TITLE:  KENROB & Associates, Inc.--Costs, B-291573.7, April 25, 2003
BNUMBER:  B-291573.7
DATE:  April 25, 2003
**********************************************************************
KENROB & Associates, Inc.--Costs, B-291573.7, April 25, 2003

   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:    KENROB & Associates, Inc.--Costs
    
File:             B-291573.7
    
Date:              April 25, 2003
    
Charles Bagley, IV, Esq., Bagley & Rhody, and James McAleese, Esq.,
McAleese & Associates, for the protester.
Raymond M. Saunders, Esq., Department of the Army, 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
    
Request for recommendation of reimbursement of protest costs is denied
where agency's decision to take corrective action was not in response to
clearly meritorious arguments raised by the protester.
DECISION
    
KENROB & Associates, Inc. requests that we recommend that it be reimbursed
the costs of filing and pursuing its protest challenging the Missile
Defense Agency's (MDA) issuance of a task order for automated information
support services to Zen Technology Inc. under Zen's Federal Supply
Schedule (FSS) contract.  The order was issued pursuant to request for
quotations (RFQ) No. HQ0006-02-Q-0012.
    

   We deny the request.
    
On April 12, 2002, MDA furnished the RFQ in question to 10 small business
FSS contractors.[1]  The solicitation contemplated the issuance of a
hybrid firm, fixed-price/time-and-materials task order for a base period
of 1 year and three 1-year options.  The fixed-price portion of the order
(for which a monthly unit price was requested) was to cover core labor
services supporting MDA's information technology operations, while the
time-and-materials portion (for which a price for an estimated 100,000
surge hours per year was requested) was to cover surge services labor to
support unusual or unplanned activities.
    
The RFQ notified the contractors that the agency was conducting a
streamlined competitive procurement, and that award would be made on a
*best value* basis.  The RFQ provided for the evaluation of quotations on
the basis of five factors:  personnel qualifications (which was considered
the most important evaluation factor), corporate experience, staffing and
management approach, corporate past performance, and price (the final four
factors were of equal weight).  The RFQ, as amended, set the due date for
receipt of quotations as May 31.
    
[Deleted] quotations were received on May 31.  The agency postponed
evaluation of the quotations pending our Office's resolution of a protest
filed by the incumbent vendor, CMS Information Services, Inc.[2]  On
August 7, we denied CMS's protest.  CMS Info. Servs., Inc., B-290541, Aug.
7, 2002, 2002 CPD P: 132.  On August 9, the agency contacted the vendors
who had submitted quotations and requested that they either confirm or
revise/update their quotations by August 22.
    
Upon receipt of the updated quotations, the agency commenced its
evaluation.  On October 8, the contracting officer determined that Zen's
quotation represented the best value to the government, and on or about
October 9, the agency issued an order to Zen and notified the other
vendors of Zen's selection. 
    
On October 17, KENROB filed a protest with our Office objecting to
issuance of the order to Zen.  On November 15, 3 days prior to the due
date for submission of an agency report responding to the protest, the
agency notified our Office that it would be taking corrective action. 
Specifically, the agency advised us that it intended to reevaluate the
quotations that it had received and reconsider its best-value
determination, and that in the event a quotation other than Zen's was
determined to represent the best value to the government, it would
terminate Zen's task order and issue a new task order to the vendor whose
quotation represented the best value.  Upon receipt of the agency's
letter, we dismissed KENROB's protest as academic.
    
By letter dated December 20, MDA notified the vendors that it had
completed its reevaluation and had determined that Zen was *still the
awardee.*  Agency Report, Tab D-16.  By letter of the same date, the
agency furnished each vendor with a *feedback briefing,*[3] which
summarized the weaknesses in, and explained the basis for the agency's
determination that Zen's quotation represented a better value than, the
particular vendor's quotation.[4]
    
On December 24, KENROB filed a second protest with our Office, complaining
that Zen lacked the ability to acquire the staffing resources required for
performance; that Zen did not have relevant corporate experience or past
performance; that Zen's pricing did not offer the best value to the agency
because KENROB's FSS contract offered similar services at lower unit
prices; that Zen had furnished services to the MDA while the agency was
performing its reevaluation; and that the agency's feedback briefing was
*inaccurate in its statements as well as its analysis,* and did not
justify the award to Zen.
    
The agency addressed both KENROB's protest and a related protest filed by
another unsuccessful vendor, Systems Engineering and Security, Inc.
(SESI), in a consolidated report.  The report showed that [deleted], and
that the evaluators viewed the following aspects of KENROB's response
[deleted]:
    
.       [Deleted]
    
Concurrence Briefing for MDA/RM, Dec. 16, 2002.
The record included the following pricing analysis:
    
    

   +------------------------------------------------------------------------+
|OFFEROR  |TOTAL $         |TOTAL HRS.  |Cost/Hour|% Diff. $|% Diff. Hrs.|
|         |                |(Core+Surge)|         |         |            |
|---------+----------------+------------+---------+---------+------------|
|Zen      |Labor           |[deleted]   |[deleted]|         |            |
|         |[deleted]       |            |         |         |            |
|         |ODCs[5]         |            |         |         |            |
|         |[deleted]       |            |         |         |            |
|         |Surge           |            |         |         |            |
|         |[deleted]       |            |         |         |            |
|         |Total           |            |         |         |            |
|         |[deleted]       |            |         |         |            |
|---------+----------------+------------+---------+---------+------------|
|[deleted]|Labor           |[deleted]   |[deleted]|[deleted]|[deleted]   |
|         |[deleted]       |            |         |         |            |
|         |ODCs   [deleted]|            |         |         |            |
|         |Surge           |            |         |         |            |
|         |[deleted]       |            |         |         |            |
|         |Total           |            |         |         |            |
|         |[deleted]       |            |         |         |            |
|---------+----------------+------------+---------+---------+------------|
|[deleted]|Labor           |[deleted]   |[deleted]|[deleted]|[deleted]   |
|         |[deleted]       |            |         |         |            |
|         |ODCs   [deleted]|            |         |         |            |
|         |Surge           |            |         |         |            |
|         |[deleted]       |            |         |         |            |
|         |Total           |            |         |         |            |
|         |[deleted]       |            |         |         |            |
|---------+----------------+------------+---------+---------+------------|
|[deleted]|Labor           |[deleted]   |[deleted]|[deleted]|[deleted]   |
|         |[deleted]       |            |         |         |            |
|         |ODCs   [deleted]|            |         |         |            |
|         |Surge           |            |         |         |            |
|         |[deleted]       |            |         |         |            |
|         |Total           |            |         |         |            |
|         |[deleted]       |            |         |         |            |
|---------+----------------+------------+---------+---------+------------|
|[deleted]|Labor           |[deleted]   |[deleted]|[deleted]|[deleted]   |
|         |[deleted]       |            |         |         |            |
|         |ODCs   [deleted]|            |         |         |            |
|         |Surge           |            |         |         |            |
|         |[deleted]       |            |         |         |            |
|         |Total           |            |         |         |            |
|         |[deleted]       |            |         |         |            |
+------------------------------------------------------------------------+

    
Id.
    
The record also included a memorandum from the contracting officer
explaining the basis for his source selection decision as follows:
    
[Deleted]  Consequently, when considering the rate per hour (for the core
hours plus the surge hours), [deleted].  Given the level of effort nature
of the contract, I gave greater weight to the [deleted] in terms of the
best value.  Although the [deleted], their significant [deleted] and
[deleted] rendered their offer not the best value for the government.
    
SES offered [deleted].  . . .
    
[Deleted].  For the purposes of best value comparison, if the offers are
[deleted] the price difference is [deleted].
    
I determined that it is in the Government's best interest to pay the
[deleted] difference for Zen Technology for the following reasons: 
[deleted].
    
Memorandum for Record, Dec. 17, 2002.
    
On February 3, 10 days after its receipt of the agency report, KENROB
filed a supplemental protest alleging that the agency had improperly
penalized KENROB for [deleted] than Zen and other vendors; that the
quotations of [deleted] were materially unbalanced; that Zen and other
vendors had offered [deleted] for the surge services; and that the agency
had improperly compared vendors' pricing on [deleted] in determining that
Zen's quotation represented the best value to the government.  On February
6, KENROB, which had requested and been granted a 3-day extension for the
filing of its comments on the agency report, filed its comments, which in
addition to elaborating on grounds of protest already raised, raised new
untimely grounds of protest.[6]
    
On February 21, the agency filed a supplemental report responding to
KENROB's supplemental protest and a supplemental protest filed by SESI. 
On February 26, our Office held a conference call concerning the scope of
the agency's document production.[7]
    
On March 4, the agency notified our Office that it would be taking
corrective action with regard to the KENROB and SESI protests. 
Specifically, the agency stated:
    
a.     The Government will re-open the technical evaluation of proposals
submitted in response to the aforementioned solicitation with a particular
focus on the adequacy of the skill mix offered for CLINs 0001 [core labor
services] and 0002 [surge labor services].
    
b.     As a result of the re-examination of technical proposals, the
Government may seek clarifications as necessary to assure a complete and
balanced evaluation.
    
c.     At the conclusion of the technical evaluation the Government will
reassess the reasonableness of prices offered and render a revised source
selection decision if appropriate.
    
Letter from Director, Special Programs, International, Science &
Technology, Mar. 4, 2003.  After permitting the parties to comment on the
sufficiency of the agency's proposed corrective action, we dismissed the
protests of KENROB and SESI as academic by decision dated March 19.
    
By letter dated March 19, KENROB requested that, pursuant to our Bid
Protest Regulations, 4 C.F.R. S: 21.8(e), we recommend that MDA reimburse
its protest costs.
    
Where a procuring agency takes corrective action in response to a protest,
our Office may recommend that the agency reimburse the protester its
protest costs where, based on the circumstances of the case, we determine
that the agency unduly delayed taking corrective action in the face of a
clearly meritorious protest, thereby
causing a protester to expend unnecessary time and resources to make
further use of the protest process in order to obtain relief.  Pemco
Aeroplex, Inc.--Recon. and Costs, B-275587.5, B-275587.6, Oct. 14, 1997,
97-2 CPD P: 102 at 5.  A clearly meritorious protest is one that clearly
would have been successful--that is, it must involve a matter over which
we have jurisdiction and be filed by an interested party in a timely
manner and otherwise comply with the requirements of our Bid Protest
Regulations, and the record must establish that the agency prejudicially
violated a procurement statute or regulation.  Georgia Power Co.; Savannah
Elec. and Power Co.--Costs, B-289211.5, B-289211.6, May 2, 2002, 2002 CPD
P: 81 at 9.
    
The agency maintains that none of KENROB's protest allegations are clearly
meritorious and that its decision to take corrective action was not
prompted by any of KENROB's arguments.  As explained below, based on our
review of the record, we agree with the agency that none of KENROB's
allegations are clearly meritorious; accordingly, we deny KENROB's request
for a recommendation that the agency reimburse its protest costs.
    
As an initial matter, we note that while the RFQ here contemplated the
issuance of a task order against an FSS contract, it solicited vendor
responses that the agency intended to use as the basis for a detailed
technical evaluation and price/technical trade-off.  Where an agency
elects to use such an approach, which is like the competition in a
negotiated procurement, we review the agency's actions to ensure that the
evaluation was reasonable and consistent with the terms of the
solicitation.  OSI Collection Servs., Inc.; C.B. Accounts, Inc.,
B-286597.3 et al., June 12, 2001, 2001 CPD P: 103 at 4.
    
Only one of the allegations raised by KENROB in its protests pertained to
the technical evaluation of its own quotation, i.e., ground one of its
February 3 supplemental protest, in which it argued as follows:
    
The Government has improperly penalized KENROB because it allegedly has
provided [deleted].  The number of [deleted] was a principal evaluation
factor used by the Government in the evaluation of both personnel
qualification and staffing & management approach.  The information in the
Agency Report clearly indicates that the Government equated technical
capability with [deleted].  The Government's evaluation runs contrary to
the stated evaluation criteria.[8]
    
In our view, this paragraph arguably raises two objections to the agency's
evaluation of KENROB's quotation:  that the agency improperly downgraded
the quotation under two different evaluation factors for the same alleged
weakness (i.e., [deleted]), and that the agency considered only [deleted]
in evaluating technical capability.  The first of these arguments is
untimely since the information providing the basis for the argument was
furnished to the protester in its feedback briefing of December 20,
approximately a month and a half prior to the filing of its supplemental
protest.  Specifically, in its feedback briefing, the agency cited the
following [deleted] in KENROB's quotation under the personnel
qualifications and staffing and management approach factors, respectively:
    
.       KENROB proposed [deleted] people for this effort.  [Deleted].
    
.       Initial [deleted] proposed is [deleted] to accomplish SOO tasks.
    
KENROB Feedback Briefing, Dec. 20, 2002.  Further, to the extent that the
protester is alleging that the agency considered only [deleted] in
evaluating KENROB's technical capability, the record does not support the
protester's position; rather, it shows that the agency also evaluated, and
found [deleted], the protester's [deleted], and that the agency evaluated,
and found [deleted] in, the protester's [deleted].[9] 
    
We also find to be without merit KENROB's argument that all vendors other
than itself offered unbalanced pricing/unrealistically low prices for the
surge services.  In particular, the record does not support KENROB's
assertion that [deleted] prices were unbalanced or that its surge services
prices were unrealistically low.  The record demonstrates that [deleted]
surge services price in fact represented [deleted], and that the disparity
between [deleted].[10]  Moreover, [deleted].
    
Finally, KENROB is not an interested party to object to the evaluation of
Zen's quotation or to the agency's use of vendors' average hourly labor
rates in its best value determination because [deleted] were we to sustain
these arguments.  A protester is not an interested party where it would
not be in line for contract award (or order issuance) were its protest to
be sustained.  Lyudmila Franke; Maria Reznikova; Alexander Reznikov,
B-275164 et al., Dec. 18, 1996, 96-2 CPD P: 231 at 6.
    
In sum, because KENROB's challenges to its own evaluation and to the
prices proposed by other vendors are either untimely or without merit,
and, as a result, KENROB is not an interested party to challenge the
evaluation of Zen, we cannot conclude that any of the protest grounds
raised by KENROB are clearly meritorious.[11]  Georgia Power Co.; Savannah
Elec. and Power Co.--Costs, supra.  Accordingly, we have no basis upon
which to recommend that KENROB recover its protest costs.
    
Anthony H. Gamboa
General Counsel
    
    

   ------------------------

   [1] The agency had pre-selected the 10 contractors as those best qualified
to satisfy its needs based on their responses to a *sources sought* notice
posted on the FedBizOpps website.
[2] CMS complained that the RFQ improperly required vendors to
self-certify as small businesses as of the date of quotation submission.
[3] The agency explained in the letters that since the procurement had
been conducted under Federal Acquisition Regulation Part 8, formal
debriefings were not required, but that it had decided to furnish each
vendor with a *feedback briefing.*
[4] The agency also informed each vendor of its technical ranking and of
Zen's price.
[5] The RFP provided that the contractor would be reimbursed for other
direct costs (ODC) in an amount not to exceed [deleted] per year. 
Accordingly, in performing the price evaluation, the agency added
[deleted] to each vendor's price, representing [deleted] per year for the
4-year contract period.
[6] An extension of the time period for filing comments does not waive the
timeliness requirements pertaining to the filing of new grounds of
protest.  SDS Petroleum Prods., Inc., B-280430, Sept. 1, 1998, 98-2 CPD P:
59 at 3-4 n.3.  Accordingly, the arguments raised for the first time by
KENROB in its February 6 comments were untimely because they were not
raised within 10 days of KENROB's receipt of the agency report, which put
KENROB on notice of these arguments.  Bid Protest Regulations, 4 C.F.R. S:
21.2(a)(2) (2003).   Specifically, the following arguments were untimely: 
the agency improperly applied an undisclosed standard in evaluating
vendors' proposed [deleted]; the vendors reasonably interpreted
differently the number of labor categories that they could insert on their
surge pricing schedules; and Zen did not intend to perform at least half
of the work under the order with its own employees and thus is not a small
business eligible for award.  In addition, KENROB raised arguments in its
February 6 comments that were untimely because the information on which
they were based was furnished to the protester in its feedback briefing of
December 20.  For example, KENROB's argument that the evaluators
improperly considered the number of [deleted] that it offered as a
[deleted] under the personnel qualifications evaluation factor and its
argument that the evaluators wrongly criticized [deleted] as unclear were
untimely on this basis.
[7] During the call, we also asked the parties to comment on an issue that
had come to our attention in the course of our review of the agency
record.  Specifically, the RFP called for vendors to complete a surge
services support schedule on which they were to insert their *on-site
labor categories and rates for specialists available to respond to surge
requests . . . to accomplish tasks . . . in accordance with SOO [Statement
of Objectives] paragraphs 17.0-19.0.*  RFQ at 19.  [Deleted] surge
services pricing schedule, however, contained a note stating:  [Deleted] 
[Deleted], Agency Report, Tab C-2.  We asked the parties to address this
[deleted] between the scope of surge services contemplated under the RFP
and the surge services [deleted] offered to provide. 
[8] We do not regard the protester's generalized assertion in its initial
protest that the feedback briefing was inaccurate as stating a basis for
protest since no specific errors in the agency's evaluation are alleged.
[9] For example, the agency cited the following [deleted] in KENROB's
staffing and management approach:
--[deleted].
--[deleted].
In addition, the evaluators cited [deleted].  Supplemental Review and
Evaluation of Offers, Concurrence Briefing for MDA/RM, Dec. 16, 2002.
[10] In its comments on the agency report, the protester asserts that
[deleted] proposed an average hourly rate of [deleted] for the core
services and an average hourly rate of [deleted] for the surge services. 
It is unclear how the protester derived these figures, and we believe that
they are incorrect.  According to our computations, [deleted] average
hourly rate for the core services was [deleted] and its average hourly
rate for the surge services was [deleted], while KENROB's average hourly
rate for the core services was [deleted] and its average hourly rate for
the surge services was [deleted].
[11] Regarding KENROB's complaint that Zen performed as a subcontractor to
the incumbent under a bridge contract for services pending resolution of
the protests, the contracting officer maintains--and the protester has
failed to refute--that the decision by the incumbent to subcontract to Zen
was a matter arranged between the two contracting parties and not at the
election or direction of the government.  Moreover, as we noted in our
March 19 decision dismissing KENROB and SESI's protests as academic, Zen's
performance as a subcontractor under the bridge contract did not violate
the automatic stay provisions of the Competition in Contracting Act
(CICA), 31 U.S.C. S: 3553(c) and (d) (2000), since those provisions
prohibit a contracting officer from authorizing performance on a protested
contract while a GAO protest is pending (absent an urgency or best
interest determination), but do not prohibit a contractor (or vendor)
whose performance has been suspended from performing under a separate
contract or order for interim services.