TITLE: KBM Group, Inc., B-281919; B-281919.2, May 3, 1999
BNUMBER: B-281919; B-281919.2
DATE: May 3, 1999
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KBM Group, Inc., B-281919; B-281919.2, May 3, 1999
Decision
Matter of: KBM Group, Inc.
File: B-281919; B-281919.2
Date: May 3, 1999
Alexander J. Brittin, Esq., Patrick K. O'Keefe, Esq., and Jeremy M. Griffin,
Esq., McKenna & Cuneo, and John S. Pachter, Esq., Smith, Pachter,
McWhorter & D'Ambrosio, for the protester.
Richard J. Vacura, Esq., Holly Emrick Svetz, Esq., and William J. Crowley,
Esq., Piper & Marbury, and Rex L. Fuller III, Esq., for Milvets Systems
Technology, Inc., an intervenor.
Duane Zezula, Esq., Bureau of Alcohol, Tobacco and Firearms, for the agency.
Guy R. Pietrovito, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Agency did not mislead protester during discussions even though award
was
ultimately made based on price and agency did not inform protester that its
price was higher than awardee's price, where agency did not believe that
protester's price was too high.
2. Agency did not conduct unequal discussions with awardee and protester
where agency conducted technical discussions with awardee, whose technical
proposal was initially evaluated as containing a number of weaknesses, while
conducting no technical discussions with protester, whose initial proposal
was evaluated as containing no weaknesses.
3. Protest that protester is entitled to a higher adjectival rating than
awardee based upon protester's specific incumbent experience and staff is
denied where agency in fact reasonably assessed the relative merits of
protester's and awardee's proposals, including protester's specific
experience and staff.
4. Protest that source selection authority did not adequately consider the
merits of protester's technical proposal is denied where source selection
authority considered the relative merits of protester's and awardee's
proposals and reasonably determined that the proposals were essentially
equal technically and that award should therefore be made to awardee based
upon its substantially lower price.
DECISION
KBM Group, Inc. protests the award of a contract to Milvets Systems
Technology, Inc. under request for proposals (RFP) No. BATF-97-15, issued as
a competitive section 8(a) set-aside, by the Bureau of Alcohol, Tobacco &
Firearms (BATF), Department of the Treasury, for services in support of the
National Tracing Center. KBM challenges the agency's conduct of discussions,
evaluation of proposals, and source selection decision.
We deny the protest.
The RFP, as amended, provided for the award of a fixed-price, labor-hour
contract for services in support of the National Tracing Center for a base
period with 4 option years. RFP amend. 4, sect.sect. B, C.2, F.3. The National
Tracing Center responds to requests of federal, state, local, and
international law enforcement agencies for tracing of firearms used in
crimes. [1] RFP sect. C.1. Among other services, the contractor will perform
data entry, convert firearm transaction documents to microfilm, index
records, and develop, install and maintain various database and data entry
systems on local area networks. RFP sect. C.2. Estimates of the kind and number
of personnel and labor hours required to perform the contract services were
provided. RFP sect.sect. B.3, C.1. Offerors were also informed as follows:
The in-house estimate for these services is between $40 and $50 million for
the term of the contract. You are advised to structure your proposal price
accordingly. [2]
RFP amend. 4., Cover Page.
The RFP provided for award on the basis of a cost/technical tradeoff and
identified the following technical evaluation factors: (1) general and
project management, (2) corporate experience and past performance, and (3)
transition plans. The general and project management factor contained the
following subfactors: (a) corporate structure and lines of authority and the
ability to provide backup resources sufficient to meet fluctuations in
workload; (b) approach to staffing and managing a project of this magnitude;
key personnel qualifications; (c) management availability and involvement in
project oversight and problem resolution; and (d) approach to providing
continuous process improvement. RFP sect. M.2.a. Offerors were informed that the
general and project management factor and corporate experience and past
performance factor were of equal importance and both of greater importance
than the transition plans factor. Also, "[a]ll evaluation factors other than
price, when combined, are significantly more important than price." RFP sect.
M.1(c). The RFP also provided for a price realism analysis to assess the
realism and relationship of proposed hourly rates to the total overall
evaluated price. RFP sect. M.2.b.
Proposals were received from seven offerors, including KBM, the incumbent
contractor, and Milvets. The proposals were evaluated by the agency's
technical evaluation panel (TEP) and source selection evaluation board
(SSEB). The SSEB noted that the offers were all less than the independent
government estimate (IGE) of $45 million and concluded that:
The difference between the [IGE] and the prices offered is that the labor
rates for the labor categories dropped dramatically as a result of this
competitive solicitation and the majority of the offerors did not adjust
their labor rates for inflation between the base and option year periods.
Agency Report, Tab E3(e), Initial SSEB Report at 1.
Four proposals, including KBM's and Milvets's, rated as follows, were
determined to be in the competitive range:
Offeror Technical Rating Price
KBM Acceptable $38.5
million
Milvets Marginal $32.5
million
Offeror A Marginal $30.5
million
Offeror B Marginal $42.4
million
Id. at 1, 6.
KBM's proposal was found to contain no deficiencies or weaknesses and to
offer a number of strengths under each of the evaluation factors. Agency
Report, Tab E3(d), TEP Initial Evaluation Report attach. at 14th-15th
unnumbered pages. For example, under the general and project management
factor, the TEP noted, among other strengths, KBM's lines of authority,
[DELETED], trained and experienced staff, and [DELETED]. Similarly, under
the corporate experience and past performance factor, the TEP found that KBM
was currently performing with [DELETED] people, had necessary skills and
abilities, had practical and technical experience in all phases of the
contract work, and required no learning curve. Id.
With respect to Milvets's marginally rated proposal, the TEP noted both
strengths and weaknesses. Id. at 7th-10th unnumbered pages. For example,
under the general and project management factor, the TEP noted as strengths
Milvets's corporate structure, lines of authority, and short chain of
command from project director to president. The TEP also noted a number of
proposal weaknesses, including Milvets's plan to use overtime to address
fluctuations in workload, lack of comprehensive (as a group) supervisory
experience (Milvets's project director's experience was identified as a
proposal strength, however), lack of key personnel past experience, and
failure to provide a specific plan to recruit and hire incumbent key
personnel. Under the corporate and past experience factor, Milvets's
proposal was found acceptable with a number of strengths, including
experience with digital scanning, microfilm processing, bar coding, film
duplication, storage and retrieval, quality control, workflow tracking, and
data entry. Id. at 7th-8th unnumbered pages.
The offerors' price proposals were also evaluated. Agency Report, Tab E4,
Price Analysis, June 23, 1998, Tab E8, Memorandum of Prenegotiation
Objectives. With respect to KBM's price proposal, the BATF noted that KBM's
rates for all labor categories were unchanged from the base year though the
fourth option year. The agency was concerned with how this would affect
employee turnover during contract performance. Agency Report, Tab E3(e),
Initial SSEB Report at 3. The agency also noted that KBM's rates in 15 labor
categories were higher than those of the IGE. Regarding Milvets's price
proposal, the agency was also concerned with Milvets's ability to retain
employees because, with the exception of Milvets's project director and
assistant project director, Milvets's labor rates also remained unchanged
for each option year. [3] Agency Report, Tab E8, Memorandum of
Prenegotiation Objectives at 4th unnumbered page.
Oral and written discussions were conducted with each competitive range
offeror. Because no weaknesses or deficiencies were identified in KBM's
initial technical proposal, discussions with KBM concerned only its price
proposal. Specifically, KBM was asked about the lack of escalation of its
labor rates over the contract term and how this would affect its employee
turnover rate during contract performance. BATF also identified to KBM 15
labor categories where KBM's rates were higher than the IGE and comparable
rates and stated for each of these labor category rates the percentage by
which the rates were considered high. Agency Report, Tab E7(a), Letter from
the Contract Specialist to KBM 1, attach. (Sept. 4, 1998); Protest, Jan. 22,
1999, attach. 3. Subsequent to the conduct of oral and written discussions,
BATF's contract specialist called KBM and stated that only eight labor
categories were considered high and that the other seven labor categories
were considered "fair and reasonable." Agency Report, Tab E7(b), Memorandum
from the Contract Specialist to the Contract File (Sept. 8, 1998);
Protester's Comments, attach. 1, Declaration of the President of KBM at
11-12; Agency Report at 25.
BATF conducted both technical and price discussions with Milvets.
Specifically, BATF informed Milvets of its evaluated technical weaknesses,
including the lack of comprehensive key personnel experience and a failure
to provide a plan to recruit incumbent staff. BATF also expressed concern
with Milvets's lack of escalation over the contract term for rates for all
labor categories (other than its project director and assistant project
director). BATF also discussed the rates of two of Milvets's labor
categories, one of which BATF stated was too high and the other of which
BATF stated was too low. Agency Report, Tab E6(a), Letter from the Contract
Specialist to Milvets (Sept. 4, 1998).
Final proposal revisions were received and evaluated. KBM made no changes in
its technical proposal in light of the agency's lack of technical
discussions with the firm. KBM's technical rating continued to be assessed
as acceptable, with a number of proposal strengths and no weaknesses or
deficiencies. Agency Report, Tab E3(g), SSEB Final Evaluation Report at 4.
KBM adjusted its cost proposal in response to the agency's cost discussions,
by escalating its labor rates for the contract option years and downwardly
adjusting the rates for the eight labor categories that BATF had indicated
were too high. This resulted in a slight increase in KBM's proposed price to
$39.1 million. Agency Report, Tab E1(d), KBM's Final Proposal Revision.
Milvets made numerous changes in its technical proposal in response to each
of the agency's identified concerns. Among other things, Milvets provided a
plan to address workload fluctuations through the use of cross-trained
employees, provided detailed key personnel resumes addressing the agency's
concerns regarding experience and past performance, and provided a staff
recruitment plan that included contacting incumbent staff as well as
employment advertising. Agency Report, Tab E1(b), Milvets's Final Proposal
Revision. BATF identified a number of strengths in Milvets's final proposal
revision and no weaknesses or deficiencies, and Milvets's proposal
evaluation rating improved from marginal to acceptable. Agency Report, Tab
E3(g), SSEB Final Evaluation Report at 3-4. Milvets also revised its cost
proposal to address the agency's cost discussions. Specifically, Milvets
escalated its labor rates for the contract option years, adjusted its labor
rates for the two labor categories identified by the agency during
discussions, and reduced its fee percentage. This resulted in Milvets
slightly increasing its proposal price to $33 million. Agency Report,
Tab E1(b), Milvets's Final Proposal Revision.
The SSEB prepared a detailed evaluation report that documented KBM's and
Milvets's proposal strengths and the agency's price analysis of final
proposals. The SSEB also prepared a best value analysis, weighing the
relative merits of KBM's and Milvets's proposals. [4] The SSEB concluded
that, although the two proposals offered different strengths, the firms'
final proposals were essentially equal technically and recommended to the
source selection authority (SSA) that award be made to Milvets, based upon
that firm's substantially lower price. The SSEB also concluded that
Milvets's price was fair and reasonable. [5] Agency Report, Tab E3(g), SSEB
Final Evaluation Report at 7-8.
The SSA, in a detailed written decision, agreed with the SSEB that KBM's and
Milvets's final proposals were essentially equal. Agency Report, Tab E10(a),
Source Selection Decision at 3. Specifically, the SSA noted that each of the
offerors presented acceptable approaches that indicated that there would be
minimal risk in awarding a contract to either offeror. In comparing the
offers, the SSA noted KBM's and Milvets's evaluated technical strengths:
The strengths in the KBM proposal are: (1) [DELETED]; (2) [DELETED];
(3) [DELETED]; (4) incumbent staff are trained and experienced; (5)
[DELETED]; (6) practical and technical experience in all phases of the
requirement; and (7) currently managing [DELETED] people for the same or
similar work under current contract. The strengths in the Milvets proposal
are: (1) short line of command from the project director to the company
president; (2) lines of authority strongly address micrographic projects;
(3) use of cross-trained employees to meet fluctuating workloads;
(4) extensive and relevant micrographic experience in high volume settings;
(5) outstanding project and assistant project director experience and
(6) impressive capabilities and past experience.
Id. at 2-3. The SSA concluded that both offers were essentially equal in
terms of technical competence and that award could be made to either offeror
with minimal risk of performance failure. Under the circumstances, the SSA
determined that she could not justify award to KBM at a premium of more than
$6 million. Id. at 3. Award was made to Milvets, and this protest followed.
KBM complains that the agency's discussions with KBM were inadequate and
misleading. Specifically, KBM argues that offerors were informed that BATF
was interested in a "high-quality" approach for which the agency was willing
to pay a price premium. KBM bases this argument upon the RFP cover sheet
which informed offerors that the government's estimate for the contract work
was $40 to $50 million and the RFP's award scheme that provided that a
cost/technical tradeoff analysis would be performed in which technical merit
was more important than price. [6] KBM asserts that during the competition
the agency decided that it wanted a low-priced approach but never informed
KBM of this. Rather, KBM argues, the agency misled KBM into continuing to
offer its high-quality approach at a price premium by informing KBM in
discussions that only eight labor categories (those exceeding the IGE by
more than 11 percent) were considered too high (although KBM's rates for
other labor categories also exceeded the IGE) and that KBM needed to offer a
labor escalation rate. KBM also complains that BATF never informed KBM that
BATF decided during the competition that the estimate provided in the RFP
cover sheet was too high. In this regard, KBM states that it believed its
competitors for this award would likely offer lower pricing than KBM and
that therefore KBM was prepared to significantly reduce its proposal price
during the competition but chose not to do so based upon the discussions it
received. KBM also argues that BATF conducted unequal discussions by
informing Milvets of the technical areas in its proposal that it could
improve but not providing technical discussions with KBM. Finally, KBM
complains that the agency did not inform KBM of the areas of its proposal
that could be altered or explained to enhance materially its proposal's
potential for award.
In negotiated procurements, contracting agencies generally must conduct
discussions with all offerors whose proposals are within the competitive
range. 41 U.S.C. sect. 253b(d) (1994); Federal Acquisition Regulation (FAR) sect.
15.306(d)(1). [7] Although discussions must be meaningful, leading an
offeror into the areas of its proposal requiring amplification or revision,
the agency is not required to "spoon-feed" an offeror as to each and every
item that could be raised as to improve its proposal. Du & Assocs., Inc.,
B-280283.3, Dec. 22, 1998, 98-2 CPD para. 156 at 7-8. An agency has not
satisfied its obligation to conduct meaningful discussions if it misleads an
offeror or conducts prejudicially unequal discussions. Biospherics, Inc.,
B-278278, Jan. 14, 1998, 98-1 CPD para. 161 at 6.
Here, we find, as explained below, that BATF conducted legally sufficient
discussions with KBM. In so finding, we disagree with KBM that within the
context of this procurement BATF misled KBM in discussions. It is true, as
asserted by KBM, that offerors were informed that a cost/technical tradoff
analysis would be performed under which technical merit was more important
than price. However, this did not mean that the agency would necessarily
select the highest technically rated proposal, but that in selecting an
offer for award technical merit would be given more weight than price. At
the heart of this cost/technical tradeoff is the agency's exercise of
business judgment in choosing between competing proposals to determine which
offers the best combination of technical merit and price. See Southwest
Marine, Inc.; American Sys. Eng'g Corp., B-265865.3, B-265865.4, Jan. 23,
1996, 96-1 CPD para. 56 at 10; DynCorp, B-245289.3, July 30, 1992, 93-1 CPD para. 69
at 8. Thus, all offerors, including KBM, knew, or should have known, that
although the agency would be willing to pay a price premium for technical
excellence, the agency retained the discretion to select a lower-priced
approach if this provided the best value to the government.
KBM elected to pursue a high-priced approach, although the firm knew that
its competitors would likely offer lower-priced approaches. Protester's
Comments at 1, 12-13. In selecting such a competitive strategy, KBM hoped
that its approach would be rated sufficiently higher technically than a
competitor's that in the agency's business judgment KBM's price premium
would be outweighed by the firm's technical superiority. Unfortunately for
KBM, the agency found that KBM's and Milvets's offers were essentially
technically equal. Having been unsuccessful in its competitive approach, KBM
essentially complains that the agency had an obligation to inform KBM that
the firm's competitive strategy (a higher-priced approach) would not
succeed.
Underlying much of KBM's protest is the firm's assumption that at the time
of discussions, BATF knew that KBM's higher-priced approach would likely not
be successful. This assumption is belied by the record. At the time BATF
conducted discussions, only KBM's proposal was found to be acceptable. The
proposals of other competitive range offerors, including Milvets's, were
evaluated as being marginal and as containing significant weaknesses.
Although it is true that Milvets's proposal was lower priced than KBM's, the
agency believed that Milvets would likely have to significantly increase its
price to become technically acceptable. Agency Report at 9, attach. 1. Thus,
even assuming that BATF had an obligation to inform KBM if the agency
expected that the firm's competitive strategy would not be successful, at
the time discussions were conducted, that was not BATF's expectation.
Although it is true that at some point in the procurement, BATF determined
that the IGE identified in the RFP cover sheet was not an accurate reflector
of prices the agency could expect to receive from offerors, we do not find
that BATF's failure to inform KBM of this fact misled that firm. [8] Not
only was KBM, as the incumbent, in the best position to know what rates were
realistic, but KBM in fact offered a lower price than that estimated by the
agency. In addition, as noted above, KBM states that it expected its
competitors to offer even lower prices. Under the circumstances, we fail to
see how KBM was prejudicially affected by the RFP's price estimate.
We also do not find anything misleading in the agency's discussions with KBM
expressing concern that KBM did not propose a labor escalation rate for the
contract option years and that this could adversely affect the firm's
ability to retain staff. Although KBM chose to provide for labor rate
escalation in its option years, the agency's discussions provided KBM with
the opportunity to explain, if it chose, its decision not to offer labor
rate escalation. Rather than misleading KBM, we think the agency's
discussions appropriately apprised the firm of an evaluated weakness in its
proposal. See Research Analysis and Maintenance, Inc., B-272261, B-272261.2,
Sept. 18, 1996, 96-2 CPD para. 131 at 11. In this regard, the agency conducted
nearly identical discussions with Milvets, which also did not offer a labor
escalation rate; Milvets in its final proposal revision also offered to
escalate its labor rates in the option years.
Finally, we find that BATF's discussions regarding KBM's labor category
rates should not have misled KBM. As noted above, BATF ultimately informed
KBM that its rates for eight labor categories that exceeded the government's
estimate by more than 10 percent were too high but those rates for seven
labor categories that exceeded the estimate by 10 percent or less were "fair
and reasonable." [9] KBM responded to these discussions by lowering the
rates of the eight labor categories that were identified as being high.
Although KBM now argues that the agency's discussions indicated to KBM that
proposed rates in excess of the government's estimate by 10 percent or less
were "competitive" (Supplemental Protest at 28), we do not think that KBM
could reasonably interpret the discussions as indicating that its prices
were competitive in the sense that they would ensure that KBM would be
selected for award. Rather, by informing KBM that certain rates were
considered "fair and reasonable," BATF merely indicated to KBM those rates
were considered realistic in relation to KBM's technical approach and in
relation to other price indicia, such as the government estimate, prior
contract prices, or other price proposals. See FAR sect. 15.404-1(b)
(government's price analysis may include comparison of price to other
proposed prices, previously proposed prices, market prices, and/or the
independent government's estimate).
KBM also complains that the agency did not inform KBM of aspects of its
proposal which could be altered or explained to materially enhance the
proposal potential for award. FAR Part 15 was recently revised to provide as
follows:
The contracting officer shall . . . indicate to, or discuss with, each
offeror still being considered for award . . . aspects of its proposal (such
as cost, price, technical approach, past performance, and terms and
conditions) that could, in the opinion of the contracting officer, be
altered or explained to enhance materially the proposal's potential for
award.
FAR sect. 15.306(d)(3). Although KBM cites the provision as a basis to argue
that the contracting officer acted improperly here, it has not identified
any material enhancements that should have been, or could have been,
identified by the agency with respect to KBM's technical proposal. With
respect to KBM's cost proposal, the protester does argue that its
competitive position could have been improved by offering a lower proposed
price. However, as noted above, the record establishes that the agency had
no reason to believe at the time of discussions that KBM's proposed price
was not competitive.
KBM also complains that BATF conducted unequal discussions because Milvets
received technical discussions while KBM did not. Although an agency must
treat offerors fairly and provide offerors with an equal opportunity in
discussions to revise their proposals, discussions with each offeror need
not be identical. Rather, a procuring agency should tailor its discussions
to each offer since the need for clarifications or revisions will vary with
the proposals. FAR sect. 15.306(d)(1); The Pragma Corp., B-255236 et al., Feb.
18, 1994, 94-1 CPD para. 124 at 9. BATF satisfied that obligation here. The
agency conducted technical discussions with Milvets because that firm's
technical proposal contained a number of evaluated weaknesses. KBM's
proposal, on the other hand, did not have any evaluated weaknesses or
deficiencies, and therefore the agency found nothing in KBM's technical
proposal that needed to be clarified or revised through discussions.
KBM also protests the agency's evaluation of KBM's and Milvets's technical
proposals. Specifically, KBM complains that, although the agency found no
weaknesses or deficiencies in KBM's technical proposal and admits that KBM's
proposal was "excellent" (Agency Report at 51), the agency assessed KBM's
proposal as only acceptable overall under the RFP's technical evaluation
factors. In the protester's view, KBM's specific experience under the
current contract, which provided the firm with a trained workforce and
program knowledge, should have entitled KBM's technical proposal to a higher
evaluation rating than Milvets's technical proposal, which was also
evaluated as acceptable overall.
All of KBM's proposal strengths stated above were detailed by the agency's
TEP and SSEB in its evaluation reports and specifically cited by the SSA in
her source selection decision. Likewise, the agency detailed Milvets's
evaluated technical proposal strengths in the TEP's and SSEB's evaluation
reports and the SSA's source selection decision. KBM's does not challenge
the strengths identified in either its proposal or Milvets's proposal. [10]
Rather, the crux of KBM's arguments appears to be that, given its evaluated
strengths, KBM should have received a better adjectival rating than
Milvets's.
We have long recognized that evaluation ratings, be they adjectival,
numerical or color, are merely guides for intelligent decision-making in the
procurement process. Grey Advertising, Inc., B-184825, May 14, 1976, 76-1
CPD para. 325 at 9. The more important consideration is whether the documented
evaluation record and source selection decision reasonably assess the
relative merits of the proposals in accordance with the stated evaluation
criteria. Southwest Marine, Inc.; American Sys. Eng'g Corp., supra, at
10-11. Here, the record shows that the relative merits of KBM's and
Milvets's proposals were adequately and reasonably documented and
considered. Specifically, as noted above, the strengths of each firm's
proposal was identified in the agency's evaluation documents and weighed in
the agency's cost/technical tradeoff analysis; this includes the strengths
that KBM asserts should have entitled it to a higher adjectival rating.
KBM also protests that the source selection decision is irrational because
the SSA did not adequately consider KBM's alleged technical superiority.
Source selection officials have broad discretion to determine the manner and
extent to which they will make use of the technical and cost evaluation
results in negotiated procurements. Grey Advertising, Inc., supra. Where
source selection officials reasonably regard proposals as essentially
technically equal, cost or price can become the determining factor in making
award notwithstanding that the RFP provided that the cost or price was of
less importance than technical merit. Resource Management Int'l, Inc.,
B-278108, Dec. 22, 1997, 98-1 CPD para. 29 at 4.
We find that, contrary to KBM's arguments, the SSA adequately considered
KBM's evaluated strengths in her source selection decision. The record shows
that the SSA was presented with the evaluated strengths in both KBM's and
Milvets's proposals. The SSA's written decision demonstrates that, for each
technical evaluation factor, the SSA weighed KBM's evaluated strengths
against those in Milvets's proposal. The SSA also acknowledged that a number
of KBM's strengths, e.g., its specific contract experience and staff, were
typical of those available to an incumbent; the SSA nevertheless
specifically credited KBM for these strengths in her source selection
decision. In balance, the SSA concluded that the two firms' proposals were
essentially equal. Agency Report, Tab E10(a), Source Selection Decision at
3. Although KBM disagrees with this judgment, it has not shown it to be
unreasonable.
The protest is denied.
Comptroller General
of the United States
Notes
1. Records of various types of firearms transactions are maintained on
microfilm and are indexed. During fiscal year 1998, the National Tracing
Center responded to more than 180,000 requests.
2. This estimate was based upon labor rates in the incumbent (KBM's)
contract (a non-competitive section 8(a) award), escalated by 5 percent for
the base and each of the 4 option years.
3. The agency identified a number of other pricing concerns in Milvets's
proposal, which were identified to the offeror during discussions.
4. The other two competitive range offerors' final proposals continued to be
rated marginal and were not considered in the SSEB's award recommendation or
in the source selection decision.
5. The SSEB noted that Milvets's price was much lower than the IGE for these
services but concluded that the IGE was not a "true indicator of the best
rates the Government [could] obtain because prior contracts for these
services [upon which the IGE was based] were awarded on a sole source
basis." Agency Report, Tab E3(g), SSEB Final Evaluation Report at 8.
6. KBM also states the agency praised KBM throughout its performance as the
incumbent, and this also indicated the agency's desire to continue to
receive high-quality services.
7. This procurement was conducted under the requirements of the FAR Part 15
revisions governing the conduct of discussions. Although the RFP was
originally issued prior to January 1, 1998 and did not contain a notice on
the cover of the RFP that the FAR Part 15 rewrite rules would apply (see 62
Fed. Reg. 51,224, Sept. 30, 1997), the agency notified offerors in a
pre-proposal conference of the application of the FAR Part 15 rewrite rules.
8. BATF states that it was only after receipt of final proposal revisions
that the agency determined that the IGE was overstated. Agency Report at
8-9; Agency Report Revision, Mar. 18, 1999.
9. FAR sect. 15.306(e)(3) provides that a contracting officer may inform an
offeror that its price is considered to be too high, too low, and reveal the
results of the analysis supporting that conclusion.
10. KBM does complain that it did not receive sufficient credit for its
incumbent workforce, particularly where Milvets was criticized during
discussions for not having a plan to recruit incumbent employees. The record
shows, however, that KBM's incumbent staff was cited as a proposal strength
in both the evaluation record and source selection decision. Furthermore,
although Milvets's initial offer was criticized for its lack of a
recruitment plan, Milvets offered an acceptable recruitment plan, that
included contacting incumbent staff as well as advertising for staff, in its
final proposal revision; Milvets's recruitment plan was not identified as a
proposal strength.