing was
provided to SKJ on October 11.  This protest followed.
    
SKJ challenges the rejection of its quotation as not *responsive* because
the RFQ only provided for considering price and price-related factors in
the award selection.  Moreover, SKJ argues that its technical proposal
included a *detailed* work plan based on the nine tasks that complied with
the terms of the RFQ, and that HHS lacked a reasonable basis to reject its
quote because the RFQ did not require vendors to demonstrate their
qualifications to perform the work, or to possess any specific skills, or
program knowledge. 
    
Simplified acquisition procedures are designed to, among other things,
reduce administrative expenses, promote efficiency and economy in
contracting, and avoid unnecessary burdens for agencies and contractors. 
Federal Acquisition Regulation (FAR) S: 13.002.  FAR S: 13.106-2 affords
contracting officers using simplified acquisition procedures discretion in
determining how to conduct a procurement and in fashioning suitable
evaluation procedures.  In the contracting officer's discretion, one or
more, but not necessarily all, of the evaluation procedures in Part 14 or
15 may be used.  FAR S: 13.106-2(b)(1).  Where an agency seeks quotations,
there is no legal requirement that it request technical proposals (as the
agency did here). 
    
Even when using simplified acquisition procedures, however, an agency must
conduct the procurement consistent with a concern for fair and equitable
competition.  Elementar Americas, Inc., B-282698, July 16, 1999, 99-2 CPD
P: 17 at 2-3.  Moreover, FAR S:S: 13.106-1(a)(2) and 13.106‑2(a)(2)
specifically require that solicitations advise potential quoters of the
basis upon which award is to be made, and agencies must conduct
evaluations based on the factors set forth in the solicitations.  American
Artisan Prods., Inc., B-278450, Jan. 30, 1998, 98-1 CPD P: 37 at 4.
    
Here, the sole award basis announced in the RFQ was the consideration of
price and price-related factors.  Even though a technical proposal was
requested, the RFQ did not state how it would be evaluated or instruct
vendors to include any specific information in their technical proposals,
except to notify potential quoters that their technical proposals should
be based on the various tasks.  Thus, HHS failed to comply with the
requirements in FAR S:S: 13.106-1(a)(2) and 13.106-2(a)(2) that the RFQ
clearly disclose the basis of award and that undisclosed factors not be
used in the award evaluation.  HHS admits that the RFQ was defective in
that there was no mention of how technical proposals would be considered
in the award evaluation.
    
These defects in the RFQ were apparent on the face of the solicitation, so
that a protest challenging them had to be filed before quotations were
due.  4 C.F.R. S: 21.2(a)(1) (2002).  That SKJ failed to do.  So the
question before us is whether the agency's evaluation and source
selection, in the context of an admittedly defective solicitation, were
reasonable.
    
HHS maintains that, when read as a whole, the only reasonable
interpretation is that technical proposals would be evaluated on an
acceptable/unacceptable basis with award to be made based on the lowest
priced, acceptable quote.  Thus, HHS argues that the evaluation and award
was proper since award was based on the lowest acceptable quote. 
    
We agree with HHS to the extent the agency is contending that SKJ was on
notice that a technical proposal was required, so that the agency was free
to reject a quotation that failed to include a technical proposal; SKJ, of
course, submitted one.  We also agree that SKJ was on notice that the
technical proposal would somehow be evaluated, so that the agency could
reject a quotation that could not reasonably be viewed as acceptable.  See
Forestry, Surveys & Data, B-276802.3, Aug. 13, 1997, 97-2 CPD P: 46, at
2.  Because of the agency's failure to provide vendors any guidance as to
the content requested in technical proposals or the basis for evaluating
them, we believe that any doubt in this case as to the acceptability of
SKJ's technical proposal should be resolved in favor of the vendor.  Cf.
COMARK Fed. Sys., B-278343, B‑278343.2, Jan. 20, 1998, 98-1 CPD
P: 34 at 6 (where solicitation failed to identify evaluation criteria, GAO
finds reasonable protester's understanding of what agency was seeking).
    
For that reason, and as discussed below, we conclude that the agency
lacked a reasonable basis for determining SKJ's technical proposal was
*unresponsive* or unacceptable here.  All of HHS's explanations for
rejecting SKJ's technical proposal reflect evaluation criteria, and none
of them were disclosed to SKJ or other vendors.  For example, in response
to the protest, HHS argues that SKJ's technical proposal was properly
found unacceptable because *the purpose of the technical proposal was to
determine whether or not offerors were capable of performing the required
work,* that *[t]he agency was reasonably expecting the offeror to describe
its qualifications to do the work and its plan for doing the work,* and
that SKJ *merely parroted the requirements of the solicitation and gave no
specifics that could be evaluated.*  Agency Report at 2; Contracting
Officer's Statement at 4.  The contracting officer contends that the RFQ
put the burden on the vendors to demonstrate that they were qualified to
perform the work, but that SKJ's proposal failed to *provide the names or
any information about the personnel who would be assigned to the
project.*  Contracting Officer's Statement at 5.
    
As noted by the protester, the RFQ did not expressly require vendors to
describe their knowledge, skills, experience, understanding, ability or
qualifications to perform the work.  In answer to one of the questions
(quoted above), the agency specifically advised that no resumes or
references were required, which suggests that experience and
qualifications were not to be part of the technical proposal.
    
The RFQ stated only that the technical proposal was to be *based on the 9
tasks.*  The protester asserts that its technical proposal provided a
detailed work plan as to how it intends to accomplish the tasks set out in
the RFQ.  Our review of SKJ's proposed plan confirms that it breaks down
the nine RFQ tasks into their various elements, where applicable, and
states what resources will be devoted to each task element and when work
on each element will start and finish.
    
Under the circumstances, we find the agency lacked a reasonable basis
under this RFQ to find's SKJ's quotation technically unacceptable.  The
quotation took no exception to the RFQ requirements and addressed the nine
tasks in the RFQ.
    
We recognize that the agency may have reasonably desired, and certainly
could have required, that technical proposals include a detailed plan, as
well as evidence of the vendors' understanding of the requirements and
their qualifications and experience.  That would be altogether appropriate
and within the agency's discretion.  Stating such desires and requirements
is the purpose of evaluation criteria in a solicitation, and it is to
provide transparency in our federal procurement process and fairness for
those competing for federal contracts that, as explained above, agencies
are required by procurement law to set out in the solicitation the
evaluation criteria, and then to follow them.  Here, the RFQ did not put
vendors on notice of any of the requirements that the agency has now
identified.[1]  In our view, it would be unfair for the agency, after the
fact, to evaluate technical proposals based on criteria that the agency
was required to identify before vendors submitted those proposals.  See
FAR S:S: 13.106-1(a)(2), 13.106‑2(a)(2).  We therefore sustain the
protest.
    
We recommend that the agency amend the RFQ to state the desired content of
proposals and the criteria to be applied in evaluating them and selecting
the winner.[2]  The agency should obtain revised quotations and if, upon
reviewing quotations in response to the amended RFQ, the agency selects
other than Policy Research, we recommend that HHS cancel that firm's
purchase order and award to the selected company.  We also recommend that
the protester be reimbursed the reasonable costs of filing and pursuing
the protest, including attorneys' fees.  4 C.F.R. S: 21.8(d)(1) (2002). 
The protester should submit its certified claim for such costs, detailing
the time expended and the costs incurred, directly to the contracting
agency within 60 days after the receipt of this decision.
    
The protest is sustained.
    
Anthony H. Gamboa
General Counsel
    

   ------------------------

   [1] This case is similar in some respects to Forestry, Surveys & Data and
American Artisan Prods., Inc., supra, which also involved procurements
conducted under simplified acquisition procedures, where the agency
required technical proposals but did not describe how they would be
considered in the award evaluation.  In those cases, we found the
protesters were not prejudiced by the agency's consideration of the
technical proposal in the award evaluation.  However, in both those cases,
unlike the present case, the RFQs described what was to be addressed in
the technical proposals so that the vendors were put on notice of what was
to be evaluated. 
[2] Here, the contracting agency decided to continue performance based on
a finding that to do so would be in the best interest of the government. 
When an agency relies on that basis to continue performance, the
Competition in Contracting Act of 1984 requires our Office to make our
recommendation without regard to any cost or disruption from terminating,
recompeting, or reawarding the contract.  31 U.S.C. S: 3554(b)(2) (2000);
4 C.F.R. S: 21.8(c) (2002).