BNUMBER:  B-279585             
DATE:  June 29, 1998
TITLE: IT Facilities Services, B-279585, June 29, 1998
**********************************************************************

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:IT Facilities Services

File:B-279585            
        
Date:June 29, 1998

Dorn C. McGrath III, Esq., Richard L. Moorhouse, Esq., and Christopher 
R. Yukins, Esq., Holland & Knight, for the protester. 
Thomas J. Madden, Esq., John J. Pavlick Jr., Esq., and Johana A. Reed, 
Esq., Venable, Baetjer, Howard & Civiletti, for Rust Constructors, 
Inc., an intervenor. 
Maj. Jonathan C. Guden, Department of the Army, for the agency. 
Paula A. Williams, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Protest alleging that agency failed to conduct meaningful 
discussions with protester concerning its proposed staffing level is 
denied where written discussion questions reasonably apprised 
protester of the areas of staffing that were deficient, and it is 
clear from protester's responses to discussion questions that it 
understood the concerns being raised by the agency.  

2.  Agency reasonably adjusted protester's cost proposal upward for 
cost realism to reflect understaffing in protester's technical 
proposal in accordance with the solicitation. 

DECISION

IT Facilities Services, a joint venture,[1] protests the award of a 
contract to Rust Constructors, Inc. under request for proposals (RFP) 
No. DABT31-97-R-0002, issued by the Department of the Army for 
facilities maintenance support services.  ITFS alleges that it was not 
afforded meaningful discussions and challenges other aspects of the 
technical and cost evaluations.

We deny the protest.
  
As amended, the RFP provided for award of a cost-plus-award-fee 
contract for facilities maintenance support services at Fort Leonard 
Wood and the Lake of the Ozarks Army Recreation Area for a base period 
with four option periods.  The RFP  performance work statement (PWS) 
described the specific services to be performed  and the contractor 
was required to provide all supervision, labor, equipment, and 
supplies necessary to perform these services.[2]  RFP  sec.  C at 1-179.  
The solicitation requirements were divided into 16 major functional 
areas (MFA) for evaluation purposes and offerors were required to 
organize their proposals by MFAs.[3]  The RFP included, as technical 
exhibit (TE) 31, historical workload data and related information for 
labor (excluding supervisor/management categories), material, and 
equipment costs incurred by the previous contractor during fiscal 
years 1994, 1995, and 1996.  For fiscal year 1997, copies of that 
contract with all modifications, and printouts of the data from which 
the information in TE 31 was derived were made available to all 
offerors.  The RFP advised prospective offerors that it was their 
responsibility to review all of this data to determine what effect 
each of these changes would have on the work requirements for this 
solicitation in relation to the historical workload data shown for the 
prior contracts.  As relevant here, paragraph 2.1 of TE 31 cautioned 
that:

     Prospective bidders should be aware that the data shown is labor, 
     material and equipment expenditures incurred and reported by [the 
     previous contractors] IAW [in accordance with] contract 
     specifications and contract modifications in existence at that 
     time.  The previous Facilities Maintenance Support Services 
     contract is available for review in the Technical Library and 
     should be used by bidders in the correlation of the data shown 
     and the work requirements of the previous Facilities Maintenance 
     Support Services contract.  In addition to the specifications a 
     summary of changes which occurred to the Real Property Inventory 
     during the time frame for which workload data is provided is also 
     available for review as part of the Technical Library.  The 
     prospective bidders should also be aware that the specifications 
     in this solicitation differ from the specifications used by the 
     previous [contract].[4]  [Emphasis added.]

The RFP stated that award would be made to the offeror whose proposal 
represented the best overall value to the government, cost and other 
factors considered.  RFP  sec.  L at 6.  It listed the significant non-cost 
evaluation factors as:  technical/management and staffing; past 
performance; quality control; small, small  disadvantaged and 
women-owned businesses (SSDWOB) participation; and phase-in and 
phase-out.  RFP  sec.  M at 2-3.  Cost was to be evaluated, but not scored, 
on the basis of whether proposed costs were realistic, complete, and 
reasonable in relation to the RFP requirements.  Costs had to be 
compatible with the technical proposal and adjustments could be made 
to obtain a most probable cost (MPC) using the results of the cost 
realism evaluation.[5]  RFP  sec.  L at 24, 28 n.5.

The Army received proposals from four offerors.  Those submitted by 
ITFS, Rust (the incumbent contractor), and two other offerors (not 
relevant here) were  evaluated by a three-member technical evaluation 
committee (TEC).[6]  All offerors' proposals were included in the 
competitive range and written discussions were held using the 
discussion questions compiled by the evaluation members.  By letter of 
December 17, 1997, the agency provided ITFS with detailed written 
questions, consisting of 44 questions in the non-cost areas and 6 in 
the cost area.  In addition to the written discussion questions, ITFS 
was provided with a copy of the Defense Contract Audit Agency (DCAA) 
audit report concerning its cost proposal for information, correction, 
or to provide an explanation of the audit findings.  Revised proposals 
were received by January 6, 1998, and best and final offers (BAFO) 
were received by February 3.  The final technical evaluation for the 
protester's and the awardee's proposals were as follows:
        
                 Factor            Rust         ITFS

         Technical/Mgmt/Staffing   Green      [DELETED]

            Past Performance       Green      [DELETED]

             Quality Control       Blue       [DELETED]

                 SSDWOB            Green      [DELETED]

           Phase in/Phase out      Green      [DELETED]

          Overall Tech. Rating     Green      [DELETED]

              Proposed Cost     $45,014,360   [DELETED]

           Most Probable Cost    [DELETED]    [DELETED]
The upward MPC adjustment to ITFS's proposed costs was based on the 
evaluated difference between the total staffing hours of approximately 
[DELETED] FTEs proposed by ITFS and the total staffing hours of 
approximately 153 FTEs in the government estimate; upward adjustments 
were also made to the protester's equipment and supply costs.  
[DELETED].  In making his source selection decision, the contracting 
officer relied on the final technical and cost evaluation reports, 
which identified the strengths and weaknesses in each proposal.  The 
contracting officer determined that Rust's proposal represented the 
best value to the government based on its best overall technical 
rating and MPC and award was made to Rust.  Price Negotiation 
Memorandum at 7.  After receiving a debriefing, ITFS filed this 
protest.  

ITFS contends that discussions held with it were not meaningful 
because the firm was never advised that its proposed staffing level 
was deficient.[7]  The protester states that not one of the Army's 
discussion questions asked ITFS how it was using the workload data set 
forth in TE-31 to calculate staffing, although it was evident in its 
initial and revised proposals that ITFS "scrupulously used the TE-31 
data to calculate the necessary staffing level for this contract but 
did not come close to [the independent government estimate (IGE)]."  
Protester's comments on the agency's report, May 4, 1998 at 2.  ITFS 
argues that, if it had "unknowingly" misinterpreted the workload data 
in TE 31, the agency should have continued discussions with it and 
given the firm an opportunity either to justify its approach or revise 
its proposal to increase its staffing level.

Agencies are required to conduct meaningful discussions with all 
offerors whose proposals are within the competitive range but they are 
not required to conduct all-encompassing discussions or discuss every 
element of a proposal receiving less than the maximum rating.  Volmar 
Constr., Inc., B-270364, B-270364.2, Mar. 4, 1996, 96-1 CPD  para.  139 at 
4; DAE Corp., B-259866, B-259866.2, May 8, 1995, 95-2 CPD  para.  12 at 4-5.  
Agencies are obligated only to lead offerors generally into those 
areas of their proposal needing amplification within the context of 
the particular procurement.  Creative Management Tech., Inc., 
B-266299, Feb. 9, 1996, 96-1 CPD  para.  61 at 4.  As discussed below, we 
find that discussions here were adequate. 

The record indicates that in the December 17 discussion letter to 
ITFS, the agency  advised ITFS of the evaluators' concerns regarding 
various aspects of its proposal, including staffing.  For example, 
under the mechanical MFA evaluation factor, the protester was 
specifically asked:

     Explain the rationale for performing scheduled maintenance on 
     mechanical equipment contained in C.5.3 and the pertinent 
     technical exhibits.
     
     What position (with accompanying man-hours) will perform 
     inspection, testing, and maintenance on cranes and hoists.

Agency discussion letter to ITFS, December 17, 1997, at 2.

Under the electrical MFA, the protester was asked, among other things, 
who would perform the sprinkler system maintenance.  Id.  Under the 
utility plants MFA, 14 discussion questions were posed to the 
protester, including:

     There seems to be several discrepancies in the Technical Proposal 
     concerning how and who will perform scheduled maintenance for the 
     Water and Wastewater Plants and Systems.  In various places, it 
     is indicated that everyone from the 'Equipment O&M Section', ITFS 
     O&M personnel, Maintenance Mechanics from the Mechanical Section, 
     operators, shift responsible operators, plumbers from the 
     Mechanical Section, mechanical equipment mechanic, swimming pool 
     maintenance  mechanics will perform scheduled maintenance.  
     Explain the staffing rationale for performing the scheduled 
     maintenance for the wastewater plant and water and intake plants?
     
                    .    .    .    .    .    
     Who will perform the scheduled maintenance requirements for the 
     Water Distribution Systems and Wastewater Collection Systems?
 
                    .    .    .    .    .

     How much of the 5.3 man-years of Boiler Mechanic will be used to 
     perform scheduled maintenance of unattended boilers contained in 
     TE 9.

                    .    .    .    .    .    

     Who will perform the work in C.5.5.2.4.2.4.1. of the PWS?

Id. at 2-3.

Although the protester contends that the discussion questions, such as 
those quoted above, did not adequately advise it of the agency's 
concerns about its staffing approach, the record shows otherwise.  It 
is clear from the December 17 discussion letter that the agency did 
bring to the protester's attention the concerns the agency had with 
ITFS's proposal, including the areas of staffing.  While ITFS asserts 
that the agency's use of the phrase "explain the rationale" did not 
reasonably convey the agency's staffing concerns, we find no merit to 
this allegation.  In our view, the phrase "explain the rationale" 
within the context of the specific questions was clearly asking ITFS 
to provide staffing information concerning the labor categories that 
would perform specific services, and a review of the protester's 
responses to the discussion questions shows that the protester 
understood it was being asked about the adequacy of its proposed level 
of staffing.  For example, ITFS's January 5, 1998 response to the 
discussion questions contained the following: 

     Question:  Explain the rationale for performing scheduled 
     maintenance on mechanical equipment contained in C.5.3 and the 
     pertinent technical exhibits?

     Answer:  We have evaluated the work load data contained in TE 31 
     for all categories of mechanical service orders, scheduled 
     maintenance, etc.  To accomplish these levels of work we will 
     have a total of 23.3 HVAC mechanics and plumbers as discussed in 
     the technical approach for mechanical section . . . .

Protester's response to agency discussion questions, January 6, 1998, 
at 1-2.

Similarly, the protester's response to another discussion question 
was:

     Question:  Part II, Tech/Mgmt Proposal, Section A.2(b)(9), 
     Construction.  Support Branch:  This element is not shown in 
     Productive Hour matrix or costed.  Provide information for this 
     effort IAW L.37e(4).

     Answer:  The RFP provided no specific Level II work or specific 
     projects on which to base a notational construction program and 
     productive man hour estimate.  We were also directed not to cost 
     these performance areas.  The rationale below provides the 
     concept we will employ to execute the construction work.

In short, it is clear from these and other ITFS's responses to the 
discussion questions that the protester reasonably understood that the 
agency had staffing concerns.  The record shows that the agency 
reasonably apprised the protester during discussions that its proposed 
staffing was inadequate to successfully perform the contract 
requirements.[8]  

ITFS also contends that the agency's failure to disclose its desired 
staffing level in the RFP provided Rust with an unfair competitive 
advantage.  According to the protester, the modifications to Rust's 
fiscal year 1997 contract do not provide "intelligible workload data 
to supplement TE-31 and the RFP" such that non-incumbent offerors 
could determine an estimated staffing. 

We disagree.  As previously stated, except for the mandatory staffing 
requirements for the medical complex, the agency did not establish a 
desired staffing level that it required or expected offerors to 
provide.  Instead, the solicitation expressed the agency's staffing 
requirements in terms of the 16 MFAs to be performed and the standards 
of quality to be maintained, and detailed information was provided in 
order to prepare an estimated staffing level.  Specifically, offerors 
were instructed to prepare their staffing proposal based on their own 
analyses of the RFP's PWS, the historical workload data in TE 31, 
printouts of the data from which the information in TE 31 was derived, 
other TEs included in the RFP, the lists of equipment that would 
require maintenance, and the 1997 contract and modifications.[9]  RFP  sec.  
TE 31 at 1; 40-41.  Offerors were also encouraged to schedule site 
visits in order to familiarize themselves with the facilities.  RFP  sec.  
L at 14-15.  The RFP clearly placed the burden on offerors to assess 
the available data and other information concerning these services and 
to propose staffing levels to ensure successful contract performance.  
We think the availability of such extensive data--in conjunction with 
the RFP's explicit instructions to prospective offerors that they were 
responsible for reviewing and analyzing this data in order to develop 
their staffing proposals since the current RFP requirements differed 
from the requirements in TE 31--was sufficient to permit a reasonably 
competent offeror to prepare its staffing proposal.  Thus, we find no 
basis to question the agency's decision not to disclose its desired 
staffing level in the solicitation.  An agency is permitted to 
evaluate the adequacy of an offeror's staffing by comparison with an 
undisclosed staffing estimate, where, as here, the RFP puts offerors 
on notice that staffing will be evaluated.  Intelcom Support Servs., 
Inc., B-257037, Aug. 23, 1994, 94-2 CPD  para.  77 at 6.

Further, the record here belies the protester's assertion that the 
modifications to the fiscal year 1997 contract did not provide 
intelligible workload data that non-incumbent offerors could readily 
use to update the workload data in TE 31.  For example, in preparing 
the government staffing estimate for the Mechanical MFA, the 
evaluators used the 24 FTEs provided in TE 31 (which is a 3-year 
compilation of prior facilities contracts); added 5 FTEs (which 
represent the modifications to the fiscal year 1997 contract, the new 
requirements in the RFP, and the tasks transferred from MFA 7 to the 
Mechanical MFA); and also added 3 FTEs for management personnel for a 
total of 32 FTEs for this MFA.  ITFS's proposed staffing for this MFA 
was [DELETED] FTE, which included both labor and management personnel, 
and there was nothing in its proposal to indicate that in estimating 
the number of FTEs required, the protester took into account the 
additions/deletions which they reasonably should have been aware of to 
the TE 31 workload data.  It appears that ITFS did not reasonably 
consider the new and additional work in its estimates.

Alternatively, the protester contends that the workload data in TE 31 
must have been outdated or incorrect to result in the agency's 
determination that its staffing was inadequate.  In support for its 
position, ITFS merely states that in preparing its initial and revised 
proposals, the firm "scrupulously" relied on the data in TE 31 to 
calculate the firm's total staffing level.  We find no merit to these 
allegations.  First, there is no indication whatsoever in the record 
that the information in TE 31 was outdated or incorrect and the 
protester has not shown otherwise.  In this regard, the RFP explicitly 
cautioned prospective offerors not to solely rely on the workload data 
in TE 31 to calculate the staffing or equipment requirements for the 
current RFP; rather, as previously discussed, the RFP described the 
manner in which offerors should analyze the historical data provided 
to calculate the staffing needs for this solicitation.  If the 
protester chose to ignore this caution in the RFP and chose to 
"scrupulously" rely on partial, rather than complete, workload data, 
it did so at its peril.

To the extent ITFS now complains that the TE 31 data was somehow 
defective, such a protest ground is untimely and will not be 
considered further, since protests based upon alleged improprieties in 
a solicitation which are apparent prior to the time set for receipt of 
initial proposals must be filed prior to the time set for receipt of 
initial proposals.  Bid Protest Regulations, 4 C.F.R.  sec.  21.2(a)(1) 
(1998).  In fact, it is clear from the record that ITFS believed early 
on that the information furnished by the agency for preparing staffing 
estimates was inadequate.  (For example, its response to the question 
concerning Level II work quoted in part above shows it believed that 
the information for Level II work was not adequate.)  Thus, ITFS 
should have raised its objections to the solicitation, if any, prior 
to the October 10, 1997 extended due date for receipt of initial 
proposals, rather than waiting until the agency had selected another 
contractor based on the terms of the solicitation as issued.[10]

Finally, ITFS contends that the agency improperly double-counted the 
agency's concerns regarding the firm's alleged staffing deficiencies 
by downgrading its proposal in the technical area and then adjusting 
its proposed costs upward for purposes of performing the MPC analysis.  
The RFP advised offerors that the cost realism evaluation would 
assess, among other things, an offeror's understanding of the contract 
requirements and the degree to which the cost proposal reflects 
information in the technical proposal.  Here, the agency concluded 
that, because ITFS's technical proposal did not adequately provide for 
successful performance, the protester's cost proposal was understated 
and needed to be adjusted upward to determine the MPC for ITFS's 
performance.  Accordingly, we have no reason to question the agency's 
consideration of ITFS's staffing deficiencies under both evaluation 
factors.[11]

The protest is denied.

Comptroller General
of the United States  

1. ITFS's joint venture partners are IT Corporation and J&J 
Maintenance, Inc.; IT is the managing partner.

2. As amended, the RFP recognized that the Service Contract Act of 
1965 (SCA), 41 U.S.C.  sec.  351-358 (1994) is applicable to this 
procurement by including the applicable wage determinations and the 
collective bargaining agreement (CBA) which set forth the minimum 
wages and fringe benefits to be paid for certain covered labor 
categories. 

3. The MFAs identified in the solicitation include mechanical, 
electrical, hospital support, and environmental services.  The 
agency's equipment needs were also listed by MFA.

4. For example, unlike the prior solicitations, section C.5.7.3.3 of 
the PWS for this RFP requires a minimum staffing level for MFA 11 
(hospital services), of 10 employees (including 1 supervisor) and 4 
operators for the hospital boiler plant.  In addition, MFA 15 
(environmental services) is a new requirement that was not included in 
the TE 31 workload data, and the CBA included in the RFP changed the 
productive staff-hours for a full-time equivalent (FTE) from 1,900 to 
1,820 for all employees subject to the CBA. 

5. Evaluated probable cost was equal in weight to the aggregate values 
of the non-cost factors; the technical/management and staffing factor 
and the past performance factor were both of equal weight and were 
each more important than the quality control factor which was worth 
more than the SSDWOB and phase-in/phase-out factors.  

6. Proposals were rated on a color/adjectival basis:  "green/best" if 
they exceeded the minimum requirements under the MFAs; "blue/good" if 
they were acceptable; "yellow/marginal" if they required substantial 
changes; and "red/poor" if they failed to meet the minimum 
requirements.

7. ITFS has raised other issues in conjunction with its protest.  We 
have reviewed them all and find that none has merit.  

8. In a related argument, ITFS claims that the evaluators ignored the 
innovations offered by the protester which significantly reduced its 
staffing needs.  However, the record shows that the innovations 
proposed by ITFS--using cross-trained workers and an automated 
maintenance management system--were in fact evaluated.  In the 
judgment of the evaluators, these innovations did not justify the 
firm's understaffed proposal and the protester's disagreement with the 
evaluators' judgment does not establish that the judgment was 
unreasonable.  McShade Enters., B-278851, Mar. 23, 1998, 98-1 CPD  para.  90 
at 2.     

9. The record shows that each prospective offeror had equal access to 
this information from which it could then estimate the necessary 
staffing and equipment to perform the contract services.  While there 
was a delay in making some of the backup data available to prospective 
offerors in the agency's technical library, the contracting officer 
extended the due date for receipt of initial proposals by 1 week to 
give all offerors additional time to prepare their initial proposal.  
RFP, amendment No. 0002.       

10. Moreover, the protester has not rebutted the other evaluated 
weaknesses in its proposal involving equipment, supplies, and quality 
control, which provided additional bases for the overall evaluation 
rating of yellow.  The record supports the agency's technical 
evaluation as reasonable and consistent with the solicitation's 
evaluation factors. 

11. ITFS also complains that the agency improperly evaluated Rust's 
past performance.  According to the protester, Rust should not have 
received a rating of green because [DELETED].  Our review of the 
record discloses nothing objectionable in the agency's judgment.