BNUMBER:  B-261367.2; B-261367.3
DATE:  November 1, 1995
TITLE:  Sociometrics, Incorporated

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Matter of:Sociometrics, Incorporated

File:     B-261367.2; B-261367.3

Date:     November 1, 1995

Paralee White, Esq., Laurel Hockey, Esq., and Joseph A. Zillo, Esq., 
Cohen & White, for the protester.
Nicholas P. Retson, Esq., and Bryant S. Banes, Esq., Department of the 
Army, for the agency.
Joel R. Feidelman, Esq., Deneen J. Melander, Esq., and Lawrence E. 
Ruggiero, Esq., Fried, Frank, Harris, Shriver & Jacobson, for Science 
Applications International Corporation, an interested party.
Paul E. Jordan, Esq., and Paul Lieberman, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  In procurement for personal services, where awardee's proposal 
received high ratings for its recruitment plan, alleged changes in 
awardee's proposed level of effort for recruiting did not require 
agency to downgrade awardee's proposal, where changes merely 
represented the deletion of direct labor hours which duplicated 
indirect hours already included, and which remained in the proposal.

2.  In contract for personal services in which level of effort was set 
at time of award, agency cost realism evaluation reasonably was 
focused primarily on comparison of proposed labor rates of offerors.

3.  Where protester's proposal was rated technically excellent, agency 
advised the protester of some, but not all, weaknesses in its initial 
proposal, and protester's responses in its best and final offer 
resulted in a higher technical score, the agency met its 
responsibility to conduct meaningful discussions; agency was not 
required to identify all elements of the proposal which received less 
than full evaluation credit. 

4.  Agency record sufficiently documented cost realism analysis and 
source selection decision which found that proposals were technically 
equivalent, thus making low cost the determining factor for award.

DECISION

Sociometrics, Inc. protests the award of a contract to Science 
Applications International Corporation, Environmental and Health 
Science Group (SAIC) under request for proposals (RFP) No. 
DAMD17-95-R-5007, issued by the Department of the Army, for personal 
medical services.  Sociometrics alleges flaws in the agency's 
technical and cost evaluations and improprieties in its conduct of 
discussions.[1] 

We deny the protest.

The RFP sought proposals for provision of early intervention services 
for exceptional family members in schools for dependents of service 
members overseas.  The services will include special educators and 
health care professionals such as nurses, therapists, and 
psychologists.  The RFP contemplated the award of a 
cost-plus-fixed-fee contract for a 2-year base period with four 1-year 
options.  Award was to be made to the offeror whose proposal 
represented the best overall value to the government.  Technical 
factors were considered more important than cost, but the RFP advised 
that if offerors' technical competence were considered approximately 
the same, then cost could become paramount.

Proposals were to be evaluated on the basis of cost and four technical 
factors listed in descending order of importance:  recruitment plan; 
factors/interview questions used for selection of applicants; ability 
to maintain a staff of highly qualified professionals, performing 
satisfactorily; and ability to provide on-site administrative support.  

Seven offerors, including Sociometrics and SAIC, submitted proposals 
by the January 30, 1995, closing time.  An initial evaluation 
eliminated all proposals from the competitive range except those of 
Sociometrics and SAIC.  Both of these firms' proposals were considered 
technically excellent, with Sociometrics's scored at 88.76 (out of 100 
possible) points and SAIC's scored at 89.38 points.  In reviewing the 
proposals for cost realism, the evaluators compared the offerors' 
proposed costs with an independent government cost estimate (IGCE).  
From these evaluations, the agency developed technical and cost 
questions for use in discussions.  Based on their responses to the 
discussion questions, each offeror's proposal score increased, 
Sociometrics's to 89.36 points and SAIC's to 89.62 points.  Each 
offeror submitted a best and final offer (BAFO).  The agency analyzed 
the BAFO cost proposals (including comparison with the IGCE), 
offerors' responses to cost questions, and audit information on 
indirect rates.  The agency concluded that both offerors' cost 
proposals were realistic and reflected sound judgment and 
comprehension of the contract requirements. 

The contracting officer, as source selection authority (SSA), 
determined that the proposals were technically equivalent.  
Accordingly, he used proposed cost as the basis for making his award 
decision.  Since Sociometrics's proposed cost for the base period and 
all options was approximately $2 million higher than SAIC's,  the 
contracting officer awarded the contract to SAIC for $11,102,232 for 
the base period.  After receiving notice of the award, Sociometrics 
filed this protest.  

TECHNICAL EVALUATION

SAIC's recruitment plan, evaluated under the first (and most 
important) evaluation factor, received 27.2 out of a possible 30 
points.  SAIC's recruitment plan involved the use of several 
personnel, two of whom were tasked with primary responsibility for 
implementation of SAIC's recruitment program at a proposed level of 
effort of more than 2,000 hours for the base period.  In its BAFO, 
SAIC did not change its recruitment plan, but in its cost proposal it 
reduced the direct hours for these employees by more than 1,000 hours, 
and did not explain the basis for the reduction.  In reviewing SAIC's 
BAFO, the agency did not change SAIC's proposal score under the 
recruiting factor.  

Sociometrics contends that the technical evaluation was flawed because 
the Army failed to re-evaluate SAIC's technical proposal despite this 
significant change in its proposed level of effort.  According to 
Sociometrics, a proper re-evaluation would have lowered SAIC's 
proposal score, resulting in the agency finding Sociometrics's 
proposal to be superior and awarding the contract to Sociometrics.

We will examine an evaluation to ensure that it was reasonable and 
consistent with the evaluation criteria and applicable statutes and 
regulations.  Information Sys. & Networks Corp., 69 Comp. Gen. 284 
(1990), 90-1 CPD  203.  Mere disagreement with the agency's 
evaluation does not render the evaluation unreasonable.  Litton Sys., 
Inc., B-237596.3, Aug. 8, 1990, 90-2 CPD  115.  Our review of the 
record here provides no basis for objecting to the evaluation of 
SAIC's recruitment plan.

First, the evaluation of the recruitment plan was not based solely on 
the level of effort of specific proposed personnel.  Thus, a change in 
the level of effort for particular employees would not necessarily 
result in a reduced score under the recruitment plan factor.  To the 
extent such changes could affect the score, while SAIC did not explain 
the change in direct hours proposed in its BAFO, it is apparent that 
there was no intention to significantly reduce the recruiting effort.  
Although the number of direct hours for two employees was lowered, the 
number of proposed hours for other personnel, including the employee 
with most of the interviewing responsibilities, was increased 
significantly, with the net effect that the proposed effort for 
recruiting actually increased overall.  Second, as explained by SAIC, 
the decrease in direct hours was simply done to rectify an attribution 
mistake in its initial proposal.[2]  In its initial proposal, SAIC had 
proposed both direct and indirect hours for its recruiting personnel.  
By mistake, it had duplicated some direct hours in the indirect 
portion of its proposal.  The "reduction" in hours was intended simply 
to delete the duplicated hours from the direct portion of the 
proposal.  Since the overall level of effort increased, and there was 
no other indication that SAIC was changing its recruiting effort, the 
agency reasonably did not downgrade this aspect of SAIC's BAFO.

In any event, Sociometrics was not prejudiced by the agency's failure 
to re-evaluate SAIC's proposal in this regard.  Sociometrics's revised 
and BAFO proposals also reflected significant, unexplained changes in 
the level of effort for various of its personnel, including recruiting 
personnel and the agency did not downgrade its proposal.  For example, 
Sociometrics's proposed direct effort for recruitment personnel in its 
BAFO was approximately 17 percent lower than that proposed in its 
initial proposal.  Sociometrics also eliminated, without explanation, 
an administrative position representing more than 7,000 hours.  While 
Sociometrics argues that its revised and BAFO proposals provided full 
explanations, the record reflects otherwise.  At best, the 
explanations simply identified the reductions, without stating why 
they were made.  Where, as here, the agency evaluates both offerors' 
proposals on the same allegedly flawed basis, there is no prejudice, 
see FKW Inc. Sys.; ColeJon Mechanical Corp., B-235989; B-235989.2, 
Oct. 23, 1989, 89-2 CPD  370, and in the clear absence of prejudice, 
we will not disturb a contract award.  American Mutual Protective 
Bureau, Inc., B-229967, Jan. 22, 1988, 88-1 CPD  65.

Sociometrics also contends that the agency should have rejected SAIC's 
proposal as technically unacceptable because it allegedly took 
exception to two provisions of the RFP.  This allegation is based on a 
misinterpretation of both the solicitation and SAIC's proposal.  

The first provision at issue, entitled "options," provides in part 
that the government has the right to increase or decrease the number 
of staff, labor categories, locations, and reporting dates, and that 
the cost of the contract will be adjusted.  According to another 
provision, the level of effort was not to be set until contract 
award.[3]  In its proposal, SAIC observed that changes to the level of 
effort during contract performance could affect the amount of the 
fixed fee.  Sociometrics argues that since the RFP contemplated 
changes as part of the statement of work, the amount of the fee could 
not be changed.  Sociometrics is mistaken.  The options provision on 
which it relies plainly contemplated the government's adjustment of 
costs based on changes in the level of effort.  It does not state 
anywhere that the fee will not be adjusted.  See Federal Acquisition 
Regulation (FAR)  16.306 (fixed fee may be adjusted as a result of 
changes in the work).

The second provision concerns application of the Service Contract Act 
of 1965, 41 U.S.C.  351, et seq.  While contracts such as this one, 
which are performed outside the continental United States, are exempt 
from the act's provisions, the RFP incorporated by reference FAR  
52.222-41, which sets forth the requirements for compliance with the 
act.  According to the agency, it included the provision to apply to 
personnel performing administrative work in the United States.  SAIC's 
proposal identified various exemptions in the act which made it 
inapplicable to the contemplated contract.  Sociometrics argues that 
since the provision was incorporated in the RFP, it applied 
notwithstanding the various statutory exemptions.  Again, Sociometrics 
is mistaken.  The RFP provision, FAR  52.222-41(b), clearly states 
that the clause does not apply to contracts exempted by the statute or 
the Secretary of Labor.  (Moreover, the protester's proposal similarly 
took exception to all RFP provisions which were not applicable to the 
type of contract awarded, which presumably would include the Service 
Contract Act.)  These two provisions thus were not a basis for 
rejecting SAIC's proposal. 

COST REALISM EVALUATION

Sociometrics alleges that the agency's cost realism analysis was 
either nonexistent or flawed.  Primarily, Sociometrics contends that 
the analysis did not include sufficient consideration of the offerors' 
direct labor rates and did not normalize the offerors' costs to 
account for the different levels of effort proposed.

The purpose of a cost realism analysis under a level-of-effort, 
cost-type contract is to determine the extent to which the offeror's 
proposed labor rates are realistic and reasonable.  ERC Envtl. and 
Energy Servs. Co., Inc., B-241549, Feb. 12, 1991, 91-1 CPD  155.  In 
this regard, an agency is not required to conduct an in-depth cost 
analysis or to verify each and every item in conducting its 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.  Since 
the cost realism analysis is a judgment function on the part of the 
contracting agency, our review is limited to a determination of 
whether an agency's cost evaluation was reasonably based and not 
arbitrary.  General Research Corp., 70 Comp. Gen. 279 (1991), 91-1 CPD  
183; The Warner/Osborn/G&T Joint Venture, B-256641.2, Aug. 23, 1994, 
94-2 CPD  76.  In order to establish the unreasonableness of an 
evaluation, it is not enough that the protester merely disagrees with 
the agency's judgment or that the protester can point to alternative 
methodologies available to the agency.  Payco Am. Corp., B-253668, 
Oct. 8, 1993, 93-2 CPD  214.

We have reviewed the Army's cost realism analysis and find it 
unobjectionable.  Prior to discussions, the agency compared SAIC's and 
Sociometrics's proposed labor rates and other costs with the agency's 
IGCE, which was based on historical costs for similar contracts, 
government estimated professional positions, and equivalent government 
salaries for professional categories.  During discussions, the agency 
asked both offerors detailed cost questions covering the basis for 
inclusion and calculation of certain costs, appropriateness of the 
proposed level of certain allowances, reimbursements and other costs, 
and market survey information.  The evaluators used the offerors' 
responses in determining whether the costs were realistic for the work 
to be performed, reflected the offerors' understanding of the 
requirements, and were consistent with the different elements of the 
technical proposal.  The evaluators also reviewed the offerors' BAFOs.

While both BAFO proposal costs were well below the IGCE, the agency 
ultimately determined that the estimate was overstated.  It based this 
determination on its finding that the offerors' proposals, responses 
to cost questions, and BAFOs provided adequate independent information 
to find both realistic as to cost.  For example, during discussions, 
SAIC provided substantial historical cost data, including market 
survey information on labor rates.  In addition, the agency obtained 
audits of the offerors' indirect rates, including overhead, fringe 
benefits, and general and administrative expenses.  A Defense Contract 
Audit Agency audit concluded that SAIC was financially stable and 
financially capable of performing the contract.  The audit found no 
violations of cost accounting standards or applicable regulations.  
The contracting officer, as the SSA, also conducted an independent 
examination of the proposals and found only slight differences in all 
of the cost elements, including labor rates.  Based on these various 
analyses, the agency determined that the costs proposed in the BAFOs 
were realistic and sufficient to perform the required services.  
Accordingly, the agency did not adjust the costs proposed by either 
offeror.  We believe the agency's cost analysis was sufficient to 
determine the realism and reasonableness of the proposed costs.

Sociometrics maintains that the agency should have had an audit 
conducted on the offerors' direct labor rates, observing that for two 
professional labor categories, SAIC's labor rates were significantly 
below Sociometrics's.  The agency explains that because the offerors' 
labor rates were very close and the product of competitive bidding, it 
did not believe it was necessary to have those rates audited.  
Instead, it relied on a comparison of the offerors' rates and sought 
additional information to support those rates which it questioned.  In 
this regard, while SAIC's rates for two labor categories were lower 
than those proposed by the protester, SAIC provided market survey 
information which supported the rates.  An agency may rely on 
information contained in offerors' cost proposals in performing a cost 
evaluation without seeking additional independent verification of each 
item of proposed costs, since the extent to which proposed costs will 
be examined is generally a matter for the agency to determine.  See 
Grey Advertising, Inc., 55 Comp. Gen. 1111 (1976), 76-1 CPD  325; 
Radian, Inc., B-256313.2; B-256313.4, June 27, 1994, 94-2 CPD  104.  

Sociometrics also contends that the agency should have "normalized" 
the offerors' cost proposals because each proposed a different level 
of effort, that is, the number of hours that each employee would be 
"on the job."  While each offeror proposed a man-year of 2,080 hours, 
Sociometrics argues that its real level of effort was 2,000 hours per 
employee (2,080 hours minus 80 hours for holidays), while SAIC's real 
level of effort was less than 2,000 hours because it subtracted all 
leave in addition to holidays from the 2,080 hour man-year.  According 
to Sociometrics, had the agency used the same level of effort for both 
offerors, it would have found that Sociometrics's proposed cost was 
lower than SAIC's.[4]

The protester's argument appears to be based on a faulty premise.  It 
is evident that both offerors' proposals contain costs for 2,080 hours 
per employee, per man-year, and the RFP sets the number of 
professional employees.  This being the case, there would be no 
meaningful difference between each proposal's "level of effort" which 
could have been normalized.  Rather, since the level of effort was not 
to be set until the contract was awarded and would be the same for 
SAIC or Sociometrics, then regardless of the level of effort proposed 
by the offerors, it was only necessary for the agency to determine 
that the labor rates were realistic and which offeror's rates were 
low.  It would have served no purpose to apply the rates to a 
standardized number of hours.  The agency report illustrated this by 
applying the offerors' direct rates to the level of effort hours set 
by the contract.  The comparison established that Sociometrics's costs 
were approximately 11 percent higher than SAIC's costs in the base 
period.  Further, Sociometrics's mere identification of another method 
of determining cost realism does not render the agency's methodology 
unreasonable.  Payco Am. Corp., supra.  

Sociometrics has submitted its own normalized comparison of its and 
SAIC's costs, which indicates that SAIC's costs were higher.  First, 
it subtracted each offeror's burdened costs for the professional 
personnel from the BAFO submitted by each offeror.  It then calculated 
a new burdened cost for each offeror's professional personnel based on 
the same number of hours for each.  In one calculation Sociometrics 
increased SAIC's hours to the protester's level, and in another it 
decreased its hours to SAIC's level.  It then added in the remaining 
proposed costs from the BAFO.  In both cases, Sociometrics's costs 
were lower than SAIC's.  However, Sociometrics's methodology is 
plainly flawed.  Sociometrics failed to consider that the proposals 
already contain charges for all 2,080 hours per employee even though 
each employee will not be "on the job" for every hour.  Thus, when it 
normalized SAIC's hours upward, it effectively double counted a 
significant number of hours already costed in SAIC's proposal.  
Similarly, when it normalized its own hours downward, it effectively 
eliminated a significant number of hours costed in its own 
proposal.[5]

MEANINGFUL DISCUSSIONS

Sociometrics argues that the agency failed to provide it with 
meaningful discussions because the agency failed to advise it of all 
weaknesses identified by the evaluators.  According to Sociometrics, 
had it been allowed to address these weaknesses, its revised proposal 
would have had a higher score than SAIC's, and it would be entitled to 
the contract award.

Agencies are required to conduct meaningful discussions with all 
competitive range offerors.  Stone & Webster Eng'g Corp., B-255286.2, 
Apr. 12, 1994, 94-1 CPD  306.  In order for discussions to be 
meaningful, contracting officials must advise offerors of deficiencies 
in their proposals and afford offerors an opportunity to revise their 
proposals to satisfy the government's requirements.  Id.  However, the 
agency is not obligated to discuss every aspect of an acceptable 
proposal that receives less than the maximum score.  Id.; Veco/W. 
Alaska Constr., B-243978, Sept. 9, 1991, 91-2 CPD  228.

Here, the agency conducted meaningful discussions with the offerors.  
Sociometrics's initial proposal was evaluated as technically 
excellent.  The evaluators were concerned with relatively few issues 
in Sociometrics's technical proposal and thus asked only two technical 
discussion questions.  Instead, the agency focused its discussions on 
cost issues.  The protester's technical responses to the questions it 
was asked increased its score by .60 points and its cost responses 
satisfied the evaluators' concerns.  Although the awardee was asked 
more technical questions, its responses resulted in a smaller increase 
in its technical score.  While the protester identifies a number of 
weaknesses identified by various evaluators, the fact remains that its 
proposal received between 84 and 93 percent of the available points on 
16 of the 17 evaluation factors and subfactors.  Its lowest score, 81 
percent of the available points, was for a subfactor under the least 
important evaluation factor.  In view of its overall high scores, we 
believe that Sociometrics was not entitled to discussions which would 
essentially have been designed to permit it to achieve a perfect score 
in all areas.  (We also note that Sociometrics does not offer any 
explanation of how it would have improved its score under any of the 
factors where weaknesses were identified.)

SOURCE SELECTION DOCUMENTATION. 

Sociometrics contends that the record does not contain sufficient 
documentation to support the source selection decision.  

In a negotiated procurement, agency selection officials have broad 
discretion in determining the manner and extent to which they will 
make use of the technical and cost evaluation results in making 
cost/technical tradeoffs.  General Servs. Eng'g, Inc., B-245458, Jan. 
9, 1992, 92-1 CPD  44.  A source selection official's judgment must 
be documented in sufficient detail to show it is not arbitrary.  KMS 
Fusion, Inc., B-242529, May 8, 1991, 91-1 CPD  447.  The official's 
failure to specifically discuss the cost/technical tradeoff in the 
selection decision does not affect the validity of the decision, if 
the record shows that the agency reasonably made its determination.  
See McShade Gov't Contracting Servs., B-232977, Feb. 6, 1989, 89-1 CPD  
118.  The fact that the explanation was not contained in the 
contemporaneous evaluation record does not provide a basis to 
disregard it in our review.  See Allied-Signal Aerospace Co., Bendix 
Communications Div., B-249214.4, Jan. 29, 1993, 93-1 CPD  109.

The record here contains the offerors' proposals, detailed technical 
evaluations, discussion questions, and proposal revisions, all of 
which support the technical scores given each proposal.  The 
contracting officer, as the SSA, reviewed these documents and 
reasonably determined that the proposals were technically equivalent.  
As provided in the evaluation criteria, the basis for award then 
became cost.  The record contains a detailed IGCE, the offerors' cost 
proposals and support for their costs, cost discussion questions which 
were based on the evaluators' thorough review of the proposals, the 
offerors' discussion responses, and BAFOs.  While the details of the 
cost realism analysis are not spelled out in a contemporaneous 
document, the contracting officer has explained the details of the 
analysis in the agency report (see discussion above).  From our review 
of the record, we are satisfied that the agency performed an adequate 
cost realism analysis which included comparison of labor rates, audits 
of indirect rates, and an assessment of whether the offerors could 
perform the contract at the proposed costs.  Accordingly, we have no 
basis to object to that analysis, or to the agency's selection 
decision, on the basis of a lack of adequate documentation. 

The protest is denied.

Comptroller General 
of the United States

1. Sociometrics also alleged that the agency was biased against it, 
treated the offerors unequally, and conducted an auction.  The agency 
report provided a detailed rebuttal explaining the absence of any 
bias, the equal treatment of all offerors, and the lack of an auction.  
The protester failed to respond to or rebut the agency's explanations.  
Under the circumstances, we have no basis to find any impropriety 
based on these grounds.  D.E.W. Management Servs., Inc., B-246761; 
B-246761.2, Apr. 1, 1992, 92-1 CPD  334. 

2. As a separate protest ground, Sociometrics argues that the agency 
improperly conducted post-award discussions with SAIC by allowing it 
to explain the basis for its deletion of direct hours related to its 
recruitment effort.  In the context of a bid protest, an agency is 
permitted to obtain post-BAFO, post-award clarifications from an 
offeror which do not provide an opportunity to revise or modify a 
proposal.  Aquidneck Sys. Int'l, Inc., B-257170.2, Sept. 30, 1994, 
94-2 CPD  122.  Here, as part of the agency's response to the 
protest, SAIC simply provided an explanation of its apparent change in 
recruitment effort; it was neither provided the opportunity, nor did 
it attempt, to modify its proposal.  Accordingly, this protest ground 
is without merit.  

3. In a separate protest ground, Sociometrics alleges that the agency 
improperly failed to apprise offerors of the level of effort it would 
use in evaluating proposals.  However, it is plain from the terms of 
the RFP that the actual level of effort was not to be filled in until 
the time of award.  Any protest by Sociometrics of this aspect of the 
solicitation is untimely.  Protests of alleged solicitation 
improprieties, apparent on the face of the solicitation must be filed 
no later than the closing time for receipt of proposals.  4 C.F.R.  
21.2(a)(1) (1995).  

4. Sociometrics originally argued that the agency should have 
considered that its higher number of hours represented a greater level 
of effort; that is, that since Sociometrics's personnel would be 
working longer than SAIC's, the agency should have considered the 
difference in technical effort and the effect on cost.  Subsequently, 
Sociometrics realized that its level of effort also was less than 
2,000 hours--and in fact, was lower than SAIC's--because it too 
provided various forms of leave for its employees.  Sociometrics then 
changed its argument to maintain that its proposal contains excess 
labor hours representing the difference, and contends that the agency 
should have adjusted for the excess hours in its evaluation.  This 
argument is untimely.  The protester was aware of the extent of the 
agency's cost evaluation as of June 16, when it received the agency's 
report.  It did not raise this issue until August 21, more than 10 
working days later.  4 C.F.R.  21.2(a)(2).

5. Another reason for discounting Sociometrics's calculations is the 
uncertainty as to which level of effort is appropriate for 
Sociometrics.  While the protester based its calculations on a 
2,000-hour man-year, it has also argued that its level of effort is 
less than 2,000 hours.