United States Government Accountability Office

Washington, DC 20548

Comptroller General

of the United States

 

Decision

Matter of: Carothers Construction, Inc.

File: B-405241.4

Date: July 26, 2012

Robert J. Symon, Esq., and Aron C. Beezley, Esq., Bradley Arant Boult Cummings 

LLP, for the protester.

James E. Moye, Esq., and Mark O. Masterson, Esq., Moye, O’Brien, O’Rourke, 

Pickert & Dillon, LLP, for Sauer, Inc., an interested party.

Connie L. Baran, Esq., Department of the Army, for the agency.

Jennifer D. Westfall-McGrail, Esq., and Edward Goldstein, Esq., Office of the 

General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Source selection official reasonably selected higher-rated, higher-priced proposal 

for award where he identified technical distinctions between proposals and 

determined that value of advantages associated with higher-rated proposal 

exceeded the difference in price.

DECISION

Carothers Construction, Inc., of Water Valley, Mississippi, protests the issuance of a 

task order for design/build of an elementary school at Fort Stewart, Georgia, to 

Sauer, Inc., of Jacksonville, Florida, pursuant to request for task order proposal 

(RFTOP) No. URSF-11-0004, issued by the U.S. Army Corps of Engineers, 

Savannah District. The protester argues that the agency unreasonably selected 

Sauer’s higher-priced proposal for award.

We deny the protest.

BACKGROUND

The RFTOP, which was issued on February 25, 2011, to firms holding multipleaward, task-order contracts, provided for award of the order to the contractor whose 

proposal represented the best value to the government. Proposals were to be 

evaluated based on price and four technical evaluation factors (quality of building 

systems and materials, building function and aesthetics, proposed contract duration 

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-405241.4 

and summary schedule, and site design). The technical factors, when combined, 

were of greater importance than price.1 The solicitation also advised that a 

construction cost limitation of $20,500,000 applied to the project, and that proposals 

exceeding the cost limitation would be considered ineligible for award.

The RFTOP provided that the building was to be designed to achieve an energy 

consumption at least 30 percent below the consumption of a baseline building 

meeting the minimum requirements of American Society of Heating Refrigeration 

and Air Conditioning (ASHRAE) Standard 90.1-2007, in compliance with the Energy 

Policy Act (EPAct) of 2005. RFTOP, App. B and Section 01 10 00 at 108.2

. . . unless demonstrated to not be life cycle cost-effective.” Section 01 10 00 at 86. 

 The 

solicitation further advised that proposals committing to achieve energy savings of 

40 percent or better might be rated more favorably. In connection with the 

foregoing, offerors were instructed to describe their overall approach for design of 

the facility in relation to energy conservation features, provide the anticipated 

energy usage for the school as proposed, and describe the most important factors 

in achieving that performance. With regard to energy conservation, the RFTOP 

also included a requirement that “[n]ot less than 30 percent of hot water demand for 

this facility shall be met through the installation and use of solar hot water heaters

The protester, Sauer, and a third offeror submitted proposals.3

 On June 3, 2011, 

the agency notified the protester that Sauer had been selected to receive the task 

order, and Carothers protested the selection decision to our Office. After the 

agency notified us that it intended to reevaluate the proposals and make a new 

source selection decision, we dismissed the protest as academic. Carothers 

Constr., Inc., B-405241, B-405241.2, July 26, 2011. 

The agency reevaluated the proposals and assigned the following ratings:

 1 Technical factors 1 and 2 were equal in weight and of greater importance than 

factors 3 and 4; factor 3, in turn, was more important than factor 4.

2 In connection with the foregoing goal, the solicitation explained that the 

Department of Defense Education Activity had emphasized the importance of 

saving energy in their facilities and was examining the feasibility of designing and 

constructing future schools to be Zero-Net-Energy-Buildings or Zero-Net-Energy 

Ready. RFTOP, App. B.

3 The third offeror’s proposal was subsequently eliminated from consideration 

because it exceeded the cost limitation. 
Page 3 B-405241.4 

Factor 1 Factor 2 Factor 3 Factor 4 Overall Evaluated

Price

Sauer O AA S AA AA $20,265,000

Carothers AA S S AA S $18,147,100

 

(O = Outstanding, AA = Average, and S = Satisfactory).

The contracting officer again selected Sauer to receive the task order, finding that 

the technical advantages of Sauer’s proposal outweighed the protester’s price 

advantage, and Carothers again protested to our Office. After reviewing the record, 

the cognizant GAO attorney conducted an outcome prediction alternative dispute 

resolution telephone conference, during which she advised the parties that, in her 

view, the protest was likely to be sustained on the grounds that the agency had 

treated the offerors unequally by engaging in discussions with Sauer only. The 

GAO attorney recommended that the agency take corrective action. In response, 

the agency notified our Office that it would hold discussions, allow the offerors to 

revise their proposals, evaluate the revised proposals, and make a new source 

selection decision. We subsequently dismissed the protest as academic. 

Carothers Constr., Inc., B-405241.3, Feb. 2, 2012.

The agency opened discussions with the two offerors, advising both that they would 

be permitted to revise their proposals only to the extent necessary to respond to the 

items discussed. Discussion items raised with Sauer (and Sauer’s responses 

thereto) included the following:

• Confirm the information provided in response to this clarification, “In 

relationship to EPACT (which does not include Plug Loads), what 

energy reduction would your proposal have?”

Response: “55% Energy Reduction. We hereby revise our proposal 

by increasing the Solar PV [photo-voltaic] system capacity and Solar 

Hot Water System capacity.”

• Confirm the information provided in response to this clarification, “In 

relationship to ASHRAE (which includes Plug Loads), what energy 

reduction would your proposal have?”

Response: “45% Energy Reduction. We hereby revise our proposal 

by increasing the Solar PV system capacity and Solar Hot Water 

system capacity.”

Contracting Officer (CO) Letter to Sauer, Feb. 10, 2012, and Sauer Letter to CO, 

Feb. 16, 2012.
Page 4 B-405241.4 

Likewise, discussion items raised with the protester (and the protester’s responses) 

included the following: 

• Confirm the information provided in response to this clarification, “In 

relationship to EPACT (which does not include Plug Loads), what 

energy reduction would your proposal have?”

Response: “Per the Energy Policy Act (EPACT) of 2005, a new 

federal facility must meet a required energy reduction of 30% against 

ASHRAE Standard 90.1. For the subject project, we propose and 

confirm an EPACT energy reduction of 44.6%.”

• Offeror did not provide the percentage of the hot water demand and 

did not demonstrate that meeting the requirements of Chapter 10 para 

10.4 [which provides that ‘not less than 30 percent of hot water 

demand for the facility shall be met through the installation and use of 

solar hot water heaters . . . unless demonstrated to not be lifecycle 

cost-effective’] was not life cycle cost effective.

Response: “As per Section 523 of the Energy Independence and 

Security Act of 2007, an analysis was performed to determine if a 

solar domestic hot water system would be life cycle cost effective. 

The area chosen for the analysis was the kitchen, which comprises 

approximately 60% of the total hot water demand for the facility. As 

stated in the Mechanical Systems paragraph of the original proposal 

dated April 5, 2011, Page 4, the domestic water heating system would 

use evacuated tube collectors to heat water in a storage tank. The 

system was calculated to have a payback of approximately 36 years, 

which does not show the system being life cycle cost effective. 

Therefore, it is proposed that a high efficiency, condensing gas fired 

domestic water heater be utilized to serve all areas of the facility. 

Additionally, a life cycle cost analysis for solar hot water heating in 

comparison to electric water heating was performed and is included as 

Attachment 1.”

CO Letter to Carothers, Feb. 10, 2012, and Carothers Letter to CO, Feb. 16, 2012. 

The technical board reevaluated the proposals. The evaluators raised the rating of 

the protester’s proposal under the building function and aesthetics factor from 

satisfactory to above average based on Carother’s response to a discussion item 
Page 5 B-405241.4 

regarding the material for wall stripes.4 At the same time, however, the evaluators 

lowered the rating assigned the protester’s proposal under the quality of building 

systems and materials factor from above average to satisfactory, finding that the 

protester had not met the solicitation requirement that not less than 30 percent of 

the facility demand for hot water be met through the installation and use of solar hot 

water heaters unless demonstrated not to be life cycle cost effective. In the 

foregoing connection, the evaluators noted that the protester had not furnished a life 

cycle analysis demonstrating that the solar hot water heaters would not be cost 

effective; rather, the protester had furnished a payback analysis. The evaluators 

further noted that the protester’s payback analysis addressed only the hot water 

demand for the kitchen (as opposed to the demand for the entire facility). Because 

the two changes in rating essentially cancelled each other out, the overall rating (of 

satisfactory) assigned the protester’s proposal remained unchanged. No changes 

were made to the ratings assigned Sauer’s proposal.

In comparing the two proposals, the contracting officer noted that energy 

conservation was an extremely important element of the project, and that

Carothers had neither proposed to furnish at least 30 percent of the facility’s hot 

water demand with solar hot water heaters, nor demonstrated that meeting the 

requirement would not be lifecycle cost effective, as required by the solicitation, 

whereas Sauer had proposed to furnish 40 percent of the facility’s hot water through 

solar heating. The contracting officer further noted that Carothers had proposed a 

44.6 percent reduction in energy consumption in relationship to the EPACT, 

whereas Sauer had proposed a reduction of 55 percent, and that while Carothers 

had not explained in its proposal whether and how its design could be expanded to 

make the facility Net Zero Energy Ready, Sauer had provided for a photovoltaic 

system with the capability for future expansion. The contracting officer also noted 

that while Carothers had proposed energy efficiency strategies for conservation and 

savings exceeding the minimum requirements of the RFTOP, Sauer had both 

proposed such strategies and “provided an extensive narrative of the design 

approach to incorporate these features and illustrate where the savings would be 

realized.” CO’s Decision Document, Apr. 13, 2012, at 5. The contracting officer 

concluded that the technical advantages of Sauer’s proposal outweighed its higher 

price, and that Sauer’s proposal represented the best value to the government. 

By letter of April 19, 2012, the contracting officer notified Carothers that Sauer had 

again been selected to receive the task order. After requesting and receiving a 

debriefing, Carothers filed a timely protest with our Office on May 1.

 4 The agency had asked Carothers to clarify the material used for glazed strips 

along the walls. In response, Carothers indicated that it would use “pre-faced 

architectural concrete masonry block that has the glazing compound permanently 

molded to the face of the [masonry block].” Id.
Page 6 B-405241.4 

DISCUSSION

Carothers argues that the evaluators relied upon an unstated evaluation factor in 

finding that its proposal had failed to meet the requirement to furnish at least 30 

percent of the facility’s hot water using solar hot water heaters and had not 

otherwise demonstrated that it was not life cycle cost effective. The protester 

contends that the solicitation did not require offerors to furnish an analysis 

demonstrating that the use of solar hot water heaters would not be cost effective, 

with their proposals. Rather, the protester maintains, the solicitation provided for 

energy calculations of that sort to be furnished post award as part of the final 

design. In the alternative, Carothers argues that it provided the requisite analysis.

The protester is in essence arguing that the agency has unreasonably interpreted 

the solicitation as requiring offerors not committing to furnish 30 percent or more of 

the facility’s hot water with solar heaters to demonstrate the non-cost-effectiveness 

of compliance in their proposals.

Where a dispute exists as to the meaning of a particular solicitation provision, our 

Office will resolve the matter by reading the solicitation as a whole and in a manner 

that gives effect to all of its provisions; to be reasonable, an interpretation must be 

consistent with such a reading. ArmorWorks Enters. LLC, B-405450, Oct. 28, 2011, 

2011 CPD ¶ 242 at 3.

In our view, the only reasonable reading of the solicitation requirement that “[n]ot 

less than 30 percent of the hot water demand for this facility shall be met through 

the installation and use of solar hot water heaters (IESA 2007) unless demonstrated 

to not be life cycle cost-effective,” RFTOP, § 01 10 00 at 108, is that offerors were 

required either to propose to meet the requirement or to demonstrate in their 

proposals that they should be exempted from the requirement because compliance 

was not cost effective. Moreover, even assuming for the sake of argument that it 

was unclear from the solicitation whether the analysis demonstrating that the solar 

heaters were not cost effective had to be submitted as part of an offeror’s proposal 

or could be furnished post award, the agency clearly placed the protester on notice 

during discussions that it expected that information to be included in its proposal. 

See Intermagnetics General Corp., B-286596, Jan. 19, 2001, 2001 CPD ¶ 10 at 6. 

Accordingly, to the extent the protester believed that the agency’s request for the 

information at this stage in the process was inconsistent with the terms of the 

solicitation, it should have protested the matter then. See Engineered Elec. Co. 

d/b/a DRS Fermont, B-295126.5, B-295126.6, Dec. 7, 2007, 2008 CPD ¶ 4 at 8-9; 

Bid Protest Regulations, 4 C.F.R. § 21.2(a)(2) (2012) (protests must be filed not 

later than 10 days after the basis of protest is known).

With regard to the protester’s alternative argument that it did in fact provide an 

analysis demonstrating the non-cost-effectiveness of solar hot water heaters in its 

proposal, the protester’s analysis addresses only the hot water demand for the 
Page 7 B-405241.4 

facility’s kitchen. Setting aside the issue of whether the “payback” analysis provided 

by the protester was an adequate substitute for the required life cycle cost analysis 

in the given circumstances, see Protester’s Comments at 14, all that the protester’s 

analysis purports to show is that it would not be cost effective to furnish the hot 

water for the facility’s kitchen with solar heaters. Given that, according to the 

protester, hot water demand for the kitchen comprises only 60 percent of the overall 

facility demand, establishing that the kitchen’s hot water cannot be provided cost 

effectively with solar heaters does not establish that 30 percent of the overall facility 

demand cannot be furnished cost effectively. Accordingly, the evaluators had a 

reasonable basis to find the protester’s cost effectiveness analysis inadequate.

Carothers further argues that the agency treated the two offerors unequally by 

giving Sauer, but not the protester, the opportunity to revise its proposed energy 

reduction during discussions. The protester also argues that the agency improperly 

prompted Sauer during discussions to increase its energy savings “in order to 

distinguish its proposal from Carother’s proposal.” Protester’s Comments, May 1, 

2012, at 9.

The protester’s first argument lacks merit. The agency treated the two offerors 

identically, asking both to confirm information that they had earlier provided in 

response to requests for clarification regarding their energy reductions in 

relationship to EPACT. The two offerors responded differently--that is, in response 

to the discussion item, Sauer increased its percentage of proposed reduction from 

45 percent to 55 percent, whereas the protester confirmed its previously furnished 

rate of 44.6 percent. The fact that the two offerors responded differently does not 

demonstrate that the agency treated them unequally.

The protester’s second argument also lacks merit. According to the protester, the 

agency “telegraphed” to Sauer that it should increase its energy reduction by asking 

Sauer to confirm its response to an earlier clarification regarding energy reduction. 

Id. A significant flaw in Carother’s argument is that, as noted above, the agency 

also asked the protester to confirm its response to an earlier clarification regarding 

energy reduction. In other words, to the extent that the agency’s request for 

confirmation of previously provided information “telegraphed” to Sauer that it 

needed to increase its energy savings, the agency “telegraphed” the same message 

to Carothers.

Carothers also argues that it was unequal for the contracting officer to require it to 

furnish a life cycle cost analysis in support of its decision not to propose solar hot 

water heaters, but not to require an equivalent analysis from Sauer in support of its 

proposed water heating system. Again, we find the protester’s argument to be 

without merit. The solicitation required offerors either to commit to furnishing at 

least 30 percent of the facility’s hot water with solar heaters or to demonstrate that 

doing so would not be life cycle cost effective. Sauer committed to furnishing more 
Page 8 B-405241.4 

than 30 percent of the facility’s hot water with solar heaters; thus, it was not required 

to provide a life cycle cost analysis.

In commenting on the agency report, Carothers raised the additional argument that 

the agency had unreasonably failed to require Sauer to substantiate the increased 

energy reduction rate that it proposed in response to the final round of discussions. 

In this connection, Carothers maintains that Sauer did not provide any support for 

its revised energy saving rates. We disagree. Sauer indicated in its discussion 

question response that it would increase its energy reduction by increasing the 

capacities of its solar photovoltaic and solar hot water systems. With regard to the 

protester’s assertion that “it is highly unlikely that Sauer could achieve an EPACT 

energy savings rate of 55% through the use of an expanded PV system, given that 

the project has already been designed and does not account for an expanded PV 

system,” Protester’s Comments, at 9 n.5, the record shows that Sauer did in fact 

account for expansion of the PV System in its proposal. For example, Sauer’s 

proposal stated that “[t]he [PV] system will be set up with spare conduits and 

components in order to make it Zero-Net-Energy Ready and capability for future 

expansion to provide 100% of the electrical building load or Zero-Net electrical 

load.” Sauer Proposal, Vol. II, at 1. Moreover, with regard to the protester’s 

argument that the school’s roof does not have enough useable space to support the 

number of panels that would be required to achieve an energy reduction of the 

given magnitude, Sauer addressed this issue in its proposal, noting that additional 

panels could be mounted on canopy-style structures over the parking areas. Id. at 

2.

Finally, Carothers argues that the contracting officer lacked a reasonable basis for 

determining that the technical advantages of Sauer’s proposal outweighed the price 

advantage of its own.

This argument also lacks merit. Where, as here, a solicitation provides for a 

price/technical tradeoff, the agency retains discretion to make award to a firm with a 

higher technical rating, despite a higher price, so long as the tradeoff decision is 

properly justified and otherwise consistent with the stated evaluation and source 

selection scheme. TtEC-Tesoro, JV, B-405313, B-405313.3, Oct. 7, 2011, 2012 

CPD ¶ 2 at 10. The contracting officer identified a number of advantages to 

Sauer’s proposal, including that Sauer had proposed an energy reduction of 55 

percent (versus the protester’s 44.6 percent); Sauer had proposed to furnish 40 

percent of the facility’s hot water with solar heaters, whereas Carothers had neither 

proposed to furnish the required 30 percent of hot water demand with solar heaters 

nor demonstrated that doing so would not be cost effective; Sauer had proposed a 

Zero-Net-Energy Ready design, whereas the protester had not; and Sauer had 

done a better job of explaining its overall approach to energy conservation. 

The protester maintains that the contracting officer’s tradeoff determination is 

irrational because the value of the advantages associated with Sauer’s proposal is 
Page 9 B-405241.4 

less than the $2 million difference between the two offeror’s prices. In so arguing, 

however, the protester is in essence asking us to substitute our judgment as to the 

value of the advantages associated with Sauer’s proposal for the contracting 

officer’s judgment, which we will not do. It is not our function to second guess the 

agency’s judgment as to the value of the advantages associated with a higher-rated 

proposal--that is, in considering the rationality of an agency’s tradeoff determination, 

we look at whether the reasons given for preferring one proposal over another are 

consistent with the stated evaluation scheme, and not whether we agree with the 

source selection authority as to the relative value of the advantages. See MCR 

Federal, LLC, B-401954.2, Aug. 17, 2010, 2010 CPD ¶ 196 at 11. In our view, the 

agency has adequately justified its selection of Sauer’s higher-rated, higher-priced 

proposal here. 

The protest is denied.

Lynn H. Gibson

General Counsel