BNUMBER: B-270697; B-270697.2
DATE: April 9, 1996
TITLE: Potomac Research International, Inc.
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Matter of:Potomac Research International, Inc.
File: B-270697; B-270697.2
Date:April 9, 1996
Kenneth S. Kramer, Esq., James M. Weitzel, Esq., and James S. Kennell,
Esq., Fried, Frank, Harris, Shriver & Jacobson, for the protester.
James J. Durney, for COBRO Corporation, an intervenor
Joshua A. Kranzberg, Esq., David H. Scott, Esq., and William R.
Hinchman, Esq., Department of the Army, for the agency.
Linda S. Lebowitz, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Where the agency properly determined that the awardee's initial
proposal was technically acceptable and that its proposed cost was
reasonable, and where the agency reserved the right to award on the
basis of initial proposals without discussions, the award to the lower
proposed cost, technically equal offeror was reasonable and consistent
with the terms of the solicitation.
DECISION
Potomac Research International, Inc. (PRI) protests the award of a
contract to COBRO Corporation under request for proposals (RFP) No.
DAAD05-95-R-0018, issued by the Department of the Army for data
collection services for the U.S. Army Aviation Technical Test Center,
Ft. Rucker, Alabama. The protester challenges the technical
acceptability of COBRO's proposal, the reasonableness of COBRO's
proposed cost, and the agency's decision to award on the basis of
initial proposals without discussions.
We deny the protest.
The RFP contemplated the award of a time-and-materials,
cost-reimbursement contract for a base period with 4 option years.
For each period of performance, the RFP schedule listed estimated
hours for specified personnel positions. Offerors were required to
insert on the schedule unit and extended hourly rates for each
position (some of which were subject to applicable wage
determinations). The RFP described "required" and "desired"
education, experience, and skills qualifications for each position.
The RFP required offerors to "provide resumes, including training
certificates and letters of intent, for all personnel, proposed
subcontractors, and consultants to be used in this effort." The RFP
also included a personnel replacement clause.
The RFP stated that the contract would be awarded to the firm whose
proposal was deemed most advantageous to the government, cost and
technical factors considered. Proposals would be evaluated in three
areas--technical (with personnel qualifications considered
significantly more important than understanding of the
problem/objective), management (with an offeror's management plan
considered significantly more important than its corporate background
and past performance/ corporate experience, which were considered
equal in importance), and cost (whether an offeror's total proposed
cost was consistent with its proposed approach).
The RFP stated that the award could be made on the basis of initial
proposals without discussions; accordingly, offerors were advised that
an initial proposal should contain the offeror's most favorable terms
from a technical and cost standpoint. The RFP stated that the
technical and management areas were slightly more important than cost,
but between technically equal proposals cost would become more
significant in awarding the contract.
Three firms, including PRI and COBRO, submitted initial proposals.
The technical and management areas were evaluated by the agency's
proposal evaluation board (PEB). In evaluating these areas, the PEB
assigned points to each of the technical and management evaluation
subfactors. An offeror's raw scores for the technical and management
areas were subsequently weighted and added together to arrive at the
offeror's total weighted technical and management score. In
evaluating the reasonableness of an offeror's proposed cost, the
contracting officer considered each offeror's proposal, the technical
evaluations, the independent government estimate, applicable wage
determinations, and the rate verifications requested from the Defense
Contract Audit Agency (DCAA).
The proposals of PRI and COBRO received the following weighted
technical and management scores:
PRI COBRO
Technical 54.7 53.9
Management 38.0 40.0
Total 92.7 93.9
COBRO's proposed cost was approximately 9 percent lower than PRI's
proposed cost.
Since there was only an approximate 1-point difference in the total
weighted technical and management scores for PRI and COBRO, the
contracting officer determined that the proposals of PRI and COBRO
were technically equal. In light of COBRO's lower proposed cost and
on the basis of initial proposals, the contracting officer awarded the
contract to COBRO whose proposal was deemed most advantageous to the
government.
PRI does not challenge the underlying evaluation of the qualifications
of its own or of COBRO's proposed personnel. For this reason, we have
no basis to question the reasonableness of the agency's evaluation in
this regard. Nevertheless, PRI argues that COBRO's proposal should
have been rejected as technically unacceptable, contending that it
should have been apparent to the evaluators that COBRO had no
reasonable expectation that many of its proposed employees would
actually perform the contract.[1] For example, for proposed personnel
currently employed by COBRO, COBRO submitted resumes, but not letters
of intent. As a result, PRI suggests that some of these proposed
individuals, despite their current employment status, are not
committed to performing the contract.
The RFP required offerors to furnish evidence of an employee's
commitment and availability to perform the contract. The resumes of
COBRO's proposed current employees confirmed that these individuals
were currently employed by COBRO and were available to support this
contract, on either a full-time or part-time basis, in particular
positions. We have found this sufficient to satisfy a solicitation
requirement for documentation showing commitment and/or availability.
See Intermetrics, Inc., B-259254.2, Apr. 3, 1995, 95-1 CPD para. 215.
Moreover, there is no evidence in the record which suggests that the
evaluators had any basis to question the commitment and availability
of COBRO's current employees to perform this contract.[2]
In addition, for proposed personnel currently employed by the
incumbent contractor, COBRO submitted letters of intent in which these
individuals stated that they intended "to join COBRO should [it] be
selected as the successful prime contractor," acknowledging that "[i]f
COBRO is awarded a contract . . . the undersigned will be offered
employment for the referenced position subject to salary
negotiations." In its consolidated comments, PRI submitted statements
from several former and current incumbent personnel which include the
following:
"I provided a copy of my resume to COBRO representatives and
granted COBRO permission to submit my resume as part of [its]
proposal. I did so, however, with the understanding that I would
be retained at my current level of pay. At no time did COBRO
indicate to me in any way that I would be required to take a
reduction in pay as a condition for accepting employment with
[it]. Had I known in advance that COBRO planned to reduce my
compensation, I would not have given [it] permission to use my
resume."
PRI contends that the "subject to salary negotiations" language in the
letters of intent executed by incumbent personnel should have alerted
the evaluators that COBRO may have deceived these individuals about
compensation levels. For this reason, PRI challenges the validity of
the commitments obtained by COBRO from these individuals and,
therefore, the technical acceptability of COBRO's proposal.
Notwithstanding the position taken by incumbent personnel during these
protests, these individuals furnished resumes and letters of intent to
COBRO to submit as part of its proposal, thus confirming that they
were committed and available to perform the contract. By signing the
letters of intent containing the language "subject to salary
negotiations," we think incumbent personnel were on notice, or should
have at least contemplated absent a firm salary agreement from COBRO
at the time the letters of intent were executed, that a salary
reduction was possible if COBRO were awarded the contract. While the
evaluators could reasonably expect post-award salary negotiations to
be bilateral and conducted in good faith, in the event these
negotiations are not ultimately successful, we do not believe this
would necessarily show COBRO's bad faith in proposing these
individuals. See Agusta Int'l S.A., 69 Comp. Gen. 326 (1990), 90-1
CPD para. 311. We conclude that prior to award, there was no basis for
the evaluators to call into question the commitment and availability
of the incumbent personnel.[3]
PRI next challenges as unreasonable COBRO's low proposed labor rates,
despite acknowledging that COBRO may pay its employees more than it
charges the government under this cost reimbursement contract and that
COBRO may even willingly perform this contract at a loss.
We find no merit in PRI's challenge. The agency points out, and PRI
does not dispute, that while for some labor categories PRI proposed
higher rates than COBRO, for other labor categories COBRO proposed
higher rates than PRI. Nevertheless, the contracting officer
determined that for the nonmanagerial labor categories subject to
applicable wage determinations, both PRI and COBRO met or exceeded the
rates required by the wage determinations, and concluded that their
labor rates for these positions were reasonable. For the managerial
labor categories not subject to applicable wage determinations,
including the program manager position, the contracting officer
requested rate verifications from DCAA. The contracting officer took
no exception to the labor rates proposed by either PRI or COBRO for
the managerial positions.
In arguing that COBRO's proposed labor rates were unreasonably low,
PRI specifically points out that COBRO's proposed labor rate for the
program manager position was approximately 18 percent below DCAA's
audited rate for this position. (DCAA provided an audited rate only
for COBRO's program manager position.) However, the record shows, and
PRI does not rebut, that using DCAA's audited rate for COBRO's program
manager position as the baseline, PRI's proposed labor rate for this
position was approximately 29 percent below the audited rate.
Furthermore, the record shows that both PRI's and COBRO's proposed
labor rate for the program manager position was below the labor rate
paid by the incumbent contractor for this position. In light of this
information, we fail to see how COBRO's proposed labor rate for the
program manger position can be viewed as unreasonably low without
making a corresponding assessment about PRI's proposed labor rate for
this position. In sum, we have no basis on this record to question
the contracting officer's conclusion that COBRO's proposed labor rates
were not unreasonably low.
PRI finally challenges the decision of the contracting officer to make
award to COBRO on the basis of its initial proposal without
discussions.
Award may be made on the basis of initial proposals where the RFP
advised offerors of the agency's intention in this regard and
discussions are not deemed necessary. 10 U.S.C. sec. 2305(b)(4)(A)(ii)
(1994); Federal Acquisition Regulation sec. 15.610(a)(3). All offerors,
including PRI, were on notice from the RFP that the agency might not
conduct technical and cost discussions, and that their initial
proposals should contain the most favorable terms that they were
prepared to offer. PRI has not challenged in any meaningful manner
the evaluation of its own proposal.[4] As discussed above, we
conclude, contrary to PRI's assertions, that the agency properly
determined that COBRO's proposal was technically acceptable and its
proposed cost was reasonable. In light of the approximate 1-point
difference in total weighted technical and management scores for PRI
and COBRO and consistent with the evaluation methodology described in
the RFP, we think the contracting officer properly determined that the
proposals of PRI and COBRO were technically equal and reasonably made
award to COBRO as the most advantageous offeror on the basis of its
technically equal, lower cost (by approximately 9 percent) initial
proposal. See WB Inc., B-250954, Feb. 23, 1993, 93-1 CPD para. 173.
The protests are denied.
Comptroller General
of the United States
1. While initially characterizing this argument as one involving a
"bait-and-switch," PRI abandoned this characterization in its
consolidated comments on the agency's initial and supplemental
administrative reports. We note that there is no evidence in the
record that COBRO intends a wholesale substitution or replacement of
personnel after award.
2. PRI specifically refers to three individuals who are currently
employed by COBRO in the positions of project coordinator, computer
system analyst, and quality control specialist. As evidenced by their
resumes, COBRO proposed these individuals for various data collector
positions. PRI speculates that absent COBRO's furnishing letters of
intent, COBRO could not reasonably expect these currently employed
individuals to perform in less prestigious and possibly lower paying
positions.
There is nothing in the record that suggests that COBRO proposed these
individuals in other than good faith. We also note that just as PRI
speculates that these individuals might not perform the contract if
they are "demoted," one can also speculate that depending on market
conditions, an individual would accept a lower paying, less
prestigious position to avoid unemployment. Further, the record shows
that COBRO is promoting some currently employed personnel. For
example, the individual who is currently performing as an office
automation specialist will be promoted to the position of program
manager, one of four designated managerial positions.
In any event, if these or other proposed individuals whose
qualifications were evaluated choose not to perform the contract,
COBRO will be required, in accordance with the personnel replacement
clause in the RFP, to replace these individuals with others "whose
qualifications are equal to or greater than the replaced employee."
In its proposal, COBRO specifically acknowledged and took no exception
to this clause.
3. Again, COBRO will be bound by the terms of the personnel
replacement clause if any incumbent personnel whose qualifications
were evaluated for particular positions choose not to perform the
contract.
4. PRI complains that the contracting officer failed to recognize that
its weighted score for the personnel qualifications technical
evaluation subfactor, the most important evaluation subfactor, was
slightly higher (by 1.5 weighted points) than COBRO's weighted score.
However, this point differential was reflected in PRI's higher
weighted technical score. Moreover, the RFP stated that the
evaluation of four specific managerial positions would be weighted
slightly higher than the evaluation of nonmanagerial positions. For
the most important managerial position--program manager--COBRO
received 4 more raw points than PRI, and for the other three
managerial positions, COBRO and PRI received the same raw points.
Consistent with the terms of the RFP, the contracting officer
reasonably could consider that COBRO's slightly higher score for the
program manager position offset its slightly lower scores for
nonmanagerial positions vis-a-vis PRI's scores for these positions.
The contracting officer thus reasonably could conclude that PRI's
slightly higher scores for the nonmanagerial positions did not justify
the payment of a cost premium.
PRI also complains that there is no explanation in the record for why
it received 2 fewer points than COBRO under an understanding of the
problem/objective technical evaluation subfactor and 3 fewer points
than COBRO under a management plan management evaluation subfactor.
While we agree with PRI that the agency did not provide a supporting
narrative for this scoring, we do not believe the agency's failure to
provide a narrative explanation prejudiced PRI. In this regard, PRI
has focused on raw points, not weighted scores. Assuming for the
subfactors in question that PRI received the same raw points as COBRO,
PRI's revised total weighted technical and management score would
increase by 1.4 weighted points to 94.1 total weighted points,
compared to COBRO's 93.9 total weighted points. The contracting
officer states in the agency's administrative report in response to
the protests that even if PRI's numerical rating exceeded COBRO's, the
difference would have to have been significant to justify PRI's
9-percent cost premium. Accordingly, we do not believe this de
minimis difference in total weighted scores would change the
contracting officer's view that the proposals of PRI and COBRO were
technically equal.