TITLE:  IT Facility Services-Joint Venture, B-285841, October 17, 2000
BNUMBER:  B-285841
DATE:  October 17, 2000
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IT Facility Services-Joint Venture, B-285841, October 17, 2000

Decision

Matter of: IT Facility Services-Joint Venture

File: B-285841

Date: October 17, 2000

Richard L. Moorhouse, Esq., Karen R. Harbaugh, Esq., Mary Kay Ogden, Esq.,
and Lawrence A. Demase, Esq., Reed Smith Shaw & McClay, and Paul C. Smith,
Esq., IT Corporation, for the protester.

Stuart B. Nibley, Esq., and Joseph J. Dyer, Esq., Seyfarth Shaw Fairweather
& Geraldson, and Gregory P. Durham, Esq., Lau, Lane, Pieper, Conley &
McCreadie, and Paul E. Pompeo, Esq., for Johnson Controls World Services,
Inc., an intervenor.

Raymond M. Saunders, Esq., Department of the Army, 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 reasonably found the protester's proposed staffing levels too
     low in certain functional areas, based upon the agency's reasonable
     assessment of the time and effort required to perform the contract
     tasks and of the protester's approach to performing the work.
  2. Agency conducted meaningful discussions with the protester concerning
     its low evaluated staffing levels in certain functional areas where the
     agency informed the protester of the agency's concerns and of the
     amount by which the agency found the protester's proposed staffing low
     in these areas.
  3. Agency reasonably determined that employees within the function under
     study in a cost comparison under Office of Management and Budget
     Circular A-76 could be on the source selection evaluation board for the
     competition among private-sector offerors, where the agency determined
     that these employees would not be directly affected by the cost
     comparison because their positions were not in jeopardy.
  4. Protest of a competition among private-sector offerors under Office of
     Management and Budget Circular A-76, objecting that a source selection
     evaluation board evaluator whose spouse holds a position under study
     has a conflict of interest is denied, where the protester was not
     prejudiced by the evaluator's alleged conflict of interest because,
     even if that individual's evaluation is set aside, the protester's
     proposal was reasonably determined to be unacceptable.
  5. Protest challenging the agency's use of a contractor to assist the
     agency in the preparation of the most efficient organization (MEO) and
     the evaluation of private-sector offers, including the preparation of
     an independent government estimate, in connection with a solicitation
     issued under Office of Management and Budget Circular A-76, is denied,
     where the contractor used discrete sets of employees to perform the
     various tasks and used a "firewall" to keep confidential the
     preparation of the MEO and management study, as well as the evaluation
     of the offers.

DECISION

IT Facility Services-Joint Venture protests the rejection of its proposal as
technically unacceptable and the award of a contract to Johnson Controls
World Services, Inc. under request for proposals (RFP) No. DABT60-98-R-0017,
issued by the Department of the Army for public works and logistics services
at Fort Lee, Virginia. IT challenges the Army's evaluation of its proposal
and conduct of discussions, and asserts that the competition was tainted by
conflicts of interest.

We deny the protest.

The RFP was issued as part of a cost comparison under Office of Management
and Budget (OMB) Circular No. A-76 to determine whether it would be more
economical to accomplish the work in-house using government employees or by
contract. In the event that a contractor was selected to perform these
functions, the RFP provided for the award of a cost-plus-award-fee contract
for a base year with 4 option years and with phase-in and phase-out periods.
RFP at F-1.

The RFP provided a detailed performance work statement (PWS) describing the
required services. The work to be performed was divided into two functional
areas: public works and logistics. In the public works area, the contractor
will provide buildings and structures maintenance, family housing
maintenance, utility systems operation and maintenance,
heating/ventilation/air conditioning systems operation and maintenance,
dining and laundry facility equipment maintenance, grounds maintenance,
surfaced area maintenance, pest control, and "U-DO-IT" services. In the
logistics area, the contractor will provide transportation services, base
supply services, and material maintenance. For each of these functional
areas, the PWS provided historical workload data to allow offerors to
forecast the anticipated level of effort required and provided detailed
performance specifications. The RFP also provided for a pre-proposal
conference, site visit, and tour of the facilities. RFP at L-11.

Offerors were informed that proposals would be evaluated in a two-phased
procedure. First, the agency would evaluate offerors' past performance,
experience, key personnel, and phase-in and quality control plans. As a
result of this evaluation, offerors would be informed that they were either
a "possible candidate for award (PCA)" or "unlikely candidate for award
(UCA)." RFP at L.14. Those offerors that were identified as PCAs and those
that were UCAs but wished nonetheless to proceed were asked to make an oral
presentations in the second phase. The agency would then evaluate, in this
phase, offerors' oral presentations, technical approaches, staffing plans,
cost proposals, subcontracting participation plans, and completed
solicitation documents.

The RFP provided that the basis for award would be the technically
acceptable offer with the lowest probable cost. Offerors were informed that
proposals would be evaluated as either acceptable, marginal, or
unacceptable, and that only offers that were technically acceptable after
assessing all factors and subfactors would be considered for award. The
following technical evaluation factors were identified: past
performance/experience; technical capability ("How the contractor will
accomplish the requirements of the PWS"); management approach; and
subcontracting. Subfactors were identified for each of these factors.

The RFP also provided instructions for the preparation of proposals and the
conduct of the oral presentations. Among other things, offerors were
directed to provide a written technical approach, not exceeding 20 pages,
that corresponded to the oral presentation and was cross-referenced to the
cost proposal and staffing plan. RFP at L.16. With respect to the oral
presentation, offerors were informed that no more than 120 "slides" could be
presented and that only those slides that were projected and substantially
addressed would be considered. At the oral presentation, offerors were
required to demonstrate their understanding of the work required by the PWS.
RFP at L.21.c.15.

The Army received six offers, including those of IT and Johnson Controls.
All of the offerors were found to be PCAs and were invited to make oral
presentations. Agency Report, Tab G.1., Source Selection Evaluation Board
(SSEB) Phase I Report. All of the offerors made oral presentations, which,
along with the remainder of the offerors' proposals, were evaluated by the
SSEB. The SSEB determined that only Johnson Controls' initial proposal was
technically acceptable.

IT's initial technical proposal was determined to be marginal, but capable
of being made acceptable if discussions were conducted. IT's marginal rating
was attributable to the SSEB's assessment that IT's staffing in certain
areas was too low, that IT failed to to provide sufficient detail to allow
staffing to be tracked directly to a task, and that although IT stated that
it would use "cross leveling of positions to accommodate many duties" this
was not explained. In addition, IT's staffing in the cost proposal was lower
than that proposed in the technical proposal. Agency Report, Tab G.2., SSEB
Initial Phase II Report. IT's staffing shortfall was found to fall within
two areas: scheduled tasks and work orders. [1] As a tool to evaluate the
offerors' proposed staffing levels, the SSEB compared the offerors' proposed
full-time equivalents (FTE) for each functional area to a range of estimated
realistic FTEs for each functional area; the SSEB then reviewed offerors'
proposed staffing levels taking into account their respective technical
approaches to accomplishing the work with the proposed staffing.

Discussions were conducted with the offerors. IT received 22 specific
questions concerning its initial proposal. Among other things, the Army
informed IT of the discrepancy in the staffing proposed in its technical and
cost proposals. The agency also asked IT the following:

The staffing in the area of scheduled tasks appears low by approximately
[DELETED] manhours per year. Please review.

The staffing in the area of Work Orders appears low by approximately
[DELETED] manhours per year. Please review.

The details provided on staffing were not sufficient to allow for tracking
the staffing directly to the efforts to be performed. Please provide
explanation as to how each requirement of the PWS will be covered by the
staffing.

Agency Report, Tab E.6, Request for Final Proposal Revisions (FPR), encl. 2,
at 1, 3.

IT responded to the agency's discussions in a FPR. With respect to its
staffing in the scheduled tasks area, IT made no adjustment in its proposed
staffing, contending that its proposal estimates were accurate and
explaining why it felt this was the case. With respect to its staffing in
the work order area, IT slightly increased its proposed staffing (by
[DELETED] hours), stating that, based upon IT's experience on other similar
contracts, its staffing was adequate. Agency Report, Tab E.8, IT FPR, at
3-4.

The SSEB found that IT's FPR did not resolve the evaluators' concerns with
the firm's proposed staffing and concluded that IT's offer was not
technically acceptable. Specifically, in the scheduled tasks portion of the
public works area, the SSEB determined that IT's proposed staffing was below
the low, acceptable limit by [DELETED] FTEs; specifically, the SSEB
calculated that between [DELETED] and [DELETED] FTEs were required to
perform the scheduled tasks functional areas, but IT proposed only [DELETED]
FTEs to perform these functions. Although this was primarily in the family
housing (for which the SSEB estimated that between [DELETED] and [DELETED]
FTEs were required and IT proposed only [DELETED] FTEs) and utilities (for
which the SSEB estimated between [DELETED] and [DELETED] FTEs were required
and IT proposed only [DELETED] FTEs) functional areas, IT's proposed
staffing was low in almost all the scheduled tasks functional areas. The
SSEB concluded that IT could not perform these requirements with the
staffing proposed by cross-training and cross-utilizing personnel, as IT
promised, because IT simply did not propose sufficient overall staff from
which to draw. Agency Report, Tab I, Post-Negotiation Memorandum, at 4.

IT's response to the agency's question regarding the firm's staffing in the
work order area was also found not to allay the evaluators' concerns.
Although the Army had informed IT that its proposed staffing in this area
was low by nearly [DELETED] staff hours, IT increased its staffing by only
[DELETED] hours. The SSEB concluded that IT's proposed work order staffing
was too low by [DELETED] FTEs; the SSEB estimated that a minimum of
[DELETED] FTEs were required to adequately perform the public works area,
but IT proposed only [DELETED] FTEs to perform this work. In this regard,
the SSEB determined that IT had not proposed "any innovative approaches to
perform the work and that the overall numbers of FTEs proposed [were] so low
in every area, there were not additional FTEs from which the work order area
could draw if necessary." Id.

The agency's source selection advisory council (SSAC) and source selection
authority (SSA) were briefed on the results of the technical and cost
evaluations. The SSEB found that all of the offers, but IT's, were
technically acceptable and recommended that the source selection authority
select Johnson Controls, on the basis of its low evaluated cost offer, to be
the private contractor to compete against the agency's most efficient
organization (MEO) in the public-private competition. [2] Agency Report, Tab
J, SSAC/SSA Briefing, at 25. The SSA adopted this recommendation.

In the public-private cost comparison, the Army determined that retaining
the services in-house was more cost effective than awarding a contract to
Johnson Controls. After a debriefing, IT filed an agency-level protest
challenging the evaluation of its proposal and the conduct of discussions,
and asserting that some members of the SSEB had conflict of interests. In
addition, IT and Johnson Controls filed appeals to the agency's
Administrative Appeal Board (AAB) challenging the agency's cost comparison.
The Army denied IT's agency-level protest, and IT filed this protest with
our Office. Subsequently, the AAB granted IT's and Johnson Controls' appeals
in part, finding that the MEO was understated and directing adjustments to
the MEO. The MEO was adjusted by adding approximately 49 FTEs, which
resulted in the selection of Johnson Controls' offer to perform the work.

IT complains that the Army unreasonably found IT's proposed staffing low,
which resulted in the improper exclusion of IT's low-priced offer from the
competition. IT contends that, given its experience in providing services of
this type under three other facility management contracts, its proposed
approach and staffing should have been found acceptable. [3] IT challenges
the agency's use of an estimated staffing range for each functional area in
its evaluation of proposals, and contends that the Army has not demonstrated
the reasonableness of its staffing estimates, that the estimates are based
upon information not available to the offerors, and that the Army
miscalculated the number of staffhours required to perform the work orders
in the logistics area and that a proper calculation would demonstrate that
IT's proposed staffing level for this area was acceptable.

Our review of the competition among private offerors, conducted as part of
an A-76 study, is no different from our review of any other competition for
a federal contract. In reviewing protests against allegedly improper
evaluations, we do not independently reevaluate proposals. Rather, our
Office examines the record to determine whether the agency's judgment was
reasonable and in accord with the RFP criteria. Abt Assocs., Inc.,
B-237060.2, Feb. 26, 1990, 90-1 CPD para. 223 at 4. The protester's mere
disagreement with the agency's judgment does not establish that an
evaluation was unreasonable. UNICCO Gov't Servs., Inc., B-277658, Nov. 7,
1997, 97-2 CPD para. 134 at 7.

First, we find reasonable the evaluation methodology used by the Army to
assess the realism of IT's and the other offerors' proposed staffing levels.
Prior to the competition, an independent government estimate (IGE) was
prepared by Management Analysis, Incorporated (MAI) for the Army. The IGE is
a line-by-line estimate of the costs associated with the work requirements
of the PWS. The Army has provided statements from MAI personnel that state
that the IGE was prepared from historical Fort Lee data, cost information
from RS Means Company, Inc., [4] and technical estimates of MAI staff
employees and Fort Lee personnel. The IGE was reviewed by the four Fort Lee
SSEB members, who developed a realistic range of staffing for each
functional area. [5]

In evaluating the offerors' proposed staffing levels, the SSEB compared an
offeror's staffing for a functional area against the agency's stated range
for the area, using a 10-percent deviation factor. The agency did not
mechanically evaluate offerors' proposed staffing against its estimated
range. Rather, as explained by the contracting officer,

[t]he actual determination was a subjective decision based on the
information at hand including the offeror's proposed approach. In other
words, an offer that was more than 10 [percent] low in one or more areas
could still be acceptable, if the overall staffing was considered adequate
or if an innovative approach had been proposed. Further, the 10 [percent
deviation factor] gave each proposal an increased chance of being acceptable
and worked to the advantage of the offerors.

Contacting Officer's Statement at 7.

The protester complains that this explanation, as well as the remainder of
the record, fails to prove that the agency's estimates are reasonable. We
disagree. Here, the record contains a detailed explanation as to how the
agency developed its range of staffing estimates. The agency's calculations
and explanations appear reasonable on their face. As the agency notes, IT
relied upon a similar explanation, in response to the agency's discussion
questions, when IT argued that its lower staffing in the scheduled tasks
area should be found reasonable because it was based upon IT's historical
data and the use of productivity standards, such as those supplied by RS
Means. See Agency Report, Tab E.8, IT Proposal Revisions, at 1.1-2. The
protester simply does not show that the agency's estimates are unreasonable.
Rather, the protester merely disagrees with the Army's judgment. That
disagreement does not demonstrate that the agency's estimates are
unreasonable. [6] UNICCO Gov't Servs., Inc., supra, at 7.

We also do not find that the agency's staffing estimates are based on
information that was required to be produced to the offerors. Specifically,
IT complains that in computing the estimated staffing range, the agency
relied upon its own knowledge of the condition of buildings and equipment
and considered travel time required to perform the required services. IT
argues that this information should have been disclosed to the offerors. [7]
We find no merit to this argument. Offerors were invited to participate in a
site and facilities visit, at which the offerors could make their own
judgments as to the condition of buildings and equipment and as to the
amount of travel time required. We do not think the agency was required to
disclose its own judgment as to these matters, inasmuch as the RFP sought to
test the offerors' understanding and ability to perform the contract
requirements.

IT also argues that the Army miscalculated the number of staffhours required
to perform the work orders in the logistics area and that a proper
calculation would demonstrate that IT's proposed staffing level for this
area was acceptable. Specifically, IT argues that the Army's average work
order time is overstated ([DELETED] hours on average compared to IT's
[DELETED] hours on average). In reply, the Army provided its calculations,
based upon the PWS, supporting its estimated average work order time. See
MAI Memo 2-6 (Sept. 12, 2000). The average time per work order was
calculated by taking the number of work orders provided in the PWS (8,025
work orders) [8] and applying the agency's judgment as to the level of
complexity and time required for each "craft" making up the work orders. [9]

From our review, we have confirmed the Army's calculations indicate an
average of [DELETED] hours per work order and that the Army did not
miscalculate this figure. While IT complains that the Army's judgment as to
the complexity and time to perform certain work order tasks is based upon
sources not available to IT, such as former military maintenance officers
and agency personnel, see IT Final Submission at 11, this complaint is again
essentially based upon IT's belief that the agency was required to disclose
in the RFP the Army's own judgment as to time required to perform the work
orders. However, as noted, the offerors were asked for their own judgment as
to the complexity and time required to perform the work orders.

IT also complains that the Army did not adequately consider its innovative
technical approach and past performance on other facility management
contracts. The record belies this complaint. Specifically, the SSEB noted
IT's proposed approach to cross-utilize personnel and claimed experience,
but found that IT's overall staffing was so low that the firm simply did not
have sufficient additional personnel from which IT could successfully "pull"
personnel to perform the work. Even though IT was provided with an
opportunity to further explain how it would be able to perform at its
proposed staffing levels, it did not avail itself of this opportunity, but
provided basically the same explanation in its FPR that was given in its
initial proposal. We find that the agency reasonably decided not to accept
IT's explanation for its low staffing, which was grounded upon IT's belief
that the Army should essentially accept IT's staffing estimates because of
IT's experience with other facility management contracts and its promised,
but insufficiently explained, cross-utilization of personnel.

In sum, we find from the record that the Army's evaluation of IT's proposal
as unacceptable because of its staffing shortfall was reasonable and in
accord with the evaluation criteria. [10]

IT also protests that the discussions the Army conducted were not meaningful
because the agency did not "inform [IT] that its proposal was in jeopardy of
being rejected if it did not increase its staffing levels in two
areas--[public works] Family Housing Maintenance and [logistics] work
orders." Protester's Comments at 14.

It is a fundamental precept of negotiated procurement that discussions, when
conducted, must be meaningful, equitable, and not misleading. 10 U.S.C.
sect. 2305(b)(4)(A)(i) (1994); Federal Acquisition Regulation (FAR) sect.
15.306(d)(1);
Du and Assocs., Inc., B-280283.3, Dec. 22, 1998, 98-2 CPD para. 156 at 7. For
discussions to be meaningful, they must lead offerors into the areas of
their proposals requiring amplification or revision. While the discussions
should be as specific as practical considerations will permit, the agency is
not required to "spoon-feed" an offeror as to each and every item that could
be revised so as to improve its proposal, however. Du and Assocs., Inc.,
supra, at 7-8; Biospherics, Inc., B-278278, Jan. 14, 1998, 98-1 CPD para. 161 at
6.

We find that the Army conducted meaningful discussions with IT because the
agency led the protester into the areas of its proposal requiring
amplification. Specifically, with respect to the agency's concern with IT's
staffing levels, the Army not only informed the firm that the agency viewed
its staffing as low for scheduled tasks (which provide for performance of
scheduled work in the public works area) and for work orders (which provide
for performance of work in the logistics area), but specifically identified
the amount of IT's staffing shortage. See Agency Report, Tab E.6, Request
for FPR, encl. 2, at 1, 3. The agency also asked that the offeror provide an
explanation as to how it intended to satisfy the PWS with its proposed
staffing. These questions should reasonably have led IT to address the
agency's evaluated concern with IT's staffing levels in these two areas as
well as its concern that IT's overall staffing was too low to allow for its
proposed cross-utilization of personnel. Having led IT to the areas of its
proposal requiring amplification, we do not think the Army was required to
warn IT, as the protester apparently believes, that failure to adequately
explain or adjust its staffing could result in the rejection of its
proposal. See Du and Assocs., Inc., supra, at 7-8.

The protester nevertheless contends that the Army had an obligation to
"continue discussions" with IT concerning the firm's staffing if the Army's
concerns were not allayed by IT's FPR. Protest at 28. The Army was not
required to reopen discussions with IT where the Army found, after providing
IT with meaningful discussions, that IT's FPR explanation of its staffing
did not alleviate the agency's concerns. See Nomura Enter. Inc., B-251889.2,
May 6, 1993, 93-1 CPD para. 490 at 5-6.

IT also protests that the evaluation of its proposal was tainted by
conflicts of interest of some members of the SSEB. Specifically, IT
complains that four of the seven SSEB members are employees at Fort Lee
working in the public works and logistics area that are under study. IT also
objects that one of these SSEB members from Fort Lee is married to a person
whose position is under study. Citing our decision in DZS/Baker LLC;
Morrison Knudsen Corp., B-281224 et al., Jan. 12, 1999, 99-1 CPD para. 19 at 7,
IT contends that we must presume prejudice to IT because of these conflicts.

In conducting government business, including the evaluation of proposals as
part of an A-76 study, the general rule is to avoid any conflict of interest
or even the appearance of a conflict of interest. FAR sect. 3.101-1. A conflict
of interest is found to exist when, "because of other activities or
relationships with other persons, a person is unable or potentially unable
to render impartial assistance or advice to the Government, or the person's
objectivity in performing the contract work is or might be otherwise
impaired." FAR sect. 9.501(d). We have held that at least the appearance of a
conflict of interest exists where, in an A-76 cost comparison, an evaluator
holds a position that is within the scope of the study and is subject to
being contracted out. See DZS/Baker LLC; Morrison Knudsen Corp., supra, at
5. A significant actual or apparent conflict of interest on the part of
evaluators whose positions are under study taints not only the individual
source selection, but undermines the integrity of the A-76 process and the
procurement system overall. GAO Letter to the Office of Government Ethics
Regarding Conflicts of Interest in A-76 Cost Comparisons, B-281224.8,
Nov. 19, 1999, 99-2 CPD para. 103 at 2.

The Army contends that no conflict exists here. Specifically, the Army
states that none of the four Fort Lee employees serving on the SSEB hold
positions that are under the study and that therefore these employees would
not be directly affected by whatever the outcome of the procurement. Agency
Report at 7-10. In selecting its SSEB members, the Army relied upon
Department of Army Pamphlet (DA Pam.) 5-20, "Commercial Activities Study
Guide," which states in pertinent part that the SSEB "cannot include any
members who may be directly affected by the cost comparison decision,
including members of . . . [t]he function under [commercial activities]
study." DA Pam. 5.20, sect. 6-20(c) (July 31, 1998) (emphasis added). This
provision was clarified by the Army not to preclude employees of the
function under study from serving on an evaluation board where those
employees' positions were not in jeopardy from the competition; these
employees were not seen as being "directly affected" by the cost comparison.
Agency Report, Tab 5, Army Decision of IT's Agency-Level Protest, encl. 2,
Memorandum of Assistant Chief of Staff for Installation Management, 2 (Aug.
16, 1999).

The protester does not assert that these evaluators' positions are in
jeopardy, but requests that we find that "no Government employee who works
in a functional area under study . . . may serve on an SSEB even if the
individual's job at present is not determined to be in danger upon award to
the private sector." Protester's Comments at 17. In this regard, the
protester argues that the evaluators' objectivity may be impaired because
of, among other things, their relationship with colleagues or subordinates
who hold positions that are at risk. Protest at 15.

A contracting officer is required to identify and evaluate potential
conflicts as early in the procurement process as possible, and to avoid,
neutralize or mitigate significant conflicts. FAR sect. 9.504(a). The
responsibility for determining whether a conflict exists rests with the
contracting agency, and we will not overturn the agency's judgment in this
regard unless it is shown to be unreasonable. Battelle Memorial Inst.,
B-278673, Feb. 27, 1998, 98-1 CPD para. 107 at 12.

Here, we find reasonable the Army's determination that the inclusion of
these Fort Lee employees on the SSEB did not create a conflict or apparent
conflict of interest. The protester has not shown that these employees will
be directly affected by the outcome of the procurement; that is, none of
these employees' positions are subject to being contracted out. [11]
Although IT is concerned that these employees may yet be biased because of
their employment within the areas under study, these concerns are too
speculative and tenuous to establish that the agency's judgment was
unreasonable. See American Mgmt. Sys., Inc., B-285645, Sept. 8, 2000, 2000
CPD para. __ at 6 (benefit from current procurement to a contractor is too
speculative and remote to establish a significant organizational conflict of
interest).

The Army also contends that no conflict exists with respect to the one SSEB
member who is married to someone holding a position under study. We disagree
and find the appearance of a conflict of interest, at the least. Unlike the
situation described above, this evaluator could clearly be directly affected
by the outcome of this procurement, inasmuch as her spouse's job is subject
to being contracted out. Although the Army contends that the evaluator's
spouse will likely lose his job even if the work is retained by the
government, this does not alleviate the apparent influence of her spouse's
employment situation upon the evaluator. In our judgment, this evaluator
should not have been allowed to serve on the SSEB. See Applied Resources
Corp., B-249258, Oct. 22, 1992, 92-2 CPD para. 272 at 3-4, recon. denied,
B-249258.2, Feb. 26, 1993, 93-1 CPD para. 180 (disqualification of a bidder was
reasonable where the spouse of the bidder's president was the contracting
officer's supervisor and had access to the government estimate).
Nevertheless, as explained below, we do not find any possible prejudice to
the protester because the conflict of interest in this case is not
significant.

Although it is true, as asserted by the protester, that we presumed
prejudice to the protester in DZS/Baker LLC; Morrison Knudsen Corp., supra,
at 7, in that case, the conflict of interest was so broad and severe (14 of
the 16 evaluators held positions under study) that there was no objective
way (such as by reviewing the evaluation record) to ascertain whether the
protester was potentially affected by the conflict. In contrast, in Battelle
Memorial Inst., supra, at 12, we did not find that a protester was
prejudiced by two evaluators' apparent conflicts of interest where the
record established that the conflicts of interest were not significant. As
is the case in all protests, where the record does not demonstrate that, but
for the agency's actions, the protester would have a reasonable chance of
receiving award, we will not sustain a protest, even if a deficiency in the
procurement is found. 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).

Here, the record consists of the individual scoring and narrative evaluation
sheets and consensus evaluation documents of the SSEB. From these documents,
we are able to compare the evaluation of the one, apparently conflicted,
evaluator with that of her colleagues. That comparison shows that the
conflicted evaluator's scores were in line with most of the SSEB. That is,
the individual scoring sheets establish that all but one evaluator (not the
conflicted evaluator) found IT's proposal to be marginal or unacceptable
overall; four of the remaining six evaluators (excluding the conflicted
evaluator) had problems with IT's staffing and found IT's proposal to be
either marginal or unacceptable with respect to its staffing. [12] Even
ignoring the conflicted evaluator's ratings, IT's proposal was found
marginal or unacceptable for its staffing, and there is nothing in this
record showing that the conflicted evaluator influenced the scoring of the
other evaluators. Given this record, we see no possible prejudice to IT
because of the evaluator's apparent conflict of interest.

IT also complains that MAI, the contractor that assisted the Army in the
creation of the MEO and of the IGE, has an improper organizational conflict
of interest that taints this procurement.

The rules governing the A-76 cost comparison process provide that the
government's management plan, MEO, and in-house cost estimate will be
prepared confidentially and kept separate from the evaluation of
contractors' bids or proposals. To this end, agencies are informed that
these documents are procurement sensitive and must be sealed and delivered
to the contracting officer prior to the receipt of offers. OMB Circular No.
A-76, Revised Supplemental Handbook, ch. 3, para. F, "Safeguarding the MEO." The
FAR also requires the confidentiality of the cost estimate of government
performance until after negotiations are completed and the most advantageous
offer has been selected and provides:

Personnel who have knowledge of the cost figures in the cost estimate for
Government performance shall not participate in the offer-evaluation process
unless the contract file is adequately documented to show that no other
qualified personnel were available.

FAR sect. 7.304(d).

The Army asserts that MAI's support activities were not improper because MAI
ensured that the MAI employees supporting the preparation of the MEO were
separate and distinct from the employees providing support for the IGE and
cost realism analysis; this separation was ensured by a "firewall" between
the two discrete sets of MAI employees performing these tasks.

From our review of the record, we find no basis to object to the Army's or
MAI's handling of the MEO and cost estimate for government performance. We
disagree with IT's apparent belief that MAI presents an organizational
conflict of interest merely because MAI, as an organization, was involved in
both preparing the MEO and assisting the evaluation teams; in fact, there is
no law or regulation prohibiting this practice. The record establishes that
the Army and MEO were well aware of the need to keep these functions
separate and confidential, and that this separation and confidentiality were
maintained by use of discrete sets of employees and a firewall.

IT nevertheless points to the written statements provided by the MAI
employees to the Army which IT asserts belie MAI's claimed effectiveness of
the "firewall" with respect to the private offerors' competition. [13] For
example, IT points to the statement of a MAI employee who reviewed the IGE
and provided cost realism support; this employee states that early in the
process she provided some ideas to the management study team, but never saw
the MEO nor received any feedback as to whether any of her comments were
accepted. [14] Contrary to the protester's arguments, we find that the
record actually supports the agency's statements that MAI created an
effective firewall that was not breached. That is, all of the MAI statements
show that no one having access to the MEO and cost estimate for government
performance was involved in the evaluation of private-sector offerors'
proposals.

The protest is denied.

Anthony H. Gamboa

Acting General Counsel

Notes

1. "Scheduled tasks" are scheduled preventive maintenance in the public
works areas, including buildings and structures, family housing, utilities,
dining facilities, grounds, surfaced areas, and pest control. Agency Report,
Tab H, Prenegotiation Objective Memorandum, at 4. "Work orders" refer to
work associated with repair of non-real property, such as, for example,
repair of fire trucks, snow removal equipment, generators, vehicles
(commercial and military), firing range equipment, tactical radios,
televisions, videocassette recorders, and small arms, in the material
maintenance function in the logistics area. Id. at 5.

2. IT's final proposed cost was $[DELETED] million and its evaluated cost
was $[DELETED] million. Johnson Controls' final proposed cost was $39.2
million and its evaluated cost was $[DELETED] million.

3. IT initially complained that, although the Army found IT's [DELETED]
proposed total FTEs low, the MEO only proposed 134 FTEs. Subsequent to its
protest to our Office, the AAB found that the MEO's proposed staffing was
understated and increased the MEO's proposed staffing by 49 FTEs. Although
IT suggests in its comments that the MEO staffing levels may have influenced
the evaluators, the record establishes that the evaluators did not have
access to the MEO and were unaware of the MEO's staffing levels.

4. RS Means provides construction cost information used by contractors,
engineers, and others to forecast costs of building and renovation projects
and facilities maintenance and repair.

5. For example, for the family housing maintenance functional area, the SSEB
stated a range of between [DELETED] to [DELETED] FTEs.

6. Throughout the protest, IT has asserted that the agency had not
demonstrated that its documentation and explanations reasonably support the
agency's actions. Where, as here, the agency's documentation and
explanations are not unreasonable on their face, we will not sustain such
protest grounds based only on the protester's disagreement. Ogden Support
Servs., B-270354.2, Oct. 29, 1996, 97-1 CPD para. 135 at 3.

7. Although IT also apparently believes that the IGE should have been
disclosed to the offerors, it cites no authority (nor are we aware of any)
requiring such disclosure.

8. Although, in response to the protest, MAI has performed a number of
calculations, which use various total work order numbers, we have relied
upon MAI's calculation based upon 8,025 work orders (see MAI Memo 2-6 (Sept.
12, 2000)), which is the number IT also relied upon in its protest. See
Protest, exh. O (July 14, 2000). IT did not challenge this figure in its
initial protest, and any objection now would be untimely.

9. "Craft" refers to trades, such as electrical mechanic or mobile equipment
servicing. The crafts, and the percentage of work orders associated with
them, were stated in PWS, Technical Exhibit 5.1-007.

10. IT also complains that its proposal should have been selected for award,
even if its proposed staffing was too low, because it offered the lowest
probable cost of performance, even after the Army's cost realism adjustment
to account for its low staffing. This argument ignores the specific
provision in the RFP that, to be considered for award, an offer must be
found acceptable under each of the evaluation factors and subfactors. Here,
IT's proposal was not acceptable under the staffing subfactors of the
technical capability factor.

11. The protester primarily relies upon the recent OMB amendment of the OMB
Circular A-76 Revised Supplemental Handbook on August 31, 2000, to provide
that "[i]ndividuals who hold positions in the function under study should
not be members of the team, unless an exception is authorized by the head of
the contracting activity." See 65 Fed. Reg. 54,568, 54,570, Sept. 8, 2000.
However, since this revision became effective after the date of the cost
comparison here, it is not applicable. We do not address whether the
revision would have affected the outcome here, if it had been applicable.

12. While IT complains of the differences in the scoring between the
evaluators and points to the scores of the one evaluator that would have
found IT's initial proposal acceptable, we note that it is not unusual for
evaluators to reach different conclusions and assign different scores when
evaluating proposals; the mere presence of such alleged "inconsistencies"
does not provide a basis for disturbing an award. See Executive Sec. & Eng'g
Techs., Inc., B-270518 et al., Mar. 15, 1996, 96-1 CPD para. 156 at 3 n.2.

13. We note that some of the MAI statements to which IT points would only
relate to alleged conflicts of interest in the public-private competition.
For example, IT points to the statement of an MAI employee who states that
he was a team leader for the effort to develop the PWS and had a minor role
in the development of the MEO with respect to the workload data in the
logistics area; he states, however, that he never saw the IGE or had any
involvement with the evaluation and source selection in the private-private
competition. Because IT was properly not selected to participate in the
public-private competition (which ultimately resulted in the award of
contract to Johnson Controls), it is not an interested party to raise these
concerns in this protest. See The Hines-Ike Co., B-270693, Mar. 15, 1996,
96-1 CPD para. 158 at 4-5.

14. An apparent conflict of interest could be said to exist in the
private-private competition where evaluators (or those supporting the
evaluation) had access to the MEO or cost estimate for government
performance. See FAR sect. 7.304(d).