BNUMBER: B-276620
DATE: July 3, 1997
TITLE: Science and Engineering Services, Inc., B-276620, July 3,
1997
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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:Science and Engineering Services, Inc.
File: B-276620
Date:July 3, 1997
Howell Roger Riggs, Esq., for the protester.
Anita B. Williams, Logistics, Engineering & Environmental Support
Services, Incorporated, an intervenor.
Joshua A. Kranzberg, Esq., and Francis J. Faraci, Esq., Department of
the Army, for the agency.
Charles W. Morrow, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Agency reasonably selected higher-cost, technically superior proposal
under evaluation scheme that favored technical merit over cost where
it determined that the awardee's technical advantages offset the
protester's advantages in cost and past performance.
DECISION
Science and Engineering Services, Inc. (SES) protests the award of a
contract to Logistics, Engineering & Environmental Support Services,
Incorporated (LESCO) under request for proposals (RFP) No.
DAAH01-97-R-0010, a total small business set-aside, issued by the
Department of the Army, United States Army Missile Command (USAMC),
Redstone Arsenal, Alabama, for support services for the USAMC
Logistics Support Activity (LOGSA).
We deny the protest.
The RFP, issued on October 15, 1996, contemplated the award of an
indefinite quantity time-and-materials contract to provide functional,
direct, on-site support services to LOGSA and LOGSA-supported
customers for a 36-month period. LOGSA is a logistics products and
services organization that is the Army's focal point for collection,
integration, analysis, and distribution of logistics data. LOGSA
supports a diverse array of customers worldwide, including the
Department of Defense (DOD), Defense Nuclear Agency, forestry service,
and allied nations. The RFP work includes development of information,
maintenance, configuration management, training, evaluation and test
support, integrated logistics support, and special projects.
The RFP provided for award to be made without discussions under a best
value evaluation scheme, considering four evaluation areas:
Technical, Management, Past Performance, and Most Probable Cost
(MPC).[1] The technical area was said to be the most important; it
was worth more than each other area individually, but not in
combination, and was said to be significantly more important than the
management area, substantially more important than the past
performance area, and slightly more important than the MPC area. The
MPC area was slightly more important than the past performance area
and substantially more important than the management area. The past
performance was slightly more important than the management area.
Under the technical area, the RFP listed four equally weighted
evaluation elements, of which the first two each were comprised of
four equally weighted factors, as follows:
(A) Element 1. The offer demonstrates an understanding of the
Army functions of:
Factor 1. Integrated Logistics Support
Factor 2. Readiness Analysis
Factor 3. Maintenance, Supply, and Transportation
Factor 4. Conventional [Arms] Control Treaties and Agreements
(B) Element 2. Offeror demonstrates an understanding of Army and
DOD current and emerging automated information systems in the
following areas:
Factor 1. Logistics and Financial Data Base
Factor 2. DOD Plan to Integrate Information Systems Including
The
Army Approach To A Seamless System
Factor 3. Expert Systems
Factor 4. Re-engineering Initiatives
(C) Element 3. Qualifications of personnel to include education,
training, and experience and the relevance and significance of
the experience to the required effort.
(D) Element 4. Offeror demonstrates an understanding of the
requirements of the [statement of work] by his approach to the
sample delivery orders, logistics integrated data base and arms
control support.
The RFP advised that the MPC would be the government's estimate of the
cost of completing the contract using the offeror's technical and
management approaches adjusted by any additional cost to the
government. The evaluation, among other things, included evaluating
the offeror's indirect expense rate, projected rates, and projected
expense pools.
Three offerors, including SES and LESCO, submitted proposals by the
December 5 closing date. The Army evaluated the technical and
management proposals under an adjectival rating scale of outstanding,
very good, satisfactory, poor and unacceptable. The past performance
area was rated with adjectival ratings of superior, good, adequate,
and inadequate, and proposal risk was assessed with ratings of low,
moderate, or high. The MPC evaluation was conducted with the
assistance of the Defense Contract Audit Agency (DCAA).
SES' proposal received an overall rating of outstanding in the
technical and management areas with virtually no risk and a superior,
low risk past performance rating. In the technical area, under
element 1, SES received very good ratings for factors 1 and 3 and
outstanding ratings for factors 2 and 4, and under element 2 it
received a very good rating for factor 1 and outstanding ratings for
the other factors; the remaining elements were rated outstanding.
SES' proposed cost of [DELETED] was upwardly adjusted by [DELETED] to
a $8,757,487 MPC because DCAA and the Army considered SES' proposed
overhead rate to be understated in that DCAA reported that it failed
to include an SES prospective contract in the indirect cost pool and
was not calculated on the basis of SES' actual labor-hour base.
LESCO's proposal also received an overall rating of outstanding with
virtually no risk under the technical and management areas, with
outstanding ratings under every element and factor in the technical
area, and received a good/low risk past performance rating. The Army
upwardly adjusted LESCO's proposed cost of [DELETED] by [DELETED] to a
$8,564,349.32 MPC.[2]
Based on this evaluation, the Source Selection Authority (SSA)
determined that LESCO's proposal represented the best value to the
government, and that award should be based on initial proposals
without discussions. After a detailed discussion of the relative
strengths and weaknesses of the proposals, the SSA concluded:
In the highest weighted technical area LESCO was rated
outstanding as compared to very good for SES in three of the
factors. Considering the equal standing between LESCO and SES in
the lowest weighted management area, and only slightly better
rating for SES over LESCO in lower weighted past performance, the
decision comes to the cost and technical areas. The MPC for
LESCO is lower than the MPC for SES. Although the proposed cost
for LESCO is slightly higher than that proposed by SES, LESCO has
demonstrated by their technical ratings their outstanding
understanding of the requirement. During the contract this
understanding would provide efficient performance resulting in
less time and lower cost for learning/preparation resulting in
lower cost overall. In this instance the higher rated technical
proposal of LESCO is worth the additional cost as proposed and
would provide the best value to the Government.
Award was made to LESCO on March 20, 1997. This protest of the award
selection followed.
Where as here, a solicitation provides that technical considerations
are more important than cost, source selection officials have broad
discretion in determining the manner in which they will make use of
the technical and cost evaluation results in arriving at a source
selection decision; such cost/technical tradeoffs are governed only by
the test of rationality and consistency with the RFP's stated
evaluation criteria. JB Indus., B-251118.2, Apr. 6, 1993, 93-1 CPD para.
297 at 7.
SES protests that it should have received the award. Specifically,
SES contends that the agency's upward adjustment in determining SES'
MPC was not reasonably based, and that SES' MPC should have been lower
than LESCO's, while its proposal was at least technically equal to
LESCO's, as evidenced by the identical outstanding ratings for the
technical area received by the two proposals, as well as SES' superior
past performance rating.
Contrary to SES' contentions, the record shows that the SSA found
that, notwithstanding their identical outstanding technical ratings,
LESCO's proposal was actually technically superior to SES', and that,
regardless of the MPC evaluation, this advantage offset any advantage
SES may have had in proposed cost and past performance. Adjectival
ratings, like numerical point scores, when used for proposal
evaluation, are useful only as guides to intelligent decision-making
and are generally not controlling for award because they often reflect
the disparate, subjective judgments of the evaluators. STD Research
Corp., 72 Comp. Gen. 211, 215, 93-1 CPD para. 406 at 5. Here, the SSA
reasonably found LESCO's proposal had a technical advantage over SES',
as evidenced by the documented higher ratings for three technical
factors.
For example, the Army found LESCO's proposal demonstrated a thorough
understanding of each technical element and factor. Specifically, the
Army concluded that LESCO's understanding of the factors related to
integrated logistics support; readiness analysis; maintenance, supply,
and transportation; and conventional arms control treaties and
agreements was exact and to the point.
In contrast, the record shows that the Army found, among other things,
that in discussing maintenance planning, SES' technical proposal did
not mention the primary data sources that would be used to perform the
work; that with respect to maintaining maintenance and readiness
policy procedures SES described only a cursory approach; that SES
incorrectly assumed that LOGSA manages major subordinate commands;
that SES did not discuss utilization of the readiness analysis data to
identify "Status of Resources and Training System" weapons systems
deficiencies to the major command or unit level; that SES incorrectly
referred to the Standard Army Management Information System; that SES'
proposal failed to elaborate on the specific actions to be taken on
data base management if awarded the contract; that SES' proposal did
not address how readiness and maintenance policies would be prepared;
and that SES' technical proposal contained some spillover among the
elements that indicated a lack of understanding of the separate
requirements. While these weaknesses only resulted in SES' receiving
very good ratings for three of the technical factors and did not
prevent its receiving an overall outstanding technical rating, they
evidence a lower degree of understanding than that exhibited by
LESCO's proposal.
The Army reports that this contract involves the issuance of separate
task orders covering a variety of LOGSA functions. Each task will
contain a separate number of hours needed to accomplish the specific
task for each labor category bound by a ceiling dollar amount that the
contractor has no obligation to exceed. Therefore, the Army reports
that the agency has a critical need to obtain the best technical
approach to complete the task within the ceiling amount. The Army
advises that time spent in familiarization, startup, and learning
means expenditure of hours and dollars without any return as the
available amount of funds shrinks and, thus, it is in the government's
best interest to keep this time to a minimum.
Based on our review of the record, we find that the agency reasonably
found LESCO's proposal was technically superior to SES' and that this
advantage under the most heavily weighted technical area offset SES'
advantages in proposed cost and past performance. Since the award
selection reasonably found that LESCO's technical superiority
overweighed SES' advantage in proposed cost, we need not consider SES'
protest of the MPC adjustments.
The protest is denied.
Comptroller General
of the United States
1. The RFP further explained that an inherent consideration in the
evaluation under these areas would be the risk associated with the
offeror's proposed technical approach.
2. The third proposal received overall [DELETED] technical and
management ratings and a [DELETED] risk past performance rating, and
its proposed cost of [DELETED] was adjusted to a [DELETED] MPC.