Comptroller General

United States Government Accountability Office

Washington, DC 20548 

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: Core Tech International Corporation--Costs 

File: B-400047.2 

Date: March 11, 2009 

Brian A. Darst, Esq., for the protester. 

Kenneth M. Racette, Jr., Esq., Naval Facilities Engineering Command, for the agency. 

David A. Ashen, Esq., and John M. Melody, Esq., Office of the General Counsel, GAO, 

participated in the preparation of the decision. 

DIGEST 

Reimbursement of costs of filing and pursuing protest is recommended where a 

reasonable agency inquiry into protest allegations would have shown that agency 

had failed to reasonably evaluate awardee’s past performance and experience, and 

had conducted disparate, unequal discussions, but agency delayed taking corrective 

action until after submission of agency report responding to allegations and GAO 

conducted “outcome prediction” alternative dispute resolution. 

DECISION 

Core Tech International Corporation (CTIC) of Guam requests that we recommend 

that the firm be reimbursed the costs of filing and pursuing its protest challenging 

the Naval Facilities Engineering Command’s (NAVFAC) award of a contract to DCK 

Pacific, LLC, under request for proposals (RFP) No. N62742-08-R-1307, for design 

and construction of replacement, larger size water lines and related work at the 

Naval Base, Guam. CTIC challenged the agency’s evaluation of proposals and 

conduct of discussions. 

We grant the request that we recommend reimbursement of costs. 

BACKGROUND 

The RFP, issued on an unrestricted basis, provided for award of a fixed-price 

contract for replacement of existing water lines with larger sized lines, construction 

of a concrete enclosure for the Fena Lake Pump Station standby generator, 

installation of zone meters for various areas, replacement of vertical pumps and 

upgrade of motors, and installation of pressure reducing valves. The RFP specified 

an estimated cost of between $20 to $30 million. RFP at 1. 
Award was to be made to the responsible offeror whose conforming offer was 

determined to be the most advantageous and represent the “best value” based on the 

evaluation of price and the following four, equally weighted technical evaluation 

factors: (1) past performance (Factor A), including (in descending order of 

importance) subfactors for the offeror’s past performance and the design firm’s past 

performance; (2) experience/qualifications (Factor B), including (in descending 

order of importance) subfactors for (a) the offeror’s experience and key personnel 

experience/qualifications and (b) the design firm’s experience and key personnel 

experience/qualifications; (3) management plan/project schedule (Factor C), 

including subfactors (of equal importance) for management plan and project 

schedule; and (4) small business subcontracting (Factor D). The technical 

evaluation factors, when combined, were approximately equal to price. 

Of particular importance here, the solicitation defined both the contracts to be 

considered relevant, and the entities other than the offeror itself whose contracts (if 

relevant) would be taken into account, for purposes of the evaluation under the past 

performance and experience/qualifications factors. Specifically, the RFP provided 

that the past performance and experience evaluations would be based on relevant 

contracts, defined as contracts for the construction or design of water pump stations 

and water distribution lines (approximately 300 mm or larger) completed or 

substantially completed within the past 10 years. RFP, Evaluation Factors for 

Award, at 3. In addition, the RFP provided for evaluation not only of the past 

performance and experience of the offeror or entity submitting the proposal, but 

also of subcontractors committed to the project, and other affiliated entities as 

follows: 

If an Offeror is utilizing past performance and experience information of 

affiliates/subsidiaries/parent /LLC/LTD member companies (name is not 

exactly as stated on the SF1442), the Factor C, Management Plan, proposal 

shall clearly demonstrate that the affiliate/subsidiary/parent/LLC/LTD member 

companies will have meaningful involvement in the performance of the 

contract in order for the past performance and experience information of the 

affiliate/subsidiary/parent/LLC/LTD member companies to be considered. 

Id. at 4. 

Proposals were received from six offerors including CTIC and DCK Pacific. 

Following discussions and the receipt of final proposal revisions, the source 

selection authority determined that DCK Pacific’s proposal represented the best 

value notwithstanding its higher price. In this regard, while both CTIC’s and DCK 

Pacific’s technical proposals were rated satisfactory overall, and both were rated 

satisfactory for the past performance and experience/qualifications factors, the 

agency determined that DCK Pacific’s proposal was superior to CTIC’s under these 

factors. Regarding past performance, the SSB noted that while DCK Pacific had 

Page 2 B-400047.2 
demonstrated experience with five relevant projects (contracts), four of which 

involved construction of water pump stations, with its performance rated 

satisfactory for four and above average for the fifth contract, CTIC had only 

demonstrated experience with two relevant projects, only one of which involved 

construction of a water pump, with one satisfactorily completed and another that 

met its objectives. In addition, while DCK Pacific’s lead designer had demonstrated 

satisfactory performance with four relevant projects involving water lines, one of 

which involved design of water pump stations, CTIC’s lead designer had 

demonstrated satisfactory performance on two projects, both of which involved 

design of water pumps. The SSB concluded that DCK Pacific’s superior past 

performance proposal offered a higher probability of successfully performing the 

project based upon DCK Pacific and its lead designer having successfully completed 

numerous projects of similar scope. 

Likewise, although both DCK Pacific’s and CTIC’s proposals were rated overall 

satisfactory under the experience/qualifications factor, the SSB determined that DCK 

Pacific had demonstrated more relevant experience and a stronger design team. In 

this regard, the SSB noted that DCK Pacific had submitted five “offeror” projects that 

were different from those submitted under the past performance factor, that 

four were determined relevant, and that three involved construction of water pump 

stations. In contrast, CTIC submitted the same five projects it submitted under the 

past performance factor, such that only two projects were considered relevant, of 

which only one involved construction of a water pump, and that by a subcontractor 

rather than by CTIC. In addition, DCK Pacific’s proposal was rated outstanding 

under the lead designer/design team subfactor, while CTIC’s was rated only 

satisfactory. 

In addition, DCK Pacific’s proposal was rated outstanding under the management 

plan/schedule factor on the basis of the agency’s conclusion that DCK Pacific 

furnished a highly detailed management strategy, organization, project approach, 

and detailed project schedule. In contrast, CTIC’s proposal was rated only 

satisfactory under this factor, based on a satisfactory management plan and a much 

less detailed schedule. Both firms’ proposals received overall satisfactory ratings 

under the small business factor. 

The source selection authority determined that the “benefits associated with DCK 

[Pacific’s] technical proposal such as its past performance, extensive construction 

experience, together with a design team with extensive experience, and its 

comprehensive management plan and project schedule,” warranted payment of the 

10-percent price premium associated with DCK Pacific’s proposal. Source Selection 

Decision at 2. 

In its initial, April 7, 2008, protest of the resulting award to DCK Pacific, CTIC 

asserted that the agency: improperly credited DCK Pacific, a recently formed entity, 

with the past performance and experience/qualifications of affiliated companies 

Page 3 B-400047.2 
without consideration of whether there would be meaningful involvement of those 

companies in contract performance; improperly failed to consider as relevant several 

of the projects cited by CTIC in the past performance and experience/qualifications 

sections of its proposal; improperly failed to apply a percent price evaluation factor 

in favor of CTIC to which it was entitled under the terms of the solicitation based 

upon its asserted status as a Historically Underutilized Business Zone (HUBZone) 

small business concern; and failed to conduct meaningful discussions regarding 

CTIC’s price (misleading CTIC into erroneously believing that its price was too low) 

and its small business status. In its May 6 agency report, NAVFAC maintained that it 

had reasonably evaluated CTIC’s and DCK Pacific’s past performance and 

experience/qualifications; reasonably accepted CTIC’s representations during the 

procurement that it was becoming other than small, and thus properly declined to 

credit CTIC with the 10-percent price HUBZone evaluation credit; and conducted 

meaningful discussions. 

In its May 15 comments on the agency report, CTIC asserted that several of the 

contracts cited in DCK Pacific’s proposal and which were evaluated as relevant were 

in fact performed by corporate entities that, while related to DCK Pacific’s parent 

corporation, nevertheless were not proposed to have a meaningful role in DCK 

Pacific’s performance of the contract here. CTIC maintained that, therefore, such 

contracts should not have been considered to be relevant here. CTIC further 

challenged other specifics of the evaluation of the past performance and 

experience/qualifications proposals. CTIC also asserted that the agency had 

conducted unequal discussions, advising DCK Pacific but not CTIC of informational 

deficiencies regarding the nature of prior contracts cited in the proposals, with the 

result that several of CTIC’s cited contracts were found to be not relevant. In 

addition, CTIC continued to assert that NAVFAC had misled it during discussions 

regarding its price, and that CTIC was entitled to a 10-percent HUBZone price 

evaluation credit. In its May 23 response, NAVFAC continued to maintain that the 

evaluation was reasonable. 

On June 25, 2008, our Office conducted “outcome prediction” alternative dispute 

resolution (ADR), during which the cognizant GAO attorney stated that it was likely 

that CTIC’s protest would be sustained based on several deficiencies in the conduct 

of the procurement.1

 In this regard, the GAO attorney advised during the ADR that 

the agency’s evaluation of past performance and experience/qualifications appeared 

unreasonable. As noted above, while the evaluation of DCK Pacific’s past 

performance was based on an evaluated five relevant projects (contracts), four of 

which involved construction of water pump stations, with its performance rated 

satisfactory for four and above average for the fifth contract, CTIC’s past 

 

1

 In “outcome prediction” ADR, the GAO attorney handling the case convenes all of 

the participating parties, usually by teleconference, and advises them of what he or 

she believes the likely outcome will be and the reasons for that belief. 

Page 4 B-400047.2 
performance was evaluated on the basis of only two relevant projects, only one of 

which involved construction of a water pump, with one satisfactorily completed and 

another that met its objectives. However, the record showed that three of the five 

evaluated relevant projects cited by DCK Pacific in its proposal, including three of 

the four water pump projects and the three largest projects, were in fact performed 

by Dick Corporation of Puerto Rico, rather than by the offeror here, DCK Pacific. 

An agency properly may attribute the experience or past performance of a parent or 

affiliated company to an offeror where the firm’s proposal demonstrates that the 

resources of the parent or affiliate will affect the performance of the offeror. 

Perini/Jones, Joint Venture, B-285906, Nov. 1, 2000, 2002 CPD ¶ 68 at 4. The relevant 

consideration is whether the resources of the parent or affiliated company--its 

workforce, management, facilities or other resources--will be provided or relied 

upon for contract performance, such that the parent or affiliate will have meaningful 

involvement in contract performance. Ecompex, Inc., B-292865.4 et al., June 18, 

2004, 2004 CPD ¶ 149 at 5. 

As our attorney explained during the ADR, the record showed that DCK Pacific, 

when questioned by NAVFAC as to why Dick Corporation of Puerto Rico’s past 

performance and experience should be imputed to DCK Pacific, advised that DCK 

Pacific (through two intermediate companies, Dick Pacific Construction Co., Ltd., 

and Dick Worldwide Pacific Region, LLC) and Dick Corporation of Puerto Rico were 

affiliates of DCK Worldwide. However, nothing in DCK Pacific’s response or 

elsewhere in its proposal demonstrated that Dick Corporation of Puerto Rico would 

have any meaningful involvement in contract performance. It was for this reason 

that our attorney indicated during the ADR that it was improper to attribute Dick 

Corporation of Puerto Rico’s past performance to DCK Pacific, with the result that 

no more than two contracts (one involving construction of a water pump), rather 

than the five contracts (four involving construction of a water pump) that were 

considered, should have been considered for purposes of the past performance 

evaluation. For the same reason, our attorney indicated that it was improper for the 

agency to base its evaluation of DCK Pacific’s experience/qualifications in part on a 

contract performed by Dick Corporation of Puerto Rico, with the result that no more 

than three contracts (two involving construction of a water pump), rather than the 

four contracts (three involving construction of a water pump) that were considered, 

should have been considered for purposes of the experience/qualifications 

evaluation. 

Furthermore, as the GAO attorney advised during the ADR, it appeared from the 

record that the agency had acted improperly during discussions such that the past 

performance and experience/qualifications evaluations were affected. In this regard, 

discussions must be meaningful, equitable, and not misleading. ACS Gov’t Solutions 

Group, Inc., B-282098 et al., June 2, 1999, 99-1 CPD ¶ 106 at 13-14. Here, the record 

showed that the agency conducted discussions with DCK Pacific regarding the 

contracts it cited in its past performance and experience/qualifications 

Page 5 B-400047.2 
proposals--“[y]our proposal does not clearly demonstrate why the past performance 

and experience of Dick Corporation of Puerto Rico and Dick Pacific Construction 

Co., Ltd. Guam should be imputed to DCK Pacific, LLC”--with the result that based 

on DCK Pacific’s discussion response, the contracts were imputed to DCK Pacific. 

DCK Pacific Discussion Questions. In contrast, however, the agency failed to advise 

CTIC of informational deficiencies that precluded consideration as part of the 

evaluation of CTIC’s past performance and experience/qualifications of two of the 

contracts cited by CTIC, including at least one contract (for the Ironwood Estates 

project) for which the protester’s performance was reported as outstanding. Thus, it 

appeared from the record that the agency had engaged in improper, disparate 

treatment of the competing offerors during discussions. Since the results of the 

above deficiencies potentially called into question the agency’s determination that 

DCK Pacific’s proposal was superior to CTIC’s under the past performance and 

experience/qualifications factors, and thus called into question part of the basis for 

the determination that the advantages offered by DCK Pacific’s proposal warranted 

payment of the price premium associated with that proposal, the GAO attorney 

indicated during the ADR that it was likely that we would sustain the protest. 

NAVFAC thereupon advised our Office that it intended to undertake corrective 

action. Specifically, the agency indicated that the agency would either terminate the 

contract awarded to DCK Pacific and resolicit, or in the alternative, reopen 

discussions with offerors and request revised proposals. See E-mails from NAVFAC 

to GAO, June 25, June 26, and July 7, 2008. GAO then dismissed the protest as 

academic (B-400047, July 7, 2008). CTIC thereupon requested that GAO recommend 

that the firm be reimbursed the costs of filing and pursuing its protest. Although the 

parties then entered into extended negotiations regarding CTIC’s entitlement to 

protest costs, NAVFAC ultimately advised our Office that a GAO decision would be 

necessary. 

Where a procuring agency takes corrective action in response to a protest, our Office 

may recommend reimbursement of protest costs where, based on the circumstances 

of the case, we determine that the agency unduly delayed taking corrective action in 

the face of a clearly meritorious protest, thereby causing the protester to expend 

unnecessary time and resources to make further use of the protest process in order 

to obtain relief. Bid Protest Regulations, 4 C.F.R. § 21.8(e) (2008); AAR Aircraft 

Servs. Costs, B-291670.6, May 12, 2003, 2003 CPD ¶ 100 at 6. A protest is clearly 

meritorious where a reasonable agency inquiry into the protest allegations would 

have shown facts disclosing the absence of a defensible legal position. AVIATE 

L.L.C., B 275058.6, B-275058.7, Apr. 14, 1997, 97-1 CPD ¶ 162 at 16. With respect to 

the promptness of the agency’s corrective action under the circumstances, we 

review the record to determine whether the agency took appropriate and timely 

steps to investigate and resolve the impropriety. See Chant Eng’g Co., Inc.--Costs, 

B-274871.2, Aug. 25, 1997, 97-2 CPD ¶ 58 at 4; Carl Zeiss, Inc.--Costs, B-247207.2, 

Oct. 23, 1992, 92-2 CPD ¶ 274 at 4. While we consider corrective action to be prompt 

if it is taken before the due date for the agency report responding to the protest, we 

Page 6 B-400047.2 
generally do not consider it to be prompt where it is taken after that date. See CDIC, 

Inc.--Costs, B-277526.2, Aug. 18, 1997, 97-2 CPD ¶ 52 at 2. 

Here, according to NAVFAC, “the Agency does not argue that [CTIC] should be 

completely deprived of attorney fees.” Agency Response, July 25, 2008, at 4. Rather, 

the agency asserts that the initial protest did not include the operative facts that 

resulted in the ADR, and, as a result, “was not persuasive and certainly not ‘clearly 

meritorious.’” Id. at 3-4. The agency concludes that the award of attorneys’ fees 

therefore should be “chiefly limited” to the period after submission of the agency 

report during which the protester was preparing its comments. Id. 

We find NAVFAC’s position unpersuasive. As an initial matter, we note that our 

willingness to inform the parties through outcome prediction ADR that a protest is 

likely to be sustained, as we did here as a result of the deficiencies in the technical 

evaluation and conduct of discussions, is generally an indication that the protest is 

viewed as clearly meritorious, and satisfies the “clearly meritorious” requirement for 

purposes of recommending reimbursement of protest costs. National Opinion 

Research Ctr.--Costs, B-289044.3, Mar. 6, 2002, 2002 CPD ¶ 55 at 3. (As for the 

remaining protest issues raised by the protester, none was clearly meritorious.) 

Furthermore, we find the agency’s corrective action, occurring only after the agency 

report and the ADR, to have been unduly delayed. In this regard, CTIC’s initial 

protest asserted that NAVFAC had improperly credited DCK Pacific, a recently 

formed entity, with the past performance and experience/qualifications of affiliated 

companies without consideration of whether there would be meaningful 

involvement of those companies in contract performance. Not only were the 

determinative facts regarding this issue apparent on the face of DCK Pacific’s 

proposal, but, in addition, CTIC’s concern in this regard was the same concern that 

NAVFAC itself raised during its discussions with DCK Pacific. In these 

circumstances, we think it to be beyond any reasonable dispute that a reasonable 

agency inquiry into CTIC’s protest allegation would have shown facts disclosing the 

absence of a defensible legal position. See AVIATE L.L.C., supra, at 16. 

We likewise find the agency’s corrective action to be unduly delayed with respect to 

CTIC’s challenge to the conduct of discussions regarding relevant contracts. In this 

regard, CTIC first asserted in its May 15 comments on the agency report that the 

agency had conducted unequal discussions, advising DCK Pacific, but not CTIC, of 

informational deficiencies regarding the nature of prior contracts cited in the 

proposals, with the result that several of CTIC’s cited contracts were found to be not 

relevant. Although it was apparent from the procurement record that NAVFAC had 

conducted disparate discussions in this manner, the agency, in its May 23 response, 

nevertheless disputed the assertion that discussions regarding relevant contracts 

were unequal or otherwise improper. It was only after the ADR conducted by GAO 

more than a month later, that NAVFAC proposed corrective action. In these 

circumstances, since corrective action was proposed only after the agency report 

Page 7 B-400047.2 
Page 8 B-400047.2 

responding to the protest ground, we do not consider the corrective action to be 

prompt. See CDIC, Inc.--Costs, supra, at 2. 

NAVFAC further asserts that CTIC should not recover protest costs related to its 

assertion that CTIC was entitled to a 10-percent HUBZone price evaluation credit. 

As a general rule, we consider a successful protester entitled to be reimbursed costs 

incurred with respect to all issues pursued, not merely those upon which it prevails. 

Burns and Roe Servs. Corp.--Costs, B-310828.2, Apr. 28, 2008, 2008 CPD ¶ 81 at 2-3. 

Nevertheless, in appropriate cases, we have limited our recommendation for the 

award of protest costs where a part of those costs is allocable to an unsuccessful 

protest issue that is so clearly severable from the successful issues as to essentially 

constitute a separate protest. See, e.g., BAE Tech. Servs., Inc.--Costs, B-296699.3, 

Aug. 11, 2006, 2006 CPD ¶ 122 at 3; Interface Floorings Sys., Inc.--Claim for 

Attorneys’ Fees, B-225439.5, July 29, 1987, 87-2 CPD ¶ 106 at 2-3. In determining 

whether protest issues are so clearly severable as to essentially constitute separate 

protests, we consider, among other things, the extent to which the issues are 

interrelated or intertwined--i.e., the successful and unsuccessful arguments share a 

common core set of facts, are based on related legal theories, or are otherwise not 

readily severable. See Sodexho Mgmt., Inc.--Costs, B-289605.3, Aug. 6, 2003, 2003 

CPD ¶ 136 at 29. 

Here, CTIC’s challenge to the agency’s determination that CTIC was not entitled to a 

10-percent HUBZone price evaluation credit did not involve the same set of core 

facts as did its clearly meritorious challenge to the technical evaluation and conduct 

of discussions. These protest grounds were also not based on related legal theories. 

Accordingly, we recommend that CTIC be reimbursed the reasonable costs of filing 

and pursuing its protest only as related to its challenge to the technical evaluation 

and conduct of discussions regarding relevant contracts. CTIC should submit its 

certified claim, detailing the time spent and costs incurred, directly to the agency 

within 60 days of its receipt of this decision. 4 C.F.R. § 21.8(f)(1). 

The request is granted. 

Gary L. Kepplinger 

General Counsel