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United States Government Accountability Office Washington, DC 20548 Comptroller General of the United States 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: File: Date: Lakeside Escrow & Title Agency, Inc. B-310331.3 January 7, 2008 James S. DelSordo, Esq., Argus Legal LLC, for the protester. Courtney B. Minor, Esq., Elisa J. Yochim, Esq., and Russell J. Coh
    Comptroller Generalof the United States United States Government Accountability Office Washington, DC 20548DOCUMENT FOR PUBLICRELEASE The decision issued on the date below was subject to aGAO Protective Order. This redacted version has beenapproved for public release. Decision Matter of: Lakeside Escrow & Title Agency, Inc. File: B-310331.3 Date: January 7, 2008 James S. DelSordo, Esq., Argus Legal LLC, for the protester.Courtney B. Minor, Esq., Elisa J. Yochim, Esq., and Russell J. Cohen, Esq.,Department of Housing and Urban Development, for the agency.Louis A. Chiarella, Esq., and Christine S. Melody, Esq., Office of the General Counsel,GAO, participated in the preparation of the decision. DIGEST Protest challenging contracting agency’s evaluation of protester’s proposal andexclusion of proposal from competitive range is denied where agency’s evaluationand competitive range determination were reasonable and in accordance with thesolicitation evaluation criteria. DECISION Lakeside Escrow & Title Agency, Inc. protests the exclusion of its proposal from thecompetitive range under request for proposals (RFP) No. R-CHI-00895, issued by theDepartment of Housing and Urban Development (HUD) for real estate closingservices in the state of Michigan. Lakeside contends that the agency’s technicalevaluation of its proposal was improper.We deny the protest.BACKGROUNDHUD, through the Federal Housing Administration (FHA), administers the SingleFamily Mortgage Insurance Program, which helps low- and moderate-incomeindividuals and families achieve homeownership. Upon the default and foreclosureof an FHA-insured loan, the mortgage lender files a claim for insurance benefits and,in exchange for payment of the claim, the lender conveys the foreclosed property toHUD. The agency, by means of a management and marketing contractor, thenmanages and sells a sizable inventory of single family homes. In order to completethese sales, HUD requires closing agent contractors to perform all necessary closingactivities on its behalf. The solicitation here involves HUD’s procurement of real  estate closing services for single family properties owned by the agency locatedthroughout Michigan. RFP § B.2, B.3.The RFP, issued on February 7, 2007 as a small-business set-aside, contemplated theaward of one or more fixed-price, indefinite-delivery/indefinite-quantity contracts fora base year together with three 1-year options. The RFP identified four evaluationfactors: technical and management approach; prior experience; past performance;and price. 1 The solicitation also stated that the three technical factors were of equalimportance and, when combined, were significantly more important than price. Award was to be made to the responsible offeror whose proposal was determined tobe the “best value” to the government all factors considered. Id. §§ M.1, M.4.The RFP contained detailed instructions regarding the submission of proposals. 2  Specifically, the technical approach submission was required to demonstrate theofferor’s ability to carry out and manage the work to be performed and to ensure thequality of performance. The technical proposal was also to be clear, concise, andsufficiently detailed so as to substantiate the validity of an offeror’s stated claims.Further, the RFP stated that proposals should not simply rephrase or restate the performance work statement requirements, but rather, must provide convincingrationales showing how the offeror intended to meet the requirements. Offerorswere also instructed to assume that HUD had no prior knowledge of their facilitiesand/or experience, and that the agency’s evaluation would be based on theinformation included within the proposals. Id. § L.8. Additionally, the RFP statedthat HUD intended to evaluate proposals and make award without conductingdiscussions; the agency, however, also reserved the right to conduct discussions if later determined by the contracting officer to be necessary. Id. § L.2.Twenty-two offerors, including Lakeside, submitted proposals by the March 7 closingdate. An agency technical evaluation panel (TEP) evaluated offerors’ proposals as to 1 The RFP also established the agency’s evaluation rating scheme. Specifically, withregard to the technical and management approach factor, proposals were to be ratedas either “Excellent,” “Good,” “Fair,” “Poor,” or “Unsatisfactory,” while offerors’ prior experience was to be evaluated as either “Excellent,” “Good,” “Fair,” or “Poor,”and past performance was to be evaluated as either “Excellent,” “Good,” “Fair,”“Unknown,” or “Poor.” The solicitation also included definitions for each adjectivalrating. Id. § M.2. 2 The RFP required each proposal to consist of two parts--a technical andmanagement approach proposal, and a business proposal. The technical proposalwas in turn to be structured as follows: 1) technical and management plan;2) staffing plan; 3) quality control plan; 4) prior experience; and 5) past performance.The solicitation also set forth a detailed narrative of the various criteria that offerorswere to expressly address in each section of their technical proposals. Id. § L.8. Page 2 B-310331.3  the technical factors. As set forth above, the RFP established the agency’s method of evaluation for each technical factor. The TEP also developed an overall rating foreach offeror’s technical proposal, using the following adjectival ratings anddefinitions: Acceptable The proposal contains no deficiencies or significant weaknesses.The evaluator is confident that the offeror can successfully perform the contract.Unacceptable,but capable of being madeacceptableThe offer contains enough deficiencies and/or significantweaknesses to question the offeror’s ability to successfully perform the contract. However, the evaluator believes theofferor may be able to remedy enough of the deficiencies andweaknesses through discussions to make the offer acceptable.Unacceptable The deficiencies and weaknesses are great and/or numerousenough that any attempt to remedy them through discussionswith the offeror would be equivalent to allowing the offeror tosubstantially rewrite its proposal. Agency Report (AR), Tab 6, TEP Guide, at 6-7, 12; Tab 10, Competitive RangeDetermination, at 1.The TEP’s evaluation of the six highest-rated proposals and Lakeside’s were asfollows: OfferorTechnical/Mgmt ApproachPriorExperiencePastPerformanceOverall 1 Good Excellent Excellent Acceptable2 Fair Good Excellent Acceptable3 Excellent Fair Good Acceptable4 Good Fair Fair Capable5 Fair Fair Fair Capable6 Fair Fair Fair Capable* * * * *Lakeside (11) Poor Fair Fair UnacceptableId., Tab 9, TEP Report, at 1-20, 68-71; Tab 10, Competitive Range Determination,at 2-3.The TEP identified numerous weaknesses and deficiencies in Lakeside’s proposal asto technical and management approach. Specifically, the evaluators found that whileLakeside’s proposal included a work flow chart and an accompanying narrativereflecting general familiarity with the real estate closing process, the proposal failedto provide specifics as to how the offeror would start up and conduct its operations Page 3 B-310331.3  in Michigan. 3 The TEP also found that while the RFP required offerors to disclosethe office locations for all key personnel, Lakeside’s staffing plan was ambiguousand never explicitly stated that any key personnel from its Cleveland headquartersoffice would actually work in Michigan. 4 The TEP also observed that Lakeside’s proposal contained no methodology for determining the number of closers needed to perform contract closings. Specifically, the offeror utilized no calculus to determinethe number of closers required based on a number of the hours per closing, traveltime, distances between closings, and/or closing volume, but simply proposed fourclosers without providing their current or prospective work locations. 5 Theevaluators concluded that because of Lakeside’s failure to identify the employeesthat would be at each office site and the other ambiguities and omissions about howcontract work would be performed, there was considerable doubt that Lakesidewould provide timely and convenient service to HUD purchasers throughoutMichigan. Id. at 69-71. As to the prior experience factor, the TEP found that Lakeside’s proposal had provided the required information regarding its HUD real estate closing servicescontract for Ohio, but did not provide all required information for its real estateclosing service contracts with the agency in other states and regions. The TEP alsonoted that while Lakeside’s proposal stated that the offeror intended to employ the 3 The TEP cited, for example, that Lakeside’s work flow narrative did not explainhow interactions, communications, and logistics would be handled between its three proposed satellite offices and its proposed main office in Michigan, or between theofferor’s main office in Michigan and its corporate headquarters in Cleveland, Ohio.Id., Tab 9, TEP Report, at 69. 4 The TEP found that Lakeside’s proposal had omitted the addresses from theresumes for all key personnel except for its corporate president, thereby making itimpossible for the evaluators to clearly determine where these individuals werelocated, where they worked, and where they may be working after contract award.Id. at 70. The resumes that Lakeside provided for many of its key personnel also didnot include current employment. The TEP also noted that while Lakeside’s staffing plan provided that all corporate headquarters personnel would work 100 percent of their time on the Michigan contract, Lakeside did not explain the apparent multipleuse of these personnel resources on other existing HUD real estate closing servicecontracts (five), as well as other noncontract work. Under these circumstances, theTEP concluded that it could not rely on Lakeside’s representation that all of itscorporate personnel would in fact work 100 percent on the contract here. Id. 5 The TEP also found that, on a collective basis, Lakeside’s proposed staff lackedclosing experience (i.e., only the resume of one of Lakeside’s four proposed closersevidenced closing experience). Id. at 70-71. Page 4 B-310331.3
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