TITLE: Alpha Data Corporation, B-291423, December 20, 2002
BNUMBER: B-291423
DATE: December 20, 2002
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Alpha Data Corporation, B-291423, December 20, 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: Alpha Data Corporation
File: B-291423
Date: December 20, 2002
J. Scott Hommer, III, Esq., and Benjamin A. Winter, Esq., Venable, Baetjer
and Howard, for the protester.
Michael A. Gordon, Esq., and Susan E. Hughes, Esq., Holmes, Schwartz &
Gordon, for Modern Technologies Corporation, an intervenor.
James H. Falk, Sr., Esq., James H. Falk, Jr., Esq., and Meredith N. Long,
Esq.,
The Falk Law Firm, for Support Systems Associates, Inc., an intervenor.
Clarence D. Long, III, Esq., Department of the Air Force, for the agency.
Jennifer D. Westfall-McGrail, Esq., and Christine S. Melody, Esq., Office
of the General Counsel, GAO, participated in the preparation of the
decision.
DIGEST
1. Agency reasonably ranked protester's proposal lower than other
offerors' proposals under past performance evaluation factor where prime
contractor had not performed the type of work solicited, and prime
contractors for other offerors had performed such work.
2. Where solicitation provided for price reasonableness to be established
through price competition and by comparing proposed labor rates to
industry labor rates or labor rates from other contracts for similar work,
agency was not required to compare sample task prices to government
baseline to determine price reasonableness.
DECISION
Alpha Data Corporation (ADC) protests the failure of the Department of the
Air Force to award it a contract under request for proposals (RFP) No.
F09603-02-R-61087, for special operations forces (SOF) support services.
The protester argues that the Air Force erred in evaluating its past
performance and that the agency failed to evaluate offerors' cost
proposals adequately.
We deny the protest.
The RFP, which was issued on January 11, 2002, provided for the award of
up to four indefinite-delivery/indefinite-quantity contracts, each for a
base period of 5 years and two 5-year option periods. The solicitation
provided for award of one of the contracts on the basis of full and open
competition and for the remainder as small business set-asides.
The RFP provided for the evaluation of proposals on the basis of the
following factors and subfactors:
1. Mission Capability
a. Special Operation Forces (SOF) Sustainment
b. Reaction Capability
c. Team Structure
2. Proposal Risk
3. Past Performance
4. Cost/Price
The solicitation advised that the first three factors would be of equal
importance in the evaluation; that the three nonprice factors, when
combined, would carry significantly more importance than cost/price; that
the mission capability subfactors were listed in descending order of
importance; and that proposal risk would be evaluated at the mission
capability subfactor level. Offerors were to make oral presentations
addressing the first two mission capability subfactors and the
requirements of each of three sample tasks. The RFP instructed offerors
to submit labor rates for a variety of labor categories and provided for a
reasonableness analysis of the proposed rates. The RFP also provided for
a realism analysis and probable cost calculation of offerors' sample task
prices.
Six offerors--the protester, Innovative Technologies Corporation (ITC),
Offeror A, Modern Technologies Corporation (MTC), Support Systems
Associates, Inc. (SSAI), and TCS Design & Management Services
(TCS)--submitted proposals by the February 14 closing date. Of the six
offerors, only MTC was not a small business. After conducting discussions
and receiving final proposal revisions, the agency evaluators assigned the
proposals the following ratings:[1]
+------------------------------------------------------------------------+
|Offeror |SOF |Reaction |Team |Confidence |Probable|
| |Sustainment |Capability |Structure |Rating |Cost |
|--------+-------------+------------+----------+----------------+--------|
|ADC |Green/Low |Green/LR |Green/LR |Very Good/ |$213,293|
| |Risk (LR) | | |Significant | |
|--------+-------------+------------+----------+----------------+--------|
|ITC |Green/LR |Green/LR |Green/LR |Very Good/ |$249,315|
| | | | |Significant | |
|--------+-------------+------------+----------+----------------+--------|
|Offeror |Green/LR |Green/Medium|Green/LR |Very Good/ |$228,291|
|A | |Risk | |Significant | |
|--------+-------------+------------+----------+----------------+--------|
|MTC |Blue/LR |Green/LR |Green/LR |Very Good/ |$244,449|
| | | | |Significant | |
|--------+-------------+------------+----------+----------------+--------|
|SSAI |Blue/LR |Green/LR |Green/LR |Exceptional/High|$104,239|
| | | | | | |
|--------+-------------+------------+----------+----------------+--------|
|TCS |Blue/LR |Green/LR |Green/LR |Very Good/ |$156,187|
| | | | |Significant | |
+------------------------------------------------------------------------+
In performing his best value analysis, the Source Selection Authority
(SSA) determined that under the most important mission capability
subfactor, SOF sustainment, there were distinctions in technical quality
even among proposals that had been assigned the same color and risk
ratings. The SSA ranked the proposals under the subfactor in the
following order: MTC, SSAI, TCS, ITC, ADC, and Offeror A.[2] The SSA
also ranked the proposals under the performance confidence factor, noting
that *subtle differences* existed among the five offerors with ratings of
Very Good/Significant Confidence. The SSA ranked MTC and ITC, the
majority of whose contracts were rated very relevant, and the remainder of
whose contracts were rated relevant, tied for first; TCS, which had one
subcontractor with no experience with either SOF or military aircraft,
third; ADC, which, as the prime contractor lacked experience with SOF or
military aircraft, fourth; and Offeror A, whose experience was limited to
military aircraft and only one of whose subcontractors had SOF aircraft
experience in all four program elements, last. Id. at 9.
The SSA determined that MTC's proposal represented the best value to the
government and that it should receive the contract to be awarded pursuant
to full and open competition. The SSA further determined that the
proposals of SSAI, TCS, and ITC represented the best value among the small
business proposals. The SSA found that the technical superiority of the
foregoing proposals and the superior past performance of these four
offerors outweighed any cost difference between their proposals and the
proposals of ADC and Offeror A. On September 3, the Air Force awarded
contracts to MTC, SSAI, TCS, and ITC.
ADC objects to the agency's ranking of its proposal as fourth among the
five proposals receiving performance confidence ratings of Very
Good/Significant Confidence based on its lack of experience with SOF or
military aircraft. Pointing to the SSA's statement (in the Source
Selection Decision Document, at 9) that *[a]lthough all of the
subcontractors for ADC have experience with SOF aircraft, ADC, who is the
prime, would be fourth based on their lack of experience with SOF or
military aircraft,* the protester contends that the SSA considered only
the prime contractor's experience in ranking the team's past performance
relative to other offerors. The protester argues that the agency should
have considered the past performance of all of the companies comprising
its team, i.e., the subcontractors, as well as the prime contractor, in
his assessment.[3]
The agency explains that the SSA did not mean by the above-cited statement
that only the past performance of ADC, the prime contractor, was
considered in ranking ADC's team's past performance relative to other
offerors'; rather, the agency explains, consistent with the terms of the
RFP, which provided for consideration of past performance information
regarding critical subcontractors, teaming partners, and/or key personnel,
RFP S: M P: 2.3.3.3, the evaluators considered the past performance of all
team members, but determined that the past performance of ADC's team was
distinguishable from that of MTC's, ITC's, and TCS's teams based on the
prime contractor's lack of experience with SOF or military aircraft. The
agency argues that the source selection officials reasonably concluded
that a prime contractor's lack of SOF experience introduced a measure of
risk into its proposal.
While Federal Acquisition Regulation (FAR) S: 15.305(a)(2)(iii) directs
agencies to take into account past performance information regarding
subcontractors that will perform major or critical aspects of the
requirement when such information is relevant to the acquisition, the
significance of, and the weight to be assigned to, a subcontractor's past
performance is a matter of contracting agency discretion. See Loral Sys.
Co., B-270755, Apr. 17, 1996, 96-1 CPD P: 241 at 5; see also Strategic
Res., Inc., B-287398, B-287398.2, June 18, 2001, 2001 CPD P: 131 at 5-6.
Similarly, the weight to be assigned a prime contractor's past
performance--or lack thereof--should, in our view, be considered a matter
of contracting agency discretion. Here, because the RFP solicited
services in support of SOF aircraft and weapons systems, the agency
determined that it was important that the prime contractor itself have had
some previous experience with SOF programs. The reasonableness of this
determination is supported by the RFP's incorporation of FAR S: 52.219-14,
Limitations on Subcontracting, which provides that by submitting an offer
for a services contract, a small business offeror agrees that *[a]t least
50 percent of the cost of contract performance incurred for personnel
shall be expended for employees of the concern.* Since ADC, as the prime
small business, would be obligated to perform at least 50 percent of the
contract labor with its own employees, the firm's lack of experience with
SOF programs was clearly pertinent.
ADC also objects to the Air Force's evaluation of offerors' cost/price
proposals, complaining that the agency failed to establish a baseline with
which to compare offerors' sample task prices for reasonableness, and that
it failed to assess the risk associated with the lowest-cost proposals.
In the former regard, ADC contends that no weight was given to the fact
that its aggregate sample task price was 17 percent lower than ITC's, and
in the latter regard, the protester complains that no performance risk was
attributed to SSAI's proposal despite the fact that SSAI's price was less
than half that of MTC, which received the highest rating on sample task
solutions.
The RFP instructed offerors to furnish cost/price proposals consisting of
direct labor rates, a labor loading factor, add-on factors, and price
schedules for each of three sample tasks. RFP S: L P: 5.2. The RFP
provided that reasonableness would *be established by the existence of
adequate price competition and by comparing all, or a representative
sample of, the proposed direct labor rates to industry labor rates or
labor rates from other contracts for similar work.* RFP S: M P:
2.4.1.1.1. The solicitation further provided that the evaluators would
analyze the sample task prices for realism by reviewing and evaluating the
skill mix, specific hours, and kinds and quantity of materials proposed by
the offerors, with the intent of determining *whether the estimated
proposed sample task prices are realistic for the work to be performed;
reflect a clear understanding of the requirements; and are consistent with
the approach described in the Offeror's technical proposal.* RFP S: M P:
2.4.1.1.2.
The SSA determined that all offerors' cost/price proposals were reasonable
based on the existence of adequate price competition and thorough
evaluation of the proposed rates and factors against the government's
direct labor rate range. Source Selection Decision Document at 9. The
SSA further determined that the sample task pricing for all offerors
except Offeror A was realistic. The SSA noted that the sample task prices
varied significantly because of the wide range of technically acceptable
solutions proposed by the offerors. Id. at 10.
We see no basis to conclude that the agency was required to compare sample
task prices with a government estimate to determine reasonableness. The
solicitation did not provide for such analysis; moreover, the agency has
provided a reasonable explanation for why comparison of offerors' sample
task prices to one another
(or an agency estimate) was not appropriate here (i.e., offerors proposed
technical solutions to the sample tasks of varying levels of complexity).
The depth of an agency's price analysis is a matter within the sound
exercise of the agency's discretion, Resource Consultants, Inc., B-290163,
B-290163.2, June 7, 2002, 2002 CPD P: 94 at 3 n.1, and the protester has
not demonstrated that the agency abused its discretion here in assessing
price reasonableness primarily on the basis of offerors' proposed labor
rates.
Regarding the protester's argument that the evaluators failed to
acknowledge the performance risk associated with SSAI's low total proposed
cost for the three sample tasks, the evaluators determined that SSAI's
price reflected an understanding of the requirements and was consistent
with the approach described in its technical proposal. Source Selection
Decision Document at 10. In other words, the evaluators did not find that
SSAI's prices entailed a performance risk. The protester has given us no
basis to question the reasonableness of this determination.[4]
Finally, to the extent that the protester contends that the Air Force
failed to take cost into account in its best value trade-off, the record
shows that cost was considered. Specifically, the SSA found that the
technical superiority of MTC and ITC's proposals and the better past
performance of those offerors outweighed the cost difference between their
proposals and those of ADC and Offeror A. Source Selection Decision
Document at 13.
The protest is denied.
Anthony H. Gamboa
General Counsel
------------------------
[1] In accordance with Air Force Federal Acquisition Regulation Supplement
S: 5315.305(a)(3)(i), the color ratings used in
evaluating proposals under the mission capability subfactors were
blue--exceptional, green--acceptable, yellow--marginal, and
red--unacceptable.
[2] The SSA documented the basis for his rankings in the Source Selection
Decision Document, noting that MTC had *distinguished itself among the
Offerors[,] demonstrating strengths related to multiple aspects of the SOF
Sustainment subfactor . . . .*; that SSAI had demonstrated strengths in
its approach to sample tasks 2 and 3 that *communicate[d] an exceptional
depth of technical competence and capability in all aspects of the SOF
Sustainment subfactor*; that TCS had *demonstrated strengths related to
three of the four aspects of SOF Sustainment in [sample tasks 1 and 3]*;
that ITC had *demonstrated outstanding processes representing three of the
four aspects in their solutions to Sample Tasks 1 and 3*; and that ADC had
*demonstrated sound and viable approaches representing two of the four
aspects in their solutions to Sample Tasks 1 and 3.* Source Selection
Decision Document at 6-7.
[3] The protester objects to the distinction between prime and
subcontractor past performance, not to the distinction between
SOF/military aircraft experience and other types of experience, and the
emphasis in the evaluation on experience with SOF and military aircraft
was consistent with the solicitation.
[4] To the extent that the protester is arguing that the agency should
have considered price in assigning proposals a rating under the proposal
risk evaluation factor, the RFP provided for the evaluation of proposal
risk at the mission capability subfactor level, RFP S: M P: 2.2, and price
was not among the mission capability subfactors. To be timely, any
objection to the terms of the RFP would have had to be filed prior to the
RFP closing date. Bid Protest Regulations, 4 C.F.R. S: 21.2(a)(1) (2002).