BNUMBER:  B-280959; B-280959.4           
DATE:  December 11, 1998
TITLE: General Security Services Corporation, B-280959; B-280959.4,
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Matter of:General Security Services Corporation

File:B-280959; B-280959.4          
        
Date:December 11, 1998

James A. Hughes, Esq., Robert S. Brams, Esq., William E. Slade, Esq., 
and Rodney A. Grandon, Esq., Patton Boggs, for the protester. 
Donald E. Barnhill, Esq., and Joan K. Fiorino, Esq., Douglas & 
Barnhill, for Akal Security, Inc., an intervenor. 
Joni M. Gibson, Esq., U.S. Marshals Service, for the agency. 
Andrew T. Pogany, Esq., and John M. Melody, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Contracting agency properly normalized pricing element of solicitation 
(wages of court security officers) where agency reasonably determined 
that security needs precluded permitting offerors to propose wages 
below the wages currently being paid to such personnel.

DECISION

General Security Services Corporation (GSSC) protests the terms of 
request for proposals (RFP) No. MS-98-R-0008, issued by the U.S. 
Marshals Service (USMS), Department of Justice, for court security 
services at eight Federal Circuits.  GSSC principally argues that the 
RFP's price evaluation scheme unduly restricts competition.

We deny the protest.

The RFP, issued on June 22, 1998, contemplates multiple awards (one 
award for each Federal Circuit) of indefinite-quantity, 
indefinite-delivery and time-and-material type contracts, with fixed 
unit prices.  RFP  sec.  L-6.  The RFP states that award will be made to 
that offeror whose proposal, conforming to the solicitation, is 
determined to provide the best value to the government, cost/price, 
technical, and past performance considered.  RFP  sec.  M-1.  The RFP 
states that technical considerations are more important than price and 
that past performance is less important than technical or price 
considerations.  RFP  sec.  M-5, M-6.

On July 24, the agency issued amendment No. A003, the subject of this 
protest, which provides, in section B, as follows:

     Court security is important to the mission of the USMS.  In order 
     to ensure a stable and experienced workforce, the prospective 
     contractor shall, at a minimum, maintain the wages and benefits 
     currently paid to the incumbent Site Supervisors, Lead Court 
     Security Officers [LCSO] and Court Security Officers [CSO] in the 
     Court Security Program.  For evaluation purposes only, offerors 
     shall propose Site Supervisor, LCSO and CSO rates using the 
     applicable Wage Determination rate plus $3.00 for Site 
     Supervisors, $2.00 for LCSOs and $1.00 for CSOs or the applicable 
     Collective Bargaining Agreement (CBA) rate.  CBAs are applicable 
     to this solicitation.  The USMS intends to amend the solicitation 
     at a later time to incorporate the CBAs once the Department of 
     Labor [DOL] has reviewed them.  Offerors shall propose the 
     applicable CBA rate and where there is no CBA rate, the 
     applicable Wage Determination rate plus the USMS cost adjustment 
     as indicated above.[1]

The RFP further states, in section M-7, that after award the agency 
will adjust, upward or downward, the total burdened rate for site 
supervisors, LSCOs and CSOs to reflect actual current wages for 
incumbent personnel; that rates for new or replacement CSOs shall be 
paid at the wage determination rate; and that rates for new or 
replacement LSCOs and site supervisors shall be negotiated during 
contract performance. 

USMS states that these provisions are necessary because, in the past, 
recompetition of court security services has resulted, in some cases, 
in lower compensation, including salaries and fringe benefits, being 
paid to CSOs.  For example, in response to the Second Judicial Circuit 
solicitation issued last year, offerors proposed wages lower than 
those paid by the incumbent contractor (the incumbent's wages were 
higher than the applicable wage rate).  Low morale and labor unrest 
followed.  There were numerous threats of strikes by CSOs and 
complaints to federal judges who, in turn, compDedcejmlained to the 
USMS and to Congress.  According to the agency, "reductions [of wages 
and fringe benefits from incumbent levels] can be detrimental in 
obtaining the quality of services needed for adequate contract 
performance and thus, jeopardizes the safety of the federal judges and 
court personnel."  Contracting Officer's (CO) Statement of Fact, Oct. 
5, 1998, at 2.  Thus, the wage rate restriction was imposed to 
maintain incumbent wages and benefits.

The protester argues that the cost adjustment provision in amendment 
No. A003 (and a similar provision added by amendment No. A010) is 
unnecessarily restrictive, and generates fictional rather than actual 
prices, contrary to the requirement that price/cost be evaluated in 
every source selection.  See Federal Acquisition Regulation (FAR)  sec.  
15.304(c)(1).  According to the protester, by incorporating this 
provision, the agency improperly has restricted an "offeror's ability 
to propose wages below the artificial wages imposed by Amendment A003, 
which would enhance price competition and save the Government money."   
Protester's Comments, Oct. 15, 1998, at 4.  GSSC further argues that 
the wage rates upon which offerors are to be evaluated "simply do not 
reflect reality, and are therefore not a valid means . . . upon which 
to base contract award."  Id.  According to the protester, even 
assuming that the need identified by the USMS to limit labor unrest 
and low morale of court security personnel caused by reduced wages is 
legitimate, the cost adjustment scheme still is unreasonable because 
less restrictive methods are available, such as "setting some minimum 
wage and benefit rate, higher than the DOL wage determination, that 
USMS actually intends to apply after award," instead of employing 
"artificial wage and benefit rates."  Id. at 5.

The Competition in Contracting Act of 1984 (CICA) provides that, in 
order to ensure full and open competition, solicitations may contain 
restrictive provisions or conditions only to the extent necessary to 
satisfy the needs of the agency.  41 U.S.C.  sec.  253a(a)(2)(B) (1994).  
It follows that agencies may impose conditions and limitations on how 
offerors may price items or services where the needs of the agency 
reasonably require such provisions or conditions.  See Courtney 
Contracting Corp., B-242945, June 24, 1991, 91-1 CPD  para.  593 at 5-6.    

The agency has established that the pricing methodology employed here 
is reasonably necessary to meet its needs.  The record supports the 
agency's conclusion that a stable workforce, without the disruption a 
wage reduction for certain personnel may cause, is a necessary 
requirement.  The contract concerns human safety and, as stated above, 
where a successful offeror in the past proposed wages lower than those 
paid by the incumbent contractor, low morale and labor unrest among 
court security personnel followed, with threats of strikes and 
numerous complaints.  Thus, the agency could reasonably seek to ensure 
that these disruptions do not occur again.  Specifying minimum wages 
for evaluation purposes seems a reasonable means to achieve this end 
under the circumstances; this approach clearly will eliminate the 
direct cause of prior labor difficulties, i.e., reduced wages.  Most 
significantly, it will preclude the most experienced officers from 
having their wage rates lowered.

We also find nothing objectionable in the agency's use of estimated 
wages in its methodology.  The agency's reliance on estimated rather 
than actual wage rates for evaluation purposes results from its lack 
of information on the salaries of the current CSOs, many or most of 
which are above the applicable DOL wage rate determination.  The 
agency states that it attempted to obtain incumbent CSO wages and 
benefits in six Circuits (comprising approximately 2,000 CSOs), but 
that GSSC, the incumbent, refused to release this information to the 
agency.  USMS then tried to survey CSOs, only to find that the 
information provided was often inaccurate and incomplete.  In 
addition, at some locations, CSOs are refusing to provide wage and 
fringe benefit information to prospective offerors or providing 
conflicting wage and benefit information, thus auctioning their 
services to the highest bidder.  Under these circumstances, the use of 
estimated rates is a reasonable means of expressing the wage rates to 
be included in offerors' pricing proposals.[2]  Finally, concerning 
the protester's argument that establishing fixed wages precludes the 
agency from considering cost, the record shows that each offeror's 
overhead, general and administrative costs, and profit will be 
evaluated.  As these pricing elements are specific to each offeror, 
they provide a basis for discriminating among offerors based on cost 
to the government.

We note that the agency's pricing methodology essentially is a 
normalization of  cost with respect to a specific price factor.  
Normalization, generally applicable to cost-reimbursement contracts, 
involves the measurement of at least two offerors against the same 
cost standard or baseline in circumstances where there is no logical 
basis for differences in approach (or in situations where insufficient 
information is provided with proposals, leading to the establishment 
of common "should have bid" estimates by the agency).  See Moshman 
Assocs., Inc., B-192008, Jan. 16, 1979, 79-1 CPD  para.  23 at 10, citing 
and quoting Dynalectron Corp., B-181738, Jan. 15, 1975, 75-1 CPD  para.  17, 
aff'd, June 5, 1975, 75-1 CPD  para.  341.  Normalization is warranted here, 
given the agency's need for wage stability, and the resulting absence 
of any logical basis for differences in pricing CSO wages.

The protest is denied.

Comptroller General
of the United States

1. The RFP required offerors to break down their rates to show their 
overhead, general and administrative costs, and profits, which were 
specific to each offeror; the remaining direct labor rates were to be 
normalized by the agency based on the applicable wage determination, 
health and welfare costs, and the cost adjustment of the evaluation 
scheme.  RFP  sec.  M-7.

2. We also agree with the agency, contrary to the protester's 
argument, that the wage rate restriction here does not violate the 
Service Contract Act (SCA) of 1965, as amended, 41 U.S.C.  sec.  351-58 
(1994).  The SCA only states, essentially, that agencies must ensure 
that contractors pay no less than the required locality wage 
determination rate to listed employees; here, the agency is requiring 
offerors to pay more than the SCA wage rate, which is not inconsistent 
with the SCA.