BNUMBER: B-278044.4; B-278044.6
DATE: June 12, 1998
TITLE: Source One Management, Inc., B-278044.4; B-278044.6, June 12,
1998
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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:Source One Management, Inc.
File: B-278044.4; B-278044.6
Date:June 12, 1998
Alexander J. Brittin, Esq., and Margaret C. Rhodes, Esq., McKenna &
Cuneo, L.L.P., for the protester.
William W. Goodrich, Jr., Esq., Matthew S. Perlman, Esq., Richard J.
Webber, Esq., Alison Micheli, Esq., and Tenley A. Carp., Esq., Arent,
Fox, Kintner, Plotkin & Kahn, for Advanced Integrated Management
Services, Inc., an intervenor.
Gena E. Cadieux, Esq., and John D. Bremer, Esq., Department of Energy,
for the agency.
Paul Jordan, Esq., and Paul I. Lieberman, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Evaluation of protester's proposal was reasonable where it was
performed in accordance with stated evaluation criteria and reflected
valid criticisms of protester's proposed subcontract management and
past performance.
2. Where offeror proposed certain employees' wage rates less than
comparable Service Contract Act and general schedule wages, without
fully supporting feasibility of that approach, agency properly
assessed a weakness under evaluation criterion concerning offerors'
projected success in obtaining and retaining a highly skilled
workforce.
DECISION
Source One Management, Inc. (SOM) protests the award of a contract to
Advanced Integrated Management Services, Inc., (AIMSI) under request
for proposals (RFP) No. DE-RP65-97WA14007, issued by the Western Area
Power Administration, Department of Energy (DOE) for technical support
services. SOM challenges the agency's technical evaluation of AIMSI's
and SOM's proposals and the cost/technical tradeoff.
We deny the protest.
BACKGROUND
The purpose of this procurement is to provide technical support
services for DOE's Corporate Services Office (CSO) in Golden,
Colorado. The technical support services to be acquired include
realty management (Task A); power system training and video production
(Task B); engineering support (Task C); three information services
support tasks: CSO support (Task D1), Corporate Applications Support
(Task D2), and Financial Management System Transition support (Task
D3); and project management (Task E). The procurement consolidates
four existing support services contracts and aligns them with changes
in DOE's organization that have occurred in the past 3 years. The
solicitation was issued as a total small business set-aside and
contemplated award of a cost-plus-fixed-fee contract for a base year
with 4 option years.
Section L of the RFP advised offerors that their proposals would
consist of an oral presentation of delineated technical information,
supplemented by written documentation. According to section M of the
RFP, technical proposals were to be evaluated on the basis of three
technical criteria: project management (50 percent), past performance
(25 percent), and understanding and approach (25 percent). The
project management criterion was divided into four subcriteria:
projected degree of success of phase-in and start-up staffing plans,
including subcontractors (20 percent); appropriateness and projected
degree of success of personnel management programs to ensure a highly
skilled workforce and retention of contract staff, including
subcontractors (15 percent); anticipated effectiveness of management
approach (10 percent); and anticipated effectiveness of proposed
on-site organization structure (5 percent). Additional evaluation
credit was available under the first and third subcriteria to offerors
that proposed to subcontract with small disadvantaged businesses
participating in the Small Business Administration's 8(a) program.
Cost, while not scored, was used in determining the offeror's
understanding of the requirements, in assessing the validity of the
offeror's approach to managing and performing the work, and in
determining the best overall value to the government. The RFP advised
that the proposed cost estimate would not be controlling and that the
government's estimate of the most probable cost (MPC) would be used
for evaluation purposes.
While technical factors were more important than cost, the RFP advised
that "apparent technical advantages will be weighed against the
evaluated price" and "[a]n offer exceeding technical requirements will
have an advantage over offers which meet requirements with lower cost,
only insofar as the offer exceeding technical requirements is
considered to be worth the price differential, if any." Award was to
be made to the offer providing the best overall value to the
government.
Twelve proposals, including those of SOM and AIMSI, were submitted by
the May 20, 1997 closing date. After initial review, the source
selection official (SSO) excluded certain offers from the competitive
range, and the remaining offerors, including SOM, made oral
presentations between July 8 and July 18, 1997. The technical
evaluation panel (TEP) evaluated the oral presentations and written
proposals and conducted discussions with each offeror immediately
following its oral presentation. The cost analyst reviewed offerors'
costs and made adjustments to calculate an MPC for each offer. The
agency requested and obtained best and final offers (BAFO) from the
competitive range offerors. In the final evaluation, AIMSI's proposal
received a score of 825 points with an MPC of $16.9 million and SOM's
proposal received a score of 800 points with an MPC of $16.4 million.
Based on the evaluation, the SSO agreed with the TEP's recommendation
to award the contract to AIMSI. After receiving notice of the
selection decision and a debriefing, SOM filed a protest with our
Office (B-278044). Among other evaluation issues, SOM challenged
DOE's upward adjustment of the firm's proposed labor costs for certain
personnel whom the agency considered to be subject to the Service
Contract Act (SCA). Since the wage rates for these personnel were
lower than the applicable Department of Labor wage determination, DOE
adjusted SOM's wage rates upward. The agency determined to take
corrective action and our Office dismissed the protest as academic.[1]
SOM filed a subsequent protest challenging the agency's decision to
limit discussions (B-278044.3). Our Office dismissed this protest as
academic when the agency decided to allow offerors to completely
revise their proposals and/or BAFOs.
DOE conducted additional discussions and reviewed the offerors'
proposal revisions and BAFOs. The results of the final evaluation
were as follows:
Criteria (Possible Points)SOM AIMSI
Project Mgmt (500)
(+ 90 Bonus Points) 445 580
Phase-in/Start up (200)
8(a) Bonus (60) 160 + 60 200 + 60
Personnel Mgmt (150)90 150
Mgmt Approach (100)
8(a) Bonus (30) 70 + 30 90 + 30
On-site Structure (50)35 50
Past Performance (250)200 175
Understanding (250) 250 225
Total (1090) 895 980
MPC[2] $16,252,782 $17,097,042
Based on the TEP's evaluation and recommendation, the SSO again
selected AIMSI for award as providing the best value to the
government. After receiving notice of the award and a debriefing, SOM
filed this protest challenging the agency's evaluation of its and
AIMSI's technical proposals.[3]
Where there is a challenge to the evaluation of proposals in a
negotiated procurement, it is not the function of our Office to
evaluate the proposals de novo. Rather, we will examine an agency's
evaluation only to ensure that it was reasonable and consistent with
the stated evaluation criteria and applicable statutes and
regulations, since determining the relative merit of competing
proposals is primarily a matter within the contracting agency's
discretion. Advanced Tech. and Research Corp., B-257451.2, Dec. 9,
1994, 94-2 CPD para. 230 at 3; Information Sys. & Networks Corp.,
B-237687, Feb. 22, 1990, 90-1 CPD para. 203 at 3.
EVALUATION OF SUBCONTRACTORS
In evaluating SOM's proposal under the project management criterion
and its subcriteria, the evaluators identified several weaknesses
associated with SOM's proposed subcontractors, [deleted], an 8(a)
contractor, and [deleted]. SOM contends that these assessed
weaknesses and their impact on its evaluation score under the project
management criteria (worth 50 percent of the total available points)
are improper because they unfairly penalize SOM simply for proposing
subcontractors. Our review of SOM's proposal and the evaluation
discloses that SOM's contentions are unfounded. While SOM asserts
that the weaknesses are attributable to the mere use of
subcontractors, the record shows that the weaknesses are actually
attributable to management issues attendant to SOM's proposed team.
For example, the TEP assessed the following weaknesses under
subcriterion A (Phase-in/Start-up Staffing): "[c]onfusion may exist
with rolling out the separate company policies for initial
orientation, for Tasks D1, D2, and D3 with three firms" and "[u]nclear
alignment of [deleted] policies and different benefits as compared to
[SOM] and [deleted], which may impact phase-in and start-up." Under
subcriterion B (Personnel Management), the TEP noted "[d]ifferent
benefits for [deleted] employees." These weaknesses are attributable
to SOM's decision to add [deleted] to perform a portion of Task D1.
SOM had overcome earlier assessed weaknesses concerning benefit
differences by ensuring that SOM's and [deleted] benefit plans were
comparable. This change was reflected in SOM's revised Executive
Summary in which it stated that [deleted]. However, when SOM added
[deleted] to its team, no apparent effort was made to conform
[deleted] benefit plan to the SOM-[deleted] plans. In this regard,
[deleted] benefit plan differs from the SOM-[deleted] plans in
virtually every area including leave, health insurance, retirement,
and disability plans. Since all three team members will perform
various parts of the information services functions (Tasks D1, D2, and
D3), the TEP reasonably was concerned with the potential impact of
different benefit plans on phase-in and start-up and properly assessed
the challenged weaknesses.[4]
We reach the same conclusion with regard to the TEP's assessment of
weaknesses under the other "Project Management" subcriteria. Under
subcriterion C (Management Approach), the TEP noted that SOM proposed
"[t]hree firms providing information services tasks [D1-D3] . . .
[which could] contribute to inefficiencies, reduced responsiveness,
and lack of flexibility" and under subcriterion D (Organization
Structure), they found "[i]nformation [s]ervices tasks are split
between two subcontractors and prime, reducing effectiveness of
on-site organization." Under these subcriteria, the TEP evaluated the
efficiency and responsiveness of the proposed project management
approach, including the authority of the project manager, and the
effectiveness of the on-site organization structure proposed to manage
the work performed. Here, SOM proposed to share task D1 with
[deleted] and have [deleted] perform tasks D2 and D3. Further, while
SOM's revised proposal showed that the project manager had hiring and
firing authority over all other employees, it is not clear from the
revised proposal that he had this authority with respect to the
[deleted] employees. Contrary to the protester's assertion, these
evaluated weaknesses are not attributable to the mere proposal of
subcontractors; rather, they are attributable to how SOM intends to
use and manage those subcontractors. We find nothing unreasonable in
the TEP's assessment that sharing various parts of three related tasks
among three contractors could lead to organizational and management
problems.
SOM also contends that the TEP improperly penalized it by
double-counting through references to the same weaknesses under
different subcriteria. It is improper for an agency to exaggerate the
stated importance of a single evaluation criterion by considering an
identical element of that criterion under other evaluation criteria.
J.A. Jones Management Servs., Inc., B-254941.2, Mar. 16, 1994, 94-1
CPD para. 244 at 6. However, an agency is not precluded from considering
an element of a proposal under more than one evaluation criterion
where the element is relevant and reasonably related to each criterion
under which it is considered. Teledyne Brown Eng'g, B-258078,
B-258078.2, Dec. 6, 1994, 94-2 CPD para. 223 at 4-5. Here, the alleged
examples of multiple counting of the same weaknesses did not reflect
an improper over-emphasis because the agency legitimately concluded
that those weaknesses had an impact under more than one subcriterion.
For example, use of the three team members to perform portions of
three related tasks was reasonably viewed by the evaluators as
affecting both SOM's management approach and its on-site structure.[5]
EVALUATION OF "EXEMPT" EMPLOYEES
An agency may properly use SCA wage rates in determining the realism
of proposed wage rates in a cost-reimbursement contract, even where
the offeror contends that the employees are exempt. T&M Joint
Venture, B-240747, Dec. 19, 1990, 90-2 CPD para. 503 at 4; see DIGICON
Corp., B-275060, B-275060.2, Jan. 21, 1997, 97-1 CPD para. 64 at 4
(comparison of offerors' wage rates appropriate for determining risk
of performance). While the agency did not adjust the offerors' MPC in
this evaluation, we believe it reasonably applied the GS and SCA rates
as a benchmark for determining whether the rates were sufficient to
obtain and retain the necessary highly skilled workforce to perform
this contract.[6]
In discussions with SOM, DOE identified 11 computer systems analyst,
programmer, and technician job categories which it believed were
subject to SCA minimum wages and for which SOM's proposed wage rates
were below the SCA minimums. The agency also identified four job
categories, not subject to the SCA, but for which it had provided
equivalent general schedule (GS) wage rates, and for which SOM had
proposed lower wage rates. DOE requested SOM to "explain [its]
ability to pay wages lower than SCA minimums" and "equivalent federal
hires," and to "explain how the payment of the lower wages can still
provide [DOE] with an adequately skilled staff."
In response, SOM outlined its process for determining when particular
labor categories or positions were exempt from the SCA. Specifically,
SOM used criteria from a "number of sources" including the Mountain
States Employers Council (MSEC) to analyze the positions, including
the character of the work, knowledge to perform, exercise of
discretion and independent judgment, and amount of time spent on
professional activities. Based on this analysis, SOM concluded that
all the questioned positions were exempt. SOM also relied on the
eligibility for exemption of computer systems analysts, computer
programmers, software engineers, and other similarly skilled workers
under the Fair Labor Standards Act. SOM also matched the RFP
categories with existing [deleted] labor categories and wage rates,
noting that the salary structure was annually updated using sources
such as the MSEC and the Economic Research Institute. In addition,
SOM stated that it used the actual salaries of proposed key personnel.
With regard to those employees being paid less than that of equivalent
federal hires, SOM noted that Federal Acquisition Regulation sec.
52.222-42 provided that such equivalent rates were identified only for
"information" and were not intended to be considered a wage
determination. SOM explained that one of these employees was an
incumbent whose wage rate was the same as his current rate, and the
other three categories' wage rates were set using the same methodology
as that to determine the exempt employees' wage rates.
Notwithstanding SOM's explanation of its wage rate methodology, the
TEP assessed a weakness under the Personnel Management subcriterion
(under the Project Management criterion), on the basis that SOM's
"[w]age strategy may reduce ability to recruit and retain highly
skilled workforce based upon comparison to average labor rates
proposed by others and Government initial estimate." SOM challenges
the propriety of this assessed weakness, since it believes it fully
supported its determination that the employees in question are exempt
and thus not entitled to the higher wages. We have reviewed SOM's
revised proposal and the agency's rationale for downgrading it based
on the lower proposed wage rates and find nothing unreasonable in the
agency's action.
According to the agency, and undisputed by the protester, in Golden,
Colorado (part of the Denver metropolitan area), where this contract
is to be performed, the labor market is large and diverse and includes
a large federal employment sector. Thus, in the agency's view, an
employer who pays its employees less than a GS or SCA wage rate risks
loss of the employee to a federal agency willing to pay more. SOM
recognized the state of the labor market in its proposal, stating:
"Currently, the labor market in Denver is tight and unemployment is
low and workers are harder to obtain." SOM even criticized its
competitors stating that they would:
lose large percentages of the incumbent work force through
inadequate compensation, and [would] incur large opportunity
costs to [DOE] through loss of technical expertise, reduced
levels of customer service, delays in contract deliverables,
reduced productivity and quality, poor morale, and increased
training costs.
SOM Revised Proposal at 47 (emphasis added).
Despite this recognition by SOM, it proposed some rates which were
significantly below SCA minimums, equivalent GS rates, and rates
proposed by other offerors. In this regard, SOM's final proposed
rates for 9 of the 11 SCA job categories in question ranged from
approximately [deleted] percent (computer systems analyst III) to
approximately [deleted] percent (computer systems analyst II) below
the minimum SCA wages for these categories. With regard to the other
four categories, SOM's proposed wages were from [deleted] percent
(senior electrical engineer) to [deleted] percent (engineering
technician VI) below the equivalent GS rate. In addition, SOM's
rates, on average, range from approximately [deleted] percent below to
[deleted] percent below the rates proposed by the other offerors in
the competitive range.
SOM nonetheless contends that some of the wages upon which its
proposal is based are equal to those the same employees received under
the incumbent contract.[7] In SOM's view, if its proposed employees
will be paid the same wages they already make, it is unreasonable for
the agency to conclude that there is any risk associated with
retaining them at those rates. In this regard, the record shows that
the agency questioned some 15 job categories under Tasks A, B, C, D1,
and D2. Of these 15, in SOM's response to the agency's questions, the
firm identified only 7 key personnel positions as being based on
incumbent salaries. The remainder were based on SOM's determination
that the positions were exempt, based primarily on [deleted]
experience. However, as the agency points out, some of these
positions, e.g., the realty appraiser, did not represent positions
performed by [deleted]-incumbent personnel. Thus, simply stating that
the wages represent incumbent wage rates is neither fully accurate,
nor sufficient to support the adequacy of the low rates in question.
In this regard, the assessment of this weakness was also based on
SOM's lack of adequate support for its lower wages. While SOM argues
that the agency was aware of the incumbent's payment of lower than SCA
and GS rates, its evidence of that awareness is unpersuasive. For
example, in response to the agency report, SOM submitted to our Office
the salary structure it proposed in 1993 allegedly showing below-SCA
rates and a 1995 detailed salary report. The salary structure
reflects a lowest and highest salary range without identifying the
specific wage rate to be paid for any particular position. While the
lower end of the salary ranges appears to be lower than the SCA rates,
the higher end appears to exceed those rates. Such a presentation of
broad ranges in a salary structure does not evidence that the agency
was on notice that incumbent personnel were being paid less than SCA
rates.[8] The 1995 salary report lists annual salaries, while SCA
rates are expressed as per-hour rates. Without an explanation of how
the hourly rate was to be calculated from the annual salaries, the
agency was not necessarily on notice that these wage rates represented
below-SCA rates. Moreover, the salary report identifies the salaries
by noting only that they are "counted for" various GS grades, without
denominating the job responsibilities as properly falling within the
"counted for" GS level.[9]
In sum, our review of the entire record leads us to conclude that the
agency's concern about SOM's wage strategy was reasonable and its
assessment of a weakness under the Personnel Management subcriterion
was unobjectionable.[10]
EVALUATION OF PAST PERFORMANCE
In evaluating SOM's past performance, the TEP noted that SOM, which
was responsible for performance of Task A (realty management), had
"[l]imited realty experience in federal acquisition[s]" and that SOM's
subcontractor, [deleted], had "failed to comply with contract
administration requirements to provide indirect rate packages
(1994-96) to [DOE] within 90 day[s] of contract period completion."
SOM challenges the assessment of these weaknesses and the consequent
downgrading of its proposal.[11] SOM argues that its proposal
provided ample evidence of its and [deleted] experience with realty
tasks and an adequate explanation for the late submissions of its rate
information. In view of the discretion afforded contracting officials
in the evaluation of past performance, our review of the record
reveals nothing improper or unreasonable in the agency's evaluation.
University of Dayton Research Inst., B-260709, July 10, 1995, 95-2 CPD para.
17 at 7.
The realty task under the incumbent contract was performed by another
contractor. In its proposal, SOM stated that it would use the
incumbent realty personnel in performing the contract. It also noted
its and [deleted] own prior experience with realty tasks. In response
to evaluators' questions, SOM's first BAFO provided more detail about
its and [deleted] realty experience. The evaluators continued to view
this as limited experience and so scored SOM's past performance at 200
out of 250 possible points. In its second BAFO, SOM stated that it
was providing "substantially more information on its extensive realty
experience highlighting Federal Acquisition experience specifically."
In this regard, SOM's proposal showed that it had 1 year of realty
experience in a contract performed at DOE's Rocky Flats Field Office
and that it had realty-task experience on an engineering design
contract with the City of Broomfield. [deleted] had some 15 years of
realty experience in two different contracts. Notwithstanding this
additional information, the TEP did not eliminate the lack of
experience weakness from the evaluation.
While SOM complains that the assessed weakness is unfair, the record
fully supports the TEP's assessment that SOM had "limited" realty
experience on federal contracts. Its sole federal contract at Rocky
Flats involved what DOE terms "clerical work." While there is no
reason to doubt that SOM performed some realty related tasks as part
of this contract, they were not the major emphasis of the contract
and, in any event, represented only 1 year of experience. With regard
to the Broomfield experience, the contract was for engineering design
services that involved some realty related tasks (e.g., appraisal,
land acquisition, and record maintenance), but that experience was
limited and was nonfederal. Although [deleted] has more experience,
the agency correctly observes that SOM proposed itself, not [deleted],
to perform the realty tasks. The fact that [deleted] is available to
provide advice does not change the fact that SOM is ultimately
responsible for the performance of these tasks. Similarly, while SOM
planned to hire incumbents to perform the realty tasks and the TEP
noted this as a strength under the project management criterion, this
does not equate to anything more than "limited" contract management
experience. In this regard, although our Office has recognized that
an agency properly may consider the experience of supervisory
personnel in evaluating the experience of a new business, see
Technical Resources, Inc., B-253506, Sept. 16, 1993, 93-2 CPD para. 176 at
5, an agency certainly is not compelled to attribute personnel
experience to the contractor. Atlantic Coast Contracting, Inc.,
B-270491, B-270590, Mar. 13, 1996, 96-1 CPD para. 147 at 3.
The other assessed weakness was based on [deleted] late submission of
indirect rate information. Under the terms of [deleted] prior
contract with DOE, it billed indirect costs using a provisional rate.
Within 90 days after the close of each fiscal year, [deleted] was
required to submit a final indirect rate package to the agency so that
it could determine the final rate. Prompt determinations were
important because the agency had obligated reserve funds to cover any
reasonable increase in final rates over provisional rates. Until the
matter was settled each fiscal year the agency could not use the
reserved funds for other requirements. In mid-1995, DOE learned that
the Defense Contract Audit Agency (DCAA) had questioned indirect rates
associated with an [deleted] ([deleted] parent corporation) contract
for fiscal years 1991-93. DCAA also audited [deleted]. Because the
amounts involved were substantial and due to the potential for payment
of penalties if [deleted] did not prevail, [deleted] did not submit
its indirect rate packages for fiscal years 1993 through 1996.
Beginning in November 1995, DOE requested [deleted] to comply with its
obligation to submit its indirect packages on six contracts. When the
agency learned that [deleted] was concerned about penalties for
submitting unallowable costs to DOE, the agency advised [deleted] that
it would not forward the rate packages to DCAA for audit until after
[deleted] resolved the dispute with DCAA. However, DOE advised
[deleted] that it still needed the overdue packages. Ultimately, in
the summer of 1997, [deleted] settled with DCAA for a fraction of the
original disputed costs from 1991. Subsequently, DOE agreed to a
schedule for submission of the overdue rate packages: fiscal year
1994, due in August 1997, fiscal year 1995 by the end of fiscal year
1997, and fiscal year 1996 in December 1997/January 1998. [deleted]
met these deadlines.
SOM admits that [deleted] was overdue in submission of the rate
packages, but argues that due to the special circumstances surrounding
its late submissions, including its positive settlement with DCAA, and
because it submitted the rate packages within the time frames agreed
to by DOE, the agency should not have assessed a weakness for past
performance.[12] We disagree. As explained by the agency, until
final indirect rates are settled, it must continue to obligate
additional funds in case the final rates legitimately exceed the
provisional rates. Thus, in addition to representing a failure to
comply with its contractual responsibilities, [deleted] delayed
submissions caused DOE additional administrative and fiscal
responsibilities. While it was more convenient for [deleted] to wait
until it had settled with DCAA, it could have submitted its rate
packages, with the caveat that those rates might be reduced if DCAA
did not agree with its position in the ongoing audit. Under these
circumstances, the TEP reasonably concluded that [deleted] late
submissions were relevant to the past performance evaluation and
justified the assessment of a weakness. In this regard, despite the
assessment of this weakness, SOM's proposal received a higher past
performance score than AIMSI's.
Further, we note that SOM was aware of the agency's assessment of both
these weaknesses and attempted to resolve them through multiple
proposal revisions. However, with each revision, SOM failed to
provide any appreciable new information which would have warranted
elimination of the weaknesses. An offeror is responsible for
affirmatively demonstrating the merits of its proposal, DBA Sys.,
Inc., B-241048, Jan. 15, 1991, 91-1 CPD para. 36 at 4, and here SOM, in
revising its proposal, did not eliminate the basis for the agency's
assessment of past performance weaknesses.
COST/TECHNICAL TRADEOFF
Finally, SOM argues that the cost/technical tradeoff was suspect
because of the evaluation errors it alleged in its protest. Agency
officials have broad discretion in determining the manner and extent
to which they will make use of technical and cost evaluation results.
Cost/technical tradeoffs may be made; the extent to which one may be
sacrificed for the other is governed by the test of rationality and
consistency with the established evaluation factors. General Servs.
Eng'g, Inc., B-245458, Jan. 9, 1992, 92-1 CPD para. 44 at 9.
Based on the detailed analysis and evaluation performed by the TEP on
the competitive range proposals, the SSO selected AIMSI's proposal for
award. In this regard, the TEP observed that AIMSI had submitted the
proposal with the highest technical score with all evaluation criteria
rated "successful" to "outstanding." AIMSI's proposal had the highest
project management score, received additional points for proposal of
an 8(a) subcontractor, and represented the second lowest MPC. The TEP
noted that SOM's proposal was technically very good with the highest
rating under the understanding and approach criterion, and the lowest
MPC. The TEP also observed that SOM had improved its score by
proposing an 8(a) subcontractor, but found SOM's technical weaknesses
could cause technical problems in the future, which would outweigh the
estimated cost savings.
In selecting AIMSI, the SSO noted that AIMSI was very strong in all
phases of project management and was highly rated in understanding and
approach. While AIMSI's past performance was rated relatively lower,
the SSO concluded that the overall technical advantages of its BAFO
were "clearly superior to the other three firms seeking the CSO's
technical support service contract." While AIMSI's MPC was higher
than SOM's, the SSO found that the technical superiority reflected in
AIMSI's higher score (85 points higher than SOM's) "more than
outweighs the additional estimated cost of the contractual services."
Since, as discussed above, there was nothing unreasonable or
objectionable in the agency's evaluation, we have no basis to question
the award determination.
The protest is denied.
Comptroller General
of the United States
1. L&M Technologies, Inc. also filed a protest challenging its
evaluation. Its protest was rendered academic by the agency's
original corrective action. L&M filed a subsequent protest
(B-278044.5), which was denied in a separate decision.
2. Each offeror's MPC was the same as its proposed cost.
3. SOM raised a number of arguments in support of its protest. We
have considered them all and find none of them has merit. This
decision will address only the more significant matters raised by SOM.
4. The fact that only two [deleted] employees are proposed to work on
the contract does not change our view. While two employees receiving
less generous benefits than the majority of employees may be viewed by
SOM as a minor problem, that does not mean that it will not be a
problem during phase-in or start-up, or in fact throughout contract
performance. To the extent the two employees have better benefits
than the majority of employees, there is reason for legitimate concern
with future management of the contract by SOM.
5. In a related argument, SOM asserts that AIMSI's proposal was
improperly evaluated more favorably under criterion one. In this
regard, SOM observes that AIMSI's proposal received the full 90 points
for proposal of an 8(a) subcontractor and, while assessed a weakness
for lack of a past relationship with that subcontractor, AIMSI's
proposal was not downgraded for this weakness. There is no evidence
of unequal treatment here. Both SOM and AIMSI received 90 points for
proposing 8(a) contractors. Likewise, under subcriterion C, both
proposals were assessed weaknesses for lack of a prior relationship
with the 8(a) subcontractor, but the evaluators specifically noted for
both offerors that the 8(a) subcontractors were performing limited
aspects of the contract. While SOM's proposal received only 100
points under this subcriterion and AIMSI's proposal received 120
points, the difference in scores is attributable to the number of
other strengths and weaknesses: AIMSI's proposal had eight strengths
and two weaknesses, while SOM's proposal had only three strengths and
three weaknesses.
6. SOM notes that, prior to its first protest, the agency adjusted
SOM's MPC to reflect the disagreement with SOM's proposed wage rates,
and only in the subsequent evaluation of revised proposals did the
agency assess a weakness in the technical evaluation (rather than
adjust SOM's proposed costs). Section M clearly advised offerors that
the agency intended to evaluate their proposed approach to hiring,
benefits package, and leave policies in its determination of the
"[a]ppropriateness and projected degree of success of . . . personnel
management programs to assure . . . a highly skilled workforce and
retention of contract staff, including proposed subcontractors."
Accordingly, and regardless of how the proposal was evaluated prior to
the first protest, there was nothing unreasonable or inappropriate in
the agency's evaluation of low wage rates as a matter of technical
weakness.
7. SOM also points out that, during the pendency of this protest,
[deleted] is performing tasks under an interim contract and that the
agency is aware that [deleted] is paying the employees in question the
same (relatively low) wages as proposed by SOM. SOM contends that the
agency has thereby agreed that the wages are appropriate. Contrary to
SOM's view, the agency denies any awareness that [deleted] is paying
sub-SCA wages. In this regard, the agency states that the only
evidence it has of [deleted] interim contract wages is a salary report
which identified employee wages by comparison to GS wages. The agency
compared this information with SOM's BAFO wages for the same employees
and found that the average wage rate for those employees was higher
than that reflected in the BAFO. To the extent the agency may have
been aware that any employees working on the interim contract were not
being paid SCA or GS-equivalent wages, this does not mean that it
agrees that those wages are appropriate or likely to result in the
employees' long-term retention during the new contract period. In
this regard, the agency points out that its most important
consideration in the interim contract was continuation of Task D3 work
and that [deleted] is paying those employees at the SCA rates. While
the agency states that it would have preferred to have had an
alternative for work on Tasks D1 and D2, a "lack of time and
contracting efficiency made [deleted] the best choice for those tasks
also." The agency's choice of [deleted] for those tasks does not
constitute an agency determination that [deleted] wages for the
affected employees are adequate for a long-term contract.
8. For example, the salary structure table shows that in 1993 a
"systems analyst III" was paid at a rate ranging from [deleted] per
hour to [deleted] per hour, while the (current) SCA hourly wage rate
for this position is $26.84, less than the 1993 "highest" rate--but
the table does not indicate whether any incumbent was paid above or
below the SCA rate. SOM proposed this position at [deleted] per hour.
9. In addition, while SOM outlined its methodology for calculating
wage rates, it did not submit any of the salary surveys on which it
relied. In the absence of any evidence that the lower wages proposed,
even those actually paid to some incumbent employees, were
commensurate with other local wages for comparable positions, the
agency reasonably concluded that SOM had failed to adequately support
its proposed rates. An offeror is responsible for providing
sufficient information in its proposal to support its approach. While
agency evaluators may consider evidence from sources outside the
proposals, Continental Maritime of San Diego, Inc., B-249858.2,
B-249858.3, Feb. 11, 1993, 93-1 CPD para. 230 at 6, agencies are not
obligated to go in search of information which the offeror has omitted
or failed to adequately present. Telos Field Eng'g, B-251384, Mar.
26, 1993, 93-1 CPD para. 271 at 6.
10. In this regard, we note that SOM's evaluation score of 90 out of
150 points under this subcriterion was also based on other weaknesses,
including different benefits of [deleted] employees and the cost of
family health insurance premiums paid by employees.
11. SOM also contends that the agency improperly evaluated AIMSI's
past performance because the agency failed to take AIMSI's past
performance weaknesses into account under the project management
criterion. As the agency correctly observes, since past performance
was not part of the evaluation factors to be used under the project
management criterion, it would have been improper to consider it under
that criterion. J.A. Jones Management Servs., Inc., supra.
12. SOM also argues that it understood that an agency cost analyst
agreed to advise the TEP not to consider the matter negatively. We
have reviewed declarations from both the cost analyst and [deleted].
Although [deleted] representative requested the cost analyst to talk
with the TEP, the cost analyst denies agreeing to advise the TEP how
they should view [deleted] late submissions. Rather, the analyst
states that he was not aware of the rating system and did not get
involved in telling the technical evaluators how to score proposals.
Instead, he told [deleted] that once [deleted] became current, he
would so inform the TEP. However, at the time of that discussion,
[deleted] was not current and did not become current as to fiscal year
1996 until January 1998. The fiscal year 1997 package was not
submitted until March 1998 (beyond the 90-day deadline after the
beginning of fiscal year 1998). Since the submissions, even under the
"agreed to" deadlines, were extremely late, and in view of the
analyst's position that he would not advise evaluators how to score a
proposal, we believe the analyst's statement represents the more
likely scenario. On balance, it appears that the [deleted]
representative simply misunderstood the cost analyst's stated
intentions.