TITLE: WPI, B-288998.4; B-288998.5, March 22, 2002
BNUMBER: B-288998.4; B-288998.5
DATE: March 22, 2002
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Decision
Matter of: WPI
File: B-288998.4; B-288998.5
Date: March 22, 2002
Michael W. Clancy, Esq., and Frank K. Peterson, Esq., Holland & Knight, for
the protester.
Rand L. Allen, Esq., Philip J. Davis, Esq., and Timothy W. Staley, Esq.,
Wiley Rein & Fielding, for Booz-Allen & Hamilton, Inc., an intervenor.
Carl J. Peckinpaugh, Esq., and Charles S. McNeish, Esq., for DynCorp
Information & Enterprise Technology, Inc., an intervenor.
Ronald G. Allen, Esq., Lt. Col. John M. Smith, and Clarence D. Long, III,
Esq., Department of the Air Force, for the agency.
Glenn G. Wolcott, Esq., and Michael R. Golden, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Agency reasonably determined that awardees' higher levels of resources
available to perform the contract constituted meaningful benefits to the
agency where the solicitation provided that an offeror's technical capacity
to respond to workload requirements around the world was the most important
consideration under two of three technical evaluation factors.
2. Protester's challenge to the manner in which the agency evaluated
offerors' costs/prices is not timely filed, where solicitation unambiguously
advised offerors of the agency's intended method of evaluation, and the
protester responded to the solicitation without objection.
3. Where solicitation established cost/price as the least important
evaluation factor and provided that it was ?significantly? less important
than the combined technical factors, we find no basis to question the
agency's judgment that the awardees'
technical superiority outweighed the protester's lower evaluated cost/price,
where that determination was supported by a documented, comprehensive
discussion of the various factors the agency considered.
DECISION
WPI protests the Department of the Air Force's award of contracts to
Booz-Allen & Hamilton, Inc. and DynCorp Information & Enterprise Technology,
Inc. under request for proposals (RFP) No. F41624-00-R-8042 to provide
global engineering, integration, and technical assistance (GEITA) services
related to environmental requirements. WPI asserts that the agency failed
to properly evaluate technical proposals, failed to properly evaluate
cost/price, and failed to perform a reasonable tradeoff between cost/price
and technical factors.
We deny the protest.
BACKGROUND
On April 17, 2001, the Air Force issued solicitation No. F41624-00-R-8042,
seeking proposals to provide a broad spectrum of support services for the
Air Force Center for Environmental Excellence (AFCEE) and for AFCEE's
customers worldwide. Specifically, the solicitation required support for
?any and all? AFCEE programs, including restoration, compliance, pollution
prevention, conservation and planning, fuel facility engineering, base
realignment and closure (BRAC) activities, and military family housing
initiatives, to include privatization and outsourcing activities. RFP, SOW,
at 4-5. The SOW emphasized the worldwide nature of the requirements, noting
that contractors will be required to provide on-site assistance at locations
around the world where ?the intensity, criticality, or other factors
warrant[] immediate attendance and full-time residence.? Id. at 17.
The solicitation contemplated award of up to four
indefinite-delivery/indefinite-quantity (ID/IQ) contracts, two competed
pursuant to full and open competition and two competed as small business
set-asides.[1] The solicitation also provided for source selection on a
?best value? basis, and stated that the agency intended to make awards on
the basis of initial proposals without conducting discussions. Regarding
source selection, the solicitation provided that awards would be based on
the following evaluation factors, listed in descending order of importance:
mission capability, past performance, proposal risk, and cost.[2] In
addition to establishing cost/price as the least significant factor, the
solicitation emphasized the limited weight to be given cost/price, stating
that it was ?significantly? less important than the other factors combined.
RFP sect. M002(A).
Regarding preparation of cost proposals, section L of the solicitation
directed offerors to submit fully burdened hourly rates for twenty specified
labor categories.[3] Offerors were advised that, for purposes of evaluating
cost/price, the agency would develop a ?composite average rate? for each
proposal by applying each offeror's labor rates to a ?typical core labor
hour mix required to complete [the] requirements under this contract,? [4]
and dividing each offeror's total costs to perform the pricing task by the
total hours within the task. RFP sect. M002(F).
Initial proposals were submitted prior to the June 1 closing date by ten
offerors, including DynCorp, Booz-Allen, and WPI; each of these offerors
subsequently made
an oral presentation to the agency. Proposals were thereafter evaluated
against the
technical evaluation factors listed above and the following ratings were
assigned:[5]
Booz-Allen DynCorp WPI
Mission Capability
--Technical Blue/Exceptional Blue/Exceptional [deleted]
Capacity
--Specialized Blue/Exceptional Blue/Exceptional [deleted]
Exper.
--Management Blue/Exceptional Blue/Exceptional [deleted]
--Small Business Green/Acceptable Green/Acceptable [deleted]
Past Performance Exceptional Very Good [deleted]
Proposal Risk
--Technical Low Low [deleted]
Capacity
--Specialized Low Low [deleted]
Exper.
--Management Low Moderate [deleted]
--Small Business Low Low [deleted]
As noted above, the solicitation provided that evaluation of offerors'
technical capacity was the most important subfactor under both the mission
capability factor and the proposal risk factor. The solicitation further
identified the specific types of technical capacity that would be evaluated,
stating that the agency would assess each offeror's:
Capacity to staff worldwide on-site services.
Capacity to support multiple tasks, worldwide, simultaneously, across the
entire spectrum of the Statement of Work.
Capacity to effectively respond to volume and complexity surges in workload
across the entire spectrum of the Statement of Work.
Capacity to leverage AFCEE's environmental team chiefs, project managers,
and government consultants in the execution of its customers' programs
across the entire spectrum of the Statement of Work.
Capacity to use, evaluate, and integrate information technology systems
pursuant to AFCEE's mission execution, [in accord with] the Statement of
Work.
RFP sect. M002(C)(1).
In rating WPI's technical capacity as [deleted] with [deleted], the agency
expressed its concern over [deleted]. The agency concluded that WPI's
reliance on [deleted] could lead to the [deleted]. The agency was also
concerned with WPI's [deleted]. The agency concluded that [deleted].
In contrast, the agency evaluated Booz-Allen's and DynCorp's technical
capacity as ?blue/exceptional? with ?low? proposal risk. The agency noted
that Booz-Allen's proposal reflected ?10,000 personnel in more than 90
offices on 6 continents with on-site staff in more than 25 locations,?
concluding that Booz-Allen had ?[e]xceptional volume and complexity surge
capacity in every facet of [the] statement of work.? Agency Report, Tab 6A,
Proposal Analysis Report, at 36. Similarly, the agency noted that DynCorp's
proposal reflected DynCorp's ?6,000 personnel, worldwide capacity in all 50
states and foreign locations including Europe, Asia, Middle East, and
Pacific Rim,? and concluded that DynCorp's proposal ?demonstrated an
exceptional technical capacity to exceed the minimum requirements.? Agency
Report, Tab 6A, Proposal Analysis Report, at 43-44.
In evaluating the cost/price associated with each offeror's proposal, the
agency provided copies of the proposals to the cognizant Defense Contract
Audit Agency (DCAA) offices, seeking input and verification from DCAA as to
the realism and reasonableness of the offerors' direct and indirect labor
rates. Based in part on DCAA's input, the contracting officer concluded
that, with certain adjustments,[6] DynCorp's, Booz-Allen's, and WPI's rates
were reasonable and realistic. The agency then calculated a ?composite
average rate? for each offeror, as contemplated by RFP sect. M002(F), discussed
above. The evaluated composite rates for DynCorp, Booz-Allen and WPI were
$81.04, $79.90, and [deleted], respectively.
Consistent with the solicitation provision disclosing the agency's intent to
make awards on the basis of initial proposals, the agency determined that
discussions were unnecessary and performed a cost/technical tradeoff based
on the above-described ratings and evaluated costs. Applying the relative
weights established in the solicitation, that is, that technical factors
were ?significantly more important? than cost/price, the source selection
authority (SSA) concluded that the benefits associated with the technical
superiority of DynCorp's and Booz-Allen's proposals outweighed their higher
costs. Accordingly, the agency selected DynCorp's and Booz-Allen's
proposals as offering the best value to the government and awarded contracts
to them on September 6. This protest followed.
DISCUSSION
WPI first protests the agency's determination that DynCorp's and
Booz-Allen's proposals were technically superior, particularly challenging
the agency's evaluation of technical capacity. In short, WPI complains that
the technical capacity reflected in its proposal should have been rated as
favorably as that of the awardees. We disagree.
The evaluation of technical proposals is a matter within the discretion of
the contracting agency since the agency is responsible for defining its
needs and the best method of accommodating them. In reviewing an agency's
evaluation, we will not reevaluate technical proposals, but instead will
examine the agency's evaluation to ensure that it was reasonable and
consistent with the solicitation's stated evaluation criteria and applicable
statutes and regulations. An offeror's mere disagreement with the agency
does not render the evaluation unreasonable. Matrix Int'l Logistics, Inc.,
B-277208, B-277208.2, Sept. 15, 1997, 97-2 CPD para. 94 at 4.
Here, as noted above, the solicitation specifically provided that proposals
would be evaluated with regard to each offeror's capacity to respond to
workload surges and to simultaneously support multiple tasks, across the
entire spectrum of contract requirements, at locations around the world.
WPI does not dispute that DynCorp's and Booz-Allen's proposals reflected
higher levels of available resources; rather, WPI maintains that the level
of resources it proposed was more than adequate to accomplish the task and,
therefore, that the additional resources reflected in the awardees'
proposals did not constitute additional value. More specifically, WPI
asserts that no more than 229 full-time equivalent personnel (FTEs) will be
required to perform the contract annually.[7] Based on that assumption, WPI
maintains that, ?by having [deleted] personnel ready to immediately commence
work, [WPI] had almost [deleted] the necessary capacity? and, therefore,
?any alleged [Booz-Allen] or DynCorp advantage in technical capacity is
'illusory'.? WPI Post-Hearing Comments (Feb. 26, 2002), at 3.
The agency agrees that WPI's technical capacity was considered adequate,
that is, ?acceptable.? Nonetheless, the agency maintains that the
significantly higher levels of resources offered by DynCorp and Booz-Allen
reflected real value in the context of the solicitation requirements here.
WPI's argument that any technical capacity beyond that offered by WPI is
without value is based on the assumption that contract performance will
occur at a uniform rate throughout the six-year performance period, and that
the distribution of labor actually required under subsequent task orders
will, similarly, be spread uniformly across the labor categories contained
in the pricing task. Neither of these assumptions is consistent with the
provisions of the solicitation. As noted above, RFP sect. M002(B)(1)
specifically advised offerors that their proposals would be evaluated with
regard to each offeror's capacity to ?respond to volume and complexity
surges? and to ?support multiple tasks, worldwide, simultaneously, across
the entire spectrum of the Statement of Work.? Similarly, the solicitation
specifically advised all offerors that the list of labor categories for
which offerors were required to submit rates ?is not exhaustive of all labor
categories,? and in fact, ?constitute[s] only an abbreviated sampling of
labor likely to be employed.? RFP sect. L-5.4.2.1. In light of the uncertainty
regarding the type and volume of resources that will actually be required,
as well as uncertainty regarding the timing of those requirements, we find
nothing unreasonable in the agency's conclusion that DynCorp's and
Booz-Allen's significantly higher level of available resources offered value
to the agency and that, overall, DynCorp's and Booz-Allen's proposals were
reasonably rated superior to WPI's with regard to the technical evaluation
factors.[8]
WPI next protests that the agency failed to properly evaluate the cost/price
associated with each proposal. As noted above, offerors were required to
submit hourly rates for various labor categories. However, the solicitation
also provided that submission of these rates did not bind an offeror to
actually provide any type of labor at any of the rates proposed.
Specifically, under the heading ?Cost of Pricing Information for Evaluation
Purposes Only,? the solicitation stated: ?For use in the Government's
evaluation matrix only, provide fully burdened hourly labor rates . . . for
the following labor categories.? RFP sect. L-5.4.2 (underlining in original).
Accordingly, WPI protests that the evaluated cost/price of each proposal
bears no relationship to the costs the Air Force will actually incur.
The non-binding nature of the ?proposed? labor rates is troubling, in our
view, particularly in the context of an ID/IQ contract where the levels of
effort that will actually be employed under subsequent task orders is
similarly subject to future negotiation. Where, as here, offerors
apparently have no legal obligation to perform the competed contract using
the ?proposed? rates, there is a reasonable basis for concern that offerors
may submit rates which, while potentially evaluated as reasonable, may be
considerably lower than the rates the offerors will actually use.[9]
Notwithstanding this concern, it is indisputable that, here, the
solicitation fully advised potential offerors of the precise manner in which
the agency intended to evaluate proposed costs/prices, and WPI responded to
that solicitation without objection.
Our Bid Protest Regulations require that a protest based on a solicitation
defect which, as here, is clearly apparent prior to the time set for
submission of proposals, must be filed prior to that time. Bid Protest
Regulations, 4 C.F.R. sect. 21.2(a)(1) (2000). An offeror may not ?sit on its
hands? in the face of an unambiguous solicitation provision which the
protester views as defective, then, upon failure to obtain award, challenge
the validity of the source selection decision on the basis of the alleged
defect. Accordingly, we will not, now, further consider WPI's assertion
that the manner in which the agency evaluated costs/prices in this
procurement was improper.[10]
Finally, WPI protests that the agency failed to perform a reasonable
tradeoff between costs/prices and the technical evaluation factors. In
short, WPI maintains that the agency could not reasonably conclude that the
benefits associated with DynCorp's and Booz-Allen's technical proposals were
worth the higher total costs.[11]
The procurement record here includes substantial documentation in support of
the agency's cost/technical tradeoff. Specifically, the source selection
decision states:
Pursuant to my GEITA program goal, requirements, and RFP criteria,
[Booz-Allen] and DynCorp are in a league of their own with regard to
performance potential, risks, and understanding of and ability to excel in
the GEITA program. They are superior to all other offerors. Their approach
and capability pose significantly less risk (virtually no risk in the most
important subfactors) in the diverse GEITA platform. Their costs are
reasonable, realistic, and very close ($79.90 and $81.04 respectively). . .
. The closest competitors to them are WPI, [deleted], and [deleted], who
pose a double threat to my GEITA objectives and needs: they bring
significant risk pursuant to a potential performance level considerably
lower than the awardees'.
WPI's, [deleted], and [deleted] costs are close together ([deleted],
[deleted], and [deleted], respectively), which suggests a definite
correlation between capability/risk level and cost, as with [Booz-Allen] and
DynCorp above.
* * * * *
Due to WPI's reliance on [deleted], they cannot support my diverse, higher
level GEITA requirements without significant detriment to technical mission,
schedule and/or cost. . . . We would have to continually search for
external contingencies in lieu of WPI's [deleted]. My mission execution
ability would be severely handicapped and my customers would be forced to
seek services elsewhere.
WPI's worldwide capability is limited and would severly hinder my ability to
sustain and progress in worldwide program execution.
As a very small prime, and especially considering the enormous challenges
resulting from their technical limitation and risk, WPI cannot [deleted] and
[deleted] their [deleted] without [deleted].
* * * * *
Therefore, I conclude that the high confidence and certainty in
[Booz-Allen's] and DynCorp's understanding, approach and proposed
performance far outweigh an ostensive potential cost difference that may be
discerned with sole regards to WPI's . . . proposed rates at the [deleted].
Source Selection Decision (Addendum) at 24-30.
Where a solicitation provides for a best value procurement and, as here,
emphasizes the significantly greater importance of technical factors over
cost/price, an agency has considerable discretion to award to an offeror
with a higher technical rating and higher price. Systems Integration &
Dev., Inc., B-271050, June 7, 1996, 96-1 CPD para. 273 at 6. Further, there is
no requirement that an agency attach specific dollar values to the benefits
associated with a technically superior proposal. Federal Acquisition
Regulation (FAR) sect. 15.308; Suddath Van Lines, Inc.; The Pasha Group,
B-274285.2, B-274285.3, May 19, 1997, 97-1 CPD para. 204 at 10; Kay and Assocs.,
Inc., B-258243.7, Sept. 7, 1995, 96-1 CPD para. 266 at 6.
Here, as discussed above, the agency reasonably concluded that DynCorp's and
Booz-Allen's proposals were technically superior to WPI's -- particularly
with regard to technical capacity, the most important consideration under
mission capability and proposal risk. Further, it is clear that the SSA
applied the solicitation's stated evaluation scheme, which made technical
superiority significantly more important than cost/price, and weighed WPI's
evaluated cost/price (as reflected in its composite rate) along with WPI's
[deleted], against the higher evaluated costs/prices of Booz-Allen and
DynCorp (as reflected in their composite rates) along with their relative
technical strengths. Based on that comprehensive analysis, quoted in part
above, the agency concluded that Booz-Allen's and DynCorp's proposals
represented the best values to the government. The fact that the SSA did
not calculate a total projected dollar cost/price for each proposal does not
invalidate the analysis. On this record, we find no basis to question the
reasonableness of the agency's judgment regarding its cost/technical
tradeoff, and WPI's assertions to the contrary constitute mere disagreement
with the agency's judgments.
The protest is denied.
Anthony H. Gamboa
General Counsel
-------------------------
[1] WPI did not compete under the small business set-aside portion of this
procurement; accordingly, we do not further discuss that portion of the
procurement.
[2] Under both mission capability and proposal risk, the solicitation
established the following subfactors, listed in descending order of
importance: technical capacity, specialized experience, management, and
commitment to small business. The solicitation advised offerors that these
subfactors would not be ?rolled up? into an overall rating for the primary
evaluation factor. RFP sect. M002(C).
[3] The categories listed were: Architect Sr.-level, Architect Mid-level,
Chemical Engineer Sr.-level, Chemical Engineer Mid-level, Chemist Sr.-level,
Chemist Mid-level, Civil Engineer Sr.-level, Civil Engineer Mid-level,
Environmental Engineer Sr.-level, Environmental Engineer Mid-level,
Geologist Sr.-level, Geologist Mid-level, Hydrogeo/Hydrologist Sr.-level,
Hydrogeo/Hydrologist Mid-level, Industrial Hygienist Sr.-level, Industrial
Hygienist Mid-level, Physical/Env. Scientist Sr.-level, Physical/Env.
Scientist Mid-level, Toxicologist Sr.-level, Toxicologist Mid-level. To
qualify as mid-level personnel, the solicitation required a bachelor of
science degree in the appropriate technical field and 8 years of
experience. To qualify as senior-level personnel, the solicitation required
a masters degree in the appropriate technical field and 12 years of
experience. RFP sect. L-5.4.2.1.
[4] The contracting officer described this ?core labor mix? as ?a pricing
task that represented the types of task orders that may be issue[d] against
the basic contract.? Agency Report, Tab 12, Price Competition Memorandum,
at 3. During the telephone hearing that GAO conducted in connection with
this protest, the agency's cost analyst testified that the pricing task
reflected ?44 percent of the work [expected to be performed] based on past
experience.? Hearing Transcript (Tr.) at 91.
[5] Under the mission capability factor, the solicitation defined a
?blue/exceptional? rating as ?[e]xceeds specified minimum performance, or
capability requirements in a way beneficial to the Air Force,? and a
?green/acceptable? rating as ?[m]eets specified minimum performance, or
capability requirements necessary for acceptable contract performance.? RFP
sect. M002(C). Under the proposal risk factor, the solicitation defined a
rating of ?low? risk as ?[h]as little potential to cause disruption of
schedule, increased cost, or degradation of performance,? and a rating of
?moderate? risk as ?[c]an potentially cause some disruption of schedule,
increased cost, or degradation of performance.? RFP sect. M002(E).
[6] WPI's rates were adjusted to reflect costs associated with [deleted].
DynCorp's rates were adjusted to reflect home office rates, as required by
the solicitation, rather than a blend of home office and regional rates.
These adjustments have not been challenged.
[7] WPI's calculation is based on the agency's pricing task that contained
a total of 193,840 hours, along with the agency price analyst's statement
that the pricing task represented 44 percent of the total contract
requirements. Based on this data, WPI calculates the total annual contract
requirements to be 440,545 hours and, assuming 1,920 hours per year, WPI
concludes that no more than 229 FTEs will be required to perform the
contract annually.
[8] In addition to challenging the agency's evaluation of technical
capacity, WPI argues that its rating for past performance should have been
higher than both of the awardees', and/or that the agency should have
afforded greater weight to WPI's past performance. WPI also takes exception
to its risk rating of [deleted] under the management subfactor of the
proposal risk factor. We have considered all of WPI's arguments, reviewed
the agency's extensive evaluation record supporting this procurement, and
find no basis to question the reasonableness of the agency's conclusion that
the awardees' technical proposals were materially superior to WPI's
technical proposal.
[9] For example, our review of the record here leads us to question the
rates submitted by WPI. As a general matter, WPI's [deleted].
Specifically, WPI responded [deleted].
[10] To the extent WPI's protest includes arguably timely assertions that
the awardees' rates - which were significantly higher than WPI's rates -
should have been evaluated as being unrealistically low, we have reviewed
the record, including the input the agency obtained from DCAA, and find no
merit in WPI's assertions.
[11] Again, to the extent this portion of WPI's proposal is based on its
dissatisfaction with the manner in which the agency advised offerors it
would evaluate costs, the protest is not timely.