TITLE: B-310372.2, Pemco Aeroplex, Inc.--Reconsideration, February 1, 2008
BNUMBER: B-310372.2
DATE: February 1, 2008
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B-310372.2, Pemco Aeroplex, Inc.--Reconsideration, February 1, 2008
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: Pemco Aeroplex, Inc.--Reconsideration
File: B-310372.2
Date:February 1, 2008
David R. Hazelton, Esq., Roger S. Goldman, Esq., and Kyle R. Jefcoat,
Esq., Latham & Watkins, LLP, for the protester.
Rand L. Allen, Esq., Paul F. Khoury, Esq., Scott M. McCaleb, Esq., and
Kara M. Sacilotto, Esq., Wiley Rein, LLP, for The Boeing Company, an
intervenor.
Brent G. Curtis, Esq., and Gerald L. Trepkowski, Esq., Department of the
Air Force, for the agency.
Kenneth Kilgour, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Request for reconsideration of prior decision sustaining protest of a
contract award is denied where the request fails to show that the prior
decision contains any errors of fact or law, and where the new argument
offered in support of the request should have been advanced during the
course of the protest.
DECISION
The Department of the Air Force requests reconsideration of our decision
in Pemco Aeroplex, Inc., B-310372.2, Dec. 27, 2007, 2007 CPD para. ___, in
which we sustained Pemco's protest against the award of a contract to
Boeing Aerospace Operations under request for proposals (RFP) No.
FA8105-05-R-0014, issued by the Air Force for programmed depot maintenance
(PDM) for KC-135 aircraft.
We deny the request.
The solicitation, originally issued in August 2005 and amended several
times, provided for award on a "best value" basis, stating that the agency
intended to award to the offeror "who gives the Air Force the greatest
confidence it will best meet our requirements affordably," and established
the following evaluation factors: mission capability, proposal risk, past
performance, and cost/price.[1] RFP at 78-79. Under the mission capability
evaluation factor, the solicitation established five subfactors: depot
maintenance, supply chain management, transition, program management, and
small business participation. Id. at 79. With regard to evaluation of
proposal risk, which was evaluated at the subfactor level of mission
capability, the solicitation provided that risk assessments of "low,"
"moderate," or "high" would be made for each of the mission capability
subfactors, id. at 83, and stated:
The Proposal Risk assessment focuses on the risks and weaknesses
associated with an Offeror's proposed approach and includes an
assessment of the potential for disruption of schedule, increased cost,
degradation of performance, and the need for increased Government
oversight, as well as the likelihood of unsuccessful contract
performance.
Id. at 82.
Finally, with regard to cost/price, the solicitation contemplated award of
a fixed-price contract. Nonetheless, the solicitation required offerors to
submit data regarding "labor, fringe benefits, overhead and [general and
administrative] rates by year for all labor categories anticipated for use
in the performance of this effort," RFP sect. L.5.1.1, and provided that
"evaluation of [the required data] will be used to determine
reasonableness and realism of the prices and labor rates proposed as they
compare to labor standards, benefits and overhead rates in the marketplace
relating to the recruitment and retention of employees." RFP sect.
M.2.7(d).
The source selection authority (SSA) concluded that Boeing's proposal was
superior with regard to mission capability, Pemco's proposal was superior
with regard to past performance, and proposal risk was not a significant
discriminator. The SSA also concluded that Boeing's proposal offered the
lowest total evaluated price.
In our decision, we found that the evaluation record contained no
meaningful documentation showing that the agency had considered the effect
of [DELETED]. Without that documentation, we were unable to determine
whether the agency reasonably concluded that Boeing's proposed price was
realistic or whether the agency's assessment of "low risk" for Boeing's
proposal, under each of the mission capability subfactors, was reasonable,
and we sustained the protest on those grounds.[2]
In requesting reconsideration, the agency asserts that: the price realism
analysis it performed was sufficiently rigorous, especially considering
that the solicitation did not specifically provide that the agency would
[DELETED] proposed; issues associated with [DELETED] were not included in
the RFP's scope of work, terms and conditions, or evaluation criteria; and
the agency's evaluation of [DELETED] is adequately documented in the
agency record, Boeing's proposal, and supporting testimony offered at the
hearing.
Under our Bid Protest Regulations, to obtain reconsideration, the
requesting party must either show that our prior decision contains errors
of fact or law, or present information not previously considered that
warrants reversal or modification of our decision. 4 C.F.R. sect. 21.14(a)
(2007); M&M Welding & Fabricators, Inc.--Recon.,
B-271750.2, Mar. 26, 1997, 97-1 CPD para. 124 at 3. The Air Force's
request for reconsideration does not meet this standard.
Where, as here, an RFP contemplates the award of a fixed-price contract,
the agency generally is not required to conduct a realism analysis; this
is because a fixed-price (as opposed to a cost-type) contract places the
risk and responsibility for loss on the contractor. WorldTravelService,
B-284155.3, Mar. 26, 2001, 2001 CPD para. 68 at 3; PHP Healthcare Corp.,
B-251933, May 13, 1993, 93-1 CPD para. 381 at 5. However, an agency may,
as the agency did here, provide for the use of a price realism analysis
for the limited purpose of measuring offerors' understanding of the
requirements or to assess the risk inherent in an offeror's proposal. PHP
Healthcare Corp., supra. The nature and extent of a price realism analysis
ultimately are matters within the sound exercise of the agency's
discretion, and our review of such an evaluation is limited to determining
whether it was reasonable and consistent with the solicitation's
evaluation criteria. Cortez, Inc., B-292178 et al., July 17, 2003, 2003
CPD para. 184 at 3; Rodgers Travel, Inc., B-291785, Mar. 12, 2003, 2003
CPD para. 60 at 4.
Focusing on language in the solicitation regarding [DELETED], the Air
Force argues that the RFP did not anticipate [DELETED] in the price
realism analysis. As is evident from our prior decision, we think the
terms of the RFP contemplated an evaluation of [DELETED] as part of the
price realism analysis. The Air Force's argument to the contrary
effectively reads out the RFP references (in sections M.1.3, and M.2.7(d)
and (e)) to the realism of "price" or "prices," a different and broader
term than [DELETED], which is also used in the RFP. In further support of
its interpretation, the Air Force points to language in the RFP stating
that the offerors' cost-related information would be used [DELETED]. In
the Air Force's view, this language indicates that the price realism
analysis was to be limited to [DELETED]. This interpretation, however,
ignores other references in the RFP clearly indicating that a broader
analysis of price realism was contemplated to determine whether the
proposal reflected "an inherent lack of competence or failure to
comprehend the complexity and risks of the program," RFP sect. M.1.3, or
that the offeror "does not understand the requirement or . . . has made
[an] unrealistic proposal." RFP sect. M.2.7(e).
Further, as Pemco points out, the RFP in fact called for offerors to
submit detailed cost-related data, [DELETED]; Pemco's Comments, Jan. 14,
2008, at 5. The offerors did so, and, as discussed below, the record shows
that the agency reviewed [DELETED] proposed.[3] The flaw in the record
here, however, is the lack of contemporaneous evaluation of the effect of
[DELETED]. It was therefore unreasonable for the agency not to document
its conclusion that [DELETED] would not create proposal risk above the
rating of "low risk" given to Boeing's proposal for each of the five
proposal risk subfactors, or create concerns as to the realism of Boeing's
price.
The agency also asserts that our analysis incorrectly assumed that the
agency's evaluation had to take into account [DELETED]. In its protest,
Pemco raised the issue of [DELETED], alleging that [DELETED]. Protest at
33. The contracting officer responded that [DELETED]. Contracting
Officer's Statement of Facts at 20. In its comments on the agency report,
Pemco again raised the issue, arguing that [DELETED]. Comments, Oct. 29,
2007, at 35. Despite the fact that Pemco twice raised (and the agency
explicitly acknowledged) the [DELETED] issue, in its request for
reconsideration the agency offers for the first time an assertion that the
RFP actually assumes a [DELETED]. A party's failure to make all arguments
available during the course of the protest does not warrant
reconsideration of our prior decision. See Department of the Army--Recon.,
B-237742.2, June 11, 1990, 90-1 CPD para. 546 at 4. The argument that the
RFP and associated documents in the agency report put offerors on notice
that they should assume a [DELETED] should have been advanced by the Air
Force during the initial protest; that argument, at this point, will not
result in reconsideration of our decision.[4] Id.
The agency next asserts that an evaluation of Boeing's [DELETED] is in
fact documented in the agency record, Boeing's proposal, and supporting
testimony offered at the hearing. We disagree. The agency sent Boeing an
evaluation notice (EN) that stated:
[DELETED].
[DELETED]. The agency asserts that this EN is evidence of the agency's
[DELETED]. Request for Reconsideration at 9. The mere posing of this
question, which could have elicited one of a myriad of possible responses,
in no way substitutes for an analysis of the response the agency actually
received from Boeing, namely, [DELETED].[5]
Finally, the agency argues that the hearing testimony adequately documents
the agency's evaluation. Post-protest explanations that provide a detailed
rationale for contemporaneous conclusions simply fill in previously
unrecorded details, and will generally be considered in our review of the
rationality of selection decisions, so long as those explanations are
credible and consistent with the contemporaneous record. Remington Arms
Co., Inc., B-297374, B-297374.2, Jan. 12, 2006, 2006 CPD para. 32 at 12.
Information relevant to a reduction in proposed prices, consistent with
selection documents, may constitute further explanation of agency
officials' contemporaneous thought processes. See ITT Fed. Servs. Int'l
Corp., B-283307, B-283307.2, Nov. 3, 1999, 99-2 CPD para. 76 at 7. Here,
however, there is nothing in the record to suggest that as part of its
proposal risk analysis, or its price realism analysis, the agency
considered the reasonableness [DELETED]. Consequently, we do not view the
testimony offered at the hearing as simply "filling in" details of a
"contemporaneous conclusion" regarding [DELETED].
The request for reconsideration is denied.
Gary L. Kepplinger
General Counsel
------------------------
[1] Offerors were advised that mission capability, proposal risk, and past
performance were of equal importance and that, when combined, these
factors were "significantly more important" than cost/price. RFP at 79.
[2] The protest was denied on several other grounds not relevant to the
request for reconsideration.
[3] To the extent that the Air Force argues that it properly considered
[DELETED] only in the context of assessing proposal risk, not price
realism, the Air Force's argument ignores the fact that both areas (price
realism and proposal risk) relate to the same consideration: assessing the
degree of risk associated with an offeror's performance of the contract as
proposed in its offer.
[4] In any event, we have reviewed the documents that the agency cites in
support of its claim that the solicitation contemplates [DELETED], and we
find unpersuasive the agency's claim that any portion of the cited
documents put offerors on notice that they should assume [DELETED].
[5] In its comments in support of the agency's reconsideration request,
Boeing maintains that [DELETED] justifies its [DELETED] and that its
[DELETED]. Boeing's own explanation of its [DELETED] does not substitute
for the agency's documented evaluation of the claims inherent in Boeing's
[DELETED], with respect to both the realism of Boeing's price and the
proposal risk assumed by the agency.