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: Ocean Ships, Inc. 

File: B-401526.4 

Date: April 21, 2010 

Ralph C. Thomas III, Esq., Barton Baker Thomas & Tolle, LLP, for the protester. 

J. Alex Ward, Esq., Daniel E. Chudd, Esq., and Caroline A. Keller, Esq., Jenner & 

Block LLP, for General Dynamics American Overseas Marine, an intervenor. 

Kimberly G. Foxx, Esq., Sebastian B. Vaneria, Esq., and Lea E. Delossantos, Esq., 

Department of the Navy, Military Sealift Command, 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. Protest that agency’s inadvertent disclosure of protester’s price information and 

discussion questions resulted in unfair competition is denied where record shows 

information was limited in scope and does not demonstrate competitive harm. 

2. Protest that protester’s proposal should have been assigned maximum evaluation 

rating under socio-economic factor based on protester’s status as small business is 

denied; factor encompassed more than small business status and agency reasonably 

evaluated protester’s proposal based upon protester’s failure to specifically identify 

any other small businesses or minority institutions that would perform the contract. 

DECISION 

Ocean Ships, Inc. (OSI), of Houston, Texas, protests the award of a contract to 

General Dynamics American Overseas Marine (AMSEA), of Quincy, Massachusetts, 

under request for proposals (RFP) No. N00033-08-R-5302, issued by the Department 

of the Navy, Military Sealift Command, for the operation and maintenance of large, 

medium-speed roll-on/roll-off (LMSR) ships in the agency’s surge project. OSI 

challenges the evaluation of its proposal. 

We deny the protest. 

The surge project, part of the agency’s Sealift Program, involves the quick transition 

of ships from reduced to full operating status to move U.S. forces and military 

equipment to defend and promote vital U.S. interests anywhere in the world. Lot 1 of 
the RFP--the subject of OSI’s protest--concerns seven BOB HOPE class LMSRs, one 

of which was to be used for the Marine Corps as a prepositioning ship. Proposals 

were to include personnel, operational and technical support (ashore and afloat), 

equipment tools, and supplies, necessary to operate and maintain the vessels. The 

RFP contemplated award--on a “best value” basis--of a fixed-price contract with 

reimbursable elements for a base year, with 4 option years. Proposals were to be 

evaluated on the basis of four factors, listed in descending order of importance--

technical (with subfactors for ship operations and manning, maintenance and repair, 

contract administration, management of reimbursables and purchasing system, and 

accounting system), past performance, socioeconomic program utilization, and 

price. Non-price factors, combined, were more important than price.1 The RFP 

warned that award would not be made to an offeror whose proposal received a 

marginal or unsatisfactory rating in any factor or subfactor. 

Seven offerors submitted proposals and, after the initial evaluation, both OSI’s and 

AMSEA’s were included in the competitive range. Prior to conducting discussions, 

the contracting officer sent an e-mail to each competitive range offeror with a list of 

discussion items. AMSEA’s e-mail included a file with business, insurance, price, 

past performance, and socioeconomic discussion issues for AMSEA and all other 

offerors covering all three lots. Of primary relevance here, the file included total 

price figures for OSI’s proposal on Lots 2 and 3 and various discussion items 

common to all offerors concerning Lot 1. Within minutes of receiving the e-mail, 

AMSEA’s vice-president, the sole recipient, notified the contracting officer and 

explained that “[i]mmediately upon discovering the content of the attachment and 

the scope of the error,” he had closed the attachment. Letter from AMSEA. 

According to the vice-president, as directed by the contracting officer--and without 

further accessing the e-mail--the vice-president deleted the e-mail and its 

attachments, then emptied the trash folder to ensure deletion of the information. Id. 

The contracting officer notified all offerors of the e-mail release, provided copies of 

the released information pertinent to each, and evaluated the impact of the 

disclosure. Based on her initial review, the contracting officer concluded that 

release of the information would not alter the course of discussions, and she 

proceeded to conduct discussions with AMSEA and the other offerors in the 

competitive range. Contracting Officer’s Memorandum on Inadvertent Disclosure, 

at 3. After OSI objected and asserted that the recipient of its Lots 2 and 3 pricing 

could “back into” OSI’s Lot 1 price, the contracting officer continued her review, 

specifically considering OSI’s objections. Based on her additional review, the 

contracting officer again concluded that the released information would not result in 

 

1

 Adjectival ratings used in the evaluation for the technical factor were exceptional, 

very good, satisfactory, marginal, and unsatisfactory; for the past performance 

factor, very good, satisfactory, unsatisfactory, and neutral; and for the 

socioeconomic utilization factor, exceptional, satisfactory, and unsatisfactory. 

Page 2 B-401526.4 
an unfair competitive advantage to AMSEA and proceeded to obtain final proposal 

revisions (FPR). Contracting Officer’s Analysis of Procurement Impact of 

Disclosure, at 2. She specifically required AMSEA to submit a narrative with its FPR 

explaining any price changes from its initial proposal. Id. Based on her review, the 

contracting officer concluded that there was no indication in AMSEA’s FPR that it 

had used the information in the e-mail to its competitive advantage. FPR Analysis of 

Procurement Impact of Disclosure, at 7. While AMSEA lowered various prices, its 

overall FPR price remained significantly lower than OSI’s initial and FPR prices. 

In the consensus evaluation, OSI’s proposal was rated marginal under the technical 

factor (marginal rating under the contract administration subfactor, very good under 

the management of reimbursables subfactor, and exceptional under the remaining 

subfactors), very good under the past performance factor, and satisfactory under the 

socioeconomic factor. AMSEA’s proposal was rated overall exceptional under the 

technical factor (very good for management of reimbursables and exceptional for 

the remaining subfactors), very good under the past performance factor, and 

satisfactory under the socioeconomic factor. AMSEA’s price of $238 million was 

approximately 8.5% lower than OSI’s. Because OSI’s proposal was rated marginal 

under the technical factor, it was not considered for award. Based on the 

evaluations, the source selection authority determined that AMSEA’s proposal was 

the best value, and made award to AMSEA for Lot 1. 

DISCUSSION 

OSI challenges both the agency’s decision to allow AMSEA to remain in the 

competition after the information disclosure and its evaluation of OSI’s proposal 

under the technical and socioeconomic factors. As discussed below, we find OSI’s 

arguments do not warrant questioning the award. 

Disclosure of OSI’s Information 

OSI asserts that the agency’s release of its pricing and all offerors’ discussion 

information to AMSEA was improper and tainted--or gave the appearance of 

tainting--the competition. In OSI’s view, AMSEA’s changed FPR prices evidenced 

possible use of this information and the agency relied on insufficient evidence in 

concluding that AMSEA had not used this information to its competitive advantage. 

OSI concludes that the agency’s decision to proceed with the competition was 

unreasonable and asserts that the agency should terminate AMSEA’s contract, cancel 

the RFP, and re-compete its requirements. 

The disclosure of source selection information, including an offeror’s price, during 

the course of a procurement is improper and the agency may take remedial steps, 

including canceling the procurement, if it reasonably determines that the disclosure 

harmed the integrity of the procurement process. Information Ventures, Inc., 

B-241441.4, B-241441.6, Dec. 27, 1991, 91-2 CPD ¶ 583 at 4-5. Where an agency 

Page 3 B-401526.4 
decides that no remedial steps are necessary, we will sustain a protest based on the 

improper disclosure only where the protester demonstrates that it was in some way 

competitively prejudiced by the disclosure. Kemron Envtl. Servs., Inc., B-299880, 

Sept. 7, 2007, 2007 CPD ¶ 176 at 2. 

While OSI makes numerous assertions in support of its claims, the record reflects 

that the protester was not competitively prejudiced by the release of information.2

For example, OSI notes that AMSEA lowered its prices in six categories that were 

the subject of discussion questions asked of all offerors--insurance, support of 

government personnel on the Marine Corps ship, and four transition rate categories. 

Each question was asked in terms of the offeror’s failure to meet a requirement or 

confirmation of its understanding of the pricing categories. OSI asserts that these 

questions would reasonably lead AMSEA to believe that the offerors’ initial prices 

indicated a lack of understanding, and thus lead it to reduce its own prices. OSI 

Comments at 8. However, as found by the contracting officer, there is nothing in the 

record to indicate that AMSEA used any of the released information as the basis for 

changing its pricing, and AMSEA provided a reasonable, detailed explanation for 

each change. In this regard, based on its decision to absorb more risk, AMSEA 

[deleted], allowing it to reduce various [deleted] rates. FPR Analysis of Procurement 

Impact of Disclosure, at 3. AMSEA explained that its [deleted] on the Marine Corps 

ship was based on RFP amendment 0014, which designated the subsistence for these 

personnel as a reimbursable expense instead of being included in its fixed-price per 

diem. Id. at 4. AMSEA explained that its reduction in [deleted] rates was based on 

its reliance on historical data from previous experience. Id. at 4-6. In accepting 

AMSEA’s explanations for its FPR changes, the contracting officer considered the 

fact that--with limited exceptions--there was no disclosure of offerors’ specific prices 

 

2

 In a related argument, OSI asserts that the agency had reason to doubt AMSEA’s 

position that it had not reviewed and destroyed the improperly released information. 

In this regard, OSI notes that the AMSEA vice-president’s certification letter was not 

notarized or made under oath; there was no evidence that AMSEA had taken 

additional steps to ensure that the information was professionally removed from the 

firm’s hard drive; and in a prior procurement, AMSEA had allegedly misrepresented 

the availability of some key personnel. OSI Comments at 3-5. The agency’s actions 

here were unobjectionable. The record shows--and OSI provides no evidence to the 

contrary--that, after quickly reporting his receipt of the information, AMSEA’s vicepresident followed the agency’s directions to delete the e-mail from his inbox and 

trash files. His later certification to these actions did not have to be made under oath 

to make the agency’s acceptance of it reasonable. As to AMSEA’s alleged 

misrepresentation under a prior procurement, what may have happened there does 

not mandate the agency’s actions here. Sabreliner Corp., B-275163 et al., Dec. 31, 

1996, 96-2 CPD ¶ 244 at 2, n.2 (each federal procurement stands on its own). 

Page 4 B-401526.4 
in any of the challenged areas, and AMSEA’s price position (fourth lowest price) did 

not change from its initial proposal to its FPR.3

 Id. at 3-6. 

Apart from its assertion that AMSEA would more likely have used its historical data 

to arrive at its initial--rather than final--pricing, OSI provides no basis for questioning 

AMSEA’s explanations. Meanwhile, we think it is significant that AMSEA’s FPR 

price advantage (post-disclosure) over OSI (8.5% lower) was only slightly less than 

its price advantage in the initial evaluation (8.8% lower); OSI does not explain, and it 

is not clear to us, why knowledge of a competitor’s significantly higher price would 

lead an offeror to lower its price further. See Health Net Fed. Servs., LLC, B-401652, 

Oct. 13, 2009, 2009 CPD ¶ 213 at 6; Kemron Envtl. Servs., Inc., supra, at 4. We 

conclude that the agency reasonably determined that AMSEA’s price changes were 

based on its business judgment, changes to the RFP, and its reliance on its own 

historical data, rather than on the disclosed information. Accordingly, we find that 

the agency reasonably concluded that disclosure of the information did not result in 

competitive prejudice to OSI. 

OSI asserts that cancellation of the RFP and elimination of AMSEA are required 

because of the “appearance that the integrity of the procurement process was 

compromised and unreliable.” OSI Comments at 10. However, as indicated, we will 

sustain a protest based on an inadvertent disclosure of information only where it is 

shown to have harmed the protester. It is undisputed that the disclosure of OSI’s 

information was inadvertent, and that the agency and AMSEA proceeded 

appropriately once the disclosure was discovered. Since, as discussed above, we 

find that OSI was not competitively prejudiced by the disclosure, there is no basis for 

us to sustain the protest and recommend the suggested corrective action. 

Evaluation of OSI’s Proposal--Socioeconomic Factor 

OSI asserts that the agency’s evaluation of its proposal as satisfactory, instead of 

exceptional, under the socioeconomic utilization program factor was unreasonable. 

Noting that the factor’s underlying objective is to ensure participation of small 

businesses, OSI asserts that, since it is a small business and will perform a 

 

3

 The only specific prices released concerned OSI’s bottom-line prices for Lots 2 and 

3 and certain line item prices of $0 proposed by some other offerors. With regard to 

the Lot 2 and 3 pricing, the agency’s analysis found--and OSI does not rebut--that 

there was no reasonable possibility that these figures allowed AMSEA to “back into” 

OSI’s Lot 1 pricing. With regard to the other offerors’ prices, with one exception, 

AMSEA’s pricing did not change in any of the areas. In the single exception, AMSEA 

reduced its price by some 27% and remained significantly above the $0 proposed by 

the other offeror. This single reduction provides no basis to conclude that AMSEA 

used the pricing information to its competitive advantage. 

Page 5 B-401526.4 
substantial amount of the work, its proposal should have received the maximum 

rating. OSI Comments at 11. 

In considering a protest of an agency’s evaluation of proposals, our review is 

confined to determining whether it was reasonable and consistent with the terms of 

the solicitation and applicable statutes and regulations. See United Def. LP, 

B-286925.3 et al., Apr. 9, 2001, 2001 CPD ¶ 75 at 10-11. 

The evaluation here was unobjectionable. Contrary to OSI’s assertions, nothing in 

the RFP provided that small business proposals automatically would receive the 

maximum score under the socioeconomic factor. In this regard, the factor not only 

addressed small business participation, but also included evaluation of the extent of 

participation of historically black colleges or universities and minority institutions in 

performance of the contract, including joint ventures, teaming arrangements, 

subcontractors, or self-performance. RFP at 106. Offerors were instructed to 

describe, in narrative form, the extent of participation by these entities and, if 

possible, to identify specific small businesses and historically black colleges or 

universities and minority institutions. RFP at 102. OSI’s proposal identified OSI as a 

small business and stated that it would perform a majority of the work. 

Socioeconomic Proposal at 1. It also identified the percentages of past subcontracts 

OSI had awarded to various small, women-owned, and disadvantaged businesses; its 

past activities in reaching out to small businesses; and its practice of giving special 

consideration to veterans and other socio-economic groups responding to its 

advertised job vacancies. Id. at 2. Based on this information, the evaluators found 

that OSI had made a reasonable effort to involve small and minority firms in 

performing the requirement, but further determined that, because it had not 

identified any specific small businesses or minority institutions that would be used 

during contract performance, a rating higher than satisfactory was not warranted. 

Socioeconomic Evaluation Report at 3. Since the evaluation factor encompassed 

more than an offeror’s status or performance as a small business, and OSI did not 

specifically propose to subcontract with any particular small or minority institutions, 

we find no basis for objecting to this rating.4 

 

(continued...) 

4

 OSI also maintains that it was entitled to the maximum rating because--under 

procurements resulting in federal supply schedule contracts, government-wide 

acquisition contracts, or multi-agency contracts--small businesses automatically 

receive the maximum possible score or credit for small business subcontracting. 

13 C.F.R. § 125.3(g). This regulation provides no basis for sustaining OSI’s protest 

since, as OSI itself recognizes (Protest at 12), the procurement here did not involve 

any of these types of contracts. Similarly unavailing is OSI’s reliance on the agency 

acquisition plan’s provision for small businesses performing a majority of the work 

to receive the highest rating. OSI Comments at 11. Alleged deviations from an 

agency’s acquisition plan do not themselves provide a basis for questioning the 

validity of the evaluation; such plans are internal agency instructions and as such do 

Page 6 B-401526.4 
Page 7 B-401526.4 

Contract Administration Subfactor 

OSI asserts that the agency unreasonably evaluated its proposal as marginal under 

both the contract administration subfactor and technical factor based on its failure 

to include one résumé. OSI maintains that the marginal rating was “unfair” because 

the missing résumé was for a “sub-key official” and OSI’s proposal was strong under 

every other subfactor. Protest at 12. The agency defends the marginal rating, 

explaining that the missing résumé was for the property administrator, identified by 

the RFP as one of several key shoreside personnel; the absence of the résumé 

prevented the agency from determining the qualifications and experience of the 

proposed employee and resulted in an unacceptable risk of unsuccessful 

performance. Technical Consensus at 13. 

We need not resolve this issue because the record shows that OSI was not 

competitively prejudiced by any alleged evaluation error. In this regard, even if OSI 

prevailed on this protest ground and its rating under this subfactor and the technical 

factor were increased to exceptional, its ratings under every subfactor and factor 

would be identical to AMSEA’s; thus, price would necessarily become the deciding 

factor. Since OSI’s price was more than $22 million higher than AMSEA’s, there is no 

reasonable possibility that OSI’s proposal would be selected for award. See

American Cybernetic Corp., B-310551.2, Feb. 1, 2008, 2008 CPD ¶ 40 at 3. Prejudice 

is an essential element of every viable protest; where, as here, the agency’s allegedly 

improper actions did not affect the protester’s chances of receiving the award, the 

allegation provides no basis for sustaining the protest. Joint Mgmt. & Tech. Servs., 

B-294229, B-294229.2, Sept. 22, 2004, 2004 CPD ¶ 208 at 7. 

The protest is denied. 

Lynn H. Gibson 

Acting General Counsel 

 

(...continued) 

not give outside parties any rights. Hubbell Elec. Heater Co., B-289098, Dec. 27, 

2001, 2002 CPD ¶ 15 at 5 n.4.