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.