TITLE: OMNIPLEX World Services Corporation, B-291105, November 6, 2002
BNUMBER: B-291105
DATE: November 6, 2002
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OMNIPLEX World Services Corporation, B-291105, November 6, 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: OMNIPLEX World Services Corporation
File: B-291105
Date: November 6, 2002
Katherine S. Nucci, Esq., and Timothy Sullivan, Esq., Thompson Coburn, for
the protester.
Joel Alvarey, Esq., Immigration and Naturalization Service, for the
contracting agency.
Thedlus L. Thompson, Esq., for the General Services Administration.
Tania Calhoun, Esq., and Christine S. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest that contracting agency's award of a blanket purchase agreement to
a firm pursuant to its federal supply schedule (FSS) contract was improper
and contrary to the solicitation's terms is sustained where it is unclear
from the record whether the services to be provided are within the scope
of the offeror's FSS contract; the agency unreasonably determined that the
offeror's proposal was technically acceptable; and the agency improperly
failed to conduct the price realism evaluation required by the
solicitation.
DECISION
OMNIPLEX World Services Corporation protests the award of a blanket
purchase agreement (BPA) to B&W Technologies under request for proposals
(RFP) No. OIS-2-00229, issued by the Immigration and Naturalization
Service (INS) to obtain investigative services from three offerors holding
a current federal supply schedule (FSS) contract with the General Services
Administration (GSA) under schedule 738 X, Human Resources and Equal
Employment Opportunity Services, special item number (SIN) 595 21.
OMNIPLEX argues that the award to B&W was improper and contrary to the
terms of the solicitation.[1]
We sustain the protest.
The INS is responsible for providing certification to institutions of
learning that have demonstrated their ability to accept foreign students
into their programs. Until recently, participating institutions gathered
and submitted the required information manually. However, the INS is
currently implementing a centralized, rapid-access electronic reporting
system, the Student and Exchange Visitor Information Program, for tracking
the more than one million foreigners who are in the United States to
attend colleges, universities, and trade schools. As part of this
initiative, INS will require that each school be investigated to determine
whether it is capable of gathering and submitting information under the
new requirements. The INS issued this solicitation to obtain the
investigative services to conduct these site visits and assessments.
The solicitation stated that INS intended to acquire these services by
awarding a *competitive BPA* to three offerors who have a current contract
with GSA under Schedule 738 X, Human Resources and Equal Employment
Opportunity Services, SIN 595 21. RFP P: 3.1. This SIN, *General Support
Services,* includes such services as planning, recruitment and internal
placement, pre-employment screening, position classification, personnel
actions, training, employee assistance, employee relations, and
outplacement. See www.gsaelibrary.gsa.gov/elib/eLibrary.jsp, GSA
E-Library Home Page. The RFP stated that all orders would be subject to
the terms and conditions of each offeror's FSS contract. RFP P:
2.1.
Award was to be made to the three offerors submitting technically
acceptable proposals with the lowest prices, RFP P: 4.3, and offerors were
required to ensure that their proposals fully complied with all RFP
requirements. Id. P: 3.3.2.1. To demonstrate their technical capability,
offerors were required to meet certain minimum requirements in order to
earn a *pass* rating.[2] Among other things, offerors were required to
demonstrate that they had immediate access to over 500 investigators and
to demonstrate that these investigators were geographically dispersed
throughout 40 or more states. RFP P:P: 3.3.2.1(1), 4.6.2. As discussed
further below, paragraph 7 of the RFP's statement of work (SOW) included a
detailed description of the contractor personnel to be provided.
Price proposals were required to contain all information necessary to
allow for a comprehensive evaluation of the prices proposed by the
offeror. RFP P: 3.3.2.1(3). This information was to include pricing
discounts with the proposed labor categories and hours, GSA schedules, a
narrative describing all assumptions made by the offeror, and base rates
for proposed employees. Id. and RFP P:P: 4.6.3, 4.6.4. Each offeror was
required to identify a fixed price for an individual assessment per fiscal
year, as well as extended pricing. Id.
The INS planned to evaluate price proposals for price realism and
reasonableness, as well as total evaluated price. The RFP stated that the
price analysis would consider that the GSA schedule price had been deemed
fair and reasonable; however, the discounted price might be considered
unrealistic if the base rate (the salary the employee receives) was
insufficient to retain quality personnel and keep turnover to a reasonable
level. The government would conduct its price analysis using one or more
of the techniques specified in Federal Acquisition Regulation (FAR) S:
15.404-1(b). RFP P: 4.6.3. Proposals that were unrealistic in terms of
technical commitment or unrealistically low in costs (e.g., had
unrealistic base rates for one or more labor categories) and/or price
would be deemed to show an inherent lack of technical competence or
failure to comprehend the complexity and risk of the BPA requirements,
which might be grounds for rejection of the proposal. Id. P: 4.6.4.
INS evaluated the proposals it received from five vendors, conducted
discussions, and received and evaluated revised proposals. All offerors
were rated *pass* under the technical capability and past performance
factors, with the following total prices:
USIS $23,250,000
ManTech $23,749,950
B&W $31,516,500
OMNIPLEX $[DELETED]
Offeror E $[DELETED]
Award was made to USIS, ManTech, and B&W, the three offerors with the
lowest prices, and this protest followed. The INS subsequently determined
that urgent and compelling circumstances existed that would not permit the
agency to wait for our decision to proceed with performance. 31 U.S.C. S:
3553(d)(3)(C)(i) (2000).
OMNIPLEX asserts that the BPA awarded to B&W improperly exceeds the scope
of the firm's FSS contract. OMNIPLEX also argues that the agency
improperly evaluated B&W's technical proposal as *passing* or technically
acceptable. OMNIPLEX finally argues that B&W's proposal failed to conform
to the RFP's requirements concerning the submission of pricing information
and that, as a result, the INS failed to evaluate B&W's price proposal in
accordance with the RFP's terms.
As a preliminary matter, we address the issue of BPAs and our standard of
review. The RFP stated that INS intended to issue a BPA against the
offeror's GSA FSS contract. See FAR S: 8.404(b)(4). A BPA is meant to
serve as *a simplified method of filling anticipated repetitive needs for
supplies or services by establishing 'charge accounts' with qualified
sources of supply . . . .* FAR S: 13.303‑1(a). Here, it appears
that INS and the private parties view the issuance of BPAs as the form of
*down‑select* that will effectively determine which vendors INS will
consider to meet its requirements. Presumably because the process of
issuing BPAs is serving as a key step in the selection process, the
agency, instead of simply choosing among FSS vendors (with or without a
BPA *charge account*), elected to conduct what was treated as a Part 15
negotiated procurement, beginning with the issuance of the RFP and
continuing through the evaluation and selection process. Where an agency
handles the selection of vendors for an FSS order, or for an FSS BPA, like
a competition in a negotiated procurement, and a protest is filed
challenging the outcome of the competition, we will review the agency's
actions to ensure that the evaluation was reasonable and consistent with
the terms of the solicitation. See COMARK Fed. Sys., B-278343,
B-278343.2, Jan. 20, 1998, 98-1 CPD P: 34 at 4-5. Here, the agency issued
a request for proposals, and the RFP specifically stated that the source
selection was to be conducted and selection made in accordance with the
guidelines set forth in the FAR, and set forth specific procedures for the
evaluation of proposals. RFP P: 4. Accordingly, while the provisions of
FAR Part 15, which govern contracting by negotiation, do not directly
apply, Computer Prods., Inc.,
B-284702, May 24, 2000, 2000 CPD P: 95 at 4, we analyze OMNIPLEX's
contentions by the standards applied to negotiated procurements.
Labat-Anderson, Inc., B-287081 et al., Apr. 16, 2001, 2001 CPD P: 79 at 6.
Scope of B&W's FSS Contract
B&W holds a current FSS contract under Schedule 738 X, SIN 595 21. B&W's
FSS contract lists various services, including forecasting the future
demand for and supply of employees; recruitment and internal placement;
pre-employment screening; position classification; training; employee
relations services; and outplacement services. The contract also lists
various labor categories, including personnel clerks and assistants,
staffing specialists, classification specialists, employee relations
specialists, employee development specialist, and subject matter expert.
B&W Schedule Price List at 7-11. B&W proposed to meet the solicitation's
requirements with its own personnel and a team of subcontractors. Under
this approach, B&W was to perform oversight and management services;
[DELETED] was to perform document analysis, data entry, quality control,
and tracking; and [DELETED] was to perform field investigation work. B&W
Technical Proposal at 1.
OMNIPLEX argues that the BPA awarded to B&W exceeds the scope of its FSS
contract and is not based upon or related to that contract, citing the
fact that B&W failed to link any of the services it proposed to perform to
any of the services, labor categories, or prices listed in its FSS
contract.
As a general rule, contracting agencies are required to obtain full and
open competition in the procurement of supplies and services. 41 U.S.C.
S: 253(a)(1)(A) (2000); FAR S: 6.101. The FSS program, directed and
managed by GSA, gives federal agencies a simplified process for obtaining
commonly used commercial supplies and services. FAR S: 8.401(a). The
procedures established for the FSS program satisfy the requirement for
full and open competition. 41 U.S.C. S: 259(b)(3); FAR S: 6.102(d)(3);
Sales Res. Consultants, Inc., B-284943, B-284943.2, June 9, 2000, 2000 CPD
P: 102 at 3. However, non-FSS products and services may not be purchased
using FSS procedures; instead, their purchase requires compliance with the
applicable procurement laws and regulations, including those requiring the
use of competitive procedures. See T-L-C Sys., B-285687.2, Sept. 29,
2000, 2000 CPD P: 166 at 4; SMS Sys. Maint. Servs., Inc., B-284550.2, Aug.
4, 2000, 2000 CPD P: 127 at 2; Pyxis Corp., B-282469, B-282469.2, July 15,
1999, 99-2 CPD P: 18 at 3-4.
Consistent with this legal framework, GSA requires that, when teaming
arrangements are being made, all team members hold FSS contracts, GSA's
Oct. 30, 2002 Comments at 1, and the RFP here required that services
provided by team members must be within the scope of their contracts. RFP
P: 3.1. While a schedule contractor may be permitted to use
subcontractors to provide the services already included in its FSS
contract, in our view, it may not properly use subcontractors to offer
services not included in either its own or those companies' FSS contracts,
since this would mean that it was improperly including non-FSS goods or
services in an FSS sale. See Pyxis Corp., supra.
In this procurement, we have concern that the INS may be improperly taking
advantage of the convenience of the FSS ordering system to enter into a
BPA with a vendor for services that are not included in the scope of that
vendor's FSS contract or to order services from vendors (whether as *team*
members or subcontractors) who do not hold FSS contracts for those
services.[3] In particular, it appears that the INS has awarded a BPA to
B&W that exceeds the scope of the services covered by that firm's FSS
contract. B&W's proposal did not link any of the services it and its
subcontractors proposed to provide to any of the services, labor
categories, or prices listed in its FSS contract. OMNIPLEX appears to
accept that two positions in B&W's FSS contract might cover the
investigative services B&W proposed to provide through its subcontractor
[DELETED], but it is not clear to us that this is the case. It is also
not clear from B&W's FSS contract that any of its services or labor
categories encompass the oversight and management functions B&W proposed
to provide itself, or the data management functions B&W proposed to
provide through its subcontractor [DELETED].[4] Notwithstanding the
apparent disconnect between the services offered in B&W's proposal and the
services covered by its FSS contract, there is no evidence that the INS
ever considered whether the services B&W and its subcontractors offered to
provide were covered by B&W's FSS contract. The INS appears to
erroneously believe that it was not required to make this inquiry as long
as B&W held a current FSS contract under schedule 738 X, SIN 595 21, see
Agency Oct. 29, 2002 Response to GAO Questions at 4, and it has failed to
address this question despite several requests from our Office to do so.
In view of the fact that the BPA awarded to B&W appears to have exceeded
the scope of that firm's FSS contract, we sustain the protest on this
basis. See T-L-C Sys., supra; American Mgmt. Sys., Inc., B-216998, July
1, 1985, 85-2 CPD P: 3 at 7.
Evaluation of Technical Proposals
OMNIPLEX argues that B&W's proposal did not meet all of the RFP's
technical requirements and that the INS improperly found the proposal
technically acceptable.
In considering a protest challenging an agency's evaluation of proposals,
we will examine the record to determine whether the agency's judgment was
reasonable and consistent with stated evaluation criteria and applicable
statutes and regulations. ENMAX Corp., B-281965, May 12, 1999, 99-1 CPD
P: 102 at 2. We have reviewed the solicitation, B&W's proposal, and the
evaluation materials and, based on the record before us, are unable to
conclude that the evaluation was reasonable.
Offerors were required to ensure that their proposals fully complied with
all RFP requirements and to clearly demonstrate their technical
capability. RFP P: 3.3.2.1. To earn a passing rating, offerors were
required to demonstrate that they had immediate access to over 500
investigators and that these investigators were geographically dispersed
throughout 40 or more states. Id. at P: 4.6.2.; see also
id. at P:P: 3.3.2.1(1); 4.6.2. These requirements are drawn from the SOW
paragraph outlining the requirements for contractor personnel. That
paragraph reads, in its entirety:
The Contractor shall have immediate access to over 500 investigators. The
Contractor shall provide trained investigators nationwide who have the
required knowledge and expertise in performing time-sensitive
investigations, test and evaluation, certification and accreditation and
compliance audits and inspections. Investigators should be knowledgeable
in the laws, regulations and procedures applicable to this program.
Individuals should be proficient in fact-finding, threat and risk
assessment skills, and be able to provide thorough, accurate and unbiased
investigative support. Personnel shall be geographically dispersed in
order to respond within the established timeframe while providing the
highest quality product.
RFP SOW P: 7.
When read as a whole, the RFP clearly requires offerors to show immediate
access to more than 500 investigators, over a wide geographical area, who
meet the requirements of SOW P: 7. The INS agrees with OMNIPLEX that the
RFP *requested 500 trained investigators.* Agency's Sept. 30, 2002
Response to GAO Questions at 7.
B&W proposed [DELETED] as its field investigation subcontractor and stated
that the firm currently performs residential and commercial inspections.
B&W Technical Proposal Cover Letter at 2. B&W's proposal states that
*[b]y leveraging its existing workforce and its expertise in hiring and
training new field investigators, [DELETED] can provide adequate resources
to complete school certifications for the INS. The company currently
maintains a full-time workforce of more than [DELETED] field
representatives who can support the required school visits.* B&W
Technical Proposal at 1.
In responding to the specific requirements of SOW P: 7, B&W states:
[DELETED] maintains a full-time, geographically dispersed workforce of
more than [DELETED] field representatives to support site visit inspection
requirements for a wide range of customers. . . . [DELETED] will train
its existing field representatives to ensure they are qualified
investigators for the INS school certification program. Through this
training, the investigators will acquire the requisite knowledge and
expertise in performing time-sensitive investigations; comprehensive
testing and evaluations; and certification, accreditation, and compliance
audits and inspections. They will also become knowledgeable in the laws,
regulations, and procedures applicable to this program. With experience
on other Federal contracts, [DELETED]'s field representatives are already
proficient in fact-finding and threat and risk assessment skills, and they
have expertise in providing thorough, accurate, and unbiased investigative
support.
Id. at 8.
OMNIPLEX argues that B&W's proposal does not meet the requirement to show
immediate access to *trained investigators,* but simply shows that it has
access to more than 500 *field representatives* who will receive training
in the future in order to meet the requirements of SOW P: 7. We agree.
The INS is incorrect when it argues that B&W's references to the provision
of training apply to newly hired employees. B&W's proposal clearly states
that it *will train its existing field representatives to ensure they are
qualified investigators for the INS school certification program.*[5] B&W
Technical Proposal at 8 (emphasis added). The INS is also incorrect when
it argues that B&W's references to the provision of training simply mean
that the investigators will be trained to ensure they understand what the
INS desires from them as concerns the INS school certification program.
In response to the SOW P: 7 requirement to *provide trained investigators
nationwide who have the required knowledge and expertise in performing
time-sensitive investigations, test and evaluation, certification and
accreditation and compliance audits and inspections,* B&W's proposal
clearly states that, *[t]hrough this training, the investigators will
acquire the requisite knowledge and expertise in performing time-sensitive
investigations; comprehensive testing and evaluations; and certification,
accreditation, and compliance audits and inspections.* Id. (emphasis
added).
The record shows that the evaluators took no notice of B&W's failure to
propose trained investigators but only considered the number of personnel
proposed and their geographic dispersion. While the RFP does not
explicitly provide that offerors must demonstrate immediate access to more
than 500 *trained* investigators, the solicitation, when read as a whole,
requires that the investigators to be provided be *trained
investigators.* Even if we could not conclude that B&W's failure in this
regard must result in a finding of technical unacceptability, it clearly
could have affected the evaluators' conclusion that B&W's proposal was
technically acceptable. Accordingly, we conclude that the evaluators had
to consider whether B&W's failure to propose personnel meeting the
requirements of the solicitation made its proposal technically
unacceptable, and we sustain the challenge to the evaluation in this
area. ENMAX Corp., supra, at 4.
Evaluation of Price Proposals
The solicitation required offerors to provide *all information necessary
to allow for a comprehensive evaluation of the prices proposed by the
[o]fferor.* RFP P: 3.3.2.1.(3). Such information included pricing
discounts with the proposed labor categories, hours, and base rates,
applicable GSA schedule contracts, and a narrative fully describing all
assumptions. RFP P:P: 3.3.2.1.(3), 4.6.3, 4.6.4. Price was to be
evaluated *for price realism and reasonableness,* and discounted prices
might be found unrealistic if the base rate (the salary an employee
receives) is *insufficient to retain quality personnel and keep turnover
to a reasonable level.* RFP P:P: 4.6.3, 4.6.4. Proposals that were
unrealistic in terms of technical commitment or unrealistically low in
costs (*e.g., unrealistic base rates for one or more labor categories*)
and/or price would be deemed to show an inherent lack of technical
competence or failure to comprehend the complexity and risk of the BPA
requirements. RFP P: 4.6.4. The government planned to conduct its
analysis of prices using one or more of the techniques specified in FAR S:
15.504-1(b).
OMNIPLEX argues that B&W's proposal failed to conform to these
requirements because it failed to include labor categories, hours, and
base rates for all of the services promised in its technical proposal and,
while it mentioned several [DELETED], it failed to provide any of the
[DELETED]. In the absence of this information, OMNIPLEX argues, the
agency did not and could not evaluate B&W's price proposal in accordance
with the RFP's terms.
The agency's evaluation of price proposals consisted solely of a
comparison of each offeror's proposed per-assessment price with those of
the other offerors and the independent government cost estimate. The
agency argues that, although the RFP requested labor categories, hours,
and base rates, this data did not play a role since it was not material in
evaluating the proposals. The INS asserts that since this is a
fixed-price contract, what was *truly relevant* was the fixed-price
per-assessment rate the offeror was charging for a given fiscal year.
Agency's Oct. 29, 2002 Response to GAO Questions at 5. Since B&W's rate
fell into the mid-range of all rates proposed, the agency determined that
its price was reasonable.
The analysis performed by the INS was for price reasonableness, an
analysis involving the evaluation of a proposed price without evaluating
its separate cost elements and proposed profit, using such techniques as
comparison of proposed prices received in response to the solicitation.
FAR S: 15.404-1(b) (defining *price analysis*). Even if the INS had
sufficient information to determine price reasonableness notwithstanding
B&W's failure to comply with the RFP's requirements for the submission of
pricing information, the RFP also explicitly required the agency to
conduct a price realism evaluation.
Where, as here, a BPA contemplating fixed-price task orders is to be
awarded, the *realism* of offerors' proposed prices is not ordinarily
considered, since a fixed-price contracting vehicle places the risk and
responsibility for contract costs and ensuing profit or loss on the
contractor. Labat-Anderson, Inc., supra, at 8. However, because there is
a risk of poor performance in certain circumstances, such as where a
contractor fails to obtain and keep qualified personnel, see Research
Mgmt. Corp., B‑237865, Apr. 3, 1990, 90-1 CPD P: 352 at 8, an agency
may, in its discretion, provide for a price realism analysis in the
solicitation of fixed-price proposals. See Hydraulics Int'l, Inc.,
B-284684, B-284684.2, May 24, 2000, 2000 CPD P: 149 at 14. The nature and
extent of an agency's price realism analysis are matters within the
agency's discretion. Cardinal Scientific, Inc., B-270309, Feb. 12, 1996,
96-1 CPD P: 70 at 4.
The INS did not conduct a price realism evaluation; the contracting
officer states that she conducted a *price analysis in lieu of a price
realism evaluation.* Contracting Officer's Statement, Oct. 29, 2002, at
1. However, the solicitation required the INS to evaluate price proposals
for both price reasonableness and price realism. The two types of
analysis have two very different purposes and are not interchangeable.
The argument raised by counsel for the INS, that the agency used the
*wrong wording* in the RFP and should have called for a *price analysis*
and not a *price realism* evaluation, Agency's Oct. 29, 2002 Response to
GAO Questions at 5, is both unsupported by any such explanation from the
contracting officer and wholly unpersuasive. The solicitation did not
merely use the term *price realism* but explained, in detail, what the
agency planned to evaluate--the salaries the employees were to receive
(the *base rates*)--and why it planned to evaluate them. The agency's
failure to conduct a price realism evaluation of any proposal was clearly
contrary to the solicitation's requirements. See M&S Farms, Inc.,
B-290599, Sept. 5, 2002, 2002 CPD P: __ at 12. Moreover, we believe the
record demonstrates that OMNIPLEX was prejudiced by the agency's failure
to evaluate proposals for price realism. As OMNIPLEX explains, its
proposal [DELETED] its FSS contract, and if it had known that the INS did
not intend to evaluate price realism to ascertain whether discounted rates
were too low to reflect adequate technical commitment and/or to ensure the
retention of qualified personnel, it might have [DELETED]. OMNIPLEX
Supplemental Comments, Oct. 30, 2002, at 4.
We recommend that the INS reevaluate technical and price proposals in a
manner consistent with the solicitation's stated evaluation criteria, and
make a new source selection decision based upon that reevaluation. If the
INS did not actually intend to evaluate proposals for price realism, the
INS should amend the solicitation accordingly and permit the submission of
revised proposals for evaluation. We also recommend that the INS review
B&W's proposal to ascertain whether the services it proposes to provide
are within the scope of its FSS contract and take appropriate action based
upon its findings. As explained above, if the INS finds that B&W has
proposed to provide services not covered by its FSS contract, it may not
properly awarded the firm a BPA under its FSS contract to provide those
services. If the new source selection decision determines that offerors
other than the current awardees are in line for award, the INS should
terminate the appropriate contracts and make award to the successful
offerors. We also recommend that OMNIPLEX be reimbursed its costs of
filing and pursuing the protests, including reasonable attorneys' fees. 4
C.F.R. S: 21.8(d)(1) (2002). OMNIPLEX should submit its certified claim
for costs, detailing the time expended and costs incurred, directly to the
contracting agency within 60 days after receipt of this decision. 4
C.F.R. S: 21.8(f)(1).
The protest is sustained.
Anthony H. Gamboa
General Counsel
------------------------
[1]OMNIPLEX does not challenge the awards made to the two other offerors.
[2] Offerors were also required to submit past performance information;
the past performance evaluation is not at issue here.
[3] The agency's position on whether B&W's *team* is comprised of
subcontractors or teaming partners, see FAR Part 9.6, has changed during
the pendency of the protest. While B&W's proposal is not entirely clear
on this issue, for the sake of this decision, we assume that the agency's
most recent position--that they are subcontractors--is correct. As GSA's
guidance on the multiple award schedules program makes clear, however,
there are material differences between the two teaming structures. GSA's
Multiple Award Schedules Program Owner's Manual at 27-30. As noted above,
if B&W's proposal were viewed as a teaming arrangement, both [DELETED] and
[DELETED] would have to be proposing services included in their FSS
contracts (which are, we note, under schedules other than the one from
which the agency intended to order). The INS does not appear to have
considered whether the services those two firms propose to provide here
are within the scope of their FSS contracts. In implementing our
recommendation, the INS may need to clarify B&W's intentions and the scope
of the other firms' FSS contracts.
[4] In contrast, the record shows that the FSS contracts held by OMNIPLEX
and at least one of the awardees encompass all of the services they
propose to provide.
[5] It is also unclear from the record whether [DELETED]'s *field
representatives* are, in fact, *investigators* as required by the RFP.