BNUMBER: B-260934.2; B-260934.3
DATE: September 12, 1995
TITLE: CAS, Inc.
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REDACTED DECISION
A protected decision was issued on the date below and was subject to a
GAO Protective Order. This version has been redacted or approved by
the parties involved for public release.
Matter of:CAS, Inc.
File: B-260934.2; B-260934.3
Date: September 12, 1995`
Howell Roger Riggs, Esq., for the protester.
James S. Roberts, Jr., Esq., Townes, Woods & Roberts, P.C., for
Mevatec Corporation, an interested party.
Robert R. Hamilton, Esq., Department of the Army, for the agency.
Andrew T. Pogany, Esq., Office of the General Counsel, GAO,
participated in the preparation of the decision.
DIGEST
1. Where protest contains general allegations of improper cost
evaluation which are only supported with detailed reasons in
subsequent comments on an agency report that were filed by the
protester more than 10 working days after receipt of the agency
report, General Accounting Office will dismiss the protest grounds as
untimely.
2. Where selection officials reasonably regard proposals as
essentially equal technically, cost may become the determinative
factor in making an award notwithstanding that the evaluation criteria
assigned cost less importance than technical considerations.
3. Given the inherently subjective nature of the technical judgments
of agency evaluators, it is within their reasonable discretion whether
a particular proposal deserves a "good" as opposed to a "very good"
rating, or a "very good" as opposed to an "exceptional" rating.
Stated differently, agency evaluators' judgments, for example, about
the slight qualitative differences which can render a proposal "very
good" as opposed to "good" are not subject to rational legal objection
unless a clear showing of unreasonableness is made.
DECISION
CAS, Inc. protests the award of a contract to Mevatec Corporation
under request for proposals (RFP) No. DASG60-94-R-0036, issued by the
U.S. Army Space and Strategic Defense Command, Huntsville, Alabama,
for technical and programmatic support for the Program Executive
Office, Missile Defense programs and projects.[1] The protester
principally contends that the agency improperly evaluated cost
proposals, including the offerors' award fee, which was given greater
weight than permitted by the terms of the solicitation; that the
agency's determination that CAS's and Mevatec's technical proposals
were essentially equivalent was unreasonable; and that Mevatec
allegedly engaged in "bait and switch" techniques.[2]
We dismiss the protest in part and deny it in part.
BACKGROUND
The RFP, issued August 28, 1994, contemplated the award of two
level-of-effort, cost-plus-award-fee contracts pursuant to a small
disadvantaged business (SDB) set-aside and a small business
set-aside.[3] The RFP specified the total number of labor hours
required and defined the labor categories and hours within each
contract line item number. The RFP stated that the government would
select the proposal which was most advantageous and represented the
best value to the government. The RFP contained three evaluation
areas: (1) technical (including technical approach factor, technical
direction planning factor, and qualifications and availability of
personnel factor); (2) management (including management approach
factor, and past performance factor); and (3) cost (including cost
realism and total evaluated probable cost). The RFP stated that the
technical area was more important than the management and cost areas
combined and that the management area was less important than the
technical area and more important than cost. Concerning cost realism,
the RFP stated that poor cost realism may result in a lower evaluation
of the technical and management areas. The RFP also stated as follows
concerning cost:
"The government may select for award the offeror whose total
evaluated probable cost is not necessarily the lowest, but whose
technical and management proposals are sufficiently more advantageous
to the government so as to justify the payment of additional costs.
Conversely, the government may select for award the offeror whose
total evaluated probable cost is the lowest, when other proposals are
not sufficiently more advantageous so as to justify the payment of
additional costs."
Finally, the RFP stated that the government would evaluate for award
purposes by adding the total cost for all options (such as labor surge
requirements) to the total cost for the basic requirement.
Seven proposals were received, five of which were included in the
competitive range. After discussions with the offerors and receipt of
best and final offers (BAFO), the agency's source selection evaluation
board (SSEB) issued a final evaluation report of the BAFOs which was
presented to the agency's source selection authority (SSA). A cost
analysis report was also issued and made available to the SSA. The
final evaluation results presented by the SSEB were as follows:[4]
Offeror Technical RatingManagement RatingOverall RatingEvaluated
Cost
Mevatec Exceptional Exceptional Exceptional [Deleted]
CAS Exceptional Exceptional Exceptional [Deleted]
As between Mevatec and CAS, the SSA selected Mevatec after determining
that both firms were "essentially equivalent" from a technical
standpoint. The SSA specifically found as follows:
"While the results of the SSEB evaluation give CAS a slight advantage
over Mevatec, they are both rated Exceptional overall [while CAS's
costs are [deleted] higher than Mevatec's]. I find that the slight
difference in technical merit is not worth the difference in cost. .
. . Of importance, Mevatec did better in the indicator of the
ability to perform the Technical Direction factor. This slight
advantage in Mevatec's proposal virtually balances the small
advantage which may be afforded by CAS's slight edge in technical
approach. Moreover, Mevatec rated slightly better than CAS in
management because of its proactive approach. . . . Finally, I note
that part of the difference between CAS and Mevatec's total evaluated
probable cost is in CAS's fee, which overall is higher than
Mevatec's."
The SSA determined Mevatec's proposal to be the "best buy" for the
government; the agency awarded the contract to that firm. This
protest followed.
COST EVALUATION
As stated above, the agency's cost realism resulted in a total
evaluated probable cost of approximately [deleted] for CAS and
[deleted] for Mevatec. CAS first argues that the agency improperly
evaluated CAS's maximum proposed award fee (which included award fees
for its subcontractors and which was substantially in excess of
Mevatec's award fee) despite the fact that the RFP allegedly did not
provide that the evaluated "most probable cost" would include an
offeror's maximum proposed award fee. According to the protester,
this evaluation of a maximum proposed award fee resulted in
displacement of CAS as the low evaluated offeror.
We will not consider this issue. The record shows that CAS, at the
very latest, was advised during its debriefing on March 23, 1995, that
the agency's cost evaluation included the maximum award fee proposed
by each offeror. However, this protest basis was not raised until CAS
filed its first supplemental protest on May 12, 2 months after the
firm knew or should have known of the basis for this protest.
Accordingly, we dismiss this ground of protest as untimely filed. See
4 C.F.R. 21.2(a)(2) (1995).
In its initial protest, CAS challenged the cost/technical tradeoff
decision and generally alleged, concerning the cost evaluation, that
in a "head to head cost evaluation [of] cost realism and most probable
cost, CAS should have won this area" since raw labor rates in the
Huntsville area are similar and its indirect burden rates are low.
The agency report in response to these allegations, dated April 27,
1995, and containing all cost evaluation documentation, was furnished
to the protester under a protective order at that time.
In its comments filed with our Office in response to the agency
report, the protester, for the first time, presents specific detailed
cost arguments that Mevatec's cost proposal should have been upwardly
adjusted by approximately [deleted]. Several other very specific
allegations of cost exceptions are made which would generally require
our Office to obtain another agency report to resolve these matters.
We find these allegations to be also untimely. Where a protest
contains general allegations of improper agency evaluation or actions
which are only supported with detailed reasons in subsequent comments
on an agency report that are filed more than 10 working days after the
protester's receipt of that report, we will dismiss the subsequent
protest grounds as untimely filed. See Dial Page, Inc., B-256210, May
16, 1994, 94-1 CPD 311. Here, the protester knew or should have
known of the specific and detailed bases of its protest concerning the
cost evaluation upon receipt of the agency report in April; since it
did not file these protest grounds within 10 working days of its
receipt of the report, we dismiss them as untimely.[5]
ESSENTIALLY EQUIVALENT DETERMINATION
CAS next argues that the SSA unreasonably determined the Mevatec and
CAS proposals to be essentially equal in technical merit because of
his finding that the "slight" difference in technical merit in CAS's
favor did not sufficiently offset the advantages to Mevatec's lower
cost. CAS principally bases its argument on the following statement
in the SSEB's report:
"While the overall adjectival ratings show a three-way tie [among
CAS, Mevatec, and an 8(a) firm] at the exceptional level, it is
the consensus opinion of the SSEB that there is a separation
between the top three offerors that is not visible in the [final
summary adjectival ratings]. This is caused, to some extent, by
the lack of an additional adjectival rating between good and
exceptional. . . . [In the] technical area CAS [is] first, [and]
Mevatec second. . . . For the management area, the ranking is
Mevatec first [and] CAS second. . . . Since the technical area
was designated as more important than management and cost
combined, the overall ranking is CAS first [and] Mevatec second."
According to the protester, because of the "coarseness" of the
adjectival ratings, the SSA could not make appropriate "fine gradient
distinctions" between the two proposals.
Where selection officials reasonably regard proposals as being
essentially equal technically, cost may become the determinative
factor in making an award notwithstanding that the evaluation criteria
assigned cost less importance than technical considerations. Contrary
to the protester's assertions, strict equality is not required. For
example, we have upheld determinations that technical proposals were
essentially equal despite significantly great technical differentials.
See, e.g., Lockheed Corp., B-199741.2, July 31, 1981, 81-2 CPD 71
(where the technical differential was more than 15 percent); Ogilvy,
Adams & Rinehart, B-246172.2, Apr. 1, 1992, 92-1 CPD 332. Moreover,
given the inherently subjective nature of the technical judgments of
the evaluators, we think it is best left to their discretion whether a
particular proposal, for example, deserves a "good" as opposed to a
"very good" rating. Stated differently, agency evaluators' judgments
about the slight qualitative differences which can render a proposal
"very good" (or exceptional) as opposed to "good" are not subject to
rational legal objection unless a clear showing of unreasonableness is
made. See Mevatec Corp., B-260419, May 26, 1995, 95-2 CPD 33. We
find no such showing here.
The record shows that the SSA did not simply rely on the evaluators
final adjectival ratings. Rather, the SSA had available the detailed
technical report of the SSEB. This report showed, for example, that
CAS's technical approach for the programmatic support effort
demonstrated exceptional understanding of the requirements. The SSEB
presented detailed technical narrative findings supporting this
determination, including positive evaluations of CAS's cost/schedule
risk assessments, cost data estimating and modeling effort,
international program support, system integration, and operational
exercises. Similarly, the SSEB presented detailed narrative findings
supporting its exceptional rating of Mevatec in these same technical
areas. The record shows no substantial difference in the evaluators
findings concerning the two proposals. Further, CAS has failed to
show any substantial discriminating technical factor which would put
into question the agency's determination that the proposals were
essentially equal. In the absence of any attempt by the protester to
show significant or substantial technical superiority of its proposal,
we deny this basis of protest for failure of proof by the protester.
MISCELLANEOUS ISSUES
Finally, CAS alleges that Mevatec engaged in "bait and switch"
techniques by recruiting and hiring substantial numbers of CAS
employees after award of the contract. First, CAS refers to a Mr.
Barnett, a key personnel under the RFP, who CAS hired on November 1,
and who also permitted Mevatec to use his resume in competing for this
contract.[6] In response, the agency states, and we agree, that there
is nothing wrong with a person employed by one company from committing
himself to work with another company contingent upon the future award
of a contract.
Second, contrary to CAS's assertions that after award of the contract
substantial numbers of its employees were hired by Mevatec at
significantly higher salaries, the record shows that Mevatec hired
only seven employees of CAS out of a total work force of 60 full time
employees (amounting to about 10 percent of the work force).[7] CAS
has presented no evidence that Mevatec intended prior to award to
change its personnel to gain any advantage. In this regard, the
agency states, and the record shows, that the contracting officer
reviewed the impact of these individuals' labor rates on the composite
labor rates provided by Mevatec during the evaluation of proposals;
his review shows that the pay rate for these individuals is less than
the composite rates and therefore did not affect proposed costs or the
cost standing of the offerors. We therefore do not find any
deliberate intent by Mevatec to engage in "bait and switch"
techniques, and we also do not find any cost or other prejudice to CAS
by Mevatec hiring these seven personnel after award.
The protest is dismissed in part and denied in part.
Comptroller General
of the United States
1. Programs and projects required to be supported include National
Missile Defense, PATRIOT, Corps Surface to Air Missile, Theater High
Altitude Area Defense, Ground Based Radar, and Joint Tactical Ground
Station. The successful contractor must monitor, assess, and analyze
programs and activities, provide systems integration, systems
engineering, and technical assistance support.
2. In its initial and supplemental protests, CAS raised numerous other
issues which it abandoned in its comments on the agency report.
Specifically, CAS, in its comments on the agency report, only "asserts
[three] principal grounds upon which [this] protest" is based. In
this decision, we will consider only the protest grounds which the
protester itself considers in its comments on the agency report. See
Logics, Inc., B-237411, Feb. 1, 1990, 90-1 CPD 140.
3. The award under the SDB set-aside is not now at issue in this
protest. Accordingly, we will only discuss the competition between
CAS and Mevatec for the small business set-aside award.
4. The agency employed adjectival ratings for the technical proposals.
These ratings were as follows: exceptional, good, acceptable, and
unacceptable, in descending order of merit.
5. As mentioned previously, this protest was subject to a protective
order under which counsel for the protester and the interested party
were admitted. At the protester's request, we also admitted an expert
consultant, a certified public accountant, who was employed by the
protester to present expert opinion to our Office concerning the cost
issues in the protest. The consultant relied upon the exhibits,
statements, and information contained in the agency report which the
protester had received much earlier. These opinions by the expert
apparently formed the basis for the specific and detailed cost
adjustment complaints subsequently raised by the protester in its
comments on the agency report. While the expert may have received
this information late, we think receipt of the agency report by the
protester's counsel started the 10-day period for purposes of our
timeliness rules. See Dial Page, Inc., supra. In any event, even if
we accept all the cost adjustments proposed by CAS's expert, we note
that Mevatec still remains the low evaluated offeror by a significant
amount. Finally, the protester argues that the agency will incur
"transition costs" to bring Mevatec "up to speed" and which should
have been evaluated. The short answer is that we do not find this
cost factor as an evaluation item in the RFP.
6. The letter of intent from Mr. Barnett, dated October 8, 1994, that
Mevatec submitted to the agency, stated unequivocally that Mr. Barnett
"agree[d] to work for Mevatec Corporation as an independent consultant
for the PEO Missile Defense support effort" and that Mevatec was
"authorized to use [his] name in the proposal."
7. Further, the record shows that Mevatec hired these personnel only
after Mevatec was "approached by the incumbent CAS personnel."