TITLE: Rolf Jensen & Associates, Inc.
BNUMBER: B-289475.2; B-289475.3
DATE: July 1, 2002
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Rolf Jensen & Associates, Inc., B-289475.2; B-289475.3, July 1, 2002
DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective
Order. This redacted version has been approved for public release.
Decision
Matter of: Rolf Jensen & Associates, Inc.
File: B-289475.2; B-289475.3
Date: July 1, 2002
George W. Stiffler, Esq., and Donald A. Tobin, Esq., Bastianelli, Brown &
Kelley, for the protester.
Joel S. Rubinstein, Esq., and Andrew N. Cook, Esq., Bell, Boyd & Lloyd, for
Hughes Associates, Inc., the intervenor.
Lee Wolanin, Esq., Department of Transportation, for the agency.
Katherine I. Riback, Esq., Guy R. Pietrovito, Esq., and James A.
Spangenberg, Esq., Office of the General Counsel, GAO, participated in the
preparation of the decision.
DIGEST
1. Protest that the agency misevaluated the awardee's technical proposal
under staffing and past performance subfactors is denied where the record
shows that the evaluation was reasonable; protester's mere disagreement does
not render the agency's judgment unreasonable.
2. Protest that the agency did not accept the protester's proposed indirect
rates in the agency's cost realism evaluation is denied where the record
shows that the protester was not prejudiced, even assuming the protester's
objections are correct.
DECISION
Rolf Jensen & Associates, Inc. protests the award of a contract by the Volpe
National Transportation Systems Center, Department of Transportation (DOT),
to Hughes Associates, Inc. under request for proposals (RFP) No.
DTRS57-01-R-20023, for fire life safety program engineering services,
including the support of fire safety improvements at airport facilities.
We deny the protest.
The RFP provided for the award of a indefinite-delivery/indefinite-quantity
task?order contract. Depending upon the services required, task orders
would be issued on either a fixed?price or cost-reimbursement basis.
Offerors were informed that DOT intended to make award, considering cost and
technical factors, based on initial proposals without conducting
discussions. The identified two equally important technical factors:
technical capabilities and technical understanding. The technical
capabilities factor had two equally weighted subfactors: staffing and past
performance. The technical understanding factor had four various weighted
subfactors: technical and management approach, quality control and health
and safety approach, resources, and responses to the hypothetical tasks.
The solicitation provided that the technical factors were significantly more
important than the cost factor in the award selection, but in the event that
the evaluation under technical factors were essentially equal, cost might
become the determining factor in the award decision.
The RFP contained detailed proposal preparation instructions. Regarding the
staffing subfactor, offerors were instructed to identify personnel for this
contract, and to provide resumes that were "verifiable in that relevant
dates and names and addresses of educational institutions and employers must
be provided for all experience, education, and specialized training
claimed."[1] RFP � L.6.3, part 1.d. With respect to the past performance
subfactor, the RFP requested past performance information for both the
offeror and the major proposed subcontractors. Specifically, the offeror
was to provide a list of contracts that it was "currently performing or had
completed within the past [3] years," and from this list the offeror was to
select no more than five contracts that it considered "the most relevant in
demonstrating its ability to perform the proposed effort." RFP � L.6.3,
part 2.
The cost evaluation was to be based on the offeror's proposed costs for
estimated labor hours for 1 year for various stated labor categories. The
RFP provided for a cost realism evaluation to assess the probable cost,
which would be used to determine the best value to the government, and
provided cost schedules (numbered 2 through 8) that offerors were to use to
provide cost information, such as indirect rates and subcontract
information. The solicitation cautioned that "[a]ll costs, rates, factors,
and calculations must be shown and supporting rationale and documentation
included." RFP � L.7.4.
Four proposals, including those of Jensen and Hughes, were submitted and
evaluated by the agency's technical evaluation team (TET). Written requests
for clarification were sent to all of the offerors. With respect to
Hughes's offer, DOT asked Hughes to explain inconsistencies in the costs
identified in various cost schedules for the firm's subcontract costs. DOT
similarly asked Jensen to clarify explain inconsistencies in the costs
identified in various cost schedules for the firm's subcontract costs.
The proposals were evaluated as follows:
Offeror Technical Technical Score Proposed Cost Evaluated
Rating (out of 100 Cost
points)
Jensen Exceptional 91.120 $1,131,955 $1,187,044
Hughes Exceptional 89.627 $ 996,951 $1,007,409
Offeror X Acceptable 81.634 $1,328,198 $1,328,198
Offeror Y Acceptable 74.670 $1,158,325 $1,158,325
Agency Report, Tab 25, Source Selection Decision at 2.
The TET advised the contracting officer that the technical proposals of
Jensen and Hughes were "essentially equal" based on the results of the
technical evaluation of their respective proposals. Agency Report, Tab 22,
Memorandum from TET Chairman to Contracting Officer (Nov. 30, 2001).
In the cost evaluation, DOT upwardly adjusted Hughes's proposed cost by
$10,458 to reflect an inconsistency in what Hughes proposed as a
subcontractor cost and what the subcontractor's sealed proposal showed for
that cost. The DOT also upwardly adjusted Jensen's proposed costs by
$55,089, which reflected the agency judgment that the firm had not supported
the creation of proposed new indirect burden rates for subcontract costs and
other direct costs (ODC), as explained below.
Specifically, Jensen had proposed the following indirect rates in its costs
proposal:
Overhead [DELETED]
General & Administrative (G&A) [DELETED]
Fringe Benefits [DELETED]
Subcontract Burden [DELETED]
ODC Burden [DELETED]
Jensen Cost Proposal, sch. No. 8. DOT requested that the Defense Contract
Audit Agency (DCAA) audit Jensen's proposed direct labor and indirect
rates. DCAA found that the firm's proposed overhead, G&A, and fringe
benefits rates were based upon calendar year 2000 actual rates, and had been
previously accepted by DCAA in 2001. DCAA took exception, however, to the
firm's proposed subcontract and ODC burden rates because "[t]hese proposed
rates are not normally used by the contractor and represent an estimate
created only for this proposal." Agency Report, Tab 24, DCAA Audit Report
of Jensen (Oct. 24, 2001), at 3. Although DCAA requested that Jensen
provide support for its proposed separate subcontract and ODC burden rates,
the firm did not provide the requested supporting information. DCAA noted
that Jensen developed its G&A rate using a total cost input base, and that
on a cost-type contract, indirect costs incurred for support and
administrative efforts related to subcontracts and ODCs would normally be
recovered in the application of the G&A rate to total cost input, which
includes subcontract and ODC costs in the base.[2] Id. at 4-5. DCAA also
stated that it discussed its audit findings with the protester's chief
financial officer and treasurer, "who understood our concerns and agreed
that any indirect effort incurred on this contract related to subcontracts
and/or ODC's would be charged indirectly in accordance with [Jensen's]
normal practice." Id. at 4.
DOT's contract price analyst agreed with the DCAA recommendation that DOT
not accept Jensen's proposed subcontract and ODC burden rates.
Specifically, the analyst found that, although the contractor could formally
change its indirect cost structure to provide for segregating subcontract
and ODC costs, there was no evidence that Jensen had developed a methodology
to segregate its existing G&A expenses into newly created subcontract and
ODC cost pools. Additionally, there was no evidence that the firm had
prepared an estimate for its new subcontract and ODC rates; instead, it
appeared that it had selected an unsupported [DELETED] percent rate for
each. Thus, in the cost realism evaluation, the agency, consistent with
DCAA's advice, applied Jensen's [DELETED] percent G&A rate to the proposed
subcontract and ODC costs, instead of the [DELETED] percent rate proposed,
which resulted in the upward cost adjustment.
The contracting officer adopted the evaluators' determination that the
technical proposals of Jensen and Hughes were "essentially equal" and
selected Hughes's lower evaluated cost offer as reflecting the best value to
the government. Agency Report, Tab 25, Proposal Evaluation Results/Source
Selection Decision, at 17. Award was made to Hughes on January 4, 2002, and
Jensen filed an agency-level protest. After denial of the agency-level
protest, this protest followed.
Jensen first complains that the agency improperly evaluated the technical
proposal of Hughes under the staffing and past performance subfactors of the
technical capabilities factor.
In reviewing protests against allegedly improper evaluations, it is not our
role to 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 �
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 � 134 at 7.
The protester contends that a number of the awardee's resumes for proposed
staff were not "verifiable," as required by the solicitation. Specifically,
DOT found, in its technical evaluation, that 4 of the 25 resumes submitted
by Hughes for its management, engineering, and subject matter expert staff
were not verifiable with respect to dates for education and employment
experience. DOT identified this lapse as a weakness in the awardee's
proposal under the staffing subfactor. Agency Report, Tab 21, Technical
Evaluation Report, at 15. The protester argues, however, that Hughes's
proposal should have been rejected or more significantly technically
downgraded for this failure.[3] Protester's Comments at 13.
We find reasonable the agency's evaluation of Hughes's resumes and proposed
staffing, despite the agency's conclusion that four of the resumes were not
"verifiable." The RFP required that resumes be submitted for proposed staff
to allow the agency to evaluate the qualifications of the offerors'
personnel "in terms of technical expertise, experience, education, and
qualifications relevant to the functional area requirements of this
contract." RFP � L.6.3. Here, based on our review, the agency reasonably
concluded that sufficient information was provided on the four resumes to
allow for this evaluation.[4] The resumes identify the individual's
academic credentials and overall years of experience (which range from 14 to
35 years of experience), and describe with some specificity each
individual's past job responsibilities. Although it is true that these four
resumes do not identify an address for employers or dates of employment for
each past job responsibility, we do not think that this required the
rejection of Hughes's proposal or a finding that this substantially affected
the agency's evaluation of qualifications of Hughes's proposed staff. In
this regard, we note that the solicitation specifically provided that the
experience and education requirements, which correspond to years of
experience and degrees, "shall not be considered minimum requirements" for
positions, including senior project engineers and staff engineers; rather,
the RFP states that these personnel requirements were for "guidance purposes
only." RFP, attach. J.1. Under the circumstances, we think that the agency
appropriately treated as a proposal weakness the fact that four of Hughes's
resumes were not "verifiable," and did not overrate Hughes's proposal under
the staffing subfactor, particularly given the other strengths evaluated in
Hughes staffing under this subfactor.[5]
With respect to the past performance evaluation, the protester objects that
the agency credited Hughes for the past performance experience of one of its
subcontractors. We find no basis to object to the agency's evaluation in
this regard. The Federal Acquisition Regulation (FAR) directs agencies to
take into account past performance information regarding predecessor
companies, key personnel, and major subcontractors when such information is
relevant to an acquisition. FAR � 15.305(a)(2)(iii). Thus, we have found
that the experience of a proposed subcontractor properly may be considered
in determining whether an offeror meets an experience requirement in the
solicitation where it is not expressly prohibited by the RFP. Premier
Clearing Sys., Inc., B-249179.2, Nov. 2, 1992, 99-2 CPD � 298 at 4;
AeroVironment, Inc., B?233712, Apr. 3, 1989, 89-1 CPD � 343 at 4. Here, the
RFP not only did not restrict the consideration of proposed subcontractors'
experience in the evaluation of proposals, but requested that offerors
submit past performance information for themselves and proposed major
subcontractors. RFP � L.6.3.
The protester also objects that the agency considered Hughes's own past
performance history as a subcontractor. This, too, was permitted by the
solicitation, however. In fact, the RFP expressly provided that
"[i]nformation regarding the Offeror's performance as a subcontractor with
the Federal Government will be obtained from the prime contractor." RFP �
L.6.3.
The protester also complains that two of the five contracts identified by
Hughes as relevant contracts were not completed within the past 3 years, as
required by the RFP. DOT recognized this fact in its technical evaluation;
this was the only weakness identified in Hughes's past performance. See
Agency Report, Tab 21, Technical Evaluation Report, at 16. Moreover, as
noted by the agency, one of these contracts missed the 3-year period by only
1 month. See Agency Report, Tab 35, Hughes's Proposal, at 76. We find no
basis to object to the agency's evaluation simply because two of the five
contracts identified as relevant by Hughes were not within 3 years of this
acquisition. In this regard, the RFP did not require offerors to submit a
minimum of five relevant contracts but only instructed offerors to "select
no more than five (5) contracts that it considers the most relevant." RFP �
L.6.3 (emphasis added). Here, Hughes provided three (and arguably four)
relevant contracts that provided DOT with a basis to evaluate Hughes's past
performance.
Jensen also protests that the agency misevaluated its proposal and failed to
recognize its "clear technical superiority" in the areas of work transition
and workforce distribution. The protester contends that "[w]hile [Jensen]
was not technically an incumbent," the contract support it had provided to
the Federal Aviation Administration (FAA) "set the standard upon which other
contractors will be evaluated." See Agency Report, Tab 28, Agency-Level
Protest, at 2.
With respect to the protester's arguments concerning work transition, as
noted by the agency, this is the agency's first acquisition of the fire life
safety program engineering services sought by the RFP. Thus, there is no
incumbent contractor, from which another contract would need to transition
the work and thus no basis to find Jensen's proposal technically superior in
this respect.[6] Supplemental Agency Report at 1.
With respect to workforce distribution, the agency states that although
there was no specific evaluation factor to assess workforce distribution, it
was considered as a part of the resources subfactor to the technical
understanding factor. Under this subfactor, the agency assessed "the
resources available for supporting the execution of the [statement of work]
such as office locations, equipment, and technical support
capabilities."[7] RFP � M.2.2. Both Jensen and Hughes received exceptional
scores under this subfactor, reflecting the fact that both firms offered
nationwide office locations to perform the contract. See Agency Report, Tab
21, Technical Evaluation Report at 19, 34. Although Jensen claims that it
has more widespread and better supported offices than Hughes, it does not
show the agency assessment in this respect was unreasonable.
In sum, we find no basis in the record to object to the agency's technical
evaluation and judgment that the proposals of Jensen and Hughes were
essentially technically equal. Although the protester clearly disagrees
with the agency's judgment, its disagreement does not show the evaluation to
be unreasonable. UNICCO Gov't Servs., Inc., supra, at 7.
The protester also challenges the agency's decision not to accept its
proposed subcontract and ODC burden rates and to upwardly adjust its cost
proposal to reflect the application of the firm's higher G&A rate to these
costs. In this regard, Jensen complains that it should have been given an
opportunity to explain these proposed indirect rates. Additionally, the
protester complains that Hughes was given an opportunity to explain an
inconsistency in its cost proposal and that this constituted discussions
that required DOT to engage in discussions with the protester regarding its
subcontractor and ODC burden rates.
We need not address these objections, because the record establishes that
Jensen was not prejudiced, even assuming that there is any merit to the
protester's arguments. Competitive prejudice is an essential element of
every viable protest. Lithos Restoration, Ltd., B-247003.2, Apr. 22, 1992,
92-1 CPD � 379 at 5. Where the record does not demonstrate that, but for
the agency's actions, the protester would have had a reasonable chance of
receiving the award, our Office will not sustain a protest, even if a
deficiency in the procurement is found. McDonald-Bradley, B?270126, Feb. 8,
1996, 96-1 CPD � 54 at 3; see Statistica, Inc. v. Christopher, 102 F.3d
1577, 1581 (Fed. Cir. 1996).
As noted above, the technical proposals of Jensen and Hughes were reasonably
found to be essentially equal, and, thus, Hughes's lower evaluated cost
properly became the basis for award. See General Research Corp., B-241569,
Feb. 19, 1991, 91-1 CPD � 183 at 10, aff'd, American Mgmt. Sys., Inc.; Dep't
of the Army--Recon., B?241569.2, B-241569.3, May 21, 1991, 91-1 CPD � 492.
Thus, even accepting Jensen's arguments that DOT should have accepted the
firm's proposed costs and that Jensen should have been given an opportunity
to explain its proposed indirect rates (given that Hughes received the
opportunity to explain inconsistencies in its cost proposal),[8] Hughes's
evaluated cost would remain lower than Jensen's.[9] Because Jensen would
not be in line for award, even were we to accept its cost evaluation
arguments, we find that there is no reasonable possibility that Jensen was
prejudiced.[10] See NV Servs., B-284119.2, Feb. 25, 2000, 2000 CPD � 64 at
18-21; Delta Research Assocs., Inc., B-254006.2, Nov. 22, 1993, 94-1 CPD �
47 at 9.
The protest is denied.
Anthony H. Gamboa
General Counsel
-------------------------
[1] Resumes were not required for all individual technical staff members,
but only for specified positions, such as, for example, the project manager,
senior project engineers, and staff engineers.
[2] In its cost proposal, Jensen states that its G&A, fringe, and overhead
rates were developed for the firm by DCAA and were based upon historical
data. Jensen also states that its G&A rate was determined by a total cost
input base. Jensen Cost Proposal, sch. No. 8.
[3] Jensen also complains that the agency's evaluation record indicates that
Hughes identified a subcontract employee as a "lead senior program engineer"
during Hughes's oral presentation but that individual's resume was not
included in Hughes's proposal. The agency and Hughes explain that no resume
was submitted for this person, because he was not offered as a senior
program engineer or intended to be a key person on this contract. In any
event, we note that Hughes submitted resumes for 10 individuals identified
as senior program engineers.
[4] Jensen does not otherwise challenge the experience and qualifications of
these four individuals.
[5] As noted by the agency, Hughes's proposal received more strengths and
fewer weaknesses (including the one discussed above) than did Jensen's
proposal. Jensen does not otherwise specifically challenge the staffing
subfactor evaluation.
[6] Similarly, Jensen asserts that Hughes would have higher "transitional"
costs for "training and staffing," which were not accounted for in the cost
realism evaluation. However, neither Jensen nor the record shows a basis to
question the finding that Hughes included all appropriate training and
staffing costs in its cost proposal, as was found by the agency in the cost
realism evaluation.
[7] The RFP did not provide that offerors would receive additional credit
for having office locations within close proximity to particular Volpe
National Transportation Systems Center sponsors, such as the FAA.
[8] Jensen does not claim that it would have made any other changes in its
proposal if discussions had been conducted. In any case, as indicated, both
Jensen and Hughes were given similar opportunities to clarify apparent
inconsistencies in their subcontract costs, which do not appear to have
constituted discussions.
[9] Jensen also argues that DCAA recommended in its audit report that no
indirect rate be applied to the firm's proposed subcontract costs and ODCs
and therefore Rolf Jensen's evaluated costs would be even lower. We believe
that Jensen misunderstands DCAA's audit advice, which recommended
disallowing the separate burden rates for subcontract costs and ODCs because
these costs were included in the firm's G&A pool. In this regard, as noted
above, DCAA and DOT recognized that the protester's proposed G&A rate was
based upon a historical rate using a total cost input base that included
subcontract costs and ODCs, and Jensen's cost proposal indicated that its
G&A rate was determined by a total cost input base. In any event, Jensen
does not show that its evaluated cost would be lower than Hughes's evaluated
cost, even if the protester's proposed subcontract costs and ODCs were not
burdened.
[10] The protester also raises a number of other concerns with the
evaluation of Hughes's proposed costs, none of which would result in any
possible change to the relative cost standing of the two firms.
Specifically, Jensen complains that DOT did not request a formal DCAA audit
of Hughes's indirect rates, as the agency had done with respect to Jensen's
proposed rates. DOT explains that a formal audit of Hughes's rates was not
required because Hughes's proposed indirect rates were based upon actual,
historical rates for the period between December 31, 2000 and July 31,
2001. Rather than obtain a formal DCAA audit report, DOT obtained informal
audit advice from DCAA, which informed DOT that Hughes's accounting system
had been found by DCAA to be acceptable for performance of government
contracts and that Hughes proposed indirect rates consistent with Hughes's
historical rates that had been accepted for forward pricing purposes.
Agency Report, Tab 23, Facsimile Transmissions from DCAA to DOT (Sept. 6,
2001) at 2, and (Nov. 29, 2001) at 23-24. Jensen also complains that there
is an inconsistency in Hughes's cost proposal with respect to whether labor
escalation was applied. The RFP, however, only required that labor be
priced for 1 year "because escalation is difficult to project accurately for
a five-year period" and provided that escalation would not be "considered a
discriminator for selection purposes." RFP � L.7.1. Jensen also objects
that when the agency adjusted Hughes's proposed costs, DOT failed to adjust
Hughes's proposed fee. DOT admits that it erred in this regard, but the
cost impact would be to increase Hughes's evaluated cost by only $641.