BNUMBER: B-276033
DATE: May 5, 1997
TITLE: Geo-Centers, Inc., B-276033, May 5, 1997
**********************************************************************
DOCUMENT 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:Geo-Centers, Inc.
File: B-276033
Date:May 5, 1997
Daniel J. Kelly, Esq., Gadsby & Hannah, LLP, for the protester.
Matthew S. Perlman, Esq., Richard J. Webber, Esq., and Alison J.
Micheli, Esq., Arent Fox Kintner Plotkin & Kahn, for Dynamac
Corporation, an intervenor.
Joshua A. Kranzberg, Esq., and David H. Scott, Esq., Department of the
Army, for the agency.
Ralph O. White, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Agency contention that protest should be dismissed as untimely
when filed nearly 3 months after contract award, and nearly 2 months
after debriefing, is denied where the record shows that: (1) the
protester sought a debriefing within 10 days of contract award; (2)
the debriefing was delayed because of the unavailability of agency
technical personnel; (3) the information which forms the basis for
protest was withheld from the protester at the debriefing, even though
the protester requested the information; and (4) the information was
later provided to the protester in response to a Freedom of
Information Act request filed immediately after the debriefing.
2. Contention that agency unreasonably evaluated technical proposals
by awarding both proposals the maximum number of available points is
denied because the record shows that the evaluation was reasonable and
in accordance with the stated evaluation criteria, and because there
is nothing per se improper about an evaluation which results in the
award of the maximum score to more than one offeror.
3. Protester's contention that the cost evaluation improperly relied
on a flawed government cost estimate is denied where the agency
recognized that its estimate of costs was low and other steps were
available to the agency to permit an assessment of proposed costs.
4. Challenge to agency's evaluation of sample task costs is sustained
where the record shows that the agency failed to evaluate sample task
cost proposals in accordance with the solicitation evaluation
criteria, and did not reasonably consider the impact that widely
divergent sample task costs might have on the determination of which
proposal is most advantageous to the government.
DECISION
Geo-Centers, Inc. protests the award of a contract to Dynamac
Corporation, pursuant to request for proposals (RFP) No.
DAAD05-95-R-0794, issued by the Department of the Army for scientific
and technical support services related to the Health Effects Research
Program of the Army's Center for Health Promotion and Preventative
Medicine at Aberdeen Proving Ground, Maryland. Geo-Centers argues
that the agency improperly awarded maximum technical scores to each
offeror's proposal and performed an unreasonable cost realism
evaluation.
We sustain the protest.
The RFP anticipated award of a cost-plus-fixed-fee task order-type
contract for a base year and 2 option years to the offeror whose
proposal offered the best value to the government. Section M of the
RFP set forth five evaluation factors: technical merit, management
merit, performance risk, cost, and subcontracting plan. The RFP
advised that the technical and management factors would be combined
and numerically scored (on a 1,000-point scale); the performance risk
and cost factors would be evaluated on a narrative basis; and the
subcontracting plan would be evaluated on a go/no-go basis. Potential
offerors were also advised that the technical/management area would be
significantly more important than cost, which would be slightly more
important than performance risk. In addition, the RFP explained that
if the proposals were relatively equal in the technical/management
area, cost would assume greater importance. Finally, the RFP
identified the required labor categories--i.e., chemist, biologist,
statistician, etc.--and the estimated hours for each category.
The RFP contained three sample tasks to which offerors were to submit
a technical response and sample task cost proposals. (The sample task
cost proposals were in addition to the main cost proposal required by
the RFP.) The RFP stated that the sample task cost proposals would be
evaluated for price reasonableness (section L at 7), and for cost
realism (section M at 2). The RFP set forth different definitions for
price reasonableness and cost realism.[1]
The Army received two proposals--one from Dynamac, one from
Geo-Centers, the incumbent contractor providing many of the services
here. The Army found both proposals acceptable,[2] and conducted
discussions with both offerors. After the conclusion of negotiations,
both offerors submitted revised proposals that were evaluated prior to
the request for best and final offers (BAFO). Upon receipt of BAFOs,
proposals were evaluated for a third time. The results of the
technical evaluations are set forth below:
OFFEROR INITIAL
PROPOSAL
SCORE POST-
DISCUSSIONS
SCORE
BAFO
SCORE
Geo-Centers 930 998 1,000
Dynamac 680 775 1,000
After concluding that the BAFOs were technically equal, the Army made
its selection decision on the basis of cost--there being no
significant discriminator under the performance risk or subcontracting
plan evaluation factors. Since the RFP specified the applicable labor
categories and labor hours under each category, and since the contract
was to involve task orders, the review of the overall cost proposals
focused on the direct and indirect rates applied. The proposed costs
offered initially, and at BAFO, are set forth below:
Initial BAFO
Costs Costs
Geo-Centers [deleted] [deleted]
Dynamac [deleted] $3.3 mil.
Using proposed costs, together with an assessment from the pricing
review team that the proposed costs were reasonable, the Army awarded
the contract to Dynamac on October 30, 1996. Geo-Centers filed its
protest with our Office on January 24, 1997.
The decision below sustains Geo-Centers's complaint that the agency
unreasonably evaluated its sample task cost proposals--one of three
challenges to the Army's cost evaluation. Before reaching this issue,
however, the decision considers and denies the other cost realism
challenges, as well as Geo-Centers's arguments that the evaluation of
technical proposals was unreasonable. In addition, the decision
considers the threshold issue of whether this protest was filed on a
timely basis.
PROCEDURAL ISSUES
The Army argues that Geo-Centers's protest is untimely because
Geo-Centers did not file here until 3 months after contract award, and
almost 2 months after its debriefing. For the reasons set forth
below, we conclude that the protest is timely.
The record in this case shows that Geo-Centers became aware of the
October 30 contract award to Dynamac on November 1. Although the
record reflects disputes about when the debriefing was requested, it
shows that on November 7 the contracting officer scheduled a November
12 debriefing for Geo-Centers.[3] Because the Army was unable to make
available any of the technical personnel involved in the evaluation on
November 12, the debriefing was rescheduled to--and held on-- November
26.
During the course of the debriefing, Army officials disclosed to
Geo-Centers that there were no weaknesses or deficiencies in either
proposal and that the proposals were relatively equal to one another
in the area of technical and management merit. Geo-Centers was also
advised that the agency conducted a cost realism review of the
proposals that was generally limited to verifying the offerors' labor,
overhead, and general and administrative (G&A) rates with the Defense
Contract Audit Agency (DCAA). In response to questions seeking the
point scores assigned to the proposals, and the independent government
cost estimate (IGCE) used for evaluation, the agency officials
explained that they were not sure such information could be released.
By letter dated December 5, Geo-Centers requested the point scores and
the IGCE from the Army under the Freedom of Information Act (FOIA).
By letter dated January 10, 1997--and received by Geo-Centers on
January 16--the Army released both items. Thus, on January 16,
Geo-Centers learned for the first time that both offerors received the
maximum possible point score--1,000 points--and that the agency IGCE
was erroneously calculated. Specifically, the materials provided by
the Army showed that the agency failed to include in its IGCE 22,500
hours of engineering technician time added by amendment No. 0003 to
the RFP, and failed to include the costs associated with the second of
the three sample tasks identified in the solicitation. Thus, in its
protest filed on January 24--8 days after receipt of the Army's
January 10 letter--the protester argues that the evaluation was
unreasonable since both offerors received the highest possible scores,
and that the conclusion that the awardee's costs were reasonable was
based on a comparison with a flawed IGCE.
The Army is correct in its claim that Geo-Centers was generally
required to challenge any of the particulars regarding its evaluation,
and the selection decision here, within 10 days of the November 26
debriefing. 4 C.F.R. sec. 21.2(a)(2) (1997); GBF Medical Group/Safety
Prod. Mktg., Inc.--Recon., B-250923.2, Nov. 24, 1992, 92-2 CPD para. 378
at 2-3. Nonetheless, receipt of a debriefing does not preclude an
offeror from filing a later protest on an issue about which it was not
advised by the agency during the debriefing. See Hughes Space and
Communications Co.; Lockheed Missiles & Space Co., Inc., B-266225.6 et
al., Apr. 15, 1996, 96-1 CPD para. 199 at 23.
Here, where the record shows that the protester clearly sought a
debriefing within 10 days of learning of the award, and diligently
sought more information at each step in the process--at no point
allowing more than 10 days to pass before making its next request--we
will not conclude that Geo-Centers has failed to diligently pursue its
interests with respect to this procurement. Thus, we conclude that
Geo-Centers can raise a timely challenge based on the information
received in the Army's FOIA response--i.e., the awarding of maximum
scores to both offerors, and the agency's reliance on a flawed
IGCE--but cannot raise issues based on information provided at the
November 26 debriefing.[4]
TECHNICAL EVALUATION
With respect to the contention that the evaluation was unreasonable
because both offers received the highest possible technical score,
Geo-Centers argues that the scoring system was flawed as it did not
discriminate between exemplary and acceptable proposals, and because
proposals were scored by way of deductions from the maximum possible
score, rather than beginning with a score of zero and awarding points.
In addition, Geo-Centers argues that the evaluation was arbitrary in
that the evaluators did not understand, and as a result, misused
several important terms of art. Finally, it argues that the high
score awarded to Dynamac's proposal was improperly achieved after the
agency spoon-fed the awardee during discussions by revealing every
weakness in the proposal perceived by agency evaluators.
In considering a protest against an agency's evaluation of proposals,
we will examine the record to determine whether the agency's judgment
was reasonable and consistent with stated evaluation criteria and
applicable statutes and regulations. ESCO, Inc., 66 Comp. Gen. 404,
410 (1987), 87-1 CPD para. 450 at 7. In this regard, we note at the
outset that there is nothing per se improper about an evaluation which
results in the award of the maximum possible score to more than one
offer, and nothing about this result automatically requires a finding
that an agency was seeking only minimally acceptable proposals.[5]
Alcoa Marine Corp., B-196721, May 9, 1980, 80-1 CPD para. 335 at 4.
With respect to Geo-Centers's first contention, our review of the
record finds no support for its claim that the agency's evaluation
approach did not discriminate between meritorious proposals and those
that are minimally acceptable.[6] The three assessments performed
here resulted in scores consistent with the evaluators' narrative
views of the relative merits of the two proposals. For example, at
the conclusion of the first two assessments of these proposals, the
record clearly reflects the evaluators' views that the Geo-Centers
proposal is strong and the Dynamac proposal is significantly weaker.
These narrative assessments are consistent with the differences in the
point scores. In the final evaluation, when the scores of both offers
are at the highest possible level, the record shows that both
proposals are considered superior for the reasons explained in the
narrative evaluation materials--reasons not challenged by Geo-Centers.
Thus, there is no basis to conclude that the agency used a scoring
device that equates minimally acceptable proposals with superior ones.
Id.
With respect to the protester's second claim--that the evaluation was
arbitrary because the record shows the agency evaluators misunderstood
or misused several terms of art--we again see nothing in the record
that would invalidate this evaluation. In this regard, while the
protester is correct that the agency evaluators referred to
deficiencies when they meant weaknesses, mislabeled an acceptable
proposal unacceptable in certain documents, and generally created a
sloppy record, our review of these errors does not lead us to conclude
that the evaluation was arbitrary. Two examples of the protester's
arguments are set forth below.
Geo-Centers points out that despite its proposal's initial technical
score of 930, the letter it received from the agency inviting
Geo-Centers to participate in discussions stated that the proposal was
"unacceptable." Geo-Centers argues it was unreasonable to consider
its highly rated initial proposal unacceptable, and then conclude that
the Dynamac proposal was acceptable after discussions, when that
proposal had a revised score of 775, significantly lower than the
score first awarded to Geo-Centers. However, Geo-Centers fails to
acknowledge that the agency report here explained that the labeling of
Geo-Centers's initial proposal as "unacceptable" was an error. Thus,
there is no evidence of unequal treatment vis-a-vis the two offerors
in this regard.
Geo-Centers also points out that in at least two instances the cost
evaluation materials include incorrect technical scores for the
Dynamac proposal. Specifically, the initial review of costs and the
final review of costs both state that Dynamac's technical/management
score is 937, when the scores should have been reflected as 680 and
775, respectively. Likewise, our review shows that Geo-Centers's
score is incorrectly displayed in these documents as 959, when the
scores should have been reflected as 930 and 998, respectively.
Nonetheless, there was no reason to set out the results of the
technical evaluation in the cost evaluation materials. While the
protester is correct in its claim that the numbers are wrong, there is
nothing about this error that invalidates either of the cost reviews.
Finally, Geo-Centers complains that the agency engaged in technical
leveling during discussions by "spoon-feeding" to Dynamac every
perceived weakness in its proposal.
Technical leveling occurs where an agency, through successive rounds
of discussions, helps to bring a proposal up to the level of another
proposal by pointing out weaknesses that remain in a proposal due to
an offeror's lack of diligence, competence, or inventiveness after
having been given an opportunity to correct them. Federal Acquisition
Regulation (FAR) sec. 15.610(d); Battelle Memorial Inst., B-259571.3,
Dec. 8, 1995, 95-2 CPD para. 284 at 5. In this regard, our Office has
recognized the tension between the requirement for meaningful
discussions with all responsible sources whose proposals are within
the competitive range, and the admonitions in the FAR against
technical leveling, technical transfusion, and auctions. Matrix Int'l
Logistics, Inc., B-249285.2, Dec. 30, 1992, 92-2 CPD para. 452 at 5. We
have held that this is an area where contracting officers necessarily
have considerable discretion. Id.
Our review of the pleadings and the record as a whole leads us to
conclude that the Army has not acted improperly in this regard, and
instead, has held detailed and thorough negotiations consistent with
its obligation to conduct meaningful discussions. FAR sec. 15.610(c).
As an initial matter, we note that despite the protester's claim that
it "strongly believe[s] that a second and perhaps third round of oral
discussion[s] occurred between the Army and Dynamac," there is no
evidence of a second round of discussions in this record. Without a
second round of discussions, the protester cannot show the successive
efforts necessary to demonstrate that the Army engaged in technical
leveling to help Dynamac improve its proposal. FAR sec. 15.610(d);
Battelle Memorial Institute, supra. Alternatively, the protester
argues that the Army engaged in spoon-feeding during discussions, and
points to the fairly straightforward correlation between the
weaknesses identified in the initial technical evaluation and the
weaknesses pointed out to Dynamac during discussions. In our view,
while we agree that the discussions here were thorough, the record
shows that both offerors were treated equally in that Geo-Centers,
too, was given thorough discussions. In short, the record shows that
the Army diligently pointed out Dynamac's weaknesses in order to give
the company an opportunity to improve its proposal, and we have no
basis to conclude that the Army's contracting officials abused their
wide discretion in this area. FAR sec. 15.610(c).
Finally, in possible explanation for the increase in Dynamac's BAFO
score, we note that the record shows that even the contracting officer
expressed curiosity about the sudden significant improvement in
Dynamac's BAFO. She reflected in her best value analysis that she
asked the evaluators about the improvement and was advised "that
Dynamac engaged a professional consultant to prepare its BAFO. The
consultant was well-versed in this particular type [of] research
project and was able to produce the proposal that the evaluators
wanted to see." Best Value Analysis at 3.
While Geo-Centers suggests there was something untoward about this
turn of events, we do not agree. The record here shows that
Geo-Centers was the incumbent on parts of this effort, and may have
enjoyed a competitive advantage in its familiarity with the effort,
and its familiarity with "a majority of the technical review team
prior to the solicitation issuance." Id. If Dynamac was able to
improve its proposal with outside, and presumably more sophisticated,
assistance, we see nothing improper about its use of that assistance
to offset the competitive advantage enjoyed by Geo-Centers.
COST EVALUATION
In its initial protest filing, Geo-Centers argues that the Army
conducted an unreasonable cost evaluation of the proposals because the
IGCE used for comparison with the offerors' proposed costs failed to
include certain categories of costs. In its comments on the agency
report, Geo-Centers supplemented its challenge to the cost evaluation
with arguments that the Army improperly permitted Dynamac to introduce
significant changes to its overhead rates without independent
verification of the rates by the agency, and that the Army did not
evaluate the sample task cost proposals reasonably, or in a manner
consistent with the RFP.
When an agency evaluates proposals for the award of a cost
reimbursement contract, an offeror's proposed estimated costs are not
dispositive, because regardless of the costs proposed, the government
is bound to pay the contractor its actual and allowable costs. FAR sec.
15.605(c). Consequently, a cost realism analysis must be performed by
the agency to determine the extent to which an offeror's proposed
costs represent what the contract should cost, assuming reasonable
economy and efficiency. CACI, Inc.-Fed., 64 Comp. Gen. 71, 75 (1984),
84-2 CPD para. 542 at 5. Contracting officers are required to document
this evaluation, FAR sec. 15.608(a)(1), and, when properly documented,
our review of an agency's exercise of judgment in this area is limited
to determining whether the agency's cost evaluation was reasonably
based and not arbitrary. General Research Corp., 70 Comp. Gen. 279,
282 (1991), 91-1 CPD para. 183 at 5, aff'd, American Management. Sys.,
Inc.; Department. of the Army--Recon., 70 Comp. Gen. 510, 515 (1991),
91-1 CPD para. 492 at 7-8; Grey Advertising, Inc., 55 Comp. Gen. 1111,
1133 (1976), 76-1 CPD para. 325 at 27-28.
Inaccuracies in the Government's Cost Estimate
With respect to Geo-Centers's first challenge--that the Army's IGCE
omitted costs associated with 22,500 hours of engineering time added
by amendment No. 0003, and contained mathematical errors as
well--there is no dispute in the record. The Army acknowledges that
these errors were made and that its overall IGCE should have been
$5,389,578, rather than the $4,236,727 estimate the Army used. Thus,
Geo-Centers argues that the agency's flawed IGCE was responsible for
its failure to conclude that Dynamac's $3.3 million BAFO cost was
unreasonably low.
As with Geo-Center's challenge to the award of maximum technical
scores, we note initially that an offeror's proposed costs are not
unreasonable per se because they are lower than the government's cost
estimate. Sterling Servs., Inc.; Trim-Flite, Inc., B-229926.5;
B-229926.6, Oct. 3, 1988, 88-2 CPD para. 306 at 4. Here, the evaluation
record shows that upon receipt of the initial proposals--wherein
Geo-Centers's proposed costs were $4.7 million and Dynamac's were $4.2
million--the evaluators recognized that the government estimate was
low and recommended that the estimate be recalculated. Pricing Review
of Proposals, June 10, 1996, at 3. In addition, while the Army
concedes that it failed to add the cost of the additional 22,500
engineering hours to its estimate, the relevant hours were properly
included on the table of labor categories and estimated hours used to
evaluate proposals. The Army explains it verified the rates proposed
for this position--as well as for the other positions--as part of its
cost review, thus resulting in less emphasis on the actual estimate
itself.
The Army also explains that Dynamac's BAFO, lowering its proposed
costs to $3.3 million, explained each change from its earlier
proposal, allowing review by the evaluators. One of the these
changes, a significant reduction in Dynamac's overhead rate, is
challenged by Geo-Centers and discussed below. It is these specific
changes and whether they are reasonable that we consider important in
this case, and not the variance between the offerors' proposed costs
and the government's estimate--especially given the recognition by the
evaluators that the estimate was flawed. See Porter/Novelli,
B-258831, Feb. 21, 1995, 95-1 CPD para. 101 at 7.
Changes in Dynamac's BAFO Overhead Rates
Dynamac's initial cost proposal included several labor overhead rates
spread over different [deleted]. In its BAFO, Dynamac shifted the
majority of its labor expenses to [deleted] cost center with an
overhead rate significantly lower than the rates used in its earlier
proposals. These lower rates for Dynamac's [deleted] cost center had
been approved by DCAA in a letter dated June 29, 1996. According to
Geo-Centers, the Army's acceptance of these rates was unreasonable
given that in other instances the Army questioned the findings in the
June 29 DCAA letter, and given that the approval of the rates for the
[deleted] cost center was made prior to the time Dynamac shifted its
billing approach and may not have considered the use of this cost
center for the majority of Dynamac's billings.
We see nothing unreasonable about the Army's acceptance of Dynamac's
[deleted] labor overhead rates. As stated above, and as Geo-Centers
notes, Dynamac presented these rates for approval by the DCAA and
received authorization to use them in DCAA's letter. In fact, the
second page of DCAA's letter directs the use of these rates in all
contracts with Dynamac. Although Geo-Centers complains that on
another issue--the appropriate G&A rate for use with a different cost
center--the Army's price analyst expressed concern in an earlier
pricing review that the rate might be overly optimistic, that concern
does not preclude the Army from accepting other DCAA findings in this
letter about Dynamac's costs. In addition, we are aware of no reason
why the Army should have rejected Dynamac's use of the [deleted] cost
center rate approved by DCAA for personnel appropriately assigned to
that cost center, as there is no requirement that an agency
independently verify each and every item in conducting a cost realism
analysis. Intermetrics, Inc., B-259254.2, Apr. 3, 1995, 95-1 CPD para.
215 at 7. In short, without evidence that DCAA erred in its review,
see American Management Sys., Inc.; Dept. of the Army--Recon., 70
Comp. Gen. 510, 514-515 (1991), 91-1 CPD para. 492 at 7-8, and without
evidence that the assignment of more personnel to this cost center
might change DCAA's conclusion, we conclude that the Army reasonably
accepted Dynamac's change in its overhead rates. Intermetrics, Inc.,
supra.
Evaluation of Sample Task Costs
Geo-Centers also alleges that the Army failed to evaluate the sample
task cost proposals associated with Dynamac's BAFO and failed to
follow the evaluation criteria set forth in the RFP for these
materials. In the protester's view, if the sample task costs had been
evaluated for both cost realism and price reasonableness, the high
costs associated with Dynamac's sample tasks--approximately [deleted]
hours and [deleted] costs proposed by Geo-Centers for the same
tasks--would have led to a conclusion that Geo-Center's proposal
offered the best value to the government.
As stated above, the RFP required separate cost proposals for each of
three sample tasks. RFP, sec. L at 7. The RFP stated that these sample
task cost proposals would be "used for a price reasonableness
determination," id., and would be "evaluated for cost realism." RFP, sec.
M at 2. Price reasonableness was defined as "a matter of the
competitiveness of the offeror's proposal, considering the price and
the merit factors area." RFP, sec. M at 3. Cost realism was defined as
"a matter of whether or not the offeror has proposed sufficient
resources to successfully perform the contract and sample task work."
RFP, sec. M at 2.
Geo-Centers's argument hinges on the fact that Dynamac [deleted] the
labor hours and costs for its sample tasks in its revised proposal and
BAFO, and, at the same time, lowered its overall proposed costs by
nearly 25 percent. (In addition, as stated above, the labor hours and
costs for these sample tasks are more [deleted] amount proposed by
Geo-Centers.) Given this BAFO increase in Dynamac's labor hours and
costs for its sample tasks, Geo-Centers argues that it was
unreasonable for the evaluators not to reevaluate the sample task
costs for price reasonableness and cost realism. In response to this
protest issue, the Army states that "[t]he pricing in the sample task
was not intended as a tool for establishing a basis for price
reasonableness." Contracting Officer's statement at 5.[7] Rather,
the contracting officer explains, the sample task responses "were
carefully analyzed to ensure both contractors had a clear
understanding of the effort involved." Id.
In using a task order requirements contract, an agency is
acknowledging that it cannot determine the precise quantity of
services and materials needed during the contract period. See FAR sec.
16.501-1, 15.503(b). In this environment, the cost of performance to
the government will vary depending on the actual task orders issued
and, in large measure, with a given contractor's efficiency in
performing the resulting tasks. Group Technologies Corp., B-240736,
Dec. 19, 1990, 90-2 CPD para. 502 at 9. As we explained in Group
Technologies, the use of sample tasks permits agencies to review the
approaches and efficiencies of different contractors under simulated
contract conditions which require the submission of detailed cost
proposals. Id. Thus, in a situation like the one here--where the RFP
expressly advised that sample task costs would be evaluated for both
cost realism and price reasonableness--agencies must use the
evaluation tools identified in the evaluation scheme to ensure that
the government obtains the lowest overall cost of performance. Id.;
Research Management Corp., 69 Comp. Gen. 368, 371-372 (1990), 90-1 CPD para.
352 at 5-6.
The record here contains no evidence of any review of the cost realism
or price reasonableness of Dynamac's BAFO sample task costs. With
respect to cost realism, a failure to analyze the realism of the
proposed costs leaves the agency open to the possibility that the
proposal did not accurately account for all of the costs that will be
incurred during performance. Failure to complete this review violates
the FAR's requirement that agencies ensure that the contractor "can
perform the contract in a manner most advantageous to the
[g]overnment." FAR sec. 15.605(c).
With respect to a review of price reasonableness, the record shows
that the Army at no point in this procurement made an assessment of
reasonableness, despite the requirement in the RFP. Instead, the
contracting officer's statement and other evaluation materials clearly
indicate that the sample task costs were not used to assess the
reasonableness of offeror's proposed costs here, but were used only to
ensure a clear understanding of the sample task effort, and verify
that the offeror understood how to write a sample task cost proposal.
In our view, these factors offer no insight into the relative
efficiency of competing sample proposals. As we stated in Group
Technologies, "a proposal with an excellent but time-consuming (and
therefore, expensive) approach which was accurately reflected in its
cost proposal would presumably, under the method of cost analysis
employed by the Army, be seen in the exact same light as a technically
excellent competing proposal which was less time-consuming and
therefore reflective of a lesser cost of contracting to the
government." Group Technologies Corp., supra.
As in Group Technologies, we think the RFP here did not permit the
Army to ignore a significant difference in an offeror's proposed
sample task costs simply because the costs were consistent with that
offeror's approach. Instead, we think the Army was required to
consider the disparity in the proposed sample task costs in the
selection decision. Nonetheless, our Office will not sustain a
protest unless the protester demonstrates a reasonable possibility
that it was prejudiced by the agency's actions, that is, unless the
protester demonstrates that, but for the agency's actions, it would
have had a substantial chance of receiving the award.
McDonald-Bradley, B-270126, Feb. 8, 1996, 96-1 CPD para. 54 at 3; see
Statistica, Inc. v. Christopher, No. 96-1148, slip op. ___ (Fed. Cir.
Dec. 19, 1996). Since the Army did not consider the reasonableness of
the sample task costs in its selection decision, and since
Geo-Centers's proposal had the highest possible technical score with
sample task hours and costs [deleted] those of the awardee, we cannot
conclude that the protester would not have had a substantial chance of
award had the agency properly reviewed this issue. Therefore, since
we cannot conclude that the Army had a reasonable basis for selecting
between these offerors, and did not follow the stated RFP evaluation
criteria, we sustain the protest. Group Technologies Corp., supra.
RECOMMENDATION
For the reasons stated above, we recommend that the Army reevaluate
the BAFOs submitted by these offerors to determine the cost realism
and price reasonableness of each offeror's proposed sample task costs,
consistent with this decision and with the terms of the solicitation.
Upon completion of this determination, we recommend that the Army
reconsider its award decision. While we do not suggest how much
weight should be given to sample task costs in evaluating overall
costs, the method chosen by the Army should consider the relative
impact that varying contractor efficiencies may have in the overall
cost to the government for these services. If, at the conclusion of
the agency's reevaluation, the revised best value determination shows
that Geo-Centers's proposal, and not Dynamac's, represents the best
value to the government, the agency should terminate the contract
awarded to Dynamac for the convenience of the government. We also
recommend that the protester be reimbursed the reasonable costs of
filing and pursuing its protest including attorneys' fees. 4 C.F.R. sec.
21.8(d)(1) (1997). In accordance with 4 C.F.R. sec. 21.8(f)(1),
Geo-Centers's certified claim for such costs, detailing the time
expended and the costs incurred, must be submitted directly to the
agency within 60 days after receipt of this decision.
The protest is sustained.
Comptroller General
of the United States
1. Cost realism was defined as "whether or not the offeror has
proposed sufficient resources to successfully perform the contract and
sample task work. Resources include materials, labor, facilities,
equipment, travel and other elements of cost (direct and indirect)
necessary" to perform the effort. RFP, sec. M at 2. Price
reasonableness is defined as "a matter of the competitiveness of the
offeror's proposal, considering the price and the merit factors area."
RFP, sec. M at 3.
2. In its letter to Geo-Centers opening discussions, the Army
described the proposal as "unacceptable but capable of being made
acceptable." However, the contracting officer explains that the
statement in the letter was incorrect and that Geo-Center's initial
proposal was acceptable. Contracting Officer's Statement at 2.
3. We need not resolve the dispute about when the debriefing was
requested since Geo-Centers did not file a protest within 5 days of
the debriefing seeking a stay of this procurement until resolution of
its protest. Accordingly, Geo-Centers does not claim that the
debriefing was a "required debriefing," as that term is used in 31
U.S.C. sec. 3553(d)(4) (1994).
4. For example, the protester cannot now argue that the agency
unreasonably determined the Dynamac proposal to have the same level of
merit as Geo-Centers's proposal, as it was on notice of this from the
debriefing. Id.
5. Likewise, there is nothing per se improper about an evaluation
approach based on the deduction of points from a stated maximum, as
opposed to the awarding of points from a starting point of zero. See
NITCO, B-246185.3, Sept. 17, 1992, 92-2 CPD para. 183 at 3, 5-6
(evaluation process of assigning maximum number of available points
for prior production of solicited item and deducting from the maximum
for less experience in producing the item held reasonable method of
assessing relative merits of different offerors).
6. For the record, our review is based on evaluations themselves, and
on compliance by the evaluators with the requirements set forth in the
RFP--not on agency rating plans. Agency rating plans are internal
agency instructions and, as such, do not give outside parties any
rights. Ralph G. Moore & Assocs., B-270686; B-270686.2, Feb. 28,
1996, 96-1 CPD para. 118 at 4.
7. This approach is also reflected in the Prenegotiation Objective
Memorandum (at the eighth unnumbered page) which states under a
heading entitled "Cost Realism": "[t]he sample tasks are not used to
determine the total contract price but were included merely as a way
to gauge how well the contractor understands the contract requirements
as well as a way to evaluate the offeror's ability to price a task."