BNUMBER:  B-276075; B-276075.2 
DATE:  May 8, 1997
TITLE: Matter of:Ouachita Mowing, Inc. 

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Matter of:Ouachita Mowing, Inc.

File:     B-276075; B-276075.2

Date:May 8, 1997

Lynda Troutman O'Sullivan, Esq., Kenneth S. Kramer, Esq., James M. 
Weitzel, Jr., Esq., and Anne B. Perry, Esq., Fried, Frank, Harris, 
Shriver & Jacobson, for the protester.
Alan M. Grayson, Esq., and Michael A. Lewis, Esq., Alan M. Grayson & 
Associates, for R&D Maintenance, Inc., an intervenor.
Larry E. Beall, Esq., Department of the Army, for the agency.
Mary G. Curcio, Esq., and John M. Melody, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Protest that agency improperly determined that protester proposed 
too few hours to perform contract satisfactorily is denied where 
protester merely asserts that its approach would permit it to perform 
with the number of hours it proposed, and does not explain what that 
approach is, or how it would enable the protester to complete all 
required tasks satisfactorily with the hours proposed.

2.  Agency held meaningful discussions with protester regarding low 
proposed man- hours where agency pointed out during discussions its 
concern that protester's man- year was based on 1,992 hours rather 
than the standard 2,080 hours; this was sufficient to indicate 
agency's general concern that proposed hours were too low, and when 
protester reduced its proposed hours further in its best and final 
offer, agency was not required to reopen discussions and address the 
problem again.

3.  Agency properly awarded contract to higher cost offeror with 
technically superior proposal, where it reasonably determined that low 
cost protester might not be able to perform satisfactorily with the 
number of man-hours it proposed.

DECISION

Ouachita Mowing, Inc. protests the award of a contract to R&D 
Maintenance Services, Inc. under request for proposals (RFP) No. 
DACW01-96-R-0065, issued by the Army Corps of Engineers for the 
operation and maintenance of recreational facilities at Lake Sidney 
Lanier in Buford, Georgia.

We deny the protest.

The RFP, which contemplated award of a cost-plus-award-fee contract, 
provided that proposals would be evaluated against technical, 
management and cost criteria, and that the award decision would be 
based on the best value to the government.   The Corps received and 
evaluated initial offers, held discussions with R&D and Ouachita, the 
two offerors whose proposals were included in the competitive range, 
received and evaluated best and final offers (BAFO), and awarded the 
contract to R&D after determining that R&D's higher-priced, but 
technically superior proposal offered the best value to the 
government.  Ouachita protests that the Corps improperly evaluated its 
proposal, failed to conduct meaningful discussions with the firm, and 
performed an unreasonable cost/technical tradeoff.

PROPOSED MAN-HOURS

The solicitation listed a number of tasks that contractors would be 
required to perform, including, for example, road repair, maintenance 
of picnic and camp areas, lawn care, and maintenance and repair of 
showers and electrical hookups, road signs, and navigation buoys.  
Offerors were required to provide the personnel to perform all 
services.  The government estimated that it would require 109,734 man- 
hours to perform the contract satisfactorily.  In its BAFO R&D 
proposed to perform with 105,348 man-hours.  Ouachita initially 
proposed to perform with 102,348 hours, but in its BAFO reduced that 
number to 97,937.  The technical evaluation team (TET) was concerned 
that Ouachita would be unable to perform the contract with the reduced 
staffing.  The source selection official (SSO) balanced this concern 
against his finding that R&D's proposal demonstrated a thorough 
understanding of the requirements, and was superior to Ouachita's 
under the technical and management factors, and concluded that R&D's 
proposal represented the best value despite its $800,000 higher cost 
($9,136,417 versus $8,320,365).

Ouachita maintains that the agency's determination that its proposed 
man-hours were inadequate is unreasonable because it is based solely 
on a comparison with the government estimate, with no consideration 
given to whether the proposed hours were adequate in light of 
Ouachita's proposed approach.

The Corps's conclusion regarding the adequacy of Ouachita's proposed 
hours was reasonable.  While neither the TET's award recommendation 
nor the SSO's decision document details the analysis of Ouachita's 
proposed hours in the context of its approach, this is not a situation 
where the agency simply decided that any proposal offering fewer hours 
than the government estimate was unacceptable.  See, e.g., The 
Jonathan Corp.; Metro Mach. Corp., B-251698.3; B-251698.4, May 17, 
1993, 93-2 CPD  para.  174 at 11-12.  Rather, the record shows that the 
agency finds no support for the low man-hours proposed.  In this 
regard, in responding to Ouachita's protest, the contracting officer 
reports:

      "After review of Ouachita's proposal, technical evaluators 
     concluded that the number of manhours proposed, which were low in 
     their initial proposal, were further reduced to such a level that 
     it was felt Ouachita could not perform minimum required services. 
     . . .  A proposal utilizing lower manhours would be desirable if 
     the technical plan showed an innovative approach that would 
     assure performance of required services with less effort and less 
     cost."

     "Ouachita's proposal contained no such innovations, and was 
     basically a rehash of the methods used by Ferguson-Williams [the 
     incumbent] for the last eight years."

Ouachita asserts that it did in fact base its proposed level of effort 
on performance efficiencies developed by Ferguson-Williams in its last 
year of contract performance, and that it proposed man-hours 
equivalent to Ferguson-Williams's in that last year of performance.  
However, Ouachita's proposal did not explain the performance 
efficiencies on which its proposed hours were based.  Moreover, the 
agency explains that Ferguson-Williams's hours during the last year of 
its contract were low, not because of some unique approach, but 
because funding had been reduced that year such that the full scope of 
services at Lake Lanier could not be utilized; the agency therefore 
reduced the services that Ferguson-Williams was required to perform.  
The record contains no evidence refuting the agency's explanation.

Ouachita also argues that the agency's man-hour estimate is 
inaccurate.  The agency reports that the estimate is based on the 
hours under Ferguson-Williams's most recent contract for the services, 
which covered the past 5 years, as well as the knowledge of Corps 
personnel familiar with the project and local contractor personnel.  
Ouachita maintains that the estimate should have been based solely on 
Ferguson-Williams's last year of performance.  

There is no requirement that an agency use only the most recent year 
of an incumbent contractor's performance when it is estimating the 
number of hours it will take to perform a contract.  Rather, when 
formulating estimates, procuring agencies are required to utilize the 
best information available; the estimate need not be absolutely 
correct, but must be a reasonably accurate representation of the 
agency's anticipated needs.  L.K. Comstock, Inc., and Liebert Fed. 
Sys., Inc., B-261711.5; B-261711.6, Dec. 14, 1995, 96-1 CPD  para.  4 at 4.  
Given the potential fluctuations in performance requirements in a 
recreational facility from year to year, based on use, weather 
conditions, and the number and types of repairs required in any year, 
we think it arguably is more reasonable to base such a man-hour 
estimate on more than 1 year of performance.  This rationale applies 
directly to the circumstances here.  As discussed, services were 
reduced under Ferguson-Williams's final contract year as a result of 
reduced funding; an estimate based on that year alone therefore would 
be an inaccurate measure of the hours necessary to perform where, as 
here, the Corps does not expect to order reduced services.  We 
conclude that there is no basis for questioning the estimate.

DISCUSSIONS

Ouachita asserts that the agency did not provide it with meaningful 
discussions regarding its man-hour concern.  In a negotiated 
procurement, agencies are required to conduct meaningful discussions 
with all competitive range offerors.  While this generally requires 
agencies to advise offerors of proposal deficiencies and to afford 
them an opportunity to submit a revised proposal, it does not mean 
that agencies must conduct all-encompassing discussions; rather, 
agencies are only required to lead offerors into those areas of their 
proposal needing amplification, given the context of the procurement.  
In this regard, the content and extent of discussions are within the 
discretion of the contracting officer.  Creative Management Tech., 
Inc., B-266299, Feb. 9, 1996, 96-1 CPD  para.  61 at 4.  

Discussions here were adequate.  Based on the evaluation of Ouachita's 
initial proposal, the Corps had no overriding concern that the total 
proposed hours were inadequate.  The Corps did note that Ouachita's 
proposed hours were excessive in certain areas and deficient in 
others, and that Ouachita's proposal of 1,992-hour man-years--instead 
of the standard 2,080--had the effect of reducing the total hours 
offered.  As Ouachita acknowledges, however, the Corps specifically 
raised these points during discussions, and specifically asked 
Ouachita to review its proposed hours per man-year.  These discussions 
brought the agency's actual concerns to the firm's attention.  While 
the Corps did not advise Ouachita that its hours were too low to 
perform adequately, again, this is because the Corps did not have this 
concern at the time of discussions; the Corps's ultimate determination 
that Ouachita's hours were too low was based on the reduced number of 
man-hours in its BAFO.  The agency was not required to reopen 
discussions to permit Ouachita to remedy this deficiency introduced in 
its BAFO.  Anderson Dev. Co., B-261112, Aug. 18, 1995, 95-2 CPD  para.  72 
at 4.

USE OF SUBCONTRACTOR

Ouachita maintains that the agency improperly downgraded its proposal 
based on an unstated evaluation factor--use of a subcontractor.  It 
also challenges the evaluation conclusion and argues that the agency 
improperly failed to raise this matter during discussions.  

The propriety of the evaluators' consideration of Ouachita's proposed 
subcontracting is irrelevant given the manner in which the selection 
decision was made.  In recommending R&D for award to the SSO, the TET 
did not mention its concerns about Ouachita's subcontracting approach; 
rather, as indicated above, it focused on its belief that Ouachita's 
reduced man-hours could cause performance problems.  The source 
selection document shows that the SSO focused on the same concern in 
the tradeoff which led him to select R&D for award.  Thus, this aspect 
of the evaluation would not provide a basis for disturbing the award.  
Scientific Research Corp., B-260478.2, July 10, 1995, 95-2 CPD  para.  8 at 
7 (protest will not be sustained where there is no showing of 
competitive prejudice).

COST/TECHNICAL TRADEOFF 

Ouachita challenges the tradeoff decision on the basis that the 1.5 
man-year difference between its and R&D's proposals did not warrant 
paying R&D's $800,000 higher cost.

In a negotiated procurement, there is no requirement that award be 
made on the basis of lowest price/cost; a cost/technical tradeoff may 
be made, and the extent to which one may be sacrificed for the other 
is governed by the tests of rationality and consistency with the 
established evaluation factors.  Hellenic Technodomiki S.A.,   
B-265930, Jan. 3, 1996, 96-1 CPD  para.  2 at 3.  We will uphold award to 
offerors with higher technical ratings and higher costs so long as the 
results are consistent with the evaluation criteria and the 
contracting agency reasonably determines that the cost premium 
involved is justified given the technical superiority of the selected 
offeror's proposal.  Id.  Here, while Ouachita is correct that R&D 
proposed only   1.5 more man-years (50.65 versus 49.17), this 
understates the difference in the proposals, since Ouachita's proposed 
man-year consisted of only 1,992 hours, compared to R&D's 2,080-hour 
man-year.  The actual hourly difference in the proposals was 7,411 
hours (105,348 versus 97,937), which equates to a 3.5-man-year 
difference in the proposals (using the standard 2,080-hour man-year).  
Given the labor intensive nature of this contract and the fact that 
the noncost factors were more important than cost under the evaluation 
scheme, we find nothing unreasonable in the SSO's determination that, 
in light of the concerns about its proposed man-hours, Ouachita's 
lower proposed cost was not sufficient to offset R&D's proposal's 
superiority under the noncost factors.

The protest is denied.

Comptroller General
of the United States