Pasha Hawaii Holdings LLC protested a contract awarded to Crowley Government Services, Inc. by the Department of Transportation, Maritime Administration (MARAD). The contract was to acquire, operate, and maintain replacement vessels for the Ready Reserve Force (RRF). The protester asserted MARAD failed to conduct a proper realism analysis of Crowley’s proposed price. It argued had it conducted this analysis it would have determined a “significant difference” in proposed prices was due to a latent ambiguity in the solicitation regarding the maintenance and operation of the vessels. Pasha challenged the evaluation of technical proposals and past performance. The Government Accountability Office (GAO) reviewed and sustained Pasha’s protest.
MARAD required replacement vessels for the RRF. The agency sought a vessel acquisition manager (VAM) with experience procuring, reflagging, re-classifying, modifying, and maintaining and operating vessels. The solicitation sought proposals of a single cost reimbursable and fixed -price indefinite-delivery, indefinite-quantity contract with a 4-year based period, 2-year option period, and a 6-month extension. Offerors were to “be compared on the basis of their ratings, strengths, weaknesses, risks, and total evaluated price.”
Award of the contract was to be made to the offeror with the proposal that had the best value to the agency. The following factors were considered when determining the best value: technical approach, management approach, operations and maintenance approach, past performance, and price. The technical approach was the most important factor while management and operations and maintenance approaches were of equal importance. All non-price factors when combined were “significantly more important than price.”
The agency was to evaluate the reasonableness of proposed prices using price analysis techniques in the Federal Acquisition Regulation (FAR) 15.404. The realism of proposed prices was to be assessed by considering whether the proposed price was realistic for the proposed contractor work statement of work (CSOW), reflected a “clear understanding of the requirements,” and was “consistent with the unique methods of performance and materials described in the offeror’s technical approach.
The Source Selection Evaluation Board (SSEB) determined Crowley’s proposal was “the most highly rated technically, with the highest available past performance rating, substantial confidence. No tradeoff between price and non-price factors were required because the highest technically rate proposal was the lowest priced. The source selection authority (SSA) agreed with SSEB’s recommendation, the award was made to Crowley, and a protest by Pasha followed.
Pasha asserted MARAD did not perform a proper price realism analysis of Crowley’s proposed price. It argued that had the agency perform a proper analysis, it would have found Crowley’s proposal presented an unacceptably high performance risk and would have downgraded it under the technical and management approach factors. Pasha argued the difference in prices was caused by a latent ambiguity in the solicitation regarding pricing for the operation and maintenance of the ships to be procured. Pasha challenged the agency’s evaluation of technical proposals and its evaluation of past performance.
Reasonableness of Pasha’s Proposed Price
MARAD argued the protest should be dismissed because Pasha’s proposal was unawardable due to its price not being fair and reasonable. The agency stated it discovered that rather than escalating labor rates by two percent after the expiration of collective bargaining agreements, as required by the solicitation, the protester applied an escalation rate greater than two percent. The agency found Pasha’s failure to comply with the terms of RFP amendments required the rejection of Pasha’s proposal. GAO noted that an offeror’s proposed escalation rate was not documented in the agency’s price reasonable analysis. It concluded this evaluation conclusion was not a fair judgment of the agency because it was not found in the record.
Price Realism Analysis of Crowley’s Proposed Price
Pasha found the agency’s realism analysis of Crowley’s price was flawed because it was based on incorrect facts. It asserted that MARAD should have found Crowley’s price unrealistically low, reflected a lack of understanding of the requirements, and posed a risk to contract performance. GAO concluded the record supported the protester’s contentions and sustained the allegation that the agency’s price realism was unreasonable.
Late Ambiguity in the Crew Requirements
Pasha asserted the RFP required offerors to crew vessels according to levels contained in the ship manager contract requirements. It argued the agency failed to recognize Crowley’s proposal did not comply with these requirements. The agency stated the RFP “contained no specific crew complements that were required to be priced, and offerors had discretion to use their business judgment with the knowledge that the vessel to be operated is not yet known…” MARAD argued the protester’s interpretations of the staffing requirements in the RFP were unreasonable.
Past Performance Evaluation
Pasha argued the agency unreasonably considered Crowley’s positive past performance of a ship building contract, while ignoring negative past performance under the same contract. It added, Crowley was unreasonably credited with past performance, which the agency had no performance reviews. It argued the agency’s evaluation utilized an unstated evaluation criterion when it evaluated past performance involving government-owned vessels as more relevant than experience with commercially owned vessels. GAO agreed with Pasha’s argument its past performance determination was inconsistent with the solicitation. It concluded the agency unreasonably evaluated past performance.
GAO sustained Pasha’s allegation that MARAD performed an unreasonable price realism analysis of Crowley’s proposed price, and that the solicitation contained an ambiguity about the crew requirements. It also found the agency unreasonably evaluated technical proposals and past performance. It recommended the agency revise the solicitation and clarify the requirements so offerors can “compete on an equal basis.”
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