BNUMBER: B-279759.2; B-279759.3
DATE: February 16, 1999
TITLE: Systems Integration & Research, Inc.; Presearch Inc., B-
279759.2; B-279759.3, February 16, 1999
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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.
Matter of:Systems Integration & Research, Inc.; Presearch Inc.
File:B-279759.2; B-279759.3
Date:February 16, 1999
James J. McCullough, Esq., and Catherine E. Pollack, Esq., Fried,
Frank, Harris,
Shriver & Jacobson for Systems Integration & Research, Inc.; and Jacob
B. Pompan, Esq., Pompan, Murray, Ruffner & Werfel, for Presearch Inc.,
the protesters.
Kenneth D. Brody, Esq., McMahon, David & Brody, for DTI Associates,
Inc., an intervenor.
Thomas W. Essig, Timothy Hickey, Esq., Andrew C. Saunders, Esq., and
John M. Davis, Esq., Naval Sea Systems Command, for the agency.
Aldo A. Benejam, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Agency's acceptance of awardee's proposed uncompensated overtime
and direct labor rates is unobjectionable where solicitation does not
prohibit uncompensated overtime; agency reasonably relied on reviews
and recommendations by Defense Contract Audit Agency of the awardee's
direct labor rates, escalation rates, overhead, and general and
administrative rates; and agency independently considered projected
cost of awardee's performance.
2. Allegation that agency improperly evaluated protester's proposal
is denied where the record shows that the agency evaluated the
proposal in accordance with the evaluation factors announced in the
solicitation and record reasonably supports protester's overall
technical rating.
DECISION
Systems Integration & Research, Inc. (SIR) and Presearch Inc. protest
the award of a contract to DTI Associates, Inc. under request for
proposals (RFP) No. N00024-97-R-5487, issued by the Department of the
Navy, Naval Sea Systems Command, for management support services.[1]
SIR argues that the Navy failed to conduct a proper cost realism
analysis to account for DTI's proposed uncompensated overtime and
labor rates in both the technical and cost evaluations, which resulted
in a flawed cost/technical tradeoff decision. Presearch contends that
the Navy improperly evaluated its proposal.
We deny the protests.
BACKGROUND
The RFP, issued on August 20, 1997, as a total small business
set-aside, contemplated the award of a cost-plus-fixed-fee contract
for a base period with up to four 1-year option periods. RFP
Amendment No. 0004, sec. B.[2] Offerors were instructed to submit
proposals in four separate volumes: offer (volume I); written
capability information (volume II); supporting cost data (volume III);
and oral presentation (volume IV). Id. sec. L-3. Section M of the RFP
stated that the agency would first determine the acceptability of each
offer on a pass/fail basis. Id. sec. M, at 130. The agency would then
evaluate the "relative capability" of each offeror in the following
areas, which were of equal importance: resumes, past performance
information, and the oral presentation. Id. at 134. With respect to
cost, the RFP stated that the evaluation would be based on an analysis
of the realism and completeness of the cost data, the traceability of
cost to the offeror's capability data, and the proposed hours and
labor mix. The RFP stated that the government would estimate the
overall cost to the government including fee. Id. at 131-32. The
"relative capability" area was to be considered more important than
projected cost. Award was to be made on the basis of the proposal
deemed to represent the best value to the government. Id. at 130.
Initial Evaluation and Source Selection
Six firms submitted initial proposals by the time set on October 17,
1997, and the contracting officer (CO) determined that all six
proposals were acceptable. A technical evaluation review panel (TERP)
evaluated the resumes and past performance information,[3] and a cost
analysis panel (CAP) evaluated the cost data with the assistance of
the Defense Contract Audit Agency (DCAA). Oral presentations were
made from October 23 to October 27. In accordance with section L of
the RFP, all offerors were provided with the same task on the day they
were scheduled for their oral presentation, and were given 1 hour in
which to prepare their response to the task. The task consisted of a
two-part acquisition support question requiring the preparation of a
milestone chart and a "budget reclama" (sample tasks 1(a) and 1(b)), a
management philosophy question, and a facilities capability question.
Each offeror was allotted 1 hour for its oral presentation, which was
videotaped and was attended by the TERP members.
After individually evaluating the offerors' resumes, past performance
information, and oral presentations, the TERP convened to reach a
consensus in assigning strengths, weaknesses, and risks to each
offeror's "relative capability," as well as an overall adjectival
rating of either outstanding, good, satisfactory, or poor to the
proposals. The TERP chairperson then prepared a consolidated report
reflecting the individual members' narrative descriptions of each
proposal's strengths, weaknesses, and risks.
The CAP reviewed all of the cost data submitted by each offeror and
requested that DCAA review and verify each offeror's proposed direct
and indirect labor rates, as well as each offeror's proposed
uncompensated overtime (UOT) and compensation plan. The CAP then
reviewed DCAA's report and recommendations, made its own independent
determination of the reasonableness of each offeror's proposed cost,
and prepared a report. In early 1998, the TERP and CAP met with the
contract award review panel (CARP) to discuss their preliminary
findings; and in February, the TERP and the CAP presented their
respective reports to the CARP. Although the CARP ultimately adopted
both reports, it also identified a few additional minor weaknesses in
the "relative capability" area in SIR's and DTI's proposals, and
adjusted the overall adjectival ratings accordingly, with the
following results:
Offeror Rel. Capability Projected Cost
Presearch Satisfactory $39,294,207
Offeror A Satisfactory 39,980,753
DTI Satisfactory 43,029,517
Offeror B Satisfactory 46,780,098
Offeror C Satisfactory 47,634,764
SIR Outstanding 47,482,590
Agency Report (AR) at 10.
Based on its review of the projected cost and "relative capability"
ratings, the CARP ranked the offerors in order of "best value" as
follows: SIR, DTI, Presearch, and offerors A, B, and C. CARP Report,
Mar. 16, 1998, at 10.
The CARP also made a cost/technical tradeoff assessment between the
two highest-ranked proposals--SIR's and DTI's. In its recommendation,
the CARP focused on four significant weaknesses in DTI's proposal.
For instance, the CARP noted that DTI's proposed Deputy Program
Manager had no similar experience indicating her capability to help
manage a contract of the magnitude contemplated by the RFP. The CARP
viewed this as a significant risk in DTI's proposal because
ineffective management of the subcontractors or the volume of work
could severely harm the programs supported. The CARP also noted that
DTI proposed two unpriced subcontractors, but did not provide any
resumes or cost information for those firms. In addition, the CARP
noted that the role of DTI's proposed principal officers was unclear,
and that DTI had provided no justification to support its use of over
[DELETED] percent of UOT,[4] which the CARP considered to present a
risk of cost growth. Id. at 11-12. Based on its review, the CARP
concluded that SIR was technically superior in the amount and quality
of experience of its proposed personnel, and recommended award to SIR
as offering the best value to the government over DTI and the other
offerors. Id. at 12.
The source selection authority (SSA) concurred with the CARP's
recommendation, and on March 23, the Navy awarded the contract to SIR.
DTI subsequently filed a protest in our Office following a debriefing
by the agency. In response to DTI's protest, the Navy terminated
SIR's contract; reopened the competition; conducted discussions with
all offerors in the competitive range, and requested and evaluated
best and final offers (BAFO).
Subsequent Evaluation and Source Selection
As part of the process of reopening the competition, by letters dated
May 19, the Navy informed all offerors of the corrective actions the
Navy was taking in response to DTI's protest. That letter stated that
the weaknesses and risks identified at the respective offeror's
debriefing would constitute the basis for discussions and, for each
offeror, the letters contained an attachment listing those weaknesses,
risks, and other discussion items. The letter sent to DTI
specifically described the significant weaknesses and risks the TERP
had identified in DTI's proposal with respect to the proposed Deputy
Program Manager, unpriced subcontractors, UOT, and the unclear role of
the principal officers. The Navy's letters also forwarded amendment
No. 0003 to the RFP, which reissued the solicitation in its entirety,
and stated that while oral presentations would not be repeated,
offerors could submit to the Navy their comments on the weaknesses
identified in that area.
Offerors responded to the May 19 letters by submitting information on
some or all of the weaknesses and risks identified. According to the
agency, some of the offerors not only commented on the oral
presentation weaknesses but also provided new answers to sample tasks
1(a) and 1(b). AR at 14. The TERP reviewed all of the information
submitted by the offerors, including the comments on the sample task
weaknesses and risks, and prepared a report on its findings. TERP
Report, June 24, 1998.
On June 19, the agency issued amendment No. 0004 to the RFP,
requesting BAFOs by July 6. Among other things, this amendment
changed sections L-3 and M of the RFP to permit offerors an
opportunity to provide new, written information on the management
philosophy and facilities capability questions asked during the oral
presentations. RFP amendment No. 0004, at 104-105, 131. The
amendment required offerors to submit this information as a new
written volume with their BAFOs, and stated that the agency would
evaluate this new information as part of the oral presentation
subfactor. Id. at 104.
Five of the six firms that had submitted initial proposals, including
SIR, DTI, and Presearch, responded to amendment No. 0004.[5] The CO
determined that all five proposals were acceptable and updated the
past performance information for each firm. The TERP reevaluated
proposals based on the BAFO responses to amendment No. 0004, and, as
it had done with initial proposals, the CAP conducted a new cost
realism analysis of each offeror's cost proposal with DCAA's
assistance. The TERP and the CAP then convened to discuss their
findings and prepared reports, which were submitted to the CARP.
The CARP concurred with the findings of the TERP and the CAP, with the
following results:
Offeror Rel. Capability Projected Cost
Presearch Satisfactory $33,061,468
DTI Good 34,016,173
SIR Outstanding 40,100,063
Offeror A Satisfactory 41,343,585
Offeror B Satisfactory 41,671,288
AR at 18.
The CARP then ranked the offerors in the following order: DTI, SIR,
Presearch, with offerors A and B in fourth and fifth place,
respectively. The CARP then compared the subfactor ratings and
respective strengths, weaknesses and risks for all offerors; the
subfactor ratings showing the technical differences between the three
highest-ranked proposals are shown below:
Offeror Past Perf. Resumes Oral Present.
SIR Good Outstanding Outstanding
DTI Good Good Satisfactory
PresearchGood Satisfactory Poor
CARP Report, Sept. 25, 1998, at 5; AR at 18.
Based on its review, the CARP found SIR and DTI to be essentially
equal in past performance, and considered those firms' proposals to be
slightly better than Presearch's. SIR's proposal was deemed superior
in both the resumes and oral presentation areas, having no weaknesses
under those subfactors.
On the other hand, DTI received no weaknesses under the resumes
subfactor and the CARP found that the firm proposed personnel almost
as well qualified as SIR's. While DTI's response to the sample tasks
had some weaknesses and risks, the CARP found that the firm had
demonstrated a thorough knowledge of defense acquisition procedures
and proposed an excellent array of available facilities. Based on its
review, the CARP concluded that SIR's personnel and oral presentation
had an advantage over DTI's, but that it was not sufficient to justify
paying an 18-percent cost premium for SIR's proposal. CARP Report,
Sept. 25, 1998, at 16. Accordingly, the CARP recommended to the SSA
that award be made to DTI. Id. The SSA agreed with the CARP's
recommendation and the Navy awarded the contract to DTI. These
protests to our Office followed debriefings by the agency.
SIR's Protest
SIR contends that the Navy failed to perform an adequate cost realism
analysis of DTI's proposal. Specifically, SIR argues that in its
evaluation, the Navy failed to properly account for DTI's proposed
UOT.[6] SIR also maintains that the Navy failed to conduct a
meaningful cost realism analysis of DTI's proposed compensation levels
which, according to SIR, are unrealistically low for the Washington,
D.C. metropolitan labor market. In this connection, SIR argues that
the Navy failed to reasonably evaluate whether DTI could attract and
retain the quality of personnel required to perform the contract at
DTI's average hourly labor rate of [DELETED] compared to SIR's average
hourly labor rate of [DELETED].[7] According to SIR, rather than
evaluating the reasonableness of DTI's unrealistically low average
hourly labor rates, the Navy based its decision to select DTI for
award solely on the firm's low proposed cost.
Cost Realism Evaluation
When an agency evaluates proposals for the award of a cost
reimbursement contract, an offeror's proposed estimated costs of
contract performance and proposed fees are not considered controlling
since an offeror's estimated costs may not provide valid indications
of the final actual costs that the government is required, within
certain limits, to pay. See Federal Acquisition Regulation (FAR) sec.
15.605(c) (June 1997); ManTech Envtl. Tech., Inc., B-271002 et al.,
June 3, 1996, 96-1 CPD para. 272 at 8. An agency is not required to
conduct an in-depth cost analysis or to verify each and every item in
conducting a cost realism analysis. Rather, the evaluation of
competing cost proposals requires the exercise of informed judgment by
the contracting agency involved, since it is in the best position to
assess the realism of cost and technical approaches and must bear the
difficulties or additional expenses resulting from a defective cost
analysis. Because the contracting agency is in the best position to
make this cost realism determination, our review is limited to
determining whether the agency's cost realism analysis is reasonably
based and not arbitrary. The Warner/Osborn/G&T Joint Venture,
B-256641.2, Aug. 23, 1994, 94-2 CPD para. 76 at 5.
Section M of the RFP advised offerors that the agency would evaluate
proposed cost based on its analysis of the realism and completeness of
the cost data; the traceability of the cost to the offeror's
capability data; and the proposed allocation of staff hours and labor
mix. RFP amendment No. 0004, at 131-34. The RFP notified offerors
that the government would consider the realism of the proposed labor
rates and would evaluate the proposed compensation in accordance with
FAR sec. 52.222-46, "Evaluation of Compensation for Professional
Employees." Id. Finally, the RFP provided that the government would
estimate its overall cost based on pertinent cost information, and
that if the offeror's proposed costs were considered to be
unrealistic, they would be adjusted accordingly. Id. Section L of
the RFP recommended a standard 40-hour work week, and required
offerors to precisely define their work week if a different work week
was proposed. Id. at 112. The RFP did not prohibit the use of UOT.
The agency explains that it was concerned that UOT could lead to
unrealistically low proposed rates that could impair an offeror's
ability to attract and retain professional employees. AR at 20-21.
Therefore, the agency included the following provision in section L:
COMPANY POLICY ON UNCOMPENSATED EFFORT
Briefly summarize the compan[y's] policy on [UOT] and state what
if any impact it may have on this effort. If [UOT] is included
in any of the cost estimates used it should be clearly identified
with an explanation as to why it is needed and how it is
consistent with the RFP [ sec. ] L clause, 'Requirements Concerning
Work Week' and RFP [ sec. ] I-1 clause, DFARS 252.237-7019
Identification of Uncompensated Overtime. Contractor and
subcontractors shall provide five years of history of salary
rates and retention, by employee, for those employees who have
performed and are proposed to perform using [UOT]. Explain any
salary increases and/or breaks in employment for these employees.
Contractor and subcontractors shall provide a company-wide
retention rate for the last five years where [UOT] was employed.
RFP amendment No. 0004, at 115.
The record shows that the CAP conducted a reasonable cost realism
analysis of each offeror's cost proposal. The proposals were also
reviewed to ascertain and verify the proposed labor mix, the
percentage of prime versus subcontractor effort, other direct costs,
and total staff hours proposed against the RFP's requirements. CAP
Report, undated at 4. The CAP also reviewed the use of UOT where
proposed. Id. In addition, the CAP requested that cognizant DCAA
branch offices verify specific BAFO cost elements including direct
labor rates, indirect rates, and other costs. Letters from Navy to
DCAA (July 13, 1998). For each offeror that proposed UOT, the Navy
specifically requested that DCAA review, verify, and comment on the
offeror's policy, 5-year salary rates history and retention rate, and
company-wide retention rate, and provide a risk assessment of the
offeror's compensation plan and indicate whether the offeror has a
DCAA-approved cost accounting system which records all hours worked,
including uncompensated hours for all employees, regardless of
contract type. Id. at 1.
DTI's Uncompensated Overtime
In accordance with the RFP's instructions, DTI's BAFO included cost
information for DTI and its proposed subcontractors, including direct
labor rates, indirect costs, and escalation rates. DTI did not
propose any contingent hires--that is, all of the personnel it
proposed were already employees of DTI or its proposed subcontractors.
DTI and two of its proposed subcontractors [DELETED] proposed that
their employees would perform UOT in accordance with their respective
company's established work schedule and compensation policies.
DTI's proposal was based on a [DELETED] workweek for its FLSA-exempt
employees, which equates to a total of approximately [DELETED] hours
of UOT over the life of the contract, including options. DTI provided
a copy of its employee compensation plan, which included its formal
written policy that FLSA-exempt employees work [DELETED] hours per
week. DTI's proposal, volume III, at 67. In addition, as required by
section L of the RFP, DTI provided a table of its FLSA-exempt
employees' 5-year salary histories. The salary history DTI submitted
shows that of the 14 key personnel DTI proposed, 6 have been employed
by DTI since 1994. DTI also provided a chart showing its company-wide
retention rate for 1994-98. Id. at 66-67. That chart shows that DTI
has had a steady retention rate of approximately [DELETED] percent
over the past 5 years. Id.
DTI also provided employee salary history for the two proposed
subcontractors that proposed UOT--[DELETED]. [DELETED] proposed a
total of [DELETED] hours of UOT based on its established
[DELETED]-hour work week for its professional personnel. The salary
history submitted by [DELETED] shows that of the nine key personnel
the firm proposed, five have been employed with the company since
1994. [DELETED] proposed [DELETED] hours of UOT in accordance with
its established corporate compensation policy for FLSA-exempt
employees. [DELETED] salary history shows that all four of the key
personnel proposed for this effort have been employed by the company
since 1993.
The record shows that DCAA reviewed DTI's compensation policies and
procedures, labor distribution, and billing system and verified that
DTI's established policy is for FLSA-exempt employees to work a
[DELETED]-hour work week, and that DTI's system records all hours
worked, including UOT. DCAA Memorandum, July 16, 1998. DCAA took no
exception to DTI's use of UOT. Id. DCAA also reviewed [DELETED] UOT
policy and found that it was not significantly different from other
firms whose employees work UOT. DCAA Memorandum, Aug. 5, 1998.
Additionally, DCAA informed the Navy that it had reviewed [DELETED]
compensation plan many times in the past and that [DELETED] accounting
system and labor recordkeeping were adequate. DCAA Memorandum, July
27, 1998. DCAA also verified that the information provided regarding
[DELETED] 5-year history of its employees' salary rates, dates of
hire, and the amount of UOT worked was generally accurate. Id.
The record thus shows that DTI's proposal and DCAA's reviews
demonstrated that DTI and its subcontractors proposed the use of
current employees; proposed the use of UOT in accordance with their
established company policies; had accounting systems that adequately
track UOT; and had retained employees with their proposed compensation
structure. DCAA specifically reviewed DTI's and its subcontractors'
salary and retention histories and found no adverse impact associated
with the companies' use of UOT. Further, rather than relying solely
on DCAA's reports, the record shows that the CAP independently
analyzed DTI's proposed costs. The CAP concurred with DCAA's
evaluation, and, with the exception of adjustments to DTI's indirect
rate, made no adjustments to DTI's proposed costs. Based on our
review of the record, we conclude that SIR's argument that the agency
failed to perform an adequate cost realism analysis of DTI's proposal,
is without merit.
DTI's Direct Labor Rates
SIR argues that the agency failed to account for DTI's lower proposed
direct labor rates in its BAFO. In this connection, SIR asserts that
DTI reduced its direct labor rates by [DELETED] percent for employees
proposed in both the initial proposal and DTI's BAFO, and that DTI and
one of its subcontractors substituted lower-paid employees in DTI's
BAFO for higher-paid employees that had been proposed in the initial
proposal. SIR argues that the agency failed to consider risks
associated with DTI's lower direct labor rates.
We have reviewed the Navy's cost realism analysis of DTI's proposed
direct labor rates and conclude that it was reasonable. In response
to the Navy's request, DCAA verified that DTI and two of its proposed
subcontractors [DELETED] proposed direct labor rates that matched
those in DCAA's files. DCAA Branch Offices' Memoranda, July 15, 1998.
DCAA found that the direct labor rates proposed for [DELETED]
personnel were slightly higher than the rates in DCAA's files, but
DCAA took no exception to the proposed direct or indirect rates. Id.
The record shows that in calculating the government's projected cost
for DTI, the CAP used the higher proposed rates for [DELETED] because
the CAP considered those rates more realistic. CAP Report, undated,
at 21.
With respect to [DELETED], DCAA found that the proposed direct labor
rates for some of that firm's employees were slightly lower than the
rates contained in DCAA's files, and DCAA did not have any rate
information for some of [DELETED] proposed employees. Id. at 22.
However, because the information in DCAA's files was unaudited and
more than 10 months old, DCAA did not take exception to [DELETED]
proposed rates. Id. Although the CAP took no exception to [DELETED]
proposed rate, it noted a potential cost risk in the unaudited nature
of the proposed rates. Id. With respect to another proposed
subcontractor, [DELETED], DCAA was unable to verify that firm's labor
rates because [DELETED] is a relatively new business and DCAA had no
information in its files. Id. at 23. However, since the direct
rates for the proposed personnel were similar to rates for similarly
qualified individuals proposed by other offerors, the CAP made no
adjustments to [DELETED] proposed rates. Id. at 23.
DCAA also reviewed DTI's and its subcontractors' proposed escalation
rates and took no exception; the CAP thus made no adjustments to the
proposed escalation rates. In addition, the record shows that DCAA
reviewed DTI's proposed fringe benefits, overhead, and general and
administrative rates, and took exception to those rates because they
did not match DCAA's approved provisional billings indirect rates for
DTI in 1998. The CAP accepted DCAA's recommended indirect rates and
adjusted DTI's proposed costs from [DELETED] to a projected cost of
[DELETED]. Id. at 17-18.
With respect to SIR's allegation that DTI reduced its proposed direct
labor rates by [DELETED] percent for all of its employees in its BAFO,
the agency states that SIR's contention is not accurate. The agency
explains that DTI based its direct labor rates for its initial
proposal on projected rates, while its direct labor rates in its BAFO
were based on actual labor rates; the actual rates simply were lower
in many cases than the initial projected rates. The agency performed
a cost realism analysis of the labor rates DTI proposed in its BAFO
and, as explained above, determined that DTI's labor rates were
realistic.
Contrary to SIR's argument, we see no basis to conclude that the
agency failed to properly consider risks associated with DTI's direct
labor rates. The record shows that DTI's proposed labor rates were
based on the wages and salaries that DTI and its subcontractors are
currently paying their employees to perform under similar contracts.
There is no evidence in the record that DTI and its proposed
subcontractors would not be able to retain their employees at the
rates proposed. Cf. Combat Sys. Dev. Assocs. Joint Venture,
B-259920.2, June 13, 1995, 95-2 CPD para. 162 at 17 (agency unreasonably
accepted awardee's proposed UOT without considering the impact of the
proposed but unannounced pay and benefits cuts). The record shows
that the Navy obtained DCAA's verification that DTI's proposed rates
were the current rates being paid by DTI and its proposed
subcontractors in comparable positions at the time the firm submitted
its BAFO, and that those rates were realistic. In the absence of
evidence showing that the rates DTI proposed were unrealistically low,
the Navy could properly rely upon DCAA's advice in performing its cost
realism analysis. Delta Research Assocs., Inc., B-254006.2, Nov. 22,
1993, 94-1 CPD para. 47 at 6. In sum, the agency had a reasonable basis
for accepting DTI's proposed labor rates, having obtained DCAA's
verification and comments that the proposed rates reflected DTI's
actual rates and that DTI had historically maintained a stable
workforce with its compensation structure. See Id.
SIR also argues that the Navy's technical evaluation failed to give
adequate consideration to the impact on performance of DTI's
compensation rates and level of UOT. According to SIR, had the Navy
properly considered the performance risk associated with DTI's
proposed compensation and UOT levels on contract performance, DTI
would not have received an overall rating of "good" in the "relative
capability" area. The protester's arguments in this regard are
without merit.[8]
As already explained, the CAP, CARP and SSA reasonably found DTI's
compensation rates and proposed amount of UOT acceptable and
realistic. The record further shows that the CAP conducted a thorough
cost realism analysis of DTI's cost data. This included an analysis
of direct and indirect labor rate history, UOT history, and the firms'
compensation plans. The record shows that the TERP's analyses
included an evaluation of the resumes for key personnel. The CARP and
the SSA also reviewed the TERP's evaluation and conducted their own
independent assessment and reasonably concluded that DTI's proposal
offered the best value. The TERP evaluated the qualifications of
DTI's proposed key personnel under the resumes subfactor within the
"relative capability" area and reasonably found no performance risks.
The CAP also was aware that DTI had proposed the specified number of
staff hours and the preferred labor mix. The CARP and the SSA
independently reviewed DTI's personnel qualifications, compensation
rates, and the amount of proposed UOT and reasonably found no
performance risk. Based on our review of the record, we have no basis
to question the Navy's evaluation of DTI's proposal.
Presearch's Protest
Presearch argues that the agency's evaluation of Presearch's technical
proposal under the resumes subfactor was unreasonable.[9] In this
regard, Presearch contends that the Navy improperly downgraded
Presearch's proposal because it failed to indicate which personnel the
firm proposed on a part-time basis. Presearch argues that this was an
invalid criticism of its proposal since it proposed no part-time
personnel and none were required by the RFP.[10]
Our Office will not engage in an independent evaluation of proposals
nor make an independent determination of their relative merits.
Litton Sys., Inc., B-239123, Aug. 7, 1990, 90-2 CPD para. 114 at 9.
Rather, we review the agency's evaluation to ensure that it was
reasonable and consistent with applicable statutes and regulations as
well as with the terms of the solicitation. Sensis Corp., B-265790.2,
Jan. 17, 1996, 96-1 CPD para. 77 at 6. Based on our review of the record
here, including the TERP's narrative in support of the evaluation, we
conclude that the "satisfactory" rating assigned the protester's
proposal under the resumes subfactor within the "relative capability"
area is reasonably supported.
Section L-3.1 of the RFP instructed offerors to submit detailed
resumes for all key personnel proposed. In addition, the RFP
instructed that "[i]f a proposed individual is a contingent hire (i.e.
not already working for the offeror and available to work on the
solicited effort)," the resume was to state that the proposed employee
was a contingent hire and identify all contingencies. RFP, amendment
No. 0004, at 100. The RFP listed the following labor categories as
comprising key personnel: program manager, deputy program manager,
senior engineers, senior analysts, information manager, risk and
schedule expert, and special consultants. Id. at 98.
Section M of the RFP explained that in evaluating resumes, the
government would assess each offeror's relative understanding of the
requirements. The Navy was also to consider the relevance and quality
of the education, experience, knowledge, skills, and abilities of the
proposed key personnel. In addition, the RFP stated that the
government would consider the dedication of the proposed key personnel
to the effort and the risk associated with any contingent hires. RFP sec.
M, para. 1.2.1,
at 130-31.
In its BAFO, Presearch proposed one unnamed senior engineer as a "new
hire," with no direct labor hours for the base year (although it
appeared that this individual was a full-time employee in the option
years of the contract). Presearch's cost volume at 4. In addition,
Presearch listed one unnamed senior analyst as a "new hire" with 2,080
direct labor hours listed for the first option year, but with no
direct labor hours listed for the base period or the other option
periods. Although both individuals were to fill "key personnel"
positions as specified in the RFP, contrary to the RFP's explicit
instructions Presearch did not submit resumes or any additional
information for these "new hires." Further, Presearch failed to
explain whether these individuals were proposed on a full-time or
part-time basis, or whether they were subcontractor employees.
Presearch also failed to provide a resume or any information
concerning another key personnel employee identified only as [DELETED]
a senior analyst.
Under the resumes subfactor, the TERP assigned Presearch's proposal an
overall rating of "satisfactory," identifying three strengths, two
weaknesses, and no risks in this area. In support of the strengths,
the TERP recognized Presearch's proposed program manager, a proposed
senior engineer, and the proposed information manager to have
extensive experience and recognized expertise in their respective
fields. The TERP identified two weaknesses under this subfactor,
however. The TERP found that because of lack of information for key
personnel, the TERP could not evaluate whether the level of effort
Presearch proposed would adequately support the requirement, and noted
this as a weakness in the proposal. The TERP also noted that
Presearch had provided no resume for employee [DELETED], whom
Presearch proposed as a full-time employee, and noted this as a
weakness. TERP Report, Aug. 24, 1998. The record shows that the CARP
reviewed the TERP's findings and, contrary to the protester's
assertions, recognized the strengths that the TERP had identified in
Presearch's proposal in the resumes area. Further, the TERP did not
downgrade its proposal for proposing part-time employees; rather, the
evaluators were primarily concerned with the lack of resumes and
information for several of Presearch's proposed key personnel.
In our view, the TERP's rating of "satisfactory" under the resumes
subfactor reasonably reflected the evaluators' concern that by failing
to provide resumes or any other information for the proposed "new
hires" or the employee identified as [DELETED] in direct contravention
of the RFP's instructions, the agency could not reasonably evaluate
the quality, education, experience, knowledge, skills and abilities of
the proposed key personnel, or their dedication to the effort.
Presearch's disagreement with the TERP's conclusions in this regard
does not render the evaluation unreasonable.[11] ESCO, Inc.,
B-225565, Apr. 29, 1987, 87-1 CPD para. 450 at 7.
In its comments on the agency report, Presearch raises several issues
for the first time. For example, Presearch argues that the Navy's
evaluation of its proposal under the "oral presentation" subfactor was
flawed because the TERP failed to assign its proposal a strength
concerning its facilities, and failed to assign a strength to its
proposal in the management philosophy area for adding another firm to
its team. The protester also maintains that the agency failed to
conduct meaningful discussions with Presearch regarding the weaknesses
the TERP identified under the resumes subfactor. As explained in
greater detail below, these contentions, raised for the first time in
the comments on the agency report, are untimely.
Under our Bid Protest Regulations, protests not based upon alleged
solicitation improprieties must be filed not later than 10 days after
the basis for protest is known. 4 C.F.R. sec. 21.2(a)(2). Where a
protester initially files a timely protest and supplements it with new
and independent grounds of protest, the new allegations must
independently satisfy these timeliness requirements; our Regulations
do not contemplate the unwarranted piecemeal presentation of protest
issues. Litton Sys., Inc., Amecom Div., B-275807.2, Apr. 16, 1997,
97-1 CPD para. 170 at 4 n.1.
While Presearch's initial protest was filed in a timely manner, that
protest did not challenge the evaluation of its proposal under the
"oral presentation" subfactor. Presearch either knew or should have
known that the TERP did not assign a strength to its proposal for its
facilities capability or management philosophy questions under the
"oral presentation" subfactor since its November 4 debriefing, when
the contracting officer informed the protester of the strengths,
weaknesses, and risks identified in its proposal by the TERP in its
report. In addition, in response to the protest, the agency provided
Presearch with a copy of the TERP report showing that Presearch's
proposal received no strengths under the "oral presentation" subfactor
on December 2.
Presearch's objections were not raised until December 21, when its
comments on the agency report were submitted to our Office--more than
45 days after Presearch learned of the bases for those objections from
its debriefing and more than 10 days after the agency provided
Presearch with the TERP report. Accordingly, we will not consider
Presearch's challenge that its proposal should have received strengths
under the "oral presentation" subfactor. See Watkins-Johnson Co.,
B-252790, July 7, 1993, 93-2 CPD para. 8 at 3-4.
In its comments, Presearch also argues that the agency failed to
conduct meaningful discussions regarding the weaknesses the TERP had
identified under the resumes subfactor. This allegation is also
untimely. In the CO's letter to Presearch dated May 19, 1998,
reopening the competition, the agency specifically notified Presearch
of the weaknesses and risks the TERP identified in its proposal for
discussions in the past performance, oral presentation, and resumes
areas. In addition, as already explained, during the November 4
debriefing, the contracting officer informed Presearch of all of the
strengths, weaknesses and risks assigned to its BAFO by reading them
from the TERP report, including the weaknesses assigned in the resumes
area. Thus, by the November 4 debriefing, Presearch had in its
possession the CO's May 19 letter listing the discussion items, and
knew the weaknesses the TERP assigned to its BAFO under the resumes
area. Accordingly, if Presearch believed that the agency failed to
conduct meaningful discussions with the firm, Presearch should have
raised this allegation, at the latest, within 10 days from its
November 4 debriefing. Presearch did not raise this issue until it
filed its comments in our Office on December 21. Accordingly, this
ground is untimely and will not be considered.
The Cost/Technical Tradeoff
SIR and Presearch argue that the agency's cost/technical tradeoff
decision was flawed because the underlying evaluations on which it was
based--specifically, the evaluation of DTI's cost and technical
proposals in the areas discussed above, and the evaluation of
Presearch's proposal in the resumes area--were flawed. As discussed
above, we conclude that the evaluation of DTI's technical and cost
proposals was reasonable, and that the evaluation of Presearch's
technical proposal
was unobjectionable. Given these conclusions, there is no basis to
object to the tradeoff on the grounds asserted by the protesters.[12]
The protests are denied.
Comptroller General
of the United States
1. The RFP sought management support services for the Program
Executive Offices for Theater Air Defense/Surface Combatants and
Expeditionary Warfare. The agency explains that the required services
generally fall into the categories of program planning, acquisition
planning, and business operations support, and states that while not
technically complicated, these tasks often require short time periods
for their performance.
2. The agency synopsized the RFP in the Commerce Business Daily on
July 7, 1997, and issued the solicitation over the Internet on August
20. The RFP was amended several times.
3. For each offeror, the CO also obtained responses from references to
a past performance questionnaire that was included as part of section
L-3 of the RFP. The CO then forwarded the responses and his notes to
the TERP for evaluation.
4. The CARP noted that DTI and its subcontractors proposed [DELETED],
which was more than [DELETED] percent of the total number of staff
hours estimated in the initial RFP (1,229,280).
5. One firm which had submitted its own proposal in response to the
initial RFP teamed with Presearch as a proposed subcontractor in
Presearch's BAFO and did not submit a separate response to amendment
No. 0004.
6."UOT" refers to the unpaid overtime hours (hours in excess of 8
hours per day/40 hours per week) incurred by salaried employees who
are exempt from coverage of the Fair Labor Standards Act of 1938
(FLSA), 29 U.S.C. sec. 201-19 (1994). Under the FLSA, exempt employees
need not be paid for hours worked in excess of 8 hours per day or 40
hours per week.
7. SIR calculated these average hourly labor rates by dividing DTI's
[DELETED] and SIR's [DELETED] total proposed BAFO costs, exclusive of
fixed fees, by the total number of labor hours specified in the RFP
for the base and option periods (1,061,493). Comments at 6 n.4 and
exhibit 1B.
8. SIR also asserts that in its BAFO, DTI proposed the use of several
non-key personnel who were lower paid than personnel initially
proposed. SIR argues that the Navy improperly failed to consider
whether these lower-paid personnel might be less qualified or less
experienced than the personnel DTI initially proposed. The RFP
provided, however, that the Navy would consider the relevance and
quality of the education, experience, knowledge, and skills of the
proposed key personnel. There was no requirement for the agency to
evaluate non-key personnel. Accordingly, SIR's argument in this
regard is without merit.
9. The Navy argues that the protest should be dismissed because
Presearch is not an interested party under our Bid Protest
Regulations, 4 C.F.R. sec. 21.0(a) (1998). The agency asserts that,
since Presearch's technical proposal was ranked third behind SIR's,
even if its protest were sustained Presearch would not be next in line
for award because there is a higher-rated intervening offeror. The
agency's argument overlooks the substance of Presearch's
challenge--that the agency improperly evaluated its proposal.
Specifically, Presearch argues that had the agency conducted a proper
evaluation of the resumes subfactor within the "relative capability"
area, its proposal would have received a higher overall technical
rating and that with its lower proposed cost, it would have been
selected as offering the best value to the government. Thus, if we
found that Presearch's arguments had merit and sustained its protest,
it is possible that upon reevaluation, Presearch's proposal would be
in line for award. We therefore consider Presearch an interested
party to maintain the protest. See Pan Am World Servs., Inc., et al.,
B-231840 et al., Nov. 7, 1988, 88-2 CPD para. 446 at 6.
10. In its protest, Presearch also argued that the agency improperly
failed to consider Presearch's responses to the oral presentation
sample tasks (submitted in response to the CO's May 19, 1998 letter
reopening the competition), and that the Navy conducted improper
discussions regarding those responses. Presearch later withdrew these
allegations. Comments, Dec. 21, 1998, at 19 n.3.
11. Presearch asserts that the evaluation was unreasonable because in
evaluating its initial proposal, the TERP found no weaknesses in the
resumes area. The agency points out, however, and the record shows,
that the TERP had assigned four risks to Presearch's initial proposal
under the resumes subfactor. The agency explains that as defined in
the source selection plan, a risk "implies that action must be taken
to avoid future failure," and that risks in this context are similar
to weaknesses. Supplemental Agency Report, Dec. 31, 1998, at 10-11
n.4.
12. In its protest, SIR also asserted that the agency's decision to
select DTI's lower-cost, lower-technically rated proposal was
inconsistent with the evaluation criteria, which stated that an
offeror's "relative capability" in the areas of personnel, past
performance, and oral presentation, was more important than cost. The
protester abandoned this contention in its comments on the agency
report, however, confining itself to the argument, set out above, that
the tradeoff decision was improper because the underlying evaluation
of DTI's proposal was flawed. In any event, we have reviewed the
tradeoff decision and see no basis to question it. The record shows
that the agency properly compared the strengths and weaknesses of
SIR's and DTI's proposals and reasonably concluded that SIR's
technical
superiority--principally in one area, personnel--was not worth the
cost premium--approximately $6 million--involved in award to SIR. See
Dayton T. Brown, Inc., B-229664, Mar. 30, 1988, 88-1 CPD para. 321 at 4.