BNUMBER:  B-278516.3, B-278516.4 
DATE:  July 8, 1998
TITLE: Veda, Incorporated--Reconsideration, B-278516.3, B-278516.4,
July 8, 1998
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Matter of:Veda, Incorporated--Reconsideration

File:     B-278516.3, B-278516.4

Date:July 8, 1998

Jerald S. Howe, Jr., Esq., Patrick O'Donnell, Esq., and John J. Duffy, 
Esq., Steptoe & Johnson, for the protester.
Jacob B. Pompan, Esq., Pompan, Murray, Ruffner & Werfel, for Resource 
Consultants, Inc., an intervenor.
Guy R. Pietrovito, Esq., and James A. Spangenberg, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Request for reconsideration is denied, where the protester fails 
to show that the General Accounting Office erred in finding as a 
matter of fact that the contracting agency essentially had performed a 
cost/technical tradeoff, even though the agency asserted that no 
cost/technical tradeoff had been performed.

2.  Awardee's recruitment of incumbent personnel after General 
Accounting Office decision denying allegations of awardee's 
bait-and-switch practices provides no basis for reconsideration of the 
decision.

DECISION

Veda, Incorporated requests reconsideration of our decision in Veda, 
Inc., B-278516.2, Mar. 19, 1998, 98-1 CPD  para.  112, in which we denied 
Veda's protest of the award of a contract to Resource Consultants, 
Inc. (RCI) under request for proposals (RFP) No. N00244-97-R-5030, 
issued by the Fleet and Industrial Supply Center, Department of the 
Navy, for support services at the North Island Naval Aviation Depot 
(NADEP), San Diego, California.  Veda challenges our findings that the 
Navy "essentially" performed a cost/technical tradeoff analysis in 
selecting RCI's offer for award, that the Navy erred in failing to 
credit RCI for that firm's proposed overhead cost cap in the agency's 
cost realism analysis, and that there was no evidence of RCI 
practicing a bait-and-switch in its offer of personnel.

We deny the request for reconsideration.

The RFP provided for the award of a cost reimbursable contract on a 
cost/technical tradeoff basis for support services for a base period 
with 4 option years.  Evaluation factors and subfactors were stated, 
and offerors informed that the technical evaluation factors combined 
were significantly more important than cost.  Offerors were also 
informed that cost realism would be evaluated.  The RFP estimated an 
annual level-of-effort of 186,450 staff-hours, identifying labor
categories and estimated staff-hours per category.  Some of the labor 
categories
were identified as key personnel labor categories.  Under the 
personnel
qualifications factor (the second most important technical evaluation 
factor), each of the offeror's proposed key personnel were to be 
evaluated for relevant experience and qualifications.  

Proposals were received from Veda and RCI, and evaluated as being 
essentially technically equal.  In the agency's cost realism 
evaluation, RCI's probable costs of performance were determined to be 
approximately $2.2 million lower than Veda's probable costs of 
performance.  Although RCI offered a contractual cap on its proposed 
overhead, which the agency calculated would further reduce RCI's 
evaluated probable costs by $1.7 million, the agency did not account 
for this contractual cap in its cost realism analysis because, in its 
view, RCI had not provided sufficient information to demonstrate that 
it could absorb this amount over the life of the contract.

The contracting officer, who served as the source selection official, 
accepted the evaluators' conclusion that Veda's and RCI's proposals 
were essentially technically equal.  However, prior to making his 
source selection, the contracting officer requested that an analysis 
of the cost impact of making award to RCI be performed to assess "how 
much would it cost RCI to get up to speed."  The contracting officer's 
representative on the prior contract performed this analysis and 
concluded that additional effort would be necessary to bring RCI "up 
to speed."  He identified for the contracting officer an estimate of 
the minimum numbers of hours of government effort and associated cost, 
and estimated a number of hours of contractor effort and associated 
cost for this additional effort.  This assessment reflected the 
contracting officer's representative's judgment as to the cost impact 
associated with the technical approach weaknesses evaluated in RCI's 
technical proposal.

In making his source selection decision, the contracting officer 
relied upon the final evaluation report (and its conclusion that the 
proposals were essentially technically equal), his discussions with 
the evaluators and the contract negotiator, the cost evaluation (which 
found that RCI's proposed evaluated cost was approximately $2.2 
million lower than Veda's), and the contracting officer's 
representative's calculation of a $1.5 million cost impact of making 
award to RCI.  Based upon this information, the contracting officer 
determined that RCI's proposal represented the best value to the 
government.  Award was made to RCI.  Although the agency chose not to 
credit RCI for its offered overhead rate cap in the agency's cost 
realism evaluation, the Navy accepted RCI's cost cap offer and 
included the cap in the contract awarded to RCI.

We found from our review of the protest record, including hearing 
testimony, that the Navy's evaluation of the proposals was reasonable 
and consistent with the stated evaluation criteria.  This evaluation 
found, as we described in our prior decision, that Veda's and RCI's 
proposals were extremely close in technical merit and that Veda's 
documented strengths and RCI's weaknesses under the technical 
evaluation factors were not significant.  See Veda, Inc., supra, at 
10-12.  We also found that, although the contracting officer stated 
that he had concluded that Veda's and RCI's technical proposals were 
technically equivalent, and had selected RCI based upon that firm's 
much lower evaluated cost, the contracting officer had "essentially 
performed a cost/technical tradeoff" in selecting RCI's proposal for 
award.  That is, the contracting officer recognized that the two 
firms' proposals were close in technical merit, considered the 
difference in the firms' evaluated costs, and also considered the 
costs associated with RCI's evaluated technical weaknesses, noting 
that these costs did not come close to offsetting RCI's cost 
advantage.  Id. at 12-13.  We also found that the agency erred in not 
crediting RCI for its proposed overhead expenses cap in the agency's 
analysis; if that cap were properly considered in the agency's cost 
evaluation, RCI's evaluated cost advantage would have been 
significantly greater than that considered.  Id. at 14.  

In addition, we found that RCI had not engaged in bait-and-switch 
practices
by misrepresenting its intent to use the personnel proposed for this 
contract, as alleged by Veda.  Although Veda had stated in its protest 
that RCI had approached a number of incumbent personnel about 
performing under this contract, we noted that it was not unusual in 
government contracts for proposed personnel to change employers and/or 
jobs after the submission of proposals.  Id. at 16-17.

In requesting reconsideration, Veda first complains that we erred in 
finding that the contracting officer performed a cost/technical 
tradeoff analysis.  Veda argues that this finding is inconsistent with 
the contracting officer's testimony and the agency's position that it 
did not perform a cost/technical tradeoff analysis, but selected RCI's 
proposal as the lower-cost, technically equivalent offer.

We recognized in our prior decision that the agency and contracting 
officer believed that a cost/technical tradeoff had not been 
conducted.  See id. at 8, 13.  Thus, the crux of Veda's arguments on 
reconsideration is that we erred in finding as a matter of fact that 
the contracting officer essentially performed a cost/technical 
tradeoff in selecting RCI's proposal for award because the contracting 
officer and agency denied conducting a cost/technical tradeoff.  We do 
not agree with Veda's belief that the agency's or any other party's 
characterization of facts in the record constrains our ability as a 
forum to make findings of fact consistent with the record.  As we have 
often noted, we consider the entire record before us in reviewing a 
protest to ascertain whether the protested matter complies with 
procurement statutes and regulations.  See, e.g., Southwest Marine, 
Inc.; American Sys. Eng'g Corp., B-265865.3, B-265865.4, Jan. 23, 
1996, 96-1 CPD  para.  56 at 10.

The record in this case belied the agency's characterization of its 
source selection as being based upon a finding of technical 
equivalence and low evaluated cost.  Rather, as described in detail in 
our prior decision, the contracting officer weighed the technical 
evaluation board's technical findings, which evidenced that the 
proposals were close in technical merit although Veda's proposal was 
higher rated than RCI's, against the expected costs to the government, 
including the cost associated with RCI's evaluated weaknesses; this 
essentially constituted a cost/technical tradeoff, despite the 
agency's denial that it had performed such a tradeoff.  Veda, Inc., 
supra, at 12-13.  While Veda clearly disagrees with this finding of 
fact, it does not demonstrate that it was in error.

Veda has also not demonstrated that we erred in finding that this 
cost/technical tradeoff was reasonable.  While Veda again complains 
that the Navy's analysis of the cost impact of making award to RCI was 
only an estimate and these costs may actually be higher than that 
estimated by the Navy, this does demonstrate that this  estimate was 
unreasonable for the purposes for which it was used in the 
cost/technical tradeoff.  Rather, Veda merely disagrees with the 
Navy's estimate, and has provided no evidence or arguments that 
demonstrate that the Navy's estimate of the additional costs 
associated with RCI's technical weaknesses was in error.

Veda also requests reconsideration of our finding that the Navy erred 
in failing to credit RCI in the agency's cost realism analysis for 
that firm's proposed overhead cost cap.  Veda again complains that 
acceptance of RCI's cost cap would pose serious technical risk that 
the Navy did not evaluate.  Repetition of arguments made during the 
original protest or mere disagreement with our decision does not 
constitute a valid basis for reconsideration.  R.E. Scherrer, 
Inc.--Recon., B-231101.3, Sept. 21, 1988, 88-2 CPD  para.  274 at 2.  Here, 
Veda has not presented any new facts, evidence, or arguments not 
already considered in our decision.  

In any event, as previously explained, an agency may not ignore an 
offeror's unequivocal offer of a cost cap in the agency's cost realism 
evaluation.  See Veda, Inc., supra, at 14-15.  Thus, the Navy could 
not ignore RCI's unequivocal offer of an overhead cost cap (which 
became effective and binding when accepted by the agency and 
incorporated into RCI's contract) in computing the probable costs of 
RCI's performance.  Rather, the agency was permitted under the RFP to 
consider whether there was any performance risk arising from the cost 
cap.  This risk was evaluated by the Navy, which found that any risk 
arising from RCI's offered overhead cap was minimal.

Veda finally argues that RCI has recently recruited three Veda 
employees, who were proposed by Veda as key personnel, and that this 
"new evidence" now demonstrates that RCI engaged in bait-and-switch 
practices.  Veda also complains that RCI is using in its recruitment 
of Veda employees a table of key employees from Veda's technical 
proposal; Veda argues that this also evidences RCI's bait-and-switch 
practices.[1]  

We do not agree that RCI's recruitment of three Veda employees 
provides any basis for reversal or modification of our decision.  As 
we have often recognized, the substitution of employees after award is 
neither prohibited nor unusual.  See Meridian Management Corp., Inc.; 
NAA Servs. Corp., B-254797, B-254797.2, Jan. 21, 1994, 94-1 CPD  para.  167 
at 9.  Here, RCI's recruitment of Veda employees would at most result 
in the substitution of only 3 of the 45 key personnel originally 
proposed more than 13 months ago.  We do not find that this 
substitution demonstrates that we erred in finding no evidence of 
bait-and-switch.  See EBA Eng'g, Inc., B-275818, Mar. 31, 1997, 97-1 
CPD  para.  127 at 7-8.  Rather, it is consistent with our recognition in 
the prior decision that RCI's efforts to interview incumbent personnel 
reflected a prudent business practice to ensure that the contractor 
had at all times the personnel necessary to perform its contract.  See 
Veda, Inc., supra, at 17; cf. Planning Research Corp. v. United 
States, 971 F.2d 736 (Fed. Cir. 1992), aff'g, Electronic Data Systems 
Federal Corp., 89-2 BCA  para.  21,655 (extensive substitution of incumbent 
personnel for proposed committed personnel immediately after contract 
award, contrary to explicit proposal promises not to hire incumbent 
personnel, was sufficient circumstantial evidence to support the 
decision of the General Services Board of Contract Appeals that the 
awardee had engaged in bait-and-switch practices).  We also do not 
find that RCI's possession of a list of Veda's proposed key personnel 
demonstrates that at the time RCI submitted its proposal RCI intended 
to practice a bait-and-switch.

The request for reconsideration is denied.

Comptroller General
of the United States

1. Veda also argues that RCI's possession of this allegedly 
confidential, proprietary information may evidence a violation of the 
Office of Federal Procurement Policy Act, 41 U.S.C.A.  sec.  423 (West 
Supp. 1998), which our Office should investigate.  That Act provides 
that no person shall file a protest alleging a violation of the Act, 
unless the alleged violation was first reported to the agency 
responsible for the procurement.  41 U.S.C.A.  sec.  423(g); see also 4 
C.F.R.  sec.  21.5(d) (1998).  The Navy has informed us that it is 
investigating Veda's allegation of RCI's procurement integrity 
violation.  Because our consideration of this issue pending the Navy's 
investigation would be premature, this allegation is dismissed.  While 
we will consider Veda's complaint that RCI's possession of this 
information may evidence a violation of the protective order issued in 
connection with Veda's protest, this allegation does not present any 
basis for reconsideration.