BNUMBER: B-270094; B-270094.2
DATE: February 8, 1996
TITLE: Proteus Corporation; United International Engineering, Inc.
**********************************************************************
DECISION FOR PUBLIC RELEASE
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:Proteus Corporation; United International Engineering, Inc.
File: B-270094; B-270094.2
Date:February 8, 1996
Eric J. Marcotte, Esq., and Carl J. Peckinpaugh, Esq., Winston &
Strawn, for Proteus Corporation; and Don A. Howard, Esq., Howard &
Aldridge, for United International Engineering, Inc., the protesters.
Richard B. Oliver, Esq., and Dana L. Fitzgibbons, Esq., McKenna &
Cuneo, for Arcata Associates, Inc., an intervenor.
Gregory H. Petkoff, Esq., and Douglas M. Whitehead, Esq., Department
of the Air Force, for the agency.
Scott H. Riback, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Agency reasonably assigned moderate risk and green/acceptable
ratings in evaluating the protester's proposal where the firm's
proposed manning--which was significantly lower than other
offerors'--represented a higher risk to successful contract
performance; difference in offerors' staffing was a proper basis for
distinguishing between protester's low cost and awardee's high cost
proposal, which was evaluated as low risk and exceptional for
technical merit.
2. Protest that agency improperly assigned an exceptional rating to
the awardee's proposal for a technical subelement and only an
acceptable rating to the protester's proposal, notwithstanding the
protester's allegedly superior experience and approach to one of
several systems being evaluated under the subelement, is denied where
the agency's evaluation considered the offerors' overall approach to
supporting all of the systems and found, in contrast to the
protester's proposal, that the awardee's proposal contained a number
of features exceeding the solicitation requirements.
DECISION
Proteus Corporation and United International Engineering, Inc. (UIE)
protest the award of a contract to Arcata Associates, Inc. under
request for proposals (RFP) No. F26600-94-R0176, issued by the
Department of the Air Force for comprehensive technical support
services for the agency's weapons and tactics center range complex
(WTCRC). Both protesters contend that the agency misevaluated
proposals and made an irrational award decision.
We deny the protests.
The RFP contemplated the award of a cost reimbursement contract for a
base year with 4 option years to perform a wide array of services in
support of the WTCRC, the Air Force's largest combat training range.
The WTCRC is comprised of a number of facilities that contain various
advanced systems for training pilots in all aspects of combat flight
activities. The RFP provided that the agency would perform an
integrated assessment to determine the proposal offering the best
overall value to the government based on the following factors listed
in descending order of importance: technical merit, current and past
performance, and cost.
The subelements of the technical merit factor listed in descending
order of importance were: engineering and integration, operations and
maintenance, and management and control functions. These subelements
were to be evaluated using three "assessment criteria": understanding
the requirement, soundness of approach and compliance with
requirements, all equal in importance. Based on this assessment, an
overall technical merit rating was to be assigned using a
color/adjectival rating system (blue/exceptional, green/acceptable,
yellow/marginal or red/unacceptable). In addition to this rating, the
RFP provided with regard to technical merit that proposals would
receive a proposal risk rating of either high, moderate, or low based
upon an assessment of the risks associated with each proposal.
In the current and past performance area, the RFP provided that the
agency would assign color/adjectival ratings based on information
submitted by the offerors with their proposals, as well as information
obtained from outside sources. In addition to the color/adjectival
rating, the RFP provided that the agency would also assign a
performance risk rating of high, medium, or low based on the offerors'
performance record. Finally, cost was to be evaluated for realism,
reasonableness, and completeness.
The Air Force received five proposals, four of which it found to be
within the competitive range. The Air Force engaged in discussions
with these four offerors and solicited best and final offers (BAFO).
After evaluating BAFOs, the agency engaged in another round of
discussions to provide offerors receiving moderate or high proposal or
performance risk ratings an opportunity to further explain their
proposed approaches, or their current or past performance. After
concluding these discussions, the agency solicited and received a
second round of BAFOs. The evaluators rated the second BAFOs as
follows:
Offeror Technical Merit/
Proposal Risk Past & Present Performance/
Performance RiskEvaluated Cost[1]
Proteus Green/Moderate Blue/Low $15,807,774
UIE Green/Low Green/Low $23,631,916
Arcata Blue/Low Blue/Low $23,937,873
JB Industries Green/Moderate Green/Low $18,841,272
On the basis of these evaluation results, the agency made award to
Arcata. The Air Force source selection authority (SSA) specifically
found that, although Arcata had the highest overall evaluated cost,
its proposal offered a combination of outstanding technical features
and low risk that was worth the extra cost.
PROTEUS'S PROTEST
Risk Rating
The evaluators assigned Proteus's proposal a moderate proposal risk
rating primarily because they were concerned with the low number of
personnel Proteus had proposed, and because Proteus's technical
approach involved extensive cross utilization of its personnel to
accomplish all of the RFP tasks. Proteus contends that the moderate
rating was improper because it was based on the erroneous finding that
its proposed staffing was inadequate. Proteus maintains it was
irrational to assign its proposal a moderate risk rating, since it was
not rated technically unacceptable and its proposed costs were not
increased in the realism analysis.[2] Proteus also argues that
Arcata's larger proposed staff in fact was excessive, and that the
agency failed to have an objective standard against which to measure
the offerors' proposed staffing.
In reviewing allegations concerning the propriety of a technical
evaluation, our Office does not independently evaluate proposals or
substitute its judgment for that of the agency; we review the
evaluation only to ensure that it was reasonable and consistent with
the terms of the solicitation and applicable statutes and regulations.
JB Indus., B-251118.2, Apr. 6, 1993, 93-1 CPD para. 297.
The record shows that Arcata offered to perform using [deleted]
employees whereas Proteus proposed only [deleted] employees. This
comparatively low staffing level reflected Proteus's proposed
extensive cross utilization of personnel, and the use of part-time
employees. Essentially, Proteus proposed to have its engineers work
on more than one of the systems, and to use part-time employees to
fulfill additional responsibilities that could not be met by the
full-time employees when peak demand circumstances arose. Proteus's
approach was predicated on the assumption that not all of the systems
will need to be maintained or operated simultaneously.
The evaluators found Proteus's approach technically acceptable and its
proposed costs realistic, concluding that the firm could in fact
perform with its proposed staffing under its technical approach. The
evaluators were concerned, however, that Proteus's staffing approach
had the potential to cause schedule delays and degradation of
operations, and that it could lead to an overall loss of training
missions or increased costs. The evaluators thus concluded that,
while Proteus's proposed approach was acceptable, the risk was higher
than if the proposal had been based on more staffing. Arcata's
proposal was assigned a low proposal risk rating for this very
reason--its approach placed less reliance on cross utilization,
included more dedicated personnel overall and did not rely on
part-time employees to meet peak demand situations.
There is nothing unreasonable in these conclusions. Using fewer
employees to perform a contract is a legitimate strategy that will
reduce the cost of performance. However, such an approach also
reasonably can be expected to result in more situations where an
employee may not be available immediately when a task arises. While
Proteus would argue that careful, skilled management can minimize (and
maybe even eliminate altogether) these situations, the agency was not
compelled to assume this best case scenario, and to ignore the worst
case scenario. We think the moderate risk rating reasonably reflects
the evaluators' legitimate concerns regarding the worst case
scenario.[3] JB Indus., supra.
There is no support for Proteus's assertion that Arcata's proposed
staffing was excessive. Proteus's staffing level was below the
government estimate, and was specifically determined to be sufficient
for Arcata's proposed approach. Proteus has not attempted to show--by
means, for example, of specific references to Arcata's proposal--that
the agency's determination was flawed. Further, the Air Force was not
required to use an objective standard--a specific staffing level--for
determining proper staffing. Indeed, the mechanical application of a
government staffing estimate to determine the acceptability of
proposed manning is improper, since such an approach fails to take
into consideration such things as unique or innovative technical
approaches. KCA Corp., B-255115, Feb. 9, 1994, 94-1 CPD para. 94. Here,
the Air Force did precisely what it should have done--it assessed the
adequacy of each offeror's proposed staffing in light of its technical
approach, finding as to both Proteus and Arcata that their staffing
was acceptable for their approaches.
Technical Merit Rating
Proteus contends that the evaluation of its proposal under the
technical merit factor was erroneous; it believes its proposal should
have received the same blue/exceptional rating as Arcata's. In
support of its position, Proteus points to the fact that the agency
initially identified numerous strengths in its offer that were the
same as the strengths found in the Arcata offer; it complains that
these strengths improperly were not conveyed to the SSA.
Proteus is correct that the evaluators initially identified strengths
in its proposal that they were not conveyed to the SSA. However, this
was because it was determined that the strengths initially identified
for Proteus's proposal reflected only individual evaluator comments,
and not the evaluators' consensus view. The evaluators thus
subsequently prepared a revised evaluation report which did not state
the strengths that did not represent the consensus view of Proteus's
proposal. There is nothing improper in revising evaluation
conclusions in this manner. While Proteus complains that Arcata's
strengths were not eliminated in this revised repo/rt, there is no
basis for finding that these strengths did not reflect the consensus.
In fact, the agency's technical evaluation team chief specifically
states that the revised report "correctly reflects the consensus of
the [technical evaluation team]."
Further, there is no reason to conclude that the Proteus and Arcata
proposals should have been treated the same in the revised report. As
discussed above, the evaluators' (and the SSA's) overriding concern
with Proteus' proposal was with the inadequacy of its proposed
staffing; there was no similar concern with Arcata's staffing. While
there was no separate evaluation category for staffing, the problem
inherent in Proteus's staffing approach pervaded its entire technical
approach. In the "Overall Proposal Risk Assessment and Evaluation
Summary," the evaluators detailed the reasons for assigning both the
color/adjectival ratings and the risk ratings. Not only were the
risks inherent in Proteus's staffing approach repeatedly noted in the
risk assessment portion of this document, but it was the basis of
notable weaknesses under two assessment criteria (soundness of
approach and understanding/compliance with requirement) under the
operations and maintenance subelement. Given the legitimate concerns
with Proteus's staffing, and its effect on the technical merits of
Proteus's proposal, there simply is no basis to conclude that
Proteus's technical merit rating should have been higher than
green/acceptable.
Improper Weighting Of Proposal Risk
Proteus contends that the Air Force assigned disproportionate weight
to proposal risk, which was only supposed to be a general
consideration, improperly elevating it above Proteus's significant
cost advantage in the cost/technical tradeoff decision.
This argument is without merit. Risk was an evaluation criterion and
the record shows that the SSA specifically considered the differences
between Proteus's and Arcata's proposals, and found that Proteus's low
staffing, extensive cross utilization, and use of management personnel
to perform work level tasks posed a risk to contract scheduling and
could potentially have a negative effect on performance in terms of
lost missions, degraded pilot training and budget adjustments. This
problem with Proteus's proposal was properly considered and reasonably
affected both Proteus's proposal risk rating and its color/adjectival
technical merit rating. See JB Industries, supra (protester's
proposal properly assigned both a yellow/marginal adjectival rating
and a high risk rating based on inadequate staffing); see also
Greenbrier Indus., Inc., B-252943, Aug. 11, 1993, 93-2 CPD para. 91
(agencies may properly consider a deficiency in more than one area of
technical evaluation where the deficiency affects the acceptability of
a firm's proposal in more than one way). The SSA weighed this risk,
together with the overall negative impact of the inadequate staffing
on the technical proposal, against Proteus's lower cost and determined
that lower risk and increased staffing were in the government's best
interest. See JWK Int'l, B-256609.4, Sept. 1, 1994, 95-1 CPD para. 166.
While cross utilization and other staffing reduction strategies are
approaches to reducing the cost of performance, the agency was not
required to sacrifice what it deemed was the staffing necessary for
satisfactory, low risk performance; the agency's conclusion was
consistent with the evaluation scheme, under which technical
considerations were most important.
UIE'S PROTEST
UIE contends that the Air Force misevaluated proposals under the
engineering and integration technical subelement. UIE's argument
centers around one of the numerous operating systems, the route
integration instrumentation system (RIIS). This is an electronic
combat training system used to monitor electronic combat ranges and
provide bomber crews with detailed post-training mission debriefings.
The system is comprised of both on the ground hardware and extensive
software, and the focus of UIE's protest allegation relates to
maintenance of the software.
Essentially, UIE contends that the agency improperly assigned a
blue/exceptional rating to Arcata's proposal under the engineering and
integration subelement while assigning UIE only a green/acceptable
rating. UIE contends that it was irrational to assign these ratings
because Arcata does not have any direct RIIS experience (although it
represented to the Air Force that it did), and engaged in "bait and
switch" tactics by misrepresenting that it had incumbent RIIS employee
commitments. UIE points out that, in comparison, its proposed
subcontractor, GTE Government Systems Corporation, was the incumbent
contractor performing software development and modification for the
RIIS system.
The RIIS system was not the sole consideration under the engineering
and integration subelement; the contract's software and firmware
support requirements included three other electronic systems. The
record shows that the evaluators were predominately concerned with
each firm's proposed approach, as opposed to the particular employees
offered to perform, under this subelement. Arcata's proposal was
assigned a blue/exceptional rating because the evaluators concluded
that it included a number of innovations that exceeded the
requirements of the RFP in a way that was beneficial to the Air Force.
For example, the evaluators noted that Arcata offered [deleted].
In comparison, while the evaluators found UIE's proposal acceptable
under this subelement, they noted no particular strengths that
exceeded the requirements of the RFP to the agency's benefit. Other
than suggesting that its proposal merited a blue/exceptional rating
largely because of its RIIS experience, UIE does not challenge the
agency's evaluation conclusions in this area. UIE does not allege,
for example, that the agency improperly failed to give its proposal
evaluation credit for specified proposal features that exceeded the
RFP's requirements; in fact, UIE does not even address the propriety
of its rating in connection with the other systems besides the RIIS
system that were reviewed under this subelement. In our view, UIE's
position amounts to no more than disagreement with the evaluators'
conclusions regarding the relative merit of its proposal in this area,
which is insufficient to show that the evaluation was unreasonable or
otherwise improper. See Cleveland Telecommunications Corp., B-257294,
Sept. 19, 1994, 94-2 CPD para. 105.
We also find no merit to UIE's bait and switch allegation. Where a
protester alleges that a bait and switch has occurred, it must show
that the firm in question made a misrepresentation regarding
particular individuals it does not expect to employ during contract
performance, that the misrepresentation was material (that is, was
relied upon by the agency), and that it had a significant impact on
the evaluation results. Intermetrics, Inc., B-259254.2, Apr. 3, 1995,
95-1 CPD para. 215.
The RFP did not require the submission of resumes for all proposed
employees, but only key management employees. For the remainder of a
firm's staffing, the RFP required only that the firm describe its
methods and procedures used in identifying and retaining personnel
qualified to perform the effort. Arcata's proposal included only one
resume in connection with the RIIS function--the resume of its
proposed RIIS site manager, who was currently employed by the Navy in
a civilian capacity and executed a letter of commitment to work for
the firm if it were awarded the contract. As for the remainder of its
staff requirements for the RIIS function, Arcata represented only that
it would retain the core personnel currently working on the system,
that it had letters of commitment from some of the incumbent RIIS
personnel, and that it had spoken with all RIIS personnel who in turn
had expressed a desire to be considered for employment if Arcata were
the successful offeror. Arcata also represented that it had "direct"
RIIS experience because of the commitments of incumbent employees.
The record shows that Arcata in fact did have letters of commitment
from a number of the incumbent RIIS personnel.[4] Arcata's proposal
thus contained no misrepresentation concerning either the extent to
which it had obtained commitments from incumbent personnel and how it
would staff the RIIS function, or as to its direct experience based on
the commitments, so it cannot be said there was an improper bait and
switch. Id.
UIE raised numerous other allegations in its initial protest which the
Air Force responded to in detail in its agency report. In its
comments, UIE did not rebut the agency's position on these issues,
stating instead that it preferred to have our Office decide these
matters based on the existing record. We have reviewed all of UIE's
allegations and find that they are either based on a misunderstanding
of the facts surrounding the acquisition, or simply without merit.
For example, UIE alleged that the agency had engaged in technical
leveling during discussions with Arcata. UIE's contention centered
around the fact that the Air Force conducted an additional round of
discussions after receiving the first BAFOs. UIE alleged that this
second round of discussions was conducted for the sole purpose of
providing Arcata an additional opportunity to improve its technical
rating. As discussed above, the agency's second round of discussions
was conducted for the limited purpose of providing offerors which had
received a moderate or high proposal or performance risk rating an
opportunity to further explain their proposed approaches. Because
Arcata had received low proposal and performance risk ratings, it was
not given any additional discussion questions after the first round of
BAFOs. (UIE on the other hand was given a discussion question because
its proposal had received a moderate performance risk rating.) The
record thus does not support the allegation.
The protests are denied.
Comptroller General
of the United States
1. The agency made no significant cost adjustments to any of the
proposals under its
cost realism
evaluation.
2. Proteus argues in the alternative that the Air Force's failure to
increase its evaluated costs during the cost realism evaluation in
light of its proposal risk rating shows that the agency failed to
conduct an adequate cost realism evaluation. It is not apparent to
us, however, how such an alleged failure could have prejudiced
Proteus, since any increase in the firm's evaluated cost necessarily
would have adversely affected its competitive standing. In any case,
as discussed below, the record shows that the agency considered
Proteus's manning acceptable and its proposed costs realistic, and
found only that there was an enhanced potential risk associated with
award to Proteus in light of its approach.
3. Proteus argues in the alternative that the Air Force did not
conduct meaningful discussions with it because the agency did not
directly discuss Proteus's proposed staffing. This allegation is
without merit. The agency reopened discussions after the first BAFOs
in order to provide firms receiving moderate or high proposal or
performance risk ratings an additional opportunity to address the
agency's concerns. Proteus was provided an additional five discussion
questions, all of which dealt specifically with the adequacy of its
proposed staffing. For example, in connection with the firm's
proposed staffing plan for hardware engineering support, the agency
asked :
"Request further explanation of hardware engineering
support methods for all Nellis Range Complex systems.
Considering Range operations and your proposed staffing
plan, please provide more detail on how your approach will
avoid significant serious disruption of schedule or
degradation of performance." (Emphasis in original.)
The agency's other discussion questions were similarly detailed. The
Air Force clearly provided Proteus meaningful discussions in the area
of its staffing approach. Fidelity Technologies Corp., B-258944, Feb.
22, 1995, 95-1 CPD para. 112.
4. Arcata advised our Office during the pendency of the protest that
it had received employment applications from a significant number of
the remaining incumbent RIIS personnel after being awarded the
contract.