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.