BNUMBER:  B-270075; B-270075.4
DATE:  February 5, 1996
TITLE:  Strategic Analysis, Inc.

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Matter of:Strategic Analysis, Inc.

File:     B-270075; B-270075.4

Date:     February 5, 1996

James D. Bachman, Esq., and Alexander T. Bakos, Esq., Doyle & Bachman, 
for the protester.
Elward L. Saul, Esq., Department of the Navy, for the agency.
Mary G. Curcio, Esq., and John M. Melody, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Record does not demonstrate that awardee intentionally 
misrepresented status of proposed key employee as employee rather than 
consultant, where there is no evidence that awardee was aware that the 
individual had been sent, and signed, a consultant agreement rather 
than an employment agreement, and the individual clearly agreed to 
employee status prior to award.

2.  Protest that agency improperly held discussions (on limited 
matters) only with awardee will not be sustained where protester does 
not establish prejudice by showing that it would have altered its 
proposal to its competitive advantage had it been included in 
discussions.

3.  Evaluation of proposals was reasonable where information provided 
by awardee in response to agency's questions demonstrated that 
awardee's proposal met the requirements of the solicitation.  

DECISION

Strategic Analysis, Inc. (SAI) protests the award of a contract to 
Management Resources, Inc. (MRI) under request for proposals (RFP) No. 
N00014-95-R-0001, issued by the Office of Naval Research for personnel 
and facilities to provide management, administrative and technical 
assistance to the Joint Directors of Laboratories.  SAI complains that 
the award was improper because (1) MRI misrepresented the status of 
one of its key personnel; (2) the agency improperly held discussions 
only with MRI; and (3) the evaluation was unreasonable.

We deny the protest.

The RFP, issued as a small business set-aside on March 21, 1995, 
contemplated the award of a cost-plus-fixed-fee contract to the 
offeror whose proposal represented the best value to the government.  
The RFP listed three evaluation factors in descending order of 
importance:  technical approach, qualifications, and cost.  The 
qualifications factor was comprised of three equally weighted 
subcriteria:  personnel, corporate experience, and corporate 
resources.  The solicitation required offerors to provide the resumes 
of personnel proposed as key personnel for the job categories 
supervisory scientist/engineer, senior analyst, and mid-level analyst.  
If the proposed personnel were not currently employed by the offeror, 
the offeror was required to provide, with its proposal, a letter of 
intent which showed that the person would accept employment if the 
offeror was awarded the contract.  The solicitation also required that 
the contractor have a conference room that could accommodate 50 
people, and was a minimum size of 400 square feet.  

Seven offerors, including SAI and MRI, submitted proposals by the May 
9 due date for initial offers.  MRI's proposed cost was second low 
($1,679,039) and SAI's was fifth low ($2,048,807).  The technical 
evaluation team (TET) rated the technical proposals and determined 
that those submitted by SAI and MRI were technically superior to the 
others received.  Both offerors were rated exceptional under the 
technical approach factor and fully qualified under each of the 
qualifications subfactors.  However, the TET was not sure of the 
employment status of two of MRI's proposed key personnel, Mr. Siewert, 
the supervisory engineer, and Mr. Reidy, the mid-level analyst.  Since 
MRI stated that it had a 50-person conference room, but did not 
indicate its size, the TET also was unclear as to whether the room was 
400 square feet, as required.  The agency sent letters to MRI  to 
request MRI to clarify these points.  In response, MRI stated that Mr. 
Siewert was a part-time employee and submitted an employment agreement 
signed by him; submitted a contingent employment agreement signed by 
Mr. Reidy; and provided dimensions showing that its conference room 
was larger than 400 square feet.  The agency found these responses 
satisfactory. 

After reviewing the evaluation results, the contracting officer 
determined that SAI's technical proposal was superior to MRI's, but 
that it was not worth an additional $369,768 ($74,000 annually).  As a 
result, she made award to MRI on an initial proposal basis. 

MISREPRESENTATION

SAI argues that MRI misrepresented the employment status of its 
supervisory engineer, Mr. Siewert, in its initial proposal and in 
subsequent communications with the agency.  SAI argues that this 
misrepresentation was improper in itself, and led the agency falsely 
to believe that MRI qualified as a small business (since proposing Mr. 
Siewert as a consultant instead of as an employee allegedly would have 
violated the RFP's subcontracting limit).

The record does not establish that MRI intentionally misrepresented 
Mr. Siewert's employment status or otherwise engaged in malfeasance.  
In its initial proposal, MRI submitted a resume which indicated that 
Mr. Siewert was employed by MRI from "1995-Present."  The TET 
questioned this information because SAI also proposed Mr. Siewert for 
a position in its proposal, and because DCAA advised the agency that 
it did not have a labor rate for Mr. Siewert as an employee of MRI.  
The agency thus asked MRI to clarify Mr. Siewert's employment status.  
On August 2, MRI responded that Mr. Siewert was a part-time MRI 
employee.  MRI also provided a signed employment agreement dated April 
7.  

At SAI's post-award debriefing, SAI questioned the employment status 
of Mr. Siewert and the agency asked MRI to provide SAI with a copy of 
the April 7 employment agreement.  MRI responded on October 3 by 
providing the agency with a copy of a professional services agreement 
(PSA) Mr. Siewert had signed on April 17, in which Mr. Siewert agreed 
to provide consultant services to MRI, a copy of the April 7 
employment agreement, and an October 3 employment agreement signed by 
Mr. Siewert.  MRI also provided a statement (further explained in 
October correspondence with the agency) explaining these different 
documents.  MRI's president stated that, during discussions with Mr. 
Siewert on April 3, he agreed to come to work for MRI.  The president 
then instructed an employee to send Mr. Siewert an employment 
agreement.  On August 1, while attempting to respond to the agency's 
July 26 inquiry into the employment status of Mr. Siewert, the 
president looked for the employment agreement, and realized for the 
first time a PSA rather than an employment agreement had been sent to, 
and had been signed by, Mr. Siewert.  The president phoned Mr. Siewert 
and asked him to become an employee.  He agreed to be a part-time 
employee and also agreed at this time that MRI could inform the Navy 
of the change in his employment status.  At that time, MRI prepared 
and signed for Mr. Siewert the April 7 employment agreement, intending 
it to replace the April 17 PSA, but inadvertently dating it April 7.  
Mr. Siewert was supposed to sign the agreement for himself when he was 
at the office but that was not done until October 3.  The president of 
MRI states that she would never have proposed a consultant for a key 
position.

While MRI furnished the April 7 agreement with knowledge that it was 
not genuine, the facts indicate that it did so not to mislead the 
agency or to misrepresent Mr. Siewert's status, but to correct a 
mistake that occurred when Mr. Siewert inadvertently was furnished a 
PSA to sign instead of an employment agreement.  Mr. Siewert's own 
statement is consistent with MRI's president's account of the facts.  
Most significantly, while Mr. Siewert states that he initially was 
engaged by MRI as a consultant, he does not state that MRI's president 
did not discuss his being employed by MRI, or provide any other 
information suggesting that MRI's president was aware in April that he 
had been hired as a consultant rather than as an employee.  Also, he 
states that he did in fact agree to employment by MRI in August, and 
that he also at that time agreed to have MRI represent to the agency 
that he was an MRI employee.  (Thus, the record shows that MRI's 
"forgery" of Mr. Siewert's signature--SAI's characterization--on the 
employment agreement in fact was authorized by Mr. Siewert.)  The 
proper course for MRI would have been to advise the agency of the 
circumstances rather than to create a replacement document.  However, 
since the record shows that the document was created to reflect the 
parties' intent in April; that the document does reflect MRI's intent; 
and that Mr. Siewert agreed to employment by MRI in August, prior to 
award, MRI's actions do not warrant upsetting the award.
 
DISCUSSIONS

SAI protests that MRI's initial proposal did not comply with the 
mandatory RFP requirements regarding the employment status of two key 
personnel and the size of the conference room, and that the agency's 
questions to MRI, which permitted MRI to correct these deficiencies in 
its proposal, therefore constituted discussions.  SAI therefore 
asserts that the agency violated procurement regulations by holding 
discussions with MRI, but not with any other competitive range 
offeror.  The agency argues that the information requested falls under 
the category of clarifications and that it was not required to hold 
discussions with all offerors in the competitive range.  

Discussions occur when the government communicates with an offeror for 
the purpose of obtaining information essential to determine the 
acceptability of a proposal or provides the offeror with an 
opportunity to revise or modify its proposal.  Federal Acquisition 
Regulation  sec.  15.601.  In contrast, clarifications are merely inquiries 
for the purpose of eliminating minor uncertainties or irregularities 
in a proposal and do not give an offeror the opportunity to revise or 
modify its proposal.  Id.  If a procuring agency holds discussions 
with one offeror, it must hold discussions with all offerors whose 
proposals are in the competitive range.  See HFS, Inc., B-248204.2, 
Sept. 18, 1992, 92-2 CPD  para.  188.  

We agree with SAI that the agency's communication with the awardee 
with regard to Mr. Riedy's employment status constituted discussions.  
The solicitation specifically required offerors to provide letters of 
intent for proposed key personnel not currently employed by the 
offeror.  MRI's proposal did not show that Mr. Reidy was a current 
employee and did not include a letter of intent for him.  The proposal 
therefore was  unacceptable in this regard, and since the 
communication with MRI was necessary to establish Mr. Reidy's 
employment status, it constituted discussions.[1]

Since the agency held discussions with MRI, it was required to hold 
discussions with all competitive range offerors.  HFS, Inc., supra.  
However, we will not sustain SAI's protest on this basis, since SAI 
has not established a reasonable possibility of prejudice; SAI has not 
shown, and on this record there is no reason to believe, that its 
competitive position would have been improved through discussions.  
See Marwais Steel Co., B-254242.2; B-254242.3, May 3, 1994, 94-1 CPD  para.  
291.   

SAI does not take issue with the evaluation of its proposal or argue 
that there were deficiencies or weaknesses in its technical proposal, 
the correction (or otherwise addressing) of which would have improved 
its evaluation.  The record shows, moreover, that the agency found 
nothing that required correction; SAI's proposal was rated exceptional 
under the technical approach factor, fully acceptable under the 
qualifications factor, and overall technically superior to MRI's 
proposal.  The only reason SAI did not receive the award is that its 
price was considered too high--$369,768 ($74,000 per year) more than 
MRI's.  SAI does not argue in its protest that if it had been given 
the opportunity to do so during discussions it could have or would 
have reduced its price.  Accordingly, there is no basis to conclude 
that SAI was prejudiced because the agency held limited discussions 
only with MRI.  See Marwais Steel Co., supra.

EVALUATION OF MRI'S PROPOSAL

SAI also challenges the technical evaluation of MRI's proposal.  
Specifically, SAI argues that the agency relied on MRI's 
misrepresentation of Mr. Siewert's employment status to evaluate its 
proposal under personnel and also to find that MRI met a material 
requirement of the solicitation.  SAI also argues that the agency 
accepted MRI's statement of Mr. Siewert's employment status as well as 
MRI's statement of the square footage of its conference room without 
verifying the information. 

We have no basis to question the evaluation.  In response to the 
agency's questions, MRI provided information showing that Mr. Siewert 
was an employee, and that the dimensions of its conference room met 
the 400-square foot requirement.  The agency therefore reasonably 
evaluated MRI's proposal based on Mr. Siewert's qualifications and 
reasonably determined that MRI met the conference room requirement.  
There is no general requirement that agencies verify the information 
presented in proposals, the RFP did not provide that information would 
be verified, and the agency did not do so with respect to SAI's 
proposal either.  There thus is no basis for objecting to the agency's 
failure to verify the information in question. 

The protest is denied.

Comptroller General
of the United States

1. It is not as clear that the communication regarding Mr. Seiwert 
constituted discussions, since MRI's proposal showed that he was a 
current employee, and letters of intent were only required for 
individuals not currently employed by the offeror.