TITLE:  Kellogg Brown & Root, Inc., B-291769, B-291769.2, March 24, 2003
BNUMBER:  B-291769, B-291769.2
DATE:  March 24, 2003
**********************************************************************
Kellogg Brown & Root, Inc., B-291769, B-291769.2, March 24, 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:    Kellogg Brown & Root, Inc.
    
File:             B-291769, B-291769.2
    
Date:              March 24, 2003
    
Michael R. Charness, Esq., and Robert J. Rothwell, Esq., Vinson & Elkins,
for the protester.
Captain Anissa N. Parekh, Raymond M. Saunders, Esq., and Matthew Bowman,
Esq., Department of the Army, for the agency.
Glenn G. Wolcott, Esq., and Michael R. Golden, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
Agency reasonably eliminated protester's proposal from consideration on
the basis of the proposal's failure to propose adequate staffing levels to
perform multiple solicitation requirements and the proposal's unacceptable
phase-in plan reflecting an intent to begin contract performance with a
majority of employees who were not completely trained and certified to
perform all contract requirements.
DECISION
    
Kellogg Brown & Root, Inc. (KBR) protests the Department of the Army's
determination that KBR's proposal failed to meet the requirements
contained in request for proposals (RFP) No. DABT23-02-R-0008 to perform
unit-level maintenance and support functions for vehicles used to conduct
training and instructional missions at Ft. Knox, Kentucky.  KBR challenges
the agency's determination that KBR's proposed staffing levels were
inadequate and that KBR's phase-in plan failed to comply with the
solicitation requirements.
    

   We deny the protest.
    
BACKGROUND
    
On May 22, 2002, pursuant to the provisions of Office of Management and
Budget (OMB) Circular A-76, the agency issued solicitation No.
DABT23-02-R-0008, seeking proposals to perform operator- and
organizational-level maintenance and support functions for the 16th
Cavalry Regiment and the 1st Armor Training Brigade at Ft. Knox,
Kentucky.[1]  The solicitation was issued to select a private sector
proposal to compete with the agency's most efficient organization (MEO)
under the A-76 cost comparison process.[2]  
    
The solicitation contemplated award of a cost-plus-award-fee contract for
a base period and four 1-year option periods, and advised offerors that
selection would be made on the basis of the technically acceptable
proposal offering the lowest proposed cost/price deemed realistic.  Agency
Report, Tab D, at 54.  As amended, the solicitation provided for
evaluation of proposals under the following primary factors:  technical,
past performance, management, and cost/price.  Agency Report, Tab D,
at 55.  Under the technical evaluation factor, the solicitation listed
various subfactors, including staffing plan and technical approach,[3]
stated that these two subfactors were the *most important,* and provided
that if a proposal was rated *marginal* or *unacceptable* under either of
these subfactors the entire proposal would be considered unacceptable.[4] 
Agency Report, Tab D, RFP at 54, 55.  The solicitation also advised
offerors that *[i]t is the Government's intention to award without
discussions.*  Agency Report, Tab D, RFP, at 44. 
    
Three offerors, including KBR, submitted proposals by the October 30, 2002
closing date; these proposals were thereafter evaluated against the stated
factors.  No discussions were conducted with any offeror.  In summarizing
its proposed staffing plan, KBR's proposal stated:
    
All equipment items identified in the PWS [performance work statement] . .
. were researched, using the Army MARC [manpower requirements criteria]
database to derive the total hours it should take Army personnel to
complete maintenance functions.[[5]]  We then applied an adjustment factor
(based on performance metrics derived from performing similar work by a
skilled contractor workforce) to the Army labor hour standards . . . .
Agency Report, Tab F, KBR Proposal, at D-24. 
    
At the hearing conducted by GAO in connection with this protest,[6] a KBR
representative testified that KBR applied two separate adjustments to the
MARC database.  First, KBR reduced its version of the MARC database by
approximately 30 percent.[7]  Thereafter, KBR applied a second [deleted]
reduction, decreasing the MARC data by [deleted].  Hearing Transcript
(Tr.), Feb. 21, 2003, at 7‑9.  KBR's proposal did not disclose the
magnitude of the second *adjustment factor,* nor did it provide any
explanation tying the [deleted] staffing reduction to any particular
contract performance approach.  Rather, KBR's representative testified
that merely changing the status of personnel from that of government
employees to that of contractor employees constituted an adequate basis
for assuming increased efficiency ranging from [deleted] to [deleted]. 
Tr., Feb. 21, 2003, at 9-10.      
    
Overall, the agency evaluated KBR's proposal as *unacceptable* based on
various factors, including an *unacceptable* rating for KBR's proposed
staffing plan, a *marginal* rating for its proposed technical approach,
and an *unacceptable* rating for its proposed phase-in plan.[8]  Agency
Report, Tab S, at 1-4.  In evaluating KBR's proposed staffing plan as
*unacceptable,* the agency concluded:  
    
KBR's proposal was [deleted] short of the MARC data estimate.  KBR failed
to demonstrate how it would achieve adequate efficiencies to compensate
for this lack of manpower. 
Agency Report, Tab G, SSEB Recommendation, at 2. 
    
More specifically, the agency identified various PWS requirements for
which KBR had proposed inadequate staffing, including requirements to
*road march* vehicles to and from training sites;[9] requirements to
inspect and clean vehicles following completion of training exercises; and
requirements to perform operator-level or *10‑level*
maintenance.[10]  Agency Report, Tab S, at 1-18, 33.  Additionally, KBR's
proposed phase-in plan was rated as unacceptable based, in part, on its
failure to provide fully trained and certified employees at the beginning
of contract performance. 
    
Based on its overall evaluation of KBR's proposal, the agency eliminated
the proposal from the competition, advising KBR of this action by letter
dated December 2, 2002.[11]  This protest followed. 
    
DISCUSSION
    
KBR initially protests that the agency unreasonably eliminated KBR's
proposal from consideration, arguing that the agency's evaluation of KBR's
staffing plan reflected only a *mechanical comparison* of KBR's proposed
staffing to the MARC data and the agency's independent government estimate
(IGE).[12]  KBR's Post-Hearing Comments (Mar. 10, 2003) at 2.  The record
is to the contrary.[13]
    
As noted above, the agency did, in fact, perform a bottom-line comparison
of KBR's total proposed staffing to the staffing requirements reflected in
the MARC data and IGE, concluding that KBR's proposed staffing was
approximately [deleted] that reflected in those benchmarks.  However, the
agency's evaluation did not end with those comparisons.  Rather, the
agency further reviewed KBR's proposed staffing levels with regard to
particular PWS requirements to determine which portions of the PWS KBR had
understaffed.  As noted above, the agency concluded that KBR had failed to
provide adequate staffing to ensure timely delivery of equipment to
training sites; to perform required inspection and cleaning of vehicles;
and to perform operator-level or *10-level* maintenance.   
    
Regarding delivery of equipment to training sites, the PWS stated:  *All
track vehicles must either be loaded for transport to the training site .
. . or road marched to and from the training site.*  PWS P: 5.3.6. 
Further, the PWS requires the contractor to provide replacement vehicles
in situations where vehicles become inoperable, and that such replacement
vehicles must be on site within 6 hours after notification.  PWS P:
5.4.3.1.
    
KBR's proposal was based on the assumption that heavy equipment transport
(HET) vehicles [deleted].  The agency evaluated this approach to contract
performance as unacceptable, noting that HETs are not always available to
perform this task, and that they are virtually never available on the
short notice necessary to comply with the solicitation's 6-hour
replacement requirement.  Agency Report, Tab S, at 33. 
    
KBR offers no explanation regarding its failure to provide for road
marching of vehicles, responding simply that *[t]here is nothing in the
mandatory requirements [of the solicitation] that require[s] the
contractor to road march vehicles.*  KBR Post‑Hearing Comments, Mar.
10, 2003, at 15.  Based on this assertion, KBR maintains that it was
unreasonable for the agency to downgrade its proposal for failing to
propose staffing to perform this activity.  We disagree. 
    
In reviewing an agency's evaluation, GAO will not reevaluate offerors'
proposals, but rather will examine the agency's evaluation to ensure that
it was reasonable and consistent with the solicitation's stated evaluation
criteria and with procurement statutes and regulations.  Encorp-Samcrete
Joint Venture, B-284171, B‑284171.2, Mar. 2, 2000, 2000 CPD P: 55 at
4.  The offeror has the burden of submitting an adequately written
proposal, and mere disagreement with the agency's judgment is insufficient
to establish that the agency acted unreasonably.  PEMCO World Air Servs.,
B-284240.3 et al., Mar. 27, 2000, 2000 CPD P: 71 at 15. 
    
KBR has not offered any basis for its apparent assumption that HETs
[deleted].  Accordingly, on this record, including the specific PWS
provision putting offerors on notice of the need to road march vehicles,
we find no basis to question the agency's downgrading of KBR's proposal
for failing to propose staffing to perform that activity.[14]
    
The agency also downgraded KBR's proposal for failing to propose staff to
clean equipment being returned from training exercises and to perform
10-level maintenance.  With regard to cleaning, the PWS stated:  *The
Contractor shall inspect, test, repair, and clean as required returned
dispatched equipment prior to re‑issue.*  PWS P: 5.3.6.3.  With
regard to operator or 10-level maintenance, the PWS stated:  *The
Contractor shall perform Operator (unless specified otherwise
herein)[[15]] and Organizational-level preventative maintenance . . . on
each of the equipment systems listed in Technical Exhibit 5.B . . . .* 
PWS P: 5.2.2.  Additionally, the PWS explained, *the intent of PM
[preventative maintenance] is to provide Level 10 and Level 20 routine
maintenance services to identify and correct equipment faults that prevent
normal safe operational readiness or may cause injury to Contractor or
Government personnel or further damage to the equipment.* [16]  PWS
P: 5.4.1.1. 
    
The agency evaluated KBR's proposed staffing plan as deficient in that it
contained virtually no staffing to clean equipment being returned from
training exercises, and similarly contained virtually no staffing to
perform 10-level maintenance.  Agency Report, Tab I, at 3.  Again, KBR
does not dispute the agency's assessment regarding its lack of proposed
staffing for these activities, stating *it was not KBR's responsibility to
wash the equipment,* Protest (Dec. 12, 2002) at 7, and similarly
acknowledging *KBR did not propose staffing for certain preventative
maintenance, safety and reliability inspections, 10 level maintenance and
'pre-turn-in' activities when the equipment was out in the field.*  Id. at
6.  
    
In both instances, KBR asserts that the Army--not the contractor--is
responsible for performing the activities at issue.  In maintaining that
the RFP did not require KBR to propose staffing to wash vehicles or
perform 10-level maintenance, KBR references various Army manuals and
regulations that direct equipment operators to clean their own vehicles
and to perform their own 10-level maintenance.  The agency responds that,
notwithstanding the Army directives, the PWS, as quoted above, explicitly
made the contractor responsible for performing these activities because
multiple students/trainees *operate* a given piece of equipment during a
training exercise; accordingly, the PWS contemplates contractor
responsibility for these activities to ensure that the equipment is
properly maintained.[17]
    
Even assuming that the Army directives on which KBR relies require the
student/trainee *operators* of the dispatched equipment to clean their own
vehicles and perform their own 10-level maintenance, KBR does not explain
how these affirmative obligations negate the clear PWS requirements that
the contractor will also perform these activities.  In light of the
specific PWS provisions that the contractor must clean equipment and
perform 10-level maintenance, along with the clearly disclosed training
mission at issue, KBR's purported interpretation, which effectively
eliminates various PWS provisions, is not reasonable.[18]  At best, we
view KBR's asserted reliance on the Army directives as creating a patent
solicitation ambiguity which KBR could challenge only prior to submitting
its proposal.  See 4 C.F.R. S: 21.2(a)(1) (2003); Bank of Am., B-287608,
B‑287608.2, July 26, 2001, 2001 CPD P: 137.  Our rule that protests
of obvious solicitation ambiguities must be filed prior to submission of
proposals is intended to facilitate clarification of legitimate questions
prior to proposal preparation.  Since KBR sought no clarification of this
matter prior to submitting its proposal, it may not now assert that the
only legally permissible interpretation is its own.  Id.  On this record
we find no basis to question the agency's conclusion that KBR's proposal
was deficient for failing to propose staff to wash vehicles and to perform
10-level maintenance. 
    
Finally, the agency evaluated KBR's proposed phase-in plan as
unacceptable.  In this regard, the PWS stated:  *To ensure smooth
transition to Contractor performance and to prevent possible decreases in
productivity, the Government will provide a 90‑calendar-day
transition period prior to the contract start date.  During the
Phase‑In period, the Contractor shall prepare to assume full
responsibility for all areas of operation in accordance with the terms and
conditions of this contract.* PWS P: 1.4.1.  The PWS further provided that
*the Contractor shall furnish employees who are fully qualified, have
current certifications; and meet the minimum experience levels,
educational requirements, and skill levels described in [PWS] paragraph
C.1.5.5.[19]  PWS P: 1.5.4.     
    
In evaluating KBR's phase-in plan as unacceptable, the agency stated:
    
KBR has not planned adequate time to train their workforce prior to
contract start.  They propose using [deleted] following the contract start
date to conduct all new employee orientation and issue tools and equipment
to their employees.
Agency Report, Tab S, at 34.
    
KBR does not dispute that its proposed phase-in plan contemplates waiting
until after commencement of contract performance to obtain various
training and certifications for most of its employees.  Specifically, KBR
states that it intended for training activities to *begin* (the bold is
KBR's) at contract commencement, and that KBR *proposed various training
and certification plans [lasting] from [deleted].*  Protest (Dec. 12,
2002) at 3.  Consistent with its explanation that a substantial portion of
employee training would not occur until after the contract start date, a
KBR representative acknowledged that approximately [deleted] of KBR's
proposed employees (over [deleted] percent of its total staff) would not
come onboard until the first day of contract performance and that *most*
of these [deleted] employees would require subsequent training and Army
certification before they would be qualified to [deleted].  Tr., Feb. 25,
2003, at 60-61; Agency Report, Tab F, KBR Proposal, at B-9.  On this
record, we find no basis to question the agency's evaluation of KBR's
proposed phase-in plan as unacceptable. 
    
In summary, as noted above, the solicitation required that an offeror's
proposed staffing plan must *provide sufficient detail to determine that
the offeror can provide a sufficiently skilled and adequate work force*
and, similarly, that an offeror must provide an *adequate description* of
its proposed technical approach.*  Agency Report, Tab D, RFP, at 55. 
Additionally, the solicitation required that the proposed phase-in plan
must *ensure smooth transition* and provide for fully qualified personnel
at commencement of contract performance.  Agency Report, Tab N, PWS P:P:
1.4.1, 1.5.4.  Based on our review of the record, it is clear that KBR's
proposal failed to comply with these requirements.  Overall, based on the
multiple deficiencies and significant weaknesses identified in KBR's
proposal, as discussed above, along with KBR's failure to adequately
explain how it would successfully perform all of the contract
requirements, we find nothing unreasonable in the agency's determination
to exclude KBR from consideration. 
    
The protest is denied.
    
Anthony H. Gamboa
General Counsel 
    
    

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

   [1] The requirements at issue here involve providing maintenance for more
than 800 Army vehicles, including tanks, trucks, personnel carriers,
fighting vehicles, and high mobility multipurpose wheeled vehicles (HMMWV)
used by students/trainees during training exercises at Ft. Knox.  
[2]  The procedures for determining whether the government should perform
an activity in-house, or have the activity performed by a contractor are
set forth in OMB Circular A-76, and that Circular's Revised Supplemental
Handbook (March 1996). 
[3] Regarding an offeror's staffing plan, the solicitation stated that a
proposal would be evaluated to determine if it *provide[s] a clear and
easily understood staffing plan that provides sufficient detail to
determine that the offeror can provide a sufficiently skilled and adequate
work force (including any cross-utilization of personnel proposed) to
perform all the requirements.*  Agency Report, Tab D, RFP, at 55.   
Regarding an offeror's technical approach, the solicitation stated that
each proposal would be evaluated to determine if it *provide[s] an
adequate description of each functional area including the identification
of major work processes, process interfaces, and the outputs of these
processes,* and *ensure[s] efficient, quality and timely performance.* 
Id. 
[4] The solicitation defined a *marginal* rating as applicable to *any
proposal that contains significant weaknesses,* and an *unacceptable*
rating as applicable to *any proposal that contains major weaknesses which
prohibit successful contract performance and/or could only become eligible
for award if it were substantially revised.*  Agency Report, Tab D, at
54. 
[5] The MARC database is maintained by the Army and identifies the
maintenance requirements for military vehicles, breaks down those
requirements into individual elements, and lists a standard amount of time
necessary to perform each element.
[6] In resolving this protest, GAO conducted a hearing, over the course of
3 separate days, during which testimony was provided by the agency's
contracting officer, the source selection evaluation board (SSEB) chair,
the senior maintenance representative on the SSEB, the agency official who
performed an independent review of the MEO, and three KBR
representatives. 
[7] It became clear during the GAO hearing that KBR and the agency relied
on differing‑‑though reconcilable--versions of the MARC
database.  In short, KBR relied on an older version that included time
spent by uniformed service members performing activities unique to their
military status (for example, standing formation or performing guard
duty); that version stated that the time required to perform each element
had been increased by a factor of 1.4 to reflect the service members'
uniquely military activities and that, to be applicable to civilians, the
data should be reduced to eliminate this factor.  In evaluating KBR's
proposal, the Army relied on a more recent version of the MARC database
that already incorporated this reduction. The parties do not dispute that,
following KBR's reduction of the data to reflect the 1.4 factor, the two
versions were not materially different.  Id.
[8] Under the technical evaluation factor, KBR's proposal also received an
*unacceptable* rating for its preventative maintenance plan and *marginal*
ratings under the technical subfactors for evaluation of recovery
services, maintenance, and transportation.  Under the primary factor for
evaluation of management, KBR's proposal received *marginal* ratings under
subfactors for evaluation of cost control and work quality.  Under the
primary factor for evaluation of past performance, the solicitation
established two subfactors*similar past experience and past performance;
KBR's proposal received a *marginal* rating under the past performance
subfactor.  Agency Report, Tab S. 
[9] The term *road march* means that a vehicle is driven under its own
power rather than loaded onto a flatbed trailer and hauled by another
vehicle.
[10] The Army explains that there are four levels of maintenance: 
operator-level, organizational-level, direct support, and general
support.  Operator-level maintenance is the least complex; general support
maintenance is the most complex.  The technical manual for operator-level
maintenance ends with the digits *-10*; the technical manuals for
organizational-level, direct support and general support maintenance end
with the digits *-20,* *-30,* and *-40,* respectively.  Accordingly, the
various levels of maintenance are frequently referred to as *10-level,*
*20-level,* *30‑level,* and *40‑level.* 
[11] With regard to the other two proposals, the agency evaluated one as
acceptable and one as unacceptable.  The cost of the technically
acceptable proposal was subsequently compared to the cost of the MEO,
leading to the agency's decision to retain performance of the services
in-house. 
[12] The agency retained a consultant to prepare an IGE for this
procurement.  The overall staffing requirements in the IGE were similar,
though somewhat higher, than the staffing reflected in the MARC database
since there are certain requirements for this procurement that were not
included in the MARC database.
[13]  With its protest, KBR requested production of the government's MEO. 
The agency objected to our Office's consideration of the MEO, questioning
the relevance of that document since, pursuant to A-76 procedures, KBR's
proposal was not compared to the MEO.  After considering the matter, we
requested that the agency provide a copy of the MEO as part of the protest
record, noting that the A-76 cost comparison had already been completed
and the MEO had been, in effect, selected as the *awardee.*  The agency
complied with this request.  In advising the agency that we intended to
consider the MEO, we explained that our Office would be concerned if the
MEO's staffing approach was substantially similar to the staffing plan in
KBR's proposal.  Based on our review of the record, we find significant
differences between the MEO staffing and KBR's proposed staffing. 
Overall, the MEO's staffing level is more than [deleted] percent higher
than that proposed by KBR.  Specifically, KBR's own staffing expert
concludes that the MEO reflects annual staffing levels of 490,369 hours
per year, while KBR's proposal offered only [deleted] hours per year.  KBR
Post Hearing Comments, Mar. 10, 2003, attach. A, at 8.  As discussed in
more detail below, we also found significant differences with regard to
the staffing levels associated with specific PWS requirements.   
[14] In reviewing the record on this issue, we compared the number of
hours in KBR's proposal associated with the requirements of PWS P: 5.3 to
the MEO staffing plan for that portion of the PWS.  We found that the MEO
reflected a total of [deleted] direct productive hours to perform the
requirements of this PWS paragraph, while KBR's proposal offered only
[deleted].  MEO, Table 16; KBR Post-Hearing Comments, attach. A.  Assuming
a total of 1,900 productive hours per full time equivalent (FTE) staff
member per year, the MEO reflects slightly more than [deleted] FTEs to
perform these requirements, while KBR's proposal reflects just under
[deleted] FTEs.  Similarly, with regard to PWS P: C.5.5, which also
includes requirements for transportation and recovery services, the MEO
reflects [deleted] direct productive hours (or approximately [deleted]
FTEs), while KBR's proposal included only [deleted] hours (or
approximately [deleted] FTEs).  Id.
[15] The solicitation provided that the 16th Cavalry Regiment would be
responsible for performing operator level maintenance for certain HMMWVs
that were dispatched to that unit on a long-term basis.   
[16] The agency evaluator who served as the senior maintenance
representative on the SSEB explained that 10-level maintenance involves
determining if basic vehicle components are in need of maintenance or
repair, and includes checking for appropriate fluid levels, changing
tires, and fixing a track on a tank; he stated that there are 114 specific
10-level *checks* for M1A1 tanks, and 54 *checks* for HMMWVs, and that
virtually all of these checks are performed either before or after vehicle
operation.  Tr., Feb. 25, 2003, at 7.           
[17] The agency's senior maintenance representative on the SSEB testified
that students/trainees using the equipment at issue here *don't have the
expertise to find what's wrong all the time.*  Tr., Feb. 25, 2003, at 4. 
[18] We find KBR's assertions regarding its interpretation of the PWS
requirements particularly unreasonable in light of the fact that KBR is
currently performing the Directorate of Base Operations (DBOS) contract at
Ft. Knox.  As the incumbent DBOS contractor at Ft. Knox, KBR is clearly
familiar with the training activities being performed there.
[19] PWS P: 1.5.5, identifies various required qualification requirements
including, among other things, *Contractor Personnel Qualified to Operate
Equipment.*  This PWS paragraph requires that contractor employees have
applicable operational instruction and driver testing.