BNUMBER: B-277849.2; B-277849.3
DATE: January 8, 1998
TITLE: Sytel, Inc., B-277849.2; B-277849.3,
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DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective
Order. This redacted version has been approved for public release.
Matter of:Sytel, Inc.
File: B-277849.2; B-277849.3
Date:January 8, 1998
Keith L. Baker, Esq., Jeffrey E. Weinstein, Esq., and Timi E.
Nickerson, Esq., Eckert Seamans Cherin & Mellott, LLC; and Eric J.
Marcotte, Esq., Winston & Strawn, for the protester.
Lindsay Ball for Dynacs Engineering Co., Inc., the intervenor.
Bernard J. Roan, Esq., and Rami S. Hanash, Esq., National Aeronautics
& Space Administration, for the agency.
Christine Davis, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Agency reasonably credited one proposal based on favorable
impressions of key personnel during discussions and downgraded another
proposal for the apparent lack of teamwork of key personnel during
discussions where solicitation indicated agency could consider such
information.
2. Agency reasonably determined that the awardee's award fee approach
provided sufficient performance incentives, notwithstanding that the
awardee proposed no additional fee in the event the agency exercised
an option to acquire additional labor hours during the contract
performance period.
3. Agency reasonably evaluated the protester's and awardee's Total
Compensation Plans as comparable where the overall cost difference
between the two plans, considering all wages and fringe benefits, was
negligible.
4. Agency properly conducted discussions expressing concern regarding
the protester's labor rates where they were less than those paid by
the incumbent and the protester's proposal did not adequately justify
such lower rates.
5. Protester's post-protest statement that, but for the agency's
alleged improper and misleading discussions, it would have reduced the
labor rates in its best and final offer in an amount sufficient to
negate the awardee's cost advantage does not establish a reasonable
possibility of prejudice, where there is no credible evidence
supporting this statement.
6. Agency's inadvertent release of the protester's discussion letter
to the awardee provides no basis to disturb the award where the record
evidences that it was not read by the awardee and that the awardee
received no competitive advantage.
DECISION
Sytel, Inc. protests the award of a contract to Dynacs Engineering
Co., Inc. under request for proposals (RFP) No. 10-97-0001, issued by
the National Aeronautics and Space Administration (NASA), for
engineering development services at Kennedy Space Center, Florida.
We deny the protest.
The RFP contemplated the award of a cost-plus-award-fee,
level-of-effort contract for a base year with 4 option years. The RFP
required an estimated 387,115 "basic labor hours" per year, which
could be increased by up to an additional 1,935,575 "option hours"
over the 5-year contract period.
The RFP provided for a best value award based upon the following
factors and subfactors:
1. Mission Suitability (1,000 points)
a. Key Personnel (300 points)
b. Management Approach and Resource Application (300
points)
c. Technical Approach (225 points)
d. Skill Mix/Staffing Plan (175 points)
2. Cost
3. Relevant Experience and Past Performance
Mission Suitability and Cost were equally important; Relevant
Experience and Past Performance was somewhat less important than
either Mission Suitability or Cost; and Cost was significantly less
important than Mission Suitability and Relevant Experience and Past
Performance, combined.
The RFP provided for an evaluation of several features of the
offerors' proposals under the Management Approach and Resource
Application subfactor, including, as relevant here, the offeror's
understanding of the award fee process and its application as an
effective management tool, and the offeror's ability to recruit and
retain a highly competent work force based upon its proposed Total
Compensation Plan of salaries and fringe benefits.
For the award fee evaluation, offerors were to describe their award
fee management approach and rationale, discussing how the proposed fee
structure, plus other motivational methods, would be applied as
incentives in motivating the offeror's work force. The amount of the
proposed award fee was stated as a consideration in the evaluation of
offerors' cost proposals.
In their Total Compensation Plans, offerors were to include the
salaries/wages, fringe benefits, and leave programs proposed for the
six RFP labor categories, which were Management/Administrative,
Clerical, Scientist/Engineer, Engineering Technician, Technician, and
Documentation Personnel. The RFP stated that proposals "envisioning
compensation levels lower than those of predecessor contractors for
the same work will be evaluated on the basis of maintaining program
continuity, uninterrupted high quality work, and availability of
required competent professional service employees." The RFP cautioned
that "lowered compensation for essentially the same professional work
may indicate lack of sound management judgment and lack of
understanding of the requirement."
The agency received 13 proposals and established a competitive range
of 3 proposals, Dynacs's, Sytel's, and Offeror C's. Offeror C
submitted the low cost proposal ($155.8 million), followed by Sytel
($161.4 million), and Dynacs ($167.1 million). Offeror C's and
Dynacs's proposals tied for the highest Mission Suitability score of
879 points, while Sytel's proposal's Mission Suitability score was 844
points.
Sytel's lower Mission Suitability score primarily resulted from the
evaluation of its Total Compensation Plan under the Management
Approach and Resource Application subfactor. In evaluating offerors'
Total Compensation Plans, NASA considered whether the proposed wages
and fringe benefits were generally comparable with the wages and
fringe benefits offered by the incumbent contractor. Sytel's
proposal, which was based upon an [deleted] percent incumbent employee
hire rate for the basic work force, included rates that were, in some
instances, significantly less than the average incumbent rates; the
proposal did not acknowledge or explain the lower rates, other than to
cite the market surveys Sytel consulted. Sytel's lower wages,
combined with other perceived informational and substantive weaknesses
in its Total Compensation Plan, caused NASA to question the
protester's ability to recruit and retain a competent work force, and
to assess one major and two minor weaknesses against its proposal
under the subfactor. Sytel's score under the subfactor, considering
the weaknesses in its Total Compensation Plan, as well as two,
unrelated major strengths and a minor strength for its proposed award
fee approach, was 222 points, compared to Offeror C's score of 261
points and Dynacs's score of 267 points.
NASA conducted written discussions with the three offerors on June 18,
1997. At 5:45 p.m. on June 18, NASA inadvertently transmitted Sytel's
discussion letter to Dynacs via facsimile. At 6:26 p.m., after
discovering the error, the contracting officer spoke to a Dynacs
administrative assistant and told her to destroy the Sytel letter.
This employee subsequently affirmed in an affidavit to NASA that
neither she nor any other Dynacs employee had photocopied or read the
letter before she destroyed the document at 6:30 p.m. On July 17,
based upon the information contained in the affidavit and NASA's
assurance that it would scrutinize Dynacs's best and final offer
(BAFO) for any Sytel proposal information, Sytel consented to the
continuation of the procurement.
Sytel's discussion letter informed it of the deficiencies found in its
Total Compensation Plan. Question No. DR-2 identified various
perceived informational deficiencies in Sytel's discussion of its
fringe benefits plan, especially its health benefits discussion, and
also advised Sytel that the incumbent offered superior benefits in
certain respects. In Question No. DR-3, NASA identified four separate
deficiencies in Sytel's proposed wages and fringe benefits, which
caused NASA to question Sytel's ability to recruit and retain a
qualified work force. The cited deficiencies were: (1) [deleted];
(2) [deleted]; (3) Sytel's average labor rate for the option hours was
$[deleted], which was "significantly less" than the incumbent average
rate of $22.87; and (4) Sytel offered lower rates than the incumbent's
rates for the basic hours as follows:
Your proposed year 1 average S/T [straight /time] labor rate of
$[deleted] for the basic workforce is $[deleted] below the
current incumbent average S/T labor rate [of $23.32]. In the
Scientist/Engineer category your year 1 average S/T labor rate of
$[deleted] is $[deleted] lower [than the incumbent rate of
$26.96].[1]
In responding to the last stated concern, Sytel advised NASA on July
21 that its BAFO would include a $[deleted] average S/T labor rate, a
$[deleted] Scientist/Engineer labor rate, and a $[deleted] average
technical labor rate[2] to "more accurately reflect the base wages of
the incumbent workforce." The revised rates were lower than the
average incumbent rates identified in its discussion letter, which
Sytel attributed without elaboration to its "optimized skill mix."
The contracting officer advised Sytel in a July 23 letter that the new
labor rate information had improved, but not resolved, the deficiency,
particularly since Sytel had apparently achieved the increase in the
Scientist/Engineer rate and overall average rate by reducing the rates
in the other five labor categories, without identifying those rates.
The protester responded that it would "[c]ontinue to work to reconcile
the differences between proposed rates and data provided by NASA" and
that the "[r]esult of that effort will be shown in the BAFO."
Sytel received oral discussions on July 30, and the contracting
officer repeated that Sytel had not resolved the deficiency with
respect to its rates for the basic hours. According to an affidavit
submitted by the protester's proposed project manager, Sytel advised
NASA that it was preparing an average overall labor rate of $[deleted]
for the basic and option hour work force, which was lower than the
average incumbent rate because it reflected Sytel's intention to hire
non-incumbent labor at reduced wages, to which NASA responded that
Sytel "must correct its average labor rate, justify it, or be
determined to have a deficient proposal."[3]
After oral discussions, Sytel's pricing director (who did not attend
the discussions) had a telephone conversation with the chairman of the
source evaluation board's (SEB) Business Committee to discuss Sytel's
rates for the basic hours. After that conversation, Sytel proposed an
average rate of $[deleted] for the basic hours, based upon revised
rates for the six labor categories. NASA advised Sytel that the
revised rates appeared reasonable, and Sytel included them in its
BAFO.
The agency received BAFOs on August 11, which were rated as follows:
Offeror C Dynacs Sytel
Key Personnel 291 297 291
Management Approach and
Resource Application 285 285 288
Technical Approach 218 221 223
Skill Mix/Staffing Plan 112 112 105
Total Mission Suitability 906 915 907
Cost[4] $160.6 million $163.7 million $170.5 million
Relevant Experience Highly Highly Highly
and Past PerformanceSatisfactorySatisfactory Satisfactory
Sytel's Management Approach and Resource Application score rose from
222 to 288 points during the BAFO evaluation, based upon NASA's
finding that Sytel had resolved the evaluated deficiencies in its
Total Compensation Plan. Sytel's Total Compensation Plan was viewed
as technically acceptable and essentially equal to Dynacs's (and
Offeror C's) plans.
Sytel lost the cost advantage it enjoyed following the initial
evaluation, with its BAFO costs increasing by $9.1 million from its
initial offer. The increase primarily resulted from Sytel's decision
to [deleted]. Sytel's BAFO costs for the basic hours did not change
appreciably from its initial proposal because, while Sytel increased
its labor rates after discussions, it concomitantly reduced its
proposed level-of-effort, overtime costs and labor burdens.
Sytel's BAFO cost proposal was $6.8 million more than Dynacs's. The
differences between the proposed costs are primarily derived from
Sytel's higher direct costs ($[deleted] more than Dynacs's), general
and administrative costs ($[deleted] more than Dynacs's), fringe
benefits costs ($[deleted] more than Dynacs's) and maximum award fee
($[deleted] million more than Dynacs's for the basic and option hours,
combined). Sytel's award fee was higher than that proposed by the
other offerors largely because the protester did not discount its fee
for the option hours, proposing a 6 percent fee for both the basic and
option hours. In contrast, Offeror C proposed a 6 percent fee for the
basic hours and a 1 percent fee for the option hours, while Dynacs
proposed a 4 percent fee for the basic hours and no additional fee for
the option hours.[5]
On September 22, the Source Selection Authority (SSA) selected Dynacs
for award. The SSA reasoned that Sytel's and Offeror C's proposals
were "virtually tied" in their overall Mission Suitability score and
that Sytel had a significant cost disadvantage not offset by any
technical advantage. The SSA then performed a cost/technical tradeoff
between Offeror C's low-cost proposal and Dynacs's highest-rated
technical proposal. The SSA considered the fact that Dynacs proposed
the highest-rated Key Personnel team, with each of the five proposed
individuals garnering the highest ("Outstanding") rating. The SSA
also considered the fact that Dynacs possessed a "significant
advantage" in the Relevant Experience and Past Performance factor,
notwithstanding that it earned the same "Highly Satisfactory" rating
as Offeror C and Sytel, because only Dynacs's experience was closely
aligned with the type of work required by the instant contract. The
SSA concluded that "Dynacs' advantages in Key Personnel and Relevant
Experience outbalance any evaluated [Offeror C] cost benefit, and
therefore, the Dynacs proposal is most advantageous to the
Government." This protest followed.
The Mission Suitability Evaluation
Sytel takes issue with several aspects of the technical evaluation of
its own and Dynacs's proposals under the Mission Suitability factor.
The evaluation of proposals is a matter within the discretion of the
contracting agency. Our Office will question the agency's evaluation
only where it lacks a reasonable basis or conflicts with the stated
evaluation criteria for award. SC&A, Inc., B-270160.2, April 10,
1996, 96-1 CPD para. 197 at 7. Here, as described below, we find no basis
for concluding that the evaluation was unreasonable.
First, Sytel claims that NASA misevaluated proposals under the Key
Personnel factor. During oral discussions, both offerors introduced
their key personnel, and NASA was more favorably impressed with the
performance and cohesiveness of the awardee's team than the
protester's team. Section M of the RFP authorized NASA to consider
information from "the Offerors themselves during discussions" in
proposal evaluation. Thus, the SEB's Final Scoring Worksheets reflect
that Sytel's Key Personnel score decreased "due to the apparent lack
of teamwork" during oral discussions, while the awardee's score
increased because its proposed Information Technology Manager proved
himself a major strength to the key personnel team during discussions.
In terms of points, NASA increased Dynacs's BAFO score by 6 points
(from 291 to 297 points) and decreased Sytel's score by 3 points (from
294 to 291 points). The SEB presented viewgraphs to the SSA
documenting these findings, which were reflected in the source
selection statement. While the protester maintains that its proposed
key personnel team is superior to the awardee's, the protester has not
provided any support for its opinion. An offeror's mere disagreement
with the agency does not render the evaluation unreasonable. AAC
Assocs., Inc., B-274928, Jan. 13, 1997, 97-1 CPD para. 55 at 3.
Sytel also protests that NASA should have considered Dynacs's proposed
award fee a major or minor weakness in its Mission Suitability
proposal. Sytel claims that Dynacs's proposal of a 4 percent fee for
the basic hours and no additional fee for the option hours does not
provide sufficient incentives for excellent performance.
Federal Acquisition Regulation (FAR) sec. 16.305 requires that the amount
of any award fee proposed must be sufficient to provide motivation for
excellence in contract performance "based upon a judgmental evaluation
by the Government."[6] Here, NASA determined that Dynacs's proposed
fee approach provided sufficient performance incentives and was
acceptable. NASA reasoned that, because cost risk was absent in the
context of this cost reimbursement, level-of-effort contract, a
contractor could reasonably accept a lower profit margin, like
Dynacs's, without fear of suffering a loss.
Contrary to the protester's contention, NASA also considered Dynacs's
failure to propose an additional fee for the option hours. NASA noted
that, among the three offerors, only Sytel failed to offer a
discounted fee during the option hours. While NASA recognized that
the use of a discounted fee exposed the offeror to some risk of
performing the option hours with a reduction in its overall award fee
percentage, the agency also considered the fact that it has
historically exercised only a fraction of the option hours. For
example, NASA advises that it exercised only 316,027 of the maximum
1.9 million option hours during the previous 5-year contract for these
services. Consequently, NASA decided that the awardee's proposed fee
did not entail undue risk or undermine sufficient performance
incentives.
Sytel argues that NASA's rationale ignores the fact that Dynacs's fee
did not approximate the incumbent's fee or the government estimate, as
did Sytel's proposed fee, and that Dynacs's employees will receive, on
average, $[deleted] less per year than Sytel's employees under the
competing fee arrangements. Contrary to the protester's argument,
NASA was aware that Sytel's proposed fee approach created stronger
performance incentives than Dynacs's, and it rewarded this feature of
Sytel's proposal by assigning it a minor strength in the technical
evaluation, which Dynacs's proposal did not receive. While Sytel
asserts that Dynacs's proposed fee approach deserved to be further
downgraded, this constitutes mere disagreement with NASA's judgment.
Accordingly, we find no error with respect to the evaluation of
Dynacs's proposed award fee.[7]
Sytel also protests the evaluation of its and Dynacs's Total
Compensation Plans. The protester argues that Dynacs proposed lower
fringe benefits than Sytel or the incumbent in certain respects, a
fact that NASA allegedly overlooked in finding Dynacs's compensation
plan acceptable and essentially equal to Sytel's plan. The protester
asserts that, had NASA properly evaluated each offeror's Total
Compensation Plan, Sytel, not Dynacs, would have earned the better
Mission Suitability score.
The record reflects that the overall wages and fringe benefits
proposed in the protester's and awardee's BAFOs were within a very
narrow cost range, with Dynacs proposing slightly higher compensation
levels than Sytel during the option hours and slightly lower
compensation levels [deleted] during the basic hours.[8] The
compensation difference between the proposals for the basic hours
basically resulted from the fact that Dynacs's health benefits plan
required employees to share insurance premium costs, while Sytel's did
not.[9] In its proposal, the awardee explained that the employee
cost-sharing feature was designed to discourage employees with an
alternate source of health insurance from enrolling simply because
enrollment was free. The agency decided that Dynacs's cost-sharing
approach (which was adopted by 10 other offerors in this procurement,
including Offeror C) was reasonable and would not detract from the
awardee's ability to attract and retain a competent work force. In
view of the overall narrow cost difference between the two
compensation plans, NASA concluded that they were essentially
comparable and acceptable overall.
In its report comments, Sytel did not rebut the agency's explanation
that the overall cost difference between the two compensation plans
was inconsequential or that Dynacs proposed an adequate health
insurance plan. Instead, Sytel seized upon certain details of
Dynacs's fringe benefits plan that did not equal the incumbent's or
Sytel's proposed benefits. For example, the protester noted that
Dynacs, unlike Sytel and the incumbent, did not offer life insurance
coverage for dependents or free coverage for long term disability
insurance, but instead required its employees to pay a biweekly
premium of, on average, $[deleted].
The protester's arguments are without merit. The RFP did not require
offerors to propose a compensation plan identical to the incumbent's,
but merely cautioned that "lowered compensation . . . may indicate
lack of sound management judgment and lack of understanding of the
requirement."[10] Moreover, we have reviewed the respective benefits
packages and find no basis to object to NASA's conclusions that the
awardee's and protester's overall compensation plans were comparable,
and that the isolated differences identified by the protester were not
meaningful discriminators.
In sum, we find NASA's evaluation of the Mission Suitability factor
reasonable.
Alleged Improper and Misleading Discussions
The protester alleges that NASA improperly induced Sytel during
discussions to raise its rates to a level at least equal to the
average incumbent rate of $23.32 for the basic hours, instead of
accepting the lower rates contained in Sytel's initial proposal.
Sytel argues that it justified the lower rates in its initial proposal
and during discussions, and that NASA did not consider the fact that
Sytel proposed [deleted] percent non-incumbent personnel, who were to
receive lower wages than their incumbent counterparts, or that Sytel
had offset its lower wages with better fringe benefits than the
incumbent's. Sytel thus argues that discussions were improper and
misleading.
We disagree. At the outset, we find that NASA reasonably determined
that Sytel did not adequately justify the use of lower labor rates in
its proposal. In so doing, NASA was properly cognizant both of
Sytel's proposed use of [deleted] percent lower-paid, non-incumbent
personnel and Sytel's fringe benefits package, which, as indicated,
NASA rated only acceptable.[11]
Here, Sytel's initial proposal did not acknowledge or explain the use
of lower labor rates, apart from identifying the market surveys
consulted by Sytel in developing the rates. When confronted by the
disparity between its and the incumbent's rates during written
discussions, Sytel raised its average rates, but did not meet the
incumbent rates or justify its failure to do so, other than by a
reference to its "optimized skill mix." While Sytel explained during
oral discussions that it intended to pay non-incumbent labor less than
incumbent labor, the protester never presented a breakdown of its
rates for the two groups so that NASA could judge whether compensation
levels were reasonable. Thus, NASA properly raised its concerns
regarding Sytel's labor rates with that firm during discussions.
Sytel nevertheless contends that the SEB's Business Committee chairman
told Sytel's pricing director in a telephone conversation after oral
discussions that NASA would deem Sytel's proposal deficient unless it
proposed an average rate of $23.32, which improperly precluded Sytel
from justifying its initial proposal rates. The chairman disputed
this assertion in an affidavit, and we find that the credibility of
the protester's assertion is diminished by the fact that it did not
appear in the pricing director's original affidavit, but in a
supplemental affidavit filed after Sytel's proposed project manager
admitted that NASA invited the protester during oral discussions to
justify its labor rates, which comports with NASA's advice during
written discussions.
In any event, even assuming that NASA directed Sytel's pricing
director to raise its rates to the incumbent's, which did not allow
Sytel to justify its proposed rates, the protester has not made a
credible showing of competitive prejudice. Competitive prejudice is
an essential element of every viable protest. Lithos Restoration
Ltd., 71 Comp. Gen. 367, 371 (1992), 92-1 CPD para. 379 at 5. Where the
record does not demonstrate that, but for the agency's actions, the
protester would have had a reasonable chance of receiving the award,
our Office will not sustain a protest, even if a deficiency in the
procurement is found. McDonald-Bradley, B-270126, Feb. 8, 1996, 96-1
CPD para. 54 at 3; see Statistica, Inc. v. Christopher, 102 F.3d 1577,
1581 (Fed. Cir. 1996).
As noted above, Sytel lost the cost advantage it enjoyed following the
initial proposal evaluation because it [deleted], a matter unrelated
to this protest. To overcome the $6.8 million cost disadvantage
created by the reconfiguration of its option hours work force, Sytel
would have been required to lower its BAFO rates considerably from its
initial proposal rates, and the record did not evidence that Sytel
intended to do so.
During the course of this protest, protester's counsel submitted
comments in response to an observation made during a telephone
conference that the prejudicial effect of the alleged misleading
discussions appeared to be inconsequential. In those comments,
counsel for the first time asserted that, but for the alleged improper
and misleading discussions, the protester would have lowered its BAFO
rates to achieve an $[deleted] million cost reduction so as to vitiate
Dynacs's cost advantage. We decline to credit counsel's assertion
that Sytel would have lowered its BAFO costs by such a large amount.
There is no documentation, contemporaneous or otherwise, supporting
this very high figure. While Sytel's pricing director stated in her
affidavit that [deleted], her affidavit was silent regarding Sytel's
intentions in this procurement, and she did not accompany her
affidavit with contemporaneous worksheets documenting, for example,
alternate rates that were under consideration during this procurement,
particularly any rates that would have achieved anything close to an
$[deleted] million reduction in Sytel's BAFO costs.
Moreover, because of its likely impact on the technical evaluation,
such a large reduction in its BAFO costs would not have created a
reasonable possibility of Sytel's winning the competition. The
protester has not persuasively explained how it could have avoided a
deficiency in its Mission Suitability rating if it had reduced its
rates to achieve the claimed $[deleted] million decrease. Such rates
would have been lower than the initial proposal rates, which, as
discussed above, NASA reasonably viewed as deficient because they were
less than those paid by the incumbent, and which the protester did not
persuasively justify. Furthermore, in response to the earlier
discussions, where Sytel was provided the option of justifying its
rates, Sytel instead raised its average hourly labor rate (to
$[deleted]). The protester states that, during subsequent oral
discussions it advised NASA that it intended to lower the average rate
in its BAFO to $[deleted] (after which it allegedly received the
direction by NASA to raise its rates to the $23.32 level of the
incumbent). Even if Sytel in its BAFO had maintained its initial
proposal rate of $[deleted] or lowered it to $[deleted], the record
indicates that this would only have reduced Sytel's BAFO costs by
approximately $[deleted] million, which would not offset Dynacs's $6.8
million cost advantage.
We therefore conclude that, even if the protester's version of the
conversation with the SEB's Business Committee Chairman is assumed,
arguendo, to be true, no reasonable possibility of prejudice is
evident, and we therefore deny this basis of protest.
Improper Release of Sytel's Proposal Information
Sytel protests NASA's inadvertent release of its June 18 discussions
letter to Dynacs.[12] During the procurement and this protest, Dynacs
denied reading Sytel's letter and also stated that it had no reason to
"lift anything from a competitor's proposal which could be a worse
proposal." The protester, disputing this, argues that the awardee
read its discussion letter and used Sytel's proposal information to
its competitive advantage, which mandates the rejection of Dynacs's
BAFO.
Sytel's and Dynacs's June 18 discussion letters advised both offerors
that their proposed average labor rates for the basic hours were lower
than the incumbent's. The incumbent rates cited in the two letters
were different because they were calculated based upon each proposal's
unique labor mix for the six labor categories. In the protester's
letter, NASA identified $23.32 as the incumbent rate; in the awardee's
letter, NASA identified $23.17 as the incumbent rate; the discussion
letters did not disclose either offeror's labor mix information. In
its BAFO, the awardee raised its average rate to $[deleted].
Assuming, arguendo, that the $23.32 incumbent rate was "Sytel's
proposal information," we are unpersuaded that this evidences that
[deleted], inasmuch as the two offerors' labor mix and rates for the
underlying six labor categories were different and Dynacs's [deleted]
inured to its clear competitive disadvantage by increasing its BAFO
cost. Since there is no evidence that Dynacs received any competitive
advantage from its receipt of Sytel's discussion letter, we find no
basis to disturb the award.
The protest is denied.
Comptroller General
of the United States
1. The Scientist/Engineer category accounted for half of the basic
hours proposed by Sytel.
2. The technical labor rate excludes the average rates for the
clerical and management/administrative labor categories.
3. According to NASA's meeting minutes, NASA advised Sytel that the
$[deleted] rate for the option hours work force appeared reasonable.
Because non-incumbent labor was expected for the option hours work
force, NASA assumed that offerors might successfully recruit and
retain a minimally competent option hours work force based upon rates
approximately 10 percent lower than the incumbent's.
4. NASA did not consider it necessary to make probable cost
adjustments to any of the three proposals.
5. Sytel, Dynacs and Offeror C all proposed to share their award fee
with their employees to varying degrees. In the technical evaluation,
Sytel earned a minor strength and additional points for its award fee
sharing approach, which dedicated a greater percentage of the maximum
fee to employees than proposed by Dynacs or Offeror C.
6. We note that FAR sec. 16.305 does not prohibit an offeror from
proposing no award fee for part of its level of effort, as suggested
by the protester, but merely requires the government to determine
whether the amount of the proposed fee provides sufficient motivation
for excellent performance.
7. Sytel also argues that NASA should have excluded its proposed fee
for the option hours from its proposal's evaluated cost. However, the
RFP provided that the cost and fee of all options would be added to
the cost and fee of the basic contract performance period for
evaluation purposes. In any event, Sytel would not have overcome
Dynacs's $6.8 million cost advantage regardless of whether NASA
excluded the $[deleted] million option hours portion of its award fee
from its evaluated cost, even accounting for the potential prejudicial
impact of the alleged improper discussions, as discussed below.
8. NASA compared compensation levels without regard to the average
amount of employee award fee sharing distributions. This aspect of
the proposals was considered during the award fee evaluation, where
Sytel's proposal was rewarded with a minor strength and a higher
Management Approach and Resource Application score than Dynacs's.
NASA's evaluation methodology was consistent with the RFP, which
provided for separate evaluation of offerors' Total Compensation Plans
and award fees.
9.[deleted].
10. The record also contradicts Sytel's assertion that NASA downgraded
its initial proposal whenever an isolated fringe benefit failed to
match the incumbent's. Instead, the evaluation documentation shows
that NASA downgraded Sytel's initial proposal because "[o]verall
fringe benefits are less than those offered by the incumbent, and the
details of coverage are vague." (Emphasis supplied.) Numerous,
uncontested weaknesses in Sytel's initial proposal contributed to this
finding, which was based upon a comprehensive review of Sytel's fringe
benefits plan.
11. We disagree with the protester's contention that NASA should have
lowered the incumbent labor rate in evaluating and discussing Sytel's
proposal to reflect Sytel's [deleted] percent non-incumbent labor base
or its supposedly superior fringe benefits. Nothing in the RFP
required NASA to adjust the incumbent rate in the manner suggested by
the protester. Rather, the RFP stated that NASA would scrutinize
proposals "envisioning compensation levels lower than those of
predecessor contractors for the same work," as did Sytel's.
12. NASA asserts that this protest contention is untimely because
Sytel was advised of the inadvertent release at the time and did not
protest the continuance of the procurement. However, Sytel asserts
that it learned during its debriefing that NASA had not implemented
the remedial action promised during the procurement, namely, that it
would review Dynacs's BAFO to ensure that the awardee had not made use
of any Sytel proposal information. Sytel protested NASA's alleged
failure to implement its promised remedial action within 10 days of
its debriefing, which renders the allegation timely. See 4 C.F.R. sec.
21.2(a)(2)(1997); compare SRS Techs., B-277366, July 30, 1997, 97-2
CPD para. 42.