TITLE: Strategic Analysis, Inc., B-292392; B-292392.2, September 3, 2003
BNUMBER: B-292392; B-292392.2
DATE: September 3, 2003
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Strategic Analysis, Inc., B-292392; B-292392.2, September 3, 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: Strategic Analysis, Inc.
File: B-292392; B-292392.2
Date: September 3, 2003
James D. Bachman, Esq., and Ron R. Hutchinson, Esq., Doyle & Bachman, for
the protester.
Michael F. Copley, Esq., and Stuart W. Harris, Esq., Kegler Brown Hill &
Ritter, for LOGTEC, Inc., the intervenor.
Maj. Brent G. Curtis, and Michael D. McGrath, Esq., Department of the Air
Force, for the agency.
Paul I. Lieberman, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Where solicitation expressly contemplated that vendor would not have
certain required non-disclosure agreements (NDA) until after commencement
of performance under task order, and provided criteria for assessing
vendor*s plan to obtain NDAs after issuance of order without calling for
price evaluation adjustments or for any adverse evaluation consequences
for doing so, agency reasonably did not downgrade proposal for including a
highly rated plan to obtain required NDAs after issuance of the order, and
was not required to increase the evaluated cost to the government to
compensate for the alleged transition costs related to the delay in
performance that the solicitation anticipated for obtaining the NDAs.
DECISION
Strategic Analysis, Inc. (SAI) protests the issuance of a 5-year time and
materials task order (to be placed against a General Services
Administration (GSA) federal supply schedule (FSS) contract) to LOGTEC,
Inc., for independent research and development and data mining (IR&D)
support under request for quotations (RFQ)No. FA8652-03-Q-0012, issued by
the Air Force Research Laboratory. SAI protests that the Air Force
misevaluated LOGTEC*s proposal by failing to properly consider the cost
and technical impact of LOGTEC*s need to obtain certain non-disclosure
agreements (NDAs) that are required in order to perform, and that the Air
Force conducted improper discussions with LOGTEC.
We deny the protest.
The RFQ, issued on April 11, 2003, sought quotations to be evaluated on
the basis of three factors, management approach to acquiring NDAs, IR&D
expertise and data mining technical ability, and price respectively on a
30/40/30 percentage weighted basis. The Air Force estimates that there
are approximately 100 required NDAs, and the RFQ statement of work (SOW)
provided that the contractor was required to initiate, update, renew, or
otherwise obtain 80 percent of these agreements prior to beginning the
data mining subtask. RFQ, SOW P: 1.1.1.1. The RFQ also stated that the
government *anticipates that it may take 5-7 months for a contractor with
few existing NDAs to establish the NDAs identified* in the solicitation,
and required that the vendor*s *proposal regarding management approach to
acquiring NDAs shall include a performance plan with progress measures.*
RFQ P: 2(a). Three quotes were received by the amended April 21 deadline,
LOGTEC*s and SAI*s, plus one from a vendor whose technical approach was
evaluated as noncompetitive.
SAI, the incumbent, had in place approximately 40 current required NDAs.
LOGTEC had 90 NDAs, a limited number of which the Air Force believed could
be used for the contract requirements at issue. SAI*s quote was
$2,059,055.70 and LOGTEC*s was $1,532,225.68. SAI*s proposal received a
slightly higher overall technical evaluation resulting in part from the
assessment under the approach to acquiring NDA factor, under which the
evaluators credited SAI for possession of a significant number of executed
NDAs, in conjunction with a solid plan to acquire the required additional
NDAs. LOGTEC*s proposal received a slightly less favorable evaluation
under this factor because LOGTEC did not have in place a comparable base
of required NDAs, but the evaluators credited LOGTEC for its extensive
experience in establishing NDAs, its possession of existing NDAs that
might be usable, and for a solid plan for acquiring and maintaining NDAs,
which included the proposed use of an incumbent consultant whose
credentials added credibility for purposes of acquiring the required
NDAs. AR, Tab 7, Technical Evaluation of LOGTEC, at 1. Neither vendor*s
proposal was evaluated as having any weaknesses under this factor. With
respect to IR&D expertise and data mining technical ability, both
proposals were highly rated, with SAI*s proposal again receiving a
slightly higher evaluation.
The contracting officer determined that SAI had an extremely low risk of
not obtaining the NDAs, while LOGTEC had a moderately low risk in this
regard, and that the prices proposed by both vendors were reasonable and
realistic for the proposed approach. The contracting officer concluded
that payment of the substantial $526,830.02 cost premium associated with
the technically superiority offered by the SAI proposal was not warranted,
and determined to issue the order to LOGTEC. Thereupon, after receiving a
debriefing, SAI filed this protest with our office.
SAI asserts that the Air Force failed to consider the impact of LOGTEC*s
lack of possession of 80 percent of the required NDAs in connection with
either the price or technical evaluation. With respect to price, SAI
asserts that the delay in performance associated with LOGTEC*s obtaining
NDAs will result in higher cost to the agency because of the need for
coverage during this transition period, and that this cost should be added
to LOGTEC*s quoted price. With respect to the technical evaluation, under
which SAI*s approach was evaluated as only slightly better than LOGTEC*s,
SAI contends that had LOGTEC*s need to spend many months obtaining the
requisite NDAs been properly evaluated, LOGTEC*s proposal would have been
rated much lower than SAI*s.
Where, as here, a protest is filed with respect to an RFQ which provides
for the issuance of task orders under vendors* FSS contracts, but solicits
vendor responses in order for the agency to perform a detailed technical
evaluation and price/technical tradeoff under stated evaluation factors,
our Office will 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.
As stated above, the RFQ at issue explicitly recognizes that the agency
anticipated receiving quotes from vendors that did not possess the
necessary NDAs (many of which only the incumbent possessed), estimates
that it could take such vendors
5-7 months to obtain the NDAs, and provides for evaluation of the vendors*
plans for acquiring the NDAs, including progress measures. While the RFQ
specifically sets forth the need for a 5-7 month period to obtain the NDAs
necessary to commence the data mining requirements, it does not contain
any provision for adding to the vendor*s quote, for cost/price evaluation
purposes, any additional costs associated with satisfying the agency*s
data mining requirements during this transition period.[2]
There is no requirement that transition costs be evaluated in every
procurement, and they cannot be evaluated unless the solicitation provides
for their consideration. Technical & Admin. Servs. Corp., B‑279828,
July 24, 1998, 98-2 CPD P: 85 at 6-7. Accordingly, there is no basis for
the agency to add these costs to its evaluation of LOGTEC*s quote. SAI*s
real objection in this regard is that the RFQ should have called for the
addition of such costs to the evaluation of any quote other than that of
the incumbent; however, this issue is untimely since it involves an
alleged apparent solicitation impropriety which must be filed prior to the
time set for receipt of proposals. Bid Protest Regulations, 4 C.F.R. S:
21.2(a)(1) (2003).
With respect to the technical evaluation, SAI*s assertion that the agency
improperly failed to downgrade LOGTEC for its lack of 80 percent of the
required NDAs misconstrues the RFQ evaluation factor as calling for a
simple quantitative assessment of how many NDAs a vendor has in place at
the time of issuance of the order. On the contrary, the RFQ provides for
an assessment of the vendor*s management approach to obtaining the NDAs,
and explicitly recognizes that obtaining the required 80 percent of the
specified NDAs could take 5-7 months. As referenced above, the agency
gave LOGTEC*s proposal for obtaining NDAs a favorable evaluation (albeit
slightly lower than SAI*s) because LOGTEC has experience in establishing
NDAs, proposed an incumbent consultant who would provide additional
credibility in establishing NDAs, possessed 90 existing NDAs some of which
may be usable, and described *a solid plan [for] acquiring and maintaining
NDAs.* AR, Tab 7, Technical Evaluation of LOGTEC, at 1. In our view,
this evaluation is reasonable and consistent with the RFQ criterion which
calls for evaluation of the vendor*s plan to acquire NDAs, and not for an
evaluation of simply the percentage of required NDAs currently possessed.
SAI subsequently objected that the agency*s evaluation was dependent on
LOGTEC*s use of an incumbent consultant whose availability would be
questionable in the event that SAI continued to perform the data mining
services during the transition period and retained the individual as its
consultant. In fact, the agency is performing the data mining services
in-house during the transition period, and this speculative objection is
immaterial. With regard to this same consultant, SAI also propounded a
supplemental allegation that the agency improperly conducted discussions
with LOGTEC only concerning the availability of the proposed consultant.
SAI protests that this constituted improper discussions because, once a
procuring agency holds discussions with one offeror, it must hold
discussions with all offerors whose proposals are in the competitive
range. Federal Acquisition Regulation (FAR) S: 15.306(d)(1).[3]
After receiving and evaluating the quotes, the agency sought additional
information from LOGTEC regarding its contingency plans if the Air Force
elected to extend SAI*s task order in order to facilitate transition to
LOGTEC, and SAI elected to retain the consultant whom LOGTEC had
proposed. However, the solicitation did not call for vendors to address
the possibility of such a sole source contract extension for transition
purposes and, in fact, the agency states that it is performing this
transition work in-house. As discussed above, the LOGTEC proposal was
reasonably evaluated as technically acceptable. In the circumstances
presented, this exchange with LOGTEC cannot be considered to constitute
discussions, which pertain to significant weaknesses, deficiencies, or
other aspects of a proposal that could be altered or explained to enhance
materially the proposal*s potential for award. FAR S: 15.306(d)(3);
Northeast MEP Servs., Inc., B-285963.9, Mar. 8, 2001, 2001 CPD P: 66
at 3. The information sought pertained to one possible transition
approach being considered by the agency that was not addressed under the
solicitation evaluation criteria, was not implemented, and did not affect
the vendor*s potential to receive the task order. In these circumstances,
there is no basis to conclude that the agency improperly conducted
discussions with only one vendor.[4]
The protest is denied.
Anthony H. Gamboa
General Counsel
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[1] The IR&D program is intended to help communicate the Air Force*s
technology needs to industry and to help Air Force scientists and
engineers find technologies relevant to Air Force needs by intensive data
mining of available industry data sources. Agency Report (AR),
Contracting Officer*s Statement at 1.
[2] In fact, the SOW contains two subtasks, the first of which consists
entirely of requirements associated with establishing, updating and
renewing the NDAs, which SAI would also have been required to perform.
RFQ, SOW 1.1.1.
[3]Since this procurement concerns an FSS purchase it would ordinarily be
governed by FAR subpart 8.4 rather than part 15. However, as explained
above, because the agency used vendor responses as the basis for a
detailed technical evaluation and price/technical tradeoff, while the
procurement is not directly governed by FAR
part 15, we will review the agency*s actions under the standards
applicable to negotiated procurements. Digital Sys. Group, Inc.,
B-286931, B‑286931.2, Mar. 7, 2001, 2001 CPD P: 50 at 6.
[4] SAI has also raised certain collateral issues that we have considered
and find without merit, which do not warrant specific discussion in this
decision.