BNUMBER:  B-279493.3 
DATE:  July 27, 1998
TITLE: Telos Corporation, B-279493.3, July 27, 1998
**********************************************************************

Matter of:Telos Corporation

File:     B-279493.3

Date:July 27, 1998

Katherine S. Nucci, Esq., and Timothy Sullivan, Esq., Adduci, 
Mastriani & Schaumberg, for the protester.
Lori S. Chofnas, Esq., Department of the Navy, for the agency.
Linda S. Lebowitz, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Agency reasonably evaluated the cost realism of the awardee's 
proposed direct labor rates for key and non-key personnel by 
considering a signed letter of commitment in which a proposed key 
employee agreed to be compensated at a relatively low labor rate and 
by considering the labor rates currently paid by the awardee under a 
contract in the same geographic area to individuals with 
qualifications similar to the qualifications required by the 
solicitation for non-key personnel.

2.  Agency engaged in meaningful discussions, not technical leveling, 
in tailoring its discussions to the awardee's proposal by specifying 
the precise organizational and presentation shortcomings in the firm's 
key personnel resumes.

3.  Agency was not required to discuss with the protester its higher 
cost since such cost was consistent with the firm's approach of paying 
higher direct labor rates to retain the incumbent personnel; the 
protester's substantially higher cost was a reasonable basis to 
exclude the firm's proposal from the competitive range.

DECISION

Telos Corporation protests the award of a contract to ITT Federal 
Services International Corporation under request for proposals (RFP) 
No. N00140-97-R-1971, issued by the Department of the Navy for 
operation, maintenance, technical, and engineering support services 
for the Kuwait Air Force Communications Network.  Telos challenges the 
agency's evaluation of ITT's cost proposal, the agency's conduct of 
discussions, and the agency's exclusion of its proposal from the 
competitive range.

We deny the protest.[1]

The RFP contemplated the award of a level-of-effort, 
cost-plus-fixed-fee contract for the base period and three 1-year 
option periods.  Section C.1.4 of the RFP's performance work statement 
addressed personnel qualifications.  The RFP required offerors to 
submit one resume for each of the four key personnel positions (senior 
project manager, installation supervisor, lead field engineer, and PBX 
engineer) which demonstrated that the individual proposed for a 
particular key position satisfied the minimum experience requirements 
described in the RFP.  For example, as relevant to these protests, the 
RFP, as amended on page 2 of amendment No. 0001, required the proposed 
PBX engineer to have the following experience:

     a minimum of ten (10) years experience in installation, test, and 
     maintenance activities of communication systems and equipment, 
     including a minimum total of five (5) years experience on PBX 
     installation and maintenance.  Within the past seven (7) years, 
     shall have a minimum total of five (5) years experience in 
     working with and managing military communication networks 
     including system integration services and encryption 
     applications.

The RFP also listed minimum experience requirements for support 
personnel positions (project management specialist, communication 
technician, and communication technician assistants), but did not 
require offerors to submit resumes for these non-key positions.

The RFP provided that the award would be made to the offeror whose 
proposal was determined most advantageous to the government, with an 
offeror's technical proposal being considered more important than the 
offeror's cost proposal.  The RFP contained the following technical 
evaluation factors:  (1) technical approach; (2) personnel resources; 
(3) management approach; (4) corporate experience; and (5) past 
performance.  (These factors were listed in descending order of 
importance, except that factors 4 and 5 were of equal importance.)  
Key personnel resumes were evaluated under technical evaluation factor 
2.  The RFP stated that if an offeror's proposal was determined 
unacceptable for any of the technical evaluation factors, the proposal 
might not be considered for award.  With respect to an offeror's 
proposed costs, the RFP stated that these would be evaluated for 
realism in terms of demonstrating the offeror's ability to project 
costs which were realistic and reasonable and indicating that the 
offeror understood the nature and scope of work to be performed.  The 
RFP further stated that the realism of personnel compensation would be 
evaluated.

Three firms, including ITT and Telos,[2] submitted initial technical 
and cost proposals by the stated closing time.  As relevant to this 
protest, the proposals of ITT and Telos were rated technically 
"unacceptable (a)" because, among other reasons, the firms failed to 
provide sufficient detail demonstrating that the individuals proposed 
for key personnel positions satisfied the RFP's minimum experience 
requirements.  According to the agency's source selection plan, an 
unacceptable (a) technical rating meant that the firm's proposal 
satisfied most of the RFP requirements; that there was some risk; that 
proposal deficiencies were considered correctable; and that the 
proposal could be made acceptable through discussions without 
extensive changes tantamount to the submission of an entirely new 
proposal.  In addition, the agency upwardly adjusted the proposed 
direct labor rates for ITT's proposed personnel after determining that 
these rates were significantly below the rates paid to incumbent 
personnel.  The agency concluded that using higher rates would be more 
realistic if personnel of a quality equivalent to those of the 
incumbent contractor were used.  The agency determined that the labor 
rates proposed by Telos were realistic when compared to the incumbent 
contractor's rates.  As proposed and as evaluated, the Telos total 
costs were significantly higher than ITT's total costs.

The agency included the proposals of ITT and Telos in the competitive 
range and conducted oral and written discussions with both firms.  For 
both ITT and Telos, the agency explained the deficiencies in the 
proposed resumes by tracking the key personnel experience requirements 
listed in the RFP.  The agency also advised ITT that its proposed 
labor rates for each key and non-key personnel position appeared to be 
understated compared to the rates paid under similar contracts.  The 
agency requested that ITT address through historical cost data or as 
otherwise appropriate how it intended to hire and retain a capable 
workforce at the proposed rates without risk to contract performance.  
The agency advised both ITT and Telos that they had the opportunity to 
improve any aspect of their technical and/or cost proposals through 
the submission of a best and final offer (BAFO).

ITT and Telos submitted timely BAFOs.  For the key personnel positions 
of senior project manager and installation supervisor, ITT submitted 
revised resumes for the previously proposed individuals.  For the key 
personnel positions of lead field engineer and PBX engineer, ITT 
proposed different individuals and submitted resumes.  ITT's resumes 
were organized by position title and the name of the individual 
proposed for a particular position.  Each resume included a broad 
summary of the individual's overall experience followed by lines 
listing the "from/to" period of time the individual served in a 
particular position, as designated by job title, for a named company 
or government entity at a specified location and the total number of 
years in each position.  Each resume then included a separate section 
listing the individual's qualifications.  These qualifications were 
not linked to any previously listed job title; rather, the 
qualifications were summarized in one paragraph in a wholesale manner.  
The resumes also listed the individual's education, security 
clearance, and language proficiency skills.  As an example, after 
summarizing his overall experience, the proposed PBX engineer (an 
individual who was a foreign national) included the following 
information in his resume (contained in volume I, chapter 2, page 8 of 
ITT's BAFO):

   From To
   1993 PresentTechnical Team Leader, Hughes Aircraft Systems Int'l, 
   Riyadh, KSA    5 years
   1983 1993 Electronics Technician (Civilian), U.S. Air Force, 
   Philippines             10 years

   QUALIFICATIONS:  Planned, installed, tested, inspected, and 
   repaired TELEX exchanges, PBX/PABX/EPABX exchanges and equipment, 
   optical fiber communications systems, electronic teleprinters, and 
   Remote Line Units (RLU).  Specific types of PBX equipment and 
   switches installed and maintained included:  Ericsson and Alcatel 
   OCB switches, and Phillips, Teletra, NEC, Fujitsu, Nokia, and SDH 
   PCMs.  Installed, serviced and repaired all model of telephone 
   instruments.  Performed cable [splicing/repair].  Maintained a 
   power plant, substation, and battery plant.  Maintained operational 
   and maintenance logs and records and maintained repair parts in 
   support of maintenance and repair operations.

In its BAFO, ITT increased the labor rates for its proposed key 
personnel.  ITT did not, however, change the labor rates proposed for 
non-key personnel.  In this respect, ITT stated that these proposed 
rates were based on rates paid by it on another contract currently 
being performed in Kuwait to foreign national personnel with skills 
similar to those required under this RFP.  In its BAFO, Telos provided 
employment commitments from most of the incumbent personnel and the 
firm adjusted its proposed costs to reflect the use of higher-priced 
incumbent personnel.

The agency rated the overall ITT BAFO as technically unacceptable (a) 
based solely on the firm's rating of unacceptable (a) for the 
personnel resources technical evaluation factor.  More specifically, 
the agency considered ITT's key personnel resumes to be deficient, but 
correctable, as it did not appear that the proposed individuals lacked 
qualifications, but rather that the resume deficiencies related to the 
organization and presentation of the listed information for purposes 
of demonstrating that these individuals possessed the requisite years 
of specified experience.  The agency rated the overall Telos BAFO at 
the high end of acceptable, with the firm receiving a highly 
acceptable rating for the personnel resources technical evaluation 
factor.  The Telos total evaluated cost was approximately 85 percent 
higher than ITT's total evaluated cost.

The agency determined to reopen discussions and to request a second 
BAFO from both ITT and Telos.  The decision to reopen was based on the 
agency's view that an award to Telos at an 85 percent cost premium 
could not be justified in light of the fact that deficiencies in ITT's 
resumes appeared correctable, which would make its proposal 
technically acceptable, without the submission of an essentially new 
proposal.[3]

During the second round of discussions, the agency advised ITT that 
its first BAFO was determined unacceptable due to deficiencies under 
the personnel resources technical evaluation factor.  For each of the 
key personnel positions, the agency advised that the resumes submitted 
did not demonstrate in sufficient detail that proposed individuals had 
the requisite years of specified experience.  Tracking the RFP 
experience requirements language, the agency advised ITT that its 
resumes did not correlate an individual's years of experience, the 
various positions held, and how this experience satisfied the specific 
requirements of the RFP.  The agency also advised that individuals, 
when listing equipment, did not specify what RFP requirement was meant 
to be satisfied and how listed positions and equipment related to the 
experience requirements set forth in the RFP.  For each key personnel 
position, and more specifically using the resume of ITT's proposed PBX 
engineer, the agency stated that the nature of the individual's work 
assignments should be defined (e.g., installation, test, and 
maintenance of communications systems and PBX experience), as well as 
the duration of the work assignments and the equipment involved, 
including the requirement which was meant to be satisfied (e.g., 
encryption applications).  For all key personnel positions, the agency 
stated that the resumes had to demonstrate that the total years of 
experience, the type of experience, the currency of experience, and 
the equipment involved all satisfied the RFP requirements.  The agency 
also specifically told ITT that this was the second opportunity the 
firm had been afforded to correct resume deficiencies.  The agency 
advised that the failure of ITT to correct these deficiencies might be 
considered conclusive evidence that ITT was unable to make its 
proposal acceptable.

With respect to ITT's proposed direct labor rates for positions to be 
filled by foreign nationals (the PBX engineer key personnel position 
and the three non-key personnel positions), the agency requested that 
ITT provide evidence that the categories being proposed were currently 
being paid at rates comparable to the understated rates in ITT's 
proposal.  The agency did determine, however, that ITT's labor rates 
for the three remaining key personnel positions were realistic.

For Telos, the agency concluded that the firm's resumes showed 
experience meeting or exceeding the amount stated in the RFP for each 
labor category.  The agency noted that three of the proposed key 
personnel were current employees of the incumbent contractor with 
direct experience in performing the work described in the RFP, thus 
ensuring that the required services would continue uninterrupted and 
without degradation or any learning curve.

In requesting second BAFOs, the agency stated that it was providing 
both ITT and Telos an opportunity to improve any aspect of their 
respective technical and/or cost proposals.  ITT responded by 
correcting the deficiencies identified with respect to its key 
personnel resumes.  For example, the resume for the individual 
proposed for the PBX engineer position was rewritten and reorganized 
to correlate specific experience to specific job titles.  In addition, 
ITT provided written confirmation from the individual proposed for the 
PBX engineer position that if ITT were awarded the contract, he would 
accept employment at the stated, agreed-upon direct labor rate and 
annual salary.  ITT also furnished resume and payroll information 
showing that on a similar, although not identical, contract it was 
currently performing in Kuwait, it employed foreign nationals at 
direct labor rates below those proposed in response to this RFP, thus 
evidencing that ITT could hire for this contract fully qualified 
foreign national personnel at stated labor rates.  Telos made no 
changes to its BAFO as previously submitted.

The agency determined that all of ITT's revised key personnel resumes, 
except that of the proposed PBX engineer, were acceptable.  With 
respect to the latter's resume, the agency stated that this resume 
included no objective evidence showing that the individual had 
"manag[ed] military communication networks" in five of the last seven 
years as required by the RFP.  The agency believed that the 
description of "team leader" included in the individual's resume did 
not provide enough evidence for the agency to conclude that this 
individual's responsibilities included managing networks.  The agency 
also believed a more detailed breakdown of the period "1993-Present" 
was necessary to show 5 full years of PBX experience.  Finally, the 
agency required further information concerning whether this 
individual's use of the word "secure" necessarily included experience 
with encryption applications.  With respect to proposed labor rates, 
the agency now determined, based on a signed letter of commitment from 
ITT's proposed PBX engineer and other resume and payroll information 
that ITT's proposed labor rates for the PBX engineer and non-key 
personnel were realistic.

After second BAFOs, the Telos total evaluated cost was 76 percent 
higher than ITT's total evaluated cost.  The agency believed that the 
organizational and presentation deficiencies remaining in ITT's 
proposed PBX engineer resume could be corrected.  The agency further 
believed that, but for the PBX engineer resume, ITT had demonstrated 
that it could perform the RFP requirements.  The agency determined 
that in light of the substantial cost premium associated with the 
Telos proposal, Telos had no reasonable chance for award.  For that 
reason, the Telos second BAFO was eliminated from the competitive 
range.

Subsequently, the agency made a written request to ITT that it provide 
a fuller description of its proposed PBX engineer's duties as a "team 
leader" to substantiate his experience in managing networks; that it 
provide additional information showing this individual had 5 full 
years, or 60 months, of PBX installation and maintenance experience; 
and that it more fully explain this individual's encryption 
experience.  The agency also stated that in lieu of correcting this 
individual's resume, ITT could submit another acceptable resume.  The 
agency advised ITT that the deficiencies in the referenced resume were 
considered correctable, and if corrected, would render ITT's second 
BAFO technically acceptable and result in an award to ITT.

ITT provided a revised resume responding to the agency's concerns.  
The agency determined that this revised resume confirmed that the 
individual proposed for the PBX engineer position met the requirements 
of the RFP.  Accordingly, having satisfactorily demonstrated that it 
could perform the RFP requirements, the agency awarded a contract to 
ITT as the most advantageous offeror.

COST REALISM ANALYSIS

Telos contends that the agency unreasonably determined realistic ITT's 
proposed labor rates for the PBX engineer key personnel position and 
for the three non-key personnel positions where ITT's proposed rates 
were understated in relation to the rates paid by the incumbent 
contractor.

Where a cost reimbursement contract is to be awarded, an offeror's 
estimated costs of contract performance should not be considered 
controlling since the estimates may not provide valid indications of 
the final actual costs which the government is required to pay.  See 
Federal Acquisition Regulation (FAR)  sec.  15.605(c) (FAC 97-01).  
Consequently, the contracting agency must perform a cost realism 
analysis to determine the realism of an offeror's proposed costs and 
to determine what the costs are likely to be under the offeror's 
technical approach, assuming reasonable economy and efficiency.  Roy 
F. Weston, Inc., B-274945 et al., Jan. 15, 1997, 97-1 CPD  para.  92 at 16.

An agency is not required, however, to conduct an in-depth analysis or 
to verify each item in conducting a cost realism analysis.  Hattal & 
Assocs., B-243357, B-243357.2, July 25, 1991, 91-2 CPD  para.  90 at 9-10.  
A cost realism assessment necessarily involves the exercise of 
informed judgment and the agency is clearly in the best position to 
make that assessment; therefore, our Office will review such a 
determination only to ascertain whether it had a reasonable basis.  
Id.

With respect to the PBX engineer key personnel position, the record 
shows that the direct labor rate to be paid by ITT was significantly 
less than the rate paid by the incumbent contractor.  However, the 
individual proposed by ITT for this key position signed a letter of 
commitment, which ITT furnished in its second BAFO, agreeing to a 
stated hourly rate, annual salary, and other benefits.[4]  Because the 
agency had a written commitment from ITT's proposed PBX engineer that 
he would work for a stated hourly rate, we think the agency reasonably 
determined that ITT's proposed labor rate for this key position was 
realistic.  See, e.g., Evaluation Research Corp., B-246869, Apr. 7, 
1992, 92-1 CPD  para.  350 at 6.

With respect to the three non-key personnel positions--all of which 
were to be filled by foreign nationals at labor rates substantially 
less than the rates paid by the incumbent contractor--the record shows 
that ITT based its proposed rates on the rates it was paying under 
another contract currently being performed in Kuwait to foreign 
national personnel with qualifications it believed were similar to 
those required under this RFP.  During the second round of 
discussions, the agency asked ITT to substantiate that the categories 
being proposed were currently being paid at rates comparable to the 
relatively low rates in ITT's proposal.  In its second BAFO, ITT 
responded by providing resume and payroll information showing that on 
the similar, although not identical, contract it was currently 
performing in Kuwait, it employed qualified foreign nationals at labor 
rates below those proposed in response to this RFP.

The agency was aware that the individuals performing under ITT's other 
contract in Kuwait did not have qualifications identical to those 
qualifications required under this RFP; however, the agency was 
satisfied that the qualifications of the individuals whose resumes and 
payroll information were submitted were sufficiently similar to the 
qualification requirements of this RFP to determine the realism of 
ITT's proposed labor rates for purposes of hiring qualified foreign 
national non-key personnel.[5]  Moreover, the agency did not require 
during discussions substantiation on the basis of individuals with 
qualifications identical to those required under this RFP.  Using the 
information provided by ITT, we believe the agency could reasonably 
determine that ITT's proposed rates under this RFP, which were higher 
than the rates paid under its other contract in Kuwait,[6] were 
realistic and that ITT would be able to hire at the rates proposed 
qualified foreign nationals to staff non-key personnel positions.  We 
have no basis to object to the agency's conclusion that ITT's proposed 
rates for non-key personnel were realistic based on the information 
submitted by ITT for a similar contract in the same geographic area.

TECHNICAL LEVELING

Telos argues that the agency's second round of discussions with ITT, 
in which the agency pointed out specific organizational and 
presentation deficiencies in ITT's key personnel resumes, as included 
in its first BAFO, constituted technical leveling.  Telos believes 
that the deficiencies in ITT's resumes should have rendered its first 
BAFO technically unacceptable, thereby making ITT ineligible for 
award.

Technical leveling occurs where an agency, through successive rounds 
of discussions, helps to bring a proposal up to the level of another 
proposal by pointing out weaknesses that remain in a proposal due to 
an offeror's lack of diligence, competence, or inventiveness after 
having been given an opportunity to correct them.  FAR  sec.  15.610(d) 
(June 1997); Battelle Mem'l Inst., B-259571.3, Dec. 8, 1995, 95-2 CPD  para.  
284 at 5.  In this regard, our Office has recognized the tension 
between the requirement for meaningful discussions with all 
responsible sources whose proposals are within the competitive range, 
and the admonitions in the FAR against technical leveling, technical 
transfusion, and auctions.  Matrix Int'l Logistics, Inc., B-249285.2, 
Dec. 30, 1992, 92-2 CPD  para.  452 at 5.  We have held that this is an area 
where agencies necessarily have considerable discretion, id., and 
where an agency points out informational deficiencies in an offeror's 
proposal, this does not constitute technical leveling, because the 
agency's purpose is to ascertain what the offeror is proposing to 
furnish.  See CBIS Fed. Inc., B-245844.2, Mar. 27, 1992, 92-1 CPD  para.  
308 at 11-12.

Our review of the record supports the agency's position that it did 
not engage in technical leveling with respect to organizational and 
presentation deficiencies in ITT's resumes, but rather engaged in 
detailed and thorough negotiations consistent with its obligation to 
conduct meaningful discussions.  FAR  sec.  15.610(c).

After the first round of discussions, the agency was concerned not 
that the individuals proposed by ITT for key personnel positions 
lacked qualifications,[7] but that ITT had not clearly organized and 
presented information in its resumes in such a way as to demonstrate 
which of an individual's qualifications satisfied specific 
requirements of the RFP.  More particularly, in the resumes ITT listed 
job titles and the dates an individual served in specific capacities, 
but ITT did not explain the actual work performed by the individual 
under each job title.  Rather, all of an individual's prior work was 
lumped together in a one paragraph summary.  (This can be seen from 
the resume information provided for ITT's proposed PBX engineer in the 
firm's first BAFO, as shown above.)  When the agency reopened 
discussions, it did so for at least two reasons:  first, it believed 
the resume deficiencies in ITT's first BAFO were correctable, i.e., 
the correction of these deficiencies would make ITT's proposal 
technically acceptable, without the submission of an entirely new 
proposal and second, if the resume deficiencies were corrected, 
rendering ITT's proposal acceptable, there were substantial cost 
savings to be achieved by awarding to ITT, as opposed to Telos, as the 
most advantageous offeror.  During the second round of discussions, 
the agency tracked the qualification requirements in the RFP and 
specified the deficiencies in ITT's key personnel resumes.  For these 
key positions, the agency required ITT to define the nature of the 
individual's work assignments, the duration of the assignments, and 
the equipment involved, including the requirement the equipment 
experience satisfied.  The agency reminded ITT that the total years, 
type, and currency of experience had to satisfy the RFP requirements.

For the two reasons stated--the potential correctability of the 
deficiencies in ITT's resumes and the potential to achieve substantial 
cost savings if ITT's proposal was determined technically acceptable, 
we think the agency reasonably exercised its discretion to reopen 
discussions.  In reopening discussions, however, we do not believe the 
agency engaged in technical leveling with ITT.  Although the first 
round of discussions generally addressed deficiencies in ITT's key 
personnel resumes, we think the agency, on reopening, simply tailored 
its discussions to ITT's proposal by specifying the precise 
organizational and presentation shortcomings in the firm's resumes for 
purposes of obtaining from ITT amplification of the information 
previously provided.  See, e.g., Planning Sys. Inc., B-246170.4, Dec. 
29, 1992, 92-2 CPD  para.  445 at 7.  Requesting correction of such 
informational deficiencies does not constitute technical leveling.

DISCUSSIONS AND COMPETITIVE RANGE

Telos argues that, since it was not told during the second round of 
discussions that its cost was considered too high based on its first 
BAFO, where the firm proposed higher-priced incumbent personnel, the 
agency could not reasonably exclude its second BAFO from the 
competitive range based on the fact that its evaluated cost was 76 
percent higher than ITT's evaluated cost.  We disagree.

The agency did not advise Telos during the second round of discussions 
that its cost, as reflected in its first BAFO, was too high because 
the agency concluded that the Telos cost was in line with its proposed 
technical approach of using higher-priced incumbent personnel to 
perform the contract.  The contracting officer stated that "Telos's 
numbers were not considered too high, per se[, that is,] vis-a-vis 
their technical proposal, their technical approach[,]" which was based 
on proposing higher-priced incumbent personnel.  Tr. at 15, 21.  More 
specifically, in explaining why he did not advise Telos during the 
second round of discussions that its price was considered too high, 
the contracting officer stated that he never tells a contractor, like 
Telos, that in comparison to another offer received, i.e., that of 
ITT, that its cost is significantly higher.  Tr. at 91-92.  The 
contracting officer stated that "[a]t the level of pricing that Telos 
had provided--and it was a supported level of pricing--it was 
intrinsically cost-realistic."  Tr. at 92.  In such circumstances, if 
an offeror's higher cost is not considered excessive for its technical 
approach, the higher cost is not a deficiency required to be pointed 
out during discussions.  See Textron Marine Sys., B-255580.3, Aug. 2, 
1994, 94-2 CPD  para.  63 at 22.  As supported by the written record and as 
further explained during the hearing, since the Telos higher cost was 
consistent with the firm's approach of paying higher labor rates to 
retain the incumbent personnel, the agency was not required to raise 
this cost issue with Telos during discussions.

Concerning the exclusion of the Telos second BAFO from the competitive 
range based on the substantial cost premium associated with its 
proposal, cost is not only a proper factor for consideration but may 
emerge as the dominant factor in determining whether proposals--even 
those that are technically acceptable--fall within the competitive 
range.  Even in circumstances where, as here, the competitive range is 
reduced to the proposal of one offeror, we will not disturb a 
determination to exclude a technically acceptable proposal from the 
competitive range unless the record indicates that it was 
unreasonable.[8]  ToxCo, Inc., B-254912, Jan. 26, 1994, 94-1 CPD  para.  41 
at 4.  Neither the written record nor the hearing provided any basis 
to conclude that the determination to establish a competitive range 
consisting of ITT's proposal only, in the circumstances as described 
above, was unreasonable.

Telos also questions the legitimacy of the agency's oral competitive 
range determination because the only place that this determination was 
documented is in the agency's post-negotiation memorandum, dated April 
2, 1998, after the protest was filed.  In this memorandum, there is a 
section captioned "DETERMINATION OF COMPETITIVE RANGE (Confirming Oral 
Determination made on 23 Feb 98)."  Telos essentially asserts that 
after the protest was filed, the agency conveniently articulated and 
documented a competitive range determination to justify its decision 
to have further discussions with ITT only, which ultimately resulted 
in an award to ITT.  In support of this position, Telos points to the 
fact that the firm was not contemporaneously advised of the 
elimination of its second BAFO from the competitive range and that the 
firm was not specifically advised during the post-award debriefing of 
its proposal's elimination.  We held the hearing to fully assess the 
merits of the protester's position.

The following chronology, as reflected in the written record and as 
further explained during the hearing, places the agency's competitive 
range and selection decisions in context for this procurement.  AT&T, 
the incumbent contractor, had advised the agency that the firm was 
leaving Kuwait on March 31, 1998.  Tr. at 108.  Because there was a 
1-month "ramp-up" requirement, id., the agency had to make an award by 
March 1 in order to have a contractor in place when AT&T left Kuwait.  
Tr. at 109.  In this regard, the agency made an oral determination to 
eliminate the second Telos BAFO from the competitive range on February 
23.  By letter dated February 27, which was telefaxed to Telos on that 
same day, the agency advised Telos that an award had been made to ITT.  
The contracting officer explained that while it was his intention that 
this letter also advise Telos that its second BAFO had been excluded 
from the competitive range, he was absent when the letter was sent 
(the letter was drafted by the contract negotiator and signed by 
another contracting official in the contracting officer's absence) and 
this information was inadvertently omitted from the letter.  Tr. at 
32-34, 78-79, 98-99.  The contracting officer further explained that 
Telos was not advised during the debriefing of the elimination of its 
second BAFO because at that point, "the real story of this procurement 
[was that Telos] did [not] get the award because of the huge 
difference in price."  Tr. at 34.  The contracting officer continued 
that, at the debriefing, the agency was trying to impart to Telos:

   that this award was made because of, essentially, despite [the 
   Telos] higher technical rating, it was made because the ITT 
   proposal was very significantly lower in cost to the government, 
   and therefore, represented the best value.  It was not an issue of 
   we [the agency] made this award to ITT because they [ITT] were the 
   only ones left in the procurement.

Id.

The contracting officer concluded by stating that "[a]ll of the 
decisions, which were ultimately written in the April 2nd document, 
were made in time frames that were explained therein . . . prior to an 
award actually occurring."  Tr. at 56.  On this record, the agency's 
actions were consistent with a competitive range determination having 
been made prior to award, and we conclude that this was the case.

Finally, we believe that the agency did nothing improper in deciding 
to reopen discussions with ITT regarding three pieces of previously 
provided information in the resume of its proposed PBX engineer after 
reasonably narrowing the competitive range to include only ITT's 
correctable, substantially lower cost second BAFO.  Since only ITT's 
second BAFO remained in the competitive range, it was the only firm 
entitled to further negotiate with the agency.  Once the Telos second 
BAFO was reasonably excluded from the competitive range based on its 
substantially higher cost, there was no duty on the agency to conduct 
discussions with Telos.  EER Sys. Corp., B-256383 et al., June 7, 
1994, 94-1 CPD  para.  354 at 19.

On this record, we have no basis to question the agency's decision to 
award the contract to ITT, whose technically acceptable, substantially 
lower cost proposal was determined most advantageous to the 
government.

The protest is denied.

Comptroller General
of the United States

1. Our Office conducted a hearing in connection with this protest.  
All transcript citations in this decision (Tr. at ___) refer to the 
transcript of this hearing.

2. The third firm--AT&T Global Communications Services, Inc.--was the 
incumbent contractor, which subsequently withdrew its proposal.

3. The agency also believed it had to discuss with ITT and Telos an 
amendment to the RFP involving the lease, not purchase, of vehicles 
necessary for contract performance.

4. ITT furnished a letter of commitment from this individual in its 
first BAFO, but this earlier letter did not contain the hourly rate to 
be paid to this individual.

5. Contrary to the position of Telos, we agree with the agency that 
there were similarities between the qualifications of individuals 
performing under ITT's other contract in Kuwait and the qualification 
requirements of this RFP.  For example, section 1.4.3.2 of the RFP 
required the communication technician to have a minimum of 10 years 
"experience in installation, test, and maintenance activities of 
communication systems and equipment."  To substantiate its proposed 
labor rate for this position, ITT submitted a resume and payroll 
information for its communication maintenance technician under its 
other contract as ITT believed this individual's qualifications were 
similar to the qualifications required by the RFP for the 
communication technician position.  The resume showed that this 
individual had more than 10 years experience in installing, testing, 
and maintaining various communication systems and equipment, including 
radios, battery charging units, mobile cellular phones, pagers, 
antennas, and power supplies.  In light of the RFP's broadly stated 
qualification requirements for each non-key personnel position, as 
shown by the referenced example, we concur with the agency that the 
resumes submitted were representative of individuals whose 
qualifications were similar to those qualifications required under 
this RFP and that these resumes, along with payroll information, could 
be used by the agency as a basis for determining the realism of ITT's 
proposed rates.

6. Recognizing that the qualifications of its currently employed 
foreign national personnel were not the same as the qualifications 
required under this RFP, ITT proposed to pay higher labor rates under 
this RFP.

7. Telos does not allege that the individuals proposed by ITT for key 
personnel positions lacked the required qualifications.

8. Although the agency concedes that it should have contemporaneously 
notified Telos of its second BAFO's elimination from the competitive 
range, the failure of the agency to do so was a procedural deficiency 
and does not affect the validity of an otherwise properly awarded 
contract.  Cinpac, Inc., B-243366, July 15, 1991, 91-2 CPD  para.  57.