United States General Accounting Office

Washington, DC 20548 

Comptroller General

of the United States

Decision 

Matter of: Kathpal Technologies, Inc. 

File: B-291637.2 

Date: April 10, 2003 

Robert M. Nutt, Esq., for the protester. 

Douglas Kornreich, Esq., Centers for Medicare & Medicaid Services, for the agency. 

Paul E. Jordan, Esq., and John M. Melody, Esq., Office of the General Counsel, GAO, 

participated in the preparation of the decision. 

DIGEST 

1. Agency properly considered adverse past performance information in evaluating 

protester’s proposal, even though the information had not been formally recorded 

during performance, where agency specifically identified adverse comments and 

provided protester an opportunity to respond during discussions. 

2. Evaluation of protester’s past performance at level below highest possible ratings 

under the applicable criteria was unobjectionable where record establishes that 

agency followed stated evaluation criteria and rating had a reasonable basis. 

DECISION 

Kathpal Technologies, Inc. (KTI) protests the failure to award it a contract under 

request for proposals (RFP) No. CMS-02-0003 issued by the Centers for Medicare 

& Medicaid Services (CMS), Department of Health and Human Services, for 

consulting services. KTI challenges the agency’s evaluation of its technical proposal 

under the past performance factor. 1

We deny the protest. 

The RFP sought proposals to provide a broad range of consulting services to support 

CMS and its 10 regional offices in the areas of analyzing management or operating 

 

1

 For award purposes, the requirements were divided into two “bundles.” KTI only 

submitted a proposal for one bundle and does not directly challenge the awards to 

the successful contractors. 

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. 
Page 2 B-291637.2 

processes, analyzing Medicare/Medicaid issues, researching alternatives, providing 

objective findings, and making concrete recommendations. The RFP contemplated 

multiple awards of indefinite-delivery/indefinite-quantity contracts for a base year, 

with four 1-year options. Task orders under the contracts would be awarded under a 

variety of pricing schemes, including fixed-price, cost-plus-fixed-fee, and time and 

materials. 

Proposals were to be evaluated under three factors, listed in descending order of 

importance: technical proposal, small disadvantaged business (SDB) utilization 

plan, and business (cost) proposal. The technical proposal, evaluated under two 

equally weighted factors--past performance and management plan--was to be rated 

as outstanding, better, acceptable, or marginal.2

 Proposed costs were to be 

evaluated for reasonableness and realism. Non-cost factors were considered 

significantly more important than cost and awards were to be made to the offerors 

whose proposals were evaluated as providing the best value to the government. 

Twenty-nine proposals, including KTI’s, were received and were evaluated by a 

technical evaluation panel. The final evaluation results for the eight awardees and 

KTI, in order of technical merit, were as follows: 

 Technical SDB Plan Business Eval’d Cost 

Booz Allen Outstanding Signif. Credit Yellow $753.34 

AdminiStar Outstanding Credit Yellow $548.36 

Peterson Better Credit Yellow $1,053.46 

RTI Better Signif. Credit Green $746.99 

CNA Better Signif. Credit Green $794.69 

AdvanceMed Better Credit Green $601.86 

Iowa Foundation Better Credit Yellow $655.96/722.02 

IPRO Better Credit Yellow $809.32 

Other Offerors3 

KTI Acceptable Signif. Credit Green $568.07 

The contracting officer determined that awarding contracts to the top eight offerors 

would best meet CMS’s needs, given the amount of work anticipated and the relative 

quality of the proposals. After receiving notice of the award and a debriefing, KTI 

filed a protest with our Office in November 2002. KTI asserted that the agency had 

improperly failed to provide it an opportunity to respond to allegedly negative 

 

2

 The SDB plan was to be rated as significant credit, credit, or no credit. The 

business proposal, which included cost information, was to be rated as green (low 

risk), yellow (some risk), or red (substantial risk). 

3

 Seven proposals were ranked lower than IPRO’s and higher than KTI’s. These 

proposals are not relevant to the issues before us. 
Page 3 B-291637.2 

comments made by its past performance references. The agency took corrective 

action in the form of identifying which task orders were associated with the 

challenged comments and provided KTI the opportunity to submit additional 

information. KTI then withdrew the protest. The agency re-evaluated KTI’s past 

performance and the contracting officer determined that no change in its rating of 

acceptable under this factor was warranted. After KTI received notice of the 

agency’s decision, it filed this protest.4

PAST PERFORMANCE INFORMATION 

KTI maintains that the agency’s past performance evaluation was flawed because it 

was based on references’ negative comments made long after some of the task 

orders to which they related had been performed. KTI asserts that, because it did 

not have the opportunity to respond to the negative evaluations at the time of 

performance, and because the agency did not provide it with sufficient information 

during discussions to respond to the negative comments, the agency was prohibited 

from relying on them in its evaluation. 

The Federal Acquisition Regulation (FAR) requires that an agency indicate to, or 

discuss with, offerors still being considered for award, adverse past performance 

information to which the offeror has not yet had an opportunity to respond. FAR 

§ 15.306(d)(3). While agencies generally are required to conduct meaningful 

discussions by leading offerors into the areas of their submissions requiring 

amplification, Arctic Slope World Servs., Inc., B-284481, B-284481.2, Apr. 27, 2000, 

2000 CPD ¶ 75 at 9, the degree of specificity required in conducting discussions is 

not constant and is primarily a matter for the procuring agency to determine. Quality 

Elevator Co., Inc., B-271899, Aug. 28, 1996, 96-2 CPD ¶ 89 at 2. 

Here, the agency provided KTI with past performance information sufficient to lead 

KTI into the areas requiring amplification. For example, as to task order No. 2003, 

CMS advised KTI that its performance was rated unsatisfactory to fair, and that the 

past performance respondent stated that KTI did not learn the subject matter; all its 

work had to be done over by a follow-on contractor; its work product was of low 

quality, though not over budget; it met its due dates, but with inferior work products; 

and the respondent was disappointed and would not hire KTI again. Agency Report 

(AR), Tab 11 at 723. Regarding task order Nos. 2008, 2009, and 2010, the agency 

advised KTI that the respondent indicated that KTI had walked away from the order 

 

4

 KTI raises a number or arguments in support of its protest. We have reviewed them 

all and find that none have merit. This decision addresses only the more significant 

assertions. 
Page 4 B-291637.2 

at one point; had overloaded every task with management fees and hours; and that 

the respondent had worked with 5 to 6 different people, none of whom worked out.5

 

Id.

We find that these comments conveyed to KTI the bases for the agency’s concerns 

with its past performance, and provided KTI with a reasonable opportunity to 

respond to those concerns. In its response during discussions, KTI did not 

specifically address the comments but, rather, expressed general disagreement with 

them; it asserted its belief that CMS was satisfied with its performance, noted that no 

contemporaneous negative statements were documented, and, with regard to the 

specific comments on task order No. 2003, asserted only that they could not be true, 

without any additional substantive response.6

 KTI asserts that it was hampered in its 

responses by the agency’s failure to document any performance problems. However, 

notwithstanding the agency’s failure to document problems contemporaneously, the 

fact remains that, during discussions, the agency provided KTI with very specific 

reasons for its concerns with KTI’s past performance. We see no reason why the 

level of specificity the agency provided was not adequate to permit KTI to respond to 

the agency’s concerns. KTI claims that its ability to respond also was hampered by 

CMS’s failure to identify the references; however, the FAR actually prohibits 

agencies from providing such information. FAR § 15.306(e)(4).7

PAST PERFORMANCE EVALUATION 

KTI asserts that, even if the negative comments about its past performance were 

properly taken into account in the evaluation, they should have been outweighed by 

its more favorable performance ratings under the other task orders. Specifically, it 

 

5

 The respondent also criticized KTI for failing to provide contracting officials with 

access to its subcontractors, and KTI did provide a specific response to this 

criticism. However, the contracting officer determined that this was not an 

appropriate criticism and disregarded it in his re-evaluation. AR, Tab 14, at 746. 

6

 We note that, while KTI states that it believed the agency was satisfied with its past 

performance on these task orders, it did not include them in the past performance 

information provided with its proposal. This suggests that KTI actually may have 

been aware of CMS’s less than favorable view of its performance. 

7

 KTI asserts that the agency failed to comply with FAR § 42.1503, which calls for 

agencies to evaluate past performance at the time work is completed and to provide 

contractors with that information and an opportunity to submit responses. While it 

appears that KTI is correct, nothing in that provision, or elsewhere in the FAR, 

prohibits an agency from evaluating a proposal based on past performance 

information that was not recorded contemporaneously. Likewise, nothing in the 

RFP prohibited CMS from considering such information. 
Page 5 B-291637.2 

observes that, of the 11 task orders evaluated, it received excellent to outstanding 

ratings on 7 orders valued at approximately $10 million, while it received poor, 

unsatisfactory, or fair to good ratings on only 4 task orders (2003, 2008, 2009, 2010) 

valued at only approximately $2.9 million. 

In reviewing an agency’s evaluation of past performance, we will not reevaluate a 

firm’s performance but, instead, will examine the evaluation to ensure that it was 

reasonable and consistent with the solicitation and applicable statutes and 

regulations. Kay & Assocs., Inc., B-291269, Dec. 11, 2002, 2003 CPD ¶ 12 at 4. 

The RFP stated that the agency would evaluate “the quality of the offeror’s past 

performance and the depth and breadth of [the] offeror’s experience in similar, 

directly related work of similar scope and complexity of work described in the 

Statement of Work; including any relevant experience with the Medicare and/or 

Medicaid programs.” RFP § M.3. KTI’s acceptable rating was based on information 

obtained from relevant contracting personnel on 11 of KTI’s prior task orders, 7 of 

which KTI identified in its proposal, and all of which KTI performed under a 

predecessor CMS contract with a scope very similar to that under the RFP. 8 KTI’s 

performance was rated outstanding to excellent for four task orders, excellent to 

good for two, good to fair for one, fair to unsatisfactory for one, and poor for three. 

AR, Tab 7, at 669-71, 674-81. In reviewing the references and KTI’s rebuttals, the 

contracting officer concluded that KTI had provided the right team and successfully 

performed certain task orders, but had been unable to provide the necessary 

expertise on others. Contracting Officer’s Declaration (CO Decl), ¶ 34-35. Based on 

the lack of expertise evidenced in the performance of some task orders, coupled 

with staff turnover on another, and problems in performance on three related task 

orders, the contracting officer concluded that, while KTI could “probably . . . do 

work of adequate quality[,] . . . the potential risks of delay, degradation of 

performance and lack of customer satisfaction still remain.” CO Decl., ¶ 36-40. 

We find nothing unreasonable in the agency’s assessment. While KTI had better 

performance ratings in the majority of its task orders, and their combined value 

outweighed that of the remaining task orders, its poor and unsatisfactory ratings 

were not insignificant, and for the 11 task orders only four respondents gave an 

unqualified “yes” in response to the question whether they would contract with KTI 

 

8

 To the extent KTI believes it was improper for CMS to consider the four task orders 

not referenced in its proposal, it is incorrect. Agencies properly may consider 

evidence of past performance from sources not listed in the offeror’s proposal, 

Lynwood Mach. & Eng’g, Inc., B-285696, Sept. 18, 2000, 2001 CPD ¶ 113 at 6, and may 

properly consider their own experience with an offeror’s past performance. Quality 

Elevator Co., Inc., supra, at 3. Further, the RFP here specifically reserved the 

agency’s right “to obtain information for use in the evaluation of past performance 

from any and all sources . . . .” RFP § M.3. 
Page 6 B-291637.2 

again. Three additional respondents indicated that they would contract with KTI 

again, but stated that this was dependent upon KTI’s hiring of a good subcontractor 

or on the type of work required. AR, Tab 7, at 668. The respondents for the other 

four orders answered “no.” In our view, KTI’s mixed past performance on these 

directly relevant task orders reasonably supports the agency’s conclusion that its 

past performance was not better than acceptable. KTI’s position to the contrary 

constitutes mere disagreement with the agency’s judgments, which does not 

establish that the evaluation was unreasonable. UNICCO Gov’t Servs., Inc., 

B-277658, Nov. 7, 1997, 97-2 CPD ¶ 134 at 7. 

The protest is denied. 

Anthony H. Gamboa 

General Counsel