BNUMBER:  B-270814; B-270814.2
DATE:  April 25, 1996
TITLE:  McCaffery & Whitener, Inc.

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Matter of:McCaffery & Whitener, Inc.

File:     B-270814; B-270814.2

Date:April 25, 1996

Thomas F. McCaffery for the protester.
Richard S. Haynes, Esq., Department of the Navy, for the agency.
Robert C. Arsenoff, Esq., and Paul I. Lieberman, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Agency properly did not consider transition costs in selecting 
awardee where solicitation did not provide for the evaluation of such 
costs.

2.  Agency evaluation of  awardee's technical proposal which did not 
take into account the need for a phase-in training period is 
unobjectionable where phase-in training was neither a requirement nor 
an evaluation factor. 

3.  Protest that agency should have rejected awardee's offer as 
presenting an unacceptable cost risk because it contained 
disproportionate prices for two labor categories is denied where 
agency reasonably concluded that the government could control the 
labor mixes to be used in the issuance of delivery orders.

DECISION

McCaffery & Whitener, Inc. (MWI) protests the award of a contract to 
Global Associates, Ltd. under request for proposals (RFP) No. 
N62387-96-D-3017, issued by the Department of the Navy for maritime 
related engineering, technical and analytical services.  MWI alleges 
that the agency failed to evaluate transition costs in selecting 
Global for award and that the agency misevaluated Global's technical 
and price proposals.

We deny the protests.

The RFP,  issued on July 17, 1995, contemplated the award of a 1-year 
indefinite quantity contract (with 1 option year) with provisions for 
both fixed-price and time- and-materials delivery orders to be issued 
by the Navy.  Award was to be made to the offeror submitting the low 
technically acceptable proposal. 

Technical acceptability was to be measured against four factors listed 
in descending order of importance:  technical approach/understanding; 
personnel; management; and facilities/resources.  Price was to be 
evaluated by multiplying fixed labor rates submitted by offerors for 
five labor categories by the estimated labor hours associated with 
each category.

Three initial proposals were received and one was eliminated, after 
which discussion were conducted with MWI and Global, the remaining 
competitive range offerors.  Following discussions, each offeror 
submitted a best and final offer (BAFO), both of which were found to 
be technically acceptable.  Global's evaluated price was $692,115; 
MWI's was $699,730.  Global received the award as the result of its 
lower price and this protest followed.

The protester's first two bases of protest relate to a transfer plan 
proposed in the event that MWI did not receive the award.  Under the 
predecessor contract, MWI was required to return software and hardware 
used during contract performance so that relevant materials could then 
be provided to the successful contractor.  Prior to the submission of 
BAFOs, MWI--the incumbent contractor--wrote the Navy proposing a 
transition plan. 

Following notice of the award to Global, MWI again wrote the Navy 
outlining the details of its proposed transition plan over a 30-day 
period at a cost of $40,078.50.  The Navy submitted a counterproposal 
for a plan to be executed over a  2-week period at a cost of 
$8,674.40. In particular, the Navy envisioned MWI performing the 
following tasks:

      "-- Review of existing data bases
       --  Ship Data Base
       --  Ship Access to Ports Evaluator,
       --  Ship Availability Generator, and
       --  the Merchant Marine Manpower Model

     "Review shall include data base familiarization, critical 
     assumptions, critical elements and data base maintenance."

MWI submitted another slightly scaled-down proposal at a cost of 
$30,583.60; negotiations have been suspended in light of the stay of 
contract performance occasioned by this protest.

Noting that there is a $7,615 difference in prices offered between 
Global and MWI, the protester first asserts that, since the Navy's 
estimate of transition costs ($8,674) is greater than the price 
difference, MWI's proposal reflects the lowest cost to the 
government and, accordingly, MWI should receive the award.  Transition 
costs may be an evaluation factor in appropriate circumstances, but an 
agency may only evaluate them if offerors are advised in the RFP that 
such costs will be evaluated. Since the RFP in this case did not so 
advise offerors, there was no basis for the agency to consider 
transition costs in determining the low cost offeror.  Cherokee Elecs. 
Corp., B-240659, Dec. 10, 1990, 90-2 CPD  para.  467.

Next, MWI alleges that since the transition period contemplated by the 
Navy to familiarize Global with government furnished data bases was to 
last 2 weeks, Global could not have been found technically acceptable 
because it was incapable of performing certain contract tasks which 
called for completion within 1 to 14 days of the placement of delivery 
orders.  However, since a transition plan was not called for in the 
RFP, and neither relates to nor affects any of the evaluation factors 
set forth in the RFP, the agency properly did not consider any such 
plan in its evaluation of proposals.  To the extent that MWI is 
objecting to the agency's failure to include the transition plan in 
the RFP as an evaluation factor, the protest is untimely since 
protests based on alleged apparent solicitation improprieties must be 
filed prior to the time set for receipt of initial proposals.  Bid 
Protest Regulations, section 21.2(a)(1), 60 Fed. Reg. 40737, 40740 
(Aug. 10, 1995) (to be codified at 4 C.F.R.  sec.  21.2(a)(1)).[1]

MWI's final allegation involves Global's pricing structure, which was 
as follows:

Labor Category       Base Year Rate       Option Year Rate

Project Director
(2,000 Hrs/yr)       $54.76               $56.52

Senior Analyst
(2,000 Hrs/yr)       $42.71               $43.99

Analyst
(2,000 Hrs/yr)       $40.24               $41.72

Junior Analyst
(2,000 Hrs/yr)       $13.20               $13.60

Clerical
(1,000 Hrs/yr)       $10.74               $11.06
Citing our decision Stanley Assocs., Inc., B-232361, Dec. 22, 1988, 
88-2 CPD  para.  617, in which we viewed a similar disparity in prices 
between Junior Analyst and Analyst labor categories as presenting a 
reasonable basis for the agency's rejection of a low offer as 
presenting an unacceptable cost risk, MWI alleges that the Navy was 
here required to reject Global's offer for the same reason.  The gist 
of the protester's argument is that there is a significant incentive 
for Global to shift work from the allegedly underpriced Junior Analyst 
category to the allegedly overpriced Analyst category during contract 
performance; on this basis, MWI argues that there is inadequate 
assurance that Global will perform at the lowest cost to the 
government.

The protester's reliance on Stanley is misplaced.  Stanley presented 
the question of whether the agency had discretion to determine whether 
or not disparate labor rates presented an unacceptable cost risk.  The 
decision was predicated on a number of facts not present here.  For 
example, in Stanley, the underpriced rates were for a labor category 
which amounted to almost one-half of the government's total 
requirements; here, the Junior Analyst category accounts for only 22 
percent of the total requirements.  In Stanley, the protester 
drastically reduced its Junior Analyst rates in its BAFO despite the 
agency having discussed the matter with the firm in negotiations; 
here, there was no such drastic reduction.  Moreover, in Stanley, the 
agency expressed concern that, although it had the unilateral right to 
determine the labor mix required for each delivery order, it believed 
that in the 
circumstances of the contract at issue, this did not provide adequate 
control to 
ensure that the government would receive the lowest price during 
contract performance.  Here, in contrast, the agency expresses 
confidence that it has the wherewithal to control the labor mix to 
assure this result.[2]

Accordingly, the potential cost uncertainty in this case does not rise 
to the level presented in Stanley, and we see no basis to conclude 
that the agency acted unreasonably in determining that Global's 
pricing structure did not present an undue risk.

The protest is denied.

Comptroller General
of the United States 

1. Moreover, to read the solicitation as requiring the rejection of 
any offer from a firm requiring transition training is tantamount to 
requesting a sole source award to the incumbent protester which does 
not require transition training.  We generally will not review a 
protest that an agency should award a contract on a sole source basis 
since the purpose of our bid protest function is to ensure full and 
open competition for government contracts.  See Simula, Inc., 
B-251749, Feb. 1, 1993, 93-1 CPD  para.  86.  

2. In cases decided subsequent to Stanley, we have given weight to an 
agency's assurances that careful contract monitoring can ensure that a 
particular awardee's performance will result in the lowest cost to the 
government.  Here, we have no basis to question the Navy's ability in 
this regard.  See Science Applications Int'l Corp., B-232548; 
B-232548.2, Jan. 23, 1989, 89-1 CPD  para.  52.