TITLE:  NV Services, B-284119.2, February 25, 2000
BNUMBER:  B-284119.2
DATE:  February 25, 2000
**********************************************************************
NV Services, B-284119.2, February 25, 2000

Decision

Matter of: NV Services

File: B-284119.2

Date: February 25, 2000

Ronald K. Henry, Esq., and Larry J. Gusman, Esq., Kaye, Scholer, Fierman,
Hays & Handler, for the protester.

Benjamin N. Thompson, Esq., Jennifer E. McDougal, Esq., and Grady L.
Shields, Esq., Wyrick Robbins Yates & Ponton, and Frank M. Rapoport, Esq.,
Pepper Hamilton, for LB&B Associates, Inc., the intervenor.

Bernard J. Roan, Esq., National Aeronautics & Space Administration, 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's cost realism analysis erred in calculating the probable cost of
the awardee's proposal because the proposal did not account for the
provision of safety equipment, employee training, and phase-out costs, all
of which were required by the solicitation for a cost-plus-award-fee
services contract; however, the protester was not prejudiced by this
misevaluation because the awardee's evaluated probable costs were still
substantially less than, and its proposal was technically superior to, the
protester's proposal.

2. Protest that the agency should have downgraded the awardee's technical
proposal for failing to identify specific personnel available for contract
performance is denied, where the solicitation, as amended, did not require
such a staffing plan.

3. Challenge to the agency's evaluation of the protester's and awardee's
past performance is denied, where the agency based its judgment upon
information in the offerors' proposals and received from references
identified by the offerors, and the protester does not demonstrate that the
agency's judgment was unreasonable.

4. Agency is not required to conduct discussions with the offerors where the
solicitation advised that the agency intended to make award on the basis of
initial proposals without conducting discussions and the record was adequate
to allow the agency to make its best value determination.

5. Where an agency's requirements change after the issuance of a
solicitation, the agency must issue an amendment to notify offerors of the
changed requirements; although the agency may not properly award a contract
with the pre-award intent to materially modify the scope of work, we will
not sustain a protest on this basis absent prejudice to the protester.

DECISION

NV Services (NVS) [1] protests the award of a contract to LB&B Associates,
Inc. under request for proposals (RFP) No. RFP5-51132-106, issued by the
National Aeronautics and Space Administration (NASA) for facilities
operation and maintenance services at the Goddard Space Flight Center,
Greenbelt, Maryland. NVS argues that NASA unreasonably evaluated NVS's and
LB&B's technical proposals, performed an unreasonable cost realism
evaluation of LB&B's cost proposal, and improperly failed to conduct
discussions concerning the cost proposals. NVS also complains that the
agency awarded the contract to LB&B with the intent to materially modify the
scope of work.

We deny the protest.

The RFP, issued as a competitive small disadvantaged business set-aside
under section 8(a) of the Small Business Act, 15 U.S.C. sect. 637(a) (1994),
provided for the award of a cost-plus-award-fee contract for a 2-year base
period with one 3-year option period. The contract will provide for planning
and implementation of a comprehensive operations and maintenance program,
covering electrical, mechanical, plumbing, and utility services, and for
plant engineering and planning, site utility restoration, and construction
coordination and quality assurance services. In performing the maintenance
services, the contractor will employ "reliability centered maintenance"
(RCM) [2] strategies and operate a computerized maintenance management
system. In general, the contractor is responsible for providing all
resources (such as, labor, supervision, tools, equipment, and material)
necessary to perform the contract. RFP attach C. Among other requirements,
the contractor will be required to:

provide or make available training courses in environmental compliance,
hazardous materials, hazardous waste management, safety, and emergency
response, as well as, other areas relevant to the areas of work in
accordance with applicable laws.

Id. at C1-6. See id. at C3-2.

The RFP provided for award, without discussions, on a cost/technical
tradeoff

basis, and stated the following evaluation factors and subfactors for award:

 1. Mission suitability

        a. Management plan

        b. Understanding and approach to
        meeting the requirements

        c. Quality control

 2. Past performance

         a. Relevant experience

         b. Technical performance

 3. Cost

RFP at 96. The RFP stated that the mission suitability, past performance,
and cost factors were of relatively equal importance, and that mission
suitability and past performance, when combined, were significantly more
important than cost. RFP at 97.

Offerors were informed that the mission suitability factor would be
adjectivally and numerically rated on a 1,000-point scale. The mission
suitability subfactors were weighted as follows: management plan (300
points), understanding and approach to meeting the requirements (400
points), and quality control (300 points). RFP at 100. A detailed
description as to how proposals would be evaluated under each of the mission
suitability subfactors was provided. For example, under the management plan
subfactor, offerors were advised that, among other things, NASA would be
evaluating the offerors' organizational structure; access to corporate
resources; and plans for recruiting, staffing, and compensation. RFP at
101-03.

The past performance factor, which was to be adjectivally rated, provided
for the evaluation of an offeror's experience and record of performing
services similar in size, content, and complexity to the requirements of the
solicitation. [3] RFP at 103-04. Offerors were informed that the agency
would consider information provided by the offerors as well as information
available within NASA or from other government agencies or non-government
organizations.

The RFP stated that offerors' cost proposals would be assessed for cost
realism and reasonableness. RFP at 104. The RFP also stated that:

the proposed cost of the work (and rates proposed) may be a significant
indicator of an Offeror's understanding and ability to perform the
[statement of work]. Therefore, Mission Suitability scores may be adjusted
for lack of cost realism.

RFP at 100. Accordingly, the solicitation provided a formula for an
adjustment to an offeror's mission suitability factor point score based upon
the percentage difference between the offeror's proposed and probable costs;
that is, an offeror's mission suitability score would be decreased by a
specified number of points commencing at a proposed/probable cost difference
of 6 percent or more. Id.

Detailed instructions were provided for the preparation of proposals. RFP at
78-93. Among other things, offerors were required to provide a total
compensation plan, addressing all proposed labor categories. Id. at 78. In
addition, offerors were instructed to provide, as part of their cost
proposals, indirect cost ceiling rates and the costs of leasing or buying
motor vehicles if necessary for contract performance. Id. at 91-92.

On August 27, 1999, proposals were received from seven offerors, including
NVS and LB&B, which were evaluated by the IEP. The technical ratings of NVS
and LB&B, the two highest-rated offerors, were as follows:

                           NVS                 LB&B

 Mission Suitability       935/Excellent       915/Excellent

 a. Management Plan        281/Excellent       274/Excellent

 b. Understanding and      369/Excellent       357/Very Good
 approach to meeting the
 requirements

 c. Quality Control        285/Excellent       284/Excellent

 Past Performance          Very Good           Excellent

Agency Report, Tab 11, IEP Report, at 6, 8, 11, 13. NVS's proposal was found
to offer nine significant strengths, two strengths, and no weaknesses under
the mission suitability factor, while LB&B's proposal was found to offer
eight significant strengths and no weaknesses. Id. at 6, 11. Both firms
proposed staffing of 115 staff-years (although not identical skill mixes).
Hearing Transcript (Tr.) at 84. The evaluators praised both NVS's and LB&B's
proposed organizational structure, offers of a project manager with
authority over project resources, recruiting and staffing plans, and
corporate resources. The evaluators found that NVS had an excellent
understanding of the contract requirements and provided an exceptional
approach for providing all operations and maintenance of building
structures. Agency Report, Tab 11, IEP Report, at 7. LB&B's proposal was
determined to have a very good understanding and approach to meeting the
requirements subfactor; in particular, the evaluators praised LB&B's
thorough understanding of the RCM program, complemented by systematic PT&I
methodologies. Id. at 12. Both NVS and LB&B were found to offer
comprehensive and excellent quality control plans. Id. at 8, 13.

Under the past performance factor, the evaluators found that NVS possessed
(through its joint venturers and principal subcontractor) significant
relevant experience in all areas of the statement of work. Contracting
Officer's Statement at 17; Agency Report, Tab 11, IEP Report, at 9. NVS's
technical performance subfactor and overall past performance factor ratings
were assessed as very good. Agency Report, Tab 11, IEP Report, at 8-9, and
Tab 12, Source Selection Briefing Charts, at 25.

The IEP found that LB&B had "strong, significant relevant
experience/capability in meeting all areas of the [statement of work]." The
IEP also found LB&B's technical performance to be excellent and assessed
LB&B's overall rating for the past performance factor as excellent. Agency
Report, Tab 11, IEP Report, at 13.

The IEP also evaluated the offerors' cost proposals for accuracy, realism,
and reasonableness. Agency Report, Tab 11, IEP Report, at 4, 10, 14. In
performing this evaluation, the IEP assessed the offerors' proposed overall
staffing (direct labor hours), labor rates, indirect cost rates (general and
administrative (G&A) and overhead/fringe rates), other direct costs (ODC),
and proposed award fee. Id., attach. A. In addition, NASA requested advisory
audit reports from the Defense Contract Audit Agency (DCAA) concerning
offerors' direct labor rates and indirect cost rates. Agency Report, Tab 16,
DCAA Report of NVS's Proposal, and Tab 17, DCAA Report of LB&B's Proposal.
DCAA also reviewed LB&B's proposed ODCs with respect to LB&B's proposed
vehicle expenses. Agency Report, Tab 17, DCAA Report of LB&B's Proposal, at
6. NVS's and LB&B's proposed and probable costs were as follows:

          Proposed        Probable      Percentage
                                        Difference

 NVS      $[DELETED]      $[DELETED]    0

 LB&B     $[DELETED]      $40,830,862   [DELETED]

Agency Report, Tab 11, IEP Report, at 9, 13.

The IEP found that NVS had proposed adequate staff (total direct labor
hours) to perform the contract work and that NVS's proposed direct labor
rates, overhead and G&A rates, and award fee ([DELETED] percent of the total
costs) were acceptable. Id. at 10. The evaluators stated that NVS's proposed
$[DELETED] for general liability insurance appeared overstated (the
government's estimate for these costs is $156,890), but found that it could
not determine from NVS's proposal if in fact these costs were overstated;
[4] no adjustment was made to NVS's probable cost to reflect this concern.
Id.; Agency Report, Tab 1, Government Estimate, at 8.

With respect to LB&B's cost proposal, the IEP found that LB&B's proposed
staffing (total direct labor hours) was adequate and accepted as realistic
LB&B's proposed direct labor rates. LB&B's proposed award fee ([DELETED]
percent of total costs) was found reasonable. The IEP made realism
adjustments for LB&B's overhead and G&A rates and for the firm's proposed
vehicle expenses (an ODC). These adjustments resulted in an $[DELETED]
increase in LB&B's probable costs. Agency Report, Tab 11, IEP Report, at 14.

The source selection authority (SSA) was briefed by the IEP on the panel's
technical and cost evaluation results. Agency Report, Tab 13, Source
Selection Statement, at 1. Based upon the evaluation results, the SSA
concluded that discussions were not necessary. Id. at 3. From her review of
the evaluated proposal strengths and weaknesses and probable costs of
performance of the offerors, the SSA determined that only NVS and LB&B had a
reasonable chance of receiving award. Id. at 8-9; Agency Legal Memorandum at
3. Weighing the relative merits of NVS's and LB&B's proposals, the SSA
concluded that LB&B's proposal reflected the best value to the government,
given its probable cost advantage of $[DELETED] and higher past performance
rating. Specifically, the SSA stated that:

the difference in mission suitability scores between NVS and LB&B was so
slight as to be negligible. LB&B had a moderately lower probable cost and a
higher rating for Relevant Experience and Past Performance than NVS.
Therefore, I concluded that LB&B was the superior proposal.

Agency Report, Tab 13, Source Selection Statement, at 9. On November 9,
award was made to LB&B. This protest followed.

COST REALISM EVALUATION

NVS first challenges NASA's assessment of the cost realism of LB&B's
proposal, primarily because the agency allegedly did not account for a
number of ODC items required for contract performance. [5] Supplemental
Protest at 3. Specifically, NVS complains that LB&B proposed unrealistic
costs for general liability insurance and phase-in, and no costs for an RCM
function/coordinator, training, safety equipment, phase-out, elevator
testing, overhead doors, asbestos removal, and overtime. [6] Protester's
Comments at 6-12.

When agencies evaluate proposals for the award of cost reimbursement
contracts, an offeror's proposed estimated costs are generally not
dispositive because regardless of the costs proposed, the government is
bound to pay the contractor its actual and allowable costs. Advanced
Sciences, Inc., B-259569.3, July 3, 1995, 95-2 CPD para. 52 at 11. Consequently,
a cost realism analysis must be performed by the agency to determine the
extent to which an offeror's proposed costs represent what the contract
should cost, assuming reasonable economy and efficiency. FAR
sect.sect. 15.305(a)(1), 15.404-1(d); CACI, Inc.--Fed., B-216516, Nov. 19, 1984,
84-2 CPD para. 542 at 5. Because the contracting agency is in the best position
to make this cost realism determination, our review of an agency's exercise
of judgment in this area is limited to determining whether the agency's cost
evaluation was reasonably based and not arbitrary. General Research Corp.,
B-241569, Feb. 19, 1991, 91-1 CPD para. 183 at 5, recon. denied, American
Management Sys., Inc.; Department of the Army--Recon., B-241569.2,
B-241569.3, May 21, 1991, 91-1 CPD para. 492.

NASA's cost realism evaluation of LB&B's proposal is questionable in several
areas. Specifically, NVS proposed $[DELETED] for its costs of training
employees (NVS Cost Proposal, exh. 2, Elements of Cost Summary; Agency
Report, Tab 11, encl. A), which is a specific contract requirement (see RFP
attach. C, at C1-6), but LB&B did not specifically identify any costs for
training employees. NASA argues that LB&B's costs for providing employment
training are included in LB&B's total compensation plan, where LB&B provided
for tuition reimbursement for job-related courses as an employee fringe
benefit. See Supplemental Contracting Officer's Statement at 8; LB&B
Proposal, Total Compensation Plan, at TC-9. Based on our review of LB&B's
proposal, we find that LB&B's voluntary tuition reimbursement benefit cannot
reasonably be read as accounting for training that is required by the
contract. Thus, we think LB&B's probable costs should have been adjusted to
account for training costs.

We also find unreasonable or unsupported NASA's evaluation of LB&B's cost
proposal with respect to the awardee's probable costs for safety equipment,
for which LB&B proposed no costs but NVS proposed $[DELETED]. LB&B Cost
Proposal; NVS Cost Proposal, exh. 2, Elements of Cost Summary. The RFP
required contractors to provide supplies to the extent not supplied by the
agency. See RFP attach. C, at C1-13. NASA speculates that LB&B would account
for these costs as depreciation to be recovered as part of overhead costs.
Supplemental Contracting Officer's Statement at 2. The safety equipment to
which NVS refers, however, consists of safety shoes, glasses, gloves,
overalls, and back-belts, see NVS Cost Proposal, Cost and Pricing Rationale
at 8, which are supplies that are not generally depreciable. See FAR sect.
31.205.11 (depreciation is applicable to tangible capital assets). Thus, it
appears that an adjustment should be made to account for these costs as
well.

Another questionable item, for which LB&B's costs should be upwardly
adjusted, is contract phase-out costs, for which LB&B also proposed no costs
but NVS proposed $[DELETED]. LB&B Cost Proposal, exh. 3, Phase-in and
Phase-out Costs, at 4-3; NVS Cost Proposal, exh. 3, Phase-in and Phase-out
Costs. NASA suggests that LB&B's failure to propose costs for contract
phase-out meant that these costs would not later be allowed. See
Supplemental Contracting Officer's Statement at 8. We disagree. Unlike the
phase-in costs, which the RFP provided would be a fixed-price item, the
phase-out costs were cost reimbursable. RFP at 91; Tr. at 8. Although LB&B
proposed no costs for phase-out, our review of its proposal indicates that
it did not contractually commit to forbear these costs, and we find from the
record that NASA would have to reimburse LB&B for its incurred phase-out
costs, absent a contractual cap. [7]

We have no basis, however, to question the agency's cost realism evaluation
of LB&B's proposal with respect to the other costs protested by NVS. With
respect to general liability insurance, LB&B proposed, as part of ODCs, only
$[DELETED] for its liability insurance costs for the term of the contract,
in contrast to NVS's proposed liability insurance costs of approximately
$[DELETED] and the government estimate of $156,890. LB&B Cost Proposal, exh.
2, Elements of Cost Summary, at 4-2; NVS Cost Proposal, exh. 2, Elements of
Cost Summary; Agency Report, Tab 1, Government estimate, at 8. Despite this
substantial difference, NASA found LB&B's proposed liability insurance costs
realistic. We have recognized that a contractor's probable insurance costs
will be based upon a variety of factors, such as historical loss experience,
liability limits, and loss control measures. See Department of
State--Recon., B-243974.4, May 18, 1992, 92-1 CPD para. 447 at 7. Here, NASA
based its judgment on LB&B's indication in its proposal that its insurance
costs, [DELETED]. Supplemental Contracting Officer's Statement at 7; LB&B
Cost Proposal at 3-7. Apart from its arguments that it proposed far more
costs for liability insurance than did LB&B, NVS has not shown that NASA's
judgment in this regard was unreasonable. Given that contractors could
reasonably be expected to bear dissimilar costs for liability insurance, we
think that NASA reasonably did not normalize LB&B's liability insurance
costs to the level of NVS's costs, as NVS suggests. [8]

NVS complains that it proposed as ODCs its costs to provide the RCM
function/coordinator ($[DELETED]), elevator testing ($[DELETED]), overhead
door maintenance ($[DELETED]), and asbestos removal ($[DELETED]), and that
LB&B did not specifically provide any costs for these items. Protester's
Comments at 10-12. The record evidences that NVS proposed to subcontract
this work and, accordingly, identified these costs as ODCs. See NVS Cost
Proposal at 13. LB&B, on the other hand, did not propose subcontracting
these items but proposed to perform them itself. See, e.g., LB&B Proposal,
Oral Presentation Slides at 5, 12 (proposal to do all but elevator
maintenance and inspection and boiler certification work in-house); LB&B
Cost Proposal at 3B-3 (proposal of a full-time RCM coordinator). Thus,
LB&B's cost to perform these items is included in LB&B's total direct labor
costs. NVS has not argued that LB&B's direct labor costs are understated in
this respect.

NVS next complains that NASA failed to account for LB&B's alleged failure to
propose sufficient supervisory personnel in two functional areas: (1)
facilities operations console and (2) mission support operations and
maintenance. Protester's Comments at 11; Declaration of NATI Project
Manager, Jan. 11, 2000. The statement of work required that these two
functional areas be staffed and managed 24 hours per day, 7 days per week.
RFP attach. C, at C4-2, C11-1. NVS states that NATI performed the required
supervision of these functions with 9 supervisors and was required to pay
overtime to ensure complete coverage; specifically, NVS asserts that each
function requires a commitment of 4.8 supervisors, based upon NVS's proposed
[DELETED] productive hours per employee. Declaration of NATI Project
Manager, Jan. 11, 2000, at 1. NVS argues that LB&B will either have to
require its supervisors for these functions to work uncompensated overtime
or pay overtime to these supervisors, which was not provided for in LB&B's
proposal. Protester's Comments at 11, 15-17. The protester does not state,
however, what cost impact, if any, would result from LB&B's alleged failure
to propose sufficient supervisory personnel.

While LB&B proposed neither uncompensated nor compensated overtime for these
supervisors, we think that NASA could reasonably find that LB&B could
perform these two functional areas as proposed. NVS's contention that 4.8
supervisors are necessary for each function does not establish that LB&B's
proposal was inadequate. The record shows that LB&B proposed [DELETED]
supervisors for each function. [9] See LB&B Proposal, Oral Presentation
Slides at 42, 55; Cost Proposal at 3B-1, 3B-4. In this regard, LB&B stressed
in its proposal that in performing the contract it would cross-utilize
personnel within branches and across branches, see LB&B Proposal, Oral
Presentation Slides, at 10, and at least for one of the functional areas
stressed the "hands-on" nature of the branch supervisor. Id. at 42. We find
no basis to question NASA's evaluation of LB&B's cost proposal in this
regard. [10]

NVS also complains that the agency did not reasonably evaluate LB&B's
proposed phase-in costs. As explained above, however, phase-in costs are a
fixed-price item under the RFP, such that no cost realism adjustment would
be appropriate. See FAR sect. 15.404-1(d)(3) (fixed prices should not be
adjusted in a cost realism evaluation).

In sum, we find several errors in NASA's probable cost evaluation, as
described above. We calculate that a reasonable probable cost evaluation of
LB&B's proposal would result in an upward adjustment of $337,115 in LB&B's
probable costs. [11] Because LB&B's probable costs were evaluated to be
nearly $1 million lower than NVS's probable costs, we find that the agency's
cost evaluation errors did not affect the firms' relative cost standing.

MISSION SUITABILITY EVALUATION

NVS next challenges NASA's evaluation of LB&B's technical proposal.
Specifically, NVS complains that NASA unreasonably assessed LB&B's proposal
as excellent under the management plan subfactor where LB&B did not identify
the specific personnel it was proposing. NVS argues that LB&B's proposal was
"nothing but an empty shell whose one idea for performance consisted of
recruiting the incumbent workforce if it was selected for award." [12] NVS
contends that its proposal therefore should have been evaluated as
technically superior to LB&B's under the mission suitability factor.
Protester's Comments at 12.

In reviewing protests of allegedly improper evaluations and source selection
decisions, our Office examines the record to determine whether the agency's
judgment was reasonable and in accord with the stated evaluation criteria.
Abt Assocs., Inc., B-237060.2, Feb. 26, 1990, 90-1 CPD para. 223 at 3-4. A
protester's
mere disagreement with an agency's judgment does not render it unreasonable.
Brunswick Defense, B-255764, Mar. 30, 1994, 94-1 CPD para. 225 at 9.

We find that NVS's complaints provide no basis to object to the agency's
technical evaluation of LB&B's proposal under the management plan subfactor.
Contrary to NVS's assertion, the RFP did not require offerors to identify
specific personnel available for performance. As amended, offerors were
required by the RFP to provide, among other things, a management plan
describing the offeror's organization, authority levels, resources (in terms
of staffing, facilities, equipment, and finances), and recruiting plans. RFP
at 83-85, and amend. No. 1, at 2.

Here, the agency found that LB&B had provided an excellent discussion of its
organizational structure, which the agency found demonstrated an excellent
ability to provide the services proposed, and a very good discussion of its
company resources in terms of LB&B's staffing, company support, facilities,
equipment and finances. Agency Report, Tab 11, IEP Report, at 11. The agency
also found that LB&B had provided a very good staffing and recruiting plan.
[13] Id. at 12. We find nothing from our review of LB&B's proposal to
question the reasonableness of the agency's evaluation. Specifically, with
respect to staffing the contract, LB&B identified the skill mix it intended
to provide and the sources (e.g., current employee, incumbent workforce
hire, or outside hire) on which LB&B intended to rely to obtain the
necessary personnel. See LB&B Proposal, Oral Presentation Slides at 18-24.
Although NVS disagrees with NASA's judgment, this disagreement does not
demonstrate that the agency's evaluation determination was unreasonable.

NVS also argues that LB&B's technical proposal should have been downgraded
under the understanding/approach to meeting the requirements subfactor to
the mission suitability factor because LB&B's failure to propose estimated
costs or proposal of inadequate costs for various aspects of the work (i.e.,
safety equipment, training, asbestos removal, and liability insurance)
indicated a lack of understanding. Although, as shown above, we found that
LB&B did not appear to realistically price all aspects of the contract work
(i.e., training, safety equipment, and contract phase-out), the protester
fails to recognize that the RFP provided a formula for adjusting an
offeror's technical rating under the mission suitability factor. Offerors
were informed that their point scores would be adjusted only in the event
the difference between costs as proposed and as evaluated was 6 percent or
more. RFP at 100. Here, the difference between LB&B's overall proposed costs
and probable costs, even as adjusted in our decision, is slightly more than
3.2 percent.

We therefore conclude that NASA's evaluation of LB&B's proposal under the
mission suitability factor was reasonable. Under the circumstances, we find
no basis to object to NASA's conclusion that NVS's and LB&B's proposals were
essentially equal under this factor.

PAST PERFORMANCE EVALUATION

NVS also protests that NASA unreasonably evaluated LB&B's and NVS's
experience and technical performance under the past performance factor.
Specifically, NVS argues that the agency unreasonably averaged the past
performance scores received by each of its joint venturers and its principal
subcontractor, and that this had the effect of negating NVS's "advantages."
NVS also complains that the agency did not consider the types of services,
and size and kind of contracts, performed by each of the joint venturers and
subcontractor, to obtain meaningful conclusions. [14] Protester's Comments
at 20-23.

NASA responds that it analyzed the information provided by the offerors as
well as evaluating the past performance questionnaires obtained from the
references identified in the proposals. Contracting Officer's Statement at
17; Agency Report, Tab 10, Past Performance Questionnaires. From this
information, the agency determined that NVS had significant relevant
experience in all areas of the contract work. With respect to each joint
venturer and the principal subcontractor, the evaluators assessed the
questionnaire responses. Specifically, the evaluators found as follows:

Viteri received ratings from good to excellent in all areas. Viteri has
excellent customer relations and adherence to schedules. NATI received
ratings from good to excellent in all areas. NATI was rated mostly excellent
in quality, timeliness and business relations. CTSI received very good to
excellent ratings. Several of NATI's and CTSI's customers noted that both
have excellent QC [quality control] programs, and their ability to identify
technical problems and adherence to schedule is exceptional. In addition,
all three companies have very low personnel turnover.

Agency Report, Tab 11, IEP Report, at 9. The IEP concluded that, overall,
NATI's past performance was excellent, Viteri's was good, and the CTSI's was
very good. Id.; Agency Report, Tab 12, Source Selection Briefing Charts, at
25. NASA concludes that NVS's very good rating under the past performance
factor was justified.

The evaluation of past performance is a matter within the discretion of the
contracting agency. HLC Indus., Inc., B-274374, Dec. 6, 1996, 96-2 CPD para. 214
at 3.
In reviewing an agency's evaluation of past performance, we will not
reevaluate proposals, but instead will examine an agency's evaluation to
ensure that it was reasonable and consistent with the solicitation. CDA Inv.
Techs., Inc., B-272093, B-272093.2, Sept. 12, 1996, 97-1 CPD para. 102 at 7.

Here, we find the agency's evaluation of NVS's experience and technical
performance to be reasonable. The record reflects that the IEP specifically
credited the joint venture with significant relevant experience in the
contract work, and the SSA was so informed. See Agency Report, Tab 12,
Source Selection Briefing Charts, at 25.

With respect to the technical performance subfactor, NASA found from its
assessment of the information received in the past performance
questionnaires that NATI's past performance was excellent, Viteri's was
good, and CTSI's was very good. Agency Report, Tab 11, IEP Report, at 9. NVS
does not assert that any of the underlying past performance information
received by NASA was erroneous or that NASA's individual adjectival ratings
for NATI, Viteri, or CTSI, based upon this information, was erroneous.
Instead, NVS challenges the overall past performance rating, arguing that
this rating does not accurately reflect its strengths nor recognize the
differences in the types of work performed by the joint venturers and
subcontractor, that is, for example, that Viteri primarily performed
fixed-price construction contracts as opposed to NATI, which performed
cost-reimbursable service contracts. Protester's Comments at 21.

We find no basis in this record to conclude that NVS would be entitled to a
higher past performance rating. [15] The RFP informed offerors that, in
assessing offers under the technical performance subfactor, the agency would
evaluate an offeror's compliance with technical requirement and standards,
quality of performance provided, and responsiveness to government personnel.
RFP at 104. This does not require the kind of analysis that NVS asserts
should have been done. Here, the agency reasonably assessed the offerors'
technical performance from information obtained from sources identified by
the offerors, as provided for by the RFP. We find that NVS's challenge to
its past performance rating is nothing more than mere disagreement with the
agency's evaluation judgment, given NVS's failure to show that NASA's
evaluation was inconsistent with the RFP criteria or unreasonable in any
regard.

NVS also challenges the agency's past performance evaluation of LB&B on the
basis that none of LB&B's identified contract references are relevant in the
areas of construction coordination and quality assurance. [16] NVS thus
argues that LB&B does not have relevant experience in all areas of the RFP
statement of work, as reported by the IEP, and that LB&B therefore does not
deserve an excellent past performance rating. Supplemental Protest at 7;
Protester's Comments at 23.

The agency responds that it was able to conclude from LB&B's proposal, as
well as its identified contracts, that LB&B had relevant experience with
respect to construction coordination and quality assurance. The intervenor
notes that construction coordination and quality assurance was expected to
comprise only
10 percent of the contract work. See Agency Report, Tab 3, Acquisition
Strategy Briefing Charts, at 8; Intervenor's Comments at 17.

We find the agency had a reasonable basis to conclude that LB&B had relevant
experience in all areas of the contract scope of work and merited its
excellent rating. Specifically, with regard to construction coordination and
quality assurance, LB&B identified in its proposal a number of contracts
under which it was responsible for these functions. For example, LB&B
identified a current $31 million, cost-plus-award-fee contract with the
Department of Agriculture for operations and maintenance support services,
which "includes construction coordination and [quality assurance],
utilization of PT&I, and our engineering support staff provides facilities
engineering support." [17] LB&B Past Performance Proposal at 4. Other
examples include an indefinite-quantity contract with the General Services
Administration (GSA) building alterations and repair, and a $1.7 million
fixed-price contract with GSA for mechanical maintenance services (LB&B was
the managing partner in a joint venture, which provided construction
coordination and quality assurance).

In sum, the record reasonably supports NVS's very good rating and LB&B's
excellent rating under the past performance factor.

AWARD ON INITIAL PROPOSALS

NVS also protests that NASA should not have made award on initial proposals
to LB&B, but rather should have conducted discussions with LB&B concerning
its proposed ODCs and with both offerors concerning their proposed award
fee. Supplemental Protest at 10.

There is generally no obligation that a contracting agency conduct
discussions where, as here, the RFP specifically instructs offerors of the
agency's intent to award a contract on the basis of initial proposals. While
the contracting officer's discretion in deciding not to hold discussions is
not unfettered, it is quite broad. We review the exercise of such discretion
to ensure that it was reasonably based on the particular circumstances of
the procurement. Robotic Sys. Tech., B-278195.2, Jan. 7, 1998, 98-1 CPD para. 20
at 11.

Here, we find that NASA reasonably exercised its discretion to make award on
the basis of initial proposals, as provided for by the RFP. It is true that
the agency found that LB&B understated its proposed costs and our review
found a number of errors in the agency's cost realism evaluation of LB&B's
proposal; we also found, however, that the firms' relative cost standing was
unaffected by NASA's and our probable cost adjustments. Under the
circumstances, the agency had no reasonable doubt as to which offer
represented the best value to the government and could make award on initial
proposals. See Southwest Marine, Inc.; American Sys. Eng'g Corp.,
B-265865.3, B-265865.4, Jan. 23, 1996, 96-1 CPD para. 56 at 19-20.

PRE-AWARD INTENT TO MODIFY CONTRACT

NVS also protests that NASA awarded the contract to LB&B with the intent to
materially expand the scope of the contract work. Specifically, NVS states
that only 3 weeks after contract award NASA modified LB&B's contract to add
work for the machine shop, sheet metal shop, and variable frequency drive
operations. Protester's Comments at 4; Agency Report, Tab 15, LB&B Contract
Mod. No. 1,
Dec. 1, 1999. This is work that NASA, during the procurement that is
protested here, had added to the predecessor contract performed by NATI. NVS
argues that this additional work reflects a significant increase in
workload, and if it had been included in the RFP, NVS would have
substantially reduced its proposed G&A rate and award fee. [18] Protester's
Comments at 5; Protester's Post-Hearing Comments at 8-9.

Generally, where an agency's requirements change after a solicitation has
been issued, it must issue an amendment to notify offerors of the changed
requirements and afford them an opportunity to respond. FAR sect. 15.206(a);
Symetrics Indus., Inc., B-274246.3 et al., Aug. 20, 1997, 97-2 CPD para. 59 at
6. The purpose of the rule is to avoid award decisions not based on the
agency's most current view of its needs. See N.V. Philips
Gloellampenfabriken, B-207485.3, May 3, 1983, 83-1 CPD para. 467 at 12. Agencies
must amend solicitations to reflect a significant change in the government's
requirements even after the submission of BAFOs, up until the time of award.
See United Tel. Co. of the Northwest, B-246977, Apr. 20, 1992, 92-1 CPD
para. 374 at 7-9, aff'd, Department of Energy et al., B-246977.2 et al., July
14, 1992, 92-2 CPD para. 20. Amending the solicitation provides offerors an
opportunity to submit revised proposals on a common basis reflecting the
agency's actual requirements. Dairy Maid Dairy, Inc., B-251758.3 et al., May
24, 1993, 93-1 CPD para. 404 at 7-9.

The record shows that before this work was added to NATI's predecessor
contract it was performed by agency personnel. Tr. at 27-28, 38. As part of
an assessment to determine which work should be contracted out, NASA
determined that the work for these three functions (machine shop, sheet
metal shop, and variable frequency drive operations) should be performed by
a contractor. NASA sought the agreement of its employee union to
contract-out this work, and a final decision could not be made on
contracting for these services until an agreement was reached. Tr. at 34,
54, 108-09. The agreement with the union to contract out these services was
executed on September 14, 1999, after the August 27 closing date for receipt
of proposals. Hearing exh. 2, Memorandum of Understanding between NASA and
the Union. NATI's proposal to perform the additional work was obtained on
September 29, and the additional work added to NATI's contract on October
26. Hearing exh. 4, NATI Contract Mod. No. 71. NATI performed these services
until the agency modified LB&B's contract to add this work on December 1.

NASA now admits that it knew, during the procurement and prior to award,
that this additional work would be added to this contract. [19] Agency
Post-Hearing Comments at 8; Contracting Officer Memorandum for Record (Dec.
1, 1999). Nevertheless, NASA argues that the additional work was not
material (between a 5 to 10 percent increase in work, according to the
agency's estimates), such that it would not significantly impact NVS's and
LB&B's relative cost standing. Tr. at 75, 80-81, 102-03.

In determining materiality, NASA and LB&B cite decisions of our Office in
which we determined whether a contract modification exceeded the scope of
the original contract. Agency's Post-Hearing Comments at 14; Intervenor's
Post-Hearing Comments at 5-7. This is not the appropriate standard. As
argued by NASA and the intervenor, the modification of a contract after
award generally concerns a matter of contract administration that is within
the discretion of the contracting agency and is not for review by our
Office, except where it is alleged that the modification is outside the
scope of the original contract such that it should have been separately
procured. 4 C.F.R. sect. 21.5(a); Theatre Aviation Maintenance Servs., B-233539,
Mar. 22, 1989, 89-1 CPD para. 294 at 4. However, the allegation that an agency
awarded a contract with the intent to modify the scope of work concerns
pre-contract award actions in violation of FAR sect. 15.206(a), which requires
that the solicitation be amended, even after receipt of proposals, to
reflect the agency's actual requirements. The appropriate standard in
reviewing these pre-contract actions is not whether the subsequent
modification is within the scope of the original contract but whether the
changed work could significantly affect the competitive positions of
offerors such that the RFP should have been amended. United Tel. Co. of
Northwest, supra, at 10. Here, it should have been apparent to NASA that
increasing the scope of the contract work by approximately 6 percent could
affect the offerors' respective proposals.

Nevertheless, we do not find that NASA's failure to modify the RFP
prejudiced NVS. As the protester was instructed at the hearing, see Tr. at
16-17, our Office will not sustain a protest unless there is a reasonable
possibility of prejudice, that is, unless the protester demonstrates that,
but for the agency's actions, it would have had a substantial chance of
receiving award. McDonald-Bradley, B-270126, Feb. 8, 1996, 96-1 CPD para. 54 at
3; see Statistica, Inc. v. Christopher, 102 F. 3d 1577, 1581 (Fed. Cir.
1996). To establish prejudice, NVS argues that if NASA had revised the RFP
to reflect this additional work, this would have resulted in revised
proposals that would have affected both the technical and cost evaluations.
Protester's Post-Hearing Comments at 5.

With respect to the technical evaluation, NVS asserts that its proposal
would have been judged superior to LB&B's under the mission suitability
factor had NASA considered the two firms' respective approaches to
performing the additional work. The record shows that NATI provided seven
employees during performance of this work, Tr. at 93, (although NATI
proposed seven and a half employees in its proposal to add this work to the
predecessor contract, see Hearing exh. 3), and that LB&B proposed seven
employees and the same skill mix to perform the Modification No. 1 work. Tr.
at 98; Hearing exh. 7, LB&B's proposal to perform the additional work. While
NVS argues that it would have proposed eight employees to perform this
additional work, Protester's Post-Hearing Comments at 9, the agency states
that it found LB&B's proposal of seven employees to be acceptable, Tr.
at 98, and NVS has not shown that this judgment was unreasonable. Given the
similarity in the technical approaches to performing this work, we see no
reasonable possibility that NVS's technical merit under the mission
suitability factor would be found to be superior to LB&B's, even if this
additional work had been considered in the evaluation.

With respect to the cost evaluation, NVS asserts that its G&A costs and
award fee would have significantly decreased if the additional work had been
considered. Specifically, NVS argues that increasing its proposed staffing
by eight employees represented a 6.5 percent increase in its proposed
staffing (an increase from 115 to 123 employees); this, NVS asserts, would
decrease its G&A rate by 6.5 percent (which NVS calculated by taking the
difference between 115 and 123 employees) because NVS, as a new entity, has
no other contracts in its allocation base. [20] Protester's Post-Hearing
Comments at 8. NVS also argues that had it known that the scope of the RFP
work would be so increased it would have considered a reduction of its award
fee from [DELETED] to [DELETED] percent; NVS contends that, though this
reduction would require "approval," it is "natural" because NATI only
received a 7 percent award fee on the prior contract and because if NVS and
NATI did not have to perform two separate contracts there would be a reduced
administrative burden. Protester's Post-Hearing Comments at 8; Declaration
of NATI Project Manager, Feb. 14, 2000, at 2.

We do not find NVS's prejudice arguments persuasive. Despite its access to
all the cost information necessary to do so and our request, see Tr. at
16-17, NVS made no effort to establish the cost impact of these asserted
changes in its G&A rate and award fee. Instead, NVS chose to make
generalized arguments that its G&A rate and award fee would decrease.

Moreover, NVS's arguments are otherwise unpersuasive. With respect to the
G&A rate, NVS's cost proposal indicated that the allocation base for its G&A
cost pool was all costs less subcontract costs, and that its ceiling rate
was less than its estimated G&A rate. [21] NVS Cost Proposal, Cost and
Pricing Rationale, at 14, and sched. C, Summary of Rates and Factors. While
it is clear that some decrease in NVS's G&A rate is possible, given the
increase in costs that would occur from increasing the staffing, we think
that it is too simplistic to calculate that difference by simply looking at
the difference between the amount of staffing; rather, it would be necessary
to consider the impact the staffing would have upon NVS's total contract
costs, which comprise the G&A allocation base. NVS did not make this
calculation, however. Furthermore, there is no indication that NVS would
have proposed a G&A rate below its already proposed ceiling rate, given that
this rate was less than its estimated rate.

We are also not persuaded that NVS would have lowered its award fee by the
amount now claimed. This reduction represents a more than [DELETED]-percent
decrease in its anticipated profit, and NVS's arguments do not support the
amount of the decrease. That is, NVS argues that 7 percent is the amount of
the award fee in NATI's contract, but this was also true when NVS submitted
its proposal under the RFP, which had a larger scope of work than NATI's
contract. While NVS also argues that a reduction of fee is appropriate
because it would not need to administer two separate contracts, the fact is
that NVS would not be holding the two contracts. Apart from the fact that
NATI and NVS are two separate entities, NATI's contract to perform this
additional work was set to expire no later than the end of March 2000 (if
all of the contract's monthly options were exercised). Finally, NATI's
project manager admits that reduction of the fee amount would have to be the
subject of consideration and approval (presumably by the joint venture), and
the project manager does not state that he had any role in structuring the
NVS cost proposal or that he would be involved in, or would make, the
decision to reduce the award fee. Under these circumstances, we discount as
speculative and unsupported NVS's assertion that it would have lowered its
award fee. See Ricards Int'l, Inc. T-A INFOTEQ, B-277808, B-277808.2, Nov.
21, 1997, 98-1 CPD para. 2 at 7-8.

In any case, even accepting the protester's claimed reductions in its G&A
rate and award fee, we calculate that NVS would not have changed its cost
standing relative to LB&B. [22]

NVS also asserts that there are a number of ODCs associated with the
additional staff provided to perform the increased work (that is, training,
safety equipment, vehicle expenses, and liability insurance costs) that have
not been addressed in considering LB&B's cost to perform this work. NVS,
however, does not identify the amount associated with these costs.
Significantly, NVS also does not state what ODC costs would be associated
with its increased staffing to perform this work, although it would appear
likely that it, too, would have additional costs for these items.

CONCLUSION

We find that NASA erred in a number of regards in its conduct of the
procurement. Notably, the agency failed to properly assess several aspects
of LB&B's cost proposal and did not revise the RFP to reflect the change in
the agency's requirements. Nevertheless, these errors did not prejudice NVS
because the relative competitive standing of NVS and LB&B would not change
as a result of correcting this errors. That is, the two firms' proposals
would continue to be viewed as essentially equal under the mission
suitability factor, and LB&B's proposal would be rated higher than NVS's
proposal under the past performance factor while LB&B's probable cost of
performance is lower than that of NVS. Under these circumstances, there is
no reasonable possibility that NASA's best value determination would be
different.

The protest is denied.

Comptroller General
of the United States

Notes

1. NVS is a joint venture of North America Telecommunications Inc. (NATI)
and Viteri Construction Management, Inc., which proposed Capitol Technology
Services, Inc. (CTSI) as the principal subcontractor. NVS Proposal, Oral
Presentation Charts, at 2, 8. NATI was the incumbent contractor for most of
the work covered by the RFP.

2. The RCM strategy was described by the RFP as "a mixture of Preventive
Maintenance, Predictive Testing and Inspection (PT&I), and Proactive
Maintenance measures." RFP attach. C, at C1-8.

3. In assessing offerors' past performance, the integrated evaluation panel
(IEP) assigned points to offerors' contract performance, as a guide in
determining which adjectival rating would be assigned. See, e.g., Agency
Report, Tab 10, IEP Evaluation Notes of NVS's Past Performance, at 66-70.

4. NVS proposed $[DELETED] in its ODCs as its costs for liability insurance,
NVS Cost Proposal, exh. 2, Elements of Cost Summary, and its principal
subcontractor, CTSI, proposed $[DELETED] for its liability insurance costs.
Agency Report, Tab 11, IEP Report, encl. A.

5. LB&B proposed $[DELETED] million for its ODCs, while NVS proposed
$[DELETED] million. Agency Report, Tab 11, IEP Report, attach. A, at 3. The
government's cost estimate included $4.97 million for ODCs. Agency Report,
Tab 1, Government Estimate, at 8.

6. NVS also complained that LB&B had not proposed costs for nonrecurring
subcontracts. NVS abandoned this allegation when it did not respond to the
agency's explanation in its report on the protest.

7. We have been informed that during the course of this protest NASA and
LB&B agreed to a $[DELETED] cap on phase-out costs. Agency's Reply to the
Protester's Post-Hearing Comments at 6. However, this does not establish the
reasonableness of its pre-award evaluation of these costs.

8. We recognize that the IEP was concerned that NVS's proposed liability
insurance costs may be overstated; we nevertheless think the agency
reasonably did not downwardly adjust NVS's proposed insurance costs, given
NVS's arguments that its estimate is not overstated but was based on actual
quotes. Protester's Comments at 7.

9. We also note that LB&B proposed [DELETED] productive work hours for these
employees, as compared to NVS's proposed [DELETED] productive work hours.
See LB&B Cost Proposal, sched. A, Direct Labor Cost, at 5-1, 5-4.

10. NVS also complained that LB&B's technical proposal should have been
downgraded under the management plan subfactor to the mission suitability
factor to account for LB&B's alleged failure to propose sufficient
supervisory personnel to staff these two functions, contending that LB&B
must intend to require its supervisory personnel in these two functions to
work uncompensated overtime to meet the RFP requirements, which LB&B failed
to identify, as required by the RFP. Given the reasonableness of the
agency's assessment that LB&B had proposed sufficient supervisory personnel
to perform these functions as required by the RFP, there is no basis to find
that the agency should have downgraded LB&B's technical proposal for its
proposed supervisory staffing of these functions or to conclude that LB&B
would use uncompensated overtime.

11. Our calculation is based upon the assumption that NVS's proposed costs
for safety equipment, training, and phase-out are reasonable estimates for
these items. We then applied LB&B's G&A ceiling rate and [DELETED] percent
award fee to determine the total probable cost adjustment.

12. We dismiss as untimely NVS's complaint, raised for the first time in its
comments, regarding LB&B's proposal to hire from the incumbent contractor a
construction coordination supervisor, five construction coordinators, and an
RCM coordinator, even though the construction coordination and RCM functions
are new functions that were not part of the incumbent contract. Protester's
Comments at 17-18. NVS should have been aware of the basis for this protest
allegation from its review of LB&B's proposal and the agency's evaluation
documents, which NVS was provided on December 3, 1999. NVS did not raise
this new allegation until January 11, 2000, more than 10 days from the date
it knew or should have known the basis of the allegation. 4 C.F.R.
sect. 21.2(a)(2) (1999).

13. NVS also complained that LB&B received credit for offering to provide a
project manager with significant experience, where LB&B did not specifically
identify the project manager. As with other staff, offerors were not
required to identify a project manager.

14. In its initial protest, NVS complained that the agency did not consider
the extent of CTSI's anticipated contribution before averaging the joint
venturers' and subcontractors' past performance ratings together. Protest at
7. Because NASA addressed this complaint in its report and NVS did not
further support this argument in its comments, we consider this complaint
abandoned.

15. The protester concedes by its arguments that NASA evaluated all
offerors' past performance on the same basis. See Protester's Comments at
22.

16. In its comments, NVS also untimely asserts that LB&B does not have
experience with respect to construction inspection.

17. NVS states that LB&B was the prime contractor for this contract, and
claims that the construction coordination and quality assurance were
actually provided by a subcontractor. From our review of the record,
including the past performance questionnaire provided by Agriculture, we
find no support for NVS's claim that this work was provided by a
subcontractor. In any event, the agency could reasonably credit LB&B for
experience involving these functions, even if the work were actually
performed by a subcontractor under its supervision. See Battelle Mem'l
Inst., B-278673, Feb. 27, 1998, 98-1 CPD para. 107 at 22.

18. NASA argues that we should have dismissed NVS's initial protest of this
issue as too "obscure" and unsupported to allow the agency to respond to the
protester's allegation. Agency's Post-Hearing Comments at 2. We disagree. In
its November 12 protest, NVS alleged upon information and belief that NASA
was modifying the specifications and statement of work. On December 1, NASA
did exactly what NVS was alleging. We think the agency had sufficient
information to know exactly the nature of NVS's complaint and to have
adequate information to respond to the allegation.

NASA also contends that NVS's allegation (raised in its initial protest)
that the agency had a pre-award intent to modify the scope of the contract
is untimely because NVS allegedly knew prior to contract award to LB&B that
this work would be added to the follow-on contract. NASA did not support
these timeliness arguments in its post-hearing comments, as our Office had
requested. In any event, we find this protest allegation timely because the
record establishes that NVS could not be certain that this work would be
included in the follow-on contract until LB&B's contract was modified to
include it. Specifically, during the hearing, the agency's witnesses
admitted that they had no discussions with NATI's project manager concerning
the addition of this work to the contract ultimately awarded to LB&B. Tr. at
53-54, 69-70. These witnesses also acknowledged that it was possible that
the work for these three functions could be performed separately from the
other contract work, although this would be less efficient. Tr. at 56.

19. In its December 14, 1999 agency report, NASA denied that it had modified
the contract scope of work, as alleged by NVS, and failed to provide any
documents regarding its contract modifications. This denial was inconsistent
with the facts. As indicated above, on December 1, NASA modified LB&B's
contract to modify the scope of work. NASA did not provide the relevant
contract modification to our Office and the parties until January 4, 2000.
Additional relevant documents establishing the agency's pre-award intent to
modify the contract were not provided to our Office and the parties until
February 8, the day before the hearing scheduled to elicit testimony
concerning the agency's pre-award intent to modify the contract. The
agency's failure to timely and forthrightly respond to the protester's
allegations and to provide relevant documents, as required by the
Competition in Contracting Act of 1984, 31 U.S.C. sect. 3553(b)(2) (Supp. II
1996), and our Bid Protest Regulations,
4 C.F.R. sect. 21.3(c), caused our Office and the parties to needlessly expend
resources to explore and establish this intent and hampered the expeditious
resolution of this protest.

20. In contrast, according to NVS, the G&A rate of LB&B, an established
entity with multiple contracts, would not change by virtue of this
additional work.

21. NVS, as a new entity, does not have an established G&A rate. The
estimated rate stated in NVS's cost proposal is based upon NVS's projected
cost pool and allocation base for G&A costs.

22. Our calculation is based upon NVS's providing eight employees to perform
the additional work (as NVS asserts in its post-hearing comments) and LB&B
providing seven employees and based upon NVS's asserted reductions in its
G&A rate (the 6.5 percent reduction) and award fee ([DELETED] to [DELETED]
percent). In calculating LB&B's total probable cost, we used LB&B's probable
G&A rate and award fee, and added the additional probable cost adjustments
we found should have been made under a proper cost realism analysis. We also
note that NVS asserts that during contract performance it would have
increased its staffing to 11 or 12 employees; this would have further
exacerbated the difference between NVS's and LB&B's probable costs.